Audit Information |
12 Months Ended |
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Dec. 31, 2023 | |
| Auditor Information [Abstract] | |
| Auditor Name | Deloitte & Touche LLP |
| Auditor Location | Boston, Massachusetts |
| Auditor Firm ID | 34 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2023 |
Dec. 31, 2022 |
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| Statement of Financial Position [Abstract] | ||
| Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
| Common shares of beneficial interest, shares authorized (in shares) | 200,000,000 | 200,000,000 |
| Common shares of beneficial interest, shares issued (in shares) | 48,755,415 | 48,565,644 |
| Common shares of beneficial interest, shares outstanding (in shares) | 48,755,415 | 48,565,644 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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| Income Statement [Abstract] | |||
| Net amortization of debt premiums, discounts and issuance costs | $ 9,209 | $ 9,134 | $ 9,771 |
Organization |
12 Months Ended |
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Dec. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization | Organization Office Properties Income Trust, or OPI, we, us or our, is a real estate investment trust, or REIT, formed in 2009 under Maryland law. As of December 31, 2023, our wholly owned properties were comprised of 152 properties containing approximately 20,541,000 rentable square feet and we had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that owned three properties totaling approximately 468,000 rentable square feet.
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Summary of Significant Accounting Policies |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are wholly owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Real Estate Properties. We record our properties at cost and provide depreciation on real estate investments on a straight line basis over estimated useful lives generally ranging from 7 to 40 years. In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives. We allocate the purchase prices of our properties to land, buildings and improvements based on determinations of the relative fair values of these assets assuming the properties are vacant. We determine the fair value of each property using methods similar to those used by independent appraisers, which may involve estimated cash flows that are based on a number of factors, including capitalization rates and discount rates, among others. We allocate a portion of the purchase price of our properties to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases. We allocate a portion of the purchase price to acquired in place leases and tenant relationships based upon market estimates to lease up the property based on the leases in place at the time of purchase. We allocate this aggregate value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease. However, we have not separated the value of tenant relationships from the value of acquired in place leases because such value and related amortization expense is immaterial to the accompanying consolidated financial statements. In making these allocations, we consider factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us. If the value of tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amounts over the estimated life of the relationships. For transactions that qualify as business combinations, we allocate the excess, if any, of the consideration over the fair value of the assets acquired to goodwill. We amortize capitalized above market lease values (included in acquired real estate leases, net in our consolidated balance sheets) and below market lease values (presented as assumed real estate lease obligations, net in our consolidated balance sheets) as a reduction or increase, respectively, to rental income over the terms of the associated leases. Such amortization resulted in a net increase to rental income of $252 during the year ended December 31, 2023 and net decreases to rental income of $975 and $2,288 during the years ended December 31, 2022 and 2021, respectively. We amortize the value of acquired in place leases (included in acquired real estate leases, net in our consolidated balance sheets), exclusive of the value of above market and below market acquired in place leases, over the terms of the associated leases. Such amortization, which is included in depreciation and amortization expense, amounted to $93,057, $118,728 and $142,538 during the years ended December 31, 2023, 2022 and 2021, respectively. If a lease is terminated prior to its stated expiration, we write off the unamortized amounts relating to that lease. As of December 31, 2023 and 2022, our acquired real estate leases and assumed real estate lease obligations, excluding properties classified as held for sale, were as follows:
As of December 31, 2023, the weighted average amortization periods for capitalized above market leases, lease origination value and capitalized below market lease values were 3.4 years, 6.5 years and 11.0 years, respectively. Future amortization of net intangible lease assets and liabilities, to be recognized over the current terms of the associated leases as of December 31, 2023 are estimated to be $67,692 in 2024, $48,838 in 2025, $35,068 in 2026, $26,833 in 2027, $14,123 in 2028 and $59,279 thereafter. We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long lived assets. Impairment indicators may include declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. The future net undiscounted cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining useful lives of our long lived assets. If we change our estimate of the remaining useful lives, we allocate the carrying value of the affected assets over their revised remaining useful lives. Cash and Cash Equivalents. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted Cash. Restricted cash consists of amounts escrowed for future real estate taxes, insurance, leasing costs, capital expenditures and debt service, as required by certain of our mortgage debts. Deferred Leasing Costs. Deferred leasing costs include brokerage costs and inducements associated with our entering leases. We amortize deferred leasing costs, which are included in depreciation and amortization expense, and inducements, which are included as a reduction to rental income, on a straight line basis over the terms of the respective leases. Legal costs associated with the execution of our leases are expensed as incurred and included in general and administrative expenses in our consolidated statements of comprehensive income (loss). We recorded amortization of deferred leasing costs of $8,737, $6,869 and $6,691, and reductions to rental income related to the amortization of inducements of $1,326, $1,124 and $1,187 for the years ended December 31, 2023, 2022 and 2021, respectively. Deferred leasing costs, excluding properties classified as held for sale, totaled $113,433 and $94,680 at December 31, 2023 and 2022, respectively, and accumulated amortization of deferred leasing costs totaled $26,462 and $21,582 at December 31, 2023 and 2022, respectively. Future amortization of deferred leasing costs to be recognized during the current terms of our existing leases as of December 31, 2023 are estimated to be $11,807 in 2024, $10,549 in 2025, $9,912 in 2026, $8,919 in 2027, $8,116 in 2028 and $37,668 thereafter. Debt Issuance Costs. Costs related to the issuance or assumption of debt are capitalized and amortized to interest expense over the terms of the respective loans. Debt issuance costs, net of accumulated amortization, for our prior $750,000 unsecured revolving credit facility, or our prior revolving credit facility, are included in other assets in our consolidated balance sheets. As of December 31, 2023 and 2022, debt issuance costs for our prior revolving credit facility were $5,328 and $4,593, respectively, and accumulated amortization of debt issuance costs for our prior revolving credit facility were $5,240 and $4,072, respectively. Debt issuance costs, net of accumulated amortization, for our senior unsecured notes and mortgage notes payable are presented as a direct deduction from the associated debt liability in our consolidated balance sheets. As of December 31, 2023 and 2022, debt issuance costs, net of accumulated amortization, for our senior unsecured notes and mortgage notes payable totaled $16,623 and $13,589, respectively. Future amortization of debt issuance costs to be recognized with respect to our prior revolving credit facility, senior unsecured notes and mortgage notes payable as of December 31, 2023 are estimated to be $3,147 in 2024, $2,573 in 2025, $2,239 in 2026, $1,499 in 2027, $1,231 in 2028 and $6,022 thereafter. Equity Method Investments. As of December 31, 2023, we had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that owned three properties. The properties owned by these joint ventures are encumbered by an aggregate of $82,000 of mortgage indebtedness. We did not control the activities that are most significant to these joint ventures and, as a result, we accounted for our investments in these joint ventures under the equity method of accounting. See Note 4 for more information regarding our unconsolidated joint ventures. We periodically evaluate our equity method investments for possible indicators of other than temporary impairment whenever events or changes in circumstances indicate the carrying amount of the investment might not be recoverable. These indicators may include the length of time and the extent to which the market value of our investment is below our carrying value, the financial condition of our investees, our intent and ability to be a long term holder of the investment and other considerations. If the decline in fair value is judged to be other than temporary, we record an impairment charge to adjust the basis of the investment to its estimated fair value. Revenue Recognition. We are a lessor of commercial office properties. Our leases provide our tenants with the contractual right to use and economically benefit from all of the physical space specified in the leases; therefore, we have determined to evaluate our leases as lease arrangements. Our leases provide for base rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. Allowances for bad debts are recognized as a direct