(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||
(Registrant’s Telephone Number, Including Area Code) |
Title Of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
(audited) | |||||||||||
ASSETS | |||||||||||
Real estate properties: | |||||||||||
Land | $ | $ | |||||||||
Buildings and improvements | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Rents receivable | |||||||||||
Other assets, net | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Mortgage notes payable, net | $ | $ | |||||||||
Accounts payable, accrued expenses and other | |||||||||||
Rent collected in advance | |||||||||||
Distributions payable | |||||||||||
Total liabilities | |||||||||||
Shareholders’ equity: | |||||||||||
Preferred shares of beneficial interest, $ | |||||||||||
Series D preferred shares; outstanding, aggregate liquidation preference of $ | |||||||||||
Common shares of beneficial interest, $ | |||||||||||
Additional paid in capital | |||||||||||
Cumulative net income | |||||||||||
Cumulative common distributions | ( | ( | |||||||||
Cumulative preferred distributions | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Rental revenue | $ | $ | $ | $ | |||||||||||||||||||
Other revenue | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total expenses | |||||||||||||||||||||||
Interest and other income, net | |||||||||||||||||||||||
Interest expense (including net amortization of debt discounts, premiums and deferred financing fees of $( $ | ( | ( | ( | ( | |||||||||||||||||||
Loss on early extinguishment of debt | ( | ( | |||||||||||||||||||||
Gain on sale of properties, net | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
Net income | |||||||||||||||||||||||
Net income attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to Equity Commonwealth | |||||||||||||||||||||||
Preferred distributions | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to Equity Commonwealth common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding — basic | |||||||||||||||||||||||
Weighted average common shares outstanding — diluted | |||||||||||||||||||||||
Earnings per common share attributable to Equity Commonwealth common shareholders: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||||
Unrealized gain on marketable securities | |||||||||||||||||||||||
Total comprehensive income | |||||||||||||||||||||||
Comprehensive income attributable to the noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
Total comprehensive income attributable to Equity Commonwealth | $ | $ | $ | $ |
Equity Commonwealth Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Series D Preferred Shares | Series D Preferred Shares | Number of Common Shares | Common Shares | Additional Paid in Capital | Cumulative Net Income | Cumulative Common Distributions | Cumulative Preferred Distributions | Noncontrolling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at April 1, 2020 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of noncontrolling interest | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest | — | — | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of shares | — | — | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Surrender of shares for tax withholding | — | — | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of noncontrolling interest | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest | — | — | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ |
Equity Commonwealth Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Series D Preferred Shares | Series D Preferred Shares | Number of Common Shares | Common Shares | Additional Paid in Capital | Cumulative Net Income | Cumulative Common Distributions | Cumulative Preferred Distributions | Cumulative Other Comprehensive Loss | Noncontrolling Interest | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at April 1, 2019 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surrender of shares for tax withholding | — | — | ( | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest | — | — | — | — | — | — | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surrender of shares for tax withholding | — | — | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest | — | — | — | — | — | — | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Net amortization of debt discounts, premiums and deferred financing fees | ( | ||||||||||
Straight line rental income | ( | ||||||||||
Amortization of acquired real estate leases | |||||||||||
Other amortization | |||||||||||
Amortization of right-of-use asset | |||||||||||
Share-based compensation | |||||||||||
Loss on early extinguishment of debt | |||||||||||
Net gain on sale of properties | ( | ( | |||||||||
Change in assets and liabilities: | |||||||||||
Rents receivable and other assets | ( | ||||||||||
Accounts payable, accrued expenses and other | ( | ( | |||||||||
Rent collected in advance | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Real estate improvements | ( | ( | |||||||||
Proceeds from sale of properties, net | |||||||||||
Proceeds from maturity of marketable securities | |||||||||||
Net cash provided by investing activities | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Repurchase and retirement of common shares | ( | ( | |||||||||
Payments on borrowings | ( | ( | |||||||||
Contributions from holders of noncontrolling interest | |||||||||||
Distributions to common shareholders | ( | ( | |||||||||
Distributions to preferred shareholders | ( | ( | |||||||||
Distributions to holders of noncontrolling interest | ( | ||||||||||
Redemption of noncontrolling interest | ( | ||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Increase in cash, cash equivalents, and restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||
Interest paid | $ | $ | |||||||||
Taxes (refunded) paid, net | ( | ||||||||||
NON-CASH INVESTING ACTIVITIES: | |||||||||||
Recognition of right-of-use asset and lease liability | $ | $ | |||||||||
Accrued capital expenditures | $ | $ | |||||||||
NON-CASH FINANCING ACTIVITIES: | |||||||||||
Distributions payable | $ | $ |
June 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ | $ |
Property | Date Sold | Number of Properties | Number of Buildings | Square Footage | Gross Sale Price(1) | Gain on Sale | ||||||||||||||||||||||||||||||||
109 Brookline Avenue | February 2020 | $ | $ | |||||||||||||||||||||||||||||||||||
333 108th Avenue NE(2) | March 2020 | |||||||||||||||||||||||||||||||||||||
Georgetown-Green and Harris Buildings | May 2020 | |||||||||||||||||||||||||||||||||||||
