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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
 
Date of Report (Date of earliest event reported): November 8, 2017
 
TIER REIT, Inc.
(Exact Name of Registrant as Specified in Its Charter) 
 
 
 
 
 
 
Maryland
 
001-37512
 
68-0509956
(State or other jurisdiction of incorporation
or organization)
 
(Commission File Number)
 
 
(I.R.S. Employer
Identification No.)
 
5950 Sherry Lane, Suite 700, Dallas, Texas
75225
(Address of principal executive offices)
(Zip Code)
 
(972) 483-2400
(Registrant’s telephone number, including area code)
 
None
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02                                 Results of Operations and Financial Condition.
 
On November 8, 2017, TIER REIT, Inc. released supplemental information regarding its financial results and operations for the quarter and the period ended September 30, 2017, by posting to its website its Third Quarter 2017 Supplemental Operating and Financial Data and issued a press release announcing its financial results for the third quarter of 2017. The supplemental information and press release are included as Exhibit 99.1 and Exhibit 99.2 to this report and are incorporated herein by reference.
The information included in this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, nor shall the information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01.                              Financial Statements and Exhibits.
 
(d)                                 Exhibits.

99.1    Third Quarter 2017 Supplemental Operating and Financial Data

99.2    Press release, dated November 8, 2017
                        




SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
 
 
 
 
TIER REIT, INC.
 
 
 
 
 
 
Dated: November 8, 2017
By:
/s/ Dallas E. Lucas
 
 
Dallas E. Lucas
 
 
Chief Financial Officer
 
 
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

391010477_tierreit3q17supplcover.jpg




Supplemental Operating and Financial Data
For the Quarter Ended September 30, 2017

391010477_tierrgbfullcolora04.jpg

About the Company
    
TIER REIT, Inc. is a publicly traded (NYSE: TIER), self-managed, Dallas-based real estate investment trust focused on owning quality, well-managed commercial office properties in dynamic markets throughout the U.S. TIER REIT’s vision is to be the premier owner and operator of best-in-class office properties in TIER1 submarkets, which are primarily higher density and amenity-rich locations within select, high-growth metropolitan areas that offer a walkable experience to various amenities. Our mission is to provide unparalleled, TIER ONE Property Services to our tenants and outsized total return through stock price appreciation and dividend growth to our stockholders.
As of September 30, 2017, we owned interests in 20 operating office properties with approximately 7.4 million rentable square feet, one non-operating property with approximately 331,000 rentable square feet, and two development properties that will consist of approximately 669,000 rentable square feet. As of September 30, 2017, our properties are located in eight markets throughout the United States.
Board of Directors
 
Executive Officers and Senior Management
Richard I. Gilchrist
 
Scott W. Fordham
Chairman of the Board and Independent Director
 
Chief Executive Officer, President, and Director
 
 
 
Scott W. Fordham
 
Dallas E. Lucas
Chief Executive Officer, President, and Director
 
Chief Financial Officer and Treasurer
 
 
 
R. Kent Griffin, Jr.
 
William J. Reister
Independent Director
 
Chief Investment Officer and Executive Vice President
 
 
 
Thomas M. Herzog
 
Telisa Webb Schelin
Independent Director
 
Chief Legal Officer, Executive Vice President, and Secretary
 
 
 
Dennis J. Martin
 
James E. Sharp
Independent Director
 
Executive Vice President - Capital Markets
 
 
 
Gregory J. Whyte
 
R. Heath Johnson
Independent Director
 
Managing Director - Asset Management
 
 
 
 
 
Dean R. Hook
 
 
Senior Vice President - Information Technology and Property Management
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Company Information
 
 
Corporate Headquarters
 
Website
 
Trading Information
 
Investor inquiries should be directed to:
5950 Sherry Lane, Suite 700
 
www.tierreit.com
 
Trading Symbol: TIER
 
Scott A. McLaughlin
Dallas, Texas 75225
 
 
 
New York Stock Exchange
 
Senior Vice President - Investor Relations
 
 
 
 
 
 
at 972.483.2400 or
 
 
 
