0000803649false00008036492024-10-232024-10-230000803649us-gaap:CommonClassAMember2024-10-232024-10-230000803649us-gaap:SeriesDPreferredStockMember2024-10-232024-10-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 23, 2024

EQUITY COMMONWEALTH
(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of incorporation)
1-931704-6558834
(Commission File Number)(IRS Employer Identification No.)
Two North Riverside Plaza, Suite 2000, Chicago, IL

60606
(Address of principal executive offices)(Zip Code)
(312) 646-2800
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title Of Each ClassTrading SymbolName of Each Exchange On Which Registered
Common Shares of Beneficial InterestEQCNew York Stock Exchange
6.50% Series D Cumulative Convertible Preferred Shares of Beneficial InterestEQCpDNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02. Results of Operations and Financial Condition.
On October 23, 2024, Equity Commonwealth, or the Company, issued a press release setting forth the Company’s results of operations and financial condition for the quarter ended September 30, 2024, and also provided certain supplemental operating and financial information for the quarter ended September 30, 2024.  Copies of the Company’s press release and supplemental operating and financial information are furnished as Exhibits 99.1 and 99.2 hereto, respectively.
Item 9.01.  Financial Statements and Exhibits.
(d)  Exhibits
99.1
99.2
104The cover page from this Current Report on form 8-K, formatted in Inline XBRL.

2




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
EQUITY COMMONWEALTH
By:/s/ William H. Griffiths
Name:William H. Griffiths
Title:Executive Vice President, Chief
Financial Officer and Treasurer
Date: October 23, 2024


Exhibit 99.1
image1.jpg
Two North Riverside Plaza, Suite 2000, Chicago, Illinois 60606

Equity Commonwealth Reports Third Quarter 2024 Results
Chicago October 23, 2024 - Equity Commonwealth (NYSE: EQC) today reported financial results for the quarter ended September 30, 2024.

Financial results for the quarter ended September 30, 2024
Net loss attributable to common shareholders was $28.2 million, or $0.26 per diluted share, for the quarter ended September 30, 2024. This compares to net income attributable to common shareholders of $24.1 million, or $0.22 per diluted share, for the quarter ended September 30, 2023. The decrease in net income was primarily due to a $50.2 million loss on asset impairment.

Funds from Operations, or FFO, as defined by the National Association of Real Estate Investment Trusts, for the quarter ended September 30, 2024, were $26.2 million, or $0.24 per diluted share. This compares to FFO for the quarter ended September 30, 2023 of $28.7 million, or $0.26 per diluted share. The following items impacted FFO for the quarter ended September 30, 2024, compared to the corresponding 2023 period:
$(0.02) per diluted share increase in general and administrative expenses, including $1.2 million of wind down costs incurred during the quarter;
$(0.01) per diluted share decrease in same property NOI; and
$0.01 per diluted share increase in interest and other income, net.

Normalized FFO was $27.4 million, or $0.25 per diluted share, for the quarter ended September 30, 2024. This compares to Normalized FFO for the quarter ended September 30, 2023 of $28.6 million, or $0.26 per diluted share. The following items impacted Normalized FFO for the quarter ended September 30, 2024, compared to the corresponding 2023 period:
$(0.01) per diluted share decrease in same property NOI;
$(0.01) per diluted share increase in general and administrative expenses; and
$0.01 per diluted share increase in interest and other income, net.

Normalized FFO begins with FFO and eliminates certain items that, by their nature, are not comparable from period to period, non-cash items, and items that obscure the companys operating performance. Definitions of FFO, Normalized FFO and reconciliations to net income, determined in accordance with U.S. generally accepted accounting principles, or GAAP, are included at the end of this press release.

Our two Austin properties and 1250 H Street are classified as held for sale as of September 30, 2024. We recognized a $50.2 million loss on asset impairment related to these properties. The impairment charge reflects our estimated market value of the properties less costs to sell. Of the $50.2 million loss on asset impairment, $33.9 million was charged against the net book value of the real estate and $16.3 million was charged against non-real estate assets to be transferred to a buyer or written off upon sale.

As of September 30, 2024, the company’s cash and cash equivalents balance was $2.2 billion.

Same property results for the quarter ended September 30, 2024
The companys same property portfolio at the end of the quarter consisted of 4 properties totaling 1.5 million square feet. Operating results were as follows:
The same property portfolio was 69.7% leased as of September 30, 2024, compared to 71.4% as of June 30, 2024, and 80.8% as of September 30, 2023.
1


The same property portfolio commenced occupancy was 69.4% as of September 30, 2024, compared to 70.7% as of June 30, 2024, and 79.9% as of September 30, 2023.
Same property NOI decreased 16.0% when compared to the same period in 2023, primarily due to a decrease in average commenced occupancy.
Same property cash NOI decreased 15.4% when compared to the same period in 2023, primarily due to a decrease in average commenced occupancy.
The company did not enter into any leases during the quarter.

The definitions and reconciliations of same property NOI and same property cash NOI to net income, determined in accordance with GAAP, are included at the end of this press release. The same property portfolio at the end of the quarter included properties continuously owned from July 1, 2023 through September 30, 2024.

Disposition Update
The sale of our two Austin properties, Bridgepoint Square and 206 East 9th Street, and 1250 H Street in Washington, D.C. are under contract with non-refundable earnest money deposits. These sales, which do not require shareholder approval of the Company’s Plan of Sale, are anticipated to begin closing in early November 2024, subject in each case to contractual extensions and other closing conditions. Current pricing for these sales is consistent with the assumptions underlying the estimated aggregate shareholder distribution range of $19.50 to $21.00 per share disclosed in our definitive proxy statement (the “Definitive Proxy”) filed on October 2, 2024 in connection with the special meeting of shareholders scheduled for November 12, 2024, where the Company intends to seek shareholder approval of its Plan of Sale. The closing of these sales is not expected to impact the estimated range or timing of the initial cash distribution to our common shareholders as disclosed in the Definitive Proxy, which we estimated to be $18.00 to $19.00 per share and paid within thirty days following shareholder approval of the Plan of Sale after payment of the liquidation preference to the holders of our Series D Preferred Shares. The marketing of our property located at 1225 Seventeenth Street in Denver, CO commenced in September 2024. Any closing on the sale of the Denver property will occur after shareholder approval of the Plan of Sale.

While we are focused on executing on the sale of our assets, the market conditions for selling office assets are uniquely challenging at this time. As a result, we may not be able to complete sales in a timely manner, if at all, any such dispositions could be completed for less than estimated, and our liquidating distributions could be delayed or reduced as a result.

We will provide updates with respect to the dispositions of our four remaining properties if and to the extent that any sales close.

