Item 2. Properties
Item 2. Properties
The following table sets forth certain information related to operating properties in which we have an ownership interest. Except as noted, all information presented is as of December 31, 2023 ($ in thousands):
Operating Properties (1)
Company's Share
Office Properties Rentable Square Feet Financial Statement Presentation Company's Ownership Interest End of Period Leased Weighted Average Occupancy (2) % of Total
Net Operating
Income (3) Property Level Debt (4)
Terminus (5) 1,226,000 Consolidated 100% 86.3% 83.8% 6.5% $ 220,687
Spring & 8th (5) 765,000 Consolidated 100% 100.0% 100.0% 5.5% —
Buckhead Plaza (5) 678,000 Consolidated 100% 95.2% 89.6% 4.1% —
Northpark (5) 1,539,000 Consolidated 100% 74.0% 73.4% 4.0% —
725 Ponce 372,000 Consolidated 100% 100.0% 100.0% 3.8% —
Avalon (5) 480,000 Consolidated 100% 100.0% 97.4% 3.1% —
3344 Peachtree 484,000 Consolidated 100% 95.1% 96.3% 2.9% —
Promenade Tower 777,000 Consolidated 100% 82.9% 63.2% 2.4% —
3348 Peachtree 258,000 Consolidated 100% 76.9% 80.5% 1.0% —
Promenade Central (6) (7) 367,000 Consolidated 100% 71.3% 55.9% 0.9% —
Medical Offices at Emory Hospital 358,000 Unconsolidated 50% 99.5% 99.5% 0.9% 41,158
Meridian Mark Plaza 160,000 Consolidated 100% 100.0% 100.0% 0.8% —
3350 Peachtree 413,000 Consolidated 100% 60.3% 57.0% 0.4% —
120 West Trinity Office 43,000 Unconsolidated 20% 100.0% 100.0% 0.1% —
ATLANTA (7) 7,920,000 86.6% 83.3% 36.4% 261,845
The Domain (5) 1,899,000 Consolidated 100% 100.0% 99.5% 13.8% 72,296
300 Colorado 378,000 Consolidated 100% 100.0% 100.0% 4.1% —
San Jacinto Center 399,000 Consolidated 100% 95.9% 86.9% 3.3% —
Colorado Tower 373,000 Consolidated 100% 98.8% 97.4% 3.2% 106,605
One Eleven Congress 519,000 Consolidated 100% 80.5% 79.9% 3.0% —
The Terrace (5) 619,000 Consolidated 100% 79.9% 77.6% 2.9% —
Domain Point (5) 240,000 Consolidated 96.5% 100.0% 100.0% 1.6% —
Research Park V 173,000 Consolidated 100% 93.0% 89.0% 0.9% —
AUSTIN 4,600,000 94.4% 92.8% 32.8% 178,901
Corporate Center (5) 1,227,000 Consolidated 100% 93.4% 92.3% 5.7% —
Heights Union (5) (6) 294,000 Consolidated 100% 100.0% 100.0% 1.9% —
The Pointe 253,000 Consolidated 100% 90.4% 89.3% 0.8% —
Harborview Plaza 206,000 Consolidated 100% 83.7% 79.3% 0.7% —
TAMPA 1,980,000 93.0% 91.7% 9.1% —
Fifth Third Center 692,000 Consolidated 100% 91.1% 91.1% 3.5% 126,369
The RailYard 329,000 Consolidated 100% 99.0% 99.2% 2.4% —
550 South 394,000 Consolidated 100% 96.7% 96.7% 2.1% —
CHARLOTTE 1,415,000 1569000 94.5% 94.5% 8.0% 126,369
Hayden Ferry (5) (8) 792,000 Consolidated 100% 90.9% 88.5% 3.3% —
100 Mill (6) 288,000 Consolidated 90% 98.1% 81.3% 2.4% —
111 West Rio 225,000 Consolidated 100% 100.0% 100.0% 1.0% —
Tempe Gateway 264,000 Consolidated 100% 75.9% 64.8% 0.9% —
PHOENIX 1,569,000 90.9% 84.4% 7.6% —
Legacy Union One 319,000 Consolidated 100% 100.0% 100.0% 1.8% —
5950 Sherry Lane 197,000 Consolidated 100% 79.3% 77.5% 0.7% —
DALLAS 516,000 92.1% 91.4% 2.5% —
BriarLake Plaza (5) 835,000 Consolidated 100% 96.8% 79.0% 2.9% —
HOUSTON 835,000 96.8% 79.0% 2.9% —
TOTAL OFFICE (7) 18,835,000 90.9% 87.6% 99.3% $ 567,115
Table continued on next page
17
Table of Contents
Company's Share
Office Properties Rentable Square Feet Financial Statement Presentation Company's Ownership Interest End of Period Leased Weighted Average Occupancy (2) % of Total
Net Operating
Income (3) Property Level Debt (4)
Other Properties
College Street Garage - Charlotte (6) N/A Consolidated 100% N/A N/A 0.6% —
120 West Trinity Apartment - Atlanta (330 Units) (6) 310,000 Unconsolidated 20% 95.3% 93.6% 0.1% —
TOTAL OTHER 310,000 95.3% 93.6% 0.7% $ —
TOTAL (7) 19,145,000 90.9% 87.7% 100.0% $ 567,115
(1) Operating properties exclude properties in our development pipeline and properties sold prior to December 31, 2023.
