EX-99.2

EX-99.2 3 d691776dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

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ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION FOR

THE THREE MONTHS ENDED MARCH 31, 2019


		Page

Consolidated Balance Sheets		4

Consolidated Statements of Income		6

First Quarter Fact Sheet		8

Portfolio Summary		9

Funds from Operations (FFO), Core FFO and Funds Available for Distribution (FAD)		10

Analysis of Capital Expenditures		12

Capital Structure and Financial Condition		13

Portfolio Operating Analysis and Statistics		14

Lease Expirations		21

Quarter-to-Date Production Statistics		25

Multifamily Summary		26

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Forward-Looking Statement

When used within this supplemental information package, the words “may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends” and similar expressions are intended to identify “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements. Such factors include the impact of competition from new and existing commercial facilities which could impact rents and occupancy levels at the Company’s facilities; the Company’s ability to evaluate, finance and integrate acquired and developed properties into the Company’s existing operations; the Company’s ability to effectively compete in the markets that it does business in; the impact of the regulatory environment as well as national, state and local laws and regulations including, without limitation, those governing REITs; the impact of general economic conditions upon rental rates and occupancy levels at the Company’s facilities; the availability of permanent capital at attractive rates, the outlook and actions of rating agencies and risks detailed from time to time in the Company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.

Non-GAAP Disclosures

Provided within this supplemental information package are measures not defined in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe our presentation of these non-GAAP measures assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. These non-GAAP measures discussed below are not substitutes of other measures of financial performance presented in accordance with GAAP. In addition, other real estate investment trusts (“REITs”) may compute these measures differently, so comparisons among REITs may not be helpful.

Net operating income (“NOI”) — We utilize NOI, a non-GAAP financial measure, to evaluate the operating performance of our business parks. We define NOI as rental income less adjusted cost of operations (described below). We believe NOI assists investors in analyzing the performance and value of our business parks by excluding (i) corporate overhead (i.e. general and administrative expenses) because it does not relate to the results of our business parks, (ii) depreciation and amortization expense because it does not accurately reflect changes in the fair value of our business parks and (iii) stock compensation expense because this expense item can vary significantly from period to period and thus impact comparability across periods. The GAAP measure most directly comparable to NOI is net income.

Cash NOI — We utilized cash NOI to evaluate the cash flow performance of our business parks. Cash NOI represents NOI adjusted to exclude non-cash items included in revenue and in cost of operations. The non-cash adjustments in revenue include straight-line rent, amortization of above and below market rents, net, and amortization of lease incentives and tenant improvement reimbursements. The non-cash adjustments in cost of operations is equal to stock compensation expense for employees whose compensation expense is recorded in cost of operations. We believe that cash NOI assists investors in analyzing cash flow performance of our business parks. The GAAP measure most directly comparable to cash NOI is net income.

Adjusted Cost of Operations — Adjusted cost of operations represents cost of operations, excluding stock compensation expense for employees whose compensation expense is recorded in cost of operations, which can vary significantly period to period based upon the performance of the company. The GAAP measure most directly comparable to adjusted cost of operations is cost of operations.

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) — EBITDAre is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is often utilized to evaluate the performance of real estate companies. EBITDAre is calculated as GAAP net income before interest, depreciation and amortization and adjusted to exclude gains or losses from sales of depreciable real estate assets. We believe our presentation of EBITDAre assists investors and analysts in evaluating the operating performance of our business activities, including the impact of general and administrative expenses, and without the impact from gains or losses from sales of depreciable real estate assets. The GAAP measure most directly comparable EBITDAre is net income.

Funds from Operations (“FFO”) and FFO per share — FFO and FFO per share are non-GAAP measures defined by NAREIT and are considered helpful measures of REIT performance by REITs and many REIT analysts. FFO represents GAAP net income before real estate depreciation and amortization expense, gains or losses on sales of operating properties and land and impairment charges on real estate assets, which are excluded because it does not accurately reflect changes in the value of our business parks. FFO per share represents FFO allocable to common and dilutive shares, divided by aggregate common and dilutive shares. The GAAP measure most directly comparable to FFO and FFO per share are net income and earnings per share, respectively.

Core FFO and Core FFO per share — Core FFO represents FFO excluding the net impact of (i) income allocated to preferred shareholders to the extent redemption value exceeds the related carrying value and (ii) nonrecurring income or expense items. Core FFO per share represents Core FFO allocable to common and dilutive shares divided by the weighted average common and dilutive shares. We believe our presentation of Core FFO and Core FFO per share assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. The GAAP measures most directly comparable to Core FFO and Core FFO per share are net income and earnings per share, respectively.

Funds Available for Distribution (“FAD”) — FAD is a non-GAAP measure that represents Core FFO adjusted to (a) deduct recurring capital improvements that maintain our real estate condition, tenant improvements and lease commissions and (b) eliminate certain non-cash income or expenses such as straight-line rent and non-cash stock compensation expense. We believe our presentation of FAD assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. FAD is not a substitute for GAAP net cash flow in evaluating our liquidity or ability to pay dividends, because they exclude investing and financing activities presented on our statements of cash flows. The GAAP measure most directly comparable to FAD is operating cash flow from our statements of cash flows.

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	March 31, 2019		December 31, 2018
ASSETS

Cash and cash equivalents	$	39,356	$	37,379	(a)

Real estate facilities, at cost
Land		816,656		816,656
Buildings and improvements		2,382,274		2,374,943

		3,198,930		3,191,599
Accumulated depreciation		(1,265,133)		(1,241,116)

		1,933,797		1,950,483	(b)
Land and building held for development		31,273		30,848

		1,965,070		1,981,331
Rent receivable, net		3,428		1,403	(c)
Deferred rent receivable, net		33,953		33,308
Other assets		14,812		15,173	(d)

Total assets	$	2,056,619	$	2,068,594


LIABILITIES AND EQUITY

Accrued and other liabilities	$	80,344	$	85,141	(e)

Total liabilities		80,344		85,141

Equity
PS Business Parks, Inc.’s shareholders’ equity:
Preferred stock		959,750		959,750
Common stock		274		274
Paid-in capital		732,955		736,131	(f)
Accumulated earnings		67,059		69,207	(g)