Earnings conference call & supplemental operating and financial information
Equity Commonwealth will host a conference call to discuss third quarter results on Wednesday, October 24, 2024, at 9:00 A.M. CT. The conference call will be available via live audio webcast on the Investor Relations section of the companys website (www.eqcre.com). A replay of the audio webcast will also be available following the call.

A copy of EQCs Third Quarter 2024 Supplemental Operating and Financial Information is available in the Investor Relations section of EQCs website at www.eqcre.com.

About Equity Commonwealth
Equity Commonwealth is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. EQC’s portfolio is comprised of four properties totaling 1.5 million square feet.

Regulation FD Disclosures
We use any of the following to comply with our disclosure obligations under Regulation FD: press releases, SEC filings, public conference calls, or our website. We routinely post important information on our website at www.eqcre.com, including information that may be deemed to be material. We encourage investors and others interested in the company to monitor these distribution channels for material disclosures.

2


Forward-Looking Statements
Some of the statements contained in this press release constitute forward-looking statements within the meaning of the federal securities laws. Any forward-looking statements contained in this press release are intended to be made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. You can identify forward-looking statements by the use of forward-looking terminology, including but not limited to, “may,” “will,” “should,” “could,” “would,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

The forward-looking statements contained in this press release reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause our future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K, subsequent quarterly reports on Form 10-Q and in our Definitive Proxy Statement on Schedule 14A filed on October 2, 2024.

Contact:
Bill Griffiths
(312) 646-2801
ir@eqcre.com
3

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands, except share data)

September 30, 2024December 31, 2023
ASSETS
Real estate properties:
Land$22,400 $44,060 
Buildings and improvements158,152 367,827 
180,552 411,887 
Accumulated depreciation(69,254)(180,535)
111,298 231,352 
Assets held for sale86,803 — 
Cash and cash equivalents2,225,150 2,160,535 
Rents receivable8,046 15,737 
Other assets, net9,833 17,417 
Total assets$2,441,130 $2,425,041 
LIABILITIES AND EQUITY
Liabilities related to properties held for sale$6,200 $— 
Accounts payable, accrued expenses and other17,621 27,298 
Rent collected in advance1,324 1,990 
Distributions payable2,803 5,640 
Total liabilities$27,948 $34,928 
Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized;
Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880$119,263 $119,263 
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 107,327,691 and 106,847,438 shares issued and outstanding, respectively
1,073 1,068 
Additional paid in capital3,942,389 3,935,873 
Cumulative net income3,950,345 3,926,979 
Cumulative common distributions(4,863,688)(4,864,440)
Cumulative preferred distributions(739,667)(733,676)
Total shareholders’ equity2,409,715 2,385,067 
Noncontrolling interest3,467 5,046 
Total equity$2,413,182 $2,390,113 
Total liabilities and equity$2,441,130 $2,425,041 

4

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except per share data)


Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Revenues:
Rental revenue$12,782 $13,928 $39,491 $41,512 
Other revenue (1)
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 amortization4,214 4,436 12,753 13,260 
General and administrative8,886 7,061 25,565 29,470 
Loss on asset impairment50,226 — 50,226 — 
Total expenses$70,189 $18,219 $108,662 $63,650 
Interest and other income, net29,996 29,269 89,278 84,997 
(Loss) income before income taxes(26,205)26,262 23,903 66,725 
Income tax expense(22)(30)(486)(1,906)
Net (loss) income$(26,227)$26,232 $23,417 $64,819 
Net loss (income) attributable to noncontrolling interest38 (86)(51)(204)
Net (loss) income attributable to Equity Commonwealth$(26,189)$26,146 $23,366 $64,615 
Preferred distributions(1,997)(1,997)(5,991)(5,991)
Net (loss) income attributable to Equity Commonwealth common shareholders$(28,186)$24,149 $17,375 $58,624 
Weighted average common shares outstanding — basic (2)
107,456 108,931 107,363 109,494 
Weighted average common shares outstanding — diluted (2)(3)
107,456 110,217 108,391 110,916 
Earnings per common share attributable to Equity Commonwealth common shareholders:
Basic$(0.26)$0.22 $0.16 $0.54 
Diluted$(0.26)$0.22 $0.16 $0.53 
(1)Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)Weighted average common shares outstanding for the three months ended September 30, 2024 and 2023 includes 128 and 131 unvested, earned RSUs, respectively. Weighted average common shares outstanding for the nine months ended September 30, 2024 and 2023 includes 129 and 125 unvested, earned RSUs, respectively.
(3)
As of September 30, 2024, we had 4,915 series D preferred shares outstanding. The series D preferred shares were convertible into 4,032 common shares as of September 30, 2024 and 2023. The series D preferred shares are anti-dilutive for GAAP EPS for all periods presented.

5

CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO
(Unaudited, amounts in thousands, except per share data)

Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Calculation of FFO
Net (loss) income$(26,227)$26,232 $23,417 $64,819 
Real estate depreciation and amortization4,202 4,429 12,717 13,231 
Loss on asset impairment (1)
50,226 — 50,226 — 
FFO attributable to Equity Commonwealth28,201 30,661 86,360 78,050 
Preferred distributions(1,997)(1,997)(5,991)(5,991)
FFO attributable to EQC common shareholders and unitholders$26,204 $28,664 $80,369 $72,059 
Calculation of Normalized FFO
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 costs1,246 — 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 
Weighted average common shares and units outstanding — basic (2)
107,610 109,292 107,543 109,842 
Weighted average common shares and units outstanding — diluted (2)
108,351 110,578 108,571 111,264 
FFO attributable to EQC common shareholders and unitholders per share and unit — basic
$0.24 $0.26 $0.75 $0.66 
FFO attributable to EQC common shareholders and unitholders per share and unit — diluted
$0.24 $0.26 $0.74 $0.65 
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit — basic
$0.25 $0.26 $0.75 $0.71 
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit — diluted
$0.25 $0.26 $0.75 $0.71 
(1)
Includes $16.3 million of loss on asset impairment related to non-real estate assets which will be written off or transferred to a buyer upon sale.
(2)
Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic for the three months ended September 30, 2024 and 2023 include 154 and 361 LTIP/Operating Partnership Units, respectively, that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only). Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic for the nine months ended September 30, 2024 and 2023 include 180 and 348 LTIP/Operating Partnership Units, respectively, that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only).




