Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document



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): August 7, 2018
 
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 August 7, 2018, TIER REIT, Inc. released supplemental information regarding its financial results and operations for the quarter and the period ended June 30, 2018, by posting to its website its Second Quarter 2018 Supplemental Operating and Financial Data and issued a press release announcing its financial results for the second quarter of 2018. 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    Second Quarter 2018 Supplemental Operating and Financial Data

99.2    Press release, dated August 7, 2018
                        




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: August 7, 2018
By:
/s/ Hannah Q. Wrenn
 
 
Hannah Q. Wrenn
 
 
Chief Accounting Officer
 
 
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

394549822_tierreitsupp18coverqa02.jpg




Supplemental Operating and Financial Data
For the Quarter Ended June 30, 2018

394549822_tierrgbfullcolora11.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 June 30, 2018, we owned interests in 18 operating office properties with approximately 6.7 million rentable square feet, one non-operating property with approximately 331,000 rentable square feet, and three development properties that will consist of approximately 989,000 rentable square feet. As of June 30, 2018, our operating properties are located in six 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 and Director
 
 
 
Scott W. Fordham
 
Dallas E. Lucas
Chief Executive Officer and Director
 
President and Chief Operating Officer
 
 
 
R. Kent Griffin, Jr.
 
James E. Sharp
Independent Director
 
Chief Financial Officer and Treasurer
 
 
 
Thomas M. Herzog
 
William J. Reister
Independent Director
 
Chief Investment Officer and Executive Vice President
 
 
 
Dennis J. Martin
 
Telisa Webb Schelin
Independent Director
 
Chief Legal Officer, Executive Vice President, and Secretary
 
 
 
Gregory J. Whyte
 
Hannah Q. Wrenn
Independent Director
 
Chief Accounting Officer
 
 
 
 
 
R. Heath Johnson
 
 
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
 
JMP Securities
 
J.P. Morgan Securities
 
Robert W. Baird & Co.
John Kim
 
Robert Stevenson
 
Mitch Germain
 
Anthony Paolone
 
David Rodgers
212.885.4115
 
646.840.3217
 
212.906.3546
 
212.622.6682
 
216.737.7341





Supplemental Operating and Financial Data
For the Quarter Ended June 30, 2018
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 EBITDAre
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 and Redevelopment Sites
22

Summary of Development Activity
23

Properties Under Development
24-26

Acquisition and Disposition Activities
27

Summary of Financing
28

Principal Payments by Year
29

Definitions of Non-GAAP Financial Measures
30-31


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, develop, or sell certain properties, the value of its assets, its anticipated capital expenditures, and other matters. Words such as “may,” "will," “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “outlook,” “would,” “could,” “should,” “objectives,” “strategies,” “opportunities,” “goals,” “position,” “future,” “vision,” “mission,” “strive,” “project” 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, 2017. 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 June 30, 2018

Property Results
Occupancy at June 30, 2018, was 89.4%, reflecting no change from March 31, 2018.
94,000 square feet leased - 48,000 square feet of renewals, 23,000 square feet of expansions, and 23,000 square feet of new leasing.
During the second quarter of 2018, we provided rent abatements of $0.8 million to tenants at One & Two Eldridge Place and Three Eldridge Place (collectively known as the “Eldridge Properties”) as a result of Hurricane Harvey.  These abatements were partially offset by $0.4 million in business interruption proceeds.  We anticipate we will receive remaining business interruption insurance proceeds in subsequent quarters.  The Eldridge Properties have been fully operational since January 2018.
Real Estate Activity
Development on Domain 12 commenced in May 2018. Domain 12 will contain 320,000 rentable square feet and is located in Austin, Texas, adjacent to our Domain 11 development property.
Capital Markets Activity
On May 4, 2018, our board of directors authorized a distribution of $0.18 per share of common stock for the second quarter of 2018, which was paid on June 29, 2018.
During the three months ended June 30, 2018, we issued 901,300 shares of common stock under our $125.0 million at-the-market equity offering program (the “ATM Program”), generating proceeds of $20.9 million, net of commissions and issuance costs. Subsequent to June 30, 2018, we issued 1,940,251 additional shares generating net proceeds of $44.8 million, resulting in total net proceeds of $65.7 million.
Subsequent Events
On August 3, 2018, our board of directors authorized a distribution of $0.18 per share of common stock for the third quarter of 2018, which will be paid on September 28, 2018.