$ | $ |
Property | Date Sold | Number of Properties | Number of Buildings | Square Footage | Gross Sale Price(1) | Gain on Sale | ||||||||||||||||||||||||||||||||
1735 Market Street(2) | March 2019 | $ | $ | |||||||||||||||||||||||||||||||||||
600 108th Avenue NE(3) | April 2019 | |||||||||||||||||||||||||||||||||||||
Research Park(4) | June 2019 | |||||||||||||||||||||||||||||||||||||
$ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Lease payments | $ | $ | $ | $ | ||||||||||||||||||||||
Variable lease payments | ||||||||||||||||||||||||||
Rental revenue | $ | $ | $ | $ |
Declaration Date | Record Date | Payment Date | Series D Dividend Per Share | |||||||||||||||||
January 10, 2020 | January 30, 2020 | February 18, 2020 | $ | |||||||||||||||||
April 9, 2020 | April 29, 2020 | May 15, 2020 | $ | |||||||||||||||||
July 8, 2020 | July 29, 2020 | August 17, 2020 | $ | |||||||||||||||||
Common Shares | OP Units and LTIP Units | Total | ||||||||||||||||||
Outstanding at January 1, 2020 | ||||||||||||||||||||
Repurchase of shares | ( | ( | ||||||||||||||||||
OP Unit redemption | ( | ( | ||||||||||||||||||
Share-based compensation grants and vesting, net of forfeitures | ||||||||||||||||||||
Outstanding at June 30, 2020 | ||||||||||||||||||||
Noncontrolling ownership interest in the Operating Trust | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Current: | |||||||||||||||||||||||
State and local | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Deferred: | |||||||||||||||||||||||
State and local | ( | ||||||||||||||||||||||
Income tax expense | $ | ( | $ | ( | $ | ( | $ | ( |
2020 | |||||
Fair value of market-based awards granted | $ | ||||
Expected term (years) | |||||
Expected volatility | % | ||||
Risk-free rate | % |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Principal Balance | Fair Value | Principal Balance | Fair Value | ||||||||||||||||||||
Mortgage note payable | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator for earnings per common share - basic: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
Preferred distributions | ( | ( | ( | ( | |||||||||||||||||||
Numerator for net income per share - basic | $ | $ | $ | $ | |||||||||||||||||||
Numerator for earnings per common share - diluted: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
Preferred distributions | ( | ||||||||||||||||||||||
Numerator for net income per share - diluted | $ | $ | $ | $ | |||||||||||||||||||
Denominator for earnings per common share - basic and diluted: | |||||||||||||||||||||||
Weighted average number of common shares outstanding - basic(1) | |||||||||||||||||||||||
RSUs(2) | |||||||||||||||||||||||
LTIP Units(3) | |||||||||||||||||||||||
Series D preferred shares; | |||||||||||||||||||||||
Weighted average number of common shares outstanding - diluted | |||||||||||||||||||||||
Net income per common share attributable to Equity Commonwealth common shareholders: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive securities: | |||||||||||||||||||||||
Effect of Series D preferred shares; | |||||||||||||||||||||||
Effect of LTIP Units | |||||||||||||||||||||||
Effect of OP Units(5) |
All Properties | Comparable Properties(1) | ||||||||||||||||||||||
As of June 30, | As of June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Total properties | 4 | 7 | 4 | 4 | |||||||||||||||||||
Total square feet | 1,507 | 2,469 | 1,507 | 1,507 | |||||||||||||||||||
Percent leased(2) | 90.1 | % | 90.5 | % | 90.1 | % | 85.7 | % |
Year | Number of Tenants Expiring(1) | Leased Square Feet Expiring(2) | % of Leased Square Feet Expiring(2) | Cumulative % of Leased Square Feet Expiring(2) | Annualized Rental Revenue Expiring(3) | % of Annualized Rental Revenue Expiring | Cumulative % of Annualized Rental Revenue Expiring | |||||||||||||||||||||||||||||||||||||
2020 | 12 | 65 | 4.8 | % | 4.8 | % | $ | 3,289 | 5.6 | % | 5.6 | % | ||||||||||||||||||||||||||||||||
2021 | 21 | 106 | 7.8 | % | 12.6 | % | 4,758 | 8.1 | % | 13.7 | % | |||||||||||||||||||||||||||||||||
2022 | 12 | 119 | 8.8 | % | 21.4 | % | 6,083 | 10.3 | % | 24.0 | % | |||||||||||||||||||||||||||||||||
2023 | 18 | 215 | 15.8 | % | 37.2 | % | 10,404 | 17.6 | % | 41.6 | % | |||||||||||||||||||||||||||||||||
2024 | 14 | 201 | 14.8 | % | 52.0 | % | 9,159 | 15.5 | % | 57.1 | % | |||||||||||||||||||||||||||||||||
2025 | 12 | 167 | 12.3 | % | 64.3 | % | 5,748 | 9.7 | % | 66.8 | % | |||||||||||||||||||||||||||||||||
2026 | 8 | 80 | 5.9 | % | 70.2 | % | 3,625 | 6.1 | % | 72.9 | % | |||||||||||||||||||||||||||||||||
2027 | 5 | 97 | 7.2 | % | 77.4 | % | 2,811 | 4.8 | % | 77.7 | % | |||||||||||||||||||||||||||||||||
2028 | 4 | 81 | 6.0 | % | 83.4 | % | 2,963 | 5.0 | % | 82.7 | % | |||||||||||||||||||||||||||||||||
2029 | 5 | 117 | 8.6 | % | 92.0 | % | 5,645 | 9.6 | % | 92.3 | % | |||||||||||||||||||||||||||||||||
Thereafter | 6 | 108 | 8.0 | % | 100.0 | % | 4,536 | 7.7 | % | 100.0 | % | |||||||||||||||||||||||||||||||||
117 | 1,356 | 100.0 | % | $ | 59,021 | 100.0 | % | |||||||||||||||||||||||||||||||||||||
Weighted average remaining lease term (in years): | 4.9 | 4.7 |
Tenant | Square Feet(1) | % of Total Leased Square Feet(1) | % of Annualized Rental Revenue(2) | Weighted Average Remaining Lease Term | |||||||||||||||||||||||||
1. | Equinor Energy Services, Inc. | 80 | 5.9 | % | 5.8 | % | 3.5 | ||||||||||||||||||||||
2. | KPMG, LLP | 71 | 5.2 | % | 5.0 | % | 8.9 | ||||||||||||||||||||||
3. | Crowdstrike, Inc. | 36 | 2.7 | % | 3.5 | % | 4.3 | ||||||||||||||||||||||
4. | CBRE, Inc. | 40 | 2.9 | % | 3.4 | % | 7.8 | ||||||||||||||||||||||
5. | International Dairy Foods Association(3) | 23 | 1.7 | % | 2.6 | % | 6.0 | ||||||||||||||||||||||
6. | Kazoo, Inc. | 26 | 1.9 | % | 2.5 | % | 1.6 | ||||||||||||||||||||||
7. | Alden Torch Financial, LLC | 34 | 2.5 | % | 2.5 | % | 6.7 | ||||||||||||||||||||||
Total | 310 | 22.8 | % | 25.3 | % | 5.8 |
Comparable Properties Results(1) | Other Properties Results(2) | Consolidated Results | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rental revenue | $ | 14,044 | $ | 16,384 | $ | (2,340) | (14.3) | % | $ | 1,204 | $ | 14,190 | $ | 15,248 | $ | 30,574 | $ | (15,326) | (50.1) | % | |||||||||||||||||||||||||||||||||||||||
Other revenue | 933 | 1,534 | (601) | (39.2) | % | 84 | 1,260 | 1,017 | 2,794 | (1,777) | (63.6) | % | |||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | (6,503) | (6,776) | 273 | (4.0) | % | (174) | (4,198) | (6,677) | (10,974) | 4,297 | (39.2) | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net operating income(3) | $ | 8,474 | $ | 11,142 | $ | (2,668) | (23.9) | % | $ | 1,114 | $ | 11,252 | 9,588 | 22,394 | (12,806) | (57.2) | % | ||||||||||||||||||||||||||||||||||||||||||