Total PS Business Parks, Inc.’s shareholders’ equity		1,760,038		1,765,362
Noncontrolling interests		216,237		218,091

Total equity		1,976,275		1,983,453

Total liabilities and equity	$	2,056,619	$	2,068,594

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(a)	Change in cash and cash equivalents
	Beginning cash balance at December 31, 2018					$	37,379
	Net cash provided by operating activities						64,755
	Net cash used in investing activities						(7,976)
	Net cash used in financing activities						(54,802)

	Ending cash balance at March 31, 2019					$	39,356


(b)	Change in real estate facilities
	Beginning balance at December 31, 2018					$	1,950,483
	Recurring capital improvements						1,180
	Tenant improvements, gross						3,653
	Capitalized lease commissions						1,956
	Nonrecurring capital improvements						864
	Depreciation and amortization						(24,339)

	Ending balance at March 31, 2019					$	1,933,797


						Increase
(c)	Change in rent receivable	March 31, 2019		December 31, 2018		(Decrease)
	Non-government customers	$	2,913	$	1,040	$	1,873
	U.S. Government customers		915		763		152
	Allowance for doubtful accounts		(400)		(400)		-

		$	3,428	$	1,403	$	2,025


						Increase
(d)	Change in other assets	March 31, 2019		December 31, 2018		(Decrease)
	Lease intangible assets, net	$	9,508	$	8,671	$	837
	Prepaid property taxes and insurance		1,667		3,381		(1,714)
	Other		3,637		3,121		516

		$	14,812	$	15,173	$	(361)


						Increase
(e)	Change in accrued and other liabilities	March 31, 2019		December 31, 2018		(Decrease)
	Customer security deposits	$	38,323	$	37,557	$	766
	Accrued property taxes		11,520		10,454		1,066
	Customer prepaid rent		12,844		16,830		(3,986)
	Lease intangible liabilities, net		9,199		7,870		1,329
	Other		8,458		12,430		(3,972)

		$	80,344	$	85,141	$	(4,797)


(f)	Change in paid-in capital
	Beginning paid-in capital					$	736,131
	Exercise of stock options						405
	Stock compensation expense, net						703
	Cash paid for taxes in lieu of shares upon vesting of restricted stock units						(5,494)
	Adjustment to reflect noncontrolling interests underlying ownership - common units						1,210

	Ending paid in capital					$	732,955


(g)	Change in accumulated earnings
	Beginning accumulated earnings					$	69,207
	Net income						39,548
	Distributions to preferred shareholders						(12,959)
	Distributions to common shareholders						(28,737)

	Ending accumulated earnings					$	67,059

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	For The Three Months Ended
	Ended March 31,
	2019		2018

Rental income	$	107,825	$	103,759	(a)

Expenses
Cost of operations ⁽¹⁾		33,593		32,456	(b)
Depreciation and amortization		24,875		23,882
General and administrative ⁽¹⁾		3,233		2,850	(c)

Total operating expenses		61,701		59,188


Interest and other income		618		284	(d)
Interest and other expense		(167)		(165)	(e)
Gain on sale of real estate facilities		-		26,835

Net income		46,575		71,525
Allocation to noncontrolling interests		(7,027)		(11,900)

Net income allocable to PS Business Parks, Inc.		39,548		59,625
Allocation to preferred shareholders		(12,959)		(13,003)
Allocation to restricted stock unit holders		(268)		(574)

Net income allocable to common shareholders	$	26,321	$	46,048


Net income per common share
Basic	$	0.96	$	1.69
Diluted	$	0.96	$	1.69

Weighted average common shares outstanding
Basic		27,373		27,267
Diluted		27,479		27,318

⁽¹⁾

Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $544,000 for the three months ended March 31, 2018, consisting of $385,000 of compensation costs and $159,000 of stock compensation expense, from cost of operations into general and administrative expenses on our consolidated statements of income in the three months ended March 31, 2018 in order to conform to the current period presentation.

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		For The Three Months Ended				Increase
(a)	Rental income:	March 31, 2019		March 31, 2018		(Decrease)
	Same Park	$	101,997	$	97,466	$	4,531
	Same Park non-cash revenue ⁽¹⁾		849		1,164		(315)
	Non-Same Park		2,318		-		2,318
	Non-Same Park non-cash revenue ⁽¹⁾		163		-		163
	Multifamily		2,497		1,424		1,073
	Multifamily non-cash revenue ⁽¹⁾		1		-		1
	Revenue from assets sold		-		3,705		(3,705)

		$	107,825	$	103,759	$	4,066


		For The Three Months Ended				Increase
(b)	Cost of operations:	March 31, 2019		March 31, 2018		(Decrease)
	Same Park	$	31,071	$	29,838	$	1,233
	Same Park non-cash adjustments ⁽²⁾		293		358		(65)
	Non-Same Park		1,145		-		1,145
	Non-Same Park non-cash adjustments ⁽²⁾		13		-		13
	Multifamily		1,071		997		74
	Expenses from assets sold		-		1,263		(1,263)

		$	33,593	$	32,456	$	1,137


		For The Three Months Ended				Increase
(c)	General and administrative expenses:	March 31, 2019		March 31, 2018		(Decrease)
	Compensation expense	$	1,683	$	1,330	$	353
	Stock compensation expense		561		637		(76)
	Professional fees and other		989		883		106

		$	3,233	$	2,850	$	383


		For The Three Months Ended				Increase
(d)	Interest and other income:	March 31, 2019		March 31, 2018		(Decrease)
	Management fee income	$	78	$	127	$	(49)
	Interest income		326		67		259
	Other income		214		90		124

		$	618	$	284	$	334


		For The Three Months Ended				Increase
(e)	Interest and other expense:	March 31, 2019		March 31, 2018		(Decrease)
	Credit facility	$	-	$	(13)	$	(13)
	Facilities fees & other charges		(167)		(152)		15

		$	(167)	$	(165)	$	2

⁽¹⁾	Non-cash revenue adjustments represent straight-line rent, amortization of above and below market rents, net, and amortization of lease incentives and tenant improvement reimbursements.