reduction of rental income. Certain of our leases contain non-lease components, such as property level operating expenses and capital expenditures reimbursed by our tenants as well as other required lease payments. We have made the policy election to not separate the lease and non-lease components because (i) the lease components are operating leases and (ii) the timing and pattern of recognition of the non-lease components are the same as those of the lease components. We apply Accounting Standards Codification 842, Leases, to the combined component. Income derived by our leases is recorded in rental income in our consolidated statements of comprehensive income (loss). Certain tenants are obligated to pay directly their obligations under their leases for insurance, real estate taxes and certain other expenses. These obligations, which have been assumed by the tenants under the terms of their respective leases, are not reflected in our consolidated financial statements. To the extent any tenant responsible for any such obligations under the applicable lease defaults on such lease or if it is deemed probable that the tenant will fail to pay for such obligations, we would record a liability for such obligations. See Note 5 for more information regarding our leases. Income Taxes. We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, and, accordingly, we generally will not be subject to federal income taxes provided we distribute our taxable income and meet certain other requirements to qualify for taxation as a REIT. We are, however, subject to certain state and local taxes. Per Common Share Amounts. We calculate basic earnings per common share using the two class method. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per share. Use of Estimates. Preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. The actual results could differ from these estimates. Significant estimates in the consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles. Segment Reporting. We operate in one business segment: direct ownership of real estate properties. New Accounting Pronouncements. On November 27, 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU No. 2023-07, which requires public entities to: (i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the Chief Operating Decision Maker, or the CODM, and included in each reported measure of segment profit or loss; (ii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Accounting Standards Codification 280, Segment Reporting, or ASC 280, in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosures. Public entities with a single reportable segment must apply all the disclosure requirements of ASU No. 2023-07, as well as all the existing segment disclosures under ASC 280. The amendments in ASU No. 2023-07 are incremental to the requirements in ASC 280 and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU No. 2023-07 should be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact ASU No. 2023-07 will have on our consolidated financial statements and disclosures.
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| Per Common Share Amounts | Per Common Share Amounts The calculation of basic and diluted earnings per share is as follows (amounts in thousands, except per share amounts):
(1)For the years ended December 31, 2023, 2022 and 2021, there were no dilutive common shares. For the year ended December 31, 2021, 34 unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive.
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| Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Properties | Real Estate Properties As of December 31, 2023, our wholly owned properties were comprised of 152 properties containing approximately 20,541,000 rentable square feet, with an undepreciated carrying value of $4,095,010, including $29,331 classified as held for sale. We also had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that owned three properties containing approximately 468,000 rentable square feet. We generally lease space at our properties on a gross lease, modified gross lease or net lease basis pursuant to fixed term contracts expiring between 2024 and 2053. Some of our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the year ended December 31, 2023, we entered into 75 leases for approximately 1,698,000 rentable square feet for a weighted (by rentable square feet) average lease term of 8.5 years and we made commitments of $82,202 for leasing related costs. As of December 31, 2023, we had estimated unspent leasing related obligations of $109,309. Acquisition Activities 2023 Acquisition Activities In December 2023, we acquired a vacant land parcel adjacent to a property we own in Irving, TX for $2,750, excluding acquisition related costs. 2022 Acquisition Activities We did not acquire any properties during the year ended December 31, 2022. 2021 Acquisition Activities During the year ended December 31, 2021, we acquired three properties containing approximately 926,000 rentable square feet for an aggregate purchase price of $576,478, including net purchase price adjustments of $1,761 and acquisition related costs of $1,264. These acquisitions were accounted for as asset acquisitions. We allocated the purchase prices of these acquisitions based on the relative estimated fair values of the acquired assets and assumed liabilities as follows:
(1)Purchase price includes an adjustment of $13,031 to record an estimated real estate tax liability as of the acquisition date. Disposition Activities The sales completed during the years ended December 31, 2023, 2022 and 2021, as presented in the tables below, do not represent significant dispositions individually or in the aggregate, nor do they represent a strategic shift in our business. As a result, the results of operations of these properties are included in continuing operations through the date of sale in our consolidated statements of comprehensive income (loss). 2023 Disposition Activities During the year ended December 31, 2023, we sold eight properties containing approximately 553,000 rentable square feet for an aggregate sales price of $44,874, excluding closing costs.
(1)Gross sales price is the gross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2022. As of December 31, 2023, we had one property located in Chicago, IL containing approximately 248,000 rentable square feet classified as held for sale in our consolidated balance sheets. We recorded an $11,299 loss on impairment of real estate to reduce the carrying value of this property to its estimated fair value less costs to sell as of December 31, 2023. As of February 14, 2024, we have entered into an agreement to sell this property for a sales price of $39,000, excluding closing costs. This pending sale is subject to conditions; accordingly, we cannot be sure that we will complete this sale or that this sale will not be delayed or the terms will not change. 2022 Disposition Activities During the year ended December 31, 2022, we sold 18 properties containing approximately 2,326,000 rentable square feet for an aggregate sales price of $211,020, excluding closing costs.
(1)Gross sales price is the gross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2021. (3)Property is a leasable land parcel. 2021 Disposition Activities During the year ended December 31, 2021, we sold six properties, a warehouse facility and two vacant land parcels containing approximately 2,565,000 rentable square feet for an aggregate sales price of $226,915, excluding closing costs.
(1)Gross sales price is the gross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2020. (3)Consists of a warehouse facility. (4)Consists of two vacant land parcels. We also recorded a $10,658 loss on impairment of real estate to reduce the carrying value of three properties that were classified as held for sale to their estimated fair values less costs to sell as of September 30, 2021. Subsequently, we removed these properties from held for sale status due to a change of plan for sale and recorded an impairment adjustment of $425 to increase the carrying value of these properties to their estimated fair value as of December 31, 2021. In addition, we recorded a $6,991 loss on impairment of real estate to reduce the carrying value of two properties that were classified as held for sale as of December 31, 2021 and subsequently sold in 2022. Unconsolidated Joint Ventures As of December 31, 2023, we owned interests in two joint ventures that owned three properties. We accounted for these investments under the equity method of accounting. As of December 31, 2023 and 2022, our investments in unconsolidated joint ventures consisted of the following:
In October 2023, our joint venture partner in our 1750 H Street, NW joint venture failed to fund a $600 capital call and was in default of the joint venture agreement as of December 31, 2023. During our periodic evaluation of our equity method investments for impairment, we determined that the estimated fair value of our investment in our 1750 H Street, NW joint venture was lower than our carrying value and the decline was other than temporary based on current market conditions and the default of our joint venture partner. As a result, we recorded a loss on impairment of equity method investment of $19,183 during the year ended December 31, 2023 to fully write off its carrying value. The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures:
(1)Includes the effect of mark to market purchase accounting. (2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we did not own. None of the debt is recourse to us. (3)In July 2023, the maturity date of this mortgage loan was extended by three years at the same interest rate. As of December 31, 2023, the unamortized basis difference of our Prosperity Metro Plaza joint venture of $701 was primarily attributable to the difference between the amount we paid to purchase our interest in this joint venture, including transaction costs, and the historical carrying value of the net assets of this joint venture. This difference is being amortized over the remaining useful life of the related property and the resulting amortization expense is included in equity in net losses of investees in our consolidated statements of comprehensive income (loss). As of December 31, 2023, there was no unamortized basis difference for our 1750 H Street, NW joint venture.
