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Real Estate Acquisitions And Discontinued Operations | 9 Months Ended
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Sep. 30, 2011
Real Estate Acquisitions And Discontinued Operations [Abstract] |
Real Estate Acquisitions And Discontinued Operations | NOTE 3: REAL ESTATE ACQUISITIONS AND DISCONTINUED OPERATIONS Acquisitions WRIT acquired the following properties and land for development during the 2011 Period:
Acquisition Date |  | Property Name |  | Property Type |  | Rentable Square Feet |  |  | Contract Purchase Price (in thousands) |
January 11, 2011 |  | 1140 Connecticut Avenue |  | Office |  |  | 184,000 |  |  | $ | 80,250 |
March 30, 2011 |  | 1227 25th Street |  | Office |  |  | 130,000 |  |  |  | 47,000 |
June 15, 2011 |  | 650 North Glebe Road(1) |  | Multifamily |  |  | N/A |  |  |  | 11,800 |
August 30, 2011 |  | Olney Village Center |  | Retail |  |  | 199,000 |  |  |  | 58,000 |
September 13, 2011 |  | Braddock Metro Center |  | Office |  |  | 345,000 |  |  |  | 101,000 |
September 15, 2011 |  | John Marshall II |  | Office |  |  | 223,000 |  |  |  | 73,500 |
|  |  |  | Total |  |  | 1,081,000 |  |  | $ | 371,550 |
(1) | 650 North Glebe Road is 37,000 square feet of land acquired by a consolidated joint venture for the purpose of developing an apartment community. WRIT is a 90% owner of joint venturethe .
The results of operations from the acquired operating properties are included in the consolidated statements of income as of their acquisition dates. The revenue and earnings of our 2011 acquisitions are as follows (amounts in thousands):
|  | Quarter Ended September 30, 2011 |  |  | Period Ended September 30, 2011 |
Real estate revenues |  | $ | 4,376 |  |  | $ | 9,458 |
Net income |  | $ | 292 |  |  | $ | 730 |
We have recorded the total purchase price of the above acquisitions as follows (in millions):
|  | Recordation of Purchase Price |
|  | 2011 |
Land |  | $ | 90.9 |
Buildings |  |  | 219.6 |
Tenant origination costs |  |  | 15.7 |
Leasing commissions/absorption costs |  |  | 29.7 |
Net lease intangible assets |  |  | 6.8 |
Net lease intangible liabilities |  |  | (2.5 | )
Fair value of assumed mortgages |  |  | (78.5 | )
Total |  | $ | 281.7 |
The weighted remaining average life in months for the components above, other than land and building, are 65 months for tenant origination costs, 54 months for leasing commissions/absorption costs, 68 months for net lease intangible assets and 65 months for net lease intangible liabilities. The difference in total contract purchase price of $371.6 million and the acquisition cost per the consolidated statements of cash flows of $281.7 million is primarily related to the two mortgage notes assumed for $76.7 million relating to John Marshall II and Olney Village Center, cash paid for the acquisition of land at 650 North Glebe Road for $11.8 million included in development, and credits received at settlement totaling $1.3 million. The following unaudited pro forma combined condensed statements of operations present the consolidated results of operations for the 2011 Quarter and Period and the 2010 Quarter and Period, as if the above described acquisitions had occurred at the beginning of the year prior to the acquisition. The unaudited pro forma information does not purport to be indicative of the results that actually would have occurred if the acquisitions had been in effect for the Quarters and Periods presented. The unaudited data presented is in thousands, except per share data.
|  | Quarter Ended September 30, |  |  | Period Ended September 30, |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Real estate revenues |  | $ | 76,823 |  |  | $ | 74,471 |  |  | $ | 231,370 |  |  | $ | 221,135 |
Income from continuing operations |  | $ | 3,283 |  |  | $ | 4,046 |  |  | $ | 11,330 |  |  | $ | 10,784 |
Net income |  | $ | 63,585 |  |  | $ | 7,578 |  |  | $ | 76,268 |  |  | $ | 29,665 |
Diluted earnings per share |  | $ | 0.96 |  |  | $ | 0.12 |  |  | $ | 1.15 |  |  | $ | 0.48 |
Noncontrolling Interests in Subsidiaries We entered into an operating partnership agreement with a member of the entity that previously owned Northern Virginia Industrial Park II in conjunction with the acquisition of this property in May 1998. We account for this activity by applying the noncontrolling owner's percentage ownership interest to the net income of the property and reporting such amount in our net income attributable to noncontrolling interests. Subsequent to the end of the 2011 Quarter, we closed on the sale of Northern Virginia Industrial Park II (see next section), thereby terminating this noncontrolling interest in our earnings. Accordingly, the total amounts reported on the consolidated statements of income for noncontrolling interests are related to discontinued operations. Discontinued Operations We dispose of assets (sometimes using tax-deferred exchanges) that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable. The proceeds from the sales may be reinvested into other properties, used to fund development operations or to support other corporate needs, or distributed to our shareholders. Properties are considered held for sale when they meet the criteria specified by GAAP. Depreciation on these properties is discontinued at that time, but operating revenues, other