Attached files
| file | filename |
|---|---|
| 8-K - 8-K - COLUMBIA PROPERTY TRUST, INC. | cxp8-k2017q2earningsrelease.htm |
2017
Q2
Supplemental Information
Introduction
Executive Summary 3
Company Profile & Investor Contacts 4
Capitalization Analysis & Research Coverage 5
2017 Guidance 6
Financial Information
Consolidated Balance Sheet - GAAP 7
Elements of Pro-Rata Balance Sheet - CXP's Interest in Unconsolidated Joint Venture 8
Consolidated Statements of Operations - GAAP 9
Elements of Pro-Rata Statement of Operations - CXP's Interest in Unconsolidated Joint Venture 10
11
Net Operating Income 12
Capital Expenditure Summary 13
Key Credit Metrics 14
Debt Overview 15
Debt Covenant Compliance 16
Debt Maturities 17
Operational & Portfolio Information
Key Operating Metrics 18
Property Overview - Gross Real Estate Assets, Net Operating Income & Annualized Lease Revenue 19
Property Overview - Square Feet & Occupancy 20
Occupancy Summary 21
Leasing Summary 22
Lease Expiration Schedule 23
Lease Expiration by Market 24
Top 20 Tenants & Tenant Industry Profile 25
Transaction Activity (2015 - 2017) 26
Additional Information
27
Reconciliation of Cash Flows From Operations to Adjusted Funds From Operations (AFFO) 27
28
29
30
Definitions 31
Forward Looking Statements:
Supplemental Information - Q2 2017 2
This supplemental package contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements can generally be identified by our use of forward-looking
terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. These forward-looking statements
include information about possible or assumed future results of the business and our financial condition, liquidity, results of operations, future plans, and
objectives. They also include, among other things, statements regarding subjects that are forward-looking by their nature, such as, our business and financial
strategy; our 2017 guidance; our ability to obtain future financing; future acquisitions and dispositions of operating assets; future repurchases of common stock;
and market and industry trends. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this
supplemental package is published, and which are subject to certain risks and uncertainties which could cause actual results to differ materially from those
projected or anticipated. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the
inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other owners and operators of real estate); adverse
economic or real estate developments in the company’s target markets; risks associated with the availability and terms of financing, the use of debt to fund
acquisitions, and the ability to refinance indebtedness as it comes due; reductions in asset valuations and related impairment charges; risks associated with
downturns in foreign, domestic and local economies, changes in interest rates; potential liability for uninsured losses and environmental contamination; risks
associated with joint ventures; risks associated with the company’s potential failure to qualify as a REIT under the Internal Revenue Code of 1986, as amended,
and possible adverse changes in tax and environmental laws; and risks associated with the company’s dependence on key personnel whose continued service is
not guaranteed. We do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or
otherwise. For additional risks and uncertainties that would cause actual results to differ materially from those presented in our forward-looking statements see
our Annual Report on Form 10-K for the year ended December 31, 2016 and subsequently filed periodic reports.
On the Cover: Washington, D.C.
Columbia Property Trust, Inc.
Table of Contents
Normalized Funds From Operations (NFFO) & Adjusted Funds From Operations (AFFO)
Reconciliation of Net Income to Normalized Funds From Operations (NFFO)
Reconciliation of Net Income to Net Operating Income (based on cash rents), and Same Store Net Operating Income (based on cash rents) - wholly-
owned properties
Reconciliation of Net Income to Net Operating Income (based on GAAP rents), and Same Store Net Operating Income (based on GAAP rents) - wholly-
owned properties
Reconciliation of Net Operating Income (based on GAAP rents), and Net Operating Income (based on cash rents)
Columbia Property Trust, Inc.
Executive Summary
Supplemental Information – Q2 2017 3
Financial Results & Guidance:
For the second quarter of 2017, net income per diluted share was $0.01 (page 9) and NFFO (1) per diluted share was
$0.26 (page 11), cash flows from operations was $30.6 million (page 27) and AFFO (1) was $16.4 million (page 11).
Consistent with previous guidance, earnings are approaching the trough created from property sales in 2016 and 2017
and are expected to turn upward as our value-add property acquisitions approach their full income potential and we
redeploy additional proceeds into our target markets.
We are updating our 2017 full year guidance for Net Income to a range of $1.58 to $1.63 per diluted share, and for
Normalized FFO to a range of $1.09 and $1.14 per diluted share. See page 6 for more information regarding our
guidance.
Quarterly Highlights:
During the second quarter of 2017, we leased 324,000 square feet, including (page 22):
- At 650 California Street in San Francisco, an eight-year, 86,000-square foot lease with Affirm; and a 22,000
renewal and expansion with an existing tenant; and
- At One Glenlake Parkway in Atlanta, a 10-year, 66,000-square-foot lease with Cotiviti; and an 11-year, 40,000-
square-foot extension and expansion with an existing tenant.
For leases executed during the quarter, Columbia achieved an 85.1% increase in rental rates based on GAAP rents and
a 61.9% increase in rental rates based on cash rents (page 22).
Our portfolio is now 95.3% leased due to strong recent leasing activity, which is expected to generate significant
increases in future cash flows. Over the next 12 months, economic occupancy is expected to increase substantially
from the current level of 83.1% as new leases commence and free-rent burns off (page 20), resulting in same-store net
operating income (NOI)(1) growth, higher cash flows, and increased AFFO (1).
We recently established a strategic partnership with Allianz, which will enable us to increase our scale in key markets
on a leverage-neutral basis. On July 6, 2017, we consummated the partnership by selling partial interests in two of our
San Francisco properties, 333 Market Street and University Circle, to Allianz for $234.0 million, and by acquiring a
partial interest in 114 Fifth Avenue in Manhattan from Allianz for $108.9 million. 333 Market Street was valued at $500
million, a 22% increase over our undepreciated basis, and University Circle was valued at $540 million, an 85% increase
over our undepreciated basis. We expect to make additional joint investments with Allianz (page 26).
Capitalization:
On July 25, 2017, we amended the terms of our $150 Million Term Loan to reduce the interest rate spread. As a result,
the loan’s effectively fixed rate decreased from 3.52% to 3.07%. All other terms remain unchanged.
During the second quarter, we repurchased $27.5 million of our common stock (1.3 million shares at an average price
of $21.95/share) (page 5).
For the second quarter of 2017, we paid dividends of $0.20 per share ($0.80 annualized), consistent with the first
quarter (page 5).
We have a solid balance sheet with an investment grade credit rating, low leverage (25.2% net debt to GREA), and $1.0
billion in liquidity (cash, plus credit facility) (pages 7 & 15).
(1) For definitions and reconciliations of these non-GAAP financial metrics see pages 27 - 31.
Company Overview
Executive and Senior Management
E. Nelson Mills James A. Fleming
Chief Executive Officer, Executive Vice President
President and Director Chief Financial Officer
David S. Dowdney Wendy W. Gill Kevin A. Hoover Adam I. Popper
Senior Vice President Senior Vice President Senior Vice President Senior Vice President
Western Region Corporate Operations and Portfolio Management Eastern Region
Chief Accounting Officer
Board of Directors
Carmen M. Bowser Charles R. Brown Richard W. Carpenter John L. Dixon David B. Henry
Independent Director Independent Director Independent Director Independent Director Independent Director
Chairman
Murray J. McCabe E. Nelson Mills Michael S. Robb George W. Sands Thomas G. Wattles
Independent Director Chief Executive Officer Independent Director Independent Director Independent Director
President
Investor Relations Shareholder Services Corporate Counsel
James A. Fleming T 855-347-0042 (toll free) King & Spalding LLP
Executive Vice President & Chief Financial Officer F 816-701-7629 1180 Peachtree Street
T 404-465-2126 E shareholders@columbia.reit Atlanta, GA 30309
E Jim.Fleming@columbia.reit T 404-572-4600
www.kslaw.com
Matt Stover
Director - Finance & Investor Relations
T 404-465-2227
E Matt.Stover@columbia.reit
Supplemental Information - Q2 2017 4
Columbia Property Trust, Inc.
Company Profile & Investor Contacts
Columbia Property Trust (NYSE: CXP) owns and operates Class-A office buildings primarily in competitive CBD locations within high-barrier-to-entry
markets. As of June 30, 2017, our $4 billion portfolio included 15 operating properties containing 7.8 million square feet, concentrated in San
Francisco, New York, Atlanta and Washington, D.C.
As of June 30, 2017, CXP owned interests in 15 operating properties, of which 14 are wholly-owned and one is owned through an unconsolidated
joint venture. CXP owns a 51% interest in the Market Square buildings and related $325 million mortgage note through an unconsolidated joint
venture. When evaluating the Company’s performance and capital resources, management considers the financial impact of investments held
directly and through unconsolidated joint ventures. This report includes financial and operational information for our wholly-owned investments
and our proportional interest in unconsolidated investments. We do not control the Market Square Joint Venture and recognize that proportional
financial data may not accurately depict all of the legal and economic implications of our interest in this joint venture.
For more information about Columbia, which carries an investment-grade rating from both Moody's and Standard & Poor's, please visit our website
at www.columbia.reit.