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Leases |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Leases Rental income from operating leases, including payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. We increased rental income by $26,194, $10,830 and $15,368 to record revenue on a straight line basis during the years ended December 31, 2023, 2022 and 2021, respectively. Rents receivable, excluding properties classified as held for sale, include $112,440 and $86,305 of straight line rent receivables at December 31, 2023 and 2022, respectively. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $88,173, $83,103 and $85,107 for the years ended December 31, 2023, 2022 and 2021, respectively, of which tenant reimbursements totaled $82,885, $78,388 and $81,295, respectively. The following operating lease maturity analysis presents the future contractual lease payments to be received by us through 2053 as of December 31, 2023:
As of December 31, 2023, tenants representing approximately 1.8% of our total operating lease maturities had exercisable rights to terminate their leases before the stated terms of their leases expire. In 2024, 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2034, 2035, 2036, 2037 and 2040, early termination rights become exercisable by other tenants who represented an additional approximately 1.4%, 2.5%, 2.4%, 2.0%, 6.1%, 2.0%, 2.6%, 1.0%, 0.8%, 1.4%, 4.4%, 0.6%, 0.6% and 2.3% of our total operating lease maturities, respectively. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis. As of December 31, 2023, eight of our tenants had the right to terminate their leases if the respective legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its obligation. These eight tenants represented approximately 3.9% of our total operating lease maturities as of December 31, 2023. Leases where we are the lessee. We had one lease where we were the lessee which expired on January 31, 2021. We subleased a portion of the space, which sublease also expired on January 31, 2021. Rent expense incurred under the lease, net of sublease revenue, was $79 for the year ended December 31, 2021.
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| Leases | Leases Rental income from operating leases, including payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. We increased rental income by $26,194, $10,830 and $15,368 to record revenue on a straight line basis during the years ended December 31, 2023, 2022 and 2021, respectively. Rents receivable, excluding properties classified as held for sale, include $112,440 and $86,305 of straight line rent receivables at December 31, 2023 and 2022, respectively. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $88,173, $83,103 and $85,107 for the years ended December 31, 2023, 2022 and 2021, respectively, of which tenant reimbursements totaled $82,885, $78,388 and $81,295, respectively. The following operating lease maturity analysis presents the future contractual lease payments to be received by us through 2053 as of December 31, 2023:
As of December 31, 2023, tenants representing approximately 1.8% of our total operating lease maturities had exercisable rights to terminate their leases before the stated terms of their leases expire. In 2024, 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2034, 2035, 2036, 2037 and 2040, early termination rights become exercisable by other tenants who represented an additional approximately 1.4%, 2.5%, 2.4%, 2.0%, 6.1%, 2.0%, 2.6%, 1.0%, 0.8%, 1.4%, 4.4%, 0.6%, 0.6% and 2.3% of our total operating lease maturities, respectively. In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations; we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis. As of December 31, 2023, eight of our tenants had the right to terminate their leases if the respective legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its obligation. These eight tenants represented approximately 3.9% of our total operating lease maturities as of December 31, 2023. Leases where we are the lessee. We had one lease where we were the lessee which expired on January 31, 2021. We subleased a portion of the space, which sublease also expired on January 31, 2021. Rent expense incurred under the lease, net of sublease revenue, was $79 for the year ended December 31, 2021.
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Business and Property Management Agreements with RMR |
12 Months Ended |
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Dec. 31, 2023 | |
| Related Party Transactions [Abstract] | |
| Business and Property Management Agreements with RMR | Business and Property Management Agreements with RMR We have no employees. The personnel and various services we require to operate our business are provided to us by The RMR Group LLC, or RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations. Management Agreements with RMR. Our management agreements with RMR provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms: •Base Management Fee. The annual base management fee payable to RMR by us for each applicable period is equal to the lesser of: •the sum of (a) 0.5% of the average aggregate historical cost of the real estate assets acquired from a REIT to which RMR provided business management or property management services, or the Transferred Assets, plus (b) 0.7% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets up to $250,000, plus (c) 0.5% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets exceeding $250,000; and •the sum of (a) 0.7% of the average closing price per share of our common shares on the stock exchange on which such shares are principally traded during such period, multiplied by the average number of our common shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of our preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of our consolidated indebtedness during such period, or, together, our Average Market Capitalization, up to $250,000, plus (b) 0.5% of our Average Market Capitalization exceeding $250,000. The average aggregate historical cost of our real estate investments includes our consolidated assets invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves. •Incentive Management Fee. The incentive management fee which may be earned by RMR for an annual period is calculated as follows: •An amount, subject to a cap based on the value of our common shares outstanding, equal to 12% of the product of: •our equity market capitalization on the last trading day of the year immediately prior to the relevant year measurement period, and •the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable index, or the benchmark return per share, for the relevant measurement period. The MSCI U.S. REIT/Office REIT Index is the benchmark index for periods on and after August 1, 2021, and the SNL U.S. REIT Office Index is the benchmark index for periods prior to August 1, 2021. For purposes of the total return per share of our common shareholders, share price appreciation for a measurement period is determined by subtracting (1) the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on the last trading day of the year immediately before the first year of the applicable measurement period, or the initial share price, from (2) the average closing price of our common shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period. •The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if we issue or repurchase our common shares, or if our common shares are forfeited, during the measurement period. •No incentive management fee is payable by us unless our total return per share during the measurement period is positive. •The measurement periods are periods ending with the year for which the incentive management fee is being calculated. •If our total return per share exceeds 12% per year in any measurement period, the benchmark return per share is adjusted to be the lesser of the total shareholder return of the applicable index for such measurement period and 12% per year, or the adjusted benchmark return per share. In instances where the adjusted benchmark return per share applies, the incentive management fee will be reduced if our total return per share is between 200 basis points and 500 basis points below the applicable index in any year by a low return factor, as defined in the business management agreement, and there will be no incentive management fee paid if, in these instances, our total return per share is more than 500 basis points below the applicable index in any year, determined on a cumulative basis (i.e., between 200 basis points and 500 basis points per year multiplied by the number of years in the measurement period and below the applicable market index). •The incentive management fee is subject to a cap. The cap is equal to the value of the number of our common shares which would, after issuance, represent 1.5% of the number of our common shares then outstanding multiplied by the average closing price of our common shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period. •Incentive management fees we paid to RMR for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements. Pursuant to our business management agreement with RMR, we recognized net business management fees of $14,751, $17,376 and $18,637 for the years ended December 31, 2023, 2022 and 2021, respectively. The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of comprehensive income (loss) for these periods. The net business management fees we recognized for each of the years ended December 31, 2023, 2022 and 2021 reflect a reduction of $603, for the amortization of the liability we recorded in connection with our former investment in RMR Inc. We did not incur any incentive management fee pursuant to our business management agreement for the years ended December 31, 2023, 2022 or 2021. •Property Management and Construction Supervision Fees. The property management fees payable to RMR by us for each applicable period are equal to 3.0% of gross collected rents and the construction supervision fees payable to RMR by us for each applicable period are equal to 5.0% of construction costs. Pursuant to our property management agreement with RMR, we recognized aggregate net property management and construction supervision fees of $23,280, $25,756 and $21,103 for each of the years ended December 31, 2023, 2022 and 2021, respectively. The net property management and construction supervision fees we recognized for the years ended December 31, 2023, 2022 and 2021 reflect a reduction of $484 for each of those years for the amortization of the liability we recorded in connection with our former investment in RMR Inc. For the years ended December 31, 2023, 2022 and 2021, $14,890, $15,839 and $16,507, respectively, of the total net property management and construction supervision fees were expensed to other operating expenses in our consolidated statements of income (loss) and $8,390, $9,917 and $4,596, respectively, were capitalized as building improvements in our consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. •Expense Reimbursement. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR $25,872, $24,371 and $24,766 for these expenses and costs for each of the years ended December 31, 2023, 2022 and 2021, respectively. We included these amounts in other operating expenses and general and administrative expense, as applicable, for these periods. •Term. Our management agreements with RMR have terms that end on December 31, 2043, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension. •Termination Rights. We have the right to terminate one or both of our management agreements with RMR: (i) at any time on 60 days’ written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR, as defined therein. RMR has the right to terminate the management agreements for good reason, as defined therein. •Termination Fee. If we terminate one or both of our management agreements with RMR for convenience, or if RMR terminates one or both of our management agreements for good reason, we have agreed to pay RMR a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination, would be between 19 and 20 years. If we terminate one or both of our management agreements with RMR for a performance reason, we have agreed to pay RMR the termination fee calculated as described above, but assuming a 10-year term was remaining prior to the termination. We are not required to pay any termination fee if we terminate our management agreements with RMR for cause or as a result of a change of control of RMR. •Transition Services. RMR has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable. •Vendors. Pursuant to our management agreements with RMR, RMR may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we may enter agreements with RMR and other companies to which RMR or its subsidiaries provide management services for the purpose of obtaining more favorable terms from such vendors and suppliers. •Investment Opportunities. Under our business management agreement with RMR, we acknowledge that RMR may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR. Management Agreements between our Joint Ventures and RMR. RMR provides management services to our two unconsolidated joint ventures. We are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding the joint ventures. The joint ventures pay management fees directly to RMR.
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Related Person Transactions |
12 Months Ended |
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Dec. 31, 2023 | |
| Related Party Transactions [Abstract] | |
| Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with RMR, RMR Inc. and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director, the president and chief executive officer of RMR Inc. and an officer and employee of RMR. Jennifer Clark, our other Managing Trustee, is a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR and an officer of ABP Trust. Each of our officers is also an officer and employee of RMR. Some of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the boards and as a managing trustee of these public companies. Other officers of RMR, including Ms. Clark, serve as managing trustees or officers of certain of these companies. Our Manager, RMR. We have two agreements with RMR to provide management services to us. RMR also provides management services to our unconsolidated joint ventures. See Note 6 for more information regarding our and our unconsolidated joint ventures’ management agreements with RMR. Leases with RMR. We lease office space to RMR in certain of our properties for RMR’s property management offices. Pursuant to our lease agreements with RMR, we recognized rental income from RMR for leased office space of $851, $1,126 and $1,138 for the years ended December 31, 2023, 2022 and 2021, respectively. Our office space leases with RMR are terminable by RMR if our management agreements with RMR are terminated. Share Awards to RMR Employees. As described further in Note 11, we award shares to our officers and other employees of RMR annually. Generally, one fifth of these awards vest on the grant date and one fifth vests on each of the next anniversaries of the grant dates. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR. These awards to RMR employees are in addition to the share awards to our Managing Trustees, as Trustee compensation, and the fees we paid to RMR. See Note 11 for more information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligations on vesting share awards. Sonesta. In June 2021, we entered into a 30-year lease agreement with a subsidiary of Sonesta International Hotels Corporation, or Sonesta, in connection with the redevelopment of an office property we own in Washington, D.C. as a mixed-use property. Sonesta’s lease commenced in August 2023 and is for the full-service hotel component of the property that includes approximately 230,000 rentable square feet, which represents approximately 55% of the total square feet upon completion of the redevelopment. Sonesta has two options to extend the term for 10 years each. Pursuant to the lease agreement, Sonesta will pay us annual base rent of approximately $6,436 beginning 18 months after the lease commenced. The annual base rent will increase by 10% every five years throughout the term. Sonesta is also obligated to pay its pro rata share of the operating costs for the property. As of December 31, 2023, we have paid approximately $66,000 of tenant improvement costs for the build out of the hotel space pursuant to the lease agreement. Mr. Portnoy is a director and controlling shareholder of Sonesta and Ms. Clark is a director of Sonesta. Another officer and employee of RMR is a director and president and chief executive officer of Sonesta. Terminated Merger Agreement with DHC. On April 11, 2023, we and Diversified Healthcare Trust, or DHC, entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which we and DHC had agreed that DHC would merge with and into us, with us as the surviving entity in the merger, subject to the terms and conditions of the Merger Agreement. On September 1, 2023, we and DHC mutually agreed to terminate the Merger Agreement and entered into a termination agreement, or the Termination Agreement. The mutual termination of the Merger Agreement was separately recommended by our and DHC’s respective Special Committees of each Board of Trustees, and approved by our and DHC’s respective Board of Trustees. Neither we nor DHC were required to pay any termination fee as a result of the mutual decision to terminate the Merger Agreement. We and DHC bore our and its respective costs and expenses related to the Merger Agreement and the transactions contemplated thereby in accordance with the terms of the Merger Agreement. We recorded $31,491 of expenses during the year ended December 31, 2023 related to the potential merger with DHC, which is included in acquisition and transaction related costs in our consolidated statement of comprehensive income (loss). Contemporaneously with the execution of the Merger Agreement, on April 11, 2023, we and our manager, RMR, entered into a Third Amended and Restated Property Management Agreement, or the Amended Property Management Agreement. The effectiveness of the Amended Property Management Agreement was conditioned upon the consummation of the merger. Since the merger was not consummated, the Amended Property Management Agreement did not become effective and the Second Amended and Restated Property Management Agreement between us and RMR remains in effect.
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Concentration |
12 Months Ended |
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Dec. 31, 2023 | |
| Risks and Uncertainties [Abstract] | |
| Concentration | Concentration Tenant and Credit Concentration As of December 31, 2023, 2022 and 2021, the U.S. government and certain state and other government tenants combined were responsible for approximately 27.5%, 28.5% and 28.9%, respectively, of our annualized rental income. The U.S. government is our largest tenant by annualized rental income and represented approximately 19.5%, 19.7%, and 19.5% of our annualized rental income as of December 31, 2023, 2022 and 2021, respectively. We define annualized rental income as the annualized contractual base rents from our tenants pursuant to our lease agreements as of the measurement date, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. Geographic Concentration As of December 31, 2023, our 152 wholly owned properties were located in 30 states and the District of Columbia. Properties located in California, Virginia, Illinois, District of Columbia and Texas were responsible for approximately 11.8%, 11.6%, 10.6%, 9.3%, and 8.8% of our annualized rental income as of December 31, 2023, respectively.
