Corporate Office Properties Trust (COPT) (NYSE: OFC), an office real estate investment trust (REIT) that focuses primarily on serving the specialized requirements of U.S. Government and Defense Information Technology tenants, announced that, subsequent to June 30, 2012, it completed the disposition of 24 operating properties and the Fort Ritchie development for gross proceeds of approximately $179 million. The operating properties contained an aggregate of 1.5 million square feet and were 83.8% occupied (90 leases) at the time of sale. (Please refer to Table 1 for detail.)
Year to date through July 24, 2012, COPT has sold a total of $317 million of properties and adjacent land containing approximately 2.3 million operational square feet and 162 leases that were 83.2% leased at the time of sale, realizing net proceeds of $253 million.
Since announcing its Strategic Reallocation Plan (SRP) in April 2011, COPT has disposed of $394 million of properties containing approximately 3.2 million operational square feet and adjacent land, realizing net proceeds after closing adjustments and repayment of property-specific debt of approximately $323 million. These properties represent 31% of COPT’s total leases but only 15% of its consolidated operating square feet that were in place at March 31, 2011 (the last reporting period before the SRP was announced).
COPT recycled $49.6 million of the proceeds into the acquisition of a 202,000 square foot property located at 13857 McLearen Road, known as the McLearen Center in Herndon, Virginia. McLearen Center is a five story, Class-A building built in 2007 and is in close proximity to the large US Government controlled campus at Dulles Discovery. The building is 99% leased to a strategic tenant in the Defense Information Technology industry.“We are pleased with our ability to execute the disposition of non-strategic assets, and to recycle some of the proceeds into McLearen Center, a highly strategic property. We look forward to discussing details of these transactions on our second quarter conference call on July 26 th,” stated Roger A. Waesche, Jr., President and Chief Executive Officer.
|Table 1: Details of July 2012 Dispositions|
|Address||Submarket||Operational Square Feet (000s)|
|9130, 9140, 9150 and 9160 Guilford Road||Howard County Perimeter||109|
|10270, 10280 and 10290 Old Columbia Road||Howard County Perimeter||42|
|9020 Mendenhall Court||Howard County Perimeter||48|
|9700, 9710, 9720, 9730 and 9740 Patuxent Woods Drive||Howard County Perimeter||153|
|110 Thomas Johnson Drive||Frederick||120|
|400 Professional Drive||Gaithersburg||130|
|7240 Parkway Drive||BWI South||75|
|Hunt Valley, MD|
|226 Schilling Circle||Hunt Valley/Rte. 83 Corridor||97|
|10150 York Road||Hunt Valley/Rte. 83 Corridor||175|
|11311 McCormick Road||Hunt Valley/Rte. 83 Corridor||215|
|200 and 201 International Circle||Hunt Valley/Rte. 83 Corridor||204|
|White Marsh, MD|
|7941-7949, 8029 and 8031 Corporate Drive||White Marsh||149|
|Subtotal - Operating Properties||1,517|
|Fort Ritchie Development Project|
|591 acres in Cascade, MD|
|Conference Call to Discuss Second Quarter 2012 Results|
|Earnings Release Date:||Thursday, July 26, 2012 at 8:00 a.m. Eastern Time|
|Conference Call Date:||Thursday, July 26, 2012|
|Time:||11:00 a.m. Eastern Time|
|Telephone Number: (within the U.S.)||888-679-8033|
|Telephone Number: (outside the U.S.)||617-213-4846|
- general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability and property values;
- adverse changes in the real estate markets including, among other things, increased competition with other companies;
- governmental actions and initiatives, including risks associated with the impact of a government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases, and/or a curtailment of demand for additional space by strategic tenants;
- the Company’s ability to sell properties included in its Strategic Reallocation Plan;
- the Company’s ability to borrow on favorable terms;
- risks of real estate acquisition and development activities, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that development or operating costs may be greater than anticipated;
- risks of investing through joint venture structures, including risks that the Company’s joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with the Company’s objectives;
- changes in the Company’s plans or views of market economic conditions or failure to obtain development rights, any of which could result in recognition of impairment losses;
- the Company’s ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships;
- the dilutive effect of issuing additional common shares; and
- environmental requirements.
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