Unaudited ($ & shares in thousands except for per-share data and percentages)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Common Stock Data
Weighted-Average Shares Outstanding - Basic 121,534 122,003 122,709 123,215 123,206
Weighted-Average Shares Outstanding - Diluted 121,909 122,329 122,855 123,350 123,294
High Closing Price 23.13$ 23.43$ 22.22$ 24.63$ 22.77$
Low Closing Price 21.45$ 21.20$ 20.47$ 21.24$ 20.20$
Average Closing Price 22.24$ 22.30$ 21.33$ 23.31$ 21.64$
Closing Price (as of period end) 22.34$ 22.25$ 21.60$ 22.39$ 21.40$
Dividends / Share (annualized) 0.80$ 0.80$ 1.20$ 1.20$ 1.20$
Dividend Yield (annualized) (1) 3.6% 3.6% 5.6% 5.4% 5.6%
Common Shares Outstanding (1) 121,235 122,451 122,184 123,471 123,464
Market Value of Common Shares (1) 2,708,390$ 2,724,535$ 2,639,174$ 2,764,516$ 2,642,130$
Total Market Capitalization (1) (2) 4,222,914$ 4,240,481$ 4,229,526$ 4,356,258$ 4,468,245$
Common Stock Repurchases
Shares Purchased 1,252 - 1,294 - -
Weighted-Average Price Per Share 21.95$ -$ 21.46$ -$ -$
Total Value of Shares Purchased 27,470$ -$ 27,769$ -$ -$
Equity Research Coverage
BMO Capital Markets Inc. Evercore ISI Goldman Sachs JMP Securities
John P. Kim Sheila McGrath Andrew Rosivach Mitch Germain
212-885-4115 212-497-0882 212-902-2796 212-906-3546
Morgan Stanley SunTrust Robinson Humphrey
Vikram Malhotra Michael R. Lewis
212-761-7064 212-319-5659
Debt Research Coverage
J.P. Morgan Securities
Mark Streeter
212-834-5086
Rating Agencies
Moody's Investor Services Standard & Poor's
Lori Marks Fernanda Hernandez
212-553-1098 212-438-1347
(2) Market value of shares plus gross debt as of quarter end.
Supplemental Information - Q2 2017 5
Columbia Property Trust, Inc.
Capitalization Analysis & Research Coverage
Three Months Ended
(1) Based on closing price and ending shares for the last trading day of quarter.
Unaudited
Per share Low High
Net Income 1.58$ 1.63$
Real Estate Depreciation & Amortization 0.99 0.99
Gain on sale of real estate assets (1.48) (1.48)
Funds From Operations 1.09$ 1.14$
Loss on early extinguishment of debt - -
Normalized Funds From Operations 1.09$ 1.14$
2017 Portfolio Assumptions
l Leased percentage at year end: 94% to 96%
l GAAP Straight Line Rental Income:
l G&A Expenses
2017 Transaction Assumptions
l Dispositions:
l
l Acquisitions: $400MM - $700MM2
2017 Other Assumptions
l Weighted-average common shares outstanding - diluted: 121.0MM - 121.7MM
Supplemental Information - Q2 2017 6
2 Includes $109MM for 114 5th Ave. completed in July and $88MM for 149 Madison expected later this year.
NOTE: These estimates reflect management's view of current market conditions and incorporate certain economic and operational assumptions and projections.
This annual guidance includes the continued repositioning of the portfolio based on the above assumptions. Actual results could differ from these estimates. Note
that individual quarters may fluctuate on both a cash basis and a GAAP basis due to the timing of dispositions, lease commencements and expirations, the timing
of repairs and maintenance, capital expenditures, capital markets activities and one-time revenue or expense events. In addition, the Company's guidance is based
on information available to management as of the date of this release.
Columbia Property Trust, Inc.
2017 Guidance
Twelve Months Ending 12/31/2017
$30MM to $35MM
$35MM to $37MM
$774MM1
Investor Conference Call and Webcast:
The Company will host a conference call and live audio webcast, both open for the general public to hear, on Thursday, July 27,
2017, at 5:00 p.m. ET to discuss financial results and business highlights. The number to call for this interactive teleconference
is (412) 542-4180. A replay of the conference call will be available through August 4, 2017, by dialing (877) 344-7529 and
entering the confirmation number, 10109176. A webcast of the call will also be available at the company's website,
www.columbia.reit.
Return of 263 Shuman Boulevard property to the lender in settlement of the $49MM mortgage note.
1 $540MM completed in January, plus sale of 22.5% of University Circle & 333 Market to Allianz in July.
Columbia Property Trust, Inc.
Unaudited (in thousands)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Assets:
Real estate assets, at cost:
Land 751,351$ 751,351$ 751,351$ 787,456$ 844,495$
Buildings and improvements 2,588,909 2,573,407 2,556,607 2,871,856 3,345,017
Buildings and improvements, accumulated depreciation (471,029) (455,392) (435,457) (500,583) (603,088)
Intangible lease asset 282,338 303,318 306,088 345,651 471,701
Intangible lease asset, accumulated amortization (99,910) (115,904) (112,777) (141,451) (235,121)
Construction in progress 49,069 36,278 36,188 28,888 14,176
Real estate assets held for sale - - 593,297 350,301 53,143
Real estate assets held for sale, accumulated depreciation - - (180,791) (111,425) (9,897)
Total real estate assets 3,100,728$ 3,093,058$ 3,514,506$ 3,630,693$ 3,880,426$
Cash and cash equivalents 506,538 554,655 216,085 190,856 23,803
Tenant receivables, net of allowance for doubtful accounts 4,002 5,290 7,163 6,366 11,210
Straight line rent receivable 77,875 71,601 64,811 70,186 113,921
Prepaid expenses and other assets 39,815 40,647 24,275 24,885 35,230
Intangible lease origination costs 117,357 126,849 128,857 140,380 227,769
Intangible lease origination costs, accumulated amortization (68,771) (75,523) (74,578) (81,735) (161,994)
Deferred lease costs 155,687 151,746 148,552 94,112 128,808
Deferred lease costs, accumulated amortization (25,838) (24,561) (22,753) (33,729) (41,626)
Investment in unconsolidated joint venture (page 8) 125,584 126,691 127,346 125,605 123,919
Investment in development authority bonds 120,000 120,000 120,000 120,000 120,000
Other assets held for sale - - 79,681 55,431 10
Other assets held for sale, accumulated amortization - - (34,152) (23,125) -
Total assets 4,152,977$ 4,190,453$ 4,299,793$ 4,319,925$ 4,461,476$
Liabilities:
Line of credit and notes payable 648,774$ 650,196$ 724,602$ 824,992$ 1,060,365$
Bonds payable 700,000 700,000 700,000 700,000 600,000
Discount and fees on notes and bonds payable (9,250) (9,663) (10,164) (10,643) (7,856)
140,151 125,743 131,028 81,617 86,010
Distributions payable - - 36,727 - -
Deferred income 19,392 19,329 19,694 20,411 23,793
Intangible lease liabilities 69,006 74,729 77,939 82,719 134,943
Intangible lease liabilities, accumulated amortization (39,939) (43,750) (44,564) (46,480) (85,547)
Obligations under capital leases 120,000 120,000 120,000 120,000 120,000
Liabilities held for sale - - 43,002 16,854 132
Liabilities held for sale, accumulated amortization - - (1,239) (1,210) -
Total liabilities 1,648,134$ 1,636,584$ 1,797,025$ 1,788,260$ 1,931,840$
Equity:
Common stock 1,211$ 1,224$ 1,221$ 1,234$ 1,234$
Additional paid in capital 4,513,922 4,539,144 4,538,912 4,565,651 4,564,729
Cumulative distributions in excess of earnings (2,009,405) (1,986,250) (2,036,482) (2,027,155) (2,027,012)
Other comprehensive loss (885) (249) (883) (8,065) (9,315)
Total equity 2,504,843$ 2,553,869$ 2,502,768$ 2,531,665$ 2,529,636$
Total liabilities and equity 4,152,977$ 4,190,453$ 4,299,793$ 4,319,925$ 4,461,476$
Supplemental Information - Q2 2017 7
Consolidated Balance Sheet - GAAP
As of Period End
Accounts payable, accrued expenses, and accrued capital
expenditures
Columbia Property Trust, Inc.
