Segment Reporting

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We have four reportable operating segments at March 31, 2013, the first three of which consist of the ownership and rental of (i) industrial, (ii) office and (iii) medical office real estate investments. The operations of our industrial, office and medical office properties, along with our retail properties, are collectively referred to as "Rental Operations." Our retail properties, as well as any other properties not included in our reportable segments, do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment. The fourth reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.

Other revenue consists of other operating revenues not identified with one of our operating segments. Interest expense and other non-property specific revenues and expenses are not allocated to individual segments in determining our performance measure.

We assess and measure the overall operating results of the General Partner and the Partnership based upon Funds From Operations ("FFO"), which is an industry performance measure that management believes is a useful indicator of consolidated operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. The most comparable GAAP measure is net income (loss) attributable to common shareholders or common unitholders. FFO attributable to common shareholders or common unitholders should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT.

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the use of FFO attributable to common shareholders or common unitholders, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assist them in comparing these operating results between periods or between different companies.

We do not allocate certain income and expenses ("Non-Segment Items," as shown in the table below) to our operating segments. Thus, the operational performance measure presented here on a segment-level basis represents net earnings, excluding depreciation expense and the Non-Segment Items not allocated, and is not meant to present FFO as defined by NAREIT.

The following table shows (i) the revenues for each of the reportable segments and (ii) a reconciliation of FFO attributable to common shareholders or common unitholders to net income (loss) attributable to common shareholders or common unitholders for the three months ended March 31, 2013 and 2012, respectively (in thousands): 

	Three Months Ended March 31,
	2013		2012
Revenues
Rental Operations:
Industrial	$	115,876	$	106,153
Office	66,708		66,378
Medical Office	35,181		21,011
Non-reportable Rental Operations	2,302		2,022
Service Operations	47,404		68,968
Total Segment Revenues	267,471		264,532
Other Revenue	1,197		1,129
Consolidated Revenue from continuing operations	268,668		265,661
Discontinued Operations	5,019		7,973
Consolidated Revenue	$	273,687	$	273,634
Reconciliation of Funds From Operations
Net earnings excluding depreciation and Non-Segment Items
Industrial	$	84,807	$	78,504

Office	38,386			38,848
Medical Office	23,949			13,935
Non-reportable Rental Operations	1,611			1,447
Service Operations	9,063			5,047
	157,816			137,781
Non-Segment Items:
Interest expense	(60,075		)	(59,299		)
Interest and other income	153			146
Other operating expenses	(68		)	(265		)
General and administrative expenses	(13,145		)	(11,839		)
Undeveloped land carrying costs	(2,198		)	(2,298		)
Acquisition-related activity	643			(580		)
Other non-segment income	311			352
Net income attributable to noncontrolling interests - consolidated entities not wholly owned by the Partnership	(206		)	(168		)
Joint venture items	8,193			10,095
Dividends on preferred shares/Preferred Units	(9,550		)	(13,193		)
Adjustments for redemption of preferred shares/Preferred Units	(5,932		)	(5,730		)
Discontinued operations	1,966			2,440
FFO attributable to common unitholders of the Partnership	77,908			57,442
Net (income) loss attributable to noncontrolling interests - common limited partnership interests in the Partnership	(392		)	811
Noncontrolling interest share of FFO adjustments	(682		)	(2,060		)
FFO attributable to common shareholders of the General Partner	76,834			56,193
Depreciation and amortization on continuing operations	(97,115		)	(88,090		)
Depreciation and amortization on discontinued operations	(2,665		)	(4,166		)
Company's share of joint venture adjustments	(7,629		)	(8,586		)
Gains on depreciated property sales on continuing operations	168			(277		)
Gains on depreciated property sales on discontinued operations	8,954			6,476
Gains on depreciated property sales - share of joint venture	48,814			—
Noncontrolling interest share of FFO adjustments	682			2,060
Net income (loss) attributable to common shareholders of the General Partner	$	28,043		$	(36,390	)
Add back: Net income (loss) attributable to noncontrolling interests - common limited partnership interests in the Partnership	392			(811		)
Net income (loss) attributable to common unitholders of the Partnership	$	28,435		$	(37,201	)

The assets for each of the reportable segments as of March 31, 2013 and December 31, 2012 are as follows (in thousands):

	March 31, 2013		December 31, 2012
Assets
Rental Operations:
Industrial	$	3,835,245	$	3,836,721
Office	1,673,827		1,683,314
Medical Office	1,233,126		1,202,929
Non-reportable Rental Operations	170,248		175,197
Service Operations	155,055		162,219
Total Segment Assets	7,067,501		7,060,380
Non-Segment Assets	734,598		499,721
Consolidated Assets	$	7,802,099	$	7,560,101