⁽²⁾	Non-cash cost of operations adjustments represent stock compensation expense attributable to employees whose compensation expense is recorded in costs of operations.

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NET OPERATING INCOME



	For The Three Months Ended March 31,
	2019		2018		% Change
Rental income
Same Park ⁽¹⁾	$	102,846	$	98,630		4.3%
Non-Same Park ⁽²⁾		2,481		-		100.0%
Multifamily		2,498		1,424		75.4%

Total rental income		107,825		100,054		7.8%

Adjusted cost of operations ⁽³⁾
Same Park ⁽¹⁾		31,071		29,838		4.1%
Non-Same Park ⁽²⁾		1,145		-		100.0%
Multifamily		1,071		997		7.4%

Total adjusted cost of operations		33,287		30,835		8.0%

Net operating income
Same Park ⁽¹⁾		71,775		68,792		4.3%
Non-Same Park ⁽²⁾		1,336		-		100.0%
Multifamily		1,427		427		234.2%

Total net operating income	$	74,538	$	69,219		7.7%


CASH NET OPERATING INCOME

	For The Three Months Ended March 31,
	2019		2018		% Change
Cash rental income ⁽⁴⁾
Same Park ⁽¹⁾	$	101,997	$	97,466		4.6%
Non-Same Park ⁽²⁾		2,318		-		100.0%
Multifamily		2,497		1,424		75.4%

Total cash rental income		106,812		98,890		8.0%

Adjusted cost of operations ⁽³⁾
Same Park ⁽¹⁾		31,071		29,838		4.1%
Non-Same Park ⁽²⁾		1,145		-		100.0%
Multifamily		1,071		997		7.4%

Total adjusted cost of operations		33,287		30,835		8.0%

Cash net operating income
Same Park ⁽¹⁾		70,926		67,628		4.9%
Non-Same Park ⁽²⁾		1,173		-		100.0%
Multifamily		1,426		427		234.0%

Total cash net operating income	$	73,525	$	68,055		8.0%


EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre)

	For The Three Months Ended March 31,
	2019		2018		% Change
Net income	$	46,575	$	71,525		(34.9%)
Net interest (income) expense		(190)		73		(360.3%)
Depreciation and amortization		24,875		23,882		4.2%
Gain on sale of real estate facilities and development rights		-		(26,835)		(100.0%)

EBITDAre	$	71,260	$	68,645		3.8%

⁽¹⁾	Same Park includes assets acquired prior to January 1, 2017.

⁽²⁾	Non-Same Park reflects assets acquired on or subsequent to January 1, 2017.

⁽³⁾

Adjusted cost of operations represents cost of operations excluding stock compensation expense for employees whose compensation expense is recorded in cost of operations. Refer to the “Forward-Looking Statement and Non-GAAP Disclosures” for more information on page 3. Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $385,000 for the three months ended March 31, 2018 from adjusted cost of operations into general and administrative expenses in order to conform to the current period presentation. Non-cash compensation expense for our divisional vice presidents, which totaled $159,000 for the three months ended March 31, 2018, had previously been excluded from adjusted cost of operations.

⁽⁴⁾	Cash rental income excludes non-cash adjustments, specifically straight-line rent, amortization of above and below market rents, net, amortization of lease incentives and tenant improvement reimbursements.

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PROPERTY INFORMATION

	For The Three Months Ended March 31,
	2019		2018		% Change
Total Portfolio⁽¹⁾
Total rentable square footage at period end		28,186,000		27,129,000		3.9%
Weighted average occupancy		93.9%		94.2%		(0.3%)
Period end occupancy		94.0%		94.4%		(0.4%)
Annualized realized rent per occupied sq. ft.⁽²⁾	$	15.91	$	15.43		3.1%
RevPAF⁽³⁾	$	14.95	$	14.54		2.8%

Same Park Portfolio ⁽⁴⁾
Total rentable square footage at period end		27,129,000		27,129,000		-
Weighted average occupancy		94.5%		94.2%		0.3%
Period end occupancy		94.6%		94.4%		0.2%
Annualized realized rent per occupied sq. ft.⁽²⁾	$	16.04	$	15.43		4.0%
RevPAF⁽³⁾	$	15.16	$	14.54		4.3%

Non-Same Park Portfolio ⁽⁵⁾
Total rentable square footage at period end		1,057,000		-		100.0%
Weighted average occupancy		78.6%		-		100.0%
Period end occupancy		79.9%		-		100.0%
Annualized realized rent per occupied sq. ft.⁽²⁾	$	11.94	$	-		100.0%
RevPAF⁽³⁾	$	9.39	$	-		100.0%

Multifamily Portfolio
Number of units		395		395		-
Period end occupancy		94.9%		61.5%		54.3%

⁽¹⁾	Operating metrics from our multifamily asset are excluded from the total portfolio operating metrics.

⁽²⁾	Annualized realized rent per occupied square foot represents the annualized revenue earned per occupied square foot.

⁽³⁾	RevPAF represents the annualized revenue earned per total weighted average available square foot.

⁽⁴⁾	Same Park includes assets acquired prior to January 1, 2017.

⁽⁵⁾	Non-Same Park reflects assets acquired on or subsequent to January 1, 2017.