(2) The weighted average economic occupancy of the property over the period for which the property was available for occupancy during the three months ended December 31, 2023.
(3) The Company's share of net operating income for the three months ended December 31, 2023. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for the definition of net operating income and a reconciliation to Net Income.
(4) The Company's share of property-specific mortgage debt, net of unamortized loan costs, as of December 31, 2023.
(5) Contains two or more buildings that are grouped together for reporting purposes.
(6) Not included in Same Property as of December 31, 2023. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for the definition of Same Property.
(7) A redevelopment of Promenade Central reached substantial completion in the fourth quarter of 2022. This building will be excluded from the Atlanta, Total Office, and Total Portfolio calculations until stabilized.
(8) Hayden Ferry 1 in this group of buildings has been excluded from Same Property, end of period leased as of December 31, 2023, and weighted average occupancy for the quarter ended December 31, 2023 due to commencement of a full redevelopment of this building effective October 1, 2023.
The above table has annualized rent of $741.6 million, which represents the sum of the annualized cash rent including tenant's share of estimated operating expenses, if applicable, each tenant is paying as of the end of the reporting period. Included in this amount is $27.7 million related to tenants not paying rent as of December 31, 2023 due to free rent concessions. For those tenants, annualized rent is calculated based on the annualized contractual rent the tenant will pay in the first period it is required to pay rent.
Office Lease Expirations (1)
As of December 31, 2023, our leases expire as follows:
Year of Expiration Square Feet
Expiring % of Leased
Space Annual Contractual Rent (in thousands) (2) % of Annual
Contractual
Rent Annual
Contractual
Rent/Sq. Ft.
2024 840,324 5.2 % $ 36,158 4.3 % $ 43.03
2025 1,496,330 9.3 % 67,847 8.0 % 45.34
2026 1,279,164 7.9 % 59,697 7.1 % 46.67
2027 1,701,666 10.5 % 78,010 9.2 % 45.84
2028 1,659,725 10.3 % 85,221 10.1 % 51.35
2029 1,750,273 10.8 % 91,173 10.8 % 52.09
2030 1,299,773 8.0 % 66,433 7.9 % 51.11
2031 1,485,103 9.2 % 89,137 10.5 % 60.02
2032 1,826,243 11.3 % 106,127 12.6 % 58.11
2033 & Thereafter 2,820,642 17.5 % 165,276 19.5 % 58.60
Total 16,159,243 100.0 % $ 845,079 100.0 % $ 52.30
(1) Company's share of leases expiring after December 31, 2023. Expiring square footage for which new leases have been executed is reflected based on the expiration date of the new lease.
(2) Annual Contractual Rent is the estimated rent in the year of expiration. It includes the minimum base rent and an estimate of the tenant's share of operating expenses, if applicable, as defined in the respective leases.
18
Table of Contents
Top 20 Office Tenants
As of December 31, 2023, our top 20 office tenants were as follows:
Tenant (1) Number of Properties Occupied Number of Markets Occupied Company's Share of Square Footage Company's Share of Annualized Rent (in thousands) (2) Percentage of Company's Share of Annualized Rent Weighted Average Remaining Lease Term (Years)
1 Amazon 5 3 1,107,805 $ 59,942 8.1% 5.2
2 NCR VOYIX 2 2 815,634 40,595 5.5% 9.4
3 Pioneer Natural Resources 2 1 359,660 25,868 3.5% 7.7
4 Meta Platforms 1 1 319,863 19,481 2.6% 7.6
5 Expedia 1 1 315,882 17,926 2.4% 7.3
6 Bank of America 2 2 347,139 12,648 1.7% 2.0
7 Apache 1 1 210,012 9,760 1.3% 14.6
8 Wells Fargo 5 3 198,507 9,153 1.2% 5.1
9 Ovintiv USA 1 1 318,582 8,313 1.1% 3.5
10 WeWork (3) 4 2 169,050 8,058 1.1% 9.8
11 ADP 1 1 225,000 7,668 1.0% 4.3
12 Westrock Shared Services 1 1 205,185 7,487 1.0% 6.3
13 Regus Equity Business Centers 5 4 145,119 7,393 1.0% 4.9
14 BlackRock 1 1 131,656 7,065 1.0% 12.4
15 Workrise Technologies 1 1 93,210 6,712 1.0% 4.6
16 Amgen 1 1 163,169 6,607 1.0% 4.8
17 Samsung Engineering America 1 1 133,860 6,482 0.9% 2.9
18 McKinsey & Company 2 2 130,513 6,357 0.9% 8.9
19 Time Warner Cable 4 2 120,140 6,048 0.8% 2.0
20 Visa U.S.A. 1 1 122,764 5,864 0.8% 9.8
Total 5,632,750 $ 279,427 37.9% 6.6
(1) In some cases, the actual tenant may be an affiliate of the entity shown.