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Indebtedness |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Indebtedness | Indebtedness As of December 31, 2023 and 2022, our outstanding indebtedness consisted of the following:
(1)This mortgage note was repaid at maturity in June 2023. In January 2024, we entered into an amended and restated credit agreement, or our credit agreement, governing a new $325,000 secured revolving credit facility and a $100,000 secured term loan. Our credit agreement replaced our prior revolving credit facility, which had a maturity date of January 31, 2024. As collateral for all loans and other obligations under our credit agreement, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 19 properties that had an undepreciated carrying value, including lease intangibles, other assets and other liabilities, of $941,937 as of December 31, 2023. We can borrow, repay, and reborrow funds available under our revolving credit facility until maturity, and no principal repayments on borrowings under our credit agreement are due until maturity. The maturity date of our credit agreement is January 29, 2027 and, subject to the payment of an extension fee and meeting certain other requirements, we can extend the stated maturity date of our revolving credit facility by one year. Our credit agreement contains a number of covenants, including covenants that require us to maintain certain financial ratios, restrict our ability to incur additional debt in excess of calculated amounts and, subject to limited exceptions, restrict our ability to increase our distribution rate above the current level of $0.01 per common share per quarter and enter into share repurchases. Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the 19 collateral properties, our satisfying certain financial covenants and other credit facility conditions. Interest payable on borrowings under our credit agreement is at a rate of the secured overnight financing rate, or SOFR, plus a margin of 350 basis points. We are also required to pay an unused facility fee on the amount of total lending commitments, which was 35 basis points per annum at February 14, 2024. As of February 14, 2024, we had $132,000 outstanding under our revolving credit facility, $100,000 outstanding under our term loan and $193,000 available for borrowing under our revolving credit facility. Prior Revolving Credit Facility Under our prior revolving credit facility, we were required to pay interest at a rate of SOFR plus a premium, which was 145 basis points per annum at December 31, 2023, on the amount outstanding under our prior revolving credit facility, as well as a facility fee on the total amount of lending commitments, which was 30 basis points per annum at December 31, 2023. As of December 31, 2023 and 2022, the annual interest rate payable on borrowings under our prior revolving credit facility was 6.9% and 5.4%, respectively. The weighted average annual interest rate for borrowings under our prior revolving credit facility was 6.5%, 4.0% and 1.2% for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we had $205,000 outstanding under our prior revolving credit facility. Our revolving credit facility is governed by a credit agreement with a syndicate of institutional lenders. Our credit agreement and senior notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business and property manager. Our credit agreement and our senior notes indentures and their supplements also contain, and our prior revolving credit facility contained, covenants, including covenants that restrict our ability to incur debts, require us to comply with certain financial covenants and, in the case of our credit agreement, restrict our ability to increase our distribution rate above the current level of $0.01 per common share per quarter. We believe we were in compliance with the terms and conditions of the respective covenants under our credit agreement and our senior notes indentures and their supplements at December 31, 2023. Mortgage Note Issuances During the year ended December 31, 2023, we issued six fixed rate, interest-only mortgage notes as summarized in the following table:
(1)Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants. (2)Requires interest-only payments through May 2028, at which time principal and interest payments are due monthly through the maturity date. Mortgage Note Repayment In June 2023, we repaid at maturity, a mortgage note secured by one property with an outstanding principal balance of $50,000, an annual interest rate of 3.70%. Senior Secured Notes Issuance In February 2024, we issued $300,000 of 9.000% senior secured notes due 2029, or the 2029 Notes. The aggregate net proceeds from the offering of the 2029 Notes were $271,500, after initial purchaser discounts and other estimated offering expenses. The 2029 Notes are fully and unconditionally guaranteed on a joint, several and senior secured basis by certain of our subsidiaries and secured by a pledge of all of the respective equity interests of the subsidiary guarantors and first mortgage liens on 17 properties with an undepreciated carrying value, including lease intangibles, other assets and other liabilities, of $574,291 as of December 31, 2023. The 2029 Notes require semi-annual payments of interest only and are prepayable, at par plus accrued interest, after March 31, 2028. Senior Unsecured Notes Redemption In February 2024, we issued a notice of early redemption, at par plus accrued interest, of all of our $350,000 of 4.25% senior unsecured notes due 2024. The redemption is expected to take place in March 2024 and is conditioned upon our borrowing an amount under our revolving credit facility sufficient, together with the net proceeds from the offering of the 2029 Notes, to pay the redemption price on or prior to the redemption date. The required principal payments due during the next five years and thereafter under all our outstanding consolidated debt as of December 31, 2023 were as follows:
(1)Total consolidated debt outstanding as of December 31, 2023, net of unamortized premiums, discounts and issuance costs totaling $21,711, was $2,572,609. None of our unsecured debt obligations require principal or sinking fund payments prior to their maturity dates. We currently do not have sufficient sources of liquidity to repay our $650,000 senior unsecured notes due 2025 and are evaluating market-based alternatives to obtain debt financing. Based on the significant number of unencumbered properties in our portfolio, our successful history of obtaining debt financings and our current financing metrics, we believe it is probable that we can obtain new debt financing that will allow us satisfy the 2025 unsecured notes as they become due. We have also engaged Moelis & Company LLC as our financial advisor to assist in evaluating our options to address our upcoming debt maturities.
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Fair Value of Assets and Liabilities |
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| Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities The following table presents certain of our assets measured at fair value at December 31, 2023, categorized by level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:
(1)We recorded an impairment charge of $11,299 to reduce the carrying value of one property in our consolidated balance sheet to its estimated fair value less estimated costs to sell of $1,777, based on a negotiated sales price with a third party buyer (Level 2 input as defined in the fair value hierarchy under GAAP). See Note 4 for more information. We recorded an impairment charge of $19,183 to fully write off our equity method investment in our 1750 H NW joint venture, based on our estimates of fair value of the investment which reflects implied pricing based on ongoing negotiations with the lender to this joint venture regarding the property (a Level 3 input as defined in the fair value hierarchy under GAAP). See Note 4 for more information. In addition to the assets described above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, accounts payable, a revolving credit facility, senior notes, mortgage notes payable, amounts due to related persons, other accrued expenses and security deposits. At December 31, 2023 and 2022, the fair values of our financial instruments approximated their carrying values in our consolidated financial statements, due to their short term nature or floating interest rates, except as follows:
(1)Includes unamortized debt premiums, discounts and issuance costs totaling $21,711 and $24,208 as of December 31, 2023 and 2022, respectively. (2)Balances as of December 31, 2022 include a mortgage note secured by one property with an outstanding principal balance of $50,000 that was repaid in June 2023. (3)Balances as of December 31, 2023 include six mortgage notes issued during the year ended December 31, 2023 with an aggregate principal balance of $177,320. We estimated the fair values of our senior unsecured notes (except for our senior unsecured notes due 2050) using an average of the bid and ask price of the notes (Level 2 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair values of our senior unsecured notes due 2050 based on the closing price on Nasdaq (Level 1 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. We estimated the fair values of our mortgage notes payable using discounted cash flow analyses and currently prevailing market rates (Level 3 inputs as defined in the fair value hierarchy under GAAP) as of the measurement date. Because Level 3 inputs are unobservable, our estimated fair values may differ materially from the actual fair values.