 
 
 
ir@tierreit.com
 
 
 
 
 
 
 
Research Coverage
 
 
 
 
 
 
BMO Capital
 
Janney Montgomery Scott LLC
 
JMP Securities
 
J.P. Morgan Securities
John Kim
 
Robert Stevenson
 
Mitch Germain
 
Anthony Paolone
212.885.4115
 
646.840.3217
 
212.906.3546
 
212.622.6682






Supplemental Operating and Financial Data
For the Quarter Ended September 30, 2017
Table of Contents
Overview and Highlights
 
Overview
1

Financial Highlights
2-3

Consolidated Balance Sheets
4

Consolidated Statements of Operations
5

Calculations of FFO and Additional Information
6

Calculations of EBITDA
7

Unconsolidated Entities Financial Summary
8

Same Store Analysis
9

Schedule of Properties Owned
10

Portfolio Analysis
11

Components of Net Asset Value
12

Significant Tenants
13

Industry Diversification
14

 
 
Leasing
 
Leasing Activity
15-16

Lease Expirations
17-18

Occupancy Trends
19

 
 
Capital Expenditures
 
Leasing Cost Summary
20

Development, Leasing, and Capital Expenditures Summary
21

 
 
Other Information
 
Potential Future Development Sites
22

Summary of Development Activity
23

Properties Under Development
24-25

Acquisition and Disposition Activities
26

Summary of Financing
27

Principal Payments by Year
28

Definitions of Non-GAAP Financial Measures
29-30


Forward-Looking Statements
This supplemental operating and financial data report contains forward-looking statements within the meaning of the federal securities laws relating to the business and financial outlook of TIER REIT, Inc. that are based on current expectations, estimates, forecasts, and projections and are not guarantees of future performance. Statements contained herein may be impacted by a number of risks and uncertainties, including the company’s ability to rent space on favorable terms, its ability to address debt maturities and fund its capital requirements, its intentions to acquire or sell certain properties, its intentions with respect to development activity, the value of its assets, its anticipated capital expenditures, and other matters. Words such as “may,” "will," “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “objectives,” “strategies,” “opportunities,” “goals,” “vision,” “mission,” and variations of these words and similar expressions are intended to identify forward-looking statements. Actual results may differ materially from those expressed in these forward-looking statements, and you should not place undue reliance on any such statements. A number of important factors could cause actual results to differ materially from the forward-looking statements contained in this document, as well as other factors described in the Risk Factors section of TIER REIT, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016. Forward-looking statements in this document speak only as of the date on which such statements were made, and we undertake no obligation to update any such statements that may become untrue because of subsequent events.





Overview
For the Quarter Ended September 30, 2017

Property Results
Occupancy at September 30, 2017, was 88.3%, a decrease of 20 basis points from June 30, 2017.
595,000 square feet leased - 515,000 square feet of renewals and 80,000 square feet of new leasing.
During the third quarter of 2017, One & Two Eldridge Place and Three Eldridge Place (collectively known as the “Eldridge Properties”), located in Houston, Texas, experienced flood-related damage as a result of Hurricane Harvey and its aftermath. Rent abatements of approximately $1.9 million were provided to tenants at the Eldridge Properties during the third quarter of 2017 because the properties were inaccessible for a portion of the quarter. We expect these losses to be recovered from insurance proceeds in subsequent quarters.
Real Estate Activity
Domain 8, a property in which we own a 50.0% interest, became fully operational during the third quarter of 2017. Domain 8 is located in Austin, Texas, and contains 291,000 rentable square feet.
Domain 11, our development property located in Austin, Texas, broke ground during the third quarter of 2017. Domain 11 is expected to contain 324,000 rentable square feet when completed in late 2018.
During the third quarter of 2017, 67% of our Third+Shoal property was leased to Facebook, Inc. Third+Shoal is a development property in which we own a 47.5% interest.
During the third quarter of 2017, Bank of America commenced a 21-month lease extension for 295,000 square feet that expires on December 31, 2020 at our Bank of America Plaza property located in Charlotte, North Carolina.
Capital Markets Activity
On August 2, 2017, our board of directors authorized a distribution of $0.18 per share of common stock for the third quarter of 2017, which was paid on September 29, 2017.
Subsequent Events

