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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark one)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2000
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 0-20047
CORPORATE OFFICE PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 23-2947217
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8815 CENTRE PARK DRIVE, SUITE 400
COLUMBIA, MD 21045
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 730-9092
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Securities registered pursuant to Section 12(b) of the Act:
(Name of Exchange
(Title of Each Class) on Which Registered)
COMMON SHARE OF BENEFICIAL INTEREST, $0.01 PAR VALUE NEW YORK STOCK EXCHANGE
SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARE NEW YORK STOCK EXCHANGE
OF BENEFICIAL INTEREST, $0.01 PAR VALUE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the (1) registrant has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X]Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was $99,996,000 based on the closing price of such Shares on the New
York Stock Exchange on March 19, 2001. At March 19, 2001, 20,426,437 shares of
the Registrant's Common Shares of Beneficial Interest, $0.01 par value, were
outstanding.
Portions of the annual shareholder report for the year ended December 31, 2000
are incorporated by reference into Parts I and II of this report and portions of
the proxy statement of the Registrant for its 2001 Annual Meeting of
Shareholders to be filed within 120 days after the end of the fiscal year
covered by this Form 10-K are incorporated by reference into Part III of this
Form 10-K.
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1
Table of Contents
Form 10-K
PART I
ITEM 1. BUSINESS.....................................................................3
ITEM 2. PROPERTIES..................................................................13
ITEM 3. LEGAL PROCEEDINGS...........................................................18
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS........................18
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.......19
ITEM 6. SELECTED FINANCIAL DATA TABLE...............................................19
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS...............................................................19
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..................19
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................................19
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE........................................................19
PART III
ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT............................19
ITEM 11. EXECUTIVE COMPENSATION.......................................................19
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...............19
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................19
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K..............19
FORWARD-LOOKING STATEMENTS
This Form 10-K contains "forward-looking" statements, as defined in the
Private Securities Litigation Reform Act of 1995 that are based on our current
expectations, estimates and projections about future events and financial trends
affecting the financial condition of the business. Statements that are not
historical facts, including statements about our beliefs and expectations, are
forward-looking statements. These statements are not guarantees of future
performance, events or results and involve potential risks and uncertainties.
Accordingly, actual results may differ materially. We undertake no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Important facts that may affect these expectations, estimates or
projections include, but are not limited to: our ability to borrow on favorable
terms; general economic and business conditions, which will, among other things
affect office property demand and rents, tenant creditworthiness and financing
availability; interest rates; adverse changes in the real estate markets
including, among other things, competition with other companies; risks of real
estate acquisition and development; governmental actions and initiatives and
environmental requirements.
2
PART I
ITEM 1. BUSINESS
OUR COMPANY
GENERAL. We are a fully-integrated and self-managed real estate investment
trust ("REIT") that focuses principally on the ownership, management, leasing,
acquisition and development of suburban office buildings located in select
submarkets in the Mid-Atlantic region of the United States. As of December 31,
2000, we:
o owned 83 office properties in Maryland, Pennsylvania and New Jersey
containing approximately 6.5 million rentable square feet;
o achieved a 97% occupancy rate on our properties;
o had construction underway on three new buildings totaling approximately
301,000 square feet that were 23% pre-leased and owned a 50% interest in
joint ventures constructing two additional new buildings totaling
approximately 268,000 square feet that were 79% pre-leased;
o had development underway on two land parcels on which we plan to construct
two new buildings; and
o owned options to purchase 73 acres of land contiguous to certain of our
office properties from related parties.
We conduct almost all of our operations through our operating
partnership, Corporate Office Properties, L.P., a Delaware limited partnership,
for which we are the managing general partner. Our Operating Partnership owns
real estate both directly and through subsidiaries. Interests in our Operating
Partnership are in the form of Common and Preferred Units. As of December 31,
2000, we owned approximately 66% of the outstanding Common Units and
approximately 55% of the outstanding Preferred Units. The remaining Common and
Preferred Units in our Operating Partnership were owned by third parties, which
included certain of our officers and Trustees.
The Operating Partnership also owned the principal economic interest
and, collectively with our Chief Executive Officer and Chief Operating Officer,
49.5% of the voting stock of Corporate Office Management, Inc. ("COMI") at
December 31, 2000. COMI provided us with asset management and managerial,
financial and legal support from September 1998 through December 2000. On
January 1, 2001, the Operating Partnership acquired all of the stock in COMI
that it did not previously own and all of COMI's employees became employees of
the Operating Partnership. COMI has three subsidiaries: Corporate Realty
Management, LLC ("CRM"), Corporate Development Services, LLC ("CDS") and Martin
G. Knott and Associates, LLC ("MGK"). CRM manages our properties and also
provides corporate facilities management for third parties. CDS provides
construction and development services predominantly to us. MGK provides heating
and air conditioning installation, maintenance and repair services. COMI owns
100% of CRM and CDS and 80% of MGK.
We believe that we are organized and have operated in a manner that
permits us to satisfy the requirements for taxation as a REIT under the Internal
Revenue Code of 1986, as amended, and we intend to continue to operate in such a
manner. If we qualify for taxation as a REIT, we generally will not be subject
to Federal income tax on our taxable income that is distributed to our
shareholders. A REIT is subject to a number of organizational and operational
requirements, including a requirement that it currently distribute to its
shareholders at least 90% of its annual taxable income (excluding net capital
gains).
Our executive offices are located at 8815 Centre Park Drive, Suite 400,
Columbia, Maryland 21045 and our telephone number is (410) 730-9092.
3
SIGNIFICANT 2000 DEVELOPMENTS
During 2000, we acquired two suburban office properties. A summary of
these acquisitions follows (dollars in thousands):
Number
of Total Rentable Initial
Project Name Location Date of Acquisition Buildings Square Feet Cost
- ------------ -------- ------------------- --------- ----------- ----
7240 Parkway Drive Hanover, MD 4/18/00 1 73,500 $7,464
9140 Route 108 Columbia, MD 12/14/00 1 150,000 7,149
During 2000, we also acquired seven parcels of land that are contiguous
to certain of our operating properties.
During 2000, we completed the construction of five office buildings
totaling 380,760 square feet. The office buildings are located in Annapolis
Junction, Maryland, Linthicum, Maryland, South Brunswick, New Jersey and
Harrisburg, Pennsylvania. Costs incurred on these properties through December
31, 2000 totaled $46.5 million. As of December 31, 2000, we had construction
underway on three new buildings, development underway on two parcels of land and
had an investment in joint ventures constructing two additional new buildings.
We also had an investment in an unconsolidated real estate joint venture engaged
in development activities on a parcel of land.
We sold three properties during 2000 for $11.6 million, generating net
proceeds after property level debt repayments and transaction costs of $4.3
million. A summary of these sales follows (dollars in thousands):
Property Type Date of Total Rentable Sales
Project Name Location Type(1) Sale Square Feet Price
------------ -------- ------- ---- ----------- -----
Minot Retail Minot, ND R 6/19/00 46,134 $2,970
Tred Avon Easton, MD R 11/10/00 149,191 5,800
3 Centre Drive Cranbury, NJ O 12/28/00 20,436 2,790
(1) "R" indicates retail property; "O" indicates office property.
A summary of our significant financing activities during 2000 follows:
o we received $43.3 million in borrowings from new mortgage loans payable,
o we obtained $49.9 million in new construction loan commitments,
o we purchased interest rate cap contracts that limit LIBOR interest rates
to rates ranging from 7.0% to 7.7% over terms expiring between October
2001 and May 2002 on a total of $125.0 million,
o we entered into an interest rate swap contract that fixes our one-month
LIBOR interest rate base to 5.76% per annum on a notional amount of $100.0
million until January 2003, and
o we initiated our share repurchase program by acquiring 166,600 of our
Common Shares of beneficial interest ("Common Shares").
