10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the quarterly period ended March 31, 2021

OR

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-9317

EQUITY COMMONWEALTH

(Exact Name of Registrant as Specified in Its Charter)

Maryland	04-6558834
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
Two North Riverside Plaza, Suite 2100, Chicago, IL	60606
(Address of Principal Executive Offices)	(Zip Code)
(312) 646-2800
(Registrant’s Telephone Number, Including Area Code)

 Securities registered pursuant to Section 12(b) of the Exchange Act:

Title Of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Shares of Beneficial Interest	EQC	The New York Stock Exchange
6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest	EQCpD	The New York Stock Exchange

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ý  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ý

Number of registrant’s common shares of beneficial interest, $0.01 par value per share, outstanding as of April 30, 2021:  121,921,850.

EQUITY COMMONWEALTH

FORM 10-Q

March 31, 2021

INDEX

		Page
PART I	Financial Information
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive (Loss) Income	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II	Other Information
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	Signatures	28

EXPLANATORY NOTE

References in this Quarterly Report on Form 10-Q to the “Company,” “EQC,” “we,” “us” or “our,” refer to Equity Commonwealth and its consolidated subsidiaries as of March 31, 2021, unless the context indicates otherwise.

i

PART I.      Financial Information

Item 1.         Financial Statements.

EQUITY COMMONWEALTH

 CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

(unaudited)

	March 31, 2021		December 31, 2020
			(audited)
ASSETS
Real estate properties:
Land	$	44,060	$	44,060
Buildings and improvements	361,107		357,650
	405,167		401,710
Accumulated depreciation	(147,034)		(143,319)
	258,133		258,391
Cash and cash equivalents	2,971,052		2,987,225
Rents receivable	14,629		14,702
Other assets, net	16,862		17,353
Total assets	$	3,260,676	$	3,277,671
LIABILITIES AND EQUITY
Accounts payable, accrued expenses and other	$	21,007	$	20,588
Rent collected in advance	2,979		2,928
Distributions payable	5,072		10,991
Total liabilities	29,058		34,507
Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized;
Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and    outstanding, aggregate liquidation preference of $122,880	119,263		119,263
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized;    121,916,875 and 121,522,555 shares issued and outstanding, respectively	1,219		1,215
Additional paid in capital	4,295,226		4,294,632
Cumulative net income	3,804,930		3,814,948
Cumulative common distributions	(4,283,753)		(4,283,668)
Cumulative preferred distributions	(711,709)		(709,712)
Total shareholders’ equity	3,225,176		3,236,678
Noncontrolling interest	6,442		6,486
Total equity	3,231,618		3,243,164
Total liabilities and equity	$	3,260,676	$	3,277,671

See accompanying notes.

1

EQUITY COMMONWEALTH

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

(unaudited)

	Three Months Ended March 31,
	2021		2020
Revenues:
Rental revenue	$	14,169	$	17,143
Other revenue	682		1,677
Total revenues	14,851		18,820
Expenses:
Operating expenses	6,621		8,761
Depreciation and amortization	4,351		5,114
General and administrative	15,729		10,604
Total expenses	26,701		24,479
Interest and other income, net	1,843		11,895
Interest expense (including net amortization of debt premiums and deferred financing fees of $— and $(56), respectively)	—		(309)
Gain on sale of properties, net	—		419,620
(Loss) income before income taxes	(10,007)		425,547
Income tax expense	(31)		(40)
Net (loss) income	(10,038)		425,507
Net loss (income) attributable to noncontrolling interest	20		(748)
Net (loss) income attributable to Equity Commonwealth	(10,018)		424,759
Preferred distributions	(1,997)		(1,997)
Net (loss) income attributable to Equity Commonwealth common shareholders	$	(12,015)	$	422,762
Weighted average common shares outstanding — basic	122,002		122,148
Weighted average common shares outstanding — diluted	122,002		126,605
Earnings per common share attributable to Equity Commonwealth common shareholders:
Basic	$	(0.10)	$	3.46
Diluted	$	(0.10)	$	3.35

See accompanying notes.

2

EQUITY COMMONWEALTH

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(amounts in thousands)

(unaudited)

	Three Months Ended March 31,
	2021		2020
Net (loss) income	$	(10,038)	$	425,507
Total comprehensive (loss) income	$	(10,038)	$	425,507
Comprehensive loss (income) attributable to noncontrolling interest	20		(748)
Total comprehensive (loss) income attributable to Equity Commonwealth	$	(10,018)	$	424,759

See accompanying notes.

3

EQUITY COMMONWEALTH

 CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(amounts in thousands, except share data)

(unaudited)

	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 January 1, 2021	4,915,196	$	119,263	121,522,555	$	1,215	$	4,294,632	$	3,814,948	$	(4,283,668)	$	(709,712)	$	6,486	$	3,243,164
Net loss	—	—		—	—		—		(10,018)		—		—		(20)		(10,038)
Surrender of shares for tax withholding	—	—		(210,334)	(2)		(6,091)		—		—		—		—		(6,093)
Share-based compensation	—	—		604,654	6		6,405		—		—		—		276		6,687
Distributions	—	—		—	—		—		—		(85)		(1,997)		(20)		(2,102)
Adjustment for noncontrolling interest	—	—		—	—		280		—		—		—		(280)		—
Balance at March 31, 2021	4,915,196	$	119,263	121,916,875	$	1,219	$	4,295,226	$	3,804,930	$	(4,283,753)	$	(711,709)	$	6,442	$	3,231,618

	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 January 1, 2020	4,915,196	$	119,263	121,924,199	$	1,219	$	4,313,831	$	3,363,654	$	(3,851,666)	$	(701,724)	$	1,295	$	3,245,872
Net income	—	—		—	—		—		424,759		—		—		748		425,507
Repurchase of shares	—	—		(711,000)	(7)		(20,862)		—		—		—		—		(20,869)
Surrender of shares for tax withholding	—	—		(183,466)	(2)		(6,010)		—		—		—		—		(6,012)
Share-based compensation	—	—		472,787	5		2,953		—		—		—		345		3,303
Distributions	—	—		—	—		—		—		(1,190)		(1,997)		—		(3,187)
Adjustment for noncontrolling interest	—	—		—	—		(4,646)		—		—		—		4,646		—
Balance at March 31, 2020	4,915,196	$	119,263	121,502,520	$	1,215	$	4,285,266	$	3,788,413	$	(3,852,856)	$	(703,721)	$	7,034	$	3,644,614

See accompanying notes.

4

EQUITY COMMONWEALTH

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)

	Three Months Ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(10,038)	$	425,507
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation	3,769		4,382
Net amortization of debt premiums and deferred financing fees	—		(56)
Straight-line rental income	(307)		198
Other amortization	582		732
Amortization of right-of-use asset	—		189
Share-based compensation	6,687		3,303
Net gain on sale of properties	—		(419,620)
Change in assets and liabilities:
Rents receivable and other assets	269		(733)
Accounts payable, accrued expenses and other	535		(1,128)
Rent collected in advance	51		(996)
Net cash provided by operating activities	1,548		11,778
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate improvements	(3,607)		(1,540)
Proceeds from sale of properties, net	—		572,599
Net cash (used in) provided by investing activities	(3,607)		571,059
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase and retirement of common shares	(6,093)		(26,881)
Payments on borrowings	—		(148)
Distributions to common shareholders	(6,024)		(1,936)
Distributions to preferred shareholders	(1,997)		(1,997)
Distributions to holders of noncontrolling interest	—		(997)
Net cash used in financing activities	(14,114)		(31,959)
(Decrease) increase in cash, cash equivalents, and restricted cash	(16,173)		550,878
Cash, cash equivalents, and restricted cash at beginning of period	2,987,225		2,800,645
Cash, cash equivalents, and restricted cash at end of period	$	2,971,052	$	3,351,523

See accompanying notes.

5

EQUITY COMMONWEALTH 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(amounts in thousands)

(unaudited)

	Three Months Ended March 31,
	2021		2020
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	—	$	366
Taxes refunded, net	(12)		(2,045)
NON-CASH INVESTING ACTIVITIES:
Accrued capital expenditures	$	840	$	1,071
NON-CASH FINANCING ACTIVITIES:
Distributions payable	$	5,072	$	5,791

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands):

	March 31,
	2021		2020
Cash and cash equivalents	$	2,971,052	$	3,348,349
Restricted cash	—		3,174
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	2,971,052	$	3,351,523

See accompanying notes.

6

EQUITY COMMONWEALTH

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  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 March 31, 2021, 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 March 31, 2021, our portfolio consisted of four properties (eight buildings), with a combined 1.5 million square feet. As of March 31, 2021, we had $3.0 billion of cash and cash equivalents.

Note 2.  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, 2020.  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.

Note 3.  Real Estate Properties

During the three months ended March 31, 2021 and 2020, we made improvements, excluding tenant-funded improvements, to our properties totaling $3.5 million and $1.2 million, respectively.

7

EQUITY COMMONWEALTH

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Property Dispositions:

We did not sell any properties during the three months ended March 31, 2021. During the three months ended March 31, 2020, we sold the following properties, which did not represent strategic shifts under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 205 (dollars in thousands):

Property	Date Sold	Number of Properties	Number of Buildings	Square Footage	Gross Sale Price(1)		Gain on Sale
109 Brookline Avenue	February 2020	1	1	285,556	$	270,000	$	225,190
333 108th Avenue NE(2)	March 2020	1	1	435,406	401,500		194,424
		2	2	720,962	$	671,500	$	419,614

(1)Gross sale price is before transfer taxes and credits, such as capital costs, contractual lease costs and rent abatements.

(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 (loss) income related to this property was $(9,000) and $193.1 million, of which $194.4 million related to the gain on sale, for the three months ended March 31, 2021 and 2020, respectively.

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 March 31, 2021, we deferred collection of approximately $20,000 of rental income on revenue that was recognized in that period.

Rental revenue consists of the following (in thousands):

	Three Months Ended March 31,
	2021		2020
Lease payments	$	9,257	$	11,770
Variable lease payments	4,912		5,373
Rental revenue	$	14,169	$	17,143

Note 4.  Shareholders’ Equity

Common Share Issuances:

See Note 7 for information regarding equity issuances related to share-based compensation.

Common Share Repurchases:

On March 10, 2020, 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. On March 10, 2021, this share repurchase authorization, none of which was utilized, expired. On March 1, 2021, our Board of Trustees authorized the repurchase of up to an additional $150.0 million of our outstanding common shares through June 30, 2022. We did not repurchase any common shares under our common share repurchase program during the three months ended March 31, 2021.

During the three months ended March 31, 2021 and 2020, certain of our employees and former employees surrendered 210,334 and 183,466 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.

8

EQUITY COMMONWEALTH

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Common Share and Unit Distribution:

In February 2021, the number of earned awards for recipients of the Company’s restricted stock units granted in January 2018 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 $6.0 million for distributions to common shareholders declared by our Board of Trustees during such awards' performance measurement period.

Preferred Share Distributions:

In 2021, our Board of Trustees declared distributions on our series D preferred shares to date as follows:

Declaration Date	Record Date	Payment Date	Series D Dividend Per Share
January 11, 2021	January 28, 2021	February 16, 2021	$	0.40625
April 9, 2021	April 29, 2021	May 17, 2021	$	0.40625

Note 5.  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 March 31, 2021, the portion of the Operating Trust not beneficially owned by the Company is in the form of OP Units and LTIP Units (see Note 7 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 three months ended March 31, 2021:

	Common Shares	OP Units and LTIP Units	Total
Outstanding at January 1, 2021	121,522,555	243,516	121,766,071
Repurchase of shares	(210,334)	—	(210,334)
Share-based compensation grants and vesting, net of forfeitures	604,654	—	604,654
Outstanding at March 31, 2021	121,916,875	243,516	122,160,391
Noncontrolling ownership interest in the Operating Trust			0.20	%

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 99.80% and 99.87% for the three months ended March 31, 2021 and 2020, respectively.

Note 6.  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.

9

EQUITY COMMONWEALTH

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Our provision for income taxes consists of the following (in thousands):

	Three Months Ended March 31,
	2021		2020
Current:
State and local	$	(31)	$	(40)
Income tax expense	$	(31)	$	(40)

Note 7. 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 four-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 to 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 three-year performance period. Following the end of the three-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.

2021 Equity Award Activity

During the three months ended March 31, 2021, 482,188 RSUs vested, and, as a result, we issued 482,188 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 4).

On January 25, 2021, the Committee approved grants in the aggregate amount of 122,466 restricted shares and 248,646 RSUs at target (619,750 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 2020. The restricted shares were valued at $28.25 per share, the closing price of our common shares on the NYSE on the grant date. The assumptions and fair value for the RSUs and

10

EQUITY COMMONWEALTH

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

market-based LTIP Units granted during the three months ended March 31, 2021 are included in the following table on a per share basis.

	2021
Fair value of market-based awards granted	$	37.87
Expected term (years)	4
Expected volatility	16.99		%
Risk-free rate	0.17		%

2020 Equity Award Activity

During the three months ended March 31, 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.

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 NYSE on the grant date. The RSUs and market-based LTIP Units were valued at $40.17 per share and per unit, their fair value on the grant date.

Outstanding Equity Awards

As of March 31, 2021, the estimated future compensation expense for all unvested restricted shares and time-based LTIP Units was $7.2 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 2.8 years.