(2) Annualized Rent represents the annualized cash rent including tenant's share of estimated operating expenses, if applicable, paid by the tenant for December 2023. If the tenant is in a free rent period for December 2023, Annualized Rent represents the annualized contractual rent the tenant will pay in the first month it is required to pay full rent. Included in this amount is $3.0 million of annualized base rent for tenants in a free rent period.
(3) Additional information regarding leases with this tenant can be found in note 13 of the Notes to Consolidated Financial Statements within this Form 10-K annual report.
Note: This schedule includes leases that have commenced. Leases that have been signed but have not commenced are excluded.
19
Table of Contents
Tenant Industry Diversification
As of December 31, 2023, our tenant industry diversification was as follows:
Industry (1) Percentage of Company's Share of Annualized Rent (2)
Technology 27.0 %
Financial 15.5 %
Professional Services 10.2 %
Legal 8.5 %
Consumer Goods & Services 8.0 %
Energy 7.3 %
Real Estate 6.0 %
Health Care 5.9 %
Insurance 3.5 %
Other 3.1 %
Marketing/Media/Telecom 3.1 %
Construction/Design 1.9 %
Total 100.0 %
(1) Management uses SIC codes when available, along with judgment, to determine tenant industry classification.
(2) Annualized Rent represents the annualized cash rent including tenant's share of estimated operating expenses, if applicable, paid by the tenant as of the date of this report. If the tenant is in a free rent period as of the date of this report, Annualized Rent represents the annualized contractual rent the tenant will pay in the first month it is required to pay full rent.
Development Pipeline (1)
As of December 31, 2023, information on our projects under development was as follows ($ in thousands):
Project Type Market Company's Ownership Interest Construction Start Date Square Feet/Units Estimated Project Cost (1) (2) Company's Share of Estimated Project Cost (2) Project Cost Incurred to Date (2) Company's Share of Project Cost Incurred to Date (2) Percent Leased Initial Occupancy (3)
Neuhoff (4) Mixed Nashville 50 % 3Q21 $ 563,000 $ 281,500 $ 472,531 $ 236,266
Office and Retail 448,000 22 % 4Q23
Apartments 542 — % 2Q24
Domain 9 Office Austin 100 % 2Q21 338,000 147,000 147,000 122,524 122,524 98 % 1Q24
Total $ 710,000 $ 428,500 $ 595,055 $ 358,790
(1) This schedule shows projects currently under active development through the substantial completion of construction as well as properties in an initial lease up period prior to stabilization. Amounts included in the estimated project cost column are the estimated costs of the project, including direct financing costs as of project commencement. Significant estimation is required to derive these costs, and the final costs may differ from these estimates.
(2) Estimated and incurred project costs are construction costs plus financing costs on project-specific debt. Neuhoff has a project-specific construction loan (see footnote 4 below). The above excludes any financing cost assumptions for projects without project-specific debt and any other incremental capitalized costs required by GAAP.
(3) Initial occupancy represents the quarter within which the Company first recognized, or estimates it will begin recognizing, revenue under GAAP. The Company capitalizes interest, real estate taxes, and certain operating expenses on the unoccupied portion of office and retail properties, which have ongoing construction of tenant improvements, until the earlier of (1) the date on which the project achieves 90% economic occupancy or (2) one year from cessation of major construction activity. For residential project construction, the Company continues to capitalize interest, real estate taxes, and certain operating expenses until cessation of major construction activity.
(4) The Neuhoff estimated project cost will be funded with a combination of $250.6 million of equity contributed by the joint venture partners and a $312.7 million construction loan. The estimated project cost, as of project commencement, includes approximately $66 million of site and associated infrastructure work related to a future phase.
20
Table of Contents
Land Holdings
As of December 31, 2023, we owned the following land holdings, either directly or indirectly through joint ventures:
Market Company's Ownership Interest Financial Statement Presentation Total Developable Land (Acres) Cost Basis of Land (in thousands)
3354/3356 Peachtree Atlanta 95% Consolidated 3.2
715 Ponce Atlanta 50% Unconsolidated 1.0
887 West Peachtree (1) Atlanta 100% Consolidated 1.6
Domain Point 3 Austin 90% Consolidated 1.7
Domain Central Austin 100% Consolidated 5.6
South End Station Charlotte 100% Consolidated 3.4
303 Tremont Charlotte 100% Consolidated 2.4
Legacy Union 2 & 3 Dallas 95% Consolidated 4.0
Corporate Center 5 & 6 (2) Tampa 100% Consolidated 14.1
Total 37.0 $ 162,812
Company's Share 36.0 $ 156,008
(1) Includes a ground lease with future obligation to purchase.
(2) Corporate Center 5 is controlled through a long-term ground lease.