Supplemental Operating and
Financial Data
394549822_tierrgbfullcolora11.jpg
2Q’18
Page 1



Financial Highlights
(in thousands, except per share data, effective rent data, percentages, and number of properties)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-Jun-18
 
30-Jun-17
 
 
30-Jun-18
 
31-Mar-18
 
31-Dec-17
 
30-Sep-17
 
30-Jun-17
Portfolio Summary:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total operating office properties
18

 
19

 
 
18

 
18

 
20

 
20

 
19

Rentable square feet (100%) (operating properties)
6,657

 
7,114

 
 
6,657

 
6,657

 
7,405

 
7,405

 
7,114

Rentable square feet (own %) (operating properties)
6,633

 
7,114

 
 
6,633

 
6,633

 
7,260

 
7,260

 
7,114

Occupancy %
89.4
%
 
88.5
%
 
 
89.4
%
 
89.4
%
 
89.1
%
 
88.3
%
 
88.5
%
Executed % SF leased
89.8
%
 
89.1
%
 
 
89.8
%
 
89.6
%
 
89.7
%
 
89.0
%
 
89.1
%
Economic % SF leased
85.3
%
 
80.3
%
 
 
85.3
%
 
86.1
%
 
84.4
%
 
82.4
%
 
80.3
%
Average effective rent/square foot
$
32.60

 
$
29.12

 
 
$
32.60

 
$
32.55

 
$
30.33

 
$
29.58

 
$
29.12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
Three Months Ended
 
30-Jun-18
 
30-Jun-17
 
 
30-Jun-18
 
31-Mar-18
 
31-Dec-17
 
30-Sep-17
 
30-Jun-17
Financial Results:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$
108,133

 
$
110,915

 
 
$
53,990

 
$
54,143

 
$
54,626

 
$
50,920

 
$
54,552

Property related expenses
(25,550
)
 
(28,620
)
 
 
(12,395
)
 
(13,155
)
 
(14,131
)
 
(13,170
)
 
(13,930
)
Real estate taxes
(17,828
)
 
(17,313
)
 
 
(9,074
)
 
(8,754
)
 
(8,512
)
 
(8,439
)
 
(8,753
)
Property management fees
(182
)
 
(132
)
 
 
(97
)
 
(85
)
 
(51
)
 
(49
)
 
(72
)
NOI
$
64,573

 
$
64,850

 
 
$
32,424

 
$
32,149

 
$
31,932

 
$
29,262

 
$
31,797

Base rent
$
70,674

 
$
80,000

 
 
$
35,556

 
$
35,118

 
$
34,122

 
$
36,002

 
$
38,629

Free rent
$
(3,080
)
 
$
(5,752
)
 
 
$
(1,776
)
 
$
(1,304
)
 
$
(1,570
)
 
$
(2,288
)
 
$
(3,022
)
Net income (loss) attributable to common stockholders
$
113

 
$
102,202

 
 
$
(8,277
)
 
$
8,390

 
$
(9,875
)
 
$
(8,041
)
 
$
4,031

Diluted income (loss) per common share (1)
$

 
$
2.13

 
 
$
(0.17
)
 
$
0.17

 
$
(0.21
)
 
$
(0.17
)
 
$
0.08

FFO attributable to common stockholders
$
28,693

 
$
37,033

 
 
$
18,804

 
$
9,889

 
$
19,020

 
$
15,885

 
$
18,735

Diluted FFO per common share
$
0.59

 
$
0.78

 
 
$
0.39

 
$
0.20

 
$
0.39

 
$
0.33

 
$
0.39

FFO attributable to common stockholders, excluding certain items
$
39,015

 
$
39,240

 
 
$
19,521

 
$
19,494

 
$
19,374

 
$
16,508

 
$
19,766

Diluted FFO, excluding certain items, per common share
$
0.80

 
$
0.82

 
 
$
0.40

 
$
0.40

 
$
0.40

 
$
0.34

 
$
0.41

Adjusted EBITDAre
$
56,562

 
$
55,684

 
 
