Company History

A History of Growth and Shareholder Return

Company originates in 1988 as Royale Investments

The Company was formed in 1988 as Royale Investments, Inc., a retail Real Estate Investment Trust (REIT). Owning a variety of grocery store-anchored retail centers in the Mid-West region, Royale conducted its Initial Public Offering in December 1991.

Merges with The Shidler Group in 1997 and acquires $170 million portfolio

In October 1997, the Company merged with The Shidler Group's Philadelphia-based organization, became self administered and converted into an UPREIT, and relocated its headquarters from Minneapolis to Philadelphia. Jay H. Shidler became the Company's new Chairman and Clay W. Hamlin, III, assumed the role of President and Chief Executive Officer. The Company shifted its focus to the acquisition, development and management of suburban office properties in targeted suburban submarkets. The Company also secured a $100 million acquisition financing commitment from Bankers Trust. In combining with The Shidler Group's organization, the Company acquired its $170 million, 1.5 million square foot Mid-Atlantic suburban office portfolio.

Becomes Corporate Office Properties Trust in 1998, conducts public offering, and begins acquisitions strategy

The Company changed its name to Corporate Office Properties Trust on January 1, 1998. In March 1998, the Company reformed as a Maryland REIT and the following month completed a $78 million public offering at $10.50 share. The Company listed on the New York Stock Exchange under the ticker symbol OFC. Also in April, Corporate Office Properties began its acquisition program by purchasing a 12-building, 813,000 square foot portfolio near the Baltimore-Washington International Airport and a two-building, 262,000 square foot office portfolio in Fairfield, New Jersey.

On May 15, 1998, the Company announced its intentions to combine with entities of Constellation Real Estate Group, Inc. (Constellation), a full-service real estate owner and developer based in Columbia, Maryland, and a wholly-owned subsidiary of Constellation Energy Group (CEG). The transaction was valued in excess of $178 million, and would add 16 properties totaling 1.6 million square feet located primarily in the Baltimore-Washington corridor. The Company would also acquire a 75% interest in Corporate Realty Management, LLC (CRM).

On August 21, 1998, the Company shareholders approved the Constellation transaction with 98.6% in favor, and on September 28, 1998, the Company closed the initial and most significant stage of this combination. Randall M. Griffin became the President and Chief Operating Officer.  The Company also received certain options and first refusal rights to acquire 91 acres of land over the next two to five years, which would permit approximately 1.7 million square feet of additional office development to be built. Effective with this merger, CEG became the largest shareholder with 41.5% ownership of the common stock.  In March 2002, CEG sold its entire ownership of this stock representing nearly 8.9 million shares.

A history of growth and performance

During 1998, the Company also acquired $173 million of other properties. As a result, the Company broadened its base further into the Baltimore/Washington corridor and penetrated further into Central New Jersey. In each case, the Company achieved the critical mass necessary to gain operating efficiencies and strengthen the base of high quality tenants.

In 1999, the Company acquired 29 office properties totaling approximately 1.5 million square feet of office space, for a total investment of $158.3 million. An additional 351,000 square feet of office space was developed and placed into service, all of which was 100% leased at the time of its completion. The Company raised nearly $100 million in equity capital without issuing common stock and finished the year 97.5% occupied and 98.5% leased. Corporate Office Properties achieved an 18.2% total return to common shareholders in 1999, which represented the highest total return in the REIT office sector.

Company consistently ranks first among office REITs in shareholder return

The strong momentum continued in 2000, with the Company finishing the year with 83 office properties totaling 6.5 million square feet of space in its portfolio. The Company leased nearly 1.4 million square feet of space in 2000, representing a 46.2% increase from the previous year. Two office buildings, totaling 223,500 square feet of space, were purchased and the Company developed an additional 380,760 square feet of Class A office space. Corporate Office Properties realized a total return to shareholders of 41.9% and a 60.1% return over the past two years, which ranked the Company first among all office REITs in the country.

By year-end 2001, Corporate Office Properties reached $1.1 billion in total market capitalization. The Company acquired 1.2 million square feet of office space for $141 million, which included the expansion into the adjacent Northern Virginia submarket with a $59 million acquisition. Additionally, the Company completed three development projects totaling 240,245 square feet of space that were 91.7% leased by year-end and raised $78 million in preferred equity. Total shareholder return in 2001 was 29% and 116.4% for the three-year period from 1999-2001. In both cases, the Company ranked first among all office REITs with a market capitalization greater than $50 million.  