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	For the Three Months Ended
	March 31,
	2019		2018

Net income allocable to common shareholders	$	26,321	$	46,048
Adjustments
Gain on sale of real estate facilities		-		(26,835)
Depreciation and amortization		24,875		23,882
Net income allocable to noncontrolling interests		7,027		11,900
Net income allocable to restricted stock unit holders		268		574
FFO (income) loss allocated to joint venture partner		(29)		13

FFO allocable to common and dilutive shares		58,462		55,582
Core FFO allocable to common and dilutive shares		58,462		55,582
Adjustments
Recurring capital improvements		(1,180)		(1,102)
Tenant improvements		(3,551)		(3,886)
Capitalized lease commissions		(1,956)		(1,919)
Total recurring capital expenditures (assets sold)		-		(96)
Total recurring capital expenditures (multifamily)		-		(7)
Straight-line rent		(657)		(735)
In-place lease adjustment		21		7
Tenant improvement reimbursement amortization, net of lease incentive amortization		(379)		(515)
Stock compensation expense		971		1,110
Cash paid for taxes in lieu of shares upon vesting of restricted stock units		(5,494)		(4,529)

FAD allocable to common and dilutive shares		46,237		43,910
Distributions to common shareholders		(28,737)		(23,171)
Distributions to common operating partnership unit holders		(7,671)		(6,210)
Distributions to restricted stock unit holders		(268)		(295)

Free cash available after fixed charges		9,561		14,234
Non-recurring property renovations ⁽¹⁾		(864)		(32)
Investment in Highgate ⁽²⁾		-		(2,760)
Investment in The Mile redevelopment ⁽³⁾		(425)		(146)

Retained cash	$	8,272	$	11,296


Weighted average outstanding:
Common shares		27,373		27,267
Operating partnership units		7,305		7,305
Restricted stock units		140		246
Common share equivalents		106		51

Total common and dilutive shares		34,924		34,869


FFO per common and dilutive share	$	1.67	$	1.59
FAD distribution payout ratio ⁽⁴⁾		79.3%		67.6%

⁽¹⁾	Non-recurring property renovations represents renovations that substantially enhance the value of a property.

⁽²⁾	Represents development costs related to a 395-unit apartment complex that commenced operations during 2017.

⁽³⁾	Represents predevelopment costs related to a multifamily project on a large contiguous block of real estate located in Tysons, Virginia.

⁽⁴⁾	FAD distribution payout ratio is equal to total distributions to common shareholders, unit holders and restricted stock unit holders divided by FAD during the same reporting periods.

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	For the Three Months Ended		Cost per Weighted
	March 31, 2019		Average Square Foot
Commercial recurring capital expenditures ⁽¹⁾
Capital improvements	$	1,180	$	0.04
Tenant improvements		3,551		0.13
Lease commissions		1,956		0.07

Total commercial recurring capital expenditures		6,687	$	0.24

Non-recurring property renovations ⁽²⁾		864

Total capital expenditures (excluding multifamily)		7,551

Multifamily capital expenditures		-

Total capital expenditures	$	7,551

⁽¹⁾

The Company defines “recurring capital expenditures” as capitalized costs necessary to continue to operate the property at its current economic value. Capital improvements in excess of $2,000 with a useful life greater than 24 months are capitalized. Lease transaction costs (tenant improvements and leasing commissions) of $1,000 or more for leases with terms greater than 12 months are capitalized. Lease-up costs on acquired properties are also included in recurring capital expenditures.

⁽²⁾	Non-recurring property renovations represents renovations that substantially enhance the value of a property.

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	As of March 31, 2019						As of December 31, 2018
			% of Total						% of Total
			Market		WTD Average				Market		WTD Average
	Total		Capitalization		Rate		Total		Capitalization		Rate

Unsecured Debt:
$250.0 million unsecured credit facility (LIBOR + 0.825%)	$	-		-		-	$	-		-		-

Total unsecured debt		-		-		-		-		-		-


Preferred Equity:
5.75% Series U preferred stock (9,200,000 depositary shares outstanding) callable 9/14/17		230,000		3.6%				230,000		4.2%
5.70% Series V preferred stock (4,400,000 depositary shares outstanding) callable 3/14/18		110,000		1.7%				110,000		2.0%
5.20% Series W preferred stock (7,590,000 depositary shares outstanding) callable 10/20/21		189,750		3.0%				189,750		3.4%
5.25% Series X preferred stock (9,200,000 depositary shares outstanding) callable 9/21/22		230,000		3.6%				230,000		4.2%
5.20% Series Y preferred stock (8,000,000 depositary shares outstanding) callable 12/7/22		200,000		3.1%				200,000		3.6%

Total preferred equity		959,750		15.0%		5.40%		959,750		17.4%		5.40%



Total debt and preferred equity		959,750		15.0%		5.40%		959,750		17.4%		5.40%


Common stock (27,417,909 and 27,362,101 shares outstanding as of March 31, 2019 and December 31, 2018, respectively) ⁽¹⁾		4,299,951		67.1%				3,584,435		65.2%
Common operating partnership units (7,305,355 units outstanding as of March 31, 2019 and December 31,2018) ⁽¹⁾		1,145,699		17.9%				957,002		17.4%

Total common equity		5,445,650		85.0%				4,541,437		82.6%


Total market capitalization	$	6,405,400		100.0%			$	5,501,187		100.0%


Ratio of Debt and Preferred Equity to EBITDAre ⁽²⁾		3.4x						3.5x

For the periods ended
Interest expense and related expenses ⁽³⁾	$	136					$	555
Preferred distributions		12,959						51,880

Total fixed charges and preferred distributions	$	13,095					$	52,435


Ratio of EBITDAre to fixed charges and preferred distributions		5.4x						5.3x
Ratio of FFO to fixed charges and preferred distributions		5.5x						5.3x

⁽¹⁾	Total common equity is calculated as the total number of common stock and operating partnership units outstanding multiplied by the Company’s closing share price at the end of each reporting period. Closing share prices on March 31, 2019 and December 31, 2018 were $156.83 and $131.00, respectively.

⁽²⁾	Ratio of debt and preferred equity to EBITDAre is calculated as total debt and preferred equity divided by EBITDAre. Ratio of debt and preferred equity to EBITDAre as of March 31, 2019 is calculated using annualized EBITDAre for the three months ended March 31, 2019.

⁽³⁾	Interest expense and related expenses includes facility fees.

