WRIT Trading Lease Proposals with World Bank, Booz Allen

1776 G St, NW

During their quarterly conference call with analysts last week, executives with Washington Real Estate Investment Trust (WRIT) (NYSE:WRE) said they have traded proposals with both World Bank and Booz Allen Hamilton, Inc. related to each firm’s pending lease expiration.

Paul McDermott, President & Chief Executive Officer of WRIT, said his firm has received a proposal from World Bank that would involve a lease extension, and that WRIT has been engaged with World Bank on its lease over the last 90 to 120 days.

“We are in deep discussions with the World Bank and at a minimum we would probably see some type of extension in that lease,” said McDermott on the conference call. “We’re going to look for an opportunity to create maximum value” for the company’s shareholders.

World Bank represents 6.17 percent of the the Rockville-based REIT’s annualized rent, making it WRIT’s largest tenant, according to its Supplemental Operating and Financial Data report (Page 25) for the first quarter of 2014. World Bank occupies 210,354 aggregate rentable square feet in one building under a lease that expires in 33 months.

In April 2009, WRIT announced it had extended the lease of The International Bank for Reconstruction and Development (IBRD), one of the two development institutions that make up the World Bank, at 1776 G Street in Washington, DC. The 5-year extension was for approximately 150,000 square feet and commenced January 1, 2011. At the time, WRIT said the IBRD occupied an additional 61,000 square feet in the building under a lease that expired February 28, 2014.

Representing nearly 3 percent of WRIT’s total annualized rent makes Booz Allen Hamilton, Inc. WRIT’s third

John Marshall II

largest tenant. The company occupies 222,989 square feet at John Marshall II, the building at 8283 Greensboro Drive in Tysons Corner, VA that is fully occupied by Booz Allen and serves as its headquarters.

“We have issued a proposal for them for renewal and we are expecting a counter offer sometime this quarter,” said McDermott of Booz Allen, which has 22 months remaining on its lease term.

WRIT entered into its contract to purchase John Marshall II for $73.5 million in April 2011.