6


We compute FFO in accordance with standards established by Nareit. Nareit defines FFO as net income (loss), calculated in accordance with GAAP, excluding real estate depreciation and amortization, gains (or losses) from sales of depreciable property, impairment of depreciable real estate and our portion of these items related to equity investees and noncontrolling interests.  Our calculation of Normalized FFO differs from Nareit’s definition of FFO because we exclude certain items that we view as nonrecurring or impacting comparability from period to period.  FFO and Normalized FFO are supplemental non-GAAP financial measures. We consider FFO and Normalized FFO to be appropriate measures of operating performance for a REIT, along with net income (loss), net income (loss) attributable to EQC common shareholders and cash flow from operating activities.
We believe that FFO and Normalized FFO provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO and Normalized FFO may facilitate a comparison of our operating performance between periods and with other REITs.  FFO and Normalized FFO do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income (loss), net income (loss) attributable to EQC common shareholders or cash flow from operating activities, determined in accordance with GAAP, or as indicators of our financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs.  These measures should be considered in conjunction with net income (loss), net income (loss) attributable to EQC common shareholders and cash flow from operating activities as presented in our condensed consolidated statements of operations and condensed consolidated statements of cash flows.  Other REITs and real estate companies may calculate FFO and Normalized FFO differently than we do.



7

CALCULATION OF SAME PROPERTY NET OPERATING INCOME (NOI) AND SAME PROPERTY CASH BASIS NOI
(Unaudited, amounts in thousands)

For the Three Months Ended
9/30/20246/30/20243/31/202412/31/20239/30/2023
Calculation of Same Property NOI and Same Property Cash Basis NOI:
Rental revenue$12,782 $12,816 $13,893 $13,824 $13,928 
Other revenue (1)
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 (2)
— 16 (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 properties183 328 839 1,168 280 
Same Property NOI$7,125 $7,391 $8,672 $8,611 $8,485 
Reconciliation of Same Property NOI to GAAP Net (Loss) Income:
Same Property NOI$7,125 $7,391 $8,672 $8,611 $8,485 
Non-cash rental income and lease termination fees from same properties(183)(328)(839)(1,168)(280)
Same Property Cash Basis NOI$6,942 $7,063 $7,833 $7,443 $8,205 
Cash Basis NOI from non-same properties (2)
— (3)(16)(7)
Cash Basis NOI$6,942 $7,060 $7,817 $7,436 $8,210 
Straight-line rent adjustments77 259 223 538 107 
Lease termination fees106 69 616 630 173 
NOI$7,125 $7,388 $8,656 $8,604 $8,490 
Depreciation and amortization(4,214)(4,182)(4,357)(4,184)(4,436)
General and administrative(8,886)(8,356)(8,323)(7,504)(7,061)
Loss on asset impairment(50,226)— — — — 
Interest and other income, net29,996 29,770 29,512 29,670 29,269 
(Loss) income before income taxes$(26,205)$24,620 $25,488 $26,586 $26,262 
Income tax (expense) benefit(22)(434)(30)40 (30)
Net (loss) income$(26,227)$24,186 $25,458 $26,626 $26,232 
(1)Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)Cash Basis NOI from non-same properties for all periods presented includes the operations of disposed properties.


8

CALCULATION OF SAME PROPERTY NET OPERATING INCOME (NOI) AND SAME PROPERTY CASH BASIS NOI
(Unaudited, amounts in thousands)

For the Nine Months Ended September 30,
20242023
Calculation of Same Property NOI and Same Property Cash Basis NOI:
Rental revenue$39,491 $41,512 
Other revenue (1)
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 (2)
19 (13)
Same Property Cash Basis NOI$21,838 $24,507 
Non-cash rental income and lease termination fees from same properties1,350 (62)
Same Property NOI$23,188 $24,445 
Reconciliation of Same Property NOI to GAAP Net Income:
Same Property NOI$23,188 $24,445 
Non-cash rental income and lease termination fees from same properties(1,350)62 
Same Property Cash Basis NOI$21,838 $24,507 
Cash Basis NOI from non-same properties (2)
(19)13 
Cash Basis NOI$21,819 $24,520 
Straight-line rent adjustments559 (445)
Lease termination fees791 383 
NOI$23,169 $24,458 
Depreciation and amortization(12,753)(13,260)
General and administrative(25,565)(29,470)
Loss on asset impairment(50,226)— 
Interest and other income, net89,278 84,997 
Income before income taxes$23,903 $66,725 
Income tax expense(486)(1,906)
Net income$23,417 $64,819 
(1)Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)Cash Basis NOI from non-same properties for all periods presented includes the operations of disposed properties.




9


NOI is income from our real estate including lease termination fees received from tenants less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions and corporate level expenses. Cash Basis NOI is NOI excluding the effects of straight-line rent adjustments, lease value amortization and lease termination fees. The quarter-to-date same property versions of these measures include the results of properties continuously owned from July 1, 2023 through September 30, 2024. The year-to-date same property versions of these measures include the results of properties continuously owned from January 1, 2023 through September 30, 2024.
We consider these supplemental non-GAAP financial measures to be appropriate supplemental measures to net income (loss) because they may help to understand the operations of our properties. We use these measures internally to evaluate property level performance, and we believe that they provide useful information to investors regarding our results of operations because they reflect only those income and expense items that are incurred at the property level and may facilitate comparisons of our operating performance between periods and with other REITs. Cash Basis NOI is among the factors considered with respect to acquisition, disposition and financing decisions. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered as an alternative to net income (loss), net income (loss) attributable to Equity Commonwealth common shareholders or cash flow from operating activities, determined in accordance with GAAP, or as indicators of our financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs. These measures should be considered in conjunction with net income (loss), net income (loss) attributable to EQC common shareholders and cash flow from operating activities as presented in our condensed consolidated statements of operations and condensed consolidated statements of cash flows. Other REITs and real estate companies may calculate these measures differently than we do.

10
Exhibit 99.2



eqcsitebannerfebruary2020.jpg

Equity Commonwealth
Supplemental Operating
and Financial Information

Third Quarter 2024

image2.jpg



Corporate HeadquartersInvestor Relations
Two North Riverside Plaza(312) 646-2801
Suite 2000ir@eqcre.com
Chicago, IL 60606www.eqcre.com
(312) 646-2800




TABLE OF CONTENTS
Corporate Information
Company Profile and Investor Information
Financial Information
Key Financial Data
Condensed Consolidated Balance Sheets
Additional Balance Sheet Information
Condensed Consolidated Statements of Operations
Calculation of Same Property Net Operating Income (NOI) and Same Property Cash Basis NOI
Same Property Results of Operations
Calculation of EBITDA, EBITDAre, and Adjusted EBITDAre
Calculation of Funds from Operations (FFO) and Normalized FFO
Portfolio Information
Property Detail
Leasing Summary
Capital Summary - Expenditures & Same Property Leasing Commitments
Tenants Representing 2.5% or More of Annualized Rental Revenue
Same Property Lease Expiration Schedule
Additional Support
Common & Potential Common Shares
Definitions
Forward-Looking Statements
Some of the statements contained in this presentation constitute forward-looking statements within the meaning of the federal securities laws including, but not limited to, statements pertaining to our capital resources, portfolio performance, lease expirations schedules, results of operations or anticipated market conditions, including statements regarding the overall impact of COVID-19 and other external factors on the foregoing. Any forward-looking statements contained in this presentation are intended to be made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. You can identify forward-looking statements by the use of forward-looking terminology, including but not limited to, “may,” “will,” “should,” “could,” “would,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
Any forward-looking statements contained in this presentation reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause our future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K, subsequent quarterly reports on Form 10-Q and in our Definitive Proxy Statement on Schedule 14A filed on October 2, 2024.
Regulation FD Disclosures
We use any of the following to comply with our disclosure obligations under Regulation FD: press releases, SEC filings, public conference calls, or our website. We routinely post important information on our website at www.eqcre.com, including information that may be deemed to be material. We encourage investors and others interested in the company to monitor these distribution channels for material disclosures.