On October 27, 2017, a construction loan secured by Third+Shoal was entered into with available borrowings of up to $103.8 million (at 100%). The loan is scheduled to mature in October 2021, with two one-year extension options, subject to certain conditions and an extension fee, and has a stated variable annual interest rate that as of October 27, 2017, was 4.74%.
On November 3, 2017, our board of directors authorized a distribution of $0.18 per share of common stock for the fourth quarter of 2017, which will be paid on December 29, 2017.





Supplemental Operating and
Financial Data
391010477_tierrgbfullcolora04.jpg
3Q’17
Page 1



Financial Highlights
(in thousands, except per share data, effective rent data, percentages, and number of properties)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-Sep-17
 
30-Sep-16
 
 
30-Sep-17
 
30-Jun-17
 
31-Mar-17
 
31-Dec-16
 
30-Sep-16
Portfolio Summary:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total operating office properties
20

 
30

 
 
20

 
19

 
25

 
29

 
30

Rentable square feet (100%) (operating properties)
7,405

 
10,155

 
 
7,405

 
7,114

 
7,908

 
10,104

 
10,155

Rentable square feet (own %) (operating properties)
7,260

 
9,039

 
 
7,260

 
7,114

 
7,517

 
8,988

 
9,039

Occupancy %
88.3
%
 
89.8
%
 
 
88.3
%
 
88.5
%
 
90.2
%
 
90.7
%
 
89.8
%
Executed % SF leased
89.0
%
 
90.2
%
 
 
89.0
%
 
89.1
%
 
90.9
%
 
91.0
%
 
90.2
%
Economic % SF leased
82.4
%
 
85.6
%
 
 
82.4
%
 
80.3
%
 
83.2
%
 
87.1
%
 
85.6
%
Average effective rent/square foot
$
29.58

 
$
26.73

 
 
$
29.58

 
$
29.12

 
$
28.49

 
$
27.19

 
$
26.73

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
Three Months Ended
 
30-Sep-17
 
30-Sep-16
 
 
30-Sep-17
 
30-Jun-17
 
31-Mar-17
 
31-Dec-16
 
30-Sep-16
Financial Results:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
161,835

 
$
188,743

 
 
$
50,920

 
$
54,552

 
$
56,363

 
$
54,075

 
$
55,998

Property related expenses
(41,790
)
 
(56,605
)
 
 
(13,170
)
 
(13,930
)
 
(14,690
)
 
(15,998
)
 
(16,315
)
Real estate taxes
(25,752
)
 
(28,843
)
 
 
(8,439
)
 
(8,753
)
 
(8,560
)
 
(7,454
)
 
(8,350
)
Property management fees
(181
)
 
(720
)
 
 
(49
)
 
(72
)
 
(60
)
 
(197
)
 
(210
)
NOI
$
94,112

 
$
102,575

 
 
$
29,262

 
$
31,797

 
$
33,053

 
$
30,426

 
$
31,123

Base rent
$
116,002

 
$
134,879

 
 
$
36,002

 
$
38,629

 
$
41,371

 
$
40,887

 
$
42,393

Free rent
$
(8,040
)
 
$
(7,367
)
 
 
$
(2,288
)
 
$
(3,022
)
 
$
(2,730
)
 
$
(2,204
)
 
$
(1,975
)
Net income (loss) attributable to common stockholders
$
94,161

 
$
(23,084
)
 
 
$
(8,041
)
 
$
4,031

 
$
98,171

 
$
(6,333
)
 
$
(1,025
)
Diluted income (loss) per common share (1)
$
1.95

 
$
(0.49
)
 
 
$
(0.17
)
 
$
0.08

 
$
2.04

 
$
(0.13
)
 
$
(0.02
)
FFO attributable to common stockholders
$
52,918

 
$
57,615

 
 
