Item 2. Properties
ITEM 2. PROPERTIES
Properties
The following table sets forth information about our portfolio by geographic location as of December 31, 2022:
Market Rentable
Square Feet Occupancy Percentage of Annualized GAAP Rental Revenue (1)
Raleigh 6,335,000 92.0 % 22.3 %
Nashville 5,230,000 95.0 21.6
Atlanta 4,926,000 88.3 16.8
Tampa 3,340,000 87.1 11.7
Charlotte 1,970,000 94.3 10.1
Orlando 1,790,000 88.9 6.0
Richmond 1,844,000 89.9 4.6
Other 2,155,000 90.9 6.9
Total 27,590,000 91.0 % 100.0 %
__________
(1) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) from our office properties for the month of December 2022 multiplied by 12.
The following table sets forth the net changes in rentable square footage of our portfolio:
Year Ended December 31,
2022 2021 2020
(in thousands)
Acquisitions 367 2,266 —
Developments Placed In-Service 263 897 —
Remeasurements/Other (11) (3) (40)
Dispositions (437) (1,661) (4,489)
Net Change in Rentable Square Footage 182 1,499 (4,529)
The following table sets forth operating information about our portfolio:
Average
Occupancy Annualized GAAP Rent
Per Square
Foot (1) Annualized Cash Rent
Per Square
Foot (2)
2018 91.7 % $ 24.68 $ 24.06
2019 91.4 % $ 26.46 $ 25.06
2020 90.7 % $ 29.23 $ 28.21
2021 90.0 % $ 30.75 $ 29.63
2022 90.8 % $ 31.89 $ 30.51
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(1) Annualized GAAP Rent Per Square Foot is rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage.
(2) Annualized Cash Rent Per Square Foot is cash rental revenue (base rent plus cost recovery income, excluding straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage.
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Customers
The following table sets forth information concerning the 20 largest customers in our portfolio as of December 31, 2022:
Customer Rentable Square
Feet Annualized
GAAP Rental
Revenue (1)
Percent of
Total
Annualized
GAAP Rental
Revenue (1)
Weighted
Average
Remaining
Lease Term in
Years
(in thousands)
Bank of America 652,313 $ 30,317 3.79 % 10.9
Asurion 543,794 28,955 3.62 13.8
Federal Government 867,006 23,907 2.99 4.4
Bridgestone Americas 506,128 20,277 2.53 14.7
Metropolitan Life Insurance 667,228 19,777 2.47 8.1
PPG Industries 370,927 11,177 1.4 8.5
Mars Petcare 223,700 9,979 1.25 8.4
Vanderbilt University 294,389 8,986 1.12 3.4
EQT 317,052 7,848 0.98 1.8
Bass, Berry & Sims 213,951 7,420 0.93 2.1
Albemarle Corporation 162,368 6,972 0.87 11.1
Deloitte & Touche 158,914 6,763 0.84 7.1
Tivity 263,598 6,753 0.84 0.2
Novelis 168,949 5,953 0.74 1.7
Lifepoint Corporate Services 202,991 5,579 0.7 6.3
State of Georgia 288,443 5,560 0.69 2.0
Regus 169,833 5,528 0.69 5.8
J.P. Morgan Chase & Co. 180,424 5,482 0.68 5.4
The CapFinancial Group, LLC 120,847 5,395 0.67 10.6
PNC Bank 162,223 5,384 0.67 4.9
Total 6,535,078 $ 228,012 28.47 % 8.1
__________
(1) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2022 multiplied by 12.
