Equity Commonwealth(US:EQC)2024-10-23 20:18Corporate Information Equity Commonwealth is a REIT specializing in commercial office properties, with a portfolio of 4 properties totaling 1.52 million square feet Company Profile and Investor Information Equity Commonwealth (EQC) is a Chicago-based, internally managed REIT specializing in US commercial office properties, with a 1.52 million square foot portfolio 69.7% leased as of September 30, 2024 - Equity Commonwealth (NYSE: EQC) is a Chicago-based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States4 Same Property Statistics (as of Sep 30, 2024) | Metric | Value | | :--------------- | :---------- | | No. of Properties | 4 | | Sq. Feet | 1,521,409 | | % Leased | 69.7% | | % Commenced | 69.4% | Financial Information This section provides a comprehensive overview of Equity Commonwealth's financial performance, balance sheet, and key operating metrics Key Financial Data The company reported a net loss of $(28.19) million for Q3 2024, primarily due to a $50.23 million asset impairment loss, with Adjusted EBITDAre slightly decreasing to $29.48 million Operating Information (Amounts in thousands, except per share data) | Metric | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :----------------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Ending property count | 4 | 4 | 4 | 4 | 4 | | Ending square footage | 1,521 | 1,521 | 1,521 | 1,521 | 1,521 | | Percent leased | 69.7 % | 71.4 % | 75.4 % | 81.2 % | 80.8 % | | Percent commenced | 69.4 % | 70.7 % | 74.6 % | 80.0 % | 79.9 % | | Net (loss) income attributable to EQC common shareholders | $ (28,186) | $ 22,153 | $ 23,408 | $ 24,552 | $ 24,149 | | Adjusted EBITDAre | 29,481 | 28,802 | 29,845 | 30,770 | 30,698 | Same Property Operating Information (Amounts in thousands) | Metric | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :------------------------- | :-------- | :-------- | :-------- | :--------- | :-------- | | Same Property NOI | $ 7,125 | $ 7,391 | $ 8,672 | $ 8,611 | $ 8,485 | | Same Property Cash Basis NOI | 6,942 | 7,063 | 7,833 | 7,443 | 8,205 | | Same Property NOI margin | 50.9 % | 52.4 % | 57.1 % | 56.9 % | 55.8 % | | Same Property Cash Basis NOI margin | 50.3 % | 51.3 % | 54.6 % | 53.3 % | 55.0 % | Balance Sheet & Market Capitalization (Amounts in thousands) | Metric | 9/30/2024 | 9/30/2023 | | :------------------------------- | :---------- | :---------- | | Total assets | $ 2,441,130 | $ 2,393,786 | | Total liabilities | 27,948 | 31,550 | | Market value of preferred shares | $ 124,109 | $ 122,929 | | Market value of diluted common shares | 2,156,185 | 1,992,980 | | Total market capitalization | $ 2,280,294 | $ 2,115,909 | Condensed Consolidated Balance Sheets As of September 30, 2024, total assets were $2.44 billion, with cash and cash equivalents increasing to $2.23 billion, while real estate properties (net) decreased due to assets held for sale Condensed Consolidated Balance Sheet (Amounts in thousands) | ASSETS | September 30, 2024 | December 31, 2023 | | :----------------------------------- | :----------------- | :---------------- | | Real estate properties (net) | $ 111,298 | $ 231,352 | | Assets held for sale | 86,803 | — | | Cash and cash equivalents | 2,225,150 | 2,160,535 | | Rents receivable | 8,046 | 15,737 | | Other assets, net | 9,833 | 17,417 | | Total assets | $ 2,441,130 | $ 2,425,041 | | | | | | LIABILITIES | | | | Liabilities related to properties held for sale | $ 6,200 | $ — | | Accounts payable, accrued expenses and other | 17,621 | 27,298 | | Rent collected in advance | 1,324 | 1,990 | | Distributions