Item 2. Properties
Item 2. Properties.
The Company leases its corporate office space, including its corporate headquarters, which is located in Phoenix, Arizona. As of December 31, 2022, the Company owned 81 office properties with an aggregate of 9.5 million square feet located in 29 states, with an occupancy rate of 88.8% and a weighted-average remaining lease term of 4.0 years as of December 31, 2022. Including the Company’s pro rata share of square feet and annualized base rent from the Arch Street Joint Venture, we owned an aggregate of 9.7 million square feet, with an occupancy rate of 89.0% and a weighted-average remaining lease term of 4.1 years as of December 31, 2022. See Schedule III – Real Estate and Accumulated Depreciation for more information about the Company’s properties and see Note 6 – Debt, Net for more information about mortgages and other indebtedness related to the Company’s properties.
Tenant Industry Diversification
The following table sets forth certain information regarding the tenant industry concentrations in our property portfolio, including our proportionate share of square feet and annualized base rent from properties owned by the Arch Street Joint Venture, as of December 31, 2022 (dollars and square feet in thousands):
Industry Number of Leases (1)
Leased Square Feet Leased Square Feet as a % of Total Portfolio Annualized Base Rent Annualized Base Rent as a % of Total Portfolio
Health Care Equipment & Services 12 1,109 11.4 % $ 21,379 13.4 %
Government & Public Services 19 826 8.5 % 19,498 12.2 %
Insurance 4 747 7.7 % 15,959 10.0 %
Financial Institutions 3 616 6.3 % 15,373 9.6 %
Software & Services 6 638 6.6 % 11,639 7.3 %
Capital Goods 9 693 7.1 % 10,739 6.7 %
Consumer Durables & Apparel 3 375 3.9 % 8,495 5.3 %
Telecommunication Services 6 497 5.1 % 8,251 5.2 %
Energy 2 461 4.7 % 7,321 4.6 %
Commercial & Professional Services 10 505 5.2 % 7,205 4.5 %
Top Ten Tenant Industries 74 6,467 66.5 % 125,859 78.8 %
Remaining Tenant Industries:
Transportation 5 541 5.6 % 7,183 4.5 %
Food & Staples Retailing 6 574 5.9 % 6,310 4.0 %
Materials 4 352 3.6 % 5,655 3.6 %
Pharmaceuticals, Biotechnology & Life Sciences 1 176 1.8 % 4,995 3.1 %
Media & Entertainment 2 264 2.7 % 3,689 2.3 %
Retailing 3 157 1.6 % 3,181 2.0 %
Food, Beverage & Tobacco 1 96 1.0 % 2,022 1.3 %
Utilities 1 25 0.3 % 394 0.3 %
Real Estate 1 4 — % 86 0.1 %
Consumer Services 2 5 — % 54 — %
Total 100 8,661 89.0 % $ 159,428 100.0 %
____________________________________
(1) The Company has certain properties that are subject to multiple leases.
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Geographic Diversification
The following table sets forth certain information regarding the geographic concentrations (by state) in our property portfolio, including our proportionate share of square feet and annualized base rent from properties owned by the Arch Street Joint Venture, as of December 31, 2022 (dollars and square feet in thousands):
Location Number of Properties Rentable Square Feet Square Feet as a % of Total Portfolio Annualized Base Rent Annualized Base Rent as a % of Total Portfolio
Texas 15 1,353 13.9 % $ 23,831 15.0 %
New Jersey 3 724 7.4 % 19,199 12.0 %
New York 5 781 8.0 % 13,564 8.5 %
Illinois 9 916 9.4 % 11,702 7.3 %
Kentucky 2 458 4.7 % 10,114 6.3 %
Oklahoma 3 585 6.0 % 9,591 6.0 %
Massachusetts 2 378 3.9 % 7,933 5.0 %
Colorado 4 570 5.9 % 7,915 5.0 %
Ohio 4 500 5.1 % 6,212 3.9 %
California 3 244 2.5 % 5,299 3.3 %
Top Ten States 50 6,509 66.8 % 115,360 72.3 %
Remaining States:
Missouri 4 529 5.4 % 4,868 3.1 %
Georgia 3 284 2.9 % 4,601 2.9 %
Maryland 2 236 2.4 % 4,537 2.9 %
Tennessee 4 240 2.5 % 4,527 2.8 %
Virginia 2 240 2.5 % 4,426 2.8 %
Rhode Island 2 206 2.1 % 3,028 1.9 %
South Carolina 1 64 0.7 % 2,364 1.5 %