$
28,359

 
$
28,203

 
$
26,321

 
$
26,181

 
$
27,558

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
47,665

 
47,524

 
 
47,684

 
47,645

 
47,554

 
47,550

 
47,536

Weighted average common shares outstanding - diluted
48,477

 
47,728

 
 
48,534

 
48,300

 
48,207

 
48,160

 
47,875

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Additional Trend Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal % based on square feet
69
%
 
64
%
 
 
74
%
 
64
%
 
30
%
 
83
%
 
53
%
Distributions declared on common shares
$
17,254

 
$
17,217

 
 
$
8,628

 
$
8,626

 
$
8,612

 
$
8,612

 
$
8,611

Annualized distribution yield (2)
3.0
%
 
3.9
%
 
 
3.0
%
 
3.9
%
 
3.5
%
 
3.7
%
 
3.9
%
_______________________________
(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 30-31.

Supplemental Operating and
Financial Data
394549822_tierrgbfullcolora11.jpg
2Q’18
Page 2



Financial Highlights (continued)
(in thousands, except stock prices, percentages, and ratios)
 
 
 
 
 
 
 
 
30-Jun-18
 
30-Jun-17
 
 
30-Jun-18
 
31-Mar-18
 
31-Dec-17
 
30-Sep-17
 
30-Jun-17
Selected Balance Sheet Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total book value of real estate
$
1,434,814

 
$
1,339,693

 
 
$
1,434,814

 
$
1,430,355

 
$
1,275,953

 
$
1,325,536

 
$
1,339,693

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
8,359

 
$
28,763

 
 
$
8,359

 
$
10,183

 
$
13,800

 
$
10,959

 
$
28,763

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated cash and cash equivalents
(at ownership %)
$
327

 
$
5,082

 
 
$
327

 
$
282

 
$
1,435

 
$
2,495

 
$
5,082

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted cash
$
14,086

 
$
10,953

 
 
$
14,086

 
$
12,565

 
$
8,510

 
$
13,323

 
$
10,953

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,696,121

 
$
1,580,776

 
 
$
1,696,121

 
$
1,688,999

 
$
1,581,138

 
$
1,581,288

 
$
1,580,776

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage debt
$
280,311

 
$
192,043

 
 
$
280,311

 
$
280,689

 
$
191,339

 
$
191,694

 
$
192,043

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility and term loans
$
608,000

 
$
595,000

 
 
$
608,000

 
$
612,000

 
$
610,000

 
$
598,000

 
$
595,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated debt (at ownership %)
$
21,248

 
$
40,931

 
 
$
21,248

 
$
16,239

 
$
52,377

 
$
43,572

 
$
40,931

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
$
1,001,531

 
$
873,915

 
 
$
1,001,531

 
$
1,001,439

 
$
903,567

 
$
889,465

 
$
873,915

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of common stock outstanding
48,575

 
47,542

 
 
48,575

 
47,656

 
47,623

 
47,552

 
47,542

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted stock units outstanding
351

 
238

 
 
351

 
356

 
228

 
228

 
238

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of restricted stock outstanding
260

 
291

 
 
260

 
265

 
181

 
291

 
291

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
49,186

 
48,071

 
 
49,186

 
48,277

 
48,032

 
48,071

 
48,071

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
High stock price
$
24.22

 
$
18.80

 
 
$
24.22

 
$
20.51

 
$
20.72

 
$
19.50

 
$
18.61

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Low stock price
$
17.04

 
$
15.96

 
 
$
18.06

 
$
17.04

 
$
18.83

 
$
16.67

 
$
15.96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average closing stock price
$
19.93

 
$
17.52

 
 
$
20.81

 
$
19.01

 
$
19.71

 
$
18.39

 
$
17.17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closing stock price
$
23.78

 
$
18.48

 
 
$
23.78

 
$
18.48

 
$
20.39

 
$
19.30

 
$
18.48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market capitalization (1)
$
1,169,643

 
$
888,352

 
 
$
1,169,643

 
$
892,159

 
$
979,372

 
$
927,770

 
$
888,352

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total debt (2)
$
909,559

 
$
827,974

 
 
$
909,559

 
$
908,928

 
$
853,716

 
$
833,266

 
$
827,974

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net debt (3)
$
900,873

 
$
794,129

 
 