SUBSEQUENT EVENT
In January 2001, we issued 544,000 Series D Cumulative
Convertible Redeemable Preferred Shares of beneficial interest ("Series D
Preferred Shares") to a foreign trust at a price of $22.00 per share for
proceeds totaling $12.0 million. These shares are nonvoting and are redeemable
for cash at $25.00 per share at our option on or after January 25, 2006. These
shares are also convertible on or after January 1, 2004 into Common Shares on
the basis of 2.2 Common Shares for each Series D Preferred Share. Holders of
these shares are entitled to cumulative dividends, payable quarterly (as and if
declared by the Board of Trustees). Dividends accrue from the date of issue at
the annual rate of $1.00 per share, which is equal to 4% of the $25.00 per share
redemption price. We contributed the net proceeds to our Operating Partnership
in exchange for 544,000 Series D Preferred Units. The Series D Preferred Units
carry terms that are substantially the same as the Series D Preferred Shares.
The Operating Partnership used most of the proceeds to pay down our revolving
credit facility with Deutsche Banc Alex. Brown.
4
OUR OPERATING STRATEGY
Our primary business objectives are to achieve sustainable long-term
growth in funds from operations per share and to maximize long-term shareholder
value. We seek to achieve these objectives by implementing our focused operating
and growth strategies. Key elements of this strategy include:
SUBURBAN OFFICE FOCUS. We focus on the ownership, management, leasing,
acquisition and development of suburban office properties. We believe office
buildings currently offer the strongest fundamentals of any real estate property
type, and suburban office properties offer us very attractive investment
opportunities. The three key factors driving the strong fundamentals of suburban
office properties are (i) increasing rental rates, (ii) low vacancy rates, and
(iii) a limited supply of new office product. Additionally, we believe that many
companies are relocating to, and expanding in, suburban locations because of
total lower costs, proximity to residential housing and better quality of life.
GEOGRAPHIC AND SUBMARKET FOCUS. We focus on operating in select,
demographically strong and growing markets within the Mid-Atlantic region of the
United States, where we believe we can achieve the critical mass necessary to
maximize management efficiencies, operating synergies, tenant services and
competitive advantages through our acquisition, property management and
development programs. By focusing within specific submarkets where our
management has extensive experience and market knowledge, we believe we can
achieve submarket prominence that will lead to better operating results.
OFFICE PARK FOCUS. We focus on owning and operating properties located
in established suburban corporate office parks. We believe the suburban office
park environment generally attracts longer-term tenants, including high-quality
corporations seeking to attract and retain quality work forces, because these
parks are typically situated along major transportation routes with easy access
to support services, amenities and residential communities.
CORPORATE TENANTS. We focus on leasing to large, high-quality
corporations with significant space requirements. To enhance the stability of
our cash flow, we typically structure our leases with terms ranging from three
to ten years. We believe this strategy enables us to establish long-term
relationships with quality tenants and, coupled with our geographic and
submarket focus, enhances our ability to become the low-cost provider and the
landlord of choice in our targeted markets.
ACQUISITION STRATEGIES. We actively pursue the acquisition of suburban
office properties through our three-part acquisition strategy. This strategy
includes targeting: (i) entity acquisitions of significant portfolios along with
their management to establish prominent ownership positions in new submarkets
and enhance our management infrastructure and local expertise, (ii) portfolio
purchases to enhance our existing submarket positions as well as enter selective
new submarkets, and (iii) opportunistic acquisitions of individual properties in
our existing submarkets. We seek to make acquisitions at attractive yields and
below replacement costs. We also look at each acquisition for opportunities to
reposition the properties and achieve rental increases through re-leasing
activities.
PROPERTY DEVELOPMENT STRATEGIES. We balance our acquisition program
through selective development and expansion of suburban office properties when
market conditions and leasing opportunities support favorable risk-adjusted
returns. We pursue development opportunities principally in response to the
needs of existing and prospective new tenants. We develop sites that are in
close proximity to our existing properties. We believe developing such sites
enhances our ability to effectively meet tenant needs and efficiently provide
critical tenant services.
TENANT SERVICES. Our investment in COMI and its subsidiaries has played
a vital role in maintaining our high levels of tenant satisfaction and
retention. We believe that further expanding our tenant service capabilities
will continue to contribute positively to the operations of our properties and
become an additional source of revenue and earnings.
INTERNAL GROWTH STRATEGIES. We aggressively manage our portfolio to
maximize the operating performance of each property through: (i) proactive
property management and leasing, (ii) achieving operating efficiencies through
increasing economies of scale, (iii) renewing tenant leases and re-tenanting at
increased rents where market conditions permit, and (iv) expanding our tenant
and real estate service capabilities. These strategies are designed to promote
tenant satisfaction, resulting in tenant retention and the attraction of new
tenants.
5
FINANCING POLICY
We pursue a capitalization strategy aimed at maintaining a flexible
capital structure in order to facilitate consistent growth and performance
through all real estate and economic market conditions. Key components of our
policy include:
DEBT STRATEGY. We primarily utilize property-level mortgage debt as
opposed to corporate unsecured debt. We believe the commercial mortgage debt
market is a more mature and generally more stable market for real estate
companies, which provides us with greater access to capital on a more consistent
basis and, generally, on more favorable terms. Additionally, we seek to utilize
long-term, fixed rate debt which we believe enhances the stability of our cash
flow. On a consolidated basis, we seek to maintain a minimum debt service
coverage ratio of 1.6 to 1.0, which we believe is generally consistent with the
current minimum investment grade requirement for mortgages securing commercial
real estate. We believe this ratio is appropriate for a seasoned portfolio of
suburban office properties.
EQUITY STRATEGY. We seek to maximize the benefits of our Operating
Partnership organizational structure by emphasizing the issuance of our
Operating Partnership units as an equity source to finance our property
acquisition program. This strategy provides prospective property sellers the
ability to defer taxable gains by receiving our units in lieu of cash and
reduces the need for us to access the equity and debt markets.
MORTGAGE LOANS PAYABLE
For information relating to future maturities of our mortgage loans
payable, you should refer to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 8 to the Consolidated
Financial Statements included in Exhibit 13.1 to this Form 10-K which is
incorporated herein by reference.
INDUSTRY SEGMENTS
We have four segments: Baltimore/Washington Corridor office, Greater
Philadelphia office, Northern/Central New Jersey office and Greater Harrisburg
office. For information relating to these segments, you should refer to Note 14
of our Consolidated Financial Statements included in Exhibit 13.1 to this Form
10-K which is incorporated herein by reference.
EMPLOYEES
We, together with COMI and its subsidiaries, employed 150 persons as of
December 31, 2000.
COMPETITION
The commercial real estate market is highly competitive. Numerous
commercial properties compete for tenants with our properties and our
competitors are building additional properties in the markets in which our
properties are located. Some of these competing properties may be newer or have
more desirable locations than our properties. If the market does not absorb
newly constructed space, market vacancies will increase and market rents may
decline. As a result, we may have difficulty leasing space at our properties and
may be forced to lower the rents we charge on leases to compete effectively.
We also compete for the purchase of commercial property with many
entities, including other publicly-traded commercial REITs. Many of our
competitors have substantially greater financial resources than ours. In
addition, our competitors may be willing to accept lower returns on their
investments. If our competitors prevent us from buying the amount of properties
that we have targeted for acquisition, we may not be able to meet our property
acquisition and development goals.
6
RISK FACTORS
Before you invest in our securities, you should be aware that there are
various risks. We have described for you below some of the risks involved in
investing in our securities. A word of caution: the list below is not a complete
list. You should carefully consider each of these factors and all of the
information in this Form 10-K and its Exhibits, including Exhibit 13.1 which
sets forth portions of the Annual Report of Corporate Office Properties Trust as
of and for the year ended December 31, 2000.
OUR PERFORMANCE IS SUBJECT TO RISKS ASSOCIATED WITH THE REAL ESTATE INDUSTRY
GENERALLY. We earn income from renting our properties. Our operating
costs do not necessarily fluctuate in relation to changes in our rental revenue.
This means our costs will not necessarily decline even if our revenues do. Also,
our operating costs may increase while our revenues do not.