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Industry Concentration as of March 31, 2019

					Percentage of
					Total Rental Income
Business services						19.2%
Warehouse, distribution, transportation and logistics						11.4%
Computer hardware, software and related services						11.1%
Health services						9.9%
Retail, food, and automotive						7.5%
Engineering and construction						7.3%
Government						7.0%
Insurance and financial services						3.6%
Electronics						3.1%
Home furnishings						2.6%
Aerospace/defense products and services						2.0%
Communications						1.9%
Educational services						1.0%
Other						12.4%

Total						100.0%


Top 10 Customers by Total Annual Rental Income as of March 31, 2019

	Square		Annualized		Percentage of Total
Customer	Footage		Rental Income ⁽¹⁾		Annualized Rental Income

US Government		681,000	$	16,066		3.8%
Luminex Corp		199,000		3,966		0.9%
Lockheed Martin Corp		143,000		2,639		0.6%
KZ Kitchen Cabinet & Stone		191,000		2,388		0.6%
CentralColo, LLC		96,000		2,293		0.5%
Applied Materials, Inc.		162,000		2,250		0.5%
Carbel, LLC		207,000		2,065		0.5%
Investorplace Media, LLC		46,000		1,937		0.5%
Keeco, L.L.C.		460,000		1,913		0.5%
ECS Federal, LLC		100,000		1,785		0.4%

Total		2,285,000	$	37,302		8.8%


Tenant Composition as of March 31, 2019

					Average Tenant Size
			Number		(in square feet)
			of Tenants		Average square footage
Large Tenants ⁽²⁾				1,510		12,364
Small Tenants ⁽³⁾				3,526		2,222

Total Portfolio				5,036		5,263

⁽¹⁾	For leases expiring within one year, annualized rental income includes only the income to be received under the existing lease from April 1, 2019 through the respective date of expiration.

⁽²⁾	Large tenant portfolio consists of properties with average leases greater than or equal to 5,000 square feet.

⁽³⁾	Small tenant portfolio consists of properties with average leases less than 5,000 square feet.

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	For the Three Months Ended
	March 31, 2019								March 31, 2018
	Flex		Office		Industrial		Total		Flex		Office		Industrial		Total
Cash rental income ⁽¹⁾
Northern California	$	2,467	$	2,992	$	20,552	$	26,011	$	2,343	$	2,758	$	19,043	$	24,144
Southern California		4,638		183		8,790		13,611		4,416		185		8,320		12,921
Dallas		5,130		—		3,050		8,180		4,830		—		2,810		7,640
Austin		5,408		—		2,061		7,469		5,432		—		1,984		7,416
Northern Virginia		6,326		10,582		1,793		18,701		6,247		10,296		1,757		18,300
South Florida		456		1		10,443		10,900		501		45		9,940		10,486
Suburban Maryland		3,394		8,094		1,197		12,685		3,217		7,932		1,141		12,290
Seattle		1,602		181		2,657		4,440		1,454		180		2,635		4,269

Total		29,421		22,033		50,543		101,997		28,440		21,396		47,630		97,466

Adjusted cost of operations ⁽²⁾
Northern California		679		770		4,595		6,044		648		733		4,310		5,691
Southern California		1,251		68		2,227		3,546		1,156		65		1,997		3,218
Dallas		1,965		—		947		2,912		1,784		—		969		2,753
Austin		2,006		—		718		2,724		1,903		—		656		2,559
Northern Virginia		2,027		4,439		616		7,082		1,977		4,390		564		6,931
South Florida		150		22		2,711		2,883		127		10		2,740		2,877
Suburban Maryland		1,081		3,383		381		4,845		1,006		3,373		367		4,746
Seattle		367		49		619		1,035		350		52		661		1,063

Total		9,526		8,731		12,814		31,071		8,951		8,623		12,264		29,838

Cash NOI
Northern California		1,788		2,222		15,957		19,967		1,695		2,025		14,733		18,453
Southern California		3,387		115		6,563		10,065		3,260		120		6,323		9,703
Dallas		3,165		—		2,103		5,268		3,046		—		1,841		4,887
Austin		3,402		—		1,343		4,745		3,529		—		1,328		4,857
Northern Virginia		4,299		6,143		1,177		11,619		4,270		5,906		1,193		11,369
South Florida		306		(21)		7,732		8,017		374		35		7,200		7,609
Suburban Maryland		2,313		4,711		816		7,840		2,211		4,559		774		7,544
Seattle		1,235		132		2,038		3,405		1,104		128		1,974		3,206

Total	$	19,895	$	13,302	$	37,729	$	70,926	$	19,489	$	12,773	$	35,366	$	67,628

⁽¹⁾	Cash rental income excludes non-cash adjustments, specifically straight-line rent, amortization of above and below market rents, net, amortization of lease incentives and tenant improvement reimbursements.

⁽²⁾	Adjusted cost of operations represents cost of operations excluding stock compensation expense related to employees whose compensation expense is included in costs of operations.

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	For the Three Months Ended
	March 31, 2019								March 31, 2018
	Flex		Office		Industrial		Total		Flex		Office		Industrial		Total
Rental Income
Northern California	$	2,447	$	2,987	$	20,622	$	26,056	$	2,342	$	2,805	$	19,088	$	24,235
Southern California		4,655		184		8,768		13,607		4,401		183		8,396		12,980
Dallas		5,226		—		3,094		8,320		4,894		—		2,856		7,750
Austin		5,520		—		2,108		7,628		5,457		—		1,979		7,436
Northern Virginia		6,166		10,808		1,892		18,866		6,267		10,753		1,860		18,880
South Florida		468		20		10,403		10,891		478		45		10,054		10,577
Suburban Maryland		3,466		8,448		1,170		13,084		3,290		8,108		1,139		12,537
Seattle		1,612		179		2,603		4,394		1,456		180		2,599		4,235

Total		29,560		22,626		50,660		102,846		28,585		22,074		47,971		98,630

Adjusted cost of operations ⁽¹⁾
Northern California		679		770		4,595		6,044		648		733		4,310		5,691
Southern California		1,251		68		2,227		3,546		1,156		65		1,997		3,218
Dallas		1,965		—		947		2,912		1,784		—		969		2,753
Austin		2,006		—		718		2,724		1,903		—		656		2,559
Northern Virginia		2,027		4,439		616		7,082		1,977		4,390		564		6,931
South Florida		150		22		2,711		2,883		127		10		2,740		2,877
Suburban Maryland		1,081		3,383		381		4,845		1,006		3,373		367		4,746
Seattle		367		49		619		1,035		350		52		661		1,063