$
900,873

 
$
898,463

 
$
838,481

 
$
819,812

 
$
794,129

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total capitalization
$
2,079,202

 
$
1,716,326

 
 
$
2,079,202

 
$
1,801,087

 
$
1,833,088

 
$
1,761,036

 
$
1,716,326

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
Three Months Ended
 
30-Jun-18
 
30-Jun-17
 
 
30-Jun-18
 
31-Mar-18
 
31-Dec-17
 
30-Sep-17
 
30-Jun-17
Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOI margin % (4)
59.7
%
 
58.5
%
 
 
60.1
%
 
59.4
%
 
58.5
%
 
57.5
%
 
58.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Normalized fixed charge coverage (5)
3.00

 
3.05

 
 
3.00

 
3.00

 
2.83

 
2.86

 
3.12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Normalized interest coverage (5)
3.13

 
3.19

 
 
3.12

 
3.13

 
2.94

 
2.97

 
3.25

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

 
N/A

 
 
7.94x

 
8.34x

 
7.96x

 
7.83x

 
7.10x

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net debt/adjusted annualized estimated full period EBITDAre from properties owned at period end, including development properties (5) (6)
N/A

 
N/A

 
 
7.13x

 
7.67x

 
7.47x

 
7.45x

 
6.67x

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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
394549822_tierrgbfullcolora11.jpg
2Q’18
Page 3



Consolidated Balance Sheets
(in thousands, except share and per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-Jun-18
 
31-Mar-18
 
31-Dec-17
 
30-Sep-17
 
30-Jun-17
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Real estate
 
 
 
 
 
 
 
 
 
 
 
Land
 
$
156,517

 
$
156,577

 
$
139,951

 
$
140,959

 
$
141,010

 
Land held for development
 
45,059

 
45,059

 
45,059

 
45,059

 
45,059

 
Buildings and improvements, net
 
1,160,273

 
1,177,433

 
1,061,418

 
1,122,072

 
1,145,496

 
Real estate under development
 
72,965

 
51,286

 
29,525

 
17,446

 
8,128

 
Total real estate
 
1,434,814

 
1,430,355

 
1,275,953

 
1,325,536

 
1,339,693

 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
8,359

 
10,183

 
13,800

 
10,959

 
28,763

 
Restricted cash
 
14,086

 
12,565

 
8,510

 
13,323

 
10,953

 
Accounts receivable, net
 
80,755

 
76,385

 
81,129

 
82,737

 
62,413

 
Prepaid expenses and other assets
 
17,124

 
14,238

 
28,112

 
20,115

 
16,399

 
Investments in unconsolidated entities
 
31,714

 
31,314

 
31,852

 
33,977

 
25,530

 
Deferred financing fees, net
 
3,211

 
3,426

 
1,387

 
1,735

 
2,089

 
Acquired above-market leases, net
 
180

 
288

 
419

 
543

 
659

 
Other lease intangibles, net
 
105,878

 
110,245

 
86,628

 
90,547

 
92,431

 
Other intangible assets, net
 

 

 

 
1,816

 
1,846

 
Assets associated with real estate held for sale
 

 

 
53,348

 

 

Total assets
 
$
1,696,121

 
$
1,688,999

 
$
1,581,138

 
$
1,581,288

 
$
1,580,776

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage debt
 
$
280,311

 
$
280,689

 
$
191,339

 
$
191,694

 
$
192,043

 
Unsecured term loans
 
575,000

 
575,000

 
575,000

 
575,000

 
575,000

 
Unsecured revolving credit facility
 
33,000

 
37,000

 
35,000

 
23,000

 
20,000

 
Unamortized debt issuance costs
 
(2,051
)
 
(2,156
)
 
(6,801
)
 
(7,308
)
 
(7,799
)
 
Total notes payable, net
 
886,260

 
890,533

 
794,538

 
782,386

 
779,244

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
82,816

 
76,144

 
81,166

 
78,174

 
64,412

 
Acquired below-market leases, net
 
25,910

 
27,684

 
17,942

 
19,462

 
20,653

 
Other liabilities
 
6,545

 
7,078

 
7,567

 
9,443

 
9,606

 
Obligations associated with real estate held for sale
 

 