$
15,885

 
$
18,735

 
$
18,298

 
$
18,917

 
$
19,239

Diluted FFO per common share
$
1.10

 
$
1.21

 
 
$
0.33

 
$
0.39

 
$
0.38

 
$
0.40

 
$
0.40

FFO attributable to common stockholders, excluding certain items
$
55,748

 
$
60,365

 
 
$
16,508

 
$
19,766

 
$
19,474

 
$
19,086

 
$
18,324

Diluted FFO, excluding certain items, per common share
$
1.16

 
$
1.26

 
 
$
0.34

 
$
0.41

 
$
0.41

 
$
0.40

 
$
0.38

Normalized EBITDA
$
81,868

 
$
97,007

 
 
$
26,182

 
$
27,558

 
$
28,128

 
$
29,099

 
$
30,036

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
47,532

 
47,403

 
 
47,550

 
47,536

 
47,511

 
47,414

 
47,413

Weighted average common shares outstanding - diluted
47,956

 
47,796

 
 
48,160

 
47,875

 
47,806

 
47,888

 
47,846

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Additional Trend Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal % based on square feet
73
%
 
54
%
 
 
83
%
 
53
%
 
78
%
 
82
%
 
41
%
Distributions declared on common shares
$
25,829

 
$
25,783

 
 
$
8,612

 
$
8,611

 
$
8,606

 
$
8,594

 
$
8,595

Annualized distribution yield (2)
3.7
%
 
4.7
%
 
 
3.7
%
 
3.9
%
 
4.1
%
 
4.1
%
 
4.7
%
_______________________________
(1) In periods of net loss from continuing operations there are no dilutive securities and diluted loss per common share is calculated using weighted average common shares outstanding - basic as the denominator.
(2) Based on the closing price of our common stock as of the last day of the associated period.
Notes:
Occupancy % represents the total square footage subject to commenced leases as of the reporting date as a percentage of the total rentable square feet (at our ownership interest).
Executed % SF leased represents the total square footage subject to commenced leases plus the square footage for currently vacant space that is subject to executed leases that have not commenced as of the reporting date as a percentage of the total rentable square feet (at our ownership interest).
Economic % SF leased represents the total square footage subject to commenced leases as of the reporting date adjusted to exclude the square footage associated with leases receiving rental abatements as a percentage of the total rentable square feet (at our ownership interest).
Average effective rent represents 12 times the sum of the monthly contractual amounts for base rent and the pro rata budgeted operating expense reimbursements, as of period end, related to leases in place as of period end, as reduced for free rent and excluding any scheduled future rent increases, as adjusted for our ownership interest, divided by the total square footage under commenced leases at period end.
This section includes non-GAAP financial measures, which are accompanied by what we consider the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Quantitative reconciliations of the differences between the non-GAAP financial measures presented and the most directly comparable GAAP financial measures are shown on pages 6-7. A description of the non-GAAP financial measures we present and a statement of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations can be found on pages 29-30.

Supplemental Operating and
Financial Data
391010477_tierrgbfullcolora04.jpg
3Q’17
Page 2



Financial Highlights (continued)
(in thousands, except stock prices, percentages, and ratios)
 
 
 
 
 
 
 
 
30-Sep-17
 
30-Sep-16
 
 
30-Sep-17
 
30-Jun-17
 
31-Mar-17
 
31-Dec-16
 
30-Sep-16
Selected Balance Sheet Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total book value of real estate
$
1,325,536

 
$
1,248,491

 
 
$
1,325,536

 
$
1,339,693

 
$
1,270,510

 
$
1,250,198

 
$
1,248,491

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
10,959

 
$
51,466

 
 
$
10,959

 
$
28,763

 
$
55,215

 
$
14,884

 
$
51,466

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated cash and cash equivalents
(at ownership %)
$
2,495

 
$
5,479

 
 
$
2,495

 
$
5,082

 
$
1,104

 
$
5,348

 
$
5,479

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted cash
$
13,323

 
$
8,586

 
 
