Our focused growth strategy is working. Corporate Office Properties Trust has consistently outperformed other publicly traded office REITs. Over the last three-year period, COPT achieved a total shareholder return of 116%—the highest among all office REITs with market capitalization over $50 million, according to the National Association of Real Estate Investment Trusts, and substantially more than the DOW and the NASDAQ. Over the last five years, COPT’s assets have grown 409%, from $194 million to $984 million. In addition at year-end 2001, COPT reached a milestone of $1 billion in total market capitalization.

The foundation of our steady growth in assets and shareholder returns is our strong balance sheet and focused growth strategy. Through selective acquisitions and strategic development, our growth strategy is to further penetrate the suburban office markets we serve while expanding into strong neighboring markets. In 2001, we continued to strengthen our balance sheet and execute this focused strategy:

  • We raised $78 million through the issuance of preferred shares to capitalize on the lower office property acquisition prices available in last year’s soft economy.
  • We reduced our borrowing costs, dropping our blended cost of debt from 7.96% to 6.85% at year-end.
  • We strengthened our dominant franchise in the Baltimore/Washington Corridor by selectively acquiring 13 office buildings, comprising 740,117 square feet of Class A space, for $85 million.
  • We completed the construction of three Class A office buildings, which were 92% leased at year-end. With over two million square feet in our development pipeline, we are positioned to rapidly respond to future tenant and market demands.
  • We strategically expanded into the Northern Virginia market with the acquisition of the Washington Technology Park, a 470,406 square foot, Class A office property with a contiguous 17 acre development site. Declared as a surplus property as a result of a series of corporate mergers, we acquired the building, which was built in 1989 at a cost of $93 million, for $59 million—a substantial discount and well below replacement cost. The building is 100% leased to six tenants at below market rental rates.
  • We established a regional office in the Washington Technology Park to help identify other acquisition opportunities available in Northern Virginia and its neighboring market, the I-270 Corridor in Montgomery County, Maryland.