Other expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 4,398 | 7,561 | (3,163) | (41.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 8,302 | 9,533 | (1,231) | (12.9) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other expenses | 12,700 | 17,094 | (4,394) | (25.7) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and other income, net | 4,443 | 20,695 | (16,252) | (78.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (302) | (4,070) | 3,768 | (92.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | (6,374) | 6,374 | (100.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on sale of properties, net | 26,916 | 227,166 | (200,250) | (88.2) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 27,945 | 242,717 | (214,772) | (88.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | (59) | (340) | 281 | (82.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 27,886 | 242,377 | (214,491) | (88.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | (54) | (91) | 37 | (40.7) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Equity Commonwealth | 27,832 | 242,286 | (214,454) | (88.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred distributions | (1,997) | (1,997) | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Equity Commonwealth common shareholders | $ | 25,835 | $ | 240,289 | $ | (214,454) | (89.2) | % |
Asset | Gain on Sale, Net | |||||||
Georgetown-Green and Harris Buildings | $ | 24,916 | ||||||
Research Park(1) | 2,000 | |||||||
$ | 26,916 |
Asset | Gain on Sale, Net | |||||||
600 108th Avenue NE | $ | 149,009 | ||||||
Research Park | 78,158 | |||||||
$ | 227,167 |
Comparable Properties Results(1) | Other Properties Results(2) | Consolidated Results | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rental revenue | $ | 28,130 | $ | 30,499 | $ | (2,369) | (7.8) | % | $ | 4,261 | $ | 38,965 | $ | 32,391 | $ | 69,464 | $ | (37,073) | (53.4) | % | |||||||||||||||||||||||||||||||||||||||
Other revenue | 2,466 | 2,963 | (497) | (16.8) | % | 228 | 2,693 | 2,694 | 5,656 | (2,962) | (52.4) | % | |||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | (13,371) | (13,257) | (114) | 0.9 | % | (2,067) | (13,497) | (15,438) | (26,754) | 11,316 | (42.3) | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net operating income(3) | $ | 17,225 | $ | 20,205 | $ | (2,980) | (14.7) | % | $ | 2,422 | $ | 28,161 | 19,647 | 48,366 | (28,719) | (59.4) | % | ||||||||||||||||||||||||||||||||||||||||||
Other expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 9,512 | 16,146 | (6,634) | (41.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 18,906 | 21,629 | (2,723) | (12.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other expenses | 28,418 | 37,775 | (9,357) | (24.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and other income, net | 16,338 | 38,470 | (22,132) | (57.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (611) | (8,276) | 7,665 | (92.6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | (6,374) | 6,374 | (100.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on sale of properties, net | 446,536 | 420,203 | 26,333 | 6.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 453,492 | 454,614 | (1,122) | (0.2) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | (99) | (1,640) | 1,541 | (94.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 453,393 | 452,974 | 419 | 0.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | (802) | (170) | (632) | 371.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Equity Commonwealth | 452,591 | 452,804 | (213) | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred distributions | (3,994) | (3,994) | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Equity Commonwealth common shareholders | $ | 448,597 | $ | 448,810 | $ | (213) | — | % |
Asset | Gain on Sale, Net | |||||||
109 Brookline Avenue | $ | 225,190 | ||||||
333 108th Avenue NE | 194,424 | |||||||
Georgetown-Green and Harris Buildings | 24,916 | |||||||
Research Park(1) | 2,000 | |||||||
$ | 446,530 |
Asset | Gain on Sale, Net | |||||||
1735 Market Street | $ | 192,985 | ||||||
600 108th Avenue NE | 149,009 | |||||||
Research Park | 78,158 | |||||||
$ | 420,152 |
Scheduled Principal Payments During Period | ||||||||||||||
Year | Secured Fixed Rate Debt(1) | Interest Rate(2) | ||||||||||||
2020 | $ | 303 | 5.69 | % | ||||||||||
2021 | 24,836 | 5.69 | % | |||||||||||
Thereafter | — | — | % | |||||||||||
$ | 25,139 | 5.69 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Tenant improvements(1) | $ | 2,448 | $ | 2,491 | $ | 3,325 | $ | 4,941 | |||||||||||||||
Leasing costs(2) | 299 | 374 | 1,245 | 1,217 | |||||||||||||||||||
Building improvements(3) | 611 | 2,328 | 962 | 3,584 |
New Leases | Renewals | Total | |||||||||||||||
Square feet leased during the period | 22 | — | 22 | ||||||||||||||
Tenant improvements and leasing commissions | $ | 1,774 | $ | — | $ | 1,774 | |||||||||||
Tenant improvements and leasing commissions per square foot | $ | 80.63 | $ | — | $ | 80.63 | |||||||||||
Weighted average lease term by square foot (years)(1) | 8.0 | — | 8.0 | ||||||||||||||
Tenant improvements and leasing commissions per square foot per year | $ | 10.08 | $ | — | $ | 10.08 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Reconciliation to FFO: | |||||||||||||||||||||||
Net income | $ | 27,886 | $ | 242,377 | $ | 453,393 | $ | 452,974 | |||||||||||||||
Real estate depreciation and amortization | 4,174 | 7,283 | 9,055 | 15,560 | |||||||||||||||||||
Gain on sale of properties, net | (26,916) | (227,166) | (446,536) | (420,203) | |||||||||||||||||||
FFO attributable to Equity Commonwealth | 5,144 | 22,494 | 15,912 | 48,331 | |||||||||||||||||||
Preferred distributions | (1,997) | (1,997) | (3,994) | (3,994) | |||||||||||||||||||
FFO attributable to Equity Commonwealth common shareholders and unitholders | $ | 3,147 | $ | 20,497 | $ | 11,918 | $ | 44,337 | |||||||||||||||
Reconciliation to Normalized FFO: | |||||||||||||||||||||||
FFO attributable to Equity Commonwealth common shareholders and unitholders | $ | 3,147 | $ | 20,497 | $ | 11,918 | $ | 44,337 | |||||||||||||||
Lease value amortization | — | (39) | — | (78) | |||||||||||||||||||
Straight line rent adjustments | 515 | (11) | 713 | (848) | |||||||||||||||||||