 
2,354

 

 

Total liabilities
 
1,001,531

 
1,001,439

 
903,567

 
889,465

 
873,915

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
 

 

 

 

 

 
Convertible stock
 

 

 

 

 

 
Common stock
 
5

 
5

 
5

 
5

 
5

 
Additional paid-in capital
 
2,632,635

 
2,610,288

 
2,609,540

 
2,609,361

 
2,608,260

 
Cumulative distributions and net loss attributable to common stockholders
 
(1,953,466
)
 
(1,936,561
)
 
(1,936,960
)
 
(1,918,473
)
 
(1,901,820
)
 
Accumulated other comprehensive income (loss)
 
12,462

 
10,479

 
4,218

 
257

 
(274
)
 
Stockholders’ equity
 
691,636

 
684,211

 
676,803

 
691,150

 
706,171

 
Noncontrolling interests
 
2,954

 
3,349

 
768

 
673

 
690

Total equity
 
694,590

 
687,560

 
677,571

 
691,823

 
706,861

Total liabilities and equity
 
$
1,696,121

 
$
1,688,999

 
$
1,581,138

 
$
1,581,288

 
$
1,580,776

 
 
 
 
 
 
 
 
 
 
 
 
Common stock, number of shares issued and outstanding
 
48,574,724

 
47,655,669

 
47,623,324

 
47,552,014

 
47,542,066

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Supplemental Operating and
Financial Data
394549822_tierrgbfullcolora11.jpg
2Q’18
Page 4



 
Consolidated Statements of Operations
 
(in thousands, except share and per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
Three Months Ended
 
 
30-Jun-18
 
30-Jun-17
 
 
30-Jun-18
 
31-Mar-18
 
31-Dec-17
 
30-Sep-17
 
30-Jun-17
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental income
$
103,029

 
$
104,853

 
 
$
51,088

 
$
51,941

 
$
52,362

 
$
47,333

 
$
51,554

 
Straight-line rent and lease incentive revenue
1,453

 
4,054

 
 
862

 
591

 
978

 
2,280

 
2,026

 
Above- and below-market rent amortization
2,941

 
1,788

 
 
1,665

 
1,276

 
1,032

 
1,075

 
880

 
Lease termination fees
710

 
220

 
 
375

 
335

 
254

 
232

 
92

 
Total revenue
108,133

 
110,915

 
 
53,990

 
54,143

 
54,626

 
50,920

 
54,552

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property related expenses
25,550

 
28,620

 
 
12,395

 
13,155

 
14,131

 
13,170

 
13,930

 
Real estate taxes
17,828

 
17,313

 
 
9,074

 
8,754

 
8,512

 
8,439

 
8,753

 
Property management fees
182

 
132

 
 
97

 
85

 
51

 
49

 
72

 
Total property operating expenses
43,560

 
46,065

 
 
21,566

 
21,994

 
22,694

 
21,658

 
22,755

 
Interest expense
15,716

 
15,335

 
 
8,011

 
7,705

 
7,534

 
7,516

 
7,397

 
Interest rate hedge ineffectiveness expense (income)

 
1

 
 

 

 
(262
)
 
8

 
(29
)
 
Amortization of deferred financing costs
762

 
1,679

 
 
358

 
404

 
883

 
882

 
867

 
Total interest expense
16,478

 
17,015

 
 
8,369

 
8,109

 
8,155

 
8,406

 
8,235

 
General and administrative
10,880

 
11,333

 
 
5,377

 
5,503

 
4,956

 
5,157

 
5,626

 
Asset impairment losses

 

 
 

 

 
5,250

 

 

 
Real estate depreciation and amortization
51,511

 
46,988

 
 
27,011

 
24,500

 
23,655

 
23,653

 
22,557

 
Depreciation and amortization - non-real estate assets
239

 
193

 
 
123

 
116

 
133

 
132

 
95

 
Total expenses
122,668

 
121,594

 
 
62,446

 
60,222

 
64,843

 
59,006

 
59,268

 
Interest and other income
595

 
1,101

 
 
550

 
45

 
88

 
170

 
783

 
Loss on early extinguishment of debt
(8,988
)
 
(545
)
 
 