As of March 31, 2021, the estimated future compensation expense for all unvested RSUs and market-based LTIP Units was $16.3 million. The weighted average period over which the future compensation expense will be recorded for the RSUs and market-based LTIP Units is approximately 2.6 years.

During the three months ended March 31, 2021 and 2020, we recorded $6.7 million and $3.3 million, respectively, of compensation expense, net of forfeitures, in general and administrative expense for grants to our trustees, eligible consultants and employees related to our equity compensation plans. Compensation expense recorded during the three months ended March 31, 2021 and 2020 includes $3.4 million and $25,000, respectively, of accelerated vesting due to staffing reductions. Forfeitures are recognized as they occur. At March 31, 2021, 1,548,936 shares/units remain available for issuance under the Equity Commonwealth 2015 Omnibus Incentive Plan, as amended.

Note 8.  Fair Value of Assets and Liabilities

As of March 31, 2021, we do not have any assets or liabilities measured at fair value.

Financial Instruments

Our financial instruments include our cash and cash equivalents.  At March 31, 2021 and December 31, 2020, the fair value of these financial instruments was not different from their carrying values.

Other financial instruments that potentially subject us to concentrations of credit risk consist principally of rents receivable. As of March 31, 2021, no single tenant of ours is responsible for more than 10% of our consolidated revenues.

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EQUITY COMMONWEALTH

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 9.  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):

	Three Months Ended March 31,
	2021		2020
Numerator for earnings per common share - basic:
Net (loss) income	$	(10,038)	$	425,507
Net loss (income) attributable to noncontrolling interest	20		(748)
Preferred distributions	(1,997)		(1,997)
Numerator for net (loss) income per share - basic	$	(12,015)	$	422,762
Numerator for earnings per common share - diluted:
Net (loss) income	$	(10,038)	$	425,507
Net income attributable to noncontrolling interests	20		(748)
Preferred distributions	(1,997)		—
Numerator for net (loss) income per share - diluted	$	(12,015)	$	424,759
Denominator for earnings per common share - basic and diluted:
Weighted average number of common shares outstanding - basic(1)	122,002		122,148
RSUs(2)	—		1,524
LTIP Units(3)	—		76
Series D preferred shares; 6.50% cumulative convertible(4)	—		2,857
Weighted average number of common shares outstanding - diluted	122,002		126,605
Net (loss) income per common share attributable to Equity Commonwealth common shareholders:
Basic	$	(0.10)	$	3.46
Diluted	$	(0.10)	$	3.35
Anti-dilutive securities:
Effect of Series D preferred shares; 6.50% cumulative convertible(4)	3,237		—
Effect of RSUs(2)	848		—
Effect of LTIP Units	149		89
Effect of OP Units(5)	170		73

(1) The three months ended March 31, 2021 and 2020, include 236 and 177 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 March 31, 2021, 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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EQUITY COMMONWEALTH

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 10.  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 three months ended March 31, 2021 were from office properties. 

Note 11.  Related Person Transactions

The following discussion includes a description of our related person transactions for the three months ended March 31, 2021 and 2020.

Two North Riverside Plaza Joint Venture Limited Partnership: We entered into a lease on July 20, 2015 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). The initial term of the lease was approximately five years, expiring on 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 had a storage lease with Two North Riverside Plaza Joint Venture Limited Partnership for storage space in the basement of Two North Riverside Plaza. We terminated the storage lease, effective August 31, 2020.

In December 2020, we entered into an amendment to the 20th/21st Floor Office Lease extending the lease term for one year, through December 31, 2021. There are no renewal options. The lease payment for the extended term is approximately $0.3 million.

During the three months ended March 31, 2021 and 2020, we recognized expense of $0.1 million and $0.2 million, respectively, pursuant to the 20th/21st Floor Office Lease and the related storage space. As of March 31, 2021 and December 31, 2020, we did not have any amounts due to Two North Riverside Plaza Joint Venture Limited Partnership pursuant to the 20th/21st Floor Office Lease.

Note 12.  Subsequent Events

On April 9, 2021, our Board of Trustees declared a dividend of $0.40625 per series D preferred share, which will be paid on May 17, 2021 to shareholders of record on April 29, 2021.

On May 4, 2021, the Company, Monmouth Real Estate Investment Corporation (NYSE: MNR), or Monmouth, and a subsidiary of the Company entered into a definitive agreement and plan of merger, or the Merger Agreement, pursuant to which Monmouth will merge with and into a subsidiary of the Company. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, upon closing of the merger, each share of Monmouth common stock issued and outstanding will be converted into the right to receive 0.67 of a newly issued share of our common shares of beneficial interest, with cash paid in lieu of any fractional shares. The Merger Agreement provides for Monmouth to declare and pay one additional regular quarterly common stock dividend of $0.18 per share without Equity Commonwealth paying a corresponding common dividend to its shareholders. In addition, upon closing, holders of Monmouth Series C preferred stock will receive $25.00 per share plus accumulated and unpaid dividends pursuant to the governing documents of the Monmouth Series C preferred stock. We currently expect the transaction to close in the second half of 2021, subject to the approval of our common shareholders and the Monmouth common shareholders and other customary closing conditions.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q, and in our Annual Report.

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the federal securities laws including, but not limited to, statements pertaining to our capital resources, portfolio performance, results of operations or anticipated market conditions, including our statements regarding the overall impact of COVID-19 on the foregoing to the extent we make any such statements. Any forward-looking statements contained in this Quarterly Report on Form 10-Q are intended to be made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

The forward-looking statements contained in this Quarterly Report on Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause our future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in our Annual Report and in Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

OVERVIEW

We are an internally managed and self-advised REIT primarily engaged in the ownership and operation of office properties in the United States. We were formed in 1986 under Maryland law. The Company operates as what is commonly referred to as an UPREIT, conducting substantially all of its activities through the Operating Trust. As of March 31, 2021, the Company beneficially owned 99.8% of the outstanding OP Units.

At March 31, 2021, our portfolio consisted of four properties (eight buildings), with a combined 1.5 million square feet. As of March 31, 2021, we had $3.0 billion of cash and cash equivalents.

We use leasing and occupancy metrics to evaluate the performance of our properties. We believe these metrics provide useful information to investors because they reflect the leasing activity and vacant space at the properties and may facilitate comparisons of our leasing and occupancy metrics with other REITs and real estate companies.

As of March 31, 2021, our overall portfolio was 85.6% leased. During the three months ended March 31, 2021, we entered into leases for 27,000 square feet, including lease renewals for 16,000 square feet and new leases for 11,000 square feet. Renewal leases entered into during the three months ended March 31, 2021 had weighted average cash and GAAP rental rates that were approximately 22.2% lower and 14.1% lower, respectively, compared to prior rental rates for the same space, and new leases entered into during the three months ended March 31, 2021 had weighted average cash and GAAP rental rates that were approximately 0.7% higher and 2.6% higher, respectively, compared to prior rental rates for the same space.  The change in GAAP rents is different than the change in cash rents due to differences in the amount of rent abatements, the magnitude and timing of contractual rent increases over the lease term, and the length of term for the newly executed leases compared to the prior leases. Percent change in GAAP and cash rents is a comparison of current rent, including estimated tenant expense reimbursements, if any, to the rent, including actual/projected tenant expense reimbursements, if any, last received for the same space on a GAAP and cash basis, respectively. Cash rent during the reporting period is calculated before deducting any initial period free rent.

We have engaged CBRE, Inc., or CBRE, to provide property management services. We pay CBRE a property-by-property management fee and may engage CBRE from time-to-time to perform project management services, such as

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coordinating and overseeing the completion of tenant improvements and other capital projects at the properties. We reimburse CBRE for certain expenses incurred in the performance of its duties, including certain personnel and equipment costs. For the three months ended March 31, 2021 and 2020, we incurred expenses of $0.8 million and $1.0 million, respectively, related to our property management agreement with CBRE, for property management fees, typically calculated as a percentage of the properties’ revenues, and salary and benefits reimbursements for property personnel, such as property managers, engineers and maintenance staff.  As of March 31, 2021 and December 31, 2020, we had amounts payable pursuant to these services of $0.3 million and $0.3 million, respectively.

In connection with repositioning our portfolio, we may sell additional properties, depending on market conditions. With the progress we have made executing dispositions, and the strength and liquidity of our balance sheet, we have shifted our primary focus to capital allocation. We may use our capital for acquisitions and/or investments in new properties or businesses, repurchase shares or make distributions that further our long-term strategic goals.

With respect to acquisitions and/or investments, we are evaluating opportunities to invest capital in high-quality assets or businesses in favorable markets that offer a compelling risk-reward profile. The set of opportunities that we pursue may include acquisitions and/or investments in a range of property types.

We may be unable to identify suitable investment opportunities. If we do not redeploy capital, we will strive to achieve a sale, liquidation or otherwise exit our business in one or more transactions in a manner that optimizes shareholder value. We are unable to predict if or when we will make a determination to sell, liquidate or otherwise exit our business.

Our business has been and may continue to be impacted by the evolving COVID-19 outbreak. Since first surfacing, the outbreak has spread throughout the world and has significantly impacted the United States. The pandemic has led to severe business disruptions, including a dramatic decline in economic activity generally. The duration of the business disruption continues to be unknown at this time. The vast majority of our employees and our tenants' employees are currently working at least in part remotely and may be subject to government-imposed restrictions. Due to the uncertainty created by the pandemic, the Company has experienced a significant reduction in leasing interest and activity when compared to pre-pandemic levels. For the three months ended March 31, 2021, in our comparable property portfolio, we collected 97% of contractual rents. For April, to date, we have collected 96% of contractual rents. We currently are not able to estimate the full impact of the COVID-19 outbreak on our business.

Property Operations

Leased occupancy data for 2021 and 2020 are as follows (square feet in thousands):

	All Properties				Comparable Properties(1)
	As of March 31,				As of March 31,
	2021		2020		2021		2020
Total properties	4		4		4		4
Total square feet	1,507		1,507		1,507		1,507
Percent leased(2)	85.6	%	90.8	%	85.6	%	90.8	%

(1)Based on properties owned continuously from January 1, 2020 through March 31, 2021, and excludes properties sold or classified as held for sale as of the end of the period.

(2)Percent leased is the percent of space subject to signed leases. Percent leased is disclosed to quantify the ratio of leased square feet to rentable square feet and we believe provides useful information as to the proportion of rentable square feet subject to a lease.

The weighted average lease term based on square feet for leases entered into during the three months ended March 31, 2021 was 4.9 years.  Commitments made for leasing expenditures and concessions, such as tenant improvements and leasing commissions, for the leases entered into during the three months ended March 31, 2021 totaled $0.9 million, or $32.00 per square foot on average (approximately $6.54 per square foot per year of the lease term).

As of March 31, 2021, approximately 6.5% of our leased square feet and 6.9% of our annualized rental revenue, determined as set forth below, are included in leases scheduled to expire through December 31, 2021.  Renewal and new leases and rental rates at which available space may be relet in the future will depend on prevailing market conditions at the times these leases are negotiated.  We believe that the in-place cash rents for leases expiring for the remainder of 2021, that have not

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been backfilled, are below market. Lease expirations by year, as of March 31, 2021, are as follows (square feet and dollars in thousands):

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
2021	12	84	6.5	%	6.5	%	$	3,973	6.9	%	6.9	%
2022	13	124	9.6	%	16.1	%	6,388		11.0	%	17.9	%
2023	18	195	15.1	%	31.2	%	8,977		15.5	%	33.4	%
2024	16	213	16.5	%	47.7	%	9,429		16.3	%	49.7	%
2025	11	145	11.2	%	58.9	%	5,640		9.8	%	59.5	%
2026	8	80	6.2	%	65.1	%	3,693		6.4	%	65.9	%
2027	11	122	9.5	%	74.6	%	5,048		8.7	%	74.6	%
2028	4	63	4.9	%	79.5	%	3,074		5.3	%	79.9	%
2029	7	144	11.2	%	90.7	%	6,423		11.1	%	91.0	%
2030	3	58	4.5	%	95.2	%	2,496		4.3	%	95.3	%
Thereafter	4	62	4.8	%	100.0	%	2,698		4.7	%	100.0	%
	107	1,290	100.0	%			$	57,839	100.0	%
Weighted average remaining lease term (in years):		4.6					4.5

(1)Tenants with leases expiring in multiple years are counted in each year they expire.

(2)Leased Square Feet as of March 31, 2021 includes space subject to leases that have commenced for revenue recognition purposes in accordance with GAAP, space being fitted out for occupancy pursuant to existing leases, and space which is leased but is not occupied or is being offered for sublease by tenants. The Leased Square Feet Expiring corresponds to the latest-expiring signed lease for a given suite. Thus, backfilled suites expire in the year stipulated by the new lease. 

(3)Annualized rental revenue is annualized contractual rents from our tenants pursuant to leases which have commenced as of March 31, 2021, plus estimated recurring expense reimbursements; excludes lease value amortization, straight-line rent adjustments, abated (free) rent periods and parking revenue. We calculate annualized rental revenue by aggregating the recurring billings outlined above for the most recent month during the quarter reported, adding abated rent, and multiplying the sum by 12 to provide an estimation of near-term potentially-recurring revenues.  Annualized rental revenue is a forward-looking non-GAAP measure.  Annualized rental revenue cannot be reconciled to a comparable GAAP measure without unreasonable efforts, primarily due to the fact that it is calculated from the billings of tenants in the most recent month at the most recent rental rates during the quarter reported, whereas historical GAAP measures include billings from a potentially different group of tenants over multiple months at potentially different rental rates.