Loss on early extinguishment of debt | — | 6,374 | — | 6,374 | |||||||||||||||||||
Taxes related to property sales included in general and administrative | 10 | — | 1,458 | — | |||||||||||||||||||
Taxes related to property sales, net included in income tax expense | 44 | 415 | 79 | 565 | |||||||||||||||||||
Normalized FFO attributable to Equity Commonwealth common shareholders and unitholders | $ | 3,716 | $ | 27,236 | $ | 14,168 | $ | 50,350 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Rental revenue | $ | 15,248 | $ | 30,574 | $ | 32,391 | $ | 69,464 | |||||||||||||||
Other revenue | 1,017 | 2,794 | 2,694 | 5,656 | |||||||||||||||||||
Operating expenses | (6,677) | (10,974) | (15,438) | (26,754) | |||||||||||||||||||
NOI | $ | 9,588 | $ | 22,394 | $ | 19,647 | $ | 48,366 | |||||||||||||||
NOI | $ | 9,588 | $ | 22,394 | $ | 19,647 | $ | 48,366 | |||||||||||||||
Depreciation and amortization | (4,398) | (7,561) | (9,512) | (16,146) | |||||||||||||||||||
General and administrative | (8,302) | (9,533) | (18,906) | (21,629) | |||||||||||||||||||
Interest and other income, net | 4,443 | 20,695 | 16,338 | 38,470 | |||||||||||||||||||
Interest expense | (302) | (4,070) | (611) | (8,276) | |||||||||||||||||||
Loss on early extinguishment of debt | — | (6,374) | — | (6,374) | |||||||||||||||||||
Gain on sale of properties, net | 26,916 | 227,166 | 446,536 | 420,203 | |||||||||||||||||||
Income before income taxes | 27,945 | 242,717 | 453,492 | 454,614 | |||||||||||||||||||
Income tax expense | (59) | (340) | (99) | (1,640) | |||||||||||||||||||
Net income | $ | 27,886 | $ | 242,377 | $ | 453,393 | $ | 452,974 |
Exhibit Number | Description | ||||
3.1 | Articles of Amendment and Restatement of Declaration of Trust of the Company, dated July 1, 1994, as amended to date. (Incorporated by reference to the Company’s Current Report on Form 8-K filed August 1, 2014.) | ||||
3.2 | Articles Supplementary, dated October 10, 2006. (Incorporated by reference to the Company’s Current Report on Form 8-K filed October 11, 2006.) | ||||
3.3 | Articles Supplementary, dated May 31, 2011. (Incorporated by reference to the Company’s Current Report on Form 8-K filed May 31, 2011.) | ||||
3.4 | Articles Supplementary, dated March 14, 2018. (Incorporated by reference to the Company’s Current Report on Form 8-K filed March 15, 2018.) | ||||
3.5 | Fourth Amended and Restated Bylaws of the Company, adopted April 2, 2020. (Incorporated by reference to the Company’s Current Report on Form 8-K filed April 3, 2020.) | ||||
4.1 | Form of Common Share Certificate. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.) | ||||
4.2 | Form of 6 1/2% Series D Cumulative Convertible Preferred Share Certificate. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.) | ||||
31.1 | Rule 13a-14(a) Certification. (Filed herewith.) | ||||
31.2 | Rule 13a-14(a) Certification. (Filed herewith.) | ||||
32.1 | Section 1350 Certification. (Furnished herewith.) | ||||
101 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) related notes to these condensed consolidated financial statements, tagged as blocks of text and in detail. (Filed herewith.) | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
EQUITY COMMONWEALTH | |||||||||||
By: | /s/ David A. Helfand | ||||||||||
David A. Helfand | |||||||||||
President and Chief Executive Officer | |||||||||||
Dated: | July 30, 2020 | ||||||||||
By: | /s/ Adam S. Markman | ||||||||||
Adam S. Markman | |||||||||||
Executive Vice President, Chief Financial Officer and Treasurer | |||||||||||
Dated: | July 30, 2020 |
Date: | July 30, 2020 | /s/ David A. Helfand | |||||||||
David A. Helfand | |||||||||||
President and Chief Executive Officer | |||||||||||
Date: | July 30, 2020 | /s/Adam S. Markman | |||||||||
Adam S. Markman | |||||||||||
Executive Vice President, Chief | |||||||||||
Financial Officer and Treasurer | |||||||||||
Certification Pursuant to 18 U.S.C. Sec. 1350 |
/s/ David A. Helfand | /s/ Adam S. Markman | ||||||||||
David A. Helfand | Adam S. Markman | ||||||||||
President and Chief Executive Officer | Executive Vice President, Chief Financial Officer | ||||||||||
and Treasurer | |||||||||||
Date: | July 30, 2020 | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Statement [Abstract] | ||||
Net amortization of debt discounts, premiums and deferred financing fees | $ (60) | $ 154 | $ (116) | $ 319 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 27,886 | $ 242,377 | $ 453,393 | $ 452,974 |
Other comprehensive income, net of tax: | ||||
Unrealized gain on marketable securities | 0 | 0 | 0 | 342 |
Total comprehensive income | 27,886 | 242,377 | 453,393 | 453,316 |
Comprehensive income attributable to the noncontrolling interest | (54) | (91) | (802) | (170) |
Total comprehensive income attributable to Equity Commonwealth | $ 27,832 | $ 242,286 | $ 452,591 | $ 453,146 |
Business |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Equity Commonwealth, or the Company, is a real estate investment trust, or REIT, formed in 1986 under the laws of the State of Maryland. Our business is primarily the ownership and operation of office properties in the United States. On November 10, 2016, the Company converted to what is commonly referred to as an umbrella partnership real estate investment trust, or UPREIT. In connection with this conversion, the Company contributed substantially all of its assets to EQC Operating Trust, a Maryland real estate investment trust, or the Operating Trust, and the Operating Trust assumed substantially all of the Company’s liabilities pursuant to a contribution and assignment agreement between the Company and the Operating Trust. Since that time, the Company has conducted and intends to continue to conduct substantially all of its activities through the Operating Trust. The Company beneficially owned 99.8% of the outstanding shares of beneficial interest, designated as units, in the Operating Trust, or OP Units, as of June 30, 2020, and the Company is the sole trustee of the Operating Trust. As the sole trustee, the Company generally has the power under the declaration of trust of the Operating Trust to manage and conduct the business of the Operating Trust, subject to certain limited approval and voting rights of other holders of OP Units. At June 30, 2020, our portfolio consisted of four properties (eight buildings), with a combined 1.5 million square feet. As of June 30, 2020, we had $3.4 billion of cash and cash equivalents.