2


COMPANY PROFILE AND INVESTOR INFORMATION
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 States.
Same Property Statistics
No. of
 PropertiesSq. Feet% Leased% Commenced
41,521,40969.7%69.4%
 NYSE Trading Symbols
 Common Stock: EQC
 Preferred Stock Series D: EQCpD
Board of Trustees
David Helfand (Chair)Peter Linneman (Lead Independent Trustee)James A. Star
Ellen-Blair ChubeMary Jane Robertson
Martin L. EdelmanGerald A. Spector
Senior Management
David A. HelfandDavid S. Weinberg
President and Chief Executive OfficerExecutive Vice President and
Chief Operating Officer
William H. GriffithsOrrin S. Shifrin
Executive Vice President,Executive Vice President,
Chief Financial Officer and TreasurerGeneral Counsel and Secretary
Equity Research Coverage (1)
CitigroupNicholas Joseph(212) 816-1909nicholas.joseph@citi.com
Green Street AdvisorsDaniel Ismail(949) 640-8780dismail@greenstreetadvisors.com




Certain terms are defined in the definitions section of this document. All financial data included herein is unaudited.
(1)Any opinions, estimates or forecasts regarding EQC's performance made by these analysts do not represent opinions, forecasts or predictions of EQC or its management. EQC does not by its reference to the analysts above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts.

3


KEY FINANCIAL DATA
(Unaudited, amounts in thousands, except per share data)
As of and for the Three Months Ended
9/30/20246/30/20243/31/202412/31/20239/30/2023
OPERATING INFORMATION
Ending property count
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 (1)
29,481 28,802 29,845 30,770 30,698 
SAME PROPERTY OPERATING INFORMATION
Ending square footage
1,521 1,521 1,521 1,521 1,521 
Percent leased69.7 %71.4 %75.4 %81.2 %80.8 %
Percent commenced69.4 %70.7 %74.6 %80.0 %79.9 %
Same Property NOI (1)
$7,125 $7,391 $8,672 $8,611 $8,485 
Same Property Cash Basis NOI (1)
6,942 7,063 7,833 7,443 8,205 
Same Property NOI margin50.9 %52.4 %57.1 %56.9 %55.8 %
Same Property Cash Basis NOI margin50.3 %51.3 %54.6 %53.3 %55.0 %
SHARES OUTSTANDING AND PER SHARE DATA
Shares Outstanding at End of Period
Common shares outstanding
107,328 107,328 107,223 106,847 106,712 
Dilutive restricted share units (RSUs), Operating Partnership Units, and LTIP Units (2)
1,023 1,618 1,358 1,467 1,779 
Preferred shares outstanding (3)
4,915 4,915 4,915 4,915 4,915 
Weighted Average Shares Outstanding - GAAP
Basic (4)
107,456 107,416 107,216 106,905 108,931 
Diluted (4)
107,456 108,751 108,224 108,015 110,217 
BALANCE SHEET
Total assets$2,441,130 $2,463,741 $2,439,686 $2,425,041 $2,393,786 
Total liabilities27,948 25,954 26,358 34,928 31,550 
MARKET CAPITALIZATION
Market value of preferred shares
$124,109 $122,438 $122,880 $123,519 $122,929 
Market value of diluted common shares
2,156,185 2,113,552 2,050,009 2,079,629 1,992,980 
Total market capitalization$2,280,294 $2,235,990 $2,172,889 $2,203,148 $2,115,909 
(1)Non-GAAP financial measures are defined and reconciled to the most directly comparable GAAP measure herein.
(2)Restricted share units (RSUs) and LTIP Units are equity awards that contain both service and market-based vesting components. Refer to the schedule of Common & Potential Common Shares for information regarding RSUs and LTIP Units and their impact on weighted average shares outstanding.
(3)
As of September 30, 2024, we had 4,915 series D preferred shares outstanding that were convertible into 4,032 common shares. The series D preferred shares are anti-dilutive for GAAP EPS for all periods presented. Refer to the schedule of Common & Potential Common Shares for information regarding the series D preferred shares and their impact on diluted weighted average shares outstanding for EPS, FFO per share and Normalized FFO per share.
(4)Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares outstanding.

4


CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands, except share data)
September 30, 2024December 31, 2023
ASSETS
Real estate properties:
Land$22,400 $44,060 
Buildings and improvements158,152 367,827 
180,552 411,887 
Accumulated depreciation(69,254)(180,535)
111,298 231,352 
Assets held for sale86,803 — 
Cash and cash equivalents2,225,150 2,160,535 
Rents receivable8,046 15,737 
Other assets, net9,833 17,417 
Total assets$2,441,130 $2,425,041 
LIABILITIES AND EQUITY
Liabilities related to properties held for sale$6,200 $— 
Accounts payable, accrued expenses and other17,621 27,298 
Rent collected in advance1,324 1,990 
Distributions payable2,803 5,640 
Total liabilities$27,948 $34,928 
Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized;
Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880$119,263 $119,263 
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 107,327,691 and 106,847,438 shares issued and outstanding, respectively
1,073 1,068 
Additional paid in capital3,942,389 3,935,873 
Cumulative net income3,950,345 3,926,979 
Cumulative common distributions(4,863,688)(4,864,440)
Cumulative preferred distributions(739,667)(733,676)
Total shareholders’ equity2,409,715 2,385,067 
Noncontrolling interest3,467 5,046 
Total equity$2,413,182 $2,390,113 
Total liabilities and equity$2,441,130 $2,425,041 

5


ADDITIONAL BALANCE SHEET INFORMATION
(Unaudited, amounts in thousands)
September 30, 2024December 31, 2023
Additional Balance Sheet Information
Straight-line rents receivable$7,152 $14,995 
Accounts receivable894 742 
Rents receivable$8,046 $15,737 
Capitalized lease incentives, net$411 $1,193 
Deferred leasing costs, net2,949 10,816 
Other6,473 5,408 
Other assets, net$9,833 $17,417 
Accounts payable$1,661 $2,824 
Accrued taxes4,492 9,527 
Accrued capital expenditures805 2,881 
Accrued leasing costs— 206 
Security deposits755 2,356 
Other accrued liabilities9,908 9,504 
Accounts payable, accrued expenses and other$17,621 $27,298 