 
(8,988
)
 

 

 

Loss before income taxes, equity in operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
of investments, and gains (losses)
(22,928
)
 
(10,123
)
 
 
(7,906
)
 
(15,022
)
 
(10,129
)
 
(7,916
)
 
(3,933
)
 
Benefit (provision) for income taxes
(409
)
 
(95
)
 
 
(214
)
 
(195
)
 
(171
)
 
(202
)
 
149

 
Equity in operations of investments
287

 
6,300

 
 

 
287

 
32

 
67

 
6,556

Income (loss) before gains (losses)
(23,050
)
 
(3,918
)
 
 
(8,120
)
 
(14,930
)
 
(10,268
)
 
(8,051
)
 
2,772

Gain (loss) on sale of assets
11,924

 
92,012

 
 
(90
)
 
12,014

 
384

 

 
1,262

Gain (loss) on remeasurement of investment in unconsolidated entities
11,090

 
14,168

 
 
(152
)
 
11,242

 

 

 

Net income (loss)
(36
)
 
102,262

 
 
(8,362
)
 
8,326

 
(9,884
)
 
(8,051
)
 
4,034

 
Noncontrolling interests
149

 
(60
)
 
 
85

 
64

 
9

 
10

 
(3
)
Net income (loss) attributable to common stockholders
$
113

 
$
102,202

 
 
$
(8,277
)
 
$
8,390

 
$
(9,875
)
 
$
(8,041
)
 
$
4,031

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
47,664,709

 
47,523,688

 
 
47,684,152

 
47,645,050

 
47,553,564

 
47,549,635

 
47,536,320

Weighted average common shares outstanding - diluted (1)
48,476,933

 
47,727,634

 
 
47,684,152

 
48,299,882

 
47,553,564

 
47,549,635

 
47,875,418

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic income (loss) per common share
$
0.00

 
$
2.14

 
 
$
(0.17
)
 
$
0.18

 
$
(0.21
)
 
$
(0.17
)
 
$
0.08

Diluted income (loss) per common share (1)
$
0.00

 
$
2.13

 
 
$
(0.17
)
 
$
0.17

 
$
(0.21
)
 
$
(0.17
)
 
$
0.08

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions declared per common share
$
0.36

 
$
0.36

 
 
$
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
394549822_tierrgbfullcolora11.jpg
2Q’18
Page 5



Calculations of FFO and Additional Information
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 Three Months Ended
 
30-Jun-18
 
30-Jun-17
 
 
30-Jun-18
 
31-Mar-18
 
31-Dec-17
 
30-Sep-17
 
30-Jun-17
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
(36
)
 
$
102,262

 
 
$
(8,362
)
 
$
8,326

 
$
(9,884
)
 
$
(8,051
)
 
$
4,034

Noncontrolling interests
149

 
(60
)
 
 
85

 
64

 
9

 
10

 
(3
)
Net income (loss) attributable to common stockholders
113

 
102,202

 
 
(8,277
)
 
8,390

 
(9,875
)
 
(8,041
)
 
4,031

Adjustments (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate depreciation and amortization from consolidated properties
51,511

 
46,988

 
 
27,011

 
24,500

 
23,655

 
23,653

 
22,557

 
Real estate depreciation and amortization from unconsolidated properties
391

 
697

 
 

 
391

 
391

 
289

 
131

 
Real estate depreciation and amortization - noncontrolling interest
(1,215
)
 

 
 
(782
)
 
(433
)
 

 

 

 
Impairment of depreciable real estate assets

 

 
 

 

 
5,250

 

 

 
Loss (gain) on sale of depreciable real estate
(11,924
)
 
(98,725
)
 
 
90

 
(12,014
)
 
(384
)
 

 
(7,975
)
 
Loss (gain) on remeasurement of investment in unconsolidated entities
(11,090
)
 
(14,168
)
 
 
152

 
(11,242
)
 

 

 

 
Noncontrolling interests
907

 
39

 
 
610

 
297

 
(17
)
 
(16
)
 
(9
)
FFO attributable to common stockholders
28,693

 
37,033

 
 
18,804

 
9,889

 
19,020

 
15,885

 
18,735

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Severance charges
127

 
451

 
 
108

 
19