|
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements of EQC have been prepared without audit. Certain information and footnote disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are appropriate. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K, or our Annual Report, for the year ended December 31, 2019. Capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include the assessment of the collectability of rental revenue, purchase price allocations, useful lives of fixed assets and impairment of real estate and intangible assets. Share amounts are presented in whole numbers, except where noted. Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of FASB Accounting Standards Codification, or ASC 820. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. We adopted ASU 2018-13 on January 1, 2020, and the adoption did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires more timely recognition of credit losses associated with financial assets. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. We adopted ASU 2016-13 on January 1, 2020, and the adoption did not have a material impact on our consolidated financial statements.
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Real Estate Properties |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Properties | Real Estate Properties During the six months ended June 30, 2020 and 2019, we made improvements, excluding tenant-funded improvements, to our properties totaling $4.3 million and $8.5 million, respectively. Property Dispositions: During the six months ended June 30, 2020, we sold the following properties, which did not represent strategic shifts under ASC Topic 205 (dollars in thousands):
(1)Gross sale price is before credits, primarily for contractual lease costs, and transfer taxes. (2)The sale represents an individually significant disposition. The operating results of this property are included in continuing operations for all periods presented through the date of sale. Net income related to this property was $28,000 and $3.7 million for the three months ended June 30, 2020 and 2019, respectively, and $193.2 million, of which $194.4 million related to the gain on sale, and $7.3 million for the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2019, we sold the following properties, which did not represent a strategic shift under ASC Topic 205 (dollars in thousands):
(1)Gross sale price is before credits for capital costs, contractual lease costs and rent abatements. (2)Certain of our subsidiaries sold 100.0% of the equity interests in the fee simple owner of this property. The sale represents an individually significant disposition. The operating results of this property are included in continuing operations for all periods presented through the date of sale. Net income related to this property was $0.1 million and $197.2 million (of which $193.0 million related to the gain on sale) for the three and six months ended June 30, 2019, respectively. (3)The property includes an office building and additional developmental rights. (4)There was consideration of $2.0 million being held in escrow related to the sale of this property in 2019. In June 2020, these proceeds were released to the Company, and we recorded an additional $2.0 million gain on the sale for the three and six months ended June 30, 2020. Lease Payments The FASB has issued additional guidance for companies to account for any COVID-19 related rent concessions in the form of FASB staff and board members’ remarks at the April 8, 2020 public meeting and the FASB staff question-and-answer document issued on April 10, 2020. We have elected the practical expedient to account for COVID-19 related rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. This policy has been elected for our lessor portfolio for any rent deferrals, and we have elected to treat the related leases as if they are unchanged. For the three months ended June 30, 2020, we deferred collection of approximately $42,000 of rental income on revenue that was recognized in the three months ended June 30, 2020. Rental revenue consists of the following (in thousands):
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Indebtedness |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Mortgage Note Payable: |
Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity Common Share Issuances: See Note 8 for information regarding equity issuances related to share-based compensation. Common Share Repurchases: On March 13, 2019, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares over the twelve months following the date of authorization, or the March 2019 Authorization. In March 2020, this share repurchase authorization, of which $129.2 million was not utilized, expired. During the six months ended June 30, 2020, we repurchased 711,000 of our common shares under the March 2019 Authorization, at a weighted average price of $29.31 per share, for a total investment of $20.8 million. On March 10, 2020, our Board of Trustees authorized the repurchase of up to an additional $150.0 million of our outstanding common shares over the twelve months following the date of authorization, none of which has been utilized. During the six months ended June 30, 2020 and 2019, certain of our employees surrendered 183,466 and 168,327 common shares owned by them, respectively, to satisfy their statutory tax withholding obligations in connection with the vesting of such common shares pursuant to our equity compensation plans. Common Share and Unit Distribution: In February 2020, the number of earned awards for certain recipients of the Company’s restricted stock units and market-based LTIP Units was determined. Pursuant to the terms of such awards, we paid a one-time catch-up cash distribution to these recipients in the aggregate amount of $2.9 million for distributions to common shareholders and unitholders declared by our Board of Trustees during such awards' performance measurement period. Preferred Share Distributions: In 2020, our Board of Trustees declared distributions on our series D preferred shares to date as follows:
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Noncontrolling Interest |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest represents the portion of the OP Units not beneficially owned by the Company. The ownership of an OP Unit and a common share of beneficial interest have essentially the same economic characteristics. Distributions with respect to OP Units will generally mirror distributions with respect to the Company’s common shares. Unitholders (other than the Company) generally have the right, commencing six months from the date of issuance of such OP Units, to cause the Operating Trust to redeem their OP Units in exchange for cash or, at the option of the Company, common shares of the Company on a one-for-one basis. As sole trustee, the Company has the sole discretion to elect whether the redemption right will be satisfied by the Company in cash or the Company’s common shares. As a result, the Noncontrolling interest is classified as permanent equity. As of June 30, 2020, the portion of the Operating Trust not beneficially owned by the Company is in the form of OP Units and LTIP Units (see Note 8 for a description of LTIP Units). LTIP Units may be subject to additional vesting requirements. The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2020:
The carrying value of the Noncontrolling interest is allocated based on the number of OP Units and LTIP Units in proportion to the number of OP Units and LTIP Units plus the number of common shares. We adjust the Noncontrolling interest balance at the end of each period to reflect the noncontrolling partners’ interest in the net assets of the Operating Trust. Net income is allocated to the Noncontrolling interest in the Operating Trust based on the weighted average ownership percentage during the period. Equity Commonwealth’s weighted average ownership interest in the Operating Trust was 99.81% and 99.84% for the three and six months ended June 30, 2020, respectively.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, and are generally not subject to federal and state income taxes provided we distribute a sufficient amount of our taxable income to our shareholders and meet other requirements for qualifying as a REIT. However, we are subject to certain state and local taxes without regard to our REIT status. Our provision for income taxes consists of the following (in thousands):