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Shareholders' Equity |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity | Shareholders’ Equity Share Awards We have common shares available for issuance under the terms of our Amended and Restated 2009 Incentive Share Award Plan, or the 2009 Plan. During the years ended December 31, 2023, 2022 and 2021, we awarded to our officers and other employees of RMR annual share awards of 210,300, 141,200 and 117,800 of our common shares, respectively, valued at $1,211, $2,470 and $2,994, in aggregate, respectively. We also awarded each of our then Trustees 3,500 of our common shares in each of 2023, 2022 and 2021 as part of their annual compensation. These awards had aggregate values of $249 ($28 per Trustee), $593 ($66 per Trustee) and $837 ($105 per Trustee) in 2023, 2022 and 2021, respectively. The values of the share awards were based upon the closing price of our common shares trading on Nasdaq on the date of award. The common shares awarded to our officers and certain other employees of RMR vest in five equal annual installments beginning on the date of award. The common shares awarded to our Trustees vest immediately. We recognize share forfeitures as they occur and include the value of awarded shares in general and administrative expenses ratably over the vesting period. A summary of shares awarded, forfeited, vested and unvested under the terms of the 2009 Plan for the years ended December 31, 2023, 2022 and 2021, is as follows:
The 288,681 unvested shares as of December 31, 2023 are scheduled to vest as follows: 98,241 shares in 2024, 83,620 shares in 2025, 65,160 shares in 2026 and 41,660 shares in 2027. As of December 31, 2023, the estimated future compensation expense for the unvested shares was $3,042. The weighted average period over which the compensation expense will be recorded is approximately 23 months. During the years ended December 31, 2023, 2022 and 2021, we recorded $2,257, $2,905 and $2,868, respectively, of compensation expense related to the 2009 Plan. At December 31, 2023, 657,860 of our common shares remained available for issuance under the 2009 Plan. Share Purchases During the years ended December 31, 2023, 2022 and 2021, we purchased 48,329, 30,821 and 37,801 of our common shares, respectively, valued at weighted average share prices of $6.08, $17.54 and $26.55 per common share, respectively, from certain of our current and former Trustees and officers and certain current and former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. Distributions During the years ended December 31, 2023, 2022 and 2021, we paid distributions on our common shares as follows:
On January 11, 2024, we declared a quarterly cash distribution payable to common shareholders of record on January 22, 2024 in the amount of $0.01 per share, or approximately $490. We expect to pay this distribution on or about February 15, 2024.
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SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION |
(1) Represents mortgage debt, net of the unamortized balance of debt issuance costs totaling $5,189. (2) Excludes the value of real estate intangibles. Aggregate cost for federal income tax purposes is approximately $7,540,917. (3) Depreciation on building and improvements is provided for periods ranging up to 40 years and on equipment up to seven years. (4) These two properties are collateral for our $54,300 mortgage note. (5) These 19 properties (with the exception of 14660 Lee Road) are collateral for our $325,000 secured revolving credit facility and $100,000 term loan under our amended and restated credit facility, which we entered into in January 2024. An analysis of the carrying amount of real estate properties and accumulated depreciation is as follows:
(1) Represents the reclassification between accumulated depreciation and building made to certain properties reclassified as assets of properties held for sale at fair value less costs to sell in accordance with GAAP.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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| Pay vs Performance Disclosure | |||
| Net Income (Loss) | $ (69,432) | $ (6,109) | $ (8,180) |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
Dec. 31, 2023 | |
| Trading Arrangements, by Individual | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2023 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are wholly owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated.
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| Real Estate Properties | Real Estate Properties. We record our properties at cost and provide depreciation on real estate investments on a straight line basis over estimated useful lives generally ranging from 7 to 40 years. In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives. We allocate the purchase prices of our properties to land, buildings and improvements based on determinations of the relative fair values of these assets assuming the properties are vacant. We determine the fair value of each property using methods similar to those used by independent appraisers, which may involve estimated cash flows that are based on a number of factors, including capitalization rates and discount rates, among others. We allocate a portion of the purchase price of our properties to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases. We allocate a portion of the purchase price to acquired in place leases and tenant relationships based upon market estimates to lease up the property based on the leases in place at the time of purchase. We allocate this aggregate value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease. However, we have not separated the value of tenant relationships from the value of acquired in place leases because such value and related amortization expense is immaterial to the accompanying consolidated financial statements. In making these allocations, we consider factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us. If the value of tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amounts over the estimated life of the relationships. For transactions that qualify as business combinations, we allocate the excess, if any, of the consideration over the fair value of the assets acquired to goodwill. We amortize capitalized above market lease values (included in acquired real estate leases, net in our consolidated balance sheets) and below market lease values (presented as assumed real estate lease obligations, net in our consolidated balance sheets) as a reduction or increase, respectively, to rental income over the terms of the associated leases. Such amortization resulted in a net increase to rental income of $252 during the year ended December 31, 2023 and net decreases to rental income of $975 and $2,288 during the years ended December 31, 2022 and 2021, respectively. We amortize the value of acquired in place leases (included in acquired real estate leases, net in our consolidated balance sheets), exclusive of the value of above market and below market acquired in place leases, over the terms of the associated leases. Such amortization, which is included in depreciation and amortization expense, amounted to $93,057, $118,728 and $142,538 during the years ended December 31, 2023, 2022 and 2021, respectively. If a lease is terminated prior to its stated expiration, we write off the unamortized amounts relating to that lease. We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long lived assets. Impairment indicators may include declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. The future net undiscounted cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining useful lives of our long lived assets. If we change our estimate of the remaining useful lives, we allocate the carrying value of the affected assets over their revised remaining useful lives.
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| Cash and Cash Equivalents | Cash and Cash Equivalents. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.
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| Restricted Cash | Restricted Cash. Restricted cash consists of amounts escrowed for future real estate taxes, insurance, leasing costs, capital expenditures and debt service, as required by certain of our mortgage debts.
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| Deferred Leasing Costs | Deferred Leasing Costs. Deferred leasing costs include brokerage costs and inducements associated with our entering leases. We amortize deferred leasing costs, which are included in depreciation and amortization expense, and inducements, which are included as a reduction to rental income, on a straight line basis over the terms of the respective leases. Legal costs associated with the execution of our leases are expensed as incurred and included in general and administrative expenses in our consolidated statements of comprehensive income (loss). |
| Debt Issuance Costs | Debt Issuance Costs. Costs related to the issuance or assumption of debt are capitalized and amortized to interest expense over the terms of the respective loans. Debt issuance costs, net of accumulated amortization, for our prior $750,000 unsecured revolving credit facility, or our prior revolving credit facility, are included in other assets in our consolidated balance sheets. As of December 31, 2023 and 2022, debt issuance costs for our prior revolving credit facility were $5,328 and $4,593, respectively, and accumulated amortization of debt issuance costs for our prior revolving credit facility were $5,240 and $4,072, respectively. Debt issuance costs, net of accumulated amortization, for our senior unsecured notes and mortgage notes payable are presented as a direct deduction from the associated debt liability in our consolidated balance sheets. |
| Equity Method Investments | Equity Method Investments. As of December 31, 2023, we had noncontrolling ownership interests of 51% and 50% in two unconsolidated joint ventures that owned three properties. The properties owned by these joint ventures are encumbered by an aggregate of $82,000 of mortgage indebtedness. We did not control the activities that are most significant to these joint ventures and, as a result, we accounted for our investments in these joint ventures under the equity method of accounting. See Note 4 for more information regarding our unconsolidated joint ventures. We periodically evaluate our equity method investments for possible indicators of other than temporary impairment whenever events or changes in circumstances indicate the carrying amount of the investment might not be recoverable. These indicators may include the length of time and the extent to which the market value of our investment is below our carrying value, the financial condition of our investees, our intent and ability to be a long term holder of the investment and other considerations. If the decline in fair value is judged to be other than temporary, we record an impairment charge to adjust the basis of the investment to its estimated fair value.