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Lease Expirations
The following table sets forth scheduled lease expirations for existing leases in our portfolio as of December 31, 2022:
Lease Expiring (1)
Number of Leases Expiring Rentable
Square Feet
Subject to
Expiring
Leases Percentage of
Leased Square
Footage
Represented
by Expiring
Leases Annualized
GAAP Rental
Revenue
Under Expiring
Leases (2)
Average
Annual GAAP
Rental Rate
Per Square
Foot for
Expirations Percent of
Annualized
GAAP Rental
Revenue
Represented
by Expiring
Leases (2)
(in thousands)
2023 (3)
386 2,172,820 8.7 % $ 64,732 $ 29.79 8.4 %
2024 331 2,735,421 10.9 85,534 31.27 11.2
2025 416 3,407,048 13.6 105,196 30.88 13.7
2026 267 2,278,837 9.1 69,180 30.36 9.0
2027 261 2,400,708 9.6 71,064 29.60 9.3
2028 151 2,236,063 8.9 66,430 29.71 8.7
2029 100 1,362,925 5.4 38,568 28.30 5.0
2030 138 1,850,762 7.3 47,536 25.68 6.2
2031 56 2,126,352 8.5 66,191 31.13 8.6
2032 47 714,103 2.8 24,680 34.56 3.2
Thereafter 114 3,831,091 15.2 127,127 33.18 16.7
2,267 25,116,130 100.0 % $ 766,238 $ 30.51 100.0 %
__________
(1) Expirations that have been renewed are reflected above based on the renewal expiration date. Expirations include leases related to completed not stabilized development properties but exclude leases related to developments in-process.
(2) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2022 multiplied by 12.
(3) Includes 39,000 rentable square feet of leases that are on a month-to-month basis, which represent 0.2% of total annualized GAAP rental revenue.
In-Process Development
As of December 31, 2022, we were developing 1.6 million rentable square feet of office properties. The following table summarizes these announced and in-process office developments:
Property Market Own % Consolidated (Y/N) Rentable Square Feet Anticipated Total Investment Investment as of December 31, 2022 )
Pre Leased % Estimated Completion Estimated Stabilization
($ in thousands)
23Springs (1)
Dallas 50.0 % N 642,000 $ 460,000 $ 80,047 17.1 % 1Q 25 1Q 28
Granite Park Six (1)
Dallas 50.0 % N 422,000 200,000 98,068 12.4 4Q 23 1Q 26
GlenLake III Office & Retail (2)
Raleigh 100.0 % Y 218,250 94,600 47,177 14.6 3Q 23 1Q 26
Midtown East Tampa 50.0 % N 143,000 83,000 11,949 2.1 1Q 25 2Q 26
2827 Peachtree Atlanta 50.0 % N 135,300 79,000 32,447 75.3 3Q 23 1Q 25
Four Morrocroft (2)(3)
Charlotte 100.0 % Y 18,000 12,000 713 100.0 2Q 24 2Q 24
1,578,550 $ 928,600 $ 270,401 20.1 %
__________
(1) Investment includes capitalized interest only on the construction loan portion of the project.
(2) Investment includes deferred lease commissions which are classified in deferred leasing costs on our Consolidated Balance Sheet.
(3) Recorded on our Consolidated Balance Sheet as land held for development, not development in-process.
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Land Held for Development
As of December 31, 2022, we estimate that we can develop approximately 4.9 million rentable square feet of office space on the wholly-owned development land that we consider core assets for our future development needs. Our core office development land is zoned and available for development, and nearly all of the land has utility infrastructure in place. We believe that our commercially zoned and unencumbered land gives us a development advantage over other commercial office development companies in many of our markets. We also own additional development land on which we or third parties can develop approximately 2.8 million square feet of mixed-use real estate projects, including retail and multi-family.
Joint Venture Investments
The following table sets forth information about our in-service joint venture investments by geographic location as of December 31, 2022:
Rentable
Square Feet Weighted
Average
Ownership
Interest (1)
Occupancy
Market
Dallas 542,000 50.0 % 95.6 %
Kansas City (2)
292,000 50.0 85.1
Richmond (3)
345,000 50.0 94.9
Tampa (3)
152,000 80.0 88.2
Total 1,331,000 53.4 % 92.2 %
__________
(1) Weighted Average Ownership Interest is calculated using Rentable Square Feet.
(2) Excluding our 26.5% ownership interest in a real estate brokerage services company.
(3) This joint venture is consolidated.
In addition, we own 50.0% interests in 2827 Peachtree, Granite Park Six, 23Springs and Midtown East, four unconsolidated joint ventures. See “Item 2. Properties - In-Process Development.”