Segment Information

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

As of March 31, 2012, the Company was managing its portfolio within seven segments: (1) Pennsylvania, (2) Philadelphia Central Business District (CBD), (3) Metropolitan Washington D.C, (4) New Jersey/Delaware, (5) Richmond, Virginia, (6) Austin, Texas and (7) California. The Pennsylvania segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Philadelphia CBD segment includes properties located in the City of Philadelphia in Pennsylvania. The Metropolitan Washington, D.C. segment includes properties in Northern Virginia and southern Maryland. The New Jersey/Delaware segment includes properties in Burlington, Camden and Mercer counties in New Jersey and in New Castle county in the state of Delaware. The Richmond, Virginia segment includes properties primarily in Albemarle, Chesterfield, Goochland and Henrico counties and one property in Durham, North Carolina. The Austin, Texas segment includes properties in Austin. The California segment includes properties in Oakland, Concord, Carlsbad and Rancho Bernardo. The corporate group is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions. Land held for development and construction in progress are transferred to operating properties by region upon completion of the associated construction or project.

Segment information is as follows (in thousands):

	Pennsylvania Suburbs		Philadelphia CBD		Metropolitan, D.C.		New Jersey /Delaware		Richmond, Virginia		Austin, Texas		California		Corporate			Total
As of March 31, 2012:
Real estate investments, at cost:
Operating properties	$	1,219,154	$	954,484	$	1,181,600	$	543,293	$	307,275	$	257,397	$	253,921	$	—		$	4,717,124
Construction-in-progress															38,442			38,442
Land inventory															109,285			109,285
As of December 31, 2011:
Real estate investments, at cost:
Operating properties	$	1,218,071	$	953,870	$	1,255,803	$	545,657	$	307,698	$	257,694	$	254,287	$	—		$	4,793,080
Construction-in-progress															25,083			25,083
Land inventory															109,008			109,008
For the three-months ended March 31, 2012:
Total revenue	$	39,829	$	33,149	$	26,437	$	20,601	$	9,034	$	7,493	$	5,636	$	(378	)	$	141,801
Property operating expenses, real estate taxes and third party management expenses	14,080		12,686		10,065		9,737		3,643		3,396		2,618		(445		)	55,780
Net operating income	$	25,749	$	20,463	$	16,372	$	10,864	$	5,391	$	4,097	$	3,018	$	67		$	86,021
For the three-months ended March 31, 2011:
Total revenue	$	40,053	$	31,850	$	30,332	$	19,978	$	8,798	$	8,114	$	5,409	$	(236	)	$	144,298
Property operating expenses, real estate taxes and third party management expenses	16,672		12,219		11,648		11,088		3,388		3,093		2,695		(333		)	60,470
Net operating income	$	23,381	$	19,631	$	18,684	$	8,890	$	5,410	$	5,021	$	2,714	$	97		$	83,828

Net operating income (“NOI”) is defined as total revenue less property operating expenses, real estate taxes and third party management expenses. Segment NOI includes revenue, real estate taxes and property operating expenses directly related to operation and management of the properties owned and managed within the respective geographical region. Segment NOI excludes property level depreciation and amortization, revenue and expenses directly associated with third party real estate management services, expenses associated with corporate administrative support services, and inter-company eliminations. NOI is the measure that is used by the Company to evaluate the operating performance of its real estate assets by segment. The Company also believes that NOI provides useful information to investors regarding its financial condition and results of operations because it reflects only those income and expenses recorded at the property level. NOI also does not reflect general and administrative expenses, interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact the Company’s results from operations. All companies may not calculate NOI in the same manner. The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure. Below is a reconciliation of consolidated NOI to consolidated net income (loss), as defined by GAAP:

	Three-month periods ended March 31,
	2012			2011
	(amounts in thousands)
Consolidated net operating income	$	86,021		$	83,828
Less:
Interest expense	(34,144		)	(32,393		)
Deferred financing costs	(1,311		)	(928		)
Depreciation and amortization	(50,502		)	(50,295		)
Administrative expenses	(6,050		)	(6,244		)
Plus:
Interest income	483			441
Interest expense - financing obligation	(182		)	—
Equity in income of real estate ventures	44			1,233
Net gain on sales of interests in real estate	—			2,791
Gain (loss) on early extinguishment of debt	(248		)	—
Loss from continuing operations	(5,889		)	(1,567		)
Income from discontinued operations	15,225			1,077
Net income (loss)	$	9,336		$	(490	)