$
13,323

 
$
10,953

 
$
7,685

 
$
7,509

 
$
8,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,581,288

 
$
1,570,685

 
 
$
1,581,288

 
$
1,580,776

 
$
1,561,423

 
$
1,552,540

 
$
1,570,685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage debt
$
191,694

 
$
270,758

 
 
$
191,694

 
$
192,043

 
$
206,400

 
$
200,131

 
$
270,758

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility and term loans
$
598,000

 
$
575,000

 
 
$
598,000

 
$
595,000

 
$
575,000

 
$
634,000

 
$
575,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated debt (at ownership %)
$
43,572

 
$
103,350

 
 
$
43,572

 
$
40,931

 
$
30,027

 
$
109,790

 
$
103,350

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
$
889,465

 
$
951,701

 
 
$
889,465

 
$
873,915

 
$
849,702

 
$
932,024

 
$
951,701

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of common stock outstanding
47,552

 
47,413

 
 
47,552

 
47,542

 
47,526

 
47,473

 
47,413

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted stock units outstanding
228

 
150

 
 
228

 
238

 
233

 
150

 
150

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of restricted stock outstanding
291

 
333

 
 
291

 
291

 
276

 
247

 
333

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
48,071

 
47,896

 
 
48,071

 
48,071

 
48,035

 
47,870

 
47,896

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
High stock price
$
19.50

 
$
17.81

 
 
$
19.50

 
$
18.61

 
$
18.80

 
$
17.44

 
$
17.81

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Low stock price
$
15.96

 
$
12.52

 
 
$
16.67

 
$
15.96

 
$
16.67

 
$
14.06

 
$
15.07

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average closing stock price
$
17.81

 
$
15.14

 
 
$
18.39

 
$
17.17

 
$
17.87

 
$
15.58

 
$
16.37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closing stock price
$
19.30

 
$
15.44

 
 
$
19.30

 
$
18.48

 
$
17.36

 
$
17.39

 
$
15.44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market capitalization (1)
$
927,770

 
$
739,514

 
 
$
927,770

 
$
888,352

 
$
833,888

 
$
832,459

 
$
739,514

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total debt (2)
$
833,266

 
$
949,108

 
 
$
833,266

 
$
827,974

 
$
811,427

 
$
943,921

 
$
949,108

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net debt (3)
$
819,812

 
$
892,163

 
 
$
819,812

 
$
794,129

 
$
755,108

 
$
923,689

 
$
892,163

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total capitalization
$
1,761,036

 
$
1,688,622

 
 
$
1,761,036

 
$
1,716,326

 
$
1,645,315

 
$
1,776,380

 
$
1,688,622

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
Three Months Ended
 
30-Sep-17
 
30-Sep-16
 
 
30-Sep-17
 
30-Jun-17
 
31-Mar-17
 
31-Dec-16
 
30-Sep-16
Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOI margin % (4)
58.2
%
 
54.3
%
 
 
57.5
%
 
58.3
%
 
58.6
%
 
56.3
%
 
55.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Normalized fixed charge coverage (5)
2.99

 
2.45

 
 
2.86

 
3.12

 
2.98

 
2.68

 
2.42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Normalized interest coverage (5)
3.12

 
2.74

 
 
2.97

 
3.25

 
3.13

 
2.91

 
2.74

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net debt/normalized annualized estimated full period EBITDA from properties owned at period end (5)
N/A

 
N/A

 
 
7.82x

 
7.10x

 
7.29x

 
8.04x

 
7.63x

Net debt/development-adjusted normalized annualized estimated full period EBITDA from properties owned at period end (5) (6)
N/A

 
N/A

 
 
7.45x

 
6.67x

 
6.95x

 
7.82x

 
7.46x

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Market capitalization is equal to outstanding shares (common stock, restricted stock, and restricted stock units, as if converted) times the closing price of our common stock as of the last day of the associated period.
(2) Includes book value of mortgage debt, the revolving credit facility and term loans, and unconsolidated debt (at ownership %).
(3) Total debt less cash and cash equivalents and unconsolidated cash and cash equivalents (at ownership %).
(4) NOI margin % is equal to NOI divided by revenue.
(5) See page 7 for more detailed information.
(6) Includes estimated stabilized NOI for development properties, to the extent of percentage of completion of the respective developments based on spend to date.