6


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except per share data)
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Revenues:
Rental revenue$12,782 $13,928 $39,491 $41,512 
Other revenue (1)
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 amortization4,214 4,436 12,753 13,260 
General and administrative8,886 7,061 25,565 29,470 
Loss on asset impairment50,226 — 50,226 — 
Total expenses$70,189 $18,219 $108,662 $63,650 
Interest and other income, net29,996 29,269 89,278 84,997 
(Loss) income before income taxes(26,205)26,262 23,903 66,725 
Income tax expense(22)(30)(486)(1,906)
Net (loss) income$(26,227)$26,232 $23,417 $64,819 
Net loss (income) attributable to noncontrolling interest38 (86)(51)(204)
Net (loss) income attributable to Equity Commonwealth$(26,189)$26,146 $23,366 $64,615 
Preferred distributions
(1,997)(1,997)(5,991)(5,991)
Net (loss) income attributable to Equity Commonwealth common shareholders$(28,186)$24,149 $17,375 $58,624 
Weighted average common shares outstanding — basic (2)
107,456 108,931 107,363 109,494 
Weighted average common shares outstanding — diluted (2)
107,456 110,217 108,391 110,916 
Earnings per common share attributable to Equity Commonwealth common shareholders:
Basic$(0.26)$0.22 $0.16 $0.54 
Diluted$(0.26)$0.22 $0.16 $0.53 
(1)Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares outstanding.

7


CALCULATION OF SAME PROPERTY NET OPERATING INCOME (NOI) AND SAME PROPERTY CASH BASIS NOI
(Unaudited, amounts in thousands)
For the Three Months Ended
9/30/20246/30/20243/31/202412/31/20239/30/2023
Calculation of Same Property NOI and Same Property Cash Basis NOI:
Rental revenue$12,782 $12,816 $13,893 $13,824 $13,928 
Other revenue (1)
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 (2)
— 16 (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 
Reconciliation of Same Property NOI to GAAP Net (Loss) Income:
Same Property NOI$7,125 $7,391 $8,672 $8,611 $8,485 
Non-cash rental income and lease termination fees from same properties
(183)(328)(839)(1,168)(280)
Same Property Cash Basis NOI$6,942 $7,063 $7,833 $7,443 $8,205 
Cash Basis NOI from non-same properties (2)
— (3)(16)(7)
Cash Basis NOI$6,942 $7,060 $7,817 $7,436 $8,210 
Straight-line rent adjustments77 259 223 538 107 
Lease termination fees106 69 616 630 173 
NOI$7,125 $7,388 $8,656 $8,604 $8,490 
Depreciation and amortization(4,214)(4,182)(4,357)(4,184)(4,436)
General and administrative(8,886)(8,356)(8,323)(7,504)(7,061)
Loss on asset impairment(50,226)— — — — 
Interest and other income, net29,996 29,770 29,512 29,670 29,269 
(Loss) income before income taxes$(26,205)$24,620 $25,488 $26,586 $26,262 
Income tax (expense) benefit(22)(434)(30)40 (30)
Net (loss) income$(26,227)$24,186 $25,458 $26,626 $26,232 
(1)Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)Cash Basis NOI from non-same properties for all periods presented includes the operations of disposed properties.

8


CALCULATION OF SAME PROPERTY NET OPERATING INCOME (NOI) AND SAME PROPERTY CASH BASIS NOI
(Unaudited, amounts in thousands)
For the Nine Months Ended September 30,
20242023
Calculation of Same Property NOI and Same Property Cash Basis NOI:
Rental revenue$39,491 $41,512 
Other revenue (1)
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 (2)
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 
Reconciliation of Same Property NOI to GAAP Net Income:
Same Property NOI$23,188 $24,445 
Non-cash rental income and lease termination fees from same properties
(1,350)62 
Same Property Cash Basis NOI$21,838 $24,507 
Cash Basis NOI from non-same properties (2)
(19)13 
Cash Basis NOI$21,819 $24,520 
Straight-line rent adjustments559 (445)
Lease termination fees791 383 
NOI$23,169 $24,458 
Depreciation and amortization(12,753)(13,260)
General and administrative(25,565)(29,470)
Loss on asset impairment(50,226)— 
Interest and other income, net89,278 84,997 
Income before income taxes$23,903 $66,725 
Income tax expense(486)(1,906)
Net income$23,417 $64,819 
(1)Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
(2)Cash Basis NOI from non-same properties for all periods presented includes the operations of disposed properties.

9


SAME PROPERTY RESULTS OF OPERATIONS
(Unaudited, dollars and square feet in thousands)
As of and for the Three Months Ended September 30,
As of and for the Nine Months Ended September 30,
20242023% Change20242023% Change
Properties
Square Feet
1,521 1,521 1,521 1,521 
% Leased69.7 %80.8 %(11.1)%69.7 %80.8 %(11.1)%
% Commenced69.4 %79.9 %(10.5)%69.4 %79.9 %(10.5)%
Rental revenue
$12,599 $13,647 (7.7)%$38,141 $41,573 (8.3)%
Other revenue (1)
1,206 1,277 (5.6)%3,796 3,848 (1.4)%
Straight-line rent adjustment
77 107 559 (445)
Lease termination fees
106 173 791 383 
Total revenue
13,988 15,204 (8.0)%43,287 45,359 (4.6)%
Operating expenses
(6,863)(6,719)2.1 %(20,099)(20,914)(3.9)%
NOI
$7,125 $8,485 (16.0)%$23,188 $24,445 (5.1)%
NOI Margin
50.9 %55.8 %53.6 %53.9 %
Straight-line rent adjustment
$(77)$(107)$(559)$445 
Lease termination fees
(106)(173)(791)(383)
Cash Basis NOI$6,942 $8,205 (15.4)%$21,838 $24,507 (10.9)%
Cash Basis NOI Margin
50.3 %55.0 %52.1 %54.0 %
(1)Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.

