Washington Real Estate Investment Trust Announces 2013 Strategic Initiatives, Expected CEO Retirement at End of 2013 and 2013

  Washington Real Estate Investment Trust Announces 2013 Strategic
  Initiatives, Expected CEO Retirement at End of 2013 and 2013 Guidance

Business Wire

ROCKVILLE, Md. -- January 29, 2013

Washington Real Estate Investment Trust (WRIT) (NYSE: WRE) announced several
major developments, as follows.

Proposed Sale of Medical Office Division

WRIT is exploring a 2013 disposition of its Medical Office Division. The
disposition will simplify WRIT’s business model to focus on its core office,
multifamily and retail sectors. Upon the completion of the transaction, WRIT’s
business will consist entirely of properties where people work, live and shop
in one of the strongest real estate markets in the world.

The Medical Office Division totals approximately 1.3 million square feet and
17 properties and, as of third quarter 2012, contributed 15% of WRIT’s total
net operating income. The Medical Office Division represents the largest
portfolio of institutional quality medical office assets in the Washington, DC
region, with all of the assets in affluent communities or urban centers or
near major medical centers such as INOVA Fairfax, Shady Grove Adventist and
George Washington Hospital. The portfolio has very low leverage, with only
three encumbered properties totaling approximately $24 million in mortgage
debt.

“We believe we have a unique opportunity to capture embedded value for our
shareholders and streamline our investment thesis, both operationally and from
a capital allocation standpoint. Beginning in earnest in 2003, we have
assembled a one-of-a-kind medical office portfolio that now encompasses 20% of
institutional grade medical office assets in the DC metro area. Given the
successful execution of our industrial portfolio sale in 2011 and our DC
market expertise, we expect to be able to reinvest the medical office
portfolio sale proceeds into high quality office, multifamily and retail
assets in core submarkets,” said George F. “Skip” McKenzie, President and
Chief Executive Officer of WRIT.

Other 2013 Strategic Initiatives

  *Breaking ground on two previously announced apartment joint ventures

       *650 N. Glebe Road, Arlington, Virginia: 163 unit project with a $49.5
         million budget, expected to break ground first quarter 2013 with
         substantial completion on or about fourth quarter 2014
       *1219 First Street, Alexandria, Virginia: 270 unit project with a
         $95.3 million budget, expected to break ground first quarter 2013
         with substantial completion on or about first quarter 2015

  *Continuing to upgrade existing properties, including lobby and common area
    renovations at 1901 Pennsylvania Avenue, 1220 19^th Street, 1140
    Connecticut Avenue, 1600 Wilson Boulevard, 6110 Executive Boulevard and 51
    Monroe Street, and multifamily unit renovations upon turnover
  *Continuing to sell non-strategic assets, including an anticipated sale of
    the Atrium office building in Rockville, Maryland, in the first quarter

Expected CEO Retirement

George F. “Skip” McKenzie has communicated to WRIT’s Board of Trustees his
decision to retire from WRIT by the end of 2013. The WRIT Board has requested
that Mr. McKenzie remain with WRIT in order to oversee the sale of the Medical
Office Division and the reinvestment of proceeds, and Mr. McKenzie has agreed
to do so. The WRIT Board intends to commence a search for a successor chief
executive promptly, with the goal of announcing a selection in the coming
months.

“On behalf of the shareholders and Board, I thank Skip for his numerous
contributions during his 16 years with WRIT. When Skip came to WRIT, we owned
only 47 properties. Since that time, WRIT has grown extensively and now owns
70 properties across the region. Since Skip took the reins as CEO, WRIT has
successfully weathered the recession, executed the sale of its Industrial
Division at a substantial gain, upgraded the quality of the portfolio by
focusing investment inside the Beltway, and developed a highly qualified team
of executives. I am delighted that Skip will continue with the company in the
coming months as we pursue the sale of the Medical Office Division, and I
thank him for his willingness to do so,” commented John P. McDaniel, Chairman
of WRIT’s Board.