For new tenants or upon lease expiration for existing tenants, we
generally must make improvements and pay other tenant-related costs for which we
may not receive increased rents. We also make building-related capital
improvements for which tenants may not reimburse us.
If our properties do not generate income sufficient to meet our
operating expenses and capital costs, we may have to borrow additional amounts
to cover these costs. In such circumstances, we would likely have lower profits
or possibly incur losses. We may also find in such circumstances that we are
unable to borrow to cover such costs. Moreover, there may be less or no cash
available for distributions to our shareholders.
WE RELY ON A FEW TENANTS FOR MOST OF OUR REVENUE. As of December 31,
2000, ten tenants accounted for 42.5% of our annualized office rents. Two of
these tenants accounted for approximately 21.1% of our total annualized office
rents. Our largest tenant is the United States Federal government, two agencies
of which lease space in 13 of our office properties. These leases represented
approximately 14.2% of our total annualized office rents as of December 31,
2000. Generally, these government leases provide for one-year terms or provide
for early termination rights. The government may terminate its leases if, among
other reasons, the Congress of the United States fails to provide funding. The
Congress of the United States has appropriated funds for these leases through
September of 2001. The second largest tenant, Unisys Corporation, represented
6.9% of our total annualized office rents as of December 31, 2000 and 9.8% of
our 2000 net operating income since Unisys pays all of its property operating
expenses directly. Unisys occupies space in three of our office properties. If
either the Federal government or Unisys fails to make rental payments to us, or
if the Federal government elects to terminate several of its leases and the
space cannot be re-leased on satisfactory terms, our financial performance and
ability to make expected distributions to shareholders would be materially
adversely affected.
WE DEPEND ON THE FINANCIAL HEALTH OF OUR TENANTS. Our performance
depends on the ability of our tenants to fulfill their lease obligations by
paying their rental payments in a timely manner. As previously discussed, we
also rely on a few major tenants for a large percentage of our total revenue. If
one of our major tenants or a number of our smaller tenants were to experience
financial difficulties, including bankruptcy, insolvency or general downturn of
business, our financial performance and ability to make expected distributions
to shareholders could be materially adversely affected.
OUR PROPERTIES ARE LOCATED MAINLY IN ONE REGION -- THE MID-ATLANTIC. All
of our properties are located in the Mid-Atlantic region of the United States
and as of December 31, 2000, our office properties located in the
Baltimore/Washington Corridor accounted for 65.1% of our annualized office
rents. Consequently, we do not have a broad geographic distribution of our
properties. As a result, a decline in the real estate market or economic
conditions generally in the Mid-Atlantic region or in the Baltimore/Washington
Corridor could have a materially adverse affect on our operations and financial
position.
7
OUR LEASE RENEWALS POSE UNCERTAINTIES. When leases expire at our
properties, our tenants may not renew or may renew but on terms less favorable
to us than the terms of the original lease. As of December 31, 2000, our
scheduled lease expirations, as a percentage of total annualized rents, for the
next five calendar years were:
2001 10.0%
2002 15.9%
2003 16.2%
2004 10.4%
2005 10.5%
If a tenant leaves, we can expect to incur a vacancy for some period of
time as well as higher capital costs than if a tenant renews. In either case,
our financial performance and ability to make expected distributions to our
shareholders could be adversely affected.
COMPETITION MAY CAUSE DIFFICULTY IN OUR LEASING ACTIVITY. The commercial
real estate market is highly competitive. Numerous commercial properties compete
for tenants with our properties and our competitors are building additional
properties in the markets in which our properties are located. Some of these
competing properties may be newer or have more desirable locations than our
properties. If the market does not absorb newly constructed space, market
vacancies will increase and market rents may decline. As a result, we may have
difficulty leasing space at our properties and we may be forced to lower the
rents we charge on new leases to compete effectively.
COMPETITION MAY CAUSE DIFFICULTY IN OUR STRATEGY OF ACQUIRING NEW
PROPERTY. We compete for the purchase of commercial property with many entities,
including other publicly traded commercial REITs. Many of our competitors have
substantially greater financial resources than ours. In addition, our
competitors may be willing to accept lower returns on their investments. If our
competitors prevent us from buying the amount of properties that we have
targeted for acquisition, we may not be able to meet our property acquisition
and development goals. We may incur costs on unsuccessful acquisitions that we
will not be able to recover. The operating performance of our property
acquisitions may also fall short of our expectations which could adversely
affect our financial performance.
OUR DEVELOPMENT AND CONSTRUCTION ACTIVITIES POSE CERTAIN RISKS. Although
the majority of our investments are in currently leased properties, we also
develop and construct properties, including some which are not fully pre-leased.
When we develop and construct properties, we run the risks that actual costs
will exceed our budgets, that we will experience construction or development
delays and that projected leasing will not occur, all of which could adversely
affect our financial performance and ability to make expected distributions to
our shareholders. In addition, we generally do not obtain construction financing
commitments until the development stage of a project is complete and
construction is about to commence. We may find that we are unable to obtain
financing needed to continue with the construction activities for such projects.
WE ARE SUBJECT TO POSSIBLE ENVIRONMENTAL LIABILITIES. We are subject to
various Federal, state and local environmental laws. These laws can impose
liability on property owners or operators for the costs of removal or
remediation of certain hazardous substances released on a property, even if the
property owner was not responsible for the release of the hazardous substances.
These costs could be substantial. The presence of hazardous substances on our
properties may also adversely affect occupancy and our ability to sell or borrow
against those properties. In addition to the costs of government claims under
environmental laws, private plaintiffs may bring claims for personal injury or
similar reasons. Various laws also impose liability for the costs of removal or
remediation of hazardous substances at the disposal or treatment facility.
Anyone who arranges for the disposal or treatment of hazardous substances at
such a facility is potentially liable under such laws. These laws often impose
liability whether or not the facility is or ever was owned or operated by such
person.
WE CANNOT SELL OUR PROPERTIES QUICKLY. Equity real estate investments
like our properties are relatively difficult to sell and convert to cash
quickly, especially if market conditions are poor. Such illiquidity will tend to
limit our ability to vary our portfolio of properties promptly in response to
changes in economic or other conditions. The Internal Revenue Code imposes
certain penalties on a REIT that sells property held for less than four years.
In addition, for certain of our properties that we acquired from the sellers
using units in our Operating Partnership, we are restricted from entering into
transactions (such as the sale or refinancing of the acquired property) that
will result in a taxable gain to the sellers
8
without the consent of the sellers. Due to all of these factors, we may be
unable to sell a property at an advantageous time.
WE ARE SUBJECT TO OTHER POSSIBLE LIABILITIES. Our properties may be
subject to other risks related to current or future laws including laws
benefiting disabled persons, and other state or local zoning, construction or
other regulations. These laws may require significant property modifications in
the future for which we may not have budgeted and could result in fines being
levied against us. In addition, although we believe that we adequately insure
our properties, we are subject to the risk that our insurance may not cover all
of the costs to restore a property which is damaged by a fire or other
catastrophic event. The occurrence of any of these events could adversely impact
our financial position, cash flows and ability to make distributions to
shareholders.
WE MAY INCUR PROBLEMS WITH OUR REAL ESTATE FINANCING
Our strategy is to operate with higher debt levels than most other
REITs. Our organizational documents do not limit the amount of indebtedness that
we may incur. However, these high debt levels could make it difficult to obtain
additional financing when required. Most of our properties have been mortgaged
to collateralize indebtedness. In addition, we will rely on borrowings to fund
some or all of the costs of new property acquisitions, construction and
development activities and other items.
As of December 31, 2000, our total outstanding debt was $474.3 million.
Our debt to total market capitalization ratio was 57.3% based upon the closing
per share market price for the Common Shares of $9.9375 on December 31, 2000.
Total market capitalization is the sum of total debt plus the value of all
outstanding Common Shares and Common Units at such market price and the total
Preferred Shares and Preferred Units at their liquidation value.