10


CALCULATION OF EBITDA, EBITDAre, AND ADJUSTED EBITDAre
(Unaudited, amounts in thousands)
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
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 costs1,246 — 1,246 — 
Former chairman accelerated compensation expense— — — 5,957 
Adjusted EBITDAre$29,481 $30,698 $88,128 $85,942 

11


CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO
(Unaudited, amounts in thousands, except per share data)
Three Months EndedNine Months Ended
September 30,September 30,
2024202320242023
Calculation of FFO
Net (loss) income$(26,227)$26,232 $23,417 $64,819 
Real estate depreciation and amortization4,202 4,429 12,717 13,231 
Loss on asset impairment (1)
50,226 — 50,226 — 
FFO attributable to Equity Commonwealth28,201 30,661 86,360 78,050 
Preferred distributions(1,997)(1,997)(5,991)(5,991)
FFO attributable to EQC common shareholders and unitholders
$26,204 $28,664 $80,369 $72,059 
Calculation of Normalized FFO
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 costs1,246 — 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 
Weighted average common shares and units outstanding -- basic (2)
107,610 109,292 107,543 109,842 
Weighted average common shares and units outstanding -- diluted (2)
108,351 110,578 108,571 111,264 
FFO attributable to EQC common shareholders and unitholders per share and unit -- basic
$0.24 $0.26 $0.75 $0.66 
FFO attributable to EQC common shareholders and unitholders per share and unit -- diluted
$0.24 $0.26 $0.74 $0.65 
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit -- basic
$0.25 $0.26 $0.75 $0.71 
Normalized FFO attributable to EQC common shareholders and unitholders per share and unit -- diluted
$0.25 $0.26 $0.75 $0.71 
(1)
Includes $16.3 million of loss on asset impairment related to non-real estate assets which will be written off or transferred to a buyer upon sale.
(2)
Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic for the three months ended September 30, 2024 and 2023 include 154 and 361 LTIP/Operating Partnership Units, respectively, that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only). Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic for the nine months ended September 30, 2024 and 2023 include 180 and 348 LTIP/Operating Partnership Units, respectively, that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only). Refer to the schedule of Common & Potential Common Shares for information regarding the components of our weighted average common shares and units outstanding.

12


PROPERTY DETAIL
As of September 30, 2024
(Unaudited, sorted by annualized rental revenue, dollars in thousands)

Same Property Portfolio(1)
PropertyCity, StateTypeNo. of BuildingsSquare Feet% Leased% CommencedAnnualized Rental RevenueUndepreciated Book ValueNet Book ValueYear Acquired
11225 Seventeenth StreetDenver, COOffice709,40283.4 %82.8 %$27,968 $180,552 $111,298 2009
(17th Street Plaza)
2
Bridgepoint Square(2)
Austin, TXOffice440,00752.5 %52.5 %9,592 88,600 29,507 1997
3
206 East 9th Street(2)
Austin, TXOffice175,51069.4 %69.4 %7,415 47,166 31,653 2012
(Capitol Tower)
4
1250 H Street, NW(2)
Washington, D.C.Office196,49059.1 %59.1 %7,019 69,195 25,547 1998
Total Same Properties8 1,521,40969.7 %69.4 %$51,994 $385,513 $198,005 
(1)Refer to the definitions section of this document for a description of our same property portfolio.
(2)Undepreciated book value and net book value for these properties are included in assets held for sale on the condensed consolidated balance sheet as of September 30, 2024.


13


LEASING SUMMARY
(Unaudited, dollars and square feet in thousands, except per square foot data)
As of and for the Three Months Ended
9/30/20246/30/20243/31/202412/31/20239/30/2023
Properties
Total square feet
1,521 1,521 1,521 1,521 1,521 
Percentage leased69.7 %71.4 %75.4 %81.2 %80.8 %
Percentage commenced69.4 %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 (1)
— 0.7 %(2.8)%7.9 %(1.8)%
Percent change in GAAP rent (1)
— 6.8 %(0.5)%26.4 %6.0 %
Total TI & LC per square foot (2)
— $21.17 $58.93 $16.97 $40.57 
Total TI & LC per sq. ft. per year of lease term (2)
— $4.99 $14.39 $5.75 $6.38 
Renewal Leases
Square feet— 20 15 27 39 
Lease term (years)— 4.0 4.0 2.6 7.0 
Starting cash rent— $47.94 $49.54 $52.04 $49.47 
Percent change in cash rent (1)
— 1.2 %0.6 %7.9 %(1.7)%
Percent change in GAAP rent (1)
— 7.5 %3.2 %26.4 %8.8 %
Total TI & LC per square foot (2)
— $18.29 $64.35 $9.46 $41.02 
Total TI & LC per sq. ft. per year of lease term (2)
— $4.58 $15.95 $3.70 $5.84 
New Leases
Square feet— 15 
Lease term (years)— 5.6 4.4 5.2 4.6 
Starting cash rent— $49.00 $50.50 $44.44 $44.73 
Percent change in cash rent (1)
— (1.4)%(17.6)%— (2.2)%
Percent change in GAAP rent (1)
— 4.0 %(17.0)%— (1.3)%
Total TI & LC per square foot (2)
— $36.67 $34.43 $58.68 $39.38 
Total TI & LC per sq. ft. per year of lease term (2)
— $6.55 $7.88 $11.36 $8.50 
Our same property leasing activity is identical to the information above for all periods presented. Refer to the definitions section of this document for a description of our same property portfolio.
(1)
Percent change in GAAP and cash rents is a comparison of current rent, including estimated tenant expense reimbursements, if any, to the rent, including actual/projected tenant expense reimbursements, if any, last received for the same space on a GAAP and cash basis, respectively. Cash rent during the reporting period is calculated before deducting any initial period free rent. Leasing in suites vacant longer than two years was excluded from the calculation.
(2)Includes tenant improvements (TI) and leasing commissions (LC).

14


CAPITAL SUMMARY
EXPENDITURES & SAME PROPERTY LEASING COMMITMENTS
(Unaudited, dollars and square feet in thousands)
CAPITAL SUMMARYThree Months Ended
EXPENDITURES9/30/20246/30/20243/31/202412/31/20239/30/2023
Tenant improvements$758 $1,815 $5,752 $645 $224 
Leasing costs
151 174 150 646 
Building improvements (1)
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 
(1)Tenant-funded capital expenditures are excluded.


15


TENANTS REPRESENTING 2.5% OR MORE OF ANNUALIZED RENTAL REVENUE
As of September 30, 2024
(Unaudited, square feet in thousands)

Tenant
Square Feet (1)
% of Total Sq. Ft. (1)
% of Annualized Rental RevenueWeighted Average Remaining Lease Term
Salesforce.com, Inc.66 6.2 %6.1 %1.2
KPMG, LLP66 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 LLP32 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, LLC35 3.3 %3.1 %2.4
Ballard Spahr LLP30 2.8 %2.7 %0.9
10 Simply Good Foods USA, Inc29 2.7 %2.7 %3.2
11 Wunderman Thompson, LLC24 2.3 %2.7 %2.8
12 Shiseido Americas Corporation21 2.0 %2.6 %5.1
13 Comcast Cable Communications30 2.8 %2.5 %2.3
Total492 46.3 %48.4 %3.7

(1)
Square footage as of September 30, 2024 includes space subject to leases that have commenced for revenue recognition purposes in accordance with GAAP, space being fitted out for occupancy pursuant to existing leases, and space which is leased but is not occupied or is being offered for sublease by tenants.