"As to my expected retirement, although I will greatly miss working with my
WRIT family, I am looking forward to spending time with my real family after a
continuous 29-year real estate career. I am expecting the sale of our Medical
Office Division and reinvestment of the proceeds to represent my last major
contribution to WRIT, and I am excited to work with our highly-capable
executive team and outstanding employees to complete these initiatives. I have
enjoyed my time at WRIT tremendously and want to thank our shareholders, the
Board and our employees. The WRIT franchise has excelled in this marketplace
for 53 years, and I have been involved for over 16 of those years, including
serving as CEO since 2007. I am exceptionally proud of my involvement with the
firm and look forward to watching WRIT continue to grow in the years ahead,"
said Mr. McKenzie.

2013 Guidance

2013 core FFO per fully diluted share is projected to be $1.82 - $1.90.
Included in this projection are all of the above strategic initiatives, with
the exception of the potential Medical Office Division sale.

The following assumptions are also incorporated into 2013 guidance:

  *Same-store multifamily NOI growth is projected to range from 3% to 5%,
    with flat same-store occupancy
  *Same-store retail NOI growth is projected to range from 1% to 3%, with
    same-store occupancy improving incrementally
  *Same-store office NOI is projected to decrease by 1% to 2%, with
    same-store occupancy improving incrementally
  *General and administrative expense is projected to be approximately $16.5
    million, an increase over the third quarter 2012 run rate, due to the
    projected three-year long-term incentive compensation plan payout in the
    fourth quarter of 2013
  *Interest expense is projected to be approximately $66 million, an increase
    over the third quarter 2012 run rate, due to the full year impact of the
    third quarter 2012 $300 million unsecured debt issuance, offset in part by
    recent mortgage prepayments totaling approximately $88.5 million, and
    capitalized interest on development
  *Acquisition and disposition activities, including the effects of the
    proposed Medical Office Division sale and any potential reinvestment, are
    not included in guidance.

Conference Call Information

WRIT management will discuss 2013 strategic initiatives, expected CEO
retirement and 2013 guidance on a conference call on Wednesday, January 30,
2013 at 1:00 PM Eastern Time. Conference call access information is as
follows:

                               
USA Toll Free Number:                1-877-407-9205
International Toll Number:           1-201-689-8054
                                     

The instant replay of the Conference Call will be available until February 13,
2013 at 11:59 PM. Instant replay access information is as follows:

                               
USA Toll Free Number:                1-877-660-6853
International Toll Number:           1-201-612-7415
Conference ID:                       408398

The live on-demand webcast of the Conference Call will be available on the
Investor section of WRIT’s website at www.writ.com. Online playback of the
webcast will be available for two weeks following the Conference Call.

WRIT is a self-administered, self-managed, equity real estate investment trust
investing in income-producing properties in the greater Washington metro
region. WRIT owns a diversified portfolio of 70 properties totaling
approximately 9 million square feet of commercial space and 2,540 residential
units, and land held for development. These 70 properties consist of 26 office
properties, 17 medical office properties, 16 retail centers and 11 multifamily
properties. WRIT shares are publicly traded on the New York Stock Exchange
(NYSE: WRE).

Certain statements in this press release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements involve known and unknown risks, uncertainties, and other
factors that may cause actual results to differ materially. Such risks,
uncertainties and other factors include, but are not limited to, the potential
for federal government budget reductions, changes in general and local
economic and real estate market conditions, the timing and pricing of lease
transactions, the effect of the current credit and financial market
conditions, the availability and cost of capital, fluctuations in interest
rates, tenants' financial conditions, levels of competition, the effect of
government regulation, the impact of newly adopted accounting principles, and
other risks and uncertainties detailed from time to time in our filings with
the SEC, including our 2011 Form 10-K and third quarter 2012 Form 10-Q. We
assume no obligation to update or supplement forward-looking statements that
become untrue because of subsequent events.

Contact:

Washington Real Estate Investment Trust (WRIT)
William T. Camp, 301-984-9400
Executive Vice President and Chief Financial Officer
bcamp@writ.com
www.writ.com
 
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