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Segment Information (Tables) | 3 Months Ended
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Mar. 31, 2019
Segment Reporting [Abstract] |
Real Estate Investments, Net Operating Income and Unconsolidated Real Estate Ventures of Reportable Segments | The following tables provide selected asset information and results of operations of the Company's reportable segments (in thousands):
Real estate investments, at cost: |  |  |  |  |  |  |  |
|  | March 31, 2019 |  |  | December 31, 2018 |
Philadelphia CBD |  | $ | 1,683,406 |  |  | $ | 1,670,388 |
Pennsylvania Suburbs |  |  | 1,008,066 |  |  |  | 1,004,537 |
Austin, Texas |  |  | 713,189 |  |  |  | 667,698 |
Metropolitan Washington, D.C. |  |  | 524,385 |  |  |  | 524,190 |
Other |  |  | 86,833 |  |  |  | 86,506 |
|  | $ | 4,015,879 |  |  | $ | 3,953,319 |
Right of use asset - operating leases (a) |  | $ | 22,175 |  |  | $ | - |
Corporate |  |  |  |  |  |  |  |
Construction-in-progress |  | $ | 112,176 |  |  | $ | 150,263 |
Land held for development (b) |  | $ | 88,047 |  |  | $ | 86,401 |
Prepaid leasehold interests in land held for development, net (c) |  | $ | 39,897 |  |  | $ | 39,999 |
(a) | On January 1, 2019, as a result of the adoption of Topic 842, Leases, the Company recognized operating ground leases for which it is a lessee on its consolidated balance sheets for the period ended March 31, 2019. See Note 2, “Basis of Presentation,” for further information.
(b) | As of March 31, 2019, the Company categorized 35.2 acres of land held for development, located in the Other segment, as held for sale in accordance with applicable accounting standards for long lived assets. As of December 31, 2018, the Company categorized 37.9 acres of land held for development, comprised of 2.7 acres and 35.2 acres, located in the Pennsylvania Suburbs segment and Other segment, respectively, as held for sale in accordance with applicable accounting standards for long lived assets. See Note 3, “Real Estate Investments,” for further information.
(c) | As of March 31, 2019 and December 31, 2018, this caption comprised leasehold interests in prepaid 99-year ground leases at 3025 and 3001-3003 JFK Boulevard, in Philadelphia, Pennsylvania.
Net operating income (in thousands):
| Three-month periods ended |
| March 31, |
| 2019 |  |  | 2018 |
| Total revenue |  |  | Operating expenses (a) |  |  | Net operating income (loss) |  |  | Total revenue |  |  | Operating expenses (a) |  |  | Net operating income (loss) |
Philadelphia CBD | $ | 65,798 |  |  | $ | (25,185 | ) |  | $ | 40,613 |  |  | $ | 62,602 |  |  | $ | (24,327 | ) |  | $ | 38,275 |
Pennsylvania Suburbs |  | 35,627 |  |  |  | (12,972 | ) |  |  | 22,655 |  |  |  | 34,882 |  |  |  | (12,964 | ) |  |  | 21,918 |
Austin, Texas (b) |  | 24,766 |  |  |  | (9,076 | ) |  |  | 15,690 |  |  |  | 8,364 |  |  |  | (3,523 | ) |  |  | 4,841 |
Metropolitan Washington, D.C. (c) |  | 13,520 |  |  |  | (6,204 | ) |  |  | 7,316 |  |  |  | 23,059 |  |  |  | (8,759 | ) |  |  | 14,300 |
Other |  | 3,182 |  |  |  | (2,145 | ) |  |  | 1,037 |  |  |  | 6,141 |  |  |  | (4,965 | ) |  |  | 1,176 |
Corporate |  | 1,003 |  |  |  | (1,799 | ) |  |  | (796 | ) |  |  | 1,310 |  |  |  | (1,966 | ) |  |  | (656 | )
Operating properties | $ | 143,896 |  |  | $ | (57,381 | ) |  | $ | 86,515 |  |  | $ | 136,358 |  |  | $ | (56,504 | ) |  | $ | 79,854 |
(a) | Includes property operating expenses, real estate taxes and third party management expense.