Supplemental Operating and
Financial Data
391010477_tierrgbfullcolora04.jpg
3Q’17
Page 3



Consolidated Balance Sheets
(in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-Sep-17
 
30-Jun-17
 
31-Mar-17
 
31-Dec-16
 
30-Sep-16
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Real estate
 
 
 
 
 
 
 
 
 
 
 
Land
 
$
140,959

 
$
141,010

 
$
142,776

 
$
143,537

 
$
143,581

 
Land held for development
 
45,059

 
45,059

 
45,059

 
45,059

 
45,059

 
Buildings and improvements, net
 
1,122,072

 
1,145,496

 
1,076,701

 
1,043,641

 
1,048,194

 
Real estate under development
 
17,446

 
8,128

 
5,974

 
17,961

 
11,657

 
Total real estate
 
1,325,536

 
1,339,693

 
1,270,510

 
1,250,198

 
1,248,491

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
10,959

 
28,763

 
55,215

 
14,884

 
51,466

 
Restricted cash
 
13,323

 
10,953

 
7,685

 
7,509

 
8,586

 
Accounts receivable, net
 
82,737

 
62,413

 
60,996

 
71,459

 
67,100

 
Prepaid expenses and other assets
 
20,115

 
16,399

 
18,163

 
25,305

 
5,540

 
Investments in unconsolidated entities
 
33,977

 
25,530

 
40,421

 
76,813

 
76,954

 
Deferred financing fees, net
 
1,735

 
2,089

 
2,442

 
2,395

 
2,698

 
Acquired above-market leases, net
 
543

 
659

 
778

 
898

 
1,017

 
Other lease intangibles, net
 
90,547

 
92,431

 
70,962

 
60,946

 
61,919

 
Other intangible assets, net
 
1,816

 
1,846

 
1,876

 
9,787

 
9,888

 
Assets associated with real estate held for sale
 

 

 
32,375

 
32,346

 
37,026

Total assets
 
$
1,581,288

 
$
1,580,776

 
$
1,561,423

 
$
1,552,540

 
$
1,570,685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage debt
 
$
191,694

 
$
192,043

 
$
206,400

 
$
200,131

 
$
270,758

 
Unsecured term loans
 
575,000

 
575,000

 
575,000

 
575,000

 
575,000

 
Unsecured revolving credit facility
 
23,000

 
20,000

 

 
59,000

 

 
Unamortized debt issuance costs
 
(7,308
)
 
(7,799
)
 
(7,495
)
 
(7,348
)
 
(7,838
)
 
Total notes payable, net
 
782,386

 
779,244

 
773,905

 
826,783

 
837,920

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
78,174

 
64,412

 
51,813

 
74,458

 
65,924

 
Acquired below-market leases, net
 
19,462

 
20,653

 
15,252

 
6,886

 
7,856

 
Distributions payable
 

 

 

 
8,601

 
8,602

 
Other liabilities
 
9,443

 
9,606

 
7,762

 
14,353

 
30,005

 
Obligations associated with real estate held for sale
 

 

 
970

 
943

 
1,394

Total liabilities
 
889,465

 
873,915

 
849,702

 
932,024

 
951,701

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
 

 

 

 

 

 
Convertible stock
 

 

 

 

 

 
Common stock, $.0001 par value per share, 382,499,000 shares authorized
5

 
5

 
5

 
5

 
5

 
Additional paid-in capital
 
2,609,361

 
2,608,260

 
2,607,071

 
2,606,098

 
2,605,569

 
Cumulative distributions and net loss attributable to common stockholders
(1,918,473
)
 
(1,901,820
)
 
(1,897,240
)
 
(1,986,515
)
 
(1,971,588
)
 
Accumulated other comprehensive income (loss)
 
257

 
(274
)
 
1,026

 
(1,042
)
 