Wisconsin 1 155 1.6 % 2,243 1.4 %
Arizona 2 215 2.2 % 2,216 1.4 %
Kansas 2 196 2.0 % 1,971 1.2 %
Iowa 2 92 0.9 % 1,911 1.2 %
Nebraska 2 180 1.9 % 1,553 1.0 %
Pennsylvania 2 233 2.4 % 1,287 0.8 %
Oregon 1 69 0.7 % 1,120 0.7 %
West Virginia 1 64 0.7 % 1,114 0.7 %
Idaho 2 45 0.5 % 1,027 0.6 %
Indiana 1 83 0.9 % 557 0.4 %
Minnesota 1 39 0.4 % 493 0.3 %
Florida 2 53 0.5 % 225 0.1 %
Total 87 9,732 100.0 % $ 159,428 100.0 %
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Tenant Diversification
The following table sets forth certain information regarding tenants comprising over one percent of annualized base rent in our property portfolio, including our proportionate share of square feet and annualized base rent from properties owned by the Arch Street Joint Venture, as of December 31, 2022 (dollars and square feet in thousands):
Tenant Number of Leases Leased Square Feet Square Feet as a % of Total Portfolio Annualized Base Rent Annualized Base Rent as a % of Total Portfolio
General Services Administration 17 782 8.0 % $ 18,950 11.9 %
Merrill Lynch 1 482 5.0 % 12,224 7.7 %
Highmark Western & Northeastern NY 1 430 4.4 % 8,328 5.2 %
RSA Security 2 328 3.4 % 7,221 4.5 %
Cigna/Express Scripts 3 365 3.7 % 6,765 4.2 %
Walgreens 6 574 5.9 % 6,310 4.0 %
Coterra Energy 1 309 3.2 % 5,658 3.6 %
T-Mobile 4 294 3.0 % 5,431 3.4 %
Novartis 1 176 1.8 % 4,995 3.1 %
FedEx 2 352 3.6 % 4,469 2.8 %
Top Ten Tenants 38 4,092 42.0 % 80,351 50.4 %
Remaining Tenants:
MDC Holdings Inc. 1 144 1.5 % 4,299 2.7 %
Charter Communications 2 264 2.7 % 3,689 2.3 %
Banner Life Insurance 1 116 1.2 % 3,493 2.2 %
Inform Diagnostics 1 172 1.8 % 3,481 2.2 %
Encompass Health 1 65 0.7 % 3,436 2.2 %
Collins Aerospace 1 207 2.1 % 3,300 2.1 %
Home Depot/HD Supply 2 153 1.6 % 3,109 2.0 %
Experian 1 178 1.8 % 2,988 1.9 %
AAA 1 147 1.5 % 2,904 1.8 %
AT&T 1 203 2.1 % 2,820 1.8 %
Linde 1 161 1.7 % 2,540 1.6 %
Citigroup 1 64 0.7 % 2,364 1.5 %
CVS/Aetna 1 127 1.3 % 2,259 1.4 %
Hasbro 1 136 1.4 % 2,243 1.4 %
Ingram Micro 1 200 2.1 % 2,197 1.4 %
Novus International 1 96 1.0 % 2,022 1.3 %
Elementis 1 66 0.7 % 1,980 1.2 %
Maximus 2 196 2.0 % 1,971 1.2 %
NetJets 1 140 1.4 % 1,966 1.2 %
Pulte Mortgage 1 95 1.0 % 1,953 1.2 %
Baker Hughes 1 152 1.6 % 1,663 1.0 %
Abbott Laboratories 1 131 1.3 % 1,609 1.0 %
AGCO 1 126 1.3 % 1,607 1.0 %
Total 64 7,431 76.5 % $ 140,244 88.0 %
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Lease Expirations
The following table sets forth certain information regarding scheduled lease expirations in our property portfolio, including our proportionate share of square feet and annualized base rent from properties owned by the Arch Street Joint Venture, as of December 31, 2022 (dollars and square feet in thousands):
Year of Expiration Number of Leases
Expiring (1)
Leased
Square Feet Leased Square Feet as a % of Total Portfolio Annualized Base Rent Annualized Base Rent as a % of Total Portfolio
2023 15 1,575 16.2 % $ 24,142 15.1 %
2024 16 1,971 20.3 % 39,972 25.1 %
2025 13 1,049 10.8 % 18,686 11.7 %
2026 13 757 7.8 % 17,134 10.7 %
2027 14 1,002 10.3 % 16,206 10.2 %
2028 9 513 5.3 % 9,093 5.7 %
2029 4 396 4.1 % 5,846 3.7 %
2030 2 98 1.0 % 4,564 2.9 %
2031 1 11 0.1 % 427 0.3 %
2032 3 300 3.1 % 4,004 2.5 %
Thereafter 8 932 9.4 % 19,069 11.9 %
Subtotal 98 8,604 88.4 % 159,143 99.8 %
Month-to-Month 2 57 0.6 % 285 0.2 %
Total 100 8,661 89.0 % $ 159,428 100.0 %
____________________________________
(1) The Company has certain properties that are subject to multiple leases.
Item 3. Legal Proceedings.
As of the end of the period covered by this Annual Report on Form 10-K, we are not a party to, and none of our properties are subject to, any material pending legal proceedings.
Item 4. Mine Safety Disclosures.
Not applicable.
PART II