Unaudited (in thousands)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Assets:
Real estate assets, at cost:
Land 77,841$ 77,841$ 77,841$ 77,840$ 77,840$
Buildings and improvements 205,062 203,973 203,534 203,002 199,761
Buildings and improvements, accumulated depreciation (10,912) (9,375) (7,708) (6,037) (4,361)
Intangible lease asset 1,817 2,214 2,222 2,221 2,361
Intangible lease asset, accumulated amortization (609) (861) (723) (571) (527)
Construction in progress 1,767 1,826 1,700 1,544 2,344
Total real estate assets 274,966$ 275,618$ 276,866$ 277,999$ 277,418$
Cash and cash equivalents 3,090 2,352 4,794 2,309 3,617
Tenant receivables, net of allowance for doubtful accounts 155 179 122 192 202
Straight line rent receivable 7,696 7,175 6,272 5,309 4,606
Prepaid expenses and other assets 288 306 170 215 239
Intangible lease origination costs 1,447 1,524 1,526 1,526 1,563
Intangible lease origination costs, accumulated amortization (422) (425) (353) (278) (231)
Deferred lease costs 15,340 15,120 14,833 11,678 10,600
Deferred lease costs, accumulated amortization (1,813) (1,503) (1,168) (834) (563)
Total assets 300,747$ 300,346$ 303,062$ 298,116$ 297,451$
Liabilities:
Line of credit and notes payable 165,750$ 165,750$ 165,750$ 165,750$ 165,750$
Fees on notes payable (162) (169) (176) (181) (191)
7,320 5,477 7,604 4,058 4,852
Deferred income 526 748 569 791 885
Intangible lease liabilities 2,523 2,548 2,561 2,561 2,644
Intangible lease liabilities, accumulated amortization (794) (699) (592) (468) (408)
Total liabilities 175,163$ 173,655$ 175,716$ 172,511$ 173,532$
Investment in unconsolidated joint venture (page 7) 125,584$ 126,691$ 127,346$ 125,605$ 123,919$
Supplemental Information - Q2 2017 8
Elements of Pro-Rata Balance Sheet - CXP's Interest in Unconsolidated Joint Venture (1)
As of Period End
Accounts payable, accrued expenses, and accrued capital
expenditures
(1) Reflects 51% of the assets and liabilities of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
Unaudited (in thousands, except per-share amounts)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Revenues:
Rental income 67,121$ 71,173$ 85,472$ 87,561$ 93,567$
Tenant reimbursements 6,972 8,584 14,219 17,090 18,708
Hotel income - 1,339 5,177 6,270 6,551
Other property income (1) 811 765 793 827 919
Lease termination income (2) (47) 295 107 1,518 8,185
Total revenues 74,857$ 82,156$ 105,768$ 113,266$ 127,930$
Operating expenses:
Property operating costs 21,831 24,105 34,289 39,101 40,242
Hotel operating costs 9 2,076 4,371 4,946 5,038
Asset and property management fees 260 269 357 387 341
Depreciation 20,423 21,605 24,026 26,778 28,450
Amortization 8,191 9,457 13,873 11,895 14,932
General and administrative 9,201 8,768 8,158 7,467 7,761
Total operating expenses 59,915$ 66,280$ 85,074$ 90,574$ 96,764$
Operating income 14,942$ 15,876$ 20,694$ 22,692$ 31,166$
Other income (expense):
Interest expense (12,662) (13,315) (13,394) (15,338) (15,580)
Capital lease obligation interest expense (1,800) (1,800) (1,800) (1,800) (1,800)
Development authority bond income 1,800 1,800 1,800 1,800 1,800
Interest and other income 677 550 36 39 8
Loss on early extinguishment of debt - (45) - (18,905) (92)
Total other income (expense) (11,985)$ (12,810)$ (13,358)$ (34,204)$ (15,664)$
2,957$ 3,066$ 7,336$ (11,512)$ 15,502$
Income tax benefit (expense) (7) 388 (58) (65) (245)
2,950$ 3,454$ 7,278$ (11,577)$ 15,257$
Loss from unconsolidated joint venture (page 10) (1,817) (1,885) (2,120) (1,937) (1,952)
1,133$ 1,569$ 5,158$ (13,514)$ 13,305$
Gain (loss) on sale of real estate assets - 73,153 22,242 50,412 (19)
1,133$ 74,722$ 27,400$ 36,898$ 13,286$
121,534 122,003 122,709 123,215 123,206
0.01$ 0.61$ 0.22$ 0.30$ 0.11$
121,909 122,329 122,855 123,350 123,294
0.01$ 0.61$ 0.22$ 0.30$ 0.11$
(1) Other property income includes (i) property management fee income, (ii) cafeteria revenue and (iii) fitness center revenue.
Supplemental Information - Q2 2017 9
Income (loss) before loss from unconsolidated joint
venture and gains on sale of real estate assets
Columbia Property Trust, Inc.
Consolidated Statements of Operations - GAAP
Three Months Ended
Income (loss) before income tax expense, loss from
unconsolidated joint venture and gains on sale
of real estate assets
(2) Includes adjustments for straight-line rent related to lease terminations.
Income (loss) before gain (loss) on sale of real estate
assets
Net income
Weighted-average common shares outstanding - basic
Net income per share - basic
Weighted-average common shares outstanding - diluted
Net income per share - diluted
Unaudited (in thousands, except per-share amounts)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Revenues:
Rental income 4,066$ 4,045$ 4,022$ 4,025$ 3,838$
Tenant reimbursements 1,252 1,123 1,080 966 1,148
Total revenues 5,318$ 5,168$ 5,102$ 4,991$ 4,986$
Operating expenses:
Property operating costs 2,642 2,585 2,762 2,449 2,497
Asset and property management fees 251 239 236 240 250
Depreciation 1,689 1,668 1,671 1,675 1,626
Amortization 434 430 435 448 451
General and administrative 9 21 8 5 5
Total operating expenses 5,025$ 4,943$ 5,112$ 4,817$ 4,829$
Operating income 293$ 225$ (10)$ 174$ 157$
Other income (expense):
Interest expense (2,108) (2,108) (2,108) (2,108) (2,108)
Interest and other income - - - - 1
Total other income (expense) (2,108)$ (2,108)$ (2,108)$ (2,108)$ (2,107)$
(1,815)$ (1,883)$ (2,118)$ (1,934)$ (1,950)$
Income tax expense (2) (2) (2) (3) (2)
(1,817)$ (1,885)$ (2,120)$ (1,937)$ (1,952)$
Supplemental Information - Q2 2017 10
(1) Reflects 51% of the revenues and expenses of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
Loss from unconsolidated joint venture (page 9)
Columbia Property Trust, Inc.
Elements of Pro-Rata Statement of Operations - CXP's Interest in Unconsolidated Joint Venture (1)
Three Months Ended
Net loss before income tax expense
Unaudited (in thousands, except per-share amounts)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net Operating Income (based on GAAP rents) 55,182$ 58,050$ 68,855$ 71,151$ 84,548$
General and administrative (G&A) (9,201) (8,768) (8,158) (7,467) (7,761)
Interest expense (net) (13,785) (14,565) (15,158) (17,116) (17,372)
Interest income from development authority bonds 1,800 1,800 1,800 1,800 1,800
Income tax benefit (expense) (7) 388 (58) (65) (245)
(2,119) (2,131) (2,118) (2,116) (2,114)
Normalized FFO 31,870$ 34,774$ 45,163$ 46,187$ 58,856$
Normalized FFO per share (basic) 0.26$ 0.29$ 0.37$ 0.37$ 0.48$
Normalized FFO per share (diluted) 0.26$ 0.28$ 0.37$ 0.37$ 0.48$
Net Operating Income (based on cash rents) 48,497$ 50,410$ 61,132$ 64,895$ 79,075$
General and administrative (G&A) (9,201) (8,768) (8,158) (7,467) (7,761)
Stock based compensation expense in G&A (2) 2,262 1,691 1,046 917 1,213
Straight-line rent receivable write-off in G&A (3) - - 2 233 79
Interest expense - cash (net) (11,265) (11,993) (12,574) (14,479) (14,655)
Income tax benefit (expense) (7) 388 (58) (65) (245)
(2,112) (2,124) (2,111) (2,108) (2,108)
Maintenance capital (4) (5) (11,752) (1,675) (82,311) (11,637) (14,575)
AFFO 16,422$ 27,929$ (43,032)$ 30,289$ 41,023$
121,534 122,003 122,709 123,215 123,206
121,909 122,329 122,855 123,350 123,294
(5) Reflects 51% of the capital expenditures of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
Supplemental Information - Q2 2017 11
(4) See page 31 of this supplemental report for a description of Maintenance Capital and page 13 for a detail of all capital expenditures.
(2) This item represents the noncash impact of compensation expense related to stock grants under our 2013 Long-Term Incentive Plan within general and
administrative expense.
(3) Includes adjustments for straight-line rent related to lease terminations within general and administrative expense.
Columbia Property Trust, Inc.
Normalized Funds From Operations (NFFO) & Adjusted Funds From Operations (AFFO) (1)
Three Months Ended
Weighted-average common shares outstanding - basic
Weighted-average common shares outstanding - diluted
Adjustments included in loss from unconsolidated
joint venture
Adjustments included in loss from unconsolidated
joint venture
(1) For definitions and reconciliations of these non-GAAP financial metrics, see pages 27 - 31.
Unaudited (in thousands)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net Operating Income (based on GAAP rents)
Revenues:
Rental Income 67,120$ 67,520$ 66,983$ 61,836$ 67,379$
Tenant Reimbursements 7,038 7,918 8,419 6,831 9,687
Other Property Income 734 784 699 663 673
Lease Termination Income (47) 295 107 1,518 8,085
Total Revenues 74,845$ 76,517$ 76,208$ 70,848$ 85,824$
Operating Expenses:
Property Operating Costs (21,987) (21,666) (21,985) (22,067) (23,764)
Total Operating Expenses (21,987)$ (21,666)$ (21,985)$ (22,067)$ (23,764)$
52,858$ 54,851$ 54,223$ 48,781$ 62,060$
2,425$ 2,344$ 2,104$ 2,301$ 2,239$
Net Operating Income from:
Acquisitions - - - - -
Dispositions (4) (101) 855 12,528 20,069 20,249
Net Operating Income (based on GAAP rents) 55,182$ 58,050$ 68,855$ 71,151$ 84,548$
Net Operating Income (based on cash rents)
Revenues:
Rental Income 60,124$ 59,921$ 58,941$ 58,876$ 64,558$
Tenant Reimbursements 7,038 7,918 8,419 6,831 9,687
Other Property Income 734 784 699 663 673
Lease Termination Income (47) 295 107 1,518 8,085
Total Revenues 67,849$ 68,918$ 68,166$ 67,888$ 83,003$
Operating Expenses:
Property Operating Costs (21,155) (20,804) (21,348) (21,431) (23,126)
Total Operating Expenses (21,155)$ (20,804)$ (21,348)$ (21,431)$ (23,126)$
46,694$ 48,114$ 46,818$ 46,457$ 59,877$
1,904$ 1,446$ 1,144$ 1,550$ 1,868$
Net Operating Income from:
Acquisitions - - - - -
Dispositions (4) (101) 850 13,170 16,888 17,330
Net Operating Income (based on cash rents) 48,497$ 50,410$ 61,132$ 64,895$ 79,075$
-1.9% 3.3%
Supplemental Information - Q2 2017 12
Same Store Net Operating Income (based on cash rents)
51% of Market Square Buildings (3)
Same Store Net Operating Income (based on cash rents)
wholly-owned properties (2)
(4) Reflects activity for the following properties sold since April 1, 2016, for all periods presented: Key Center Tower, Key Center Marriott, 5 Houston Center,
Energy Center, 515 Post Oak, SanTan Corporate Center, Sterling Commerce, 80 Park Plaza, 9127, 9189, 9191 & 9193 S. Jamaica Street, 800 North Frederick.