(16,662
)
 
Stockholders’ equity
 
691,150

 
706,171

 
710,862

 
618,546

 
617,324

 
Noncontrolling interests
 
673

 
690

 
859

 
1,970

 
1,660

Total equity
 
691,823

 
706,861

 
711,721

 
620,516

 
618,984

Total liabilities and equity
 
$
1,581,288

 
$
1,580,776

 
$
1,561,423

 
$
1,552,540

 
$
1,570,685

 
 
 
 
 
 
 
 
 
 
 
 
Common stock, number of shares issued and outstanding
 
47,552,014

 
47,542,066

 
47,525,725

 
47,473,218

 
47,412,705

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Supplemental Operating and
Financial Data
391010477_tierrgbfullcolora04.jpg
3Q’17
Page 4



 
Consolidated Statements of Operations
 
(in thousands, except share and per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
Three Months Ended
 
 
30-Sep-17
 
30-Sep-16
 
 
30-Sep-17
 
30-Jun-17
 
31-Mar-17
 
31-Dec-16
 
30-Sep-16
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental income
$
152,186

 
$
177,854

 
 
$
47,333

 
$
51,554

 
$
53,299

 
$
51,613

 
$
53,975

 
Straight-line rent and lease incentive revenue
6,334

 
5,903

 
 
2,280

 
2,026

 
2,028

 
1,500

 
756

 
Above- and below-market rent amortization
2,863

 
3,399

 
 
1,075

 
880

 
908

 
856

 
936

 
Lease termination fees
452

 
1,587

 
 
232

 
92

 
128

 
106

 
331

 
Total revenue
161,835

 
188,743

 
 
50,920

 
54,552

 
56,363

 
54,075

 
55,998

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property related expenses
41,790

 
56,605

 
 
13,170

 
13,930

 
14,690

 
15,998

 
16,315

 
Real estate taxes
25,752

 
28,843

 
 
8,439

 
8,753

 
8,560

 
7,454

 
8,350

 
Property management fees
181

 
720

 
 
49

 
72

 
60

 
197

 
210

 
Total property operating expenses
67,723

 
86,168

 
 
21,658

 
22,755

 
23,310

 
23,649

 
24,875

 
Interest expense
22,851

 
31,977

 
 
7,516

 
7,397

 
7,938

 
8,746

 
9,754

 
Interest rate hedge ineffectiveness expense (income)
9

 
407

 
 
8

 
(29
)
 
30

 
(979
)
 
(1,534
)
 
Amortization of deferred financing costs
2,561

 
2,308

 
 
882

 
867

 
812

 
798

 
785

 
Total interest expense
25,421

 
34,692

 
 
8,406

 
8,235

 
8,780

 
8,565

 
9,005

 
General and administrative
16,490

 
17,853

 
 
5,157

 
5,626

 
5,707

 
5,796

 
5,529

 
Asset impairment losses

 
8,977

 
 

 

 

 

 
4,151

 
Real estate depreciation and amortization
70,641

 
87,351

 
 
23,653

 
22,557

 
24,431

 
23,771

 
25,062

 
Depreciation and amortization - non-real estate assets
325

 
623

 
 
132

 
95

 
98

 
85

 
71

 
Total expenses
180,600

 
235,664

 
 
59,006

 
59,268

 
62,326

 
61,866

 
68,693

 
Interest and other income
1,271

 
866

 
 
170

 
783

 
318

 
303

 
248

 
Loss on early extinguishment of debt
(545
)
 

 
 

 

 
(545
)
 

 

Loss before income taxes, equity in operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
of investments, and gains
(18,039
)
 
(46,055
)
 
 
(7,916
)
 
(3,933
)
 
(6,190
)
 
(7,488
)
 
(12,447
)
 
Benefit (provision) for income taxes
(297
)
 
(467
)
 
 
(202
)
 
149

 
(244
)
 
(188
)
 
(4
)
 
Equity in operations of investments
6,367

 
1,884

 
 
67

 
6,556

 
(256
)
 