The principal source of funds for our operations is rents from tenants at our properties.  Rents are generally received from our tenants monthly in advance.  As of March 31, 2021, tenants representing 2.5% or more of our total annualized rental revenue were as follows (square feet in thousands):

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	6.2	%	5.8	%	2.8
2.	KPMG, LLP	71	5.5	%	5.1	%	8.2
3.	Crowdstrike, Inc.	36	2.8	%	3.7	%	3.6
4.	CBRE, Inc.	40	3.1	%	3.4	%	7.0
5.	Salesforce.com, Inc.(3)	65	5.0	%	3.4	%	4.7
6.	Kazoo, Inc.	26	2.0	%	2.7	%	0.8
7.	Alden Torch Financial, LLC	34	2.6	%	2.6	%	5.9
8.	The Boon Group, Inc.	36	2.8	%	2.5	%	4.9
	Total	388	30.0	%	29.2	%	4.9

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(1)Total Leased Square Feet as of March 31, 2021 includes space subject to leases that have commenced, space being fitted out for occupancy pursuant to existing leases, and space which is leased but is not occupied or is being offered for sublease by tenants. 

(2)Annualized rental revenue is annualized contractual rents from our tenants pursuant to leases which have commenced as of March 31, 2021, plus estimated recurring expense reimbursements; excludes lease value amortization, straight-line rent adjustments, abated (free) rent periods and parking revenue. We calculate annualized rental revenue by aggregating the recurring billings outlined above for the most recent month during the quarter reported, adding abated rent, and multiplying the sum by 12 to provide an estimation of near-term potentially-recurring revenues.  Annualized rental revenue is a forward-looking non-GAAP measure.  Annualized rental revenue cannot be reconciled to a comparable GAAP measure without unreasonable efforts, primarily due to the fact that it is calculated from the billings of tenants in the most recent month at the most recent rental rates during the quarter reported, whereas historical GAAP measures include billings from a potentially different group of tenants over multiple months at potentially different rental rates.

(3)Our lease with Salesforce.com, Inc. has partially commenced. Approximately 44,000 square feet commenced as of December 31, 2020, and the remaining 21,000 square feet are expected to commence in the second half of 2021.

Regulation FD Disclosures

We use any of the following to comply with our disclosure obligations under Regulation FD: press releases, SEC filings, public conference calls, or our website. We routinely post important information on our website at www.eqcre.com, including information that may be deemed to be material. We encourage investors and others interested in the Company to monitor these distribution channels for material disclosures. Our website address is included in this Quarterly Report as a textual reference only and the information on the website is not incorporated by reference into this Quarterly Report.

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RESULTS OF OPERATIONS 

Three Months Ended March 31, 2021, Compared to Three Months Ended March 31, 2020

	Comparable Properties Results(1)								Other Properties Results(2)				Consolidated Results
	Three Months Ended March 31,
	2021		2020		$ Change		% Change		2021		2020		2021		2020		$ Change		% Change
	(dollars in thousands)
Rental revenue	$	14,026	$	14,086	$	(60)	(0.4)	%	$	143	$	3,057	$	14,169	$	17,143	$	(2,974)	(17.3)	%
Other revenue	682		1,533		(851)		(55.5)	%	—		144		682		1,677		(995)		(59.3)	%
Operating expenses	(6,602)		(6,868)		266		(3.9)	%	(19)		(1,893)		(6,621)		(8,761)		2,140		(24.4)	%
Net operating income(3)	$	8,106	$	8,751	$	(645)	(7.4)	%	$	124	$	1,308	8,230		10,059		(1,829)		(18.2)	%
Other expenses:
Depreciation and amortization													4,351		5,114		(763)		(14.9)	%
General and administrative													15,729		10,604		5,125		48.3	%
Total other expenses													20,080		15,718		4,362		27.8	%
Interest and other income, net													1,843		11,895		(10,052)		(84.5)	%
Interest expense													—		(309)		309		(100.0)	%
Gain on sale of properties, net													—		419,620		(419,620)		(100.0)	%
(Loss) income before income taxes													(10,007)		425,547		(435,554)		(102.4)	%
Income tax expense													(31)		(40)		9		(22.5)	%
Net (loss) income													(10,038)		425,507		(435,545)		(102.4)	%
Net loss (income) attributable to noncontrolling interests													20		(748)		768		(102.7)	%
Net (loss) income attributable to Equity Commonwealth													(10,018)		424,759		(434,777)		(102.4)	%
Preferred distributions													(1,997)		(1,997)		—		—	%
Net (loss) income attributable to Equity Commonwealth common shareholders													$	(12,015)	$	422,762	$	(434,777)	(102.8)	%

(1)Comparable properties consist of four properties we owned continuously from January 1, 2020 to March 31, 2021.

(2)Other properties consist of properties sold.

(3)We define net operating income, or NOI, as income from our real estate including lease termination fees received from tenants less our property operating expenses.  NOI excludes amortization of capitalized tenant improvement costs and leasing commissions and corporate level expenses.  For a discussion of why we consider NOI to be an appropriate supplemental measure to net income as well as a reconciliation of NOI to net income, the most directly comparable financial measure under GAAP reported on our consolidated financial statements, please see the section entitled “- Liquidity and Capital Resources - Property Net Operating Income (NOI).”

Rental revenue. Rental revenue decreased $3.0 million, or 17.3%, in the 2021 period, compared to the 2020 period, primarily due to the loss of revenue from properties sold in 2020. Rental revenue at the comparable properties decreased $0.1 million, or 0.4%, in the 2021 period, compared to the 2020 period, primarily due to a $0.3 million increase in uncollectible receivables, partially offset by a $0.1 million increase in real estate tax recoveries and a $0.1 million increase in escalations.

Rental revenue includes increases (decreases) for straight-line rent adjustments totaling $0.3 million in the 2021 period and $(0.2) million in the 2020 period.

Other revenue. Other revenue, which primarily includes parking revenue, decreased $1.0 million, or 59.3%, in the 2021 period, compared to the 2020 period, primarily due to the decrease at the comparable properties. Other revenue decreased $0.9 million, or 55.5%, at the comparable properties in the 2021 period, compared to the 2020 period, primarily due to decreased parking revenue during the 2021 period as a result of the COVID-19 outbreak.

Operating expenses. Operating expenses decreased $2.1 million, or 24.4%, in the 2021 period, compared to the 2020 period, primarily due to the properties sold in 2020. Operating expenses decreased $0.3 million, or 3.9%, at the comparable properties in the 2021 period, compared to the 2020 period, primarily due to a $0.1 million decrease in utilities expense and a $0.1 million decrease in parking expense.

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Depreciation and amortization. Depreciation and amortization decreased $0.8 million, or 14.9%, in the 2021 period, compared to the 2020 period, primarily due to the properties sold in 2020.

General and administrative. General and administrative expenses increased $5.1 million, or 48.3%, in the 2021 period, compared to the 2020 period, primarily due to a $7.0 million increase in compensation expenses related to severance for our former Executive Vice President, Chief Financial Officer and Treasurer, partially offset by a $1.7 million decrease in state franchise taxes largely related to the 2020 property sales.

Interest and other income, net. Interest and other income, net decreased $10.1 million, or 84.5%, in the 2021 period, compared to the 2020 period, primarily due to $10.1 million less interest received from lower average interest rates.

Interest expense. Interest expense decreased $0.3 million, or 100.0%, in the 2021 period, compared to the 2020 period, due to the repayment at par in July 2020 of mortgage debt at 206 East 9th Street.

Gain on sale of properties, net. We did not have any Gain on sale of properties, net in the 2021 period. Gain on sale of properties, net in the 2020 period primarily related to the following (dollars in thousands):

Asset	Gain on Sale, Net
109 Brookline Avenue	$	225,190
333 108th Avenue NE	194,424
	$	419,614

Income tax expense. Income tax expense decreased $9,000, or 22.5%, in the 2021 period, compared to the 2020 period, primarily due to a decrease in state and local taxes as a result of the sale of properties in 2020.

Net loss (income) attributable to noncontrolling interest. In 2017 through 2020, we granted LTIP Units to certain of our trustees and employees. Net loss (income) attributable to noncontrolling interest of $20,000 in the 2021 period and $(0.7) million in the 2020 period relates to the allocation to the LTIP/OP Unit holders.

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LIQUIDITY AND CAPITAL RESOURCES

Our Operating Liquidity and Resources

As of March 31, 2021, we had $3.0 billion of cash and cash equivalents.  We expect to use our cash balances, cash flow from our operations and proceeds of any future property sales to fund our operations, make distributions, repurchase our common shares, make acquisitions and/or investments in properties or businesses, fund tenant improvements and leasing costs and for other general business purposes.  We believe our cash balances and the cash flow from our operations will be sufficient to fund our ordinary course activities.

Our future cash flows from operating activities will depend on our ability to collect rent from our current tenants under their leases. Our ability to collect rent and generate parking revenue in the near term may continue to be adversely impacted by the market disruption caused by the COVID-19 outbreak. We cannot predict the ultimate impact of the pandemic on our results of operations.

Our future cash flows from operating activities will also depend upon our:

•ability to maintain or improve the occupancy of, and the rental rates at, our properties;

•ability to control operating and financing expense increases at our properties; and

•ability to purchase additional properties, which produce rents, less property operating expenses, in excess of our costs of acquisition capital.

In addition, our future cash flows will also depend in part on interest income earned on our invested cash balances.

Volatility in energy costs and real estate taxes may cause our future operating expenses to fluctuate; however, the impact of these fluctuations is expected to be partially offset by the pass through of operating expenses to our tenants pursuant to lease terms, although there can be no assurance that we will be able to successfully offset these expenses or that doing so would not negatively impact our competitive position or business. 

Net cash flows provided by (used in) operating, investing and financing activities were $1.5 million, $(3.6) million and $(14.1) million, respectively, for the three months ended March 31, 2021, and $11.8 million, $571.1 million and $(32.0) million, respectively, for the three months ended March 31, 2020.  Changes in these three categories of our cash flows between 2021 and 2020 are primarily related to a decrease in property net operating income (as a result of property dispositions), a decrease in interest income (as a result of lower average interest rates in 2021), an increase in real estate improvements, dispositions of properties, repurchase of our common shares and distributions to common shareholders.

Our Investment and Financing Liquidity and Resources

During the three months ended March 31, 2021, we paid an aggregate of $2.0 million of distributions on our series D preferred shares.  On April 9, 2021, our Board of Trustees declared a dividend of $0.40625 per series D preferred share, which will be paid on May 17, 2021 to shareholders of record on April 29, 2021.

On March 1, 2021, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares through June 30, 2022. We did not repurchase any common shares under our common share repurchase program during the three months ended March 31, 2021.

We may utilize various types of financings, including debt or equity, to fund future acquisitions and/or investments and to pay any debt we may incur and other obligations as they become due. Although we are not currently rated by the debt rating agencies, the completion and the costs of any future debt transactions will depend primarily upon market conditions and our credit ratings at such time, if any. We have no control over market conditions. Any credit ratings will depend upon evaluations by credit rating agencies of our business practices and plans and, in particular, whether we appear to have the ability to maintain our earnings, to space any debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably foreseeable adverse changes. We intend to conduct our business activities in a manner which will continue to afford us reasonable access to capital for investment and financing activities. However, there can be no assurance regarding our ability to complete any debt or equity offerings or that our cost of any future public or private financings will not increase.

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During the three months ended March 31, 2021 and 2020, amounts capitalized at our properties, including properties sold, for tenant improvements, leasing costs and building improvements were as follows (amounts in thousands):

	Three Months Ended March 31,
	2021		2020
Tenant improvements(1)	$	3,219	$	877
Leasing costs(2)	268		946
Building improvements(3)	238		351

(1)Tenant improvements include capital expenditures to improve tenants’ spaces.

(2)Leasing costs include leasing commissions and related legal expenses.

(3)Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets. Tenant-funded capital expenditures are excluded.

During the three months ended March 31, 2021, commitments made for expenditures in connection with leasing space at our properties were as follows (dollar and square foot measures in thousands):

	New Leases		Renewals		Total
Square feet leased during the period	11		16		27
Tenant improvements and leasing commissions	$	109	$	759	$	868
Tenant improvements and leasing commissions per square foot	$	9.89	$	47.43	$	32.00
Weighted average lease term by square foot (years)(1)	2.3		6.7		4.9
Tenant improvements and leasing commissions per square foot per year	$	4.35	$	7.06	$	6.54

(1)For renewal lease terms, if the existing rents of an original lease term are modified, the new term starts at the rent modification date. Weighted average lease term generally excludes renewal options.

NON-GAAP MEASURES

Funds from Operations (FFO) and Normalized FFO

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or Nareit. Nareit defines FFO as net income (loss), calculated in accordance with GAAP, excluding real estate depreciation and amortization, gains (or losses) from sales of depreciable property, impairment of depreciable real estate, and our portion of these items related to equity investees and non-controlling interests.  Our calculation of Normalized FFO differs from Nareit’s definition of FFO because we exclude certain items that we view as nonrecurring or impacting comparability from period to period.  We consider FFO and Normalized FFO to be appropriate measures of operating performance for a REIT, along with net income, net income attributable to Equity Commonwealth common shareholders and cash flow from operating activities.