16


SAME PROPERTY LEASE EXPIRATION SCHEDULE
As of September 30, 2024
(Unaudited, dollars and sq. ft. in thousands)
YearNumber of Tenants Expiring
Leased Sq. Ft. Expiring (1)
% of Leased Sq. Ft. ExpiringCumulative % of Leased Sq. Ft. Expiring
Annualized Rental Revenue Expiring (2)
% of Annualized Rental Revenue ExpiringCumulative % of Annualized Rental Revenue Expiring
20243222.1 %2.1 %$1,105 2.1 %2.1 %
2025914013.2 %15.3 %6,839 13.2 %15.3 %
202611696.5 %21.8 %3,271 6.3 %21.6 %
20271722020.8 %42.6 %10,616 20.3 %41.9 %
20281112311.6 %54.2 %5,860 11.3 %53.2 %
20291014914.1 %68.3 %7,016 13.5 %66.7 %
20301217015.9 %84.2 %8,259 15.9 %82.6 %
20314585.5 %89.7 %2,698 5.2 %87.8 %
20321323.0 %92.7 %1,989 3.8 %91.6 %
20333232.2 %94.9 %1,174 2.3 %93.9 %
Thereafter4545.1 %100.0 %3,167 6.1 %100.0 %
    Total851,060100.0 %$51,994 100.0 %
Weighted average remaining
    lease term (in years)4.0 4.2 
(1)
Leased square footage as of September 30, 2024 includes space subject to leases that have commenced for revenue recognition purposes in accordance with GAAP, space being fitted out for occupancy pursuant to existing leases, and space which is leased but is not occupied or is being offered for sublease by tenants. The year expiring corresponds to the latest-expiring signed lease for a given suite. Thus, backfilled suites expire in the year stipulated by the new lease.
(2)Excludes the Annualized Rental Revenue of space that is leased but not commenced.

17


COMMON & POTENTIAL COMMON SHARES
(Unaudited, share amounts in thousands)
Three Months EndedNine Months Ended
September 30,September 30,
Weighted Average Share Calculation - GAAP EPS2024202320242023
Weighted average common shares outstanding - basic (1)
107,456 108,931 107,363 109,494 
Weighted average dilutive RSUs and maket-based LTIP Units (2)
— 1,286 1,028 1,422 
Weighted average common shares outstanding - diluted (1)
107,456 110,217 108,391 110,916 
Three Months EndedNine Months Ended
September 30,September 30,
Weighted Average Share and Unit Calculation - FFO and Normalized FFO per share and unit2024202320242023
Weighted average EQC common shares outstanding (1)
107,456 108,931 107,363 109,494 
Weighted average Operating Partnership Units outstanding (3)
44 256 73 240 
Weighted average time-based LTIP Units (2)(3)
110 105 107 108 
Weighted average common shares and units outstanding - basic (1)
107,610 109,292 107,543 109,842 
Weighted average dilutive RSUs and market-based LTIP Units (2)
741 1,286 1,028 1,422 
Weighted average common shares and units outstanding - diluted (1)
108,351 110,578 108,571 111,264 
Rollforward of Share Count to September 30, 2024
Series D Preferred Shares (4)
EQC Common Shares (5)
Outstanding on December 31, 20234,915 106,847 
Operating Partnership Unit redemption— 78 
Share-based compensation grants and vesting, net (6)
— 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 (2)
1,023 
Potential common shares as measured on September 30, 2024 (7)
108,351 
(1)
Weighted average common shares outstanding for the three months ended September 30, 2024 and 2023 includes 128 and 131 unvested, earned RSUs, respectively. Weighted average common shares outstanding for the nine months ended September 30, 2024 and 2023 includes 129 and 125 unvested, earned RSUs, respectively.
(2)
We have granted RSUs and LTIP Units to certain trustees, employees and eligible consultants. RSUs and market-based LTIP Units contain service and market-based vesting components. Time-based LTIP Units contain service-based vesting components. Each LTIP Unit will convert automatically into an OP Unit on a one-for-one basis when the LTIP Unit becomes vested and its capital account is equalized with the per-unit capital account of the OP Units.
(3)
Our calculations of FFO and Normalized FFO attributable to EQC common shareholders and unitholders per share and unit - basic include time-based LTIP Units and OP Units that are excluded from the calculation of basic earnings per common share attributable to EQC common shareholders (only).
(4)
As of September 30, 2024, we had 4,915 series D preferred shares that were convertible into 4,032 common shares. The series D preferred shares are anti-dilutive for GAAP EPS for all periods presented. The series D preferred shares are anti-dilutive for all periods presented with respect to FFO and Normalized FFO per common share and unit.
(5)EQC common shares include unvested restricted shares.
(6)This amount is net of forfeitures and shares surrendered to satisfy statutory tax withholding obligations.
(7)
Potential common shares as measured on September 30, 2024 include unvested earned RSUs. The 4,915 series D preferred shares outstanding that were convertible into 4,032 common shares as of September 30, 2024 are excluded.
18


