Noncontrolling Interest

3 Months Ended

Mar. 31, 2025

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, 2025, 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, 2025:


	Common Shares	OP Units and LTIP Units(1)	Total
Outstanding at January 1, 2025	107,335,177	148,103	107,483,280
Repurchase and surrender of shares	(510,000)	—	(510,000)
OP Unit redemption	52,549	(52,549)	—
Share-based compensation grants and vesting, net of forfeitures	873,406	59,024	932,430
Outstanding at March 31, 2025	107,751,132	154,578	107,905,710
Noncontrolling ownership interest in the Operating Trust			0.14	%

(1) It is unlikely that 101,634 LTIP Units outstanding as of March 31, 2025, will participate in any Company liquidating distributions. The noncontrolling ownership interest in the Operating Trust that is likely to participate in liquidating distributions as of March 31, 2025 is 0.05%

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.