685

 
646

Income (loss) before gains
(11,969
)
 
(44,638
)
 
 
(8,051
)
 
2,772

 
(6,690
)
 
(6,991
)
 
(11,805
)
Gain on sale of assets
92,012

 
21,526

 
 

 
1,262

 
90,750

 
650

 
10,777

Gain on remeasurement of investment in unconsolidated entities
14,168

 

 
 

 

 
14,168

 

 

Net income (loss)
94,211

 
(23,112
)
 
 
(8,051
)
 
4,034

 
98,228

 
(6,341
)
 
(1,028
)
 
Noncontrolling interests
(50
)
 
28

 
 
10

 
(3
)
 
(57
)
 
8

 
3

Net income (loss) attributable to common stockholders
$
94,161

 
$
(23,084
)
 
 
$
(8,041
)
 
$
4,031

 
$
98,171

 
$
(6,333
)
 
$
(1,025
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic weighted average common shares outstanding
47,532,432

 
47,402,724

 
 
47,549,635

 
47,536,320

 
47,510,915

 
47,414,021

 
47,412,705

Diluted weighted average common shares outstanding (1)
47,956,167

 
47,402,724

 
 
47,549,635

 
47,875,418

 
47,806,069

 
47,414,021

 
47,412,705

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic income (loss) per common share
$
1.97

 
$
(0.49
)
 
 
$
(0.17
)
 
$
0.08

 
$
2.05

 
$
(0.13
)
 
$
(0.02
)
Diluted income (loss) per common share (1)
$
1.95

 
$
(0.49
)
 
 
$
(0.17
)
 
$
0.08

 
$
2.04

 
$
(0.13
)
 
$
(0.02
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions declared per common share
$
0.54

 
$
0.54

 
 
$
0.18

 
$
0.18

 
$
0.18

 
$
0.18

 
$
0.18

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
In periods of net loss there are no dilutive securities and diluted loss per common share is calculated using weighted average common shares outstanding - basic as the denominator.

Supplemental Operating and
Financial Data
391010477_tierrgbfullcolora04.jpg
3Q’17
Page 5



Calculations of FFO and Additional Information
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 Three Months Ended
 
30-Sep-17
 
30-Sep-16
 
 
30-Sep-17
 
30-Jun-17
 
31-Mar-17
 
31-Dec-16
 
30-Sep-16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
94,211

 
$
(23,112
)
 
 
$
(8,051
)
 
$
4,034

 
$
98,228

 
$
(6,341
)
 
$
(1,028
)
Noncontrolling interests
(50
)
 
28

 
 
10

 
(3
)
 
(57
)
 
8

 
3

Net income (loss) attributable to common stockholders
94,161

 
(23,084
)
 
 
(8,041
)
 
4,031

 
98,171

 
(6,333
)
 
(1,025
)
Adjustments (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate depreciation and amortization from consolidated properties
70,641

 
87,351

 
 
23,653

 
22,557

 
24,431

 
23,771

 
25,062

 
Real estate depreciation and amortization from unconsolidated properties
986

 
6,108

 
 
289

 
131

 
566

 
2,150

 
2,058

 
Real estate depreciation and amortization - noncontrolling interest

 
(6
)
 
 

 

 

 

 

 
Impairment of depreciable real estate assets

 
8,977

 
 

 

 

 

 
4,151

 
Gain on sale of depreciable real estate
(98,725
)
 
(21,586
)
 
 

 
(7,975
)
 
(90,750
)
 
(650
)
 
(10,837
)
 
Gain on remeasurement of investment in unconsolidated entities
(14,168
)
 

 
 

 

 
(14,168
)
 

 

 
Taxes associated with sale of depreciable real estate

 
(88
)
 
 

 

 

 

 
(152
)
 
Noncontrolling interests
23

 
(57
)
 
 
(16
)
 
(9
)
 
48

 
(21
)
 
(18
)
FFO attributable to common stockholders
52,918

 
57,615

 
 
15,885

 
18,735

 
18,298

 
18,917

 
19,239

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments (1):