DEFINITIONS
Annualized Rental Revenue
Annualized Rental Revenue is annualized contractual rents from our tenants pursuant to leases which have commenced as of September 30, 2024, plus estimated recurring expense reimbursements; excludes lease value amortization, straight-line rent adjustments, abated (free) rent periods and parking revenue. We calculate annualized rental revenue by aggregating the recurring billings outlined above for the most recent month during the quarter reported, adding abated rent, and multiplying the sum by 12 to provide an estimation of near-term potentially-recurring revenues. The annualized rental revenue of disposed properties, if any, is presented for the quarter-ended preceding each disposition.
Annualized rental revenue is a forward-looking non-GAAP measure. Annualized rental revenue cannot be reconciled to a comparable GAAP measure without unreasonable efforts, primarily due to the fact that it is calculated from the billings of tenants in the most recent month at the most recent rental rates during the quarter reported, whereas historical GAAP measures include billings from a potentially different group of tenants over multiple months at potentially different rental rates.
Building Improvements
Building improvements are expenditures to replace obsolete building components or extend the useful life of existing assets. Tenant-funded capital expenditures are excluded.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDAre and Adjusted EBITDAre
We calculate EBITDA as net income (loss) excluding interest expense, income tax expense and depreciation and amortization.
We calculate EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts (Nareit). Nareit defines EBITDAre as net income (loss), calculated in accordance with GAAP, plus interest expense, plus income tax expense, plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property and investments in unconsolidated joint ventures, plus adjustments to reflect the entity's share of EBITDAre of unconsolidated joint ventures. Our calculation of Adjusted EBITDAre differs from our calculations of EBITDA and EBITDAre because we exclude certain items that we view as nonrecurring or impacting comparability from period to period. EBITDA, EBITDAre and Adjusted EBITDAre are supplemental non-GAAP financial measures.
We consider EBITDA, EBITDAre and Adjusted EBITDAre to be appropriate measures of our operating performance, along with net income (loss), net income (loss) attributable to EQC common shareholders, and cash flow from operating activities. We believe that EBITDA, EBITDAre and Adjusted EBITDAre provide useful information to investors because by excluding the effects of certain historical amounts, such as interest, depreciation and amortization expense, EBITDA, EBITDAre and Adjusted EBITDAre may facilitate a comparison of current operating performance with our past operating performance. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss), net income (loss) attributable to EQC common shareholders or cash flow from operating activities, determined in accordance with GAAP, or as indicators of our financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs. These measures should be considered in conjunction with net income (loss), net income (loss) attributable to EQC common shareholders and cash flow from operating activities as presented in our condensed consolidated statements of operations and condensed consolidated statements of cash flows. Other REITs and real estate companies may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently than we do.
Funds from Operations (FFO) and Normalized FFO
We compute FFO in accordance with standards established by Nareit. Nareit defines FFO as net income (loss), calculated in accordance with GAAP, excluding real estate depreciation and amortization, gains (or losses) from sales of depreciable property, impairment of depreciable real estate and our portion of these items related to equity investees and noncontrolling interests.  Our calculation of Normalized FFO differs from Nareit’s definition of FFO because we exclude certain items that we view as nonrecurring or impacting comparability from period to period.  FFO and Normalized FFO are supplemental non-GAAP financial measures. We consider FFO and Normalized FFO to be appropriate measures of operating performance for a REIT, along with net income (loss), net income (loss) attributable to EQC common shareholders and cash flow from operating activities.
We believe that FFO and Normalized FFO provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO and Normalized FFO may facilitate a comparison of our operating performance between periods and with other REITs.  FFO and Normalized FFO do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income (loss), net income (loss) attributable to EQC common shareholders or cash flow from operating activities, determined in accordance with GAAP, or as indicators of our financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs.  These measures should be considered in conjunction with net income (loss), net income (loss) attributable to EQC common shareholders and cash flow from operating activities as presented in our condensed consolidated statements of operations and condensed consolidated statements of cash flows.  Other REITs and real estate companies may calculate FFO and Normalized FFO differently than we do.
Leasing Costs
Leasing costs include leasing commissions (LCs) and related legal expenses.
19


DEFINITIONS
LTIP Units
LTIP Units are a class of beneficial interests in EQC Operating Trust (the Operating Trust) that may be issued to employees, officers or trustees of the Operating Trust, EQC, or their subsidiaries.
Net Operating Income (NOI), Same Property NOI, Cash Basis NOI and Same Property Cash Basis NOI
NOI is income from our real estate including lease termination fees received from tenants less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions and corporate level expenses. Cash Basis NOI is NOI excluding the effects of straight-line rent adjustments, lease value amortization and lease termination fees. The quarter-to-date same property versions of these measures include the results of properties continuously owned from July 1, 2023 through September 30, 2024. The year-to-date same property versions of these measures include the results of properties continuously owned from January 1, 2023 through September 30, 2024.
We consider these supplemental non-GAAP financial measures to be appropriate supplemental measures to net income (loss) because they may help to understand the operations of our properties. We use these measures internally to evaluate property level performance, and we believe that they provide useful information to investors regarding our results of operations because they reflect only those income and expense items that are incurred at the property level and may facilitate comparisons of our operating performance between periods and with other REITs. Cash Basis NOI is among the factors considered with respect to acquisition, disposition and financing decisions. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered as an alternative to net income (loss), net income (loss) attributable to Equity Commonwealth common shareholders or cash flow from operating activities, determined in accordance with GAAP, or as indicators of our financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs. These measures should be considered in conjunction with net income (loss), net income (loss) attributable to EQC common shareholders and cash flow from operating activities as presented in our condensed consolidated statements of operations and condensed consolidated statements of cash flows. Other REITs and real estate companies may calculate these measures differently than we do.
Net Book Value
Net book value represents the carrying value of real estate properties after depreciation and amortization, purchase price allocations and impairment write-downs, if any.
NOI Margin
NOI Margin is NOI (or the same property or cash basis derivations of NOI defined above) divided by the total revenues used to calculate NOI (or its derivation).
Operating Partnership Units
Operating Partnership Units are beneficial interests in the Operating Trust.
Other Revenue
Other revenue is primarily comprised of parking revenue that does not represent a component of a lease.
Percentage Commenced
Percentage commenced is the percentage of space subject to leases that have commenced for revenue recognition purposes in accordance with GAAP, which includes the space of tenants in a free rent period.
Percentage Leased
Percentage leased is the percentage of space subject to signed leases.
Rental Revenue
Rental revenue is primarily comprised of minimum lease payments from tenants, including tenant reimbursements. In addition, rental revenue includes lease termination fees and straight-line rent adjustments.
Same Properties
Our quarter-to-date same property portfolio is comprised of those properties continuously owned from July 1, 2023 through September 30, 2024. Our year-to-date same property portfolio is comprised of those properties continuously owned from January 1, 2023 through September 30, 2024.
Tenant Improvements
Tenant improvements are capital expenditures to improve tenant spaces.

20


DEFINITIONS
Total Market Capitalization
Total market capitalization is the market value of preferred shares plus the market value of diluted common shares. The market value of preferred shares is the product of the number of Series D preferred shares outstanding at the end of the period and the closing share price of the Series D preferred shares (EQCpD) at the end of the period. The market value of diluted common shares is the product of the number of diluted common shares outstanding at the end of the period and the closing share price of the common shares (EQC) at the end of the period.
Undepreciated Book Value
Undepreciated book value represents the carrying value of real estate properties after purchase price allocations, and impairment write-downs, if any.


21
v3.24.3
Cover Page
Oct. 23, 2024
Document Information [Line Items]  
Entity Central Index Key 0000803649
Amendment Flag false
Document Type 8-K
Document Period End Date Oct. 23, 2024
Entity Registrant Name EQUITY COMMONWEALTH
Entity Incorporation, State or Country Code MD
Entity File Number 1-9317
Entity Tax Identification Number 04-6558834
Entity Address, Address Line One Two North Riverside Plaza, Suite 2000
Entity Address, City or Town Chicago
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60606
City Area Code (312)
Local Phone Number 646-2800
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Common Shares of Beneficial Interest  
Document Information [Line Items]  
Title of 12(b) Security Common Shares of Beneficial Interest
Trading Symbol EQC
Security Exchange Name NYSE
6 1/2% Series D Cumulative Convertible Preferred Shares of Beneficial Interest  
Document Information [Line Items]  
Title of 12(b) Security 6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest
Trading Symbol EQCpD
Security Exchange Name NYSE

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