We believe that FFO and Normalized FFO provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO and Normalized FFO may facilitate a comparison of our operating performance between periods and with other REITs.  FFO and Normalized FFO do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income, net income attributable to Equity Commonwealth common shareholders or cash flow from operating activities, determined in accordance with GAAP, or as indicators of our financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs.  These measures should be considered in conjunction with net income, net income attributable to Equity Commonwealth common shareholders and cash flow from operating activities as presented in our condensed consolidated statements of operations, condensed consolidated statements of comprehensive income and condensed consolidated statements of cash flows.  Other REITs and real estate companies may calculate FFO and Normalized FFO differently than we do.

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The following table provides a reconciliation of net income to FFO attributable to Equity Commonwealth common shareholders and unitholders and a reconciliation to Normalized FFO attributable to Equity Commonwealth common shareholders and unitholders (in thousands):

	Three Months Ended March 31,
	2021		2020
Reconciliation to FFO:
Net (loss) income	$	(10,038)	$	425,507
Real estate depreciation and amortization	4,301		4,881
Gain on sale of properties, net	—		(419,620)
FFO attributable to Equity Commonwealth	(5,737)		10,768
Preferred distributions	(1,997)		(1,997)
FFO attributable to Equity Commonwealth common shareholders and unitholders	$	(7,734)	$	8,771
Reconciliation to Normalized FFO:
FFO attributable to Equity Commonwealth common shareholders and unitholders	$	(7,734)	$	8,771
Straight-line rent adjustments	(307)		198
Executive severance expense	7,107		—
Taxes related to property sales included in general and administrative	—		1,448
Taxes related to property sales, net included in income tax expense	—		35
Normalized FFO attributable to Equity Commonwealth common shareholders and unitholders	$	(934)	$	10,452

Property Net Operating Income (NOI)

We use another non-GAAP measure, property net operating income, or NOI, to evaluate the performance of our properties. We define NOI as income from our real estate including lease termination fees received from tenants less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions and corporate level expenses.

The following table includes the reconciliation of NOI to net income, the most directly comparable financial measure under GAAP reported in our consolidated financial statements.  We consider NOI to be an appropriate supplemental measure to net income because it may help to understand the operations of our properties.  We use NOI internally to evaluate property level performance, and we believe that NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are incurred at the property level and may facilitate comparisons of our operating performance between periods and with other REITs.  NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered as an alternative to net income, net income attributable to Equity Commonwealth common shareholders or cash flow from operating activities, determined in accordance with GAAP, or as an indicator of our financial performance or liquidity, nor is this measure necessarily indicative of sufficient cash flow to fund all of our needs.  This measure should be considered in conjunction with net income, net income attributable to Equity Commonwealth common shareholders and cash flow from operating activities as presented in our consolidated statements of operations, consolidated statements of comprehensive income and consolidated statements of cash flows.  Other REITs and real estate companies may calculate NOI differently than we do. 

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A reconciliation of NOI to net income for the three months ended March 31, 2021 and 2020, is as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Rental revenue	$	14,169	$	17,143
Other revenue	682		1,677
Operating expenses	(6,621)		(8,761)
NOI	$	8,230	$	10,059
NOI	$	8,230	$	10,059
Depreciation and amortization	(4,351)		(5,114)
General and administrative	(15,729)		(10,604)
Interest and other income, net	1,843		11,895
Interest expense	—		(309)
Gain on sale of properties, net	—		419,620
(Loss) income before income taxes	(10,007)		425,547
Income tax expense	(31)		(40)
Net (loss) income	$	(10,038)	$	425,507

Related Person Transactions

For information about our related person transactions, see Note 11 to the notes to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

The Company’s market risk has not changed materially from the amounts and information reported in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report.

Item 4.  Controls and Procedures.

As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Senior Vice President, Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to the Exchange Act Rule 13a-15 and Rule 15d-15. Based upon that evaluation, our President and Chief Executive Officer and our Senior Vice President, Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  Other Information

Item 1. Legal Proceedings.

We are or may become a party to various legal proceedings. We are not currently involved in any litigation nor, to our knowledge, is any litigation threatened against us where the outcome would, in our judgment based on information currently available to us, have a material adverse effect on the Company.

Item 1A. Risk Factors.

Other than the additional risk factors below related to our recently announced merger with Monmouth, there have been no material changes to the risk factors previously disclosed in our Annual Report.

Risks Related to the Merger with Monmouth

The proposed merger with Monmouth presents certain risks to our business, operations and financial condition.

On May 4, 2021, we entered into the Merger Agreement with Monmouth, which provides for the merger of Monmouth with and into one of our subsidiaries. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, upon closing, each share of Monmouth common stock issued and outstanding will be converted into the right to receive 0.67 of a newly issued share of our common shares of beneficial interest, with cash paid in lieu of any fractional shares. The Merger Agreement provides for Monmouth to declare and pay one additional regular quarterly common stock dividend of $0.18 per share without Equity Commonwealth paying a corresponding common dividend to its shareholders. In addition, upon closing, holders of Monmouth Series C preferred stock will receive $25.00 per share plus accumulated and unpaid accrued dividends pursuant to the governing documents of the Monmouth Series C preferred stock. We currently expect the merger to close in the second half of 2021, subject to the approval of our common shareholders and the Monmouth common shareholders and other customary closing conditions, although we cannot assure you that the transaction will close on such timetable or at all.

Because the consideration received by the Monmouth shareholders is fixed and will not be adjusted in the event of any change in our stock price or the stock price of Monmouth, our shareholders have no assurances of the market value of the consideration we will pay to Monmouth shareholders in the merger. Neither we nor Monmouth has the right to terminate the Merger Agreement based on an increase or decrease in the market price of our common shares.

Prior to closing, the merger may present certain risks to our business and operations, which could materially affect our business, financial results and stock price, including, among other things, that:

• failure to complete the merger, including due to the failure of our shareholders or the Monmouth shareholders to approve the merger or the failure of us or Monmouth to satisfy another closing condition, could negatively impact our stock price and our future business and financial results;

• we expect to incur substantial expenses related to the merger, regardless of whether the merger is ultimately completed; and

• the pendency of the merger could adversely affect our business and operations, including by diverting significant focus of management and other resources or preventing us from undertaking other strategic transactions.

In addition, certain risks may continue to exist at and following the closing of the merger, including, among other things, that:

• we may be unable to successfully integrate our and Monmouth’s businesses;

• we may be unable to realize the anticipated benefits of the merger;

• our future results will suffer if we do not effectively manage our repositioned portfolio; and

• the market price of our common shares may decline as a result of the merger.

The merger may not be completed on the terms or timeline currently contemplated, or at all.

The completion of the merger is subject to certain customary closing conditions, including, without limitation: (i) approval by our common shareholders of the issuance of our common shares and approval by the Monmouth common shareholders of the merger; (ii) approval from the New York Stock Exchange for the listing of our common shares to be issued in the merger; (iii) the absence of an injunction or law prohibiting the merger; (iv) the absence of any pending, threatened or

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outstanding government investigation with respect to the merger; (v) the accuracy of each party's representations and warranties, subject in most cases to material adverse effect qualifications, and receipt by each party of a certificate to such effect from an officer of the other party; (vi) the absence of any material adverse effect with respect to either us or Monmouth; (vii) material compliance with each party’s covenants and agreements; (viii) receipt by us and by Monmouth of an opinion to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and of an opinion as to the qualification of Monmouth and us, respectively, as a REIT under the Code; and (ix) effectiveness of the registration statement that will be filed by us with the SEC and will contain the joint proxy statement/prospectus sent to our common shareholders and the Monmouth common shareholders. We cannot provide assurances that the merger will be consummated on the terms or timeline currently contemplated, or at all.

Monmouth and/or the Company may be or become the target of shareholder class action and/or derivative lawsuits that could result in substantial costs and may delay or prevent the merger from being completed.

Shareholder class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. There can be no assurances as to the outcome of such lawsuits, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the merger on the agreed-upon terms, such an injunction may delay or prevent the merger from being completed, which may adversely affect the Company’s and Monmouth’s respective business, results of operations and financial position.

Following the merger, we may be unable to timely and successfully integrate our current operations with those of Monmouth or realize the anticipated benefits of the merger.

The merger involves the combination of two companies that currently operate as independent public companies. We will be required to devote significant management attention and resources to integrating the portfolio and operations of Monmouth into our own. Potential difficulties that we may encounter in the integration process include, among others, the following:

• the inability to successfully manage and grow the Monmouth portfolio in a manner that permits us to achieve the benefits anticipated from the merger, in the time frame currently anticipated, or at all;

• the inability to successfully realize the anticipated value from some of Monmouth’s assets;

• potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the merger;

• performance shortfalls as a result of the diversion of management's attention caused by completing the merger and integrating the companies’ operations; and

• the possibility that the integration process results in the distraction of our management, the disruption of our business or inconsistencies in our operations, controls, procedures and policies, any of which could adversely affect the ability of us to maintain relationships with tenants, employees and service providers or to achieve the anticipated benefits of the merger, or could otherwise adversely affect our business, results of operations and financial condition.

The merger represents a strategic transformation for our business and we may encounter unanticipated difficulties and costs managing and growing the Monmouth portfolio which may have a material adverse effect on us.

The Monmouth portfolio is comprised primarily of industrial assets and the merger represents a strategic transformation for our business away from the office sector that will require a different set of management expertise and experience. Although we expect to have access to the appropriate resources, relationships and expertise to manage and grow the Monmouth portfolio, there can be no assurance that we will be successful in our utilization, development or procurement of such resources, relationships and expertise. As a result, we may not be able to successfully manage and grow the Monmouth portfolio, and may not achieve the returns we expect, which could have a material adverse effect on us.

We may incur adverse tax consequences if Monmouth has failed or fails to qualify to be taxed under the Code as a REIT.

It is a condition to the obligation of the Company to complete the merger that we receive a written opinion of Monmouth’s legal counsel to the effect that, for Monmouth’s taxable year ended September 30, 2008 and through its taxable year ended September 30, 2020, Monmouth has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its actual method of operation through the date of such opinion has enabled, and its proposed method of operation will continue to enable, Monmouth to meet the requirements for qualification and taxation as a REIT through the effective time of the merger. The opinion will be subject to customary exceptions,

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assumptions and qualifications and will be based on customary representations made by Monmouth, and if any such representations are or become inaccurate or incomplete, such opinion may be invalid and the conclusions reached therein could be jeopardized. In addition, the opinion will not be binding on the Internal Revenue Service, or the IRS, or any court, and there can be no assurance that the IRS will not take a contrary position or that such position would not be sustained. If Monmouth has failed or fails to qualify to be taxed under the Code as a REIT and the merger is completed, the Company generally would succeed to and may incur significant tax liabilities and the Company could possibly fail to qualify as a REIT. In addition, if Monmouth has failed or fails to qualify to be taxed under the Code as a REIT and the merger is completed, for the five-year period following the merger closing, upon a taxable disposition of any of Monmouth’s assets, the Company generally would be subject to corporate level tax with respect to any gain in such asset at the time of the merger, and any of Monmouth’s earnings and profits accumulated in a non-REIT year must be distributed by the Company before the end of the taxable year in which the merger closes. For more information regarding our REIT status, see “Risk Factors—Risks Related to Our Taxation as a REIT” in Part I, Item 1A of our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Surrender of Common Shares for Tax Withholding

During the three months ended March 31, 2021, certain of our employees surrendered common shares to satisfy their statutory tax withholding obligations in connection with the vesting of restricted common shares and restricted stock units. 

The following table summarizes all of these repurchases during the three months ended March 31, 2021:

Period	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number or Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 2021	—		$	—	N/A	N/A
February 2021	210,334		$	28.97	N/A	N/A
March 2021	—		$	—	N/A	N/A
Total	$	210,334	$	28.97

(1) The number of shares repurchased represents common shares surrendered by certain of our employees to satisfy their statutory federal and state tax obligations associated with the vesting of restricted common shares and restricted stock units of beneficial interest. With respect to these shares, the price paid per share is based on the closing price of our common shares as of the date of the determination of the statutory minimum federal and state tax obligations.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

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Item 6.  Exhibits.

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.)
10.1	Separation Agreement and Release, dated as of March 1, 2021, by and between the Company, Equity Commonwealth Management LLC and Adam Markman. (+) (Filed herewith.)
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 March 31, 2021, 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 (Loss) 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).

(+)    Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EQUITY COMMONWEALTH
By:	/s/ David A. Helfand
	David A. Helfand
	President and Chief Executive Officer
	Dated:	May 5, 2021
By:	/s/ William H. Griffiths
	William H. Griffiths
	Senior Vice President, Chief Financial Officer and Treasurer
	Dated:	May 5, 2021

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EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

    This Separation Agreement and Release (“Agreement”) by and between Equity Commonwealth, a Maryland real estate investment trust (“EQC”), Equity Commonwealth Management LLC, a Delaware limited liability company and indirect subsidiary of EQC (“Equity Management” and, together with EQC and its past and present subsidiaries and affiliates, the “Company”), and Adam Markman (hereafter, “you” or “your” or “Employee”) is entered into as of March 1, 2021 (the “Effective Date”). The Company and you are jointly referred to herein as the “Parties.”