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Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Recipients of the Company’s restricted shares have the same voting rights as any other common shareholder. During the period of restriction, holders of unvested restricted shares are eligible to receive dividend payments on their shares at the same rate and on the same date as any other common shareholder. The restricted shares are service based awards and vest over a -year period. Recipients of the Company’s restricted stock units, or RSUs, are entitled to receive dividends with respect to the common shares underlying the RSUs if and when the RSUs are earned, at which time the recipient will be entitled to receive an amount in cash equal to the aggregate amount of cash dividends that would have been paid in respect of the common shares underlying the recipient’s earned RSUs had such common shares been issued to the recipient on the first day of the performance period. To the extent that an award does not vest, the dividends related to unvested RSUs will be forfeited. The RSUs are market-based awards with a service condition and recipients may earn RSUs based on the Company’s total shareholder return, or TSR, relative to the TSRs of the companies that comprise the Nareit Office Index over a -year performance period. Following the end of the -year performance period, the number of earned awards will be determined. The earned awards vest in two tranches with 50% of the earned award vesting following the end of the performance period on the date the Compensation Committee of our Board of Trustees, or the Committee, determines the level of achievement of the performance metric and the remaining 50% of the earned award vesting approximately one year thereafter, subject to the grant recipient’s continued employment. Compensation expense for the RSUs is determined using a Monte Carlo simulation model and is recognized ratably from the grant date to the vesting date of each tranche. LTIP Units are a class of beneficial interests in the Operating Trust that may be issued to employees, officers or trustees of the Operating Trust, the Company or their subsidiaries. Time-based LTIP Units have the same general characteristics as restricted shares and market-based LTIP Units have the same general characteristics as RSUs. Each LTIP Unit will convert automatically into an OP Unit on a one-for-one basis when the LTIP Unit becomes vested and its capital account is equalized with the per-unit capital account of the OP Units. Holders of LTIP Units generally will be entitled to receive the same per-unit distributions as the other outstanding OP Units in the Operating Trust, except that market-based LTIP Units will not participate in distributions until expiration of the applicable performance period, at which time any earned market-based LTIP Units generally will become entitled to receive a catch-up distribution for the periods prior to such time. 2020 Equity Award Activity During the six months ended June 30, 2020, 387,729 RSUs vested, and, as a result, we issued 387,729 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 5). On June 23, 2020, in accordance with the Company’s compensation plan for independent Trustees, the Committee awarded each of the nine independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2020-2021 year of service on the Board of Trustees. These awards equated to 3,184 shares or time-based LTIP Units per Trustee, for a total of 19,104 shares and 9,552 time-based LTIP Units, valued at $31.41 per share and unit, the closing price of our common shares on the New York Stock Exchange, or the NYSE, on that day. These shares and time-based LTIP Units vest one year after the date of the award. On January 27, 2020, the Committee approved grants in the aggregate amount of 20,116 time-based LTIP Units, 40,841 market-based LTIP Units at target (101,796 market-based LTIP Units at maximum), 85,058 restricted shares and 172,697 RSUs at target (430,447 RSUs at maximum) to the Company’s officers, certain employees, an eligible consultant and to Mr. Zell, the Chairman of our Board of Trustees, as part of their compensation for fiscal year 2019. The restricted shares and time-based LTIP Units were valued at $32.81 per share and per unit, the closing price of our common shares on the New York Stock Exchange (NYSE) on the grant date. The assumptions and fair value for the RSUs and market-based LTIP Units granted during the six months ended June 30, 2020 are included in the following table on a per share and per unit basis.
2019 Equity Award Activity During the six months ended June 30, 2019, 382,413 RSUs vested, and, as a result, we issued 382,413 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations. On June 20, 2019, in accordance with the Company’s compensation plan for independent Trustees, the Committee awarded each of the nine independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2019-2020 year of service on the Board of Trustees. These awards equated to 2,940 shares or time-based LTIP Units per Trustee, for a total of 23,520 shares and 2,940 time-based LTIP Units, valued at $34.01 per share and unit, the closing price of our common shares on the NYSE on that day. These shares and time-based LTIP Units vest one year after the date of the award. On January 29, 2019, the Committee approved grants in the aggregate amount of 112,359 restricted shares and 228,128 RSUs at target (568,609 RSUs at maximum) to the Company’s officers, certain employees and to Mr. Zell, the Chairman of our Board of Trustees, as part of their compensation for fiscal year 2018. The restricted shares were valued at $31.77 per share, the closing price of our common shares on the NYSE on the grant date. The RSUs were valued at $39.65 per share, their fair value on the grant date. Outstanding Equity Awards As of June 30, 2020, the estimated future compensation expense for all unvested restricted shares and time-based LTIP Units was $8.1 million. Compensation expense for the restricted share and time-based LTIP Unit awards is being recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The weighted average period over which the future compensation expense will be recorded for the restricted shares and time-based LTIP units is approximately 2.5 years. As of June 30, 2020, the estimated future compensation expense for all unvested RSUs and market-based LTIP Units was $15.9 million. The weighted average period over which the future compensation expense will be recorded for the RSUs and market-based LTIP Units is approximately 2.4 years. During the three months ended June 30, 2020 and 2019, we recorded $3.3 million and $3.7 million, respectively, and during the six months ended June 30, 2020 and 2019, we recorded $6.6 million and $7.6 million, respectively, of compensation expense, net of forfeitures, in general and administrative expense for grants to our trustees and employees related to our equity compensation plans. Compensation expense recorded during the three months ended June 30, 2020 and 2019 includes $0.0 million and $0.3 million, respectively, and compensation expense recorded during the six months ended June 30, 2020 and 2019 includes $18,000 and $0.8 million, respectively, of accelerated vesting due to staffing reductions. Forfeitures are recognized as they occur. At June 30, 2020, 2,291,799 shares/units remain available for issuance under the Equity Commonwealth 2015 Omnibus Incentive Plan, as amended.