Total		9,526		8,731		12,814		31,071		8,951		8,623		12,264		29,838

NOI
Northern California		1,768		2,217		16,027		20,012		1,694		2,072		14,778		18,544
Southern California		3,404		116		6,541		10,061		3,245		118		6,399		9,762
Dallas		3,261		—		2,147		5,408		3,110		—		1,887		4,997
Austin		3,514		—		1,390		4,904		3,554		—		1,323		4,877
Northern Virginia		4,139		6,369		1,276		11,784		4,290		6,363		1,296		11,949
South Florida		318		(2)		7,692		8,008		351		35		7,314		7,700
Suburban Maryland		2,385		5,065		789		8,239		2,284		4,735		772		7,791
Seattle		1,245		130		1,984		3,359		1,106		128		1,938		3,172

Total	$	20,034	$	13,895	$	37,846	$	71,775	$	19,634	$	13,451	$	35,707	$	68,792

⁽¹⁾

Adjusted cost of operations represents cost of operations excluding stock compensation expense related to employees whose compensation expense is included in cost of operations. Refer to the “Forward-Looking Statement and Non-GAAP Disclosures” for more information on page 3. Beginning January 1, 2019, the Company has recorded our divisional vice presidents’ compensation costs within general and administrative expense as we determined that the nature of these individuals’ responsibilities is more consistent with corporate oversight as opposed to direct property operations. As a result of this change, we have reclassified divisional vice presidents’ compensation costs totaling $385,000 for the three months ended March 31, 2018 from adjusted cost of operations into general and administrative expenses in order to conform to the current period presentation. Non-cash compensation expense for our divisional vice presidents, which totaled $159,000 for the three months ended March 31, 2018, had previously been excluded from adjusted cost of operations.

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Realized Revenue per Occupied Square Foot ⁽¹⁾
	For the Three Months
	Ended March 31,
Region	2019		2018		% Change

Northern California	$	14.90	$	13.72	8.6%
Southern California	$	17.34	$	16.24	6.8%
Dallas	$	12.47	$	11.98	4.1%
Austin	$	17.14	$	16.04	6.9%
Northern Virginia	$	20.55	$	21.19	(3.0%)
South Florida	$	11.69	$	11.38	2.7%
Suburban Maryland	$	22.51	$	22.62	(0.5%)
Seattle	$	13.16	$	12.41	6.0%
Total	$	16.04	$	15.43	4.0%


Revenue per Available Foot (RevPAF)⁽²⁾
	For the Three Months
	Ended March 31,
Region	2019		2018		% Change

Northern California	$	14.39	$	13.38	7.5%
Southern California	$	16.58	$	15.81	4.9%
Dallas	$	11.53	$	10.74	7.4%
Austin	$	15.54	$	15.15	2.6%
Northern Virginia	$	19.27	$	19.28	(0.1%)
South Florida	$	11.27	$	10.94	3.0%
Suburban Maryland	$	20.30	$	19.45	4.4%
Seattle	$	12.64	$	12.19	3.7%
Total	$	15.16	$	14.54	4.3%


Revenue per Available Foot (RevPAF)⁽²⁾
	For the Three Months
	Ended March 31,
Region	2019		2018		% Change

Industrial	$	12.31	$	11.65	5.7%
Flex	$	17.72	$	17.13	3.4%
Office	$	22.69	$	22.13	2.5%
Total	$	15.16	$	14.54	4.3%

⁽¹⁾	Represents revenue earned per occupied square foot. For the three month periods ending March 31, 2019 and 2018, rental income amounts have been annualized.

⁽²⁾	Represents revenue earned per total weighted average available square foot. For the three month periods ending March 31, 2019 and 2018, rental income amounts have been annualized.

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Rentable Square Footage of Same Park Properties as of March 31, 2019

Markets	Industrial		Flex		Office		Total		% of Total

Northern Virginia		507		1,440		1,970		3,917		14.4%
South Florida		3,728		126		12		3,866		14.3%
Silicon Valley		3,094		367		-		3,461		12.8%
East Bay		3,297		53		-		3,350		12.4%
Dallas		1,300		1,587		-		2,887		10.6%
Suburban Maryland		394		576		1,608		2,578		9.5%
Austin		755		1,208		-		1,963		7.2%
Los Angeles County		1,256		317		31		1,604		5.9%
Seattle		1,092		270		28		1,390		5.1%
Orange County		810		101		-		911		3.4%
San Diego County		233		535		-		768		2.8%
Mid-Peninsula		-		94		340		434		1.6%

Total		16,466		6,674		3,989		27,129		100.0%

Percentage by Product Type		60.7%		24.6%		14.7%		100.0%

Same Park Weighted Average Occupancy Rates by Product Type for the Three Months Ended March 31, 2019

Markets			Industrial		Flex		Office		Total

Northern Virginia				93.8%		96.0%		92.0%		93.7%
South Florida				96.7%		91.0%		65.6%		96.4%
Silicon Valley				97.1%		96.5%		-		97.1%
East Bay				96.5%		95.9%		-		96.5%
Dallas				96.5%		88.9%		-		92.3%
Suburban Maryland				87.4%		97.1%		88.2%		90.0%
Austin				98.1%		86.0%		-		90.7%
Los Angeles County				96.1%		96.2%		95.9%		96.1%
Seattle				95.6%		97.7%		100.0%		96.1%
Orange County				95.0%		98.5%		-		95.4%
San Diego County				97.7%		93.8%		-		95.0%
Mid-Peninsula				-		92.7%		94.0%		93.7%
Total				96.3%		92.4%		90.6%		94.5%

Same Park Weighted Average Occupancy Rates by Portfolio Type for the Three Months Ended March 31, 2019 ⁽¹⁾

Markets					Large Tenant		Small Tenant		Total

Northern Virginia						93.6%		93.9%		93.7%
South Florida						96.9%		94.3%		96.4%
Silicon Valley						97.6%		94.6%		97.1%
East Bay						96.2%		99.3%		96.5%
Dallas						92.0%		92.8%		92.3%
Suburban Maryland						90.3%		89.4%		90.0%
Austin						92.3%		79.3%		90.7%
Los Angeles County						96.3%		96.0%		96.1%
Seattle						95.4%		97.6%		96.1%
Orange County						95.6%		95.2%		95.4%
San Diego County						-		95.0%		95.0%
Mid-Peninsula						-		93.7%		93.7%
Total						94.8%		93.8%		94.5%