The Company was in the right place at the right time in 2002. Again, the Company was first among all office REITs for its 2002 total shareholder return of 26% and its four year total shareholder return of 172%. $107 million of office buildings were acquired in 2002 and the Company had occupancy numbers well above the national averages at 94% for the year. The Company remained focused on growth in 2002, growing its total market capitalization over 20% while increasing diluted FFO 7.8%.

The Company consistently outperformed in 2003, achieving a 58% total shareholder return and a 329% total shareholder return over the past five years. Total assets grew 136% over the past five years and the Company reached $1 billion in equity capitalization for 2003. The Company increased diluted FFO 8%, outperforming its office peer group. During 2003, the Company entered a new submarket, Herndon, Virginia, acquiring three office buildings. The Company plans to continue expanding its portfolio within chosen markets, developing to meet tenant demand and exceeding tenant expectations through customer service.

The Company’s ability to build on its long-term relationships with its tenants was showcased through 2004. The Company has the resources to meet its tenants’ expansion requirements with strategically located properties. Over the last five years, the Company achieved a 427% total shareholder return, the highest in the office REIT industry. The Company was among the top performing office REITs for 2004, increasing its diluted FFO 11.5%, its quarterly dividend 8.5%, renewing 71% of its expiring leases and increasing its portfolio occupancy to 94% at year-end. The Company entered a new submarket in St. Mary’s County and King George County, proving its ability to strategically locate near government demand drivers.

In 2005, the Company reported another year of strong financial results. What’s our secret? A great strategy, great customers and a great team. The Company achieved strong financial results through a sound strategy, FFO growth and solid execution by its team. The result: consistent excellent shareholder returns – at 365% for the last 5 years--the highest of all office REITs. The Company grew strategically through its tenant-driven expansion strategy, and its expansion of land inventory, ensuring the continuation of the Company’s development activities. The formation of mission-specific joint ventures added depth to the Company’s portfolio, combined with its other acquisition activities. 

The Company’s growth continued in 2006 by accelerating its growth drivers to create new and long-term opportunities for the Company. As in past years, the Company continued to build its land inventory for future development. The Company closed on Fort Ritchie, a former U.S. army base located in Washington County, Maryland, providing 1.7 million square feet of office development capacity as well as 673 residential units. The Company’s total land under control at December 31, 2006 is over 1200 acres and has a potential 11.2 million square feet of future office development over the next 5 to 10 years. The Company had many financial accomplishments throughout the year – the stock price hit an historic high at $50.47 and shareholder returns remained among the highest in the office REIT sector with 46% for one year and 426% for five years. The Company made several significant management changes, beginning the succession planning process and positioning the Company for future growth. The Company also relocated its corporate headquarters to the Columbia Gateway Business Park where the Company has a dominant position. The Company defined its core values and created its vision for the future which will sustain the Company over the next 20 years. The core values define “The COPT WAY” - how the Company operates everyday with its customers, its vendors and its shareholders.  The core values were named ISITE – and are defined as operating with the highest level of Integrity, Service, Innovation, Teamwork, and Excellence.  By living these core values, the Company has grown into one of the top performing office REITs for the past 8 years. 

2007 was another great earnings year for COPT.  It marked the 10th consecutive year of increasing revenue and FFO for the Company. COPT generated FFO of $2.24 for the year, a 12.6% increase over 2006 results. 2007 also marked the 10th consecutive annual dividend increase for the Company with a dividend increase of 10%. During the year, COPT strengthened its presence in Baltimore County and Columbia with the acquisition of the Nottingham Properties office portfolio containing 2.4 million square feet, 187 acres of land and future development capacity of a minimum of 2 million square feet. The Company also expanded relationships with existing tenants, consistent with its strategy of meeting customers’ multi-location regional and national needs. COPT extended its dominant position in growth markets by being named master developer for a 272 acre business park at the entrance of the Colorado Springs Airport and adjacent to Peterson Air Force Base. The Company added to its specialty product expertise with two data centers placed into service throughout the year.  COPT began positioning itself to participate in the significant job growth in Maryland that will be generated as a result of the Base Realignment and Closure (BRAC) initiative. Major land positions were acquired adjacent to bases scheduled to add jobs and buildings are being designed and constructed to meet DoD’s security guidelines. The Company’s development pipeline remains substantial. 77% of the square footage of the Company’s projected construction starts were designated to meet demand from government and defense information technology sector clients throughout the year. COPT continues to strengthen customer relationships through consistently outstanding customer service. This year was the fourth consecutive year that the Company won the CEL & Associates, Inc. award for quality service and tenant satisfaction among nationwide office operators in the large owner category.