(1) For definitions and reconciliations of these non-GAAP financial metrics, see pages 27 - 31.
(3) Reflects NOI from 51% of the Market Square Buildings for all periods presented. On October 28, 2015, we transferred the Market Square Buildings and the
$325.0 million mortgage note to a joint venture, and sold a 49% interest in the joint venture.
(2) Reflects NOI from properties that were wholly-owned for the entirety of the periods presented.
Same Store Net Operating Income (based on GAAP rents)
wholly-owned properties (2)
Same Store Net Operating Income (based on GAAP rents)
51% of Market Square Buildings (3)
Columbia Property Trust, Inc.
Net Operating Income (1)
Three Months Ended
Unaudited ($ in thousands)
6/30/2017 3/31/2017 9/30/2016 6/30/2016
Maintenance
Building Capital 1,124$ 423$ 1,044$ 429$ 844$
Tenant Improvements 9,854 716 1,610 7,810 2,551
Leasing Commissions 769 358 10,319 2,181 10,060
Other Leasing Costs 5 178 69,338 (2) 1,217 1,120
Total - Maintenance 11,752$ 1,675$ 82,311$ 11,637$ 14,575$
Investment
Building Capital 5,971$ 9,069$ 7,192$ 7,975$ 1,994$
Tenant Improvements 13,525 8,961 8,800 7,723 3,000
Leasing Commissions 3,978 3,074 4,232 969 1,979
Other Leasing Costs 83 141 1,796 144 2,580
Total - Investment 23,557$ 21,245$ 22,020$ 16,811$ 9,553$
Maintenance & Investment
Building Capital 7,095$ 9,492$ 8,236$ 8,404$ 2,838$
Tenant Improvements 23,379 9,677 10,410 15,533 5,551
Leasing Commissions 4,747 3,432 14,551 3,150 12,039
Other Leasing Costs 88 319 71,134 1,361 3,700
Total - Maintenance & Investment 35,309$ 22,920$ 104,331$ 28,448$ 24,128$
(1) Reflects 51% of the capital expenditures of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
(2) Includes $68.7M of lease incentives related to the NYU lease at 222 East 41st Street.
NOTE: See page 13 of this supplemental report for a description of Maintenance and Investment Capital.
Supplemental Information - Q2 2017 13
Columbia Property Trust, Inc.
Capital Expenditure Summary (1)
Capital Expenditures Three Months Ended
12/31/2016
Unaudited
14Supplemental Information - Q2 2017
Columbia Property Trust, Inc.
Key Credit Metrics
Investment Grade Rating Low Leverage - 6/30/17
Debt Ratios - Q2 17 Liquidity - 6/30/17
2.8x
5.2x
Fixed Charge Coverage Net Debt to EBITDA
Leasing Spreads
(Cash Basis) $1.0B
Cash &
Line of Credit
S&P
BBB / Stable
Moody's
Baa2 / Stable
25.2%
82%
Net Debt to
Gross Real Estate Assets
Gross Real Estate Assets
Unencumbered
Unaudited ($ in thousands) (at 6/30/2017)
Debt Instrument - Secured Maturity Rate Rate Type Balance % of Total Debt
Mortgage Debt
263 Shuman Boulevard July-17 5.55% Fixed 49,000$ (1) 3.2%
One Glenlake Parkway December-18 5.80% Fixed 24,769 1.6%
650 California Street July-19 3.60% Fixed 125,005 8.3%
Market Square July-23 5.07% Fixed 165,750 (2) 11.0%
Weighted Average / Secured - Mortgage Notes 3.5 Years 4.68% 364,524$ 24.1%
Debt Instrument - Unsecured Maturity Rate Rate Type Balance % of Total Debt
Bank Facilities
$500 Million Revolving Credit Facility (3) July-19 LIBOR + 100 bps Floating -$ 0.0%
$300 Million Term Loan (4) July-20 LIBOR + 110 bps Floating 300,000 19.8%
$150 Million Term Loan (5) July-22 3.52% Fixed 150,000 9.9%
Weighted Average / Bank Facilities 3.8 Years 2.59% 450,000$ 29.7%
Bonds
$350 Million @ 4.150% April-25 4.15% Fixed 350,000$ 23.1%
$350 Million @ 3.650% August-26 3.65% Fixed 350,000 23.1%
Weighted Average / Bonds 8.4 Years 3.90% 700,000$ 46.2%
Weighted Average / Unsecured 6.6 Years 3.39% 1,150,000$ 75.9%
Weighted Average / Total Debt 5.9 Years 3.70% 1,514,524$ 100.0%
Debt - consolidated 1,348,774$
Debt - unconsolidated 165,750
Total Debt 1,514,524$
Weighted Ave
Maturity
Weighted Ave
Rate - Qtr Balance % of Total Debt
6.5 Years 4.09% 1,214,524$ 80.2%
3.1 Years 2.12% 300,000 19.8%
Total 5.9 Years 3.70% 1,514,524$ 100.0%
(2) Reflects 51% of the mortgage balance of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
Supplemental Information - Q2 2017 15
(5) Columbia Property Trust is party to an interest rate swap agreement, which effectively fixes its interest rate on the $150 Million Term Loan at 3.52% per annum
and terminates on July 29, 2022. The spread of 1.55% over the swapped rate is based on the company's credit rating. This interest rate swap agreement qualifies
for hedge accounting treatment; therefore, changes in fair value are recorded as a market value adjustment to interest rate swap in our consolidated statements of
other comprehensive income.
Columbia Property Trust, Inc.
Debt Overview
(4) The $300 Million Term Loan bears interest at a rate based on, at the option of Columbia Property Trust, LIBOR for seven days, one-, two-, three-, or six-month
periods, plus an applicable margin ranging from 0.90% to 1.75% based on credit rating, or the alternate base rate which is the greater of (a) Prime Rate, (b) Fed
Funds plus 1/2 of 1%, and (c) the Libor Rate plus 1%, plus an applicable margin ranging from 0.00% to 0.75% based on credit rating.
Fixed and Floating Rate Debt Analysis
Fixed Rate Debt
Floating Rate Debt
(3) The Revolving Credit Facility ($500MM) bears interest at a rate based on, at the option of Columbia Property Trust, LIBOR for seven days, one-, two-, three-, or six-
month periods, plus an applicable margin ranging from 0.875% to 1.55% based on credit rating, or the alternate base rate which is the greater of (a) Prime Rate, (b)
Fed Funds plus 1/2 of 1%, and (c) the Libor Rate plus 1%, plus an applicable margin ranging from 0.00% to 0.55% based on credit rating. This facility carries two six-
month extension options.
(1) In January 2017, the lender put this mortgage note into non-monetary default because the full-building lease with OfficeMax was not renewed, as required by
the loan agreement. OfficeMax vacated the property in 2015, and the lease will expire in May 2017. Columbia Property Trust is in process of working to transfer this
property to the lender.
Unaudited (at 6/30/2017)
Bond Covenant Compliance Metric Actual (6/30/17)
Debt to Total Asset Value Ratio Max 60% 30%
Interest Coverage Ratio (adjusted EBITDA) Min 1.50x 2.90x
Secured Debt to Total Asset Value Ratio Max 40% 4%
Maintenance of Total Unencumbered Assets Min 150% 343%
Term Loan / Revolving Credit Facility Covenant Compliance Metric Actual (6/30/17)
Debt to Total Asset Value Ratio Max 60% 37%
Interest Coverage Ratio (adjusted EBITDA) Min 1.50x 2.41x
Secured Debt to Total Asset Value Ratio Max 40% 7%
Unencumbered Asset Coverage Ratio Min 1.66x 4.26x
Unencumbered Interest Coverage Ratio Min 1.75x 4.45x
Supplemental Information - Q2 2017 16
Columbia Property Trust, Inc.
Debt Covenant Compliance
Unaudited ($ in thousands) (at 6/30/2017)
Secured Unsecured Unsecured % of Interest % of Gross
Mortgage Debt Term Loans Bonds Total Debt Total Debt Rate (1) Real Estate Assets
49,000$ (2) -$ -$ 49,000$ 3.2% 5.55% 1.2%
24,769 - - 24,769 1.6% 5.80% 0.6%
125,005 - - 125,005 8.3% 3.60% 3.1%
- 300,000 - 300,000 19.8% 2.12% 7.5%
- 150,000 - 150,000 9.9% 3.52% 3.8%
165,750 - - 165,750 11.0% 5.07% 4.1%
- - 350,000 350,000 23.1% 4.15% 8.8%
- - 350,000 350,000 23.1% 3.65% 8.8%
364,524$ 450,000$ 700,000$ 1,514,524$ 100.0% 3.70% 37.9%
24.1% 29.7% 46.2%
Supplemental Information - Q2 2017 17
2020
2022
2023
(2) In January 2017, the lender put the $49 million 263 Shuman mortgage note into non-monetary default because the full-building lease with OfficeMax was not
renewed, as required by the loan agreement. OfficeMax vacated the property in 2015, and the lease will expire in May 2017. Columbia Property Trust is in
process of working to transfer this property to the lender.
Columbia Property Trust, Inc.
Debt Maturities
(1) Weighted average. Includes effective rates on variable rate loans swapped to fixed.
Maturity
2025
2026
Total
% of Total Debt
2017
2018
2019
$49 (2)
$25
$125
$166
$300
$150
$350 $350
$0
$100
$200
$300
$400
$500
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Maturity Schedule ($M)
Mortgage Debt Term Loans Bonds
5.55%
5.07%
4.15% 3.65%
2.12%
3.52%
3.60%
5.80%
Unaudited
18Supplemental Information - Q2 2017
Columbia Property Trust, Inc.