⁽¹⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Rentable Square Footage of Properties as of March 31, 2019

Markets	Industrial		Flex		Office		Total		% of Total

Northern Virginia		1,564		1,440		1,970		4,974		17.7%
South Florida		3,728		126		12		3,866		13.7%
Silicon Valley		3,094		367		-		3,461		12.3%
East Bay		3,297		53		-		3,350		11.9%
Dallas		1,300		1,587		-		2,887		10.2%
Suburban Maryland		394		576		1,608		2,578		9.2%
Austin		755		1,208		-		1,963		7.0%
Los Angeles County		1,256		317		31		1,604		5.7%
Seattle		1,092		270		28		1,390		4.9%
Orange County		810		101		-		911		3.2%
San Diego County		233		535		-		768		2.7%
Mid-Peninsula		-		94		340		434		1.5%

Total		17,523		6,674		3,989		28,186		100.0%

Percentage by Product Type		62.2%		23.7%		14.1%		100.0%

Weighted Average Occupancy Rates by Product Type for the Three Months Ended March 31, 2019

Markets			Industrial		Flex		Office		Total

Northern Virginia				83.6%		96.0%		92.0%		90.5%
South Florida				96.7%		91.0%		65.6%		96.4%
Silicon Valley				97.1%		96.5%		-		97.1%
East Bay				96.5%		95.9%		-		96.5%
Dallas				96.5%		88.9%		-		92.3%
Suburban Maryland				87.4%		97.1%		88.2%		90.0%
Austin				98.1%		86.0%		-		90.7%
Los Angeles County				96.1%		96.2%		95.9%		96.1%
Seattle				95.6%		97.7%		100.0%		96.1%
Orange County				95.0%		98.5%		-		95.4%
San Diego County				97.7%		93.8%		-		95.0%
Mid-Peninsula				-		92.7%		94.0%		93.7%
Total				95.2%		92.4%		90.6%		93.9%

Weighted Average Occupancy Rates by Portfolio Type for the Three Months Ended March 31, 2019 ⁽¹⁾

Markets					Large Tenant		Small Tenant		Total

Northern Virginia						89.4%		93.0%		90.5%
South Florida						96.9%		94.3%		96.4%
Silicon Valley						97.6%		94.6%		97.1%
East Bay						96.2%		99.3%		96.5%
Dallas						92.0%		92.8%		92.3%
Suburban Maryland						90.3%		89.4%		90.0%
Austin						92.3%		79.3%		90.7%
Los Angeles County						96.3%		96.0%		96.1%
Seattle						95.4%		97.6%		96.1%
Orange County						95.6%		95.2%		95.4%
San Diego County						-		95.0%		95.0%
Mid-Peninsula						-		93.7%		93.7%
Total						94.0%		93.6%		93.9%

⁽¹⁾	The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

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Lease Expirations - Industrial

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income

2019		3,433	$	42,762		18.9%		9.5%
2020		3,993		51,196		22.7%		11.5%
2021		2,688		37,788		16.7%		8.6%
2022		2,310		31,914		14.1%		7.1%
2023		1,958		27,009		11.9%		6.1%
Thereafter		2,322		35,354		15.7%		7.9%

Total		16,704	$	226,023		100.0%		50.7%


Lease Expirations - Flex

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income

2019		1,242	$	25,266		20.3%		5.8%
2020		1,349		23,938		19.3%		5.4%
2021		1,094		20,693		16.7%		4.6%
2022		975		21,024		16.9%		4.7%
2023		491		10,026		8.1%		2.2%
Thereafter		1,073		23,220		18.7%		5.2%

Total		6,224	$	124,167		100.0%		27.9%


Lease Expirations - Office

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income

2019		608	$	15,363		16.0%		3.4%
2020		849		22,807		23.8%		5.1%
2021		569		13,563		14.1%		3.0%
2022		501		13,887		14.5%		3.1%
2023		501		12,660		13.2%		2.8%
Thereafter		647		17,655		18.4%		4.0%

Total		3,675	$	95,935		100.0%		21.4%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

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Lease Expirations - Southern California

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		724	$	12,803		22.2%		2.9%
2020		1,037		17,614		30.5%		3.9%
2021		554		10,602		18.3%		2.4%
2022		406		7,751		13.4%		1.7%
2023		194		4,083		7.1%		0.9%
Thereafter		217		4,907		8.5%		1.1%

Total		3,132	$	57,760		100.0%		12.9%


Lease Expirations - Northern California

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		1,644	$	23,369		20.6%		5.2%
2020		1,425		24,660		21.8%		5.5%
2021		1,099		18,271		16.1%		4.1%
2022		878		14,030		12.4%		3.1%
2023		772		12,675		11.2%		2.8%
Thereafter		1,166		20,362		17.9%		4.6%

Total		6,984	$	113,367		100.0%		25.3%


Lease Expirations - Austin

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		241	$	3,889		12.1%		0.9%
2020		350		5,358		16.7%		1.2%
2021		290		5,545		17.3%		1.3%
2022		286		4,898		15.2%		1.1%
2023		176		3,063		9.5%		0.7%
Thereafter		445		9,381		29.2%		2.1%

Total		1,788	$	32,134		100.0%		7.3%


Lease Expirations - Dallas

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income⁽¹⁾		%		Rental Income
2019		492	$	5,815		16.5%		1.3%
2020		687		8,063		22.8%		1.8%
2021		482		6,631		18.8%		1.5%
2022		273		3,896		11.0%		0.9%
2023		320		4,353		12.3%		1.0%
Thereafter		448		6,545		18.6%		1.5%

Total		2,702	$	35,303		100.0%		8.0%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

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Lease Expirations - South Florida

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		672	$	7,496		16.9%		1.7%
2020		836		9,940		22.4%		2.2%
2021		756		9,145		20.5%		2.0%
2022		575		6,758		15.2%		1.5%
2023		541		6,585		14.8%		1.5%
Thereafter		373		4,547		10.2%		1.0%