payable | 2,803 | 5,640 | | Total liabilities | $ 27,948 | $ 34,928 | | | | | | EQUITY | | | | Total shareholders' equity | 2,409,715 | 2,385,067 | | Noncontrolling interest | 3,467 | 5,046 | | Total equity | $ 2,413,182 | $ 2,390,113 | | Total liabilities and equity | $ 2,441,130 | $ 2,425,041 | Additional Balance Sheet Information This section details specific balance sheet accounts, showing a significant decrease in straight-line rents receivable from $14.99 million to $7.15 million, alongside reductions in deferred leasing costs and accrued taxes Additional Balance Sheet Information (Amounts in thousands) | Metric | September 30, 2024 | December 31, 2023 | | :------------------------------------- | :----------------- | :---------------- | | Straight-line rents receivable | $ 7,152 | $ 14,995 | | Accounts receivable | 894 | 742 | | Rents receivable | $ 8,046 | $ 15,737 | | | | | | Capitalized lease incentives, net | $ 411 | $ 1,193 | | Deferred leasing costs, net | 2,949 | 10,816 | | Other | 6,473 | 5,408 | | Other assets, net | $ 9,833 | $ 17,417 | | | | | | Accounts payable | $ 1,661 | $ 2,824 | | Accrued taxes | 4,492 | 9,527 | | Accrued capital expenditures | 805 | 2,881 | | Accrued leasing costs | — | 206 | | Security deposits | 755 | 2,356 | | Other accrued liabilities | 9,908 | 9,504 | | Accounts payable, accrued expenses and other | $ 17,621 | $ 27,298 | Condensed Consolidated Statements of Operations For Q3 2024, Equity Commonwealth reported a net loss of $(26.23) million, a significant decline from prior year net income, primarily due to a $50.23 million loss on asset impairment Condensed Consolidated Statements of Operations (Amounts in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenues: | | | | | | Rental revenue | $ 12,782 | $ 13,928 | $ 39,491 | $ 41,512 | | Other revenue | 1,206 | 1,284 | 3,796 | 3,866 | | Total revenues | $ 13,988 | $ 15,212 | $ 43,287 | $ 45,378 | | Expenses: | | | | | | Operating expenses | $ 6,863 | $ 6,722 | $ 20,118 | $ 20,920 | | Depreciation and amortization | 4,214 | 4,436 | 12,753 | 13,260 | | General and administrative | 8,886 | 7,061 | 25,565 | 29,470 | | Loss on asset impairment | 50,226 | — | 50,226 | — | | Total expenses | $ 70,189 | $ 18,219 | $ 108,662 | $ 63,650 | | Interest and other income, net | 29,996 | 29,269 | 89,278 | 84,997 | | Net (loss) income attributable to Equity Commonwealth common shareholders | $ (28,186) | $ 24,149 | $ 17,375 | $ 58,624 | | Earnings per common share: | | | | | | Basic | $ (0.26) | $ 0.22 | $ 0.16 | $ 0.54 | | Diluted | $ (0.26) | $ 0.22 | $ 0.16 | $ 0.53 | Calculation of Same Property Net Operating Income (NOI) and Same Property Cash Basis NOI Same Property NOI for Q3 2024 decreased to $7.13 million from $8.49 million year-over-year, reflecting lower rental revenue and higher operating expenses, with Cash Basis NOI also declining Same Property NOI and Cash Basis NOI (Three Months Ended, Amounts in thousands) | Metric | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :------------------------- | :-------- | :-------- | :-------- | :--------- | :-------- | | Rental revenue | $ 12,782 | $ 12,816 | $ 13,893 | $ 13,824 | $ 13,928 | | Other revenue | 1,206 | 1,293 | 1,297 | 1,322 | 1,284 | | Operating expenses | (6,863) | (6,721) | (6,534) | (6,542) | (6,722) | | NOI | $ 7,125 | $ 7,388 | $ 8,656 | $ 8,604 | $ 8,490 | | Straight-line rent adjustments | (77) | (259) | (223) | (538) | (107) | | Lease termination fees | (106) | (69) | (616) | (630) | (173) | | Cash Basis NOI | $ 6,942 | $ 7,060 | $ 7,817 | $ 7,436 | $ 8,210 | | Cash Basis NOI from non-same properties | — | 3 | 16 | 7 | (5) | | Same Property Cash Basis NOI | $ 6,942 | $ 7,063 | $ 7,833 | $ 7,443 | $ 8,205 | | Non-cash rental income and lease termination fees from same properties | 183 | 328 | 839 | 1,168 | 280 | | Same Property NOI | $ 7,125 | $ 7,391 | $ 8,672 | $ 8,611 | $ 8,485 | Same Property NOI and Cash Basis NOI (Nine Months Ended, Amounts in thousands) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------------- | :----------------------------- | :----------------------------- | | Rental revenue | $ 39,491 | $ 41,512 | | Other revenue | 3,796 | 3,866 | | Operating expenses | (20,118) | (20,920) | | NOI | $ 23,169 | $ 24,458 | | Straight-line rent adjustments | (559) | 445 | | Lease termination fees | (791) | (383) | | Cash Basis NOI | $ 21,819 | $ 24,520 | | Cash Basis NOI from non-same properties | 19 | (13) | | Same Property Cash Basis NOI | $ 21,838 | $ 24,507 | | Non-cash rental income and lease termination fees from same properties | 1,350 | (62) | | Same Property NOI | $ 23,188 | $ 24,445 | Same Property Results of Operations For Q3 2024, same property rental revenue decreased by 7.7%, leading to a 16.0% decline in NOI and a 15.4% decline in Cash Basis NOI, with percentage leased dropping to 69.7% Same Property Results of Operations (Three Months Ended September 30) | Metric | 2024 | 2023 | % Change | | :------------------------- | :-------- | :-------- | :-------- | | Properties | 4 | 4 | | | Square Feet | 1,521 | 1,521 | | | % Leased | 69.7 % | 80.8 % | (11.1)% | | % Commenced | 69.4 % | 79.9 % | (10.5)% | | Rental revenue | $ 12,599 | $ 13,647 | (7.7)% | | Other revenue | 1,206 | 1,277 | (5.6)% | | Total revenue | 13,988 | 15,204 | (8.0)% | | Operating expenses | (6,863) | (6,719) | 2.1 % | | NOI | $ 7,125 | $ 8,485 | (16.0)% | | NOI Margin | 50.9 % | 55.8 % | | | Cash Basis NOI | $ 6,942 | $ 8,205 | (15.4)% | Same Property Results of Operations (Nine Months Ended September 30) | Metric | 2024 | 2023 | % Change | | :------------------------- | :-------- | :-------- | :-------- | | Properties | 4 | 4 | | | Square Feet | 1,521 | 1,521 | | | % Leased | 69.7 % | 80.8 % | (11.1)% | | % Commenced | 69.4 % | 79.9 % | (10.5)% | | Rental revenue | $ 38,141 | $ 41,573 | (8.3)% | | Other revenue | 3,796 | 3,848 | (1.4)% | | Total revenue | 43,287 | 45,359 | (4.6)% | | Operating expenses | (20,099) | (20,914) | (3.9)% | | NOI | $ 23,188 | $ 24,445 | (5.1)% | | NOI Margin | 53.6 % | 53.9 % | | | Cash Basis NOI | $ 21,838 | $ 24,507 | (10.9)% | Calculation of EBITDA, EBITDAre, and Adjusted EBITDAre For Q3 2024, EBITDA was $(21.99) million, significantly impacted by a $50.23 million asset impairment loss, while Adjusted EBITDAre stood at $29.48 million including wind-down costs EBITDA, EBITDAre, and Adjusted EBITDAre (Amounts in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net (loss) income | $ (26,227) | $ 26,232 | $ 23,417 | $ 64,819 | | Income tax expense | 22 | 30 | 486 | 1,906 | | Depreciation and amortization | 4,214 | 4,436 | 12,753 | 13,260 | | EBITDA | $ (21,991) | $ 30,698 | $ 36,656 | $ 79,985 | | Loss on asset impairment | 50,226 | — | 50,226 | — | | EBITDAre | $ 28,235 | $ 30,698 | $ 86,882 | $ 79,985 | | Adjustments to EBITDAre: | | | | | | Wind down costs | 1,246 | — | 1,246 | — | | Former chairman accelerated compensation expense | — | — | — | 5,957 | | Adjusted EBITDAre | $ 29,481 | $ 30,698 | $ 88,128 | $ 85,942 | Calculation of Funds from Operations (FFO) and Normalized FFO FFO attributable to EQC common shareholders and unitholders decreased to $26.20 million for Q3 2024, with FFO per share (basic and diluted) at $0.24, down from $0.26 in Q3 2023 FFO and Normalized FFO (Amounts in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net (loss) income | $ (26,227) | $ 26,232 | $ 23,417 | $ 64,819 | | Real estate depreciation and amortization | 4,202 | 4,429 | 12,717 | 13,231 | | Loss on asset impairment | 50,226 | — | 50,226 | — | | FFO attributable to EQC common shareholders and unitholders | $ 26,204 | $ 28,664 | $ 80,369 | $ 72,059 | | Straight-line rent adjustments | (77) | (107) | (559) | 445 | | Wind down costs | 1,246 | — | 1,246 | — | | Former chairman accelerated compensation expense | — | — | — | 5,957 | | Normalized FFO attributable to EQC common shareholders and unitholders | $ 27,373 | $ 28,557 | $ 81,056 | $ 78,461 | | FFO per share and unit - basic | $ 0.24 | $ 0.26 | $ 0.75 | $ 0.66 | | FFO per share and unit - diluted | $ 0.24 | $ 0.26 | $ 0.74 | $ 0.65 | | Normalized FFO per share and unit - basic | $ 0.25 | $ 0.26 | $ 0.75 | $ 0.71 | | Normalized FFO per share and unit - diluted | $ 0.25 | $ 0.26 | $ 0.75 | $ 0.71 | Portfolio Information This section details Equity Commonwealth's property portfolio, leasing activities, capital expenditures, and lease expiration schedules Property Detail As of September 30, 2024, Equity Commonwealth's portfolio consists of 4 office properties totaling 1.52 million square feet, 69.7% leased, with an annualized rental revenue of $51.99 million Same Property Portfolio Detail (As of September 30, 2024, dollars in thousands) | Property Name | City, State | Type | No. of Buildings | Square Feet | % Leased | % Commenced | Annualized Rental Revenue | Undepreciated Book Value | Net Book Value | Year Acquired | | :------------------------- | :------------ | :----- | :--------------- | :---------- | :------- | :---------- | :------------------------ | :----------------------- | :------------- | :------------ | | 1225 Seventeenth Street | Denver, CO | Office | 1 | 709,402 | 83.4 % | 82.8 % | $ 27,968 | $ 180,552 | $ 111,298 | 2009 | | Bridgepoint Square | Austin, TX | Office | 5 | 440,007 | 52.5 % | 52.5 % | 9,592 | 88,600 | 29,507 | 1997 | | 206 East 9th Street | Austin, TX | Office | 1 | 175,510 | 69.4 % | 69.4 % | 7,415 | 47,166 | 31,653 | 2012 | | 1250 H Street, NW | Washington, D.C. | Office | 1 | 196,490 | 59.1 % | 59.1 % | 7,019 | 69,195 | 25,547 | 1998 | | Total Same Properties | | | 8 | 1,521,409 | 69.7 % | 69.4 % | $ 51,994 | $ 385,513 | $ 198,005 | | - Undepreciated book value and net book value for 206 East 9th Street (Capitol Tower) and 1250 H Street, NW are included in assets held for sale on the condensed consolidated balance sheet as of September 30, 202429 Leasing Summary The company's percentage leased decreased from 80.8% in Q3 2023 to 69.7% in Q3 2024, with no new or renewal leases executed in Q3 2024 Leasing Activity Summary (Square feet in thousands) | Metric | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :------------------------- | :-------- | :-------- | :-------- | :--------- | :-------- | | Properties | 4 | 4 | 4 | 4 | 4 | | Total square feet | 1,521 | 1,521 | 1,521 | 1,521 | 1,521 | | Percentage leased | 69.7 % | 71.4 % | 75.4 % | 81.2 % | 80.8 % | | Percentage commenced | 69.4 % | 70.7 % | 74.6 % | 80.0 % | 79.9 % | | Total Leases | | | | | | | Square feet | — | 24 | 18 | 32 | 54 | | Lease term (years) | — | 4.2 | 4.1 | 3.0 | 6.4 | | Starting cash rent | — | $ 48.11 | $ 49.71 | $ 50.88 | $ 48.17 | | Percent change in cash rent | — | 0.7 % | (2.8)% | 7.9 % | (1.8)% | | Renewal Leases | | | | | | | Square feet | — | 20 | 15 | 27 | 39 | | Percent change in cash rent | — | 1.2 % | 0.6 % | 7.9 % | (1.7)% | | New Leases | | | | | | | Square feet | — | 4 | 3 | 5 | 15 | | Percent change in cash rent | — | (1.4)% | (17.6)% | — | (2.2)% | Capital Summary - Expenditures & Same Property Leasing Commitments Total capital expenditures for Q3 2024 were $1.30 million, a decrease from $2.31 million in the prior year, primarily due to lower tenant improvements and leasing costs Capital Expenditures (Amounts in thousands) | Metric | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :----------------------------------------- | :-------- | :-------- | :-------- | :--------- | :-------- | | Tenant improvements | $ 758 | $ 1,815 | $ 5,752 | $ 645 | $ 224 | | Leasing costs | 8 | 151 | 174 | 150 | 646 | | Building improvements | 536 | 730 | 1,855 | 1,495 | 1,438 | | Total capital expenditures | $ 1,302 | $ 2,696 | $ 7,781 | $ 2,290 | $ 2,308 | | Average square feet during period | 1,521 | 1,521 | 1,521 | 1,521 | 1,521 | | Building improvements per average total sq. ft. during period | $ 0.35 | $ 0.48 | $ 1.22 | $ 0.98 | $ 0.95 | Tenants Representing 2.5% or More of Annualized Rental Revenue As of September 30, 2024, the top 13 tenants account for 46.3% of total square footage and 48.4% of annualized rental revenue, with a weighted average remaining lease term of 3.7 years Top Tenants by Annualized Rental Revenue (As of September 30, 2024, square feet in thousands) | Tenant | Square Feet | % of Total Sq. Ft. | % of Annualized Rental Revenue | Weighted Average Remaining Lease Term | | :-------------------------------- | :---------- | :----------------- | :----------------------------- | :------------------------------------ | | Salesforce.com, Inc. | 66 | 6.2 % | 6.1 % | 1.2 | | KPMG, LLP | 66 | 6.2 % | 5.5 % | 4.7 | | Crowdstrike, Inc. | 48 | 4.5 % | 5.5 % | 5.4 | | CBRE, Inc. | 41 | 3.9 % | 4.2 % | 3.5 | | RSM US LLP | 32 | 3.0 % | 3.8 % | 7.7 | | Jones Lang LaSalle Americas, Inc. | 42 | 4.0 % | 3.8 % | 5.8 | | SonarSource US, Inc. | 28 | 2.6 % | 3.2 % | 2.9 | | Alden Torch Financial, LLC | 35 | 3.3 % | 3.1 % | 2.4 | | Ballard Spahr LLP | 30 | 2.8 % | 2.7 % | 0.9 | | Simply Good Foods USA, Inc | 29 | 2.7 % | 2.7 % | 3.2 | | Wunderman Thompson, LLC | 24 | 2.3 % | 2.7 % | 2.8 | | Shiseido Americas Corporation | 21 | 2.0 % | 2.6 % | 5.1 | | Comcast Cable Communications | 30 | 2.8 % | 2.5 % | 2.3 | | Total | 492 | 46.3 % | 48.4 % | 3.7 | Same Property Lease Expiration Schedule Significant lease expirations are projected for 2025 (13.2% of leased square footage) and 2027 (20.8%), with 42.6% of leased square footage and 41.9% of annualized rental revenue expiring by the end of 2027 Same Property Lease Expiration Schedule (As of September 30, 2024, dollars and sq. ft. in thousands) | Year | Number of Expiring Tenants | Leased Sq. Ft. Expiring | % of Leased Sq. Ft. Expiring | Cumulative % of Leased Sq. Ft. Expiring | Annualized Rental Revenue Expiring | % of Annualized Rental Revenue Expiring | Cumulative % of Annualized Rental Revenue Expiring | | :--------- | :------------------------- | :---------------------- | :--------------------------- | :-------------------------------------- | :--------------------------------- | :-------------------------------------- | :------------------------------------------------- | | 2024 | 3 | 22 | 2.1 % | 2.1 % | $ 1,105 | 2.1 % | 2.1 % | | 2025 | 9 | 140 | 13.2 % | 15.3 % | 6,839 | 13.2 % | 15.3 % | | 2026 | 11 | 69 | 6.5 % | 21.8 % | 3,271 | 6.3 % | 21.6 % | | 2027 | 17 | 220 | 20.8 % | 42.6 % | 10,616 | 20.3 % | 41.9 % | | 2028 | 11 | 123 | 11.6 % | 54.2 % | 5,860 | 11.3 % | 53.2 % | | 2029 | 10 | 149 | 14.1 % | 68.3 % | 7,016 | 13.5 % | 66.7 % | | 2030 | 12 | 170 | 15.9 % | 84.2 % | 8,259 | 15.9 % | 82.6 % | | 2031 | 4 | 58 | 5.5 % | 89.7 % | 2,698 | 5.2 % | 87.8 % | | 2032 | 1 | 32 | 3.0 % | 92.7 % | 1,989 | 3.8 % | 91.6 % | | 2033 | 3 | 23 | 2.2 % | 94.9 % | 1,174 | 2.3 % | 93.9 % | | Thereafter | 4 | 54 | 5.1 % | 100.0 % | 3,167 | 6.1 % | 100.0 % | | Total | 85 | 1,060 | 100.0 % | | $ 51,994 | 100.0 % | | Additional Support This section provides details on common and potential common shares, along with comprehensive definitions of key financial and operational terms Common & Potential Common Shares As of September 30, 2024, basic weighted average common shares for GAAP EPS were 107.46 million, while for FFO/Normalized FFO, basic shares and units totaled 107.61 million Weighted Average Share Calculation - GAAP EPS (Amounts in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Weighted average common shares outstanding - basic | 107,456 | 108,931 | 107,363 | 109,494 | | Weighted average dilutive RSUs and market-based LTIP Units | — | 1,286 | 1,028 | 1,422 | | Weighted average common shares outstanding - diluted | 107,456 | 110,217 | 108,391 | 110,916 | Weighted Average Share and Unit Calculation - FFO and Normalized FFO (Amounts in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Weighted average EQC common shares outstanding | 107,456 | 108,931 | 107,363 | 109,494 | | Weighted average Operating Partnership Units outstanding | 44 | 256 | 73 | 240 | | Weighted average time-based LTIP Units | 110 | 105 | 107 | 108 | | Weighted average common shares and units outstanding - basic | 107,610 | 109,292 | 107,543 | 109,842 | | Weighted average dilutive RSUs and market-based LTIP Units | 741 | 1,286 | 1,028 | 1,422 | | Weighted average common shares and units outstanding - diluted | 108,351 | 110,578 | 108,571 | 111,264 | Rollforward of Share Count to September 30, 2024 (Amounts in thousands) | Metric | Series D Preferred Shares | EQC Common Shares | | :----------------------------------------- | :------------------------ | :---------------- | | Outstanding on December 31, 2023 | 4,915 | 106,847 | | Operating Partnership Unit redemption | — | 78 | | Share-based compensation grants and vesting, net | — | 403 | | Outstanding on September 30, 2024 | 4,915 | 107,328 | | Common shares issuable from RSUs, Operating Partnership Units, and LTIP Units as measured on September 30, 2024 | | 1,023 | | Potential common shares as measured on September 30, 2024 | | 108,351 | Definitions This section defines key financial and operational terms, including non-GAAP measures like EBITDA, FFO, and NOI, clarifying their calculation and purpose as supplemental performance indicators - Key terms defined include Annualized Rental Revenue, Building Improvements, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDAre, Adjusted EBITDAre, Funds from Operations (FFO), Normalized FFO, Leasing Costs, LTIP Units, Net Operating Income (NOI), Same Property NOI, Cash Basis NOI, Same Property Cash Basis NOI, Net Book Value, NOI Margin, Operating Partnership Units, Other Revenue, Percentage Commenced, Percentage Leased, Rental Revenue, Same Properties, Tenant Improvements, Total Market Capitalization, and Undepreciated Book Value4445464748495051525354 - Non-GAAP financial measures like EBITDA, EBITDAre, Adjusted EBITDAre, FFO, and Normalized FFO are considered appropriate supplemental measures of operating performance for a REIT, providing useful information by excluding certain historical or nonrecurring amounts to facilitate comparison, but are not alternatives to GAAP net income or cash flow454648