Key Operating Metrics
Leasing Activity - YTD 17 Leasing Spreads - YTD 17
Market Distribution by
% Gross Real Estate Assets - 6/30/17
Portfolio Occupancy
35%
31%
11%
10%
7% 6%
SF Leased
83.1%
95.3%
Avg. Economic - Q2 17 Leased - 6/30/17
Occupancy
2Q 17
101%
GAAP Basis
New & Renewal
605,238
Square Feet
New & Renewal
Cash Basis
New & Renewal
84%
Columbia Property Trust, Inc.
Property Overview - Gross Real Estate Assets, Net Operating Income & Annualized Lease Revenue
Unaudited ($ in thousands) (at 6/30/2017)
Secured
Market Ownership % Debt?
229 West 43rd Street New York, NY 100% 510,818$ 35,669$ 6,896$ 6,776$
315 Park Avenue South New York, NY 100% 373,686 17,968 2,258 685
222 East 41st Street New York, NY 100% 299,161 15,318 (2) 3,148 (498)
95 Columbus Jersey City, NJ 100% 204,149 24,791 3,957 4,214
Subtotal - New York 1,387,814 35% 93,746 16,259 11,177
333 Market Street San Francisco, CA 100% 408,640 24,830 (3) 6,369 5,910
650 California Street San Francisco, CA 100% Yes 323,272 29,522 1,854 1,237
University Circle East Palo Alto, CA 100% 279,258 40,403 7,405 7,401
221 Main Street San Francisco, CA 100% 241,401 24,656 4,073 3,501
Subtotal - San Francisco 1,252,571 31% 119,411 19,701 18,049
Lindbergh Center Atlanta, GA 100% 288,447 22,183 (3) 5,592 5,531
One & Three Glenlake Parkway Atlanta, GA 100% Yes (4) 174,724 17,859 (5) 2,693 2,809
Subtotal - Atlanta 463,171 11% 40,042 8,285 8,340
Market Square Washington, D.C. 51% Yes 285,411 (6) 22,299 (6) 2,425 (6) 1,904 (6)
80 M Street Washington, D.C. 100% 104,933 13,608 1,140 1,229
Subtotal - Washington, D.C. 390,344 10% 35,907 3,565 3,133
Cranberry Woods Drive Pittsburgh, PA 100% 188,884 15,942 (3) 4,099 4,062
116 Huntington Avenue Boston, MA 100% 164,472 11,103 1,192 1,162
Pasadena Corporate Park Los Angeles, CA 100% 111,681 8,128 1,202 1,326
Subtotal - Other 465,037 12% 35,173 6,493 6,550
263 Shuman Boulevard Chicago, IL 100% Yes 45,333 - (7) 590 958
Subtotal - Dispositions 45,333 1% - 590 958
Corporate & Other 1,159 - 289 (8) 290 (8)
Total - All Properties (6) 4,005,429$ 324,279$ 55,182$ 48,497$
Total - wholly-owned properties 3,720,018$ 301,980$ 52,757$ 46,593$
Total - 51% of Market Square Buildings 285,411$ 22,299$ 2,425$ 1,904$
Supplemental Information - Q2 2017 19
(1) Gross Real Estate Assets includes (i) land, (ii) building and improvements, (iii) intangible lease assets, (iv) construction in progress, and (v) intangible lease origination
costs, less (vi) intangible lease liabilities.
(2) Reimbursements are excluded, as operating expenses are paid directly by the tenant.
(3) Reimbursements are excluded, as operating expenses, except for insurance expense, are paid directly by the tenant.
(6) Reflects 51% of the gross real estate assets, ALR and NOI of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint
venture.
(7) Pro forma for the planned return of the property to the lender.
(8) Includes net operating income for previously sold properties.
(4) Secured debt only applies to One Glenlake Parkway.
(5) Reimbursements are excluded for Three Glenlake Parkway, as operating expenses, except for insurance expense, are paid directly by the tenant.
Real Estate Lease (based on (based on
Property Assets (1) Revenue (ALR) GAAP rents) cash rents)
Gross Annualized Income - Q2 2017 Income - Q2 2017
Net Operating Net Operating
Columbia Property Trust, Inc.
Property Overview - Square Feet & Occupancy
Unaudited (SF in thousands) (at 6/30/2017)
Average
Percent Commenced Economic
Market Ownership % Leased Occupancy Occupancy (1)
229 West 43rd Street New York, NY 100% 481 481 100.0% 100.0% 100.0%
315 Park Avenue South New York, NY 100% 331 226 68.3% 68.3% 53.3%
222 East 41st Street New York, NY 100% 390 390 100.0% 100.0% 0.0%
95 Columbus Jersey City, NJ 100% 630 630 100.0% 100.0% 98.4%
Subtotal - New York 1,832 1,727 94.3% 94.3% 69.8%
333 Market Street San Francisco, CA 100% 657 657 100.0% 100.0% 100.0%
650 California Street San Francisco, CA 100% 483 433 89.6% 54.0% 52.1%
University Circle East Palo Alto, CA 100% 451 451 100.0% 98.8% 98.4%
221 Main Street San Francisco, CA 100% 381 363 95.3% 90.6% 87.9%
Subtotal - San Francisco 1,972 1,904 96.6% 86.6% 85.6%
Lindbergh Center Atlanta, GA 100% 955 955 100.0% 100.0% 100.0%
One & Three Glenlake Parkway Atlanta, GA 100% 706 706 100.0% 87.8% 86.3%
Subtotal - Atlanta 1,661 1,661 100.0% 94.8% 94.2%
Market Square Washington, D.C. 51% 356 (2) 274 (2) 77.0% 73.7% 62.2%
80 M Street Washington, D.C. 100% 285 268 94.0% 64.0% 62.7%
Subtotal - Washington, D.C. 641 542 84.6% 69.4% 62.4%
Cranberry Woods Drive Pittsburgh, PA 100% 824 824 100.0% 100.0% 100.0%
116 Huntington Avenue Boston, MA 100% 272 209 76.8% 75.7% 72.9%
Pasadena Corporate Park Los Angeles, CA 100% 264 249 94.3% 94.3% 94.3%
Subtotal - Other 1,360 1,282 94.3% 94.0% 93.5%
263 Shuman Boulevard Chicago, IL 100% - (3) - (3) - - -
Subtotal - Dispositions - - - - -
Total - All Properties (2) 7,466 7,116 95.3% 90.2% 83.1%
Total - All Properties (at 100%) 7,808 (4) 7,379 (4)
Supplemental Information - Q2 2017 20
Rentable Leased
(4) Includes 100% of Market Square: 698 rentable square feet and 537K leased square feet.
Property Square Feet Square Feet
(1) Total square feet of leases that have commenced and the tenant is paying rent divided by total rentable square feet. Monthly average for the current quarter.
(2) Reflects 51% of the square feet of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
(3) Pro forma for the planned return of the property to the lender.
Unaudited (SF in thousands) (at 6/30/2017)
Rentable Leased Percent
Square Footage Square Footage Leased
As of March 31, 2017 7,455 7,013 94.1%
Leasing Activity
New Leases (1) 11 305
Lease Expirations/Early Terminations (202)
Net Absorption 11 103
As of June 30, 2017 7,466 7,116 95.3%
6/30/17
Supplemental Information - Q2 2017 21
Columbia Property Trust, Inc.
Occupancy Summary
(1) New leasing activity for space that was either vacant at the beginning of the quarter or that became available due to expiration/termination of an existing
lease.