WITNESSETH

WHEREAS, prior to the execution of this Agreement, you have been employed by the Company;

WHEREAS, you and the Company mutually agree that your employment with the Company will terminate effective as of the Separation Date (as defined below); and

WHEREAS, in light of the termination of your employment relationship with the Company as of the Separation Date, you and the Company desire to fully and finally resolve all matters between the Parties;

WHEREAS, the Board of Trustees (the “Board”) of the Company has approved the payment of the compensation and benefits set forth in this Agreement, subject to the terms of this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the respective agreements of the Parties contained herein and other good and valuation consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

1.Separation Date. Your employment with the Company shall end at the close of business on March 31, 2021 (the “Separation Date”). You agree to continue to use your reasonable best efforts in the performance of your services on behalf of the Company through the Separation Date. Your usual base salary and benefits entitlements will continue from the Effective Date through the Separation Date, and shall cease on the Separation Date, except to the extent provided in Section 2 of this Agreement. The Parties further agree that effective as of the Separation Date, you (i) will cease to serve in any positions as an officer of the Company or any of its subsidiaries or affiliates, and (ii) will no longer be authorized to incur any expenses, obligations or liabilities on behalf of the Company unless approved in advance by the Company’s Chief Executive Officer. You agree to promptly execute any writings as are requested by the Company or any of its subsidiaries or affiliates to effectuate the foregoing at any time following the Separation Date.

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2.    Separation Payments.

(a)In connection with the termination of your employment relationship with the Company, the Company will pay to you all amounts that have accrued to your benefit through the Separation Date but have not been paid as of the Separation Date, including: (i) base salary, (ii) reimbursement for reasonable and necessary expenses incurred by you on behalf of the Company during the period ending on the Separation Date, (iii) vacation and sick leave pay (to the extent provided by Company policy or applicable law), with all amounts owed to you under each of (i), (ii) and (iii) payable in a cash lump sum no later than the Company’s first regularly scheduled payroll date after the Separation Date, (iv) any amounts that are vested benefits or that you are otherwise entitled to receive under any plan, policy, practice or program of or any other contract or agreement with the Company at or subsequent to the Separation Date, payable in accordance with such plan, policy, practice or program, contract or agreement, and (v) any other amounts or benefits required to be paid by law (items (i) - (v), collectively, “Accrued Compensation”)).

(b)In addition to the Accrued Compensation, as consideration for you entering into this Agreement, the Company has agreed to pay you certain compensation and benefits that you otherwise would not be entitled to receive. You hereby acknowledge that payments and benefits set forth in this Section 2(b) constitutes discretionary payments in connection with the separation of your employment relationship with the Company. Specifically, the Company will pay or provide to you the following compensation and benefits, subject to Section 3 hereof:

(i)An amount equal to your pro rata 2020 annual incentive award provided under the Company’s Short-Term Annual Incentive Program, in the amount approved by the Compensation Committee of the Board (the “Compensation Committee”) on or about January 25, 2021 (the “2020 Annual Incentive Award”), for service rendered in 2021, calculated as follows: your 2020 Annual Incentive Award of $410,176, multiplied by a fraction, the numerator of which is the number of days in 2021 through the Separation Date and the denominator of which is 365.

(ii)An amount equal to three (3) times the sum of (x) your annual base salary of $566,500, and (y) $585,955, which is the average of: (i) your 2020 annual cash bonus award of $410,176, and (ii) your 2019 annual cash bonus award of $761,733.

(iii)$50,880, which amount is equal to (x) twenty-four (24) multiplied by (y) the total monthly premium (i.e., both the employer portion and the employee portion of the premium) in effect on the Separation Date for family coverage under the Company’s group health plan less the monthly employee charge for such coverage in effect on the Separation Date.

(iv)All outstanding, unvested restricted stock, restricted stock units, LTIP units and other equity awards held by you that are subject to solely time-based vesting conditions (collectively, the “Time-Based Awards”) shall fully vest as of the Separation Date, subject to Section 3 below; and

(v)All outstanding, unvested restricted stock units, LTIP units and other equity awards held by you that are subject to performance-based vesting conditions

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(collectively, the “Performance-Based Awards”) shall remain eligible to become earned based on the actual level of achievement of the applicable performance criteria, as determined by the Compensation Committee at the end of the applicable performance period or, if earlier, as of the date of a Change in Control (as defined below) in which such Performance-Based Awards are not assumed by the acquirer or surviving entity, and the earned portion of such Performance-Based Awards, if any, shall become fully vested as of the date the Compensation Committee determines the achievement of the applicable performance criteria and shall be settled in accordance with the terms of the applicable award agreements, subject to Section 3 below. For purposes of this Agreement, a “Change in Control” shall have the meaning set forth in the Company’s 2015 Omnibus Incentive Plan, as amended, or any successor equity incentive plan.

(c)Payment of the Accrued Compensation will be made as set forth in Section 2(a) above. Payment of the amounts set forth in Section 2(b) above (collectively the “Severance Payments”), unless otherwise expressly indicated, will be made in a lump sum within forty-five (45) days following the Release Effective Date (as defined in Section 3 of this Agreement). An itemized schedule of the estimated amounts constituting the Severance Payments is attached hereto as Exhibit A. The Company shall have the authority and right to withhold an amount sufficient to satisfy federal, state and local taxes required by law to be withheld with respect to any payments or benefits under this Agreement. You will receive a W-2 Form issued to you by the Company for the payment of the Accrued Compensation and Severance Payments, as applicable. Other than as set forth in this Section 2, you acknowledge that no additional compensation is due to you following the Separation Date.

(d)You shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to you in any subsequent employment.

3.    Release. As a condition to receiving the Severance Payments hereunder, following the Separation Date, you shall execute a release of claims substantially in the form of the release attached hereto as Exhibit B (the “Release”). On or prior to the Separation Date, the Company shall deliver to you the final Release for you to execute following the Separation Date. You shall forfeit all rights to receive the Severance Payments unless, within 30 (thirty) days following delivery of the Release by the Company to you, you execute and deliver the Release to the Company and such Release has become irrevocable by virtue of the expiration of the revocation period specified therein without the Release having been revoked (the first such date, the “Release Effective Date”).

    4.    Non-Solicitation. For a period of one (1) year immediately following the Separation Date, you agree that, without the prior written consent of the Company, you will not, directly or indirectly, for your benefit or for the benefit of any other person, firm or entity, solicit the employment or services of, or hire or engage, any person who was known to be employed or engaged by the Company as of the Separation Date or who is known to be employed or engaged by the Company during the six (6) month period immediately preceding the Separation Date.

3

    5.    Non-Disclosure of Proprietary Information.

(a)The Company may have provided and/or may provide you with access to confidential, proprietary, and highly sensitive information relating to the business of the Company, which is a competitive asset of the Company, and which may include, without limitation, data and information: (i) relating to the Company’s business, regardless of whether the data or information constitutes a trade secret; (ii) disclosed to you or of which you became aware of as a consequence of your relationship with the Company or any of its affiliates; (iii) having value to the Company or any of its affiliates; (iv) not generally known to competitors of the Company; and (v) which may include, without limitation, trade secrets, methods of operation, information regarding acquisitions and dispositions, tenant (including prospective tenant) and lease information, shareholder information, financial information and projections, personnel data, information of any third party provided to the Company or any of its affiliates which the Company or any affiliate is obligated to treat as confidential, and similar information. The confidential, proprietary, and highly sensitive information described herein above is referred to as “Proprietary Information.” The Company and you hereby agree that the term Proprietary Information shall include only such information of which you have specific knowledge.

(b)You acknowledge and understand that the term Proprietary Information does not include information or know-how which: (i) has been voluntarily disclosed to the public by the Company, except where such public disclosure has been made without authorization from the Company; (ii) which has otherwise entered the public domain through lawful means, or (iii) is approved for release by written authorization of the Company.

(c)You acknowledge that from time to time the Company may have and/or may disclose Proprietary Information to you in order to enable you to perform your duties for the Company. You recognize and agree that the unauthorized disclosure of Proprietary Information could place the Company at a competitive disadvantage. Consequently, you agree not: (i) to use, at any time, any Proprietary Information for your own benefit or for the benefit of any person, entity, or corporation other than the Company; or (ii) to disclose, directly or indirectly, any Proprietary Information to any person who is not a current trustee or employee of the Company, except in the performance of the duties assigned to you by the Company, at any time before or after the termination of your employment, without the express, written consent of the Company. You further acknowledge and agree not to make copies, except in the performance of the duties assigned to you by the Company, of any Proprietary Information, except as authorized by the Company.

(d)You acknowledge that any and all documents, including documents containing Proprietary Information, furnished by the Company or otherwise acquired or developed by you in connection with your employment or association with the Company (collectively, “Recipient Materials”) shall at all times be the property of the Company. Prior to or on the Separation Date, you shall destroy or return to the Company any Recipient Materials that are in your possession, custody, or control.

4

(e)Nothing contained herein shall prohibit you from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Occupational Safety and Health Administration, the Equal Employment Opportunity Commission, any Inspector General, or making other disclosures protected under the whistleblower provisions of federal law or regulation. You do not need the prior authorization of the Company to make any such reports or disclosures and you are not required to notify the Company that you have made such reports or disclosures.

(f)Notwithstanding anything to the contrary contain herein, the Parties hereto acknowledge that pursuant to 18 USC § 1833(b), you may not be held liable under any criminal or civil federal or state trade secret law for disclosure of a trade secret: (i) made in confidence to a government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, the parties hereto acknowledge that if you sue the Company for retaliation based on the reporting of a suspected violation of law, you may disclose a trade secret to your attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and you do not disclose the trade secret except pursuant to court order.

6.    Return of Company Property. On or before the Separation Date, you shall return to the Company all documents, emails, notes, reports, sketches, plans, books, keys, unpublished memoranda or other documents, and any access card, laptop or other computer, or any other property of the Company or its affiliates in your possession or property created, developed or generated by you or that came into your possession during your employment and which are related to Company’s business, whether containing or relating to confidential information or not.

7.    Breach of Agreement. You understand and agree that if the Company incurs any actual monetary damage caused by either (i) the future discovery of any material misconduct, wrongdoing, or violations of the Company’s policies or directives on your part, or (ii) any other action on your part which constitutes a material breach of this Agreement, you shall forfeit or repay to the Company the amount of such monetary damage in an amount up to eighty percent (80%) of the gross amount of any Severance Payments made to you under this Agreement. Notwithstanding the foregoing, you acknowledge and agree that your sole and exclusive remedy for any claim asserted by you for violation of Section 2 shall be, at most, recovery of the total gross Severance Payments amount referenced in Section 2, and that any claim you make for the Company’s breach of this Agreement will not revive any claims released by you pursuant to the Release. You further acknowledge and agree that your violation of Sections 4-6 of this Agreement will cause immediate and irreparable harm to the Company for which monetary damages constitute an inadequate remedy, and that the Company shall, in addition to other remedies, have the right to institute and maintain a proceeding to compel specific performance of Sections 4-6 (without posting any bond).

8.    Miscellaneous. This Agreement is binding upon and shall inure to the benefit of you and the Company. For purposes of this Agreement, the term “Company” shall include the

5

Company’s successors and assigns, including a corporation or other entity acquiring all or substantially all the voting securities, assets or business of the Company whether by operation of law or otherwise, and any affiliate of such successors and assigns. By signing this Agreement, the Parties represent that they have read and understand it, that they have discussed it or had the opportunity to discuss it with their respective attorneys, and that they enter into it knowingly and voluntarily. This Agreement shall be governed by the substantive laws of the State of Illinois, without regard to choice of law principals. The terms and provisions of this Agreement shall be deemed separable, so that if any term or provision is deemed to be invalid or unenforceable, such term or provision shall be deemed deleted or modified so as to be valid and enforceable to the full extent permitted by applicable law, and all remaining parts of this Agreement shall remain in full force and effect and shall in no way be invalidated or affected. No addition, modification, amendment or waiver of any part of this Agreement shall be binding or enforceable unless executed in writing by both Parties. You understand that this Agreement fully sets forth all separation benefits you will receive from the Company, and it supersedes any offers or promises of separation benefits, whether oral or written, which may have been made at any time, including, for the avoidance of doubt, that certain Change in Control Agreement by and between you and the Company dated April 24, 2019.

9.Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by overnight courier addressed to the respective addresses last given by each party to the other, provided that all notices to the Company shall include as an addressee the Chief Executive Officer and the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or one business day after mailing if sent by overnight courier.

    10.    Section 409A. The Company intends that the payments and benefits provided under this Agreement shall be exempt from the application of the requirements of Section 409A of the Code as payments pursuant to the “short term deferral” rules set forth in Treas. Reg. 1.409A-1(b)(4), and this Agreement shall be construed in a manner that effectuates this intent. Neither the Company nor its respective trustees, directors, officers, employees or advisers (other than you) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by you as a result of this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company may amend this Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of remaining exempt from or complying with the requirements of Section 409A of the Code and the administrative regulations and rulings promulgated thereunder.

11.    Effective Date. This Agreement is effective as of the Effective Date set forth in the recitals to this Agreement and the Release, attached hereto as Exhibit B, will become effective as set forth in the Release.

12.     No admissions. The Parties agree that neither this Agreement nor the consideration given shall be construed as an admission of any wrong doing or liability of any kind by the Parties and that all such wrong doing and/or liability is expressly denied.

6

    13.    Counterparts and Signature.  This Agreement may be executed electronically and be entered into in one or more counterparts, and a fully executed copy may be used in lieu of the originals for all purposes.

7

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative and you have executed this Agreement as of the day and year first above written.