(b) | On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties.
(c) | On December 20, 2018, the Company contributed a portfolio of eight properties containing an aggregate of 1,293,197 square feet, located in its Metropolitan Washington, D.C. segment, known as the Rockpoint Portfolio, to the Herndon Innovation Center Venture. The Company and its partner own 15% and 85% interests in the Herndon Innovation Center Venture, respectively.
Unconsolidated real estate ventures (in thousands): |
| Investment in real estate ventures, at equity |  |  | Equity in income (loss) of real estate venture |
| As of |  |  | Three-month periods ended March 31, |
| March 31, 2019 |  |  | December 31, 2018 |  |  | 2019 |  |  | 2018 |
Philadelphia CBD | $ | 19,325 |  |  | $ | 19,897 |  |  | $ | 78 |  |  | $ | (236 | )
Metropolitan Washington, D.C. (a) |  | 135,149 |  |  |  | 136,142 |  |  |  | (175 | ) |  |  | (37 | )
MAP Venture (b) |  | 5,101 |  |  |  | 11,173 |  |  |  | (1,367 | ) |  |  | (736 | )
Other |  | 1,993 |  |  |  | 1,888 |  |  |  | 106 |  |  |  | 104 |
Austin, Texas (c) |  | - |  |  |  | - |  |  |  | - |  |  |  | 80 |
Total | $ | 161,568 |  |  | $ | 169,100 |  |  | $ | (1,358 | ) |  | $ | (825 | )
(a) | On December 20, 2018, the Company formed the Herndon Innovation Center Venture. See footnote (b) to the “Net operating income” table above for further information regarding this transaction.
(b) | The MAP Venture represents a joint venture formed between the Company and MAP Ground Lease Holdings LLC, an affiliate of Och-Ziff Capital Management Group, LLC, on February 4, 2016. The MAP Venture’s business operations, including properties in Richmond, Virginia; Metropolitan Washington, D.C.; New Jersey/Delaware and Pennsylvania Suburbs, are centrally managed with the results reported to management of the Company on a consolidated basis. As a result, the investment in the MAP Venture is separately presented. All other unconsolidated real estate ventures are managed consistently with the Company’s regional segments.
(c) | On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties.
Reconciliation of Consolidated Net Income to Consolidated NOI | The following is a reconciliation of consolidated net income, as defined by GAAP, to consolidated NOI, (in thousands):
| Three-month periods ended March 31, |
| 2019 |  |  | 2018 |
Net income | $ | 4,066 |  |  | $ | 44,705 |
Plus: |  |  |  |  |  |  |
Interest expense |  | 20,357 |  |  |  | 19,533 |
Interest expense - amortization of deferred financing costs |  | 666 |  |  |  | 627 |
Depreciation and amortization |  | 51,980 |  |  |  | 43,291 |
General and administrative expenses |  | 9,844 |  |  |  | 8,723 |
Equity in loss of Real Estate Ventures |  | 1,358 |  |  |  | 825 |
Less: |  |  |  |  |  |  |
Interest income |  | 525 |  |  |  | 703 |
Income tax provision |  | (29 | ) |  |  | (138 | )
Net gain on sale of undepreciated real estate |  | 1,001 |  |  |  | 22 |
Net gain on real estate venture transactions |  | 259 |  |  |  | 37,263 |
Consolidated net operating income | $ | 86,515 |  |  | $ | 79,854 |

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- Definition Tabular disclosure of the reconciliation of profit (loss) from reportable segments to the consolidated income (loss) before income tax expense (benefit) and discontinued operations. Includes, but is not limited to, reconciliation after income tax if income tax is allocated to the reportable segment. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8924-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8813-108599 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=108376223&loc=d3e13816-109267 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8721-108599 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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