operating expenses and interest continue to be recognized until the date of sale. On August 5, 2011 we entered into five separate purchase and sale agreements to effectuate the sale of our entire industrial segment and two office assets (the Crescent and Albemarle Point) for an aggregate purchase price of $350.0 million. On September 2, 2011, we closed the first three of the purchase and sale agreements, for an aggregate $235.8 million. We closed on the remaining two purchase and sale agreements subsequent to the end of the quarter. We recognized a $56.6 million gain on sale of real estate during the 2011 Quarter in connection with the first three purchase and sale agreements. The impact of the disposal of our industrial segment on revenues and net income is summarized as follows (amounts in thousands, except per share data):
|  | Quarter Ended September 30, |  |  | Period Ended September 30, |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Real estate revenues |  | $ | 6,053 |  |  | $ | 7,854 |  |  | $ | 22,503 |  |  | $ | 24,252 |
Net income |  | $ | 3,297 |  |  | $ | 2,778 |  |  | $ | 9,340 |  |  | $ | 8,215 |
Basic net income per share |  | $ | 0.05 |  |  | $ | 0.04 |  |  | $ | 0.14 |  |  | $ | 0.13 |
Diluted net income per share |  | $ | 0.05 |  |  | $ | 0.04 |  |  | $ | 0.14 |  |  | $ | 0.13 |
We sold or classified as held for sale the following properties during the 2011 Period and 2010:
Disposition Date |  | Property Name |  | Property Type |  | Rentable Square Feet |  |  | Contract Purchase Price (In millions) |
September 2, 2011 |  | Industrial Portfolio(1) |  | Industrial/Office |  |  | 3,092,000 |  |  | $ | 350.0 |
April 5, 2011 |  | Dulles Station, Phase I |  | Office |  |  | 180,000 |  |  |  | 58.8 |
|  |  |  | Total 2011 |  |  | 3,272,000 |  |  | $ | 408.8 |
June 18, 2010 |  | Parklawn Portfolio(2) |  | Office/Industrial |  |  | 229,000 |  |  | $ | 23.4 |
December 21, 2010 |  | The Ridges |  | Office |  |  | 104,000 |  |  |  | 27.5 |
December 22, 2010 |  | Ammendale I&II and Amvax |  | Industrial |  |  | 305,000 |  |  |  | 23.0 |
|  |  |  | Total 2010 |  |  | 638,000 |  |  | $ | 73.9 |
(1) | The Industrial Portfolio consists of every property in our industrial segment and two office properties (the Crescent and Albemarle Point). On September 2, 2011 we closed on the sale of industrial properties (8880 Gorman Road, Dulles South IV, Fullerton Business Center, Hampton Overlook, Alban Business Center, Pickett Industrial Park, Northern Virginia Industrial Park I, 270 Technology Park, Fullerton Industrial Center, Sully Square, 9950 Business Parkway, Hampton South and 8900 Telegraph Road) and two office properties (Crescent and Albemarle Point). We closed on the sales of the remaining properties in the Industrial Portfolio subsequent to the end of the 2011 Quarter.
(2) | The Parklawn Portfolio consists of three office properties (Parklawn Plaza, Lexington Building and Saratoga Building) and one industrial property (Charleston Business Center).
Operating results of the properties classified as discontinued operations are summarized as follows (in thousands):
|  | Quarter Ended September 30, |  |  | Period Ended September 30, |
|  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Revenues |  | $ | 6,597 |  |  | $ | 11,241 |  |  | $ | 25,612 |  |  | $ | 36,410 |
Property expenses |  |  | (1,768 | ) |  |  | (3,239 | ) |  |  | (7,564 | ) |  |  | (11,866 | )
Real estate impairment |  |  | — |  |  |  | — |  |  |  | (599 | ) |  |  | — |
Depreciation and amortization |  |  | (943 | ) |  |  | (4,054 | ) |  |  | (7,231 | ) |  |  | (11,981 | )
Interest expense |  |  | (231 | ) |  |  | (383 | ) |  |  | (696 | ) |  |  | (1,516 | )
|  | $ | 3,655 |  |  | $ | 3,565 |  |  | $ | 9,522 |  |  | $ | 11,047 |
Operating income (loss) by each property classified as discontinued operations is summarized below (in thousands):
|  |  |  | Quarter Ended September 30, |  |  | Period Ended September 30, |
Property |  | Segment |  | 2011 |  |  | 2010 |  |  | 2011 |  |  | 2010 |
Parklawn Plaza |  | Office |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 132 |
Lexington Building |  | Office |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 65 |
Saratoga Building |  | Office |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 225 |
Charleston Business Center |  | Industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 370 |
The Ridges |  | Office |  |  | — |  |  |  | 156 |  |  |  | — |  |  |  | 347 |
Ammendale I&II |  | Industrial |  |  | — |  |  |  | 217 |  |  |  | — |  |  |  | 733 |
Amvax |  | Industrial |  |  | — |  |  |  | 82 |  |  |  | — |  |  |  | 260 |
Dulles Station, Phase I |  | Office |  |  | — |  |  |  | 160 |  |  |  | (468 | ) |  |  | 367 |
Industrial Portfolio |  | Industrial/Office |  | $ | 3,655 |  |  |  | 2,950 |  |  | $ | 9,990 |  |  |  | 8,548 |
|  |  |  | $ | 3,655 |  |  |  | 3,565 |  |  | $ | 9,522 |  |  | $ | 11,047 |
The operating loss for Dulles Station I for the 2011 Period includes a $0.6 million impairment charge to reflect the property's fair value less any selling costs based on its contract sales price.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Subparagraph Schedule III -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 67 -Paragraph 4, 5, 6, 7 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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