90.6% 90.7% 90.6%
94.1%
95.3%
60%
70%
80%
90%
100%
6/30/16 9/30/16 12/31/16 3/31/17 6/30/17
Percent Leased
Unaudited (weighted average unless otherwise noted)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Renewal Leases
Number of Leases 8 6 6 7 4
Square Feet of Leasing (at 100%) 75,082 138,545 33,789 112,828 155,236
Square Feet of Leasing (at CXP's share) (1) 69,580 135,356 22,554 92,625 148,489
Lease Term (months) 104 36 60 75 87
Tenant Improvements per Square Foot 81.23 10.74 21.18 50.85 25.29
Leasing Commissions per Square Foot 19.45 10.20 16.43 16.98 10.39
Total per Square Foot 100.68$ 20.94$ 37.61$ 67.83$ 35.68$
Tenant Improvements per Square Foot per Year of Lease Term 9.36 3.56 4.25 8.09 3.51
Leasing Commissions per Square Foot per Year of Lease Term 2.24 3.38 3.30 2.70 1.44
Total per Square Foot per Year 11.60$ 6.94$ 7.55$ 10.79$ 4.95$
Cash Rent Releasing Spread (2) 51.6% 0.7% 15.3% 18.3% 10.5%
GAAP Rent Releasing Spread (2) 74.8% 2.6% 35.4% 26.3% 25.9%
New Leases (Space Vacant > 1 Year)
Number of Leases 9 6 7 4 1
Square Feet of Leasing (at 100%) 193,128 49,455 53,622 35,858 34,844
Square Feet of Leasing (at CXP's share) (1) 193,128 47,173 41,642 34,388 34,844
Lease Term (months) 111 116 118 97 131
Tenant Improvements per Square Foot 98.68 87.48 106.58 31.36 74.04
Leasing Commissions per Square Foot 23.37 14.74 36.94 24.07 47.44
Total per Square Foot 122.05$ 102.22$ 143.52$ 55.43$ 121.48$
Tenant Improvements per Square Foot per Year of Lease Term 10.65 9.03 10.82 3.89 6.78
Leasing Commissions per Square Foot per Year of Lease Term 2.52 1.52 3.75 2.99 4.35
Total per Square Foot per Year 13.17$ 10.55$ 14.57$ 6.88$ 11.13$
New Leases (Space Vacant < 1 Year) (3)
Number of Leases 2 4 9 - 7
Square Feet of Leasing (at 100%) 55,643 93,385 173,995 - 413,917
Square Feet of Leasing (at CXP's share) (1) 55,643 93,385 173,995 - 412,182
Lease Term (months) 97 123 145 - 376
Tenant Improvements per Square Foot 91.92 57.31 116.59 - 178.71
Leasing Commissions per Square Foot 21.56 17.91 26.97 - 44.63
Total per Square Foot 113.48$ 75.22$ 143.56$ -$ 223.34$
Tenant Improvements per Square Foot per Year of Lease Term 11.35 5.61 9.66 - 5.70
Leasing Commissions per Square Foot per Year of Lease Term 2.66 1.75 2.24 - 1.42
Total per Square Foot per Year 14.01$ 7.36$ 11.90$ -$ 7.12$
Cash Rent Releasing Spread (2) 73.8% 128.6% 3.5% - -18.5%
GAAP Rent Releasing Spread (2) 96.9% 147.0% 15.3% - 15.4%
Total Leases
Number of Leases 19 16 22 11 12
Square Feet of Leasing (at 100%) 323,853 281,385 261,406 148,686 603,997
Square Feet of Leasing (at CXP's share) (1) 318,351 275,914 238,191 127,013 595,515
Lease Term (months) 108 104 135 82 361
Tenant Improvements per Square Foot 94.23 53.41 108.05 44.59 171.14
Leasing Commissions per Square Foot 22.32 15.77 27.41 19.25 43.86
Total per Square Foot 116.55$ 69.18$ 135.46$ 63.84$ 215.00$
Tenant Improvements per Square Foot per Year of Lease Term 10.49 5.19 9.35 6.96 5.22
Leasing Commissions per Square Foot per Year of Lease Term 2.49 2.51 2.60 2.78 1.60
Total per Square Foot per Year 12.98$ 7.70$ 11.95$ 9.74$ 6.82$
Cash Rent Releasing Spread (2) 61.9% 97.1% 4.5% 18.3% -17.7%
GAAP Rent Releasing Spread (2) 85.1% 111.4% 17.0% 26.3% 15.7%
(3) Includes executed leases that have not yet commenced for space covered by an existing lease.
Supplemental Information - Q2 2017 22
Columbia Property Trust, Inc.
Leasing Summary
Three Months Ended
(2) Spread calculation is based on the change in net rent (base rent plus reimbursements less operating expenses).
(1) Reflects 51% of the square feet of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
Unaudited (SF & $ in thousands) (at 6/30/2017)
Expiring Annualized Lease
Revenue (ALR) % of ALR Expiring
Expiring Rentable Square
Footage
% of Rentable Square Footage
Expiring
-$ 0.0% 350 4.7%
7,601 2.3% 128 1.7%
16,695 5.2% 245 3.3%
16,255 5.0% 211 2.8%
27,890 8.6% 676 9.1%
64,620 19.9% 1,781 23.8%
23,071 7.1% 446 6.0%
18,861 5.8% 359 4.8%
13,583 4.2% 203 2.7%
40,852 12.6% 1,161 15.5%
37,104 11.4% 895 12.0%
14,799 4.6% 189 2.5%
6,083 1.9% 102 1.4%
5,942 1.8% 117 1.6%
4,209 1.3% 51 0.7%
26,714 8.3% 552 7.4%
324,279$ 100.0% 7,466 100.0%
Supplemental Information - Q2 2017 23
Vacant
Columbia Property Trust, Inc.
Lease Expiration Schedule (1)
Year
2028
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
(1) Pro forma for the planned return of 263 Shuman Boulevard to the lender.
2029
2030
2031+
Total
NOTE: Expirations that have been renewed are reflected above based on the renewal expiration date.
2.3%
5.2% 5.0%
8.6%
19.9%
7.1%
5.8%
4.2%
12.6%
11.4%
4.6%
1.9% 1.8%
1.3%
8.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031+
Lease Expiration Schedule
% of ALR Expiring
Columbia Property Trust, Inc.
Unaudited (SF & $ in thousands)
Current Per Current Per Current Per
Period ALR (2) SF ALR (2) SF ALR (2) SF
Q3 2017 81 (3) 5,284$ 65.23 18 1,120$ 62.22 - -$ -
Q4 2017 1 71 71.00 4 200 50.00 17 481 28.29
Total - 2017 82 5,355 65.30 22 1,320 60.00 17 481 28.29
Q1 2018 - - - 20 1,104 55.20 - - -
Q2 2018 - - - 16 1,160 72.50 - - -
Q3 2018 1 57 57.00 142 10,146 71.45 6 168 28.00
Q4 2018 - - - 28 2,109 75.32 - - -
Total - 2018 1 57 57.00 206 14,519 70.48 6 168 28.00
64 4,698 73.41 99 8,658 87.45 - - -
40 2,802 70.05 187 13,326 71.26 363 8,013 22.07
472 18,045 38.23 162 14,152 87.36 977 22,866 23.40
70 5,067 72.39 49 4,219 86.10 26 787 30.27
998 57,722 57.84 1,179 63,217 53.62 272 7,727 28.41
Total 1,727 93,746$ 54.28$ 1,904 119,411$ 62.72$ 1,661 40,042$ 24.11$
Current Per Current Per Current Per
Period ALR (2) SF ALR (2) SF ALR (2) SF
Q3 2017 5 272$ 54.40 - -$ - 104 6,676$ 64.19
Q4 2017 2 173 86.50 - - - 24 925 38.54
Total - 2017 7 445 63.57 - - - 128 7,601 59.38
Q1 2018 1 36 36.00 1 64 64.00 22 1,204 54.73
Q2 2018 2 180 90.00 - - - 18 1,340 74.44
Q3 2018 12 820 68.33 - - - 161 11,191 69.51
Q4 2018 16 851 53.19 - - - 44 2,960 67.27
Total - 2018 31 1,887 60.87 1 64 64.00 245 16,695 68.14
48 2,899 60.40 - - - 211 16,255 77.04
13 997 76.69 73 2,752 37.70 676 27,890 41.26
92 6,071 65.99 78 3,486 44.69 1,781 64,620 36.28
89 5,173 58.12 212 7,825 36.91 446 23,071 51.73
262 18,435 70.36 918 21,046 22.93 3,629 168,147 46.33
Total 542 35,907$ 66.25$ 1,282 35,173$ 27.44$ 7,116 324,279$ 45.57$
(1) Pro forma for the planned return of 263 Shuman Boulevard to the lender.
(2) Expiring ALR is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space.
(3) Includes 48,000 square feet at 229 West 43rd Street which has been preleased to Snap, Inc.
(4) Reflects 51% of the ALR and square feet of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
Supplemental Information - Q2 2017 24
Lease Expiration by Market (1)
New York San Francisco Atlanta
2021
Expiring Expiring
SF SF
Expiring
SF
Expiring
SF
Other All Markets
2022
Thereafter
Expiring
SF
2021
2022
Thereafter
Washington, D.C. (4)
SF
2019
2020
Expiring
2019
2020
Unaudited (SF & $ in thousands) (at 6/30/2017)
Tenant
Credit Rating
(2)
Number of
Properties
Annualized Lease
Revenue (ALR) (3) % of ALR
Leased
Square
Footage
% of Leased
Square
Footage
Remaining
Lease Term
Years (4)
Wells Fargo Bank N.A. AA- 3 26,413$ 8.1% 673 9.5% 8.8
AT&T Corporation/AT&T Services BBB+ 1 22,183 6.8% 955 13.4% 3.5
Pershing LLC A 1 18,262 5.6% 471 6.6% 3.9
Westinghouse Electric Company Not Rated 1 15,942 4.9% 824 11.6% 7.9
NYU AA- 1 14,802 4.6% 390 5.5% 31.0
Yahoo! BB+ 1 14,556 4.5% 193 2.7% 8.0
Newell Rubbermaid, Inc. BBB- 1 9,315 2.9% 411 5.8% 3.3
DocuSign, Inc. Not Rated 1 8,794 2.7% 117 1.6% 7.1
DLA Piper US, LLP Not Rated 1 8,603 2.7% 119 1.7% 1.0
Amazon Web Services, Inc. AA- 1 8,469 2.6% 90 1.3% 4.0
WeWork Companies Inc. Not Rated 2 7,414 2.3% 129 1.8% 13.6
Snap Inc. Not Rated 1 5,790 1.8% 73 1.0% 10.0
Affirm, Inc. Not Rated 1 5,599 1.7% 86 1.2% 8.7
Oracle America, Inc. AA- 2 5,252 1.6% 102 1.4% 5.4
Quality Technology Services Not Rated 1 5,205 1.6% 128 1.8% 9.3
MongoDB, Inc. Not Rated 1 4,698 1.5% 64 0.9% 1.5
Credit Suisse A 1 4,500 1.4% 62 0.9% 2.8
Green Dot Corporation Not Rated 1 4,196 1.3% 142 2.0% 5.3
ORC International Not Rated 1 3,859 1.2% 57 0.8% 8.0
Prosper Marketplace, Inc. Not Rated 1 3,719 1.1% 50 0.7% 5.7
Subtotal - Top 20 197,571$ 60.9% 5,136 72.2% 8.1
All other 126,708 39.1% 1,980 27.8% 5.5
Total 324,279$ 100.0% 7,116 100.0% 7.1
(1) Pro forma for the planned return of 263 Shuman Boulevard to the lender.
(2) Credit rating may reflect the credit rating of the parent or a guarantor. Only the Standard & Poor's credit rating has been provided.