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Fair Value of Assets and Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities As of June 30, 2020, we do not have any assets or liabilities measured at fair value. Financial Instruments Our financial instruments include our cash and cash equivalents, restricted cash and mortgage note payable. At June 30, 2020 and December 31, 2019, the fair value of these additional financial instruments was not materially different from their carrying values, except as follows (in thousands):
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Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands except per share amounts):
(1) The three months ended June 30, 2020 and 2019, include 150 and 220 weighted-average, unvested, earned RSUs, respectively, and the six months ended June 30, 2020 and 2019, include 164 and 203 weighted-average, unvested, earned RSUs, respectively. (2) Represents weighted-average number of common shares that would have been issued if the quarter-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from LTIP Units if the quarter-end was the measurement date for the periods shown. (4) The Series D preferred shares are excluded from the diluted earnings per share calculation for the three months ended June 30, 2020 because including the Series D preferred shares would also require that the preferred distributions be added back to net income, resulting in anti-dilution. (5) Beneficial interests in the Operating Trust.
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Segment Information |
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Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our primary business is the ownership and operation of office properties, and we currently have one reportable segment. One hundred percent of our revenues for the six months ended June 30, 2020 were from office properties. |
Related Person Transactions |
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Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions The following discussion includes a description of our related person transactions for the six months ended June 30, 2020 and 2019. Two North Riverside Plaza Joint Venture Limited Partnership: We have a lease with Two North Riverside Plaza Joint Venture Limited Partnership, an entity associated with Mr. Zell, our Chairman, to occupy office space on the twentieth and twenty-first floors of Two North Riverside Plaza in Chicago, Illinois (20th/21st Floor Office Lease), which had an initial term of approximately five years. The 20th/21st Floor Office Lease expires December 31, 2020. We made improvements to the office space utilizing the $0.7 million tenant improvement allowance pursuant to the lease. In connection with the 20th/21st Floor Office Lease, we also have a storage lease with Two North Riverside Plaza Joint Venture Limited Partnership for storage space in the basement of Two North Riverside Plaza. The storage lease expires December 31, 2020; however, each party has the right to terminate on 30 days’ prior written notice. During the three months ended June 30, 2020 and 2019, we recognized expense of $0.2 million and $0.3 million, respectively, and during the six months ended June 30, 2020 and 2019, we recognized expense of $0.5 million and $0.5 million, respectively, pursuant to the 20th/21st Floor Office Lease and the related storage space.
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Subsequent Events |
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Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events As of July 5, 2020, we repaid at par $25.1 million of mortgage debt at 206 East 9th Street. On July 8, 2020, our Board of Trustees declared a dividend of $0.40625 per series D preferred share, which will be paid on August 17, 2020 to shareholders of record on July 29, 2020.
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Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of EQC have been prepared without audit. Certain information and footnote disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are appropriate. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K, or our Annual Report, for the year ended December 31, 2019. Capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include the assessment of the collectability of rental revenue, purchase price allocations, useful lives of fixed assets and impairment of real estate and intangible assets. Share amounts are presented in whole numbers, except where noted.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of FASB Accounting Standards Codification, or ASC 820. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. We adopted ASU 2018-13 on January 1, 2020, and the adoption did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires more timely recognition of credit losses associated with financial assets. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. We adopted ASU 2016-13 on January 1, 2020, and the adoption did not have a material impact on our consolidated financial statements.
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Real Estate Properties (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Properties Sold and Income Statement Information for Properties Disposed of | During the six months ended June 30, 2020, we sold the following properties, which did not represent strategic shifts under ASC Topic 205 (dollars in thousands):
(1)Gross sale price is before credits, primarily for contractual lease costs, and transfer taxes. (2)The sale represents an individually significant disposition. The operating results of this property are included in continuing operations for all periods presented through the date of sale. Net income related to this property was $28,000 and $3.7 million for the three months ended June 30, 2020 and 2019, respectively, and $193.2 million, of which $194.4 million related to the gain on sale, and $7.3 million for the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2019, we sold the following properties, which did not represent a strategic shift under ASC Topic 205 (dollars in thousands):
(1)Gross sale price is before credits for capital costs, contractual lease costs and rent abatements. (2)Certain of our subsidiaries sold 100.0% of the equity interests in the fee simple owner of this property. The sale represents an individually significant disposition. The operating results of this property are included in continuing operations for all periods presented through the date of sale. Net income related to this property was $0.1 million and $197.2 million (of which $193.0 million related to the gain on sale) for the three and six months ended June 30, 2019, respectively. (3)The property includes an office building and additional developmental rights. (4)There was consideration of $2.0 million being held in escrow related to the sale of this property in 2019. In June 2020, these proceeds were released to the Company, and we recorded an additional $2.0 million gain on the sale for the three and six months ended June 30, 2020.
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Schedule of Rental Revenue | Rental revenue consists of the following (in thousands):
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Shareholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Declared Distributions | In 2020, our Board of Trustees declared distributions on our series D preferred shares to date as follows:
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Noncontrolling Interest (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Issued and Outstanding Common Shares | The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2020:
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Schedule of Issued and Outstanding Units | The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2020:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Provision for Income Taxes | Our provision for income taxes consists of the following (in thousands):
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Share-Based Compensation (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||
Summary of Assumptions and Fair Values for RSUs Granted in the Period | The assumptions and fair value for the RSUs and market-based LTIP Units granted during the six months ended June 30, 2020 are included in the following table on a per share and per unit basis.