EMPLOYEE	EQUITY COMMONWEALTH AND
	EQUITY COMMONWEALTH
	MANAGEMENT LLC

Signature:	/s/ Adam Markman	By:	/s/ Orrin S. Shifrin
		Name:	Orrin S. Shifrin
		Title:	EVP, General Counsel & Secretary

8

EXHIBIT A

Schedule of Estimated Severance Payments

This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained therein is not material and is not otherwise publicly disclosed.  The Company will furnish supplementally a copy of the exhibit to the Securities and Exchange Commission or its staff upon request.

Exhibit A - 1

EXHIBIT B

WAIVER AND RELEASE AGREEMENT

This is an important legal document. You are advised to consult with an attorney before signing this Agreement.

THIS WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of March 31, 2021 (the “Effective Date”), by Adam Markman (the “Employee”) in consideration of the severance payments and benefits (collectively, the “Severance Payments”) provided to the Employee pursuant to the Separation Agreement and Release by and between Equity Commonwealth and Equity Commonwealth Management LLC on behalf of themselves and their past and present subsidiaries and affiliates (collectively, the “Company”), and the Employee, dated as of March 1, 2021 (the “Separation Agreement”).

1.Waiver and Release. Subject to the last sentence of the first paragraph of this Section 1, the Employee, on his own behalf and on behalf of his heirs, executors, administrators, attorneys and assigns, hereby unconditionally and irrevocably releases, waives and forever discharges the Company and each of its affiliates, parents, subsidiaries, successors, and predecessors, and each of their respective directors, trustees, owners, members, shareholders, officers, agents, and employees (collectively, all of the foregoing are referred to as the “Employer”), from any and all causes of action, claims and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen, presently asserted or otherwise arising through the date of his signing of this Release, concerning his employment or separation from employment with the Company and any services that he provided to the Company. Subject to the last sentence of the first paragraph of this Section 1, this Release includes, but is not limited to, any payments, benefits or damages arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each as amended, and all other employment discrimination laws whatsoever as may be created or amended from time to time); any claim arising under any state or local laws, ordinances or regulations (including, but not limited to, any state or local laws, ordinances or regulations requiring that advance notice be given of certain workforce reductions), including, but not limited to, the Chicago Human Rights Ordinance, the Cook County Human Rights Ordinance, the Illinois Human Rights Act, as amended, and the Illinois Constitution; and any claim arising under any common law principle or public policy, including, but not limited to, all suits in tort or contract, such as wrongful termination, defamation, emotional distress, invasion of privacy or loss of consortium. Notwithstanding any other provision of this Release to the contrary, this Release does not encompass, and the Employee does not release, waive or discharge, the obligations of the Company (a) to make the payments and provide the other benefits contemplated by the Separation Agreement, or (b) under any restricted stock agreement, restricted stock unit agreement, LTIP unit agreement or other agreement pertaining to the Employee’s equity ownership, or (c) under any indemnification or

Release - 1

similar agreement with the Employee or indemnification under the Amended and Restated Bylaws or other governing instruments of the Company.

The Employee understands that by signing this Release, he is not waiving any claims or administrative charges which cannot be waived by law. Nothing in this Release shall be construed to prohibit the Employee from commencing or otherwise assisting in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or any other federal, state or local government agency; provided, however, the Employee waives any right to monetary recovery or individual relief in connection with any such proceeding or should one be pursued on his behalf arising out of or related to his employment with and/or separation from employment with the Company. For the avoidance of doubt, nothing herein prevents the Employee from pursuing a whistleblower claim under applicable law.

The Employee further agrees without any reservation whatsoever, never to sue the Employer or become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly released in this Release.

2.Acknowledgements. The Employee is signing this Release knowingly and voluntarily. He acknowledges that:

i.He is hereby advised in writing to consult an attorney before signing this Release;

ii.He has relied solely on his own judgment and/or that of his attorney regarding the consideration for and the terms of this Release and is signing this Release knowingly and voluntarily of his own free will;

iii.He is not entitled to the Severance Payments unless he agrees to and honors the terms of this Release;

iv.He has been given at least twenty-one (21) calendar days to consider this Release, or he expressly waives his right to have at least twenty-one (21) days to consider this Release;

v.He may revoke this Release within seven (7) calendar days after signing it by submitting a written notice of revocation to the Employer. He further understands that this Release is not effective or enforceable until after the seven (7) day period of revocation has expired without revocation, and that if he revokes this Release within the seven (7) day revocation period, he will not receive the Severance Payments;

vi.He has read and understands the Release and further understands that, subject to the limitations contained herein, it includes a general release of any and all known and unknown, foreseen or unforeseen claims presently asserted or otherwise arising through the date of his signing of this Release that he may have against the Employer; and

Release - 2

vii.No statements made or conduct by the Employer has in any way coerced or unduly influenced him to execute this Release.

a.No Admission of Liability. This Release does not constitute an admission of liability or wrongdoing on the part of the Employer, the Employer does not admit there has been any wrongdoing whatsoever against the Employee, and the Employer expressly denies that any wrongdoing has occurred.

b.Entire Agreement. There are no other agreements of any nature between the Employer and the Employee with respect to the matters discussed in this Release, except as expressly stated herein, and in signing this Release, the Employee is not relying on any agreements or representations, except those expressly contained in this Release.

c.Execution. It is not necessary that the Employer sign this Release following the Employee’s full and complete execution of it for it to become fully effective and enforceable.

d.Severability. If any provision of this Release is found, held or deemed by a court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or controlling law, the remainder of this Release shall continue in full force and effect.

e.Governing Law. This Release shall be governed by and construed and enforced in accordance with the substantive laws of the State of Illinois without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Release shall be brought and maintained in a court of competent jurisdiction in Cook County in the State of Illinois.

f.Headings. Section and subsection headings contained in this Release are inserted for the convenience of reference only. Section and subsection headings shall not be deemed to be a part of this Release for any purpose, and they shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

YOU ACKNOWLEDGE THAT YOU HAVE READ THIS AGREEMENT, AND UNDERSTAND IT, AND THAT YOU ARE VOLUNTARILY ENTERING INTO THIS AGREEMENT WITH THE INTENTION OF RELINQUISHING ALL KNOWN AND UNKNOWN CLAIMS AND RIGHTS AS SET FORTH IN THIS AGREEMENT.

EMPLOYEE

Adam Markman

Date

Release - 3

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, David A. Helfand, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Equity Commonwealth;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 5, 2021	/s/ David A. Helfand
		David A. Helfand
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, William H. Griffiths, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Equity Commonwealth;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 5, 2021	/s/ William H. Griffiths
		William H. Griffiths
		Senior Vice President, Chief
		Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Sec. 1350

In connection with the filing by Equity Commonwealth (the “Company”) of the Quarterly Report on Form 10-Q for the period ended March 31, 2021 (the “Report”), each of the undersigned hereby certifies, to the best of his knowledge:

1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David A. Helfand		/s/ William H. Griffiths
David A. Helfand		William H. Griffiths
President and Chief Executive Officer		Senior Vice President, Chief Financial Officer
		and Treasurer
Date:	May 5, 2021

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2021	Apr. 30, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	1-9317
Entity Registrant Name	EQUITY COMMONWEALTH
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	04-6558834
Entity Address, Address Line One	Two North Riverside Plaza, Suite 2100
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60606
City Area Code	(312)
Local Phone Number	646-2800
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		121,921,850
Entity Central Index Key	0000803649
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Common Shares of Beneficial Interest
Document Information [Line Items]
Title of 12(b) Security	Common Shares of Beneficial Interest
Trading Symbol	EQC
Security Exchange Name	NYSE
6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest
Document Information [Line Items]
Title of 12(b) Security	6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest
Trading Symbol	EQCpD
Security Exchange Name	NYSE

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Real estate properties:
Land	$ 44,060	$ 44,060
Buildings and improvements	361,107	357,650
Total real estate properties, at cost, gross	405,167	401,710
Accumulated depreciation	(147,034)	(143,319)
Total real estate properties, at cost, net	258,133	258,391
Cash and cash equivalents	2,971,052	2,987,225
Rents receivable	14,629	14,702
Other assets, net	16,862	17,353
Total assets	3,260,676	3,277,671
LIABILITIES AND EQUITY
Accounts payable, accrued expenses and other	21,007	20,588
Rent collected in advance	2,979	2,928
Distributions payable	5,072	10,991
Total liabilities	29,058	34,507
Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized; Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880	119,263	119,263
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 121,916,875 and 121,522,555 shares issued and outstanding, respectively	1,219	1,215
Additional paid in capital	4,295,226	4,294,632
Cumulative net income	3,804,930	3,814,948
Cumulative common distributions	(4,283,753)	(4,283,668)
Cumulative preferred distributions	(711,709)	(709,712)
Total shareholders’ equity	3,225,176	3,236,678
Noncontrolling interest	6,442	6,486
Total equity	3,231,618	3,243,164
Total liabilities and equity	$ 3,260,676	$ 3,277,671

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Preferred shares of beneficial interest, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred shares of beneficial interest, shares authorized (in shares)	50,000,000	50,000,000
Preferred shares, dividend percentage	6.50%
Preferred shares of beneficial interest, shares issued (in shares)	4,915,196	4,915,196
Preferred shares, of beneficial interest, shares outstanding (in shares)	4,915,196	4,915,196
Preferred shares, aggregate liquidation preference	$ 122,880	$ 122,880
Common shares of beneficial interest, par value (in dollars per share)	$ 0.01	$ 0.01
Common shares of beneficial interest, shares authorized (in shares)	350,000,000	350,000,000
Common shares of beneficial interest, shares issued (in shares)	121,916,875	121,522,555
Common shares of beneficial interest, shares outstanding (in shares)	121,916,875	121,522,555

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues:
Rental revenue	$ 14,169	$ 17,143
Other revenue	682	1,677
Total revenues	14,851	18,820
Expenses:
Operating expenses	6,621	8,761
Depreciation and amortization	4,351	5,114
General and administrative	15,729	10,604
Total expenses	26,701	24,479
Interest and other income, net	1,843	11,895
Interest expense (including net amortization of debt premiums and deferred financing fees of $— and $(56), respectively)	0	(309)
Gain on sale of properties, net	0	419,620
(Loss) income before income taxes	(10,007)	425,547
Income tax expense	(31)	(40)
Net (loss) income	(10,038)	425,507
Net loss (income) attributable to noncontrolling interest	20	(748)
Net (loss) income attributable to Equity Commonwealth	(10,018)	424,759
Preferred distributions	(1,997)	(1,997)
Net (loss) income attributable to Equity Commonwealth common shareholders	$ (12,015)	$ 422,762
Weighted average common shares outstanding — basic (in shares)	122,002	122,148
Weighted average common shares outstanding — diluted (in shares)	122,002	126,605
Earnings per common share attributable to Equity Commonwealth common shareholders:
Basic (in dollars per share)	$ (0.10)	$ 3.46
Diluted (in dollars per share)	$ (0.10)	$ 3.35

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Net amortization of debt premiums and deferred financing fees	$ 0	$ (56)

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (10,038)	$ 425,507
Total comprehensive (loss) income	(10,038)	425,507
Comprehensive loss (income) attributable to noncontrolling interest	20	(748)
Total comprehensive (loss) income attributable to Equity Commonwealth	$ (10,018)	$ 424,759

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Series D Preferred Shares	Common Shares	Additional Paid in Capital	Cumulative Net Income	Cumulative Common Distributions	Cumulative Preferred Distributions	Noncontrolling Interest
Balance as of beginning of period (in shares) at Dec. 31, 2019		4,915,196	121,924,199
Balance as of beginning of period at Dec. 31, 2019	$ 3,245,872	$ 119,263	$ 1,219	$ 4,313,831	$ 3,363,654	$ (3,851,666)	$ (701,724)	$ 1,295
Increase (Decrease) in Stockholders' Equity
Net (loss) income	425,507				424,759			748
Repurchase of shares (in shares)			(711,000)
Repurchase of shares	(20,869)		$ (7)	(20,862)
Surrender of shares for tax withholding (in shares)			(183,466)
Surrender of shares for tax withholding	(6,012)		$ (2)	(6,010)
Share-based compensation (in shares)			472,787
Share-based compensation	3,303		$ 5	2,953				345
Distributions	(3,187)					(1,190)	(1,997)
Adjustment for noncontrolling interest				(4,646)				4,646
Balance as of end of period (in shares) at Mar. 31, 2020		4,915,196	121,502,520
Balance as of end of period at Mar. 31, 2020	3,644,614	$ 119,263	$ 1,215	4,285,266	3,788,413	(3,852,856)	(703,721)	7,034
Balance as of beginning of period (in shares) at Dec. 31, 2020		4,915,196	121,522,555
Balance as of beginning of period at Dec. 31, 2020	3,243,164	$ 119,263	$ 1,215	4,294,632	3,814,948	(4,283,668)	(709,712)	6,486
Increase (Decrease) in Stockholders' Equity
Net (loss) income	(10,038)				(10,018)			(20)
Surrender of shares for tax withholding (in shares)			(210,334)
Surrender of shares for tax withholding	(6,093)		$ (2)	(6,091)
Share-based compensation (in shares)			604,654
Share-based compensation	6,687		$ 6	6,405				276
Distributions	(2,102)					(85)	(1,997)	(20)
Adjustment for noncontrolling interest				280				(280)
Balance as of end of period (in shares) at Mar. 31, 2021		4,915,196	121,916,875
Balance as of end of period at Mar. 31, 2021	$ 3,231,618	$ 119,263	$ 1,219	$ 4,295,226	$ 3,804,930	$ (4,283,753)	$ (711,709)	$ 6,442