(3) Reflects 51% of the ALR of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
(4) Weighted average based on CXP's share of Annualized Lease Revenue.
Supplemental Information - Q2 2017 25
Columbia Property Trust, Inc.
Top 20 Tenants & Tenant Industry Profile (1)
18.8%
13.6%
8.7%
7.2%6.3%
6.1%
5.9%
5.5%
3.3%
3.3%
21.3%
Tenant Industry Profile (3)
Services - Business Services
Fire - Depository Institutions
Services - Legal Services
Trans & Util - Electric, Gas,
and Sanitary Services
Trans & Util - Communication
Services - Engineering &
Management Services
Fire - Security and
Commodity Brokers
Services - Health Services
Other
Fire - Real Estate
Fire - Nondepository Institutions
Unaudited ($ in thousands) (at 7/27/2017)
Acquisitions
Location
Acquisition
Date
Percent
Ownership Purchase Price
Rentable Square
Footage $ / SF
% Leased at
Acquisition
229 West 43rd Street New York, NY 8/4/2015 100.0% 516,000$ 481,110 1,073$ 97.7%
315 Park Avenue South New York, NY 1/7/2015 100.0% 372,000 326,812 1,138 93.9%
1881 Campus Commons Reston, VA 1/7/2015 100.0% 64,000 244,565 262 78.0%
Subtotal (2 Property Portfolio) 436,000 571,377 763
116 Huntington Avenue Boston, MA 1/8/2015 100.0% 152,000 270,943 561 77.8%
Total - Acquisitions 1,104,000$ 1,323,430
Location Closing Date % Purchased
Contributed
Value
Rentable Square
Footage $ / SF
% Leased at
Closing Date
114 5th Avenue New York, NY 7/6/2017 49.5% 220,000$ 351,451 626$ 100.0%
Dispositions
Location
Disposition
Date
Percent
Ownership
Gross Sale
Price
Rentable Square
Footage $ / SF
% Leased at
Disposition
Key Center Tower Cleveland, OH 1/31/2017 100.0% 1,326,153 81.8%
Key Center Marriott Cleveland, OH 1/31/2017 100.0% NA
Subtotal (2 Property Portfolio) 267,500$ 1,326,153 NA
5 Houston Center Houston, TX 1/6/2017 100.0% 580,875 75.4%
Energy Center Houston, TX 1/6/2017 100.0% 332,000 100.0%
515 Post Oak Houston, TX 1/6/2017 100.0% 273,710 79.6%
Subtotal (3 Property Portfolio) 272,000 1,186,585 229$ 83.2%
SanTan Corporate Center Phoenix, AZ 12/15/2016 100.0% 58,500 266,531 219 100.0%
Sterling Commerce Dallas, TX 11/30/2016 100.0% 51,000 309,586 165 100.0%
9127 S. Jamaica Street Denver, CO 10/12/2016 100.0% 19,500 107,638 181 0.0%
80 Park Plaza Northern New Jersey 9/30/2016 100.0% 174,500 960,689 182 85.8%
9189, 9191 & 9193 S. Jamaica Street Denver, CO 9/22/2016 100.0% 122,000 370,485 329 100.0%
800 North Frederick Suburban Maryland 7/8/2016 100.0% 48,000 393,000 122 0.0%
100 East Pratt Baltimore, MD 3/31/2016 100.0% 187,000 653,135 286 98.5%
1881 Campus Commons Reston, VA 12/10/2015 100.0% 65,000 244,565 266 91.4%
180 Park Avenue Northern New Jersey 7/1/2015 100.0% 223,837 71.4%
170 Park Avenue Northern New Jersey 7/1/2015 100.0% 145,000 0.0%
1580 West Nursery Road Baltimore, MD 7/1/2015 100.0% 315,350 100.0%
Acxiom Chicago, IL 7/1/2015 100.0% 321,852 100.0%
Highland Landmark III Chicago, IL 7/1/2015 100.0% 272,975 68.1%
The Corridors III Chicago, IL 7/1/2015 100.0% 221,940 95.0%
215 Diehl Road Chicago, IL 7/1/2015 100.0% 161,865 100.0%
544 Lakeview Chicago, IL 7/1/2015 100.0% 139,218 51.1%
Bannockburn Lake III Chicago, IL 7/1/2015 100.0% 106,495 0.0%
Robbins Road Boston, MA 7/1/2015 100.0% 458,237 100.0%
550 King Street Boston, MA 7/1/2015 100.0% 490,119 100.0%
Subtotal (11 Property Portfolio) 433,250 2,856,888 152
Total - Dispositions (excluding Joint Venture) 1,698,250$ 8,675,255
Location Closing Date
% Sold /
Retained
Contributed
Value
Rentable Square
Footage $ / SF
% Leased at
Closing Date
University Circle San Francisco, CA 7/6/2017 22.5% / 77.5% 540,000$ 451,287 1,197$ 100.0%
333 Market Street San Francisco, CA 7/6/2017 22.5% / 77.5% 500,000 657,114 761 100.0%
Market Square Washington, D.C. 10/28/2015 49% / 51% 595,000 687,310 866 80.5%
Total - Contributions 1,635,000$ 1,795,711
Supplemental Information - Q2 2017 26
Columbia Property Trust, Inc.
Transaction Activity (2015 - 2017)
Property Name
Property Name
Property Contributed to Joint Venture
Property Purchased in Joint Venture
Unaudited (in thousands, except per-share amounts)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net Income 1,133$ 74,722$ 27,400$ 36,898$ 13,286$
Depreciation 20,423 21,605 24,026 26,778 28,450
Amortization 8,191 9,457 13,873 11,895 14,932
2,123 2,098 2,106 2,123 2,077
(Gain) loss on sale of real estate assets - (73,153) (22,242) (50,412) 19
FFO 31,870$ 34,729$ 45,163$ 27,282$ 58,764$
Loss on early extinguishment of debt - 45 - 18,905 92
Normalized FFO 31,870$ 34,774$ 45,163$ 46,187$ 58,856$
Normalized FFO per share (basic) 0.26$ 0.29$ 0.37$ 0.37$ 0.48$
Normalized FFO per share (diluted) 0.26$ 0.28$ 0.37$ 0.37$ 0.48$
121,534 122,003 122,709 123,215 123,206
121,909 122,329 122,855 123,350 123,294
Unaudited (in thousands, except per-share amounts)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net Cash Provided by Operating Activities 30,565$ 5,398$ 43,387$ 60,266$ 46,598$
(209) (680) (968) (559) (238)
Net changes in operating assets and liabilities (2,182) 24,886 (3,140) (17,781) 9,238
Maintenance capital (1) (2) (11,752) (1,675) (82,311) (11,637) (14,575)
AFFO 16,422$ 27,929$ (43,032)$ 30,289$ 41,023$
121,534 122,003 122,709 123,215 123,206
121,909 122,329 122,855 123,350 123,294
(2) Reflects 51% of the capital expenditures of the Market Square Joint Venture, in which CXP owns a 51% interest through an unconsolidated joint venture.
Supplemental Information - Q2 2017 27
Weighted-average common shares outstanding - basic
Columbia Property Trust, Inc.
Reconciliation of Net Income to Normalized Funds From Operations (NFFO)
Three Months Ended
Adjustments included in loss from unconsolidated
joint venture
Weighted-average common shares outstanding - diluted
(1) See page 31 of this supplemental report for a description of Maintenance Capital and page 13 for a detail of all capital expenditures.
Weighted-average common shares outstanding - diluted
Reconciliation of Cash Flows From Operations to Adjusted Funds From Operations (AFFO)
Three Months Ended
Weighted-average common shares outstanding - basic
Adjustments included in loss from unconsolidated
joint venture
Unaudited (in thousands)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net Income 1,133$ 74,722$ 27,400$ 36,898$ 13,286$
Interest expense (net) 13,785 14,565 15,158 17,116 17,372
Interest income from development authority bonds (1,800) (1,800) (1,800) (1,800) (1,800)
Income tax (benefit) expense 7 (388) 58 65 245
Depreciation 20,423 21,605 24,026 26,778 28,450
Amortization 8,191 9,457 13,873 11,895 14,932
4,233 4,208 4,216 4,234 4,186
EBITDA 45,972$ 122,369$ 82,931$ 95,186$ 76,671$
(Gain) loss on sale of real estate assets - (73,153) (22,242) (50,412) 19
Loss on early extinguishment of debt - 45 - 18,905 92
Adjusted EBITDA 45,972$ 49,261$ 60,689$ 63,679$ 76,782$
General and administrative 9,201 8,768 8,158 7,467 7,761
Straight line rental income (5,893) (6,154) (6,152) (4,823) (3,474)
Net effect of below market amortization (271) (587) (611) (682) (1,628)
(512) (878) (952) (746) (366)
Net Operating Income (based on cash rents) 48,497$ 50,410$ 61,132$ 64,895$ 79,075$
(1,904) (1,446) (1,144) (1,550) (1,868)
Less Net Operating Income from:
Acquisitions - - - - -
Dispositions (2) 101 (850) (13,170) (16,888) (17,330)
46,694$ 48,114$ 46,818$ 46,457$ 59,877$
Supplemental Information - Q2 2017 28
(3) Reflects NOI from properties that were wholly-owned for the entirety of the periods presented.
(1) Reflects NOI from 51% of the Market Square Buildings for all periods presented. On October 28, 2015, we transferred the Market Square Buildings and the
$325.0 million mortgage note to a joint venture, and sold a 49% interest in the joint venture. Our interest in NOI from the Market Square Buildings is included in
loss from unconsolidated joint venture for all quarters presented.