Total		3,753	$	44,471		100.0%		9.9%


Lease Expirations - Northern Virginia

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		923	$	16,908		18.9%		3.8%
2020		1,021		18,598		20.7%		4.2%
2021		635		11,537		12.9%		2.6%
2022		867		20,040		22.4%		4.5%
2023		401		8,064		9.0%		1.8%
Thereafter		727		14,426		16.1%		3.2%

Total		4,574	$	89,573		100.0%		20.1%


Lease Expirations - Suburban Maryland

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		370	$	9,497		17.5%		2.1%
2020		350		7,694		14.2%		1.8%
2021		376		7,660		14.1%		1.7%
2022		306		6,641		12.2%		1.5%
2023		373		8,419		15.5%		1.9%
Thereafter		551		14,416		26.5%		3.2%

Total		2,326	$	54,327		100.0%		12.2%


Lease Expirations - Seattle

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽¹⁾		%		Rental Income
2019		217	$	3,614		18.8%		0.8%
2020		485		6,014		31.3%		1.4%
2021		159		2,653		13.9%		0.6%
2022		195		2,811		14.6%		0.6%
2023		173		2,453		12.8%		0.5%
Thereafter		115		1,645		8.6%		0.4%

Total		1,344	$	19,190		100.0%		4.3%

⁽¹⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

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Lease Expirations - Large Tenant Portfolio ⁽¹⁾

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽³⁾		%		Rental Income
2019		3,455	$	50,317		17.4%		11.3%
2020		3,924		53,499		18.5%		12.0%
2021		2,803		41,837		14.5%		9.4%
2022		2,869		48,135		16.6%		10.7%
2023		2,254		34,437		11.9%		7.7%
Thereafter		3,422		60,916		21.1%		13.7%

Total		18,727	$	289,141		100.0%		64.8%


Lease Expirations - Small Tenant Portfolio ⁽²⁾

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽³⁾		%		Rental Income
2019		1,828	$	33,074		21.1%		7.4%
2020		2,267		44,442		28.3%		10.0%
2021		1,548		30,207		19.2%		6.8%
2022		917		18,690		11.9%		4.2%
2023		696		15,258		9.7%		3.4%
Thereafter		620		15,313		9.8%		3.4%

Total		7,876	$	156,984		100.0%		35.2%


Lease Expirations - Total Portfolio

			Annualized				% of Total Annualized
Year of Lease Expiration	Leased Square Footage		Rental Income ⁽³⁾		%		Rental Income
2019		5,283	$	83,391		18.7%		18.7%
2020		6,191		97,941		22.0%		22.0%
2021		4,351		72,044		16.2%		16.2%
2022		3,786		66,825		14.9%		14.9%
2023		2,950		49,695		11.1%		11.1%
Thereafter		4,042		76,229		17.1%		17.1%

Total		26,603	$	446,125		100.0%		100.0%

⁽¹⁾	Large tenant portfolio consists of properties with average leases greater than or equal to 5,000 square feet.

⁽²⁾	Small tenant portfolio consists of properties with average leases less than 5,000 square feet.

⁽³⁾	Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-letting of expiring spaces.

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	Total Portfolio Activity
	Wtd. Avg.		Leasing		Customer		Transaction Costs		Transaction		Cash Rental Rate
	Occupancy		Volume		Retention		per Executed Foot		Costs ⁽¹⁾		Change ⁽²⁾

Northern Virginia		90.5%		322,000		83.1%		$5.20		10.6%	-0.7%

South Florida		96.4%		219,000		76.8%		$1.55		3.1%	16.0%

Silicon Valley		97.1%		186,000		70.2%		$2.25		2.1%	24.1%

East Bay		96.5%		116,000		15.0%		$1.89		2.8%	27.3%

Dallas		92.3%		283,000		90.6%		$5.28		11.4%	6.6%

Suburban Maryland		90.0%		78,000		61.4%		$7.27		10.3%	-9.0%

Austin		90.7%		44,000		51.0%		$3.42		6.0%	5.5%

Los Angeles		96.1%		159,000		67.9%		$1.29		2.3%	18.2%

Seattle		96.1%		78,000		62.0%		$0.90		1.6%	18.9%

Orange County		95.4%		76,000		75.2%		$2.21		2.9%	0.6%

San Diego		95.0%		76,000		71.0%		$2.10		3.3%	10.9%

Mid-Peninsula		93.7%		27,000		58.7%		$0.85		1.0%	9.2%
Company Totals by Market		93.9%		1,664,000		66.5%		$3.30		5.4%	9.1%

Industrial		95.2%		1,065,000		62.5%		$2.33		4.0%	15.7%

Flex		92.4%		366,000		74.4%		$4.59		7.5%	6.1%

Office		90.6%		233,000		75.1%		$5.71		7.9%	-1.1%
Company Totals by Type		93.9%		1,664,000		66.5%		$3.30		5.4%	9.1%

⁽¹⁾	Transaction cost percentages are computed by taking the total transaction costs divided by the total rents (including estimated expense recoveries) over the term of the lease.

⁽²⁾

Cash rental rate change percentages are computed by taking the percentage difference between outgoing rents (including estimated expense recoveries) and incoming rents (including estimated expense recoveries) for leases executed during the period. Leases executed on spaces vacant for more than the preceding twelve months have been excluded.

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Total Costs⁽¹⁾

Construction

Property Information

Location

Apartment Units

(in thousands)

Completion

Highgate at the Mile

Tysons, VA

395

115,426

Q4 2017

As of March 31, 2019

Period end occupancy

94.9

Average rent per unit ⁽²⁾

2,074

⁽¹⁾	The total costs of the project include contributed land value of $21.0 million plus unrealized land appreciation of $6.0 million. The unrealized land appreciation of $6.0 million is not recorded on our balance sheet.

⁽²⁾	Average rent per unit is defined as the total potential monthly rental revenue (i.e. actual rent for occupied apartment units plus market rent for vacant apartment units) divided by the number of available units.