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| Revenue Recognition | Revenue Recognition. We are a lessor of commercial office properties. Our leases provide our tenants with the contractual right to use and economically benefit from all of the physical space specified in the leases; therefore, we have determined to evaluate our leases as lease arrangements. Our leases provide for base rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. Allowances for bad debts are recognized as a direct reduction of rental income. Certain of our leases contain non-lease components, such as property level operating expenses and capital expenditures reimbursed by our tenants as well as other required lease payments. We have made the policy election to not separate the lease and non-lease components because (i) the lease components are operating leases and (ii) the timing and pattern of recognition of the non-lease components are the same as those of the lease components. We apply Accounting Standards Codification 842, Leases, to the combined component. Income derived by our leases is recorded in rental income in our consolidated statements of comprehensive income (loss). Certain tenants are obligated to pay directly their obligations under their leases for insurance, real estate taxes and certain other expenses. These obligations, which have been assumed by the tenants under the terms of their respective leases, are not reflected in our consolidated financial statements. To the extent any tenant responsible for any such obligations under the applicable lease defaults on such lease or if it is deemed probable that the tenant will fail to pay for such obligations, we would record a liability for such obligations. See Note 5 for more information regarding our leases.
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| Income Taxes | Income Taxes. We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, and, accordingly, we generally will not be subject to federal income taxes provided we distribute our taxable income and meet certain other requirements to qualify for taxation as a REIT. We are, however, subject to certain state and local taxes. |
| Per Common Share Amounts | Per Common Share Amounts. We calculate basic earnings per common share using the two class method. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares, together with the related impact on earnings, are considered when calculating diluted earnings per share.
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| Use of Estimates | Use of Estimates. Preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. The actual results could differ from these estimates. Significant estimates in the consolidated financial statements include purchase price allocations, useful lives of fixed assets and assessment of impairment of real estate and the related intangibles.
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| Segment Reporting | Segment Reporting. We operate in one business segment: direct ownership of real estate properties.
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| New Accounting Pronouncements | New Accounting Pronouncements. On November 27, 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU No. 2023-07, which requires public entities to: (i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the Chief Operating Decision Maker, or the CODM, and included in each reported measure of segment profit or loss; (ii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Accounting Standards Codification 280, Segment Reporting, or ASC 280, in interim periods; and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosures. Public entities with a single reportable segment must apply all the disclosure requirements of ASU No. 2023-07, as well as all the existing segment disclosures under ASC 280. The amendments in ASU No. 2023-07 are incremental to the requirements in ASC 280 and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU No. 2023-07 should be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact ASU No. 2023-07 will have on our consolidated financial statements and disclosures.
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Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Real Estate Properties | As of December 31, 2023 and 2022, our acquired real estate leases and assumed real estate lease obligations, excluding properties classified as held for sale, were as follows:
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Per Common Share Amounts (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted earnings per share is as follows (amounts in thousands, except per share amounts):
(1)For the years ended December 31, 2023, 2022 and 2021, there were no dilutive common shares. For the year ended December 31, 2021, 34 unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive.
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Real Estate Properties (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Business Acquisitions, by Acquisition | We allocated the purchase prices of these acquisitions based on the relative estimated fair values of the acquired assets and assumed liabilities as follows:
(1)Purchase price includes an adjustment of $13,031 to record an estimated real estate tax liability as of the acquisition date.
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| Schedule of Disposal Groups |
(1)Gross sales price is the gross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2022.
(1)Gross sales price is the gross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2021. (3)Property is a leasable land parcel.
(1)Gross sales price is the gross contract price, excluding closing costs. (2)Properties were classified as held for sale as of December 31, 2020. (3)Consists of a warehouse facility. (4)Consists of two vacant land parcels.
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| Schedule of Joint Ventures | As of December 31, 2023 and 2022, our investments in unconsolidated joint ventures consisted of the following:
The following table provides a summary of the mortgage debt of our two unconsolidated joint ventures:
(1)Includes the effect of mark to market purchase accounting. (2)Reflects the entire balance of the debt secured by the properties and is not adjusted to reflect the interests in the joint ventures we did not own. None of the debt is recourse to us. (3)In July 2023, the maturity date of this mortgage loan was extended by three years at the same interest rate.
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Future Contractual Lease Payments to be Received | The following operating lease maturity analysis presents the future contractual lease payments to be received by us through 2053 as of December 31, 2023:
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Indebtedness (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-Term Debt Instruments | As of December 31, 2023 and 2022, our outstanding indebtedness consisted of the following:
(1)This mortgage note was repaid at maturity in June 2023. During the year ended December 31, 2023, we issued six fixed rate, interest-only mortgage notes as summarized in the following table:
(1)Our mortgage notes are non-recourse, subject to certain limited exceptions and do not contain any material financial covenants. (2)Requires interest-only payments through May 2028, at which time principal and interest payments are due monthly through the maturity date.
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| Schedule of Required Principal Payments | The required principal payments due during the next five years and thereafter under all our outstanding consolidated debt as of December 31, 2023 were as follows:
(1)Total consolidated debt outstanding as of December 31, 2023, net of unamortized premiums, discounts and issuance costs totaling $21,711, was $2,572,609.
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Fair Value of Assets and Liabilities (Tables) |
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Assets Measured at Fair Value | The following table presents certain of our assets measured at fair value at December 31, 2023, categorized by level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:
(1)We recorded an impairment charge of $11,299 to reduce the carrying value of one property in our consolidated balance sheet to its estimated fair value less estimated costs to sell of $1,777, based on a negotiated sales price with a third party buyer (Level 2 input as defined in the fair value hierarchy under GAAP). See Note 4 for more information.
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| Schedule of Fair Value and Carrying Value of Financial Instruments | At December 31, 2023 and 2022, the fair values of our financial instruments approximated their carrying values in our consolidated financial statements, due to their short term nature or floating interest rates, except as follows:
(1)Includes unamortized debt premiums, discounts and issuance costs totaling $21,711 and $24,208 as of December 31, 2023 and 2022, respectively. (2)Balances as of December 31, 2022 include a mortgage note secured by one property with an outstanding principal balance of $50,000 that was repaid in June 2023. (3)Balances as of December 31, 2023 include six mortgage notes issued during the year ended December 31, 2023 with an aggregate principal balance of $177,320.