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Fair Value of Assets and Liabilities (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value and Carrying Value of Financial Instruments | At June 30, 2020 and December 31, 2019, the fair value of these additional financial instruments was not materially different from their carrying values, except as follows (in thousands):
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Earnings Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands except per share amounts):
(1) The three months ended June 30, 2020 and 2019, include 150 and 220 weighted-average, unvested, earned RSUs, respectively, and the six months ended June 30, 2020 and 2019, include 164 and 203 weighted-average, unvested, earned RSUs, respectively. (2) Represents weighted-average number of common shares that would have been issued if the quarter-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from LTIP Units if the quarter-end was the measurement date for the periods shown. (4) The Series D preferred shares are excluded from the diluted earnings per share calculation for the three months ended June 30, 2020 because including the Series D preferred shares would also require that the preferred distributions be added back to net income, resulting in anti-dilution. (5) Beneficial interests in the Operating Trust.
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Business (Details) $ in Thousands, ft² in Millions |
Jun. 30, 2020
USD ($)
ft²
building
property
|
Dec. 31, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
---|---|---|---|
Noncontrolling Interest [Line Items] | |||
Cash and cash equivalents | $ | $ 3,437,775 | $ 2,795,642 | $ 3,180,548 |
Consolidated Properties | |||
Noncontrolling Interest [Line Items] | |||
Number of real estate properties | property | 4 | ||
Number of buildings | building | 8 | ||
Square footage (in sqft) | ft² | 1.5 | ||
Operating Trust | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, ownership percentage by parent | 99.80% |
Real Estate Properties - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Real Estate [Abstract] | |||
Real estate improvements | $ 4,300 | $ 8,500 | |
COVID-19 | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Deferred collection of rental income | $ 42 |
Real Estate Properties - Rental Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Real Estate [Abstract] | ||||
Lease payments | $ 9,983 | $ 20,429 | $ 21,753 | $ 48,334 |
Variable lease payments | 5,265 | 10,145 | 10,638 | 21,130 |
Rental revenue | $ 15,248 | $ 30,574 | $ 32,391 | $ 69,464 |
Indebtedness (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
property
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Debt Instrument [Line Items] | ||
Real estate properties, net | $ 258,664 | $ 459,421 |
Mortgage notes payable, net | $ 25,281 | $ 25,691 |
Mortgage notes | ||
Debt Instrument [Line Items] | ||
Number of real estate properties secured by mortgage | property | 1 | |
Real estate properties, net | $ 42,800 | |
Mortgage notes payable, net | $ 25,300 |
Shareholders' Equity - Schedule of Declared Distributions (Details) - $ / shares |
Aug. 17, 2020 |
Jul. 08, 2020 |
May 15, 2020 |
Apr. 09, 2020 |
Feb. 18, 2020 |
Jan. 10, 2020 |
---|---|---|---|---|---|---|
Class of Stock [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Dividend paid (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Subsequent event | ||||||
Class of Stock [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | |||||
Subsequent event | Scenario, Forecast | ||||||
Class of Stock [Line Items] | ||||||
Dividend paid (in dollars per share) | $ 0.40625 |
Noncontrolling Interest - Narrative (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
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Noncontrolling Interest [Abstract] | ||
Common stock, conversion term | 6 months | |
Common stock, conversion basis | 1 | |
Operating Trust | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, weighted average ownership percentage by parent | 99.81% | 99.84% |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Current: | ||||
State and local | $ (59) | $ (340) | $ (99) | $ (640) |
Deferred: | ||||
State and local | 0 | 0 | 0 | (1,000) |
Income tax expense | $ (59) | $ (340) | $ (99) | $ (1,640) |
Share-Based Compensation - Summary of Assumptions and Fair Values for Restricted Stock Units Granted in the Period (Details) - Restricted shares and time-based LTIP Units - $ / shares |
6 Months Ended | |
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Jan. 27, 2020 |
Jun. 30, 2020 |
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Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Fair value of RSUs granted (in dollars per share) | $ 32.81 | $ 40.17 |
Expected term | 4 years | |
Expected volatility | 12.39% | |
Risk-free rate | 1.41% |
Fair Value of Assets and Liabilities - Narrative (Details) |
Jun. 30, 2020
USD ($)
|
---|---|
Fair Value Disclosures [Abstract] | |
Fair value, net asset (liability) | $ 0 |
Fair Value of Assets and Liabilities - Schedule of Fair Value and Carrying Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Principal Balance | ||
Fair value of financial instruments | ||
Mortgage note payable | $ 25,139 | $ 25,433 |
Fair Value | ||
Fair value of financial instruments | ||
Mortgage note payable | $ 25,139 | $ 26,071 |
Segment Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Percentage of revenue from office properties | 100.00% |
Related Person Transactions (Details) - Two North Riverside Plaza Joint Venture Limited Partnership - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Related Party Transaction [Line Items] | ||||
Lease term | 5 years | 5 years | ||
Tenant improvements | $ 0.7 | $ 0.7 | ||
Lease termination period term | 30 days | |||
Operating lease, expense | $ 0.2 | $ 0.3 | $ 0.5 | $ 0.5 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions |
Aug. 17, 2020 |
Jul. 08, 2020 |
Jul. 05, 2020 |
May 15, 2020 |
Apr. 09, 2020 |
Feb. 18, 2020 |
Jan. 10, 2020 |
---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | |||||||
Dividend declared (in dollars per share) | $ 0.40625 | $ 0.40625 | |||||
Dividend paid (in dollars per share) | $ 0.40625 | $ 0.40625 | |||||
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Dividend declared (in dollars per share) | $ 0.40625 | ||||||
Subsequent event | 206 East 9th Street | Mortgage notes | |||||||
Subsequent Event [Line Items] | |||||||
Debt repaid, at par | $ 25.1 | ||||||
Scenario, Forecast | Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Dividend paid (in dollars per share) | $ 0.40625 |
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