Payments of principal and interest on our debt may leave us with
insufficient cash to operate our properties or pay distributions to our
shareholders required to maintain our qualification as a REIT. We are also
subject to the risks that:
o We may not be able to refinance our existing indebtedness, or refinance on
terms as favorable as the terms of our existing indebtedness;
o Certain debt agreements of our Operating Partnership could restrict the
ability of our Operating Partnership to make cash distributions to us,
which could result in reduced distributions to our shareholders or the
need to incur additional debt to fund distributions; and
o If we are unable to pay our debt service on time or are unable to comply
with restrictive financial covenants appearing in certain of our mortgage
loans, our lenders could foreclose on our properties securing such debt
and in some cases other properties and assets which we own. A number of
our loans are cross-collateralized, which means that separate groups of
properties from our portfolio secure each of these loans. More
importantly, almost all of our loans are cross-defaulted, which means that
failure to pay interest or principal on any of our loans will create a
default on certain of our other loans. Any foreclosure of our properties
would result in loss of income and asset value which would negatively
impact our financial condition and results of operations. In addition, if
we are in default and the value of the properties securing a loan is less
than the loan balance, the lender may require payment from our other
assets.
As of December 31, 2000, approximately 57.5% of our total debt had
adjustable interest rates. Consequently, if short term interest rates were to
rise, our debt service payments would increase, which would lower our net income
and could decrease our distributions to our shareholders. As of December 31,
2000, we had three interest rate caps with Bear Stearns Capital Markets, Inc.
and one interest rate swap agreement with Deutsche Banc Alex. Brown to reduce
the impact of interest rate changes. Decreases in interest rates would result
in increased interest expense payments due under the interest rate swap
agreement and could result in the Company's management deciding to make a
payment to unwind the agreement.
9
We must refinance our mortgage debt in the future. As of December 31,
2000, our scheduled debt payments over the next five calendar years, including
maturities, are as follows:
2001 $237,900 (1)
2002 37,771 (2)
2003 3,924
2004 29,771
2005 24,051
(1) Includes $100.0 million maturity in October that may be extended for a
one-year period, subject to certain conditions. Also includes an $8.9
million maturity in October that may be extended for a one-year term,
subject to certain conditions, and a $4.8 million maturity in February
that was extended for a two-year period.
(2) Includes $10.0 million maturity in March and $6.1 million in maturities in
July that may be extended for one-year terms, subject to certain
conditions.
Our operations would not generate enough cash flow to repay some or all of
this debt without additional borrowings or new equity investment. If we cannot
refinance, extend the debt due dates, or raise additional equity prior to the
date when our debt matures, we would default on our existing debt.
THE LEVEL OF OUR SHAREHOLDER DISTRIBUTIONS COULD DECLINE
We intend to make regular quarterly cash distributions to our
shareholders. However, distribution levels depend on a number of factors, some
of which are beyond our control.
Our loan agreements contain provisions which could restrict future
distributions. Our ability to sustain our current distribution level also will
be dependent, in part, on other matters including continued property occupancy
and profitability of tenants, the amount of future capital expenditures and
expenses relating to our properties, the level of leasing activity and future
rental rates, the strength of the commercial real estate market, competition,
the costs of compliance with environmental and other laws, our corporate
overhead levels, the amount of uninsured losses and our decisions whether to
reinvest rather than distribute available cash.
In addition, we can make distributions to the holders of our Common
Shares only after we make preferential distributions to the holders of our
Series A Convertible Preferred Shares of beneficial interest ("Series A
Preferred Shares"), Series B Cumulative Redeemable Preferred Shares of
beneficial interest ("Series B Preferred Shares") and Series D Preferred Shares.
We also would likely have to make prior distributions to third party holders of
the Series C Preferred Units in our Operating Partnership ("Series C Preferred
Units"). For information relating to our Series A and B Preferred Shares, Series
D Preferred Shares and Series C Preferred Units, you should refer to Notes 9, 3
and 18 to the Consolidated Financial Statements included in Exhibit 13.1 to this
Form 10-K which is incorporated herein by reference.
A THIRD PARTY COULD HAVE DIFFICULTY IN SEEKING TO ACQUIRE CONTROL OF US
CONSTELLATION'S COMMON SHARE OWNERSHIP AND OUR OWNERSHIP LIMITS ARE
IMPORTANT FACTORS. As of December 31, 2000, Constellation Real Estate, Inc. and
its affiliates own approximately 43% of our outstanding Common Shares. Under our
charter, two-thirds of the outstanding Common Shares must approve a merger, a
sale of substantially all our assets, any amendment to our charter, the removal
of a Trustee and the termination of COPT. Because Constellation Real Estate,
Inc. and its affiliates own more than one-third of our voting shares, they have
the ability to veto any of those transactions, which could make it more
difficult for any third party to acquire control of us. Such change of control
could involve a premium over the market price for the Common Shares or other
attributes that the shareholders may consider desirable. In addition, our
charter limits ownership of our Common Shares by any single shareholder to 9.8%
of the number of the outstanding Common Shares or 9.8% of the value of the
outstanding Common Shares. We call these restrictions the "Ownership Limit." Our
charter allows our Board of Trustees to exempt shareholders from the Ownership
Limit, and the Board has exempted Constellation Real Estate, Inc. and its
affiliates and the foreign trust owning all of our Series D Preferred Shares
from the Ownership Limit.
OUR CHARTER PROVIDES OTHER POTENTIAL DEFENSES. Subject to the
requirements of the New York Stock Exchange, the Board of Trustees has the
authority without shareholder approval to issue additional securities of COPT on
terms that
10
could delay, defer or prevent a change in control of COPT. In addition, our
Board has the authority to reclassify any of our unissued Common Shares into
Preferred Shares. The Board may issue Preferred Shares with such preferences,
rights, powers and restrictions as the Board may determine.
Our Board is divided into three classes of Trustees. The term of one
class of the Trustees will expire each year, at which time a successor class is
elected for a three-year term. Such staggered three-year terms make it more
difficult for a third party to acquire control of us.
THE MARYLAND BUSINESS STATUTES ALSO IMPOSE POTENTIAL RESTRICTIONS.
Various Maryland laws may have the effect of discouraging offers to acquire us,
even if the acquisition would be advantageous to shareholders. Our Bylaws exempt
us from such laws, but our Board of Trustees can change our Bylaws at any time
to make these provisions applicable to us.
WE AND OUR SHAREHOLDERS ARE SUBJECT TO CERTAIN TAX RISKS
OUR FAILURE TO QUALIFY AS A REIT WOULD HAVE ADVERSE TAX CONSEQUENCES.
We believe that since 1992 we have qualified for taxation as a REIT for Federal
income tax purposes. We plan to continue to meet the requirements for taxation
as a REIT. Many of these requirements, however, are highly technical and
complex. The determination that we are a REIT requires an analysis of various
factual matters and circumstances that may not be totally within our control.
For example, to qualify as a REIT, at least 95% of our gross income must come
from certain sources that are itemized in the REIT tax laws. We are also
required to distribute to shareholders at least 90% of our REIT taxable income,
excluding capital gains (95% prior to January 1, 2001). The fact that we hold
most of our assets through our Operating Partnership and its subsidiaries
further complicates the application of the REIT requirements. Even a technical
or inadvertent mistake could jeopardize our REIT status. Furthermore, Congress
and the IRS might make changes to the tax laws and regulations, and the courts
might issue new rulings that make it more difficult, or impossible for us to
remain qualified as a REIT.
If we fail to qualify as a REIT, we would be subject to Federal income
tax at regular corporate rates. Also, unless the IRS granted us relief under
certain statutory provisions, we would remain disqualified as a REIT for four
years following the year we first fail to qualify. If we fail to qualify as a
REIT, we would have to pay significant income taxes and would therefore have
less money available for investments or for distributions to our shareholders.
This would likely have a significant adverse effect on the value of our
securities and would impair our ability to raise capital. In addition, we would
no longer be required to make any distributions to our shareholders.
WE HAVE CERTAIN DISTRIBUTION REQUIREMENTS. As a REIT, we must distribute
90% of our annual taxable income, which limits the amount of cash we have
available for other business purposes, including amounts to fund our growth.