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Shareholders' Equity (Tables) |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Shares Granted And Vested Under The Terms of The Entity's 2009 Plan | A summary of shares awarded, forfeited, vested and unvested under the terms of the 2009 Plan for the years ended December 31, 2023, 2022 and 2021, is as follows:
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| Schedule of Dividends | During the years ended December 31, 2023, 2022 and 2021, we paid distributions on our common shares as follows:
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Organization (Details) |
12 Months Ended | |
|---|---|---|
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Dec. 31, 2023
ft²
joint_venture
property
|
Dec. 31, 2021
ft²
|
|
| Real Estate Properties [Line Items] | ||
| Number of properties (in properties) | property | 152 | |
| Rentable area of properties (in square feet) | 926,000 | |
| Number of joint ventures | joint_venture | 2 | |
| Unconsolidated Joint Ventures | ||
| Real Estate Properties [Line Items] | ||
| Number of properties (in properties) | property | 3 | |
| Rentable area of properties (in square feet) | 468,000 | |
| Number of joint ventures | joint_venture | 2 | |
| Joint Venture Property 1 | ||
| Real Estate Properties [Line Items] | ||
| Percentage of ownership interest | 51.00% | |
| Joint Venture Property 2 | ||
| Real Estate Properties [Line Items] | ||
| Percentage of ownership interest | 50.00% | |
| Continuing Operations | ||
| Real Estate Properties [Line Items] | ||
| Rentable area of properties (in square feet) | 20,541,000 |
Summary of Significant Accounting Policies - Schedule of Real Estate Assets and Obligations (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Real Estate [Line Items] | ||
| Acquired real estate leases, net | $ 263,498 | $ 369,333 |
| Capitalized below market lease values | 25,678 | 27,033 |
| Less: accumulated amortization | (14,013) | (12,876) |
| Assumed real estate lease obligations, net | 11,665 | 14,157 |
| Above Market Lease | ||
| Real Estate [Line Items] | ||
| Real estate leases | 14,758 | 15,792 |
| Less: accumulated amortization | (10,876) | (9,672) |
| Acquired real estate leases, net | 3,882 | 6,120 |
| Original Value Lease | ||
| Real Estate [Line Items] | ||
| Real estate leases | 572,766 | 728,773 |
| Less: accumulated amortization | (313,150) | (365,560) |
| Acquired real estate leases, net | $ 259,616 | $ 363,213 |
Per Common Share Amounts - Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Numerators: | |||
| Net loss | $ (69,432) | $ (6,109) | $ (8,180) |
| Income attributable to unvested participating securities | (305) | (427) | 0 |
| Net loss used in calculating earnings per share | $ (69,737) | $ (6,536) | $ (8,180) |
| Denominators: | |||
| Weighted average common shares for basic earnings per share (in shares) | 48,389 | 48,278 | 48,195 |
| Weighted average common shares outstanding (diluted) (in shares) | 48,389 | 48,278 | 48,195 |
| Net income (loss) per common share - basic (in dollars per share) | $ (1.44) | $ (0.14) | $ (0.17) |
| Net income (loss) per common share - diluted (in dollars per share) | $ (1.44) | $ (0.14) | $ (0.17) |
| Antidilutive securities (in shares) | 34 | ||
Leases - Operating Lease Maturity (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
|---|---|
| Leases [Abstract] | |
| 2024 | $ 378,748 |
| 2025 | 339,500 |
| 2026 | 310,205 |
| 2027 | 281,109 |
| 2028 | 243,928 |
| Thereafter | 1,428,379 |
| Total | $ 2,981,869 |
Indebtedness - Future Principal Payments (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Debt Disclosure [Abstract] | ||
| 2024 | $ 555,000 | |
| 2025 | 650,000 | |
| 2026 | 300,000 | |
| 2027 | 350,000 | |
| 2028 | 123,487 | |
| Thereafter | 615,833 | |
| Total | 2,594,320 | $ 2,457,000 |
| Unamortized debt premiums, discounts and issuance | 21,711 | 24,208 |
| Total debt outstanding | $ 2,572,609 | $ 2,432,792 |
Shareholders' Equity - Unvested Shares Activity (Details) - 2009 Award Plan - $ / shares |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Number of Shares | |||
| Unvested at the beginning of the period (in shares) | 231,301 | 182,224 | 157,521 |
| Granted (in shares) | 241,800 | 172,700 | 145,800 |
| Forfeited (in shares) | (3,700) | (1,900) | (700) |
| Vested (in shares) | (180,720) | (121,723) | (120,397) |
| Unvested at the end of the period (in shares) | 288,681 | 231,301 | 182,224 |
| Weighted Average Grant Date Fair Value | |||
| Unvested at the beginning of the period (in dollars per share) | $ 21.47 | $ 26.23 | $ 29.26 |
| Granted (in dollars per share) | 6.04 | 17.74 | 26.28 |
| Forfeited (in dollars per share) | 17.31 | 25.97 | 25.97 |
| Vested (in dollars per share) | 16.00 | 23.24 | 30.24 |
| Unvested at the end of the period (in dollars per share) | $ 12.01 | $ 21.47 | $ 26.23 |
Shareholders' Equity - Share Repurchases/Sale of Shares (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
|---|---|---|---|---|
Jan. 11, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Class of Stock [Line Items] | ||||
| Share repurchases (in shares) | 48,329 | 30,821 | 37,801 | |
| Stock repurchase price (in dollars per share) | $ 6.08 | $ 17.54 | $ 26.55 | |
| Subsequent Event | ||||
| Class of Stock [Line Items] | ||||
| Common distributions declared (in dollars per share) | $ 0.01 | |||
| Dividends payable | $ 490 | |||
Shareholders' Equity - Distribution (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Equity [Abstract] | |||
| Annual Per Share Distribution (in dollars per share) | $ 1.30 | $ 2.20 | $ 2.20 |
| Total Distributions | $ 63,187 | $ 106,630 | $ 106,368 |
| Characterization of Distribution, Return of Capital | 100.00% | 62.68% | 0.00% |
| Characterization of Distribution, Ordinary Income | 0.00% | 37.32% | 100.00% |
| Characterization of Distribution, Quality Dividend | 0.00% | 0.00% | 0.00% |
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - Carrying Amount and Accumulated Depreciation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Real Estate Properties | |||
| Balance at the beginning of the period | $ 3,936,074 | $ 3,911,086 | $ 3,522,143 |
| Additions | 221,246 | 222,951 | 584,805 |
| Loss on asset impairment | (11,299) | (17,303) | (58,696) |
| Disposals | (51,011) | (173,841) | (72,137) |
| Cost basis adjustment | (4,235) | (37,239) | |
| Reclassification of assets of properties held for sale | (29,331) | (2,584) | (27,790) |
| Balance at the end of the period | 4,065,679 | 3,936,074 | 3,911,086 |
| Accumulated Depreciation | |||
| Balance at the beginning of the period | 561,458 | 495,912 | 451,914 |
| Additions | 107,460 | 96,966 | 92,266 |
| Loss on asset impairment | 0 | 0 | 0 |
| Disposals | (15,709) | (26,997) | (8,675) |
| Cost basis adjustment | (4,235) | (37,239) | |
| Reclassification of assets of properties held for sale | (3,030) | (188) | (2,354) |
| Balance at the end of the period | $ 650,179 | $ 561,458 | $ 495,912 |