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (10,038)	$ 425,507
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation	3,769	4,382
Net amortization of debt premiums and deferred financing fees	0	(56)
Straight-line rental income	(307)	198
Other amortization	582	732
Amortization of right-of-use asset	0	189
Share-based compensation	6,687	3,303
Net gain on sale of properties	0	(419,620)
Change in assets and liabilities:
Rents receivable and other assets	269	(733)
Accounts payable, accrued expenses and other	535	(1,128)
Rent collected in advance	51	(996)
Net cash provided by operating activities	1,548	11,778
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate improvements	(3,607)	(1,540)
Proceeds from sale of properties, net	0	572,599
Net cash (used in) provided by investing activities	(3,607)	571,059
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase and retirement of common shares	(6,093)	(26,881)
Payments on borrowings	0	(148)
Distributions to common shareholders	(6,024)	(1,936)
Distributions to preferred shareholders	(1,997)	(1,997)
Distributions to holders of noncontrolling interest	0	(997)
Net cash used in financing activities	(14,114)	(31,959)
(Decrease) increase in cash, cash equivalents, and restricted cash	(16,173)	550,878
Cash, cash equivalents, and restricted cash at beginning of period	2,987,225	2,800,645
Cash, cash equivalents, and restricted cash at end of period	2,971,052	3,351,523
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	0	366
Taxes refunded, net	(12)	(2,045)
NON-CASH INVESTING ACTIVITIES:
Accrued capital expenditures	840	1,071
NON-CASH FINANCING ACTIVITIES:
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$ 2,971,052	$ 3,351,523

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Business

3 Months Ended

Mar. 31, 2021

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 March 31, 2021, 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 March 31, 2021, our portfolio consisted of four properties (eight buildings), with a combined 1.5 million square feet. As of March 31, 2021, we had $3.0 billion of cash and cash equivalents.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

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, 2020.  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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Real Estate Properties

3 Months Ended

Mar. 31, 2021

Real Estate [Abstract]

Real Estate Properties

Real Estate PropertiesDuring the three months ended March 31, 2021 and 2020, we made improvements, excluding tenant-funded improvements, to our properties totaling $3.5 million and $1.2 million, respectively.

Property Dispositions:

We did not sell any properties during the three months ended March 31, 2021. During the three months ended March 31, 2020, we sold the following properties, which did not represent strategic shifts under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 205 (dollars in thousands):

Property	Date Sold	Number of Properties	Number of Buildings	Square Footage	Gross Sale Price(1)		Gain on Sale
109 Brookline Avenue	February 2020	1	1	285,556	$	270,000	$	225,190
333 108th Avenue NE(2)	March 2020	1	1	435,406	401,500		194,424
		2	2	720,962	$	671,500	$	419,614

(1)Gross sale price is before transfer taxes and credits, such as capital costs, contractual lease costs and rent abatements.

(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 (loss) income related to this property was $(9,000) and $193.1 million, of which $194.4 million related to the gain on sale, for the three months ended March 31, 2021 and 2020, respectively.

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 March 31, 2021, we deferred collection of approximately $20,000 of rental income on revenue that was recognized in that period.

Rental revenue consists of the following (in thousands):

	Three Months Ended March 31,
	2021		2020
Lease payments	$	9,257	$	11,770
Variable lease payments	4,912		5,373
Rental revenue	$	14,169	$	17,143

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Shareholders' Equity

3 Months Ended

Mar. 31, 2021

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Share Issuances:

See Note 7 for information regarding equity issuances related to share-based compensation.

Common Share Repurchases:

On March 10, 2020, 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. On March 10, 2021, this share repurchase authorization, none of which was utilized, expired. On March 1, 2021, our Board of Trustees authorized the repurchase of up to an additional $150.0 million of our outstanding common shares through June 30, 2022. We did not repurchase any common shares under our common share repurchase program during the three months ended March 31, 2021.

During the three months ended March 31, 2021 and 2020, certain of our employees and former employees surrendered 210,334 and 183,466 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 2021, the number of earned awards for recipients of the Company’s restricted stock units granted in January 2018 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 $6.0 million for distributions to common shareholders declared by our Board of Trustees during such awards' performance measurement period.

Preferred Share Distributions:

In 2021, our Board of Trustees declared distributions on our series D preferred shares to date as follows:

Declaration Date	Record Date	Payment Date	Series D Dividend Per Share
January 11, 2021	January 28, 2021	February 16, 2021	$	0.40625
April 9, 2021	April 29, 2021	May 17, 2021	$	0.40625

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Noncontrolling Interest

3 Months Ended

Mar. 31, 2021

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 March 31, 2021, the portion of the Operating Trust not beneficially owned by the Company is in the form of OP Units and LTIP Units (see Note 7 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 three months ended March 31, 2021:

	Common Shares	OP Units and LTIP Units	Total
Outstanding at January 1, 2021	121,522,555	243,516	121,766,071
Repurchase of shares	(210,334)	—	(210,334)
Share-based compensation grants and vesting, net of forfeitures	604,654	—	604,654
Outstanding at March 31, 2021	121,916,875	243,516	122,160,391
Noncontrolling ownership interest in the Operating Trust			0.20	%

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 99.80% and 99.87% for the three months ended March 31, 2021 and 2020, respectively.

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Income Taxes

3 Months Ended

Mar. 31, 2021

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):

	Three Months Ended March 31,
	2021		2020
Current:
State and local	$	(31)	$	(40)
Income tax expense	$	(31)	$	(40)

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Share-Based Compensation

3 Months Ended

Mar. 31, 2021

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 four-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 to 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 three-year performance period. Following the end of the three-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.

2021 Equity Award Activity

During the three months ended March 31, 2021, 482,188 RSUs vested, and, as a result, we issued 482,188 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 4).

On January 25, 2021, the Committee approved grants in the aggregate amount of 122,466 restricted shares and 248,646 RSUs at target (619,750 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 2020. The restricted shares were valued at $28.25 per share, the closing price of our common shares on the NYSE on the grant date. The assumptions and fair value for the RSUs and

market-based LTIP Units granted during the three months ended March 31, 2021 are included in the following table on a per share basis.

	2021
Fair value of market-based awards granted	$	37.87
Expected term (years)	4
Expected volatility	16.99		%
Risk-free rate	0.17		%

2020 Equity Award Activity

During the three months ended March 31, 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.

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 NYSE on the grant date. The RSUs and market-based LTIP Units were valued at $40.17 per share and per unit, their fair value on the grant date.

Outstanding Equity Awards

As of March 31, 2021, the estimated future compensation expense for all unvested restricted shares and time-based LTIP Units was $7.2 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 2.8 years.

As of March 31, 2021, the estimated future compensation expense for all unvested RSUs and market-based LTIP Units was $16.3 million. The weighted average period over which the future compensation expense will be recorded for the RSUs and market-based LTIP Units is approximately 2.6 years.

During the three months ended March 31, 2021 and 2020, we recorded $6.7 million and $3.3 million, respectively, of compensation expense, net of forfeitures, in general and administrative expense for grants to our trustees, eligible consultants and employees related to our equity compensation plans. Compensation expense recorded during the three months ended March 31, 2021 and 2020 includes $3.4 million and $25,000, respectively, of accelerated vesting due to staffing reductions. Forfeitures are recognized as they occur. At March 31, 2021, 1,548,936 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

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

As of March 31, 2021, we do not have any assets or liabilities measured at fair value.

Financial Instruments

Our financial instruments include our cash and cash equivalents.  At March 31, 2021 and December 31, 2020, the fair value of these financial instruments was not different from their carrying values.

Other financial instruments that potentially subject us to concentrations of credit risk consist principally of rents receivable. As of March 31, 2021, no single tenant of ours is responsible for more than 10% of our consolidated revenues.

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2021

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):

	Three Months Ended March 31,
	2021		2020
Numerator for earnings per common share - basic:
Net (loss) income	$	(10,038)	$	425,507
Net loss (income) attributable to noncontrolling interest	20		(748)
Preferred distributions	(1,997)		(1,997)
Numerator for net (loss) income per share - basic	$	(12,015)	$	422,762
Numerator for earnings per common share - diluted:
Net (loss) income	$	(10,038)	$	425,507
Net income attributable to noncontrolling interests	20		(748)
Preferred distributions	(1,997)		—
Numerator for net (loss) income per share - diluted	$	(12,015)	$	424,759
Denominator for earnings per common share - basic and diluted:
Weighted average number of common shares outstanding - basic(1)	122,002		122,148
RSUs(2)	—		1,524
LTIP Units(3)	—		76
Series D preferred shares; 6.50% cumulative convertible(4)	—		2,857
Weighted average number of common shares outstanding - diluted	122,002		126,605
Net (loss) income per common share attributable to Equity Commonwealth common shareholders:
Basic	$	(0.10)	$	3.46
Diluted	$	(0.10)	$	3.35
Anti-dilutive securities:
Effect of Series D preferred shares; 6.50% cumulative convertible(4)	3,237		—
Effect of RSUs(2)	848		—
Effect of LTIP Units	149		89
Effect of OP Units(5)	170		73

(1) The three months ended March 31, 2021 and 2020, include 236 and 177 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 March 31, 2021, 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	3 Months Ended
	Mar. 31, 2021
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 three months ended March 31, 2021 were from office properties.

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Related Person Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Related Person Transactions

Related Person Transactions

The following discussion includes a description of our related person transactions for the three months ended March 31, 2021 and 2020.

Two North Riverside Plaza Joint Venture Limited Partnership: We entered into a lease on July 20, 2015 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). The initial term of the lease was approximately five years, expiring on 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 had a storage lease with Two North Riverside Plaza Joint Venture Limited Partnership for storage space in the basement of Two North Riverside Plaza. We terminated the storage lease, effective August 31, 2020.

In December 2020, we entered into an amendment to the 20th/21st Floor Office Lease extending the lease term for one year, through December 31, 2021. There are no renewal options. The lease payment for the extended term is approximately $0.3 million.

During the three months ended March 31, 2021 and 2020, we recognized expense of $0.1 million and $0.2 million, respectively, pursuant to the 20th/21st Floor Office Lease and the related storage space. As of March 31, 2021 and December 31, 2020, we did not have any amounts due to Two North Riverside Plaza Joint Venture Limited Partnership pursuant to the 20th/21st Floor Office Lease.

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Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On April 9, 2021, our Board of Trustees declared a dividend of $0.40625 per series D preferred share, which will be paid on May 17, 2021 to shareholders of record on April 29, 2021.

On May 4, 2021, the Company, Monmouth Real Estate Investment Corporation (NYSE: MNR), or Monmouth, and a subsidiary of the Company entered into a definitive agreement and plan of merger, or the Merger Agreement, pursuant to which Monmouth will merge with and into a subsidiary of the Company. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, upon closing of the merger, each share of Monmouth common stock issued and outstanding will be converted into the right to receive 0.67 of a newly issued share of our common shares of beneficial interest, with cash paid in lieu of any fractional shares. The Merger Agreement provides for Monmouth to declare and pay one additional regular quarterly common stock dividend of $0.18 per share without Equity Commonwealth paying a corresponding common dividend to its shareholders. In addition, upon closing, holders of Monmouth Series C preferred stock will receive $25.00 per share plus accumulated and unpaid dividends pursuant to the governing documents of the Monmouth Series C preferred stock. We currently expect the transaction to close in the second half of 2021, subject to the approval of our common shareholders and the Monmouth common shareholders and other customary closing conditions.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

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, 2020.  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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Real Estate Properties (Tables)

3 Months Ended

Mar. 31, 2021

Real Estate [Abstract]

Summary of Properties Sold and Income Statement Information for Properties Disposed of

During the three months ended March 31, 2020, we sold the following properties, which did not represent strategic shifts under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 205 (dollars in thousands):

Property	Date Sold	Number of Properties	Number of Buildings	Square Footage	Gross Sale Price(1)		Gain on Sale
109 Brookline Avenue	February 2020	1	1	285,556	$	270,000	$	225,190
333 108th Avenue NE(2)	March 2020	1	1	435,406	401,500		194,424
		2	2	720,962	$	671,500	$	419,614

(1)Gross sale price is before transfer taxes and credits, such as capital costs, contractual lease costs and rent abatements.

(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 (loss) income related to this property was $(9,000) and $193.1 million, of which $194.4 million related to the gain on sale, for the three months ended March 31, 2021 and 2020, respectively.

Schedule of Rental Revenue

Rental revenue consists of the following (in thousands):

	Three Months Ended March 31,
	2021		2020
Lease payments	$	9,257	$	11,770
Variable lease payments	4,912		5,373
Rental revenue	$	14,169	$	17,143

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2021

Stockholders' Equity Note [Abstract]

Schedule of Declared Distributions

In 2021, our Board of Trustees declared distributions on our series D preferred shares to date as follows:

Declaration Date	Record Date	Payment Date	Series D Dividend Per Share
January 11, 2021	January 28, 2021	February 16, 2021	$	0.40625
April 9, 2021	April 29, 2021	May 17, 2021	$	0.40625

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Noncontrolling Interest (Tables)

3 Months Ended

Mar. 31, 2021

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 three months ended March 31, 2021:

	Common Shares	OP Units and LTIP Units	Total
Outstanding at January 1, 2021	121,522,555	243,516	121,766,071
Repurchase of shares	(210,334)	—	(210,334)
Share-based compensation grants and vesting, net of forfeitures	604,654	—	604,654
Outstanding at March 31, 2021	121,916,875	243,516	122,160,391
Noncontrolling ownership interest in the Operating Trust			0.20	%

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 three months ended March 31, 2021:

	Common Shares	OP Units and LTIP Units	Total
Outstanding at January 1, 2021	121,522,555	243,516	121,766,071
Repurchase of shares	(210,334)	—	(210,334)
Share-based compensation grants and vesting, net of forfeitures	604,654	—	604,654
Outstanding at March 31, 2021	121,916,875	243,516	122,160,391
Noncontrolling ownership interest in the Operating Trust			0.20	%

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

Our provision for income taxes consists of the following (in thousands):

	Three Months Ended March 31,
	2021		2020
Current:
State and local	$	(31)	$	(40)
Income tax expense	$	(31)	$	(40)

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Assumptions and Fair Values for RSUs and Market-based LTIP Units Granted in the Period

The assumptions and fair value for the RSUs and

market-based LTIP Units granted during the three months ended March 31, 2021 are included in the following table on a per share basis.

	2021
Fair value of market-based awards granted	$	37.87
Expected term (years)	4
Expected volatility	16.99		%
Risk-free rate	0.17		%

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2021

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):

	Three Months Ended March 31,
	2021		2020
Numerator for earnings per common share - basic:
Net (loss) income	$	(10,038)	$	425,507
Net loss (income) attributable to noncontrolling interest	20		(748)
Preferred distributions	(1,997)		(1,997)
Numerator for net (loss) income per share - basic	$	(12,015)	$	422,762
Numerator for earnings per common share - diluted:
Net (loss) income	$	(10,038)	$	425,507
Net income attributable to noncontrolling interests	20		(748)
Preferred distributions	(1,997)		—
Numerator for net (loss) income per share - diluted	$	(12,015)	$	424,759
Denominator for earnings per common share - basic and diluted:
Weighted average number of common shares outstanding - basic(1)	122,002		122,148
RSUs(2)	—		1,524
LTIP Units(3)	—		76
Series D preferred shares; 6.50% cumulative convertible(4)	—		2,857
Weighted average number of common shares outstanding - diluted	122,002		126,605
Net (loss) income per common share attributable to Equity Commonwealth common shareholders:
Basic	$	(0.10)	$	3.46
Diluted	$	(0.10)	$	3.35
Anti-dilutive securities:
Effect of Series D preferred shares; 6.50% cumulative convertible(4)	3,237		—
Effect of RSUs(2)	848		—
Effect of LTIP Units	149		89
Effect of OP Units(5)	170		73

(1) The three months ended March 31, 2021 and 2020, include 236 and 177 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 March 31, 2021, 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	Mar. 31, 2021 USD ($) ft² building property	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)
Noncontrolling Interest [Line Items]
Cash and cash equivalents | $	$ 2,971,052	$ 2,987,225	$ 3,348,349
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%

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Real Estate Properties - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Real Estate [Abstract]
Real estate improvements	$ 3,500	$ 1,200
COVID-19
Unusual or Infrequent Item, or Both [Line Items]
Deferred collection of rental income	$ 20

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Real Estate Properties - Summary of Properties Sold (Details) $ in Thousands	1 Months Ended		3 Months Ended
	Mar. 31, 2020 USD ($) ft² property building	Feb. 29, 2020 USD ($) ft² property building	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($) ft² building property
Real Estate Properties [Line Items]
Gain on Sale			$ 0	$ 419,620
Disposed of by Sale
Real Estate Properties [Line Items]
Number of Properties | property				2
Number of Buildings | building				2
Square Footage (in sqft) | ft²				720,962
Gross Sale Price				$ 671,500
Gain on Sale				419,614
Disposed of by Sale | 109 Brookline Avenue
Real Estate Properties [Line Items]
Number of Properties | property		1
Number of Buildings | building		1
Square Footage (in sqft) | ft²		285,556
Gross Sale Price		$ 270,000
Gain on Sale		$ 225,190
Disposed of by Sale | 333 108th Avenue NE
Real Estate Properties [Line Items]
Number of Properties | property	1
Number of Buildings | building	1
Square Footage (in sqft) | ft²	435,406
Gross Sale Price	$ 401,500
Gain on Sale	$ 194,424			194,400
Net (loss) income included in continued operations			$ (9)	$ 193,100

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Real Estate Properties - Rental Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Real Estate [Abstract]
Lease payments	$ 9,257	$ 11,770
Variable lease payments	4,912	5,373
Rental revenue	$ 14,169	$ 17,143

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Shareholders' Equity - Narrative (Details) - USD ($)		1 Months Ended	3 Months Ended
	Mar. 10, 2020	Feb. 28, 2021	Mar. 31, 2021	Mar. 31, 2020	Mar. 01, 2021
Class of Stock [Line Items]
Distributions to common shareholders/unitholders		$ 6,000,000.0	$ 6,024,000	$ 1,936,000
Common Shares
Class of Stock [Line Items]
Repurchase of shares (in shares)			0
Surrender of shares for tax withholding (in shares)			210,334	183,466
Share Repurchase Program, March 13, 2019 | Common Shares
Class of Stock [Line Items]
Stock repurchase program, authorized amount (up to)	$ 150,000,000.0
Stock repurchase program, period in force	12 months
Share Repurchase Program, March 10, 2020 | Common Shares
Class of Stock [Line Items]
Stock repurchase program, authorized amount (up to)					$ 150,000,000.0

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Shareholders' Equity - Schedule of Declared Distributions (Details) - $ / shares	May 17, 2021	Apr. 09, 2021	Feb. 16, 2021	Jan. 11, 2021
Class of Stock [Line Items]
Distributions to common shareholders				$ 0.40625
Dividend paid (in dollars per share)			$ 0.40625
Subsequent event
Class of Stock [Line Items]
Distributions to common shareholders		$ 0.40625
Subsequent event | Scenario, Forecast
Class of Stock [Line Items]
Dividend paid (in dollars per share)	$ 0.40625

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Noncontrolling Interest - Narrative (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
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	99.80%	99.87%

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Noncontrolling Interest - Common Shares and Units Activity (Details)	3 Months Ended
	Mar. 31, 2021 shares
Equity Commonwealth
Increase (Decrease) in Stockholders' Equity
Ownership percentage by noncontrolling owners	0.20%
Common Shares
Increase (Decrease) in Stockholders' Equity
Balance as of beginning of period (in shares)	121,522,555
Repurchase of shares (in shares)	(210,334)
Share-based compensation grants and vesting, net of forfeitures (in shares)	604,654
Balance as of end of period (in shares)	121,916,875
OP Units and LTIP Units | Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity
Balance as of beginning of period (in shares)	243,516
Repurchase of shares (in shares)	0
Share-based compensation grants and vesting, net of forfeitures (in shares)	0
Balance as of end of period (in shares)	243,516
Common Stock, OP Units, and LTIP Units
Increase (Decrease) in Stockholders' Equity
Balance as of beginning of period (in shares)	121,766,071
Repurchase of shares (in shares)	(210,334)
Share-based compensation grants and vesting, net of forfeitures (in shares)	604,654
Balance as of end of period (in shares)	122,160,391

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Current:
State and local	$ (31)	$ (40)
Income tax expense	$ (31)	$ (40)

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Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands			3 Months Ended
	Jan. 25, 2021 $ / shares shares	Jan. 27, 2020 $ / shares shares	Mar. 31, 2021 USD ($) tranche $ / shares shares	Mar. 31, 2020 USD ($) shares	Dec. 31, 2020 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued (in shares)			121,916,875		121,522,555
Compensation expense, accelerated vesting due to a staffing reduction | $			$ 3,400	$ 25
Common shares available for issuance (in shares)			1,548,936
General and Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense | $			$ 6,700	$ 3,300
Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			4 years
Number of equity awards granted (in shares)	122,466	85,058
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Number of tranches | tranche			2
Share-based compensation arrangement (in shares)			482,188	387,729
Common stock issued (in shares)			482,188	387,729
RSUs | Vesting in three years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percent			50.00%
RSUs | Vesting in four years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			1 year
Vesting percent			50.00%
RSUs at target
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity awards granted (in shares)	248,646	172,697
RSUs at maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity awards granted (in shares)	619,750	430,447
LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion basis			1
Time-based LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity awards granted (in shares)		20,116
Market-Based LTIP Units, Target
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity awards granted (in shares)		40,841
Market-Based LTIP Units, Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity awards granted (in shares)		101,796
Time-Based LTIP Units and Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted shares value (in dollars per share) | $ / shares		$ 32.81
RSUs and Market-Based LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted shares value (in dollars per share) | $ / shares		$ 40.17	$ 37.87
Estimated future compensation expense for unvested shares | $			$ 16,300
Weighted average period over which compensation expense will be recorded			2 years 7 months 6 days
Restricted Shares and Time-Based LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted shares value (in dollars per share) | $ / shares	$ 28.25
Estimated future compensation expense for unvested shares | $			$ 7,200
Weighted average period over which compensation expense will be recorded			2 years 9 months 18 days

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Share-Based Compensation - Summary of Assumptions and Fair Values for RSUs and Market-based LTIP Units Granted in the Period (Details) - RSUs and Market-Based LTIP Units - $ / shares		3 Months Ended
	Jan. 27, 2020	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Fair value of RSUs granted (in dollars per share)	$ 40.17	$ 37.87
Expected term		4 years
Expected volatility		16.99%
Risk-free rate		0.17%

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Fair Value of Assets and Liabilities - Narrative (Details)	Mar. 31, 2021 USD ($)
Fair Value Disclosures [Abstract]
Fair value, net asset (liability)	$ 0

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Numerator for earnings per common share - basic:
Net (loss) income	$ (10,038)	$ 425,507
Net loss (income) attributable to noncontrolling interest	20	(748)
Preferred distributions	(1,997)	(1,997)
Net (loss) income attributable to Equity Commonwealth common shareholders	(12,015)	422,762
Numerator for earnings per common share - diluted:
Net (loss) income	(10,038)	425,507
Net income attributable to noncontrolling interests	20	(748)
Preferred distributions	(1,997)	0
Numerator for net (loss) income per share - diluted	$ (12,015)	$ 424,759
Denominator for earnings per common share - basic and diluted:
Weighted average number of common shares outstanding — basic (in shares)	122,002	122,148
Series D preferred shares; 6 1/2% cumulative convertible (in shares)	0	2,857
Weighted average number of common shares outstanding — diluted (in shares)	122,002	126,605
Preferred shares, dividend percentage	6.50%
Net (loss) income per common share attributable to Equity Commonwealth common shareholders:
Basic (in dollars per share)	$ (0.10)	$ 3.46
Diluted (in dollars per share)	$ (0.10)	$ 3.35
Anti-dilutive securities:
Weighted average number of shares, restricted stock units, unvested (in shares)	236	177
6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest
Anti-dilutive securities:
Effect of anti-dilutive securities (in shares)	3,237	0
RSUs
Anti-dilutive securities:
Effect of anti-dilutive securities (in shares)	848	0
LTIP Units
Anti-dilutive securities:
Effect of anti-dilutive securities (in shares)	149	89
OP Units
Anti-dilutive securities:
Effect of anti-dilutive securities (in shares)	170	73
RSUs
Denominator for earnings per common share - basic and diluted:
Weighted average number of common shares outstanding, dilutive adjustment (in shares)	0	1,524
LTIP Units
Denominator for earnings per common share - basic and diluted:
Weighted average number of common shares outstanding, dilutive adjustment (in shares)	0	76

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Segment Information (Details)	3 Months Ended
	Mar. 31, 2021 segment
Segment Reporting [Abstract]
Number of reportable segments	1
Office Building | Total rents | Product Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk (more than)	100.00%

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Related Person Transactions (Details) - Two North Riverside Plaza Joint Venture Limited Partnership $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) option	Jul. 20, 2015
Related Party Transaction [Line Items]
Lease term				5 years
Tenant improvements	$ 0.7
Renewal term of lease arrangement			1 year
Number of renewal options of lease arrangement | option			0
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2021			$ 0.3
Operating lease, expense	$ 0.1	$ 0.2

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Subsequent Events (Details)	May 17, 2021 $ / shares	May 04, 2021 $ / shares	Apr. 09, 2021 $ / shares	Feb. 16, 2021 $ / shares	Jan. 11, 2021 $ / shares
Subsequent Event [Line Items]
Distributions to common shareholders					$ 0.40625
Dividend paid (in dollars per share)				$ 0.40625
Subsequent event
Subsequent Event [Line Items]
Distributions to common shareholders			$ 0.40625
Subsequent event | Monmouth Real Estate Investment Corporation
Subsequent Event [Line Items]
Business acquisition, conversion basis		0.67
Business acquisition, quarterly dividend (in dollars per share)		$ 0.18
Business acquisition, share price (in dollars per share)		$ 25.00
Subsequent event | Scenario, Forecast
Subsequent Event [Line Items]
Dividend paid (in dollars per share)	$ 0.40625

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Label	Element	Value
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	$ 0
Restricted Cash and Cash Equivalents	us-gaap_RestrictedCashAndCashEquivalents	$ 3,174,000