Also, it is possible that because of the differences between the time we
actually receive revenue or pay expenses and the period we report those items
for distribution purposes, we may have to borrow funds on a short-term basis to
meet the 90% distribution requirement.
COMI AND ITS SUBSIDIARIES ARE SUBJECT TO INCOME TAXES. Effective January
1, 2001, REITs are permitted to own 100% investments in the stock of a taxable
REIT subsidiary ("TRS"). TRSs can provide services to REIT tenants and others
without adversely impacting the income requirements to which REITs are subject.
We have elected to have COMI treated as a TRS effective January 1, 2001. The
taxable income of COMI is subject to Federal, state and local income taxes at
regular corporate rates.
WE ARE ALSO SUBJECT TO OTHER TAX LIABILITIES. Even if we qualify as a
REIT, we may be subject to certain Federal, state and local taxes on our income
and property. Any such taxes would reduce our operating cash flow.
A NUMBER OF FACTORS COULD CAUSE OUR SECURITY PRICES TO DECLINE
As is the case with any publicly traded securities, certain factors
outside of our control could influence the value of our Common and Preferred
Shares. These conditions include, but are not limited to: market perception of
REITs in general; market perception of office REITs; market perception of REITs
relative to other investment opportunities; the level of institutional investor
interest in our Company; general economic and business conditions; interest
rates; and market perception of our financial condition, performance, dividends
and growth potential.
11
The average daily trading volume of our Common Shares during 2000 was
approximately 18,000 shares and the average trading volume of our Series B
Preferred Shares is generally insignificant. As a result, the appearance of a
significant number of shares on the market for sale in a short period of time
could lead to a decrease in the market price of such shares. Such additional
shares on the market could occur in a number of ways, including the following:
o We could issue additional Common or Preferred Shares.
o At December 31, 2000, there were Common and Preferred Units in our
Operating Partnership not owned by us that could be exchanged for
11,808,208 of our Common Shares.
o We have a number of shareholders each holding large numbers of shares. Any
of these major shareholders could decide to sell some or all of their
shares.
o A large number of our smaller shareholders may independently decide to
sell their positions in our Common or Preferred Shares in a short period
of time.
WE ARE DEPENDENT ON EXTERNAL SOURCES OF CAPITAL FOR FUTURE GROWTH
As a REIT, we must distribute 90% of our annual taxable income. Due to
these requirements, we will not be able to fund our acquisitions, construction
and development activities using cash flow from operations. Our ability to fund
these activities is dependent on our ability to access capital funded by third
parties. Such capital could be in the form of new loans, equity issuances of
Common Shares, Preferred Shares, Common Units, Preferred Units or joint venture
funding. Such capital may not be available on favorable terms or at all.
Moreover, additional debt financing may substantially increase our leverage and
additional equity offerings may result in substantial dilution of our
shareholders' interests.
CERTAIN OFFICERS AND TRUSTEES OF COPT HAVE POTENTIAL CONFLICTS OF INTEREST
The Chairman of our Board, our Chief Executive Officer, and certain
other officers own indirect interests in office properties and other real
estate assets in which we have an interest. The interests of these persons may
give rise to certain conflicts of interest concerning the fulfillment of their
responsibilities as our officers and Trustees. We have adopted certain policies
designed to minimize conflicts of interest. We cannot assure you, however, that
these policies will be successful in eliminating the influence of such
conflicts, and if they are not successful, decisions could be made that might
fail to reflect fully the interests of all shareholders of COPT. For example,
the Chairman of our Board of Trustees and our Chief Executive Officer own a
significant share of the units of our Operating Partnership. If our Operating
Partnership sells or refinances certain of the properties that these officers
contributed to the Operating Partnership, they could suffer adverse tax
consequences. Therefore, they could oppose such a transaction.
WE ARE DEPENDENT ON OUR KEY PERSONNEL
We are dependent on the efforts of our Trustees and executive officers,
including Jay Shidler, our Chairman of the Board of Trustees, Clay Hamlin, our
Chief Executive Officer, and Rand Griffin, our President. The loss of any of
their services could have an adverse effect on our operations. Although certain
of our officers have entered into employment agreements with us, we cannot
assure you that they will remain employed with us.
WE MAY CHANGE OUR POLICIES WITHOUT SHAREHOLDER APPROVAL
Our Board of Trustees determines all of our policies, including our
investment, financing and distribution policies. Although our Board of Trustees
has no current plans to do so, it may amend or revise these policies at any time
without a vote of our shareholders. Policy changes could adversely affect our
financial condition, results of operations, the market price of the Common
Shares or our ability to pay dividends or distributions.
12
ITEM 2. PROPERTIES
The following table provides certain information about our properties as of
December 31, 2000:
Percentage Percentage Total Rental
Year Occupied Total of Total Revenue per
Built/ Rentable as of Rental Rental Occupied
Property Location Renovated Square Feet 12/31/00(1) Revenue(2) Revenue(3) Square Feet (4)
----------------- --------- ----------- ----------- ---------- ---------- ---------------
BALTIMORE/WASHINGTON CORRIDOR:
Annapolis Junction, MD
- ----------------------
2730 Hercules Road 1990 240,336 100.00% $4,890,030 4.64% $20.35
132 National Business Parkway 2000 118,456 100.00% 2,475,589 2.35% 20.90
221 National Business Parkway 2000 117,890(5) 100.00% 1,983,722 1.88% 21.60
134 National Business Parkway 1999 93,482 100.00% 1,666,091 1.58% 17.82
133 National Business Parkway 1997 88,666 100.00% 1,822,346 1.73% 20.55
141 National Business Parkway 1990 86,964 100.00% 1,569,973 1.49% 18.05
135 National Business Parkway 1998 86,863 100.00% 1,741,973 1.65% 20.05
131 National Business Parkway 1990 68,906 100.00% 1,377,900 1.31% 20.00
Linthicum, MD
- -------------
1306 Concourse Drive 1990 113,837 97.46% 2,308,398 2.19% 20.81
900 Elkridge Landing Road 1982 97,139 100.00% 1,652,369 1.57% 17.01
1199 Winterson Road 1988 96,636 100.00% 1,534,245 1.45% 15.88
1302 Concourse Drive 1996 84,607 100.00% 1,793,732 1.70% 21.20
881 Elkridge Landing Road 1986 73,572 100.00% 866,280 0.82% 11.77
1099 Winterson Road 1988 70,569 97.50% 1,195,118 1.13% 17.37
1190 Winterson Road 1987 68,567 100.00% 1,175,232 1.11% 17.14
911 Elkridge Landing Road 1985 68,297 100.00% 1,104,019 1.05% 16.16
849 International Drive 1988 68,186 100.00% 1,320,214 1.25% 19.36
1201 Winterson Road 1985 67,903 100.00% 736,892 0.70% 10.85
999 Corporate Boulevard 2000 67,351 100.00% 1,387,039 1.31% 20.59
930 International Drive 1986 57,140 100.00% 623,714 0.59% 10.92
900 International Drive 1986 57,140 100.00% 688,872 0.65% 12.06
921 Elkridge Landing Road 1983 54,057 100.00% 879,030 0.83% 16.26
939 Elkridge Landing Road 1983 51,953 100.00% 823,951 0.78% 15.86
Major Tenants
(10% or more
Property Location Rentable Sq. Ft.)
