Real Estate Properties

12 Months Ended

Dec. 31, 2021

Acquisitions and Expenditures

We did not make any acquisitions during the years ended December 31, 2021, 2020 or 2019.

During the years ended December 31, 2021, 2020, and 2019, we made improvements, excluding tenant-funded improvements, to our properties totaling $6.3 million, $11.6 million and $13.9 million, respectively.

We committed $4.6 million for expenditures related to 0.1 million square feet of leases executed during 2021. Committed but unspent tenant related obligations are leasing commissions and tenant improvements. Based on existing leases as of December 31, 2021, committed but unspent tenant related obligations were $6.7 million.

Property Dispositions:

We did not sell any properties during the year ended December 31, 2021.

During the year ended December 31, 2020, we sold the following properties, which did not represent strategic shifts under ASC Topic 2015 (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		194,662
Georgetown-Green and Harris Buildings	May 2020	1	2	240,475	85,000		24,916
		3	4	961,437	$	756,500	$	444,768

(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 $(14,000), $193.4 million, of which $194.7 million related to the gain on sale, and $14.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.

During the year ended December 31, 2019, we sold the following properties, which did not represent strategic shifts under ASC Topic 2015 (dollars in thousands):


Property	Date Sold	Number of Properties	Number of Buildings	Square Footage	Gross Sale Price(1)		Gain on Sale
1735 Market Street(2)	March 2019	1	1	1,286,936	$	451,600	$	192,985
600 108th Avenue NE(3)	April 2019	1	1	254,510	195,000		149,009
Research Park(4)	June 2019	1	4	1,110,007	165,500		78,158
		3	6	2,651,453	$	812,100	$	420,152

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

(2)Certain of our subsidiaries sold 100.0% of the equity interests in the fee simple owner of this property. The sale represents an individually significant disposition. The operating results of this property are included in continuing operations for all periods presented through the date of sale. Net (loss) income related to this property was $(41,000), $0.1 million and $197.5 million, of which $193.0 million related to the gain on sale, for the years ended December 31, 2021, 2020 and 2019 respectively.

(3)The property includes an office building and additional development rights.

(4)There was consideration of $2.0 million being held in escrow related to the sale of this property. In June 2020, these proceeds were released to the Company, and we recorded an additional $2.0 million gain on the sale for the year ended December 31, 2020.

Lease Payments

Our real estate properties are generally leased on gross lease and modified gross lease bases pursuant to non-cancelable, fixed term operating leases expiring between 2022 and 2035. These gross leases and modified gross leases require us to pay all or some property operating expenses and to provide all or some property management services. A portion of these property operating expenses are reimbursed by the tenants.

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 years ended December 31, 2021 and 2020, we deferred collection of $20,000 and $0.3 million, respectively, of rental income on revenue that was recognized in that period.

The future minimum lease payments, excluding tenant reimbursement revenue, scheduled to be received by us during the current terms of our leases as of December 31, 2021 are as follows (in thousands):


2022	$	36,598
2023	35,282
2024	28,645
2025	24,575
2026	20,714
Thereafter	53,575
	$	199,389

Rental revenue consists of the following (in thousands):


	December 31,
	2021		2020		2019
Lease payments	$	36,461	$	40,514	$	81,698
Variable lease payments	18,466		21,620		35,171
Rental revenue	$	54,927	$	62,134	$	116,869