(2) Reflects activity for the following properties sold since April 1, 2016, for all periods presented: Key Center Tower, Key Center Marriott, 5 Houston Center,
Energy Center, 515 Post Oak, SanTan Corporate Center, Sterling Commerce, 80 Park Plaza, 9127, 9189, 9191 & 9193 S. Jamaica Street, 800 North Frederick.
Columbia Property Trust, Inc.
Reconciliation of Net Income to Net Operating Income (based on cash rents), and Same Store Net Operating
Income (based on cash rents) - wholly-owned properties
Three Months Ended
Same Store Net Operating Income (based on cash rents)
wholly-owned properties (3)
Same Store Net Operating Income (based on cash rents)
51% of Market Square Buildings (1)
Adjustments included in loss from unconsolidated
joint venture
Adjustments included in loss from unconsolidated
joint venture
Unaudited (in thousands)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net Income 1,133$ 74,722$ 27,400$ 36,898$ 13,286$
Interest expense (net) 13,785 14,565 15,158 17,116 17,372
Interest income from development authority bonds (1,800) (1,800) (1,800) (1,800) (1,800)
Income tax (benefit) expense 7 (388) 58 65 245
Depreciation 20,423 21,605 24,026 26,778 28,450
Amortization 8,191 9,457 13,873 11,895 14,932
4,233 4,208 4,216 4,234 4,186
EBITDA 45,972$ 122,369$ 82,931$ 95,186$ 76,671$
(Gain) loss on sale of real estate assets - (73,153) (22,242) (50,412) 19
Loss on early extinguishment of debt - 45 - 18,905 92
Adjusted EBITDA 45,972$ 49,261$ 60,689$ 63,679$ 76,782$
General and administrative 9,201 8,768 8,158 7,467 7,761
9 21 8 5 5
Net Operating Income (based on GAAP rents) 55,182$ 58,050$ 68,855$ 71,151$ 84,548$
(2,425) (2,344) (2,104) (2,301) (2,239)
Less Net Operating Income from:
Acquisitions - - - - -
Dispositions (2) 101 (855) (12,528) (20,069) (20,249)
52,858$ 54,851$ 54,223$ 48,781$ 62,060$
Supplemental Information - Q2 2017 29
(3) Reflects NOI from properties that were wholly-owned for the entirety of the periods presented.
(1) Reflects NOI from 51% of the Market Square Buildings for all periods presented. On October 28, 2015, we transferred the Market Square Buildings and the
$325.0 million mortgage note to a joint venture, and sold a 49% interest in the joint venture. Our interest in NOI from the Market Square Buildings is included in
loss from unconsolidated joint venture for all quarters presented.
(2) Reflects activity for the following properties sold since April 1, 2016, for all periods presented: Key Center Tower, Key Center Marriott, 5 Houston Center,
Energy Center, 515 Post Oak, SanTan Corporate Center, Sterling Commerce, 80 Park Plaza, 9127, 9189, 9191 & 9193 S. Jamaica Street, 800 North Frederick.
Columbia Property Trust, Inc.
Reconciliation of Net Income to Net Operating Income (based on GAAP rents), and Same Store Net Operating
Income (based on GAAP rents) - wholly-owned properties
Three Months Ended
Same Store Net Operating Income (based on GAAP rents)
wholly-owned properties (3)
Same Store Net Operating Income (based on GAAP rents)
51% of Market Square Buildings (1)
Adjustments included in loss from unconsolidated
joint venture
Adjustments included in loss from unconsolidated joint
venture
Unaudited (in thousands)
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net Operating Income (based on GAAP rents) 55,182$ 58,050$ 68,855$ 71,151$ 84,548$
Straight-line rental income (6,414) (7,057) (7,115) (5,525) (3,764)
Net effect of below lease market amortization (271) (583) (608) (731) (1,709)
Net Operating Income (based on cash rents) 48,497$ 50,410$ 61,132$ 64,895$ 79,075$
Supplemental Information - Q2 2017 30
Columbia Property Trust, Inc.
Reconciliation of Net Operating Income (based on GAAP rents), and Net Operating Income (based on cash
rents)
Three Months Ended
Supplemental Information - Q2 2017 31
EBITDA: EBITDA is defined as net income before interest, taxes, depreciation and amortization. We believe EBITDA is a reasonable measure of our liquidity.
EBITDA is a non-GAAP financial measure and should not be viewed as an alternative measurement of cash flows from operating activities or other GAAP basis
liquidity measures. Other REITs may calculate EBITDA differently and our calculation should not be compared to that of other REITs.
Columbia Property Trust, Inc.
Definitions - Non-GAAP Financial Measures
Included in this supplemental report are non-GAAP financial measures, which are accompanied by what we consider the most directly comparable financial
measures calculated and presented in accordance with GAAP. These measures include earnings (or components of earnings), as defined, from both continuing
operations and discontinued operations. A description of the non-GAAP financial measures we present and a statement of the reasons why management believes
the non-GAAP measures provide useful information to investors about the company's financial condition and results of operations can be found below.
Adjusted Funds From Operations (“AFFO”): AFFO is calculated by adjusting Cash Flow from Operations to exclude (i) changes in assets and liabilities resulting
from timing differences (ii) additional amortization of lease assets (liabilities), (iii) straight-line rental income, (iv) gain (loss) on interest rate swaps, (v) recurring
capital expenditures, and adding back (vi) stock based compensation expense and (vii) non-cash interest expense. Because AFFO adjusts for income and expenses
that we believe are not reflective of our core operations, we believe AFFO provides useful supplemental information. AFFO is a non-GAAP financial measure and
should not be viewed as an alternative measurement of our operating performance to net cash flows from operating activities or net income.
Adjusted EBITDA: Adjusted EBITDA is defined as net income before interest, taxes, depreciation and amortization and incrementally removing any impairment
losses, gains or losses from sales of property, real estate acquisition-related costs, discontinued operations adjustments, or other extraordinary items. We do not
include impairment losses in this measure because we feel these types of losses create volatility in our earnings and make it difficult to determine the earnings
generated by our ongoing business. We believe adjusted EBITDA is a reasonable measure of our liquidity. Adjusted EBITDA is a non-GAAP financial measure and
should not be viewed as an alternative measurement of cash flows from operating activities or other GAAP basis liquidity measures. Other REITs may calculate
adjusted EBITDA differently and our calculation should not be compared to that of other REITs.
Annualized Lease Revenue (“ALR”): ALR is the sum of (i) annualized rental payments (defined as base rent plus operating expense reimbursements, excluding
rental abatements) for executed and commenced leases as well as leases executed but not yet commenced for vacant space, and (ii) annualized parking revenues,
payable either under the terms of an executed lease or vendor contract. ALR excludes rental payments for executed leases that have not yet commenced for
space covered by an existing lease.
Maintenance Capital: Capital expenditures incurred to maintain the building structure and functionality, and to lease space at our properties in their current
condition. Maintenance capital excludes capital for recent acquisitions and first generation leasing.
Investment Capital: Capital expenditures incurred to lease space to first generation tenants; to lease space that has been vacant for more than one year; to
expand or repurpose building functionality in our existing portfolio; and to bring properties up to our ownership standards. We establish our ownership standards
based on Class A office property characteristics typical for the respective local market, including level of finishes, systems, accessibility, and defined market
presence. All costs incurred within 36 months of acquisition are considered Investment Capital.
Funds From Operations (“FFO”): FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), represents net income (computed in
accordance with GAAP), plus depreciation of real estate assets and amortization of lease-related costs, excluding gains (losses) on sales of real estate and
impairment losses on real estate assets. The Company computes FFO in accordance with NAREIT's definition, which may differ from the methodology for
calculating FFO, or similarly titled measures, used by other companies and this may not be comparable to those presentations. We consider FFO an appropriate
supplemental performance measure given its wide use by and relevance to investors and analysts. FFO, reflecting the assumption that real estate asset values rise
or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assume that the value of real
estate diminishes predictably over time.
Normalized FFO: We calculate Normalized FFO by starting with FFO, as defined by NAREIT, and adjusting for certain items that are not reflective of our core
operations, including: (i) real estate acquisition-related costs, (ii) listing costs, (iii) loss on interest rate swaps and (iv) loss on early extinguishment of debt. Such
items create significant earnings volatility. We believe Normalized FFO provides a meaningful measure of our operating performance and more predictability
regarding future earnings potential. Normalized FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating
performance to net income; therefore, it should not be compared to other REITs' equivalent to Normalized FFO.
Net Operating Income (based on cash rents) (“NOI - cash rents”): NOI - cash rents is defined as Adjusted EBITDA adjusted for (i) portfolio general and
administrative expense, (ii) interest rate swap valuation adjustments, (iii) interest expense associated with interest rates swaps, (iv) non-cash property operations,
(v) straight-line rental income, and (vi) net effect of above/(below) market amortization. The company uses this measure to assess its operating results and
believes it is important in assessing operating performance. NOI - cash rents is a non-GAAP measure which does not have any standard meaning prescribed by
GAAP and therefore may not be comparable to similar measures presented by other companies.
Net Operating Income (based on GAAP rents) (“NOI - GAAP rents”): NOI - GAAP rents is defined as Adjusted EBITDA adjusted for (i) portfolio general and
administrative expense, (ii) interest rate swap valuation adjustments, and (iii) interest expense associated with interest rates swaps. The company uses this
measure to assess its operating results and believes it is important in assessing operating performance. NOI - GAAP rents is a non-GAAP measure which does not
have any standard meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.
Same Store Net Operating Income (“Same Store NOI”): Same Store NOI is calculated as the NOI attributable to the properties continuously owned and operating
for the entirety of the reporting periods presented. We believe Same Store NOI is an important measure of comparison of our stabilized properties’ operating
performance. Other REITs may calculate Same Store NOI differently and our calculation should not be compared to that of other REITs.
Definitions - Other