----------------- -----------------
BALTIMORE/WASHINGTON CORRIDOR:
Annapolis Junction, MD
- ----------------------
2730 Hercules Road U.S. Department of Defense (100%)
132 National Business Parkway Ameritrade Holding Corporation (53%)
Computer Sciences Corporation (47%)
221 National Business Parkway General Dynamics Information Systems, Inc. (78%)
134 National Business Parkway Booz Allen Hamilton (74%)
Panacya, Inc. (26%)
133 National Business Parkway Mentor Technologies (67%)
Applied Signal Technology (33%)
141 National Business Parkway ITT Industries (46%)
Wang Government Services (20%)
Harris Data Services Corporation (14%)
135 National Business Parkway Credit Management Solutions, Inc. (82%)
131 National Business Parkway TASC, Inc. (38%)
e.spire Communications, Inc. (35%)
U.S. Department of Defense (15%)
Intel Corporation (12%)
Linthicum, MD
- -------------
1306 Concourse Drive PricewaterhouseCoopers (33%)
AT&T Local Services (26%)
Qwest Communications (13%)
900 Elkridge Landing Road First Annapolis Consulting (51%)
Booz Allen Hamilton (38%)
1199 Winterson Road U.S. Department of Defense (100%)
1302 Concourse Drive Lucent Technologies (31%)
Aetna US Healthcare (23%)
881 Elkridge Landing Road U.S. Department of Defense (100%)
1099 Winterson Road Preferred Health Network (63%)
1190 Winterson Road Commercial Credit Corp. (57%)
U.S. Department of Defense (15%)
Motorola, Inc. (14%)
911 Elkridge Landing Road U.S. Department of Defense (100%)
849 International Drive EMC Corporation (13%)
Raytheon E-Systems, Inc. (11%)
U.S. Department of Defense (11%)
Dames & Moore (10%)
1201 Winterson Road Ciena Corporation (100%)
999 Corporate Boulevard RAG American Coal Holding (71%)
Ciena Corporation (29%)
930 International Drive Ciena Corporation (100%)
900 International Drive Ciena Corporation (100%)
921 Elkridge Landing Road Aerotek, Inc.(100%)
939 Elkridge Landing Road Agency Holding Company (68%)
U.S. Department of Defense (24%)
13
Percentage Percentage Total Rental
Year Occupied Total of Total Revenue per
Built/ Rentable as of Rental Rental Occupied
Property Location Renovated Square Feet 12/31/00(1) Revenue(2) Revenue(3) Square Feet (4)
----------------- --------- ----------- ----------- ---------- ---------- ---------------
800 International Drive 1988 50,979 100.00% 904,877 0.86% 17.75
Columbia, MD
- ------------
7200 Riverwood 1986 160,000 100.00% 2,820,240 2.67% 17.63
9140 Rt. 108 1974/1985 150,000 100.00% 1,200,072 1.14% 8.00
6940 Columbia Gateway Drive 1999 108,737 100.00% 2,369,052 2.25% 21.79
6950 Columbia Gateway Drive 1998 107,778 100.00% 2,257,695 2.14% 20.95
6750 Alexander Bell Drive 2001 0(6) 100.00% 896,461 0.85% 25.43
6740 Alexander Bell Drive 1992 61,878 83.81% 1,193,419 1.13% 23.01
8815 Centre Park Drive 1987 53,782 100.00% 1,194,665 1.13% 22.21
6716 Alexander Bell Drive 1990 51,980 95.63% 919,490 0.87% 18.50
6760 Alexander Bell Drive 1991 37,248 100.00% 782,030 0.74% 21.00
Hanover, MD
- -----------
7467 Ridge Road 1990 73,756 100.00% 1,684,075 1.60% 22.83
7240 Parkway Drive 1985 73,500 98.28% 1,342,055 1.27% 18.58
7318 Parkway Drive 1984 59,204 100.00% 754,981 0.72% 12.75
1340 Ashton Road 1989 46,400 100.00% 598,668 0.57% 12.90
7321 Parkway Drive 1984 39,822 100.00% 657,063 0.62% 16.50
1334 Ashton Road 1989 37,565 100.00% 596,434 0.57% 15.88
1331 Ashton Road 1989 29,936 100.00% 464,161 0.44% 15.51
1350 Dorsey Road 1989 19,992 90.29% 280,821 0.27% 15.56
1344 Ashton Road 1989 16,865 100.00% 399,162 0.38% 23.67
1341 Ashton Road 1989 15,841 100.00% 242,664 0.23% 15.32
1343 Ashton Road 1989 9,962 100.00% 131,208 0.12% 13.17
Laurel, MD
- ----------
14502 Greenview Drive 1988 71,873 100.00% 1,341,855 1.27% 18.67
14504 Greenview Drive 1985 69,194 98.07% 1,266,408 1.20% 18.66
Major Tenants
(10% or more
Property Location Rentable Sq. Ft.)
----------------- -----------------
800 International Drive Raytheon E-Systems, Inc. (100%)
Columbia, MD
- ------------
7200 Riverwood U.S. Department of Defense (100%)
9140 Rt. 108 Honeywell International (100%)
6940 Columbia Gateway Drive Magellan Behavioral Health, Inc. (39%)
Response Services Center (26%)
Remedy Corporation (14%)
Reliance Insurance (10%)
6950 Columbia Gateway Drive Magellan Behavioral Health, Inc. (100%)
6750 Alexander Bell Drive Sun Microsystems, Inc. (45%)
6740 Alexander Bell Drive Johns Hopkins University (68%)
Atmel Corporation (16%)
8815 Centre Park Drive Corporate Office Management, Inc. (25%)
Lipman, Frizzell and Mitchell (16%)
Reap, Inc/REMAX (16%)
Corporate Realty Management, LLC (13%)
Copeland Associates, Inc. (10%)
6716 Alexander Bell Drive Sun Microsystems, Inc. (87%)
6760 Alexander Bell Drive Cadence Design Systems, Inc. (65%)
Hanover, MD
- -----------
7467 Ridge Road Travelers Casualty and Surety (53%)
Pro Object (25%)
7240 Parkway Drive National Data Payment System (47%)
International Paper (12%)
7318 Parkway Drive U.S. Department of Defense (100%)
1340 Ashton Road Lockheed Martin Corporation (100%)
7321 Parkway Drive U.S. Department of Defense (100%)
1334 Ashton Road Science Applications International Corporation (60%)
Merrill Corporation (37%)
1331 Ashton Road Booz Allen Hamilton (71%)
Aerosol Monitoring (29%)
1350 Dorsey Road Aerotek, Inc. (23%)
Noodles, Inc. (14%)
Hunan Pagoda (12%)
Electronic Systems USA (11%)
1344 Ashton Road Titan Systems (28%)
Student Travel Services (23%)
AMP Corporation (16%)
Jani-King of Baltimore (14%)
Citizens National Bank (12%)
1341 Ashton Road Supertots Childcare, Inc. (71%)
Devereux Chesapeake Network (29%)
1343 Ashton Road Nauticus Corporation (100%)
Laurel, MD
- ----------
14502 Greenview Drive iSky (20%)
Greenman-Pedersen, Inc. (18%)
LCC Telecom Management (11%)
14504 Greenview Drive Great West Life & Annuity (17%)
14
Percentage Percentage Total Rental
Year Occupied Total of Total Revenue per
Built/ Rentable as of Rental Rental Occupied
Property Location Renovated Square Feet 12/31/00(1) Revenue(2) Revenue(3) Square Feet (4)
----------------- --------- ----------- ----------- ---------- ---------- ---------------
Timonium, MD
- ------------
9690 Deereco Road 1988 133,702 85.15% 2,551,040 2.42% 22.41
375 W. Padonia Road 1986 100,804 100.00% 1,589,563 1.51% 15.77
Oxon Hill, MD
- -------------
6009 - 6011 Oxon Hill Road 1990 181,768 78.83% 2,897,049 2.75% 20.22
Baltimore, MD
- -------------
1615 - 1629 Thames Street 1989 103,683 96.43% 1,690,681 1.60% 16.91
--------- ----------- -----
TOTAL BALTIMORE/WASHINGTON CORRIDOR 3,864,766 97.84% $68,642,618 65.08% $18.11
--------- ----------- -----
GREATER PHILADELPHIA:
Blue Bell, PA
- -------------
753 Jolly Road 1960/92-94 419,472 100.00% $ 3,644,515 3.46% $ 8.69
785 Jolly Road 1970/1996 219,065 100.00% 2,193,339 2.08% 10.01
760 Jolly Road 1974/1994 208,854 100.00% 2,670,981 2.53% 12.79
751 Jolly Road 1966/1991 112,958 100.00% 981,605 0.93% 8.69
--------- ----------- -----
TOTAL GREATER PHILADELPHIA 960,349 100.00% $ 9,490,440 9.00% $ 9.88
--------- ----------- -----
GREATER HARRISBURG:
Harrisburg, PA
- --------------
2605 Interstate Drive 1990 84,268 100.00% $ 1,219,392 1.15% $14.47
6345 Flank Drive 1989 69,443 100.00% 1,120,377 1.05% 16.13
6340 Flank Drive 1988 68,200 100.00% 724,253 0.69% 10.62
2601 Market Place 1989 67,753 95.51% 1,153,377 1.09% 17.82
5035 Ritter Road 1988 56,556 100.00% 733,365 0.70% 12.97
6400 Flank Drive 1992 52,439 100.00% 745,234 0.71% 14.21
6360 Flank Drive 1988 46,500 84.86% 535,359 0.51% 13.57
6385 Flank Drive 1995 32,800 100.00% 470,178 0.45% 14.33
Major Tenants
(10% or more
Property Location Rentable Sq. Ft.)
----------------- -----------------
Laurel Consulting Group (16%)
Moore USA (11%)
Light Wave Communications (10%)
Timonium, MD
- ------------
9690 Deereco Road Fireman's Fund Insurance (24%)
Verizon Wireless (11%)
375 W. Padonia Road Deutsche Bank Alex. Brown (84%)
Riparius Corporation (13%)
Oxon Hill, MD
- -------------
6009 - 6011 Oxon Hill Road U.S. Department of Treasury (47%)
NRL Federal Credit Union (10%)
Baltimore, MD
- -------------
1615 - 1629 Thames Street Johns Hopkins University (37%)
Community of Science (18%)
Listas (14%)
TOTAL BALTIMORE/WASHINGTON CORRIDOR
GREATER PHILADELPHIA:
Blue Bell, PA
- -------------
753 Jolly Road Unisys (100%)
785 Jolly Road Unisys with 100% sublease to Merck
760 Jolly Road Unisys (100%)
751 Jolly Road Unisys (100%)
TOTAL GREATER PHILADELPHIA
GREATER HARRISBURG:
Harrisburg, PA
- --------------
2605 Interstate Drive Commonwealth of Pennsylvania (56%)
Health Central (38%)
6345 Flank Drive Allstate Insurance (30%)
First Health Services (24%)
Coventry Health Care (18%)
LWN Enterprises (15%)
6340 Flank Drive Lancaster Lebanon (73%)
Merkert Enterprises (27%)
2601 Market Place Penn State Geisinger Systems (37%)
Duke Energy Operating Company (26%)
Ernst & Young, LLP (26%)
5035 Ritter Road Commonwealth of Pennsylvania (81%)
6400 Flank Drive Pennsylvania Coalition Against Violence (51%)
REM Organization (27%)
Liberty Business Information (16%)
6360 Flank Drive Ikon Office Solutions, Inc. (22%)
Computer Applications (20%)
Sentage/Muth & Mumma (15%)
Health Spectrum Medical (15%)
6385 Flank Drive Cowles Enthusiast Media (34%)
Coventry Management Services (26%)
Pitney Bowes, Inc. (21%)
Orion Consulting (11%)
15
Percentage Percentage Total Rental
Year Occupied Total of Total Revenue per
Built/ Rentable as of Rental Rental Occupied
Property Location Renovated Square Feet 12/31/00(1) Revenue(2) Revenue(3) Square Feet (4)
----------------- --------- ----------- ----------- ---------- ---------- ---------------
6380 Flank Drive 1991 32,000 59.76% 279,478 0.26% 14.61
6405 Flank Drive 1991 32,000 100.00% 461,152 0.44% 14.41
5070 Ritter Road - Building A 1989 32,000 62.81% 334,818 0.32% 16.66
5070 Ritter Road - Building B 1989 28,000 95.88% 332,562 0.32% 12.39
95 Shannon Road 1999 21,976 100.00% 325,456 0.31% 14.81
75 Shannon Road 1999 20,887 100.00% 320,938 0.30% 15.37
6375 Flank Drive 2000 19,783 71.31% 227,123 0.22% 16.10
85 Shannon Road 1999 12,863 100.00% 190,496 0.18% 14.81
--------- ----------- -----
TOTAL GREATER HARRISBURG 677,468 93.86% $9,173,558 8.70% $14.43
--------- ----------- -----
NORTHERN/CENTRAL NEW JERSEY:
South Brunswick, NJ
- -------------------
431 Ridge Road 1958/1998 170,000 100.00% $3,432,839 3.26% 20.19
429 Ridge Road 1966/1996 142,385 100.00% 2,705,071 2.56% 19.00
68 Culver Road 2000 57,280 100.00% 1,221,782 1.16% 21.33
437 Ridge Road 1962/1996 30,000 100.00% 636,496 0.60% 21.22
Cranbury, NJ
- ------------
19 Commerce 1989 65,277 100.00% 1,338,179 1.27% 20.50
104 Interchange Plaza 1990 47,677 100.00% 1,095,704 1.04% 22.98
101 Interchange Plaza 1985 43,749 94.67% 993,311 0.94% 23.98
47 Commerce 1992/1998 41,398 100.00% 478,940 0.45% 11.57
7 Centre Drive 1989 19,466 100.00% 394,198 0.37% 20.25
8 Centre Drive 1986 16,199 0.00% - 0.00% -
2 Centre Drive 1989 16,132 100.00% 407,419 0.39% 25.26
Fairfield, NJ
- -------------
695 Rt. 46 1990 157,394 95.30% 3,157,526 2.99% 21.05
710 Rt. 46 1985 101,791 59.47% 1,089,596 1.03% 18.00
Monmouth Junction, NJ
- ---------------------
4301 Route 1 1986 61,300 100.00% 1,223,357 1.16% 19.96
--------- ----------- -----
Major Tenants
(10% or more
Property Location Rentable Sq. Ft.)
----------------- -----------------
6380 Flank Drive Myers & Stauffer (17%)
Bell Atlantic Network (14%)
Critical Care System (13%)
U-Conn Technology USA, Inc. (10%)
6405 Flank Drive Cowles Enthusiast Media (100%)
5070 Ritter Road - Building A Maryland Casualty Company (63%)
5070 Ritter Road - Building B Vale National Training Center (63%)
Pennsylvania Trauma System Foundation (18%)
Paytime, Inc. (13%)
95 Shannon Road New World Pasta (100%)
75 Shannon Road McCormick, Taylor & Associates (100%)
6375 Flank Drive Orion Capital Companies, Inc. (71%)
85 Shannon Road New World Pasta (100%)
TOTAL GREATER HARRISBURG
NORTHERN/CENTRAL NEW JERSEY:
South Brunswick, NJ
- -------------------
431 Ridge Road IBM with 100% sublease to AT&T Local Services
429 Ridge Road AT&T Local Services (100%)
68 Culver Road AT&T Local Services (100%)
437 Ridge Road IBM with 100% sublease to AT&T Local Services (100%)
Cranbury, NJ
- ------------
19 Commerce The Associated Press (100%)
104 Interchange Plaza Turner Construction Company (35%)
Utica Mutual Insurance Company (15%)
Laborer's International Union (13%)
Lanier Worldwide (12%)
101 Interchange Plaza Ford Motor Credit Company (21%)
CSX Transportation, Inc. (18%)
Arquest, Inc. (16%)
Middlesex County Improve. Authority (13%)
Trans Union Corporation (11%)
47 Commerce Somfy Systems, Inc. (100%)
7 Centre Drive Compugen, Inc. (29%)
Systems Freight (22%)
8 Centre Drive
2 Centre Drive Summit Bancorp (100%)
Fairfield, NJ
- -------------
695 Rt. 46 ADT Security Services, Inc. (26%)
The Museum Company (16%)
Chase Manhattan (15%)
Dean Witter Reynolds (13%)
710 Rt. 46 Continental Casualty Company (12%)
Lincoln Financial Group (11%)
Monmouth Junction, NJ
- ---------------------
4301 Route 1 Guest Supply, Inc. (45%)
eCOM Server (16%)
16
Percentage Percentage Total Rental
Year Occupied Total of Total Revenue per
Built/ Rentable as of Rental Rental Occupied
Property Location Renovated Square Feet 12/31/00(1) Revenue(2) Revenue(3) Square Feet (4)
----------------- --------- ----------- ----------- ---------- ---------- ---------------
TOTAL NORTHERN/CENTRAL NEW JERSEY 970,048 93.07% $ 18,174,418 17.22% $20.13
--------- ----------- ------
TOTAL OFFICE PROPERTIES 6,472,631 97.03% $105,481,034 100.00% $16.77
========= ============ ======
Major Tenants
(10% or more
Property Location Rentable Sq. Ft.)
----------------- -----------------
Ikon Office Solutions (16%)
NJ Foster Parents Association (10%)
TOTAL NORTHERN/CENTRAL NEW JERSEY
TOTAL OFFICE PROPERTIES
(1) This percentage is based upon all leases signed and tenants occupying as
of December 31, 2000.
(2) Total Rental Revenue is the monthly contractual base rent as of December
31, 2000 multiplied by 12 plus the estimated annualized expense
reimbursements under existing leases.
(3) This percentage represents the individual property's rental revenue to our
total revenue as of December 31, 2000.
(4) This total rent per occupied square foot is the property's total rental
revenue divided by that property's occupied square feet as of December 31,
2000.
(5) This property contains 26,051 square feet which was not delivered as of
December 31, 2000 due to construction of initial tenant fit-out.
Accordingly, occupancy has been measured on the 91,839 square feet
delivered as of December 31, 2000 which is 100% occupied.
(6) This property under construction contains 78,460 square feet of which
35,248 was occupied and rent paying as of December 31, 2000. As
substantial occupancy was not achieved for this property as of 12/31/00,
this building is still considered under development. However, occupany
ratios include the 35,248 square feet at 12/31/00.
17
The following table provides a summary schedule of the lease expirations
for leases in place as of December 31, 2000, assuming that none of the tenants
exercise renewal options (dollars in thousands, except per square foot amounts):
OFFICE LEASE EXPIRATION ANALYSIS BY YEAR
Percentage Total Rental
Square Total Rental of Total Revenue of
Number Footage Percentage of Revenue of Rental Expiring Leases
Year of of Leases of Leases Total Occupied Expiring Revenue per Occupied
Expiration (1) Expiring Expiring Square Feet Leases (2) Expiring Square Foot
-------------- -------- -------- ----------- ---------- -------- -----------
2001 83 682,906 10.9% $ 10,544 10.0% $15.44
2002 81 978,397 15.6% 16,777 15.9% 17.15
2003 89 925,536 14.7% 17,107 16.2% 18.48
2004 48 585,463 9.3% 11,006 10.4% 18.80
2005 57 585,929 9.3% 11,125 10.5% 18.99
2006 7 219,722 3.5% 3,775 3.6% 17.18
2007 7 188,326 3.0% 2,938 2.8% 15.60
2008 9 539,101 8.6% 10,440 9.9% 19.37
2009 11 1,193,500 18.9% 13,477 12.8% 11.29
2010 7 325,272 5.2% 6,954 6.6% 21.38
2015 1 65,277 1.0% 1,338 1.3% 20.50
--- --------- ----- -------- -----
Total/Weighted Avg. 400 6,289,429 100.0% $105,481 100.0% $17.31
=== ========= ===== ======== =====
(1) Many of our government leases are subject to certain early termination
provisions which are customary to government leases. The year of lease
expiration was computed assuming no exercise of such early termination
rights.
(2) Total Rental Revenue is the monthly contractual base rent as of December
31, 2000 multiplied by 12 plus the estimated annualized expense
reimbursements under existing office leases.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any material litigation nor, to our
knowledge, is any material litigation currently threatened against the Company
(other than routine litigation arising in the ordinary course of business,
substantially all of which is expected to be covered by liability insurance).
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our security holders during the
fourth quarter of 2000.
18
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
Information for this item is incorporated herein by reference to the
section of Exhibit 13.1 entitled "Market for Registrant's Common Equity and
Related Shareholder Matters".
ITEM 6. SELECTED FINANCIAL DATA
Information for this item is incorporated herein by reference to the
section of Exhibit 13.1 to this Form 10-K entitled "Selected Financial Data".
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information for this item is incorporated herein by reference to the
section of Exhibit 13.1 to this Form 10-K entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations".
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information for this section is incorporated herein by reference to the
section of Exhibit 13.1 to this Form 10-K entitled "Quantitative and Qualitative
Disclosures about Market Risk".
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information for this section is incorporated herein by reference to the
Section of Exhibit 13.1 to this Form 10-K beginning on Page 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10, 11, 12 & 13. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT,
EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For the information required by Item 10, Item 11, Item 12 and Item 13,
you should refer to our definitive proxy statement relating to the 2001 Annual
Meeting of our Shareholders to be filed with the Securities and Exchange
Commission no later than 120 days after the end of the fiscal year covered by
this Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as exhibits to this Form 10-K:
1. FINANCIAL STATEMENTS. Audited consolidated balance sheets as of December
31, 2000 and 1999, and the related consolidated statements of operations,
of shareholders' equity, and of cash flows for each of the three years in
the period ended December 31, 2000 are included in Exhibit 13.1 to this
Form 10-K and are incorporated by reference.
2. FINANCIAL STATEMENT SCHEDULE. Audited Schedule III - Real Estate and
Accumulated Depreciation is included in Exhibit 13.2 to this Form 10-K and
is incorporated by reference.
19
(b) We filed the following Current Reports on Form 8-K in the last quarter of
the year ended December 31, 2000:
Item 7 and Item 9 dated October 25, 2000 that was filed in connection with
our release of earnings on October 25, 2000. We also through this filing
made available certain additional information pertaining to our properties
and operations as of and for the period ended September 30, 2000.
(C) EXHIBITS. Refer to the Exhibit Index that follows.
Exhibit
NO. DESCRIPTION
- ------- -----------
2.1.1 Contribution Agreement between the Company and the Operating
Partnership and certain Constellation affiliates (filed as Exhibit A
of the Company's Schedule 14A Information on June 26, 1998 and
incorporated herein by reference).
2.1.2 First Amendment to Contribution Agreement, dated July 16, 1998,
between Constellation Properties, Inc. and certain entities controlled
by Constellation Properties, Inc. (filed with the Company's Current
Report on Form 8-K on October 13, 1998 and incorporated herein by
reference).
2.1.3 Second Amendment to Contribution Agreement, dated September 28, 1998,
between Constellation Properties, Inc. and certain entities controlled
by Constellation Properties, Inc. (filed with the Company's Current
Report on Form 8-K on October 13, 1998 and incorporated herein by
reference).
2.2 Service Company Asset Contribution Agreement between the Company and
the Operating Partnership and certain Constellation affiliates (filed
as Exhibit B of the Company's Schedule 14A Information on June 26,
1998 and incorporated herein by reference).
2.3 Contribution Agreement, dated February 24, 1999, between the Operating
Partnership and John Parsinen, John D. Parsinen, Jr., Enterprise
Nautical, Inc. and Vernon Beck (filed with the Company's Quarterly
Report on Form 10-Q on May 14, 1999 and incorporated herein by
reference).
2.4 Agreement to Sell Partnership Interests, dated August 12, 1999,
between Gateway Shannon Development Corporation, Clay W. Hamlin, III
and COPT Acquisitions, Inc. (filed with the Company's Quarterly Report
on Form 10-Q on November 8, 1999 and incorporated herein by
reference).
2.5 Agreement of Purchase and Sale, dated July 21, 1999, between First
Industrial Financing Partnership, L.P. and COPT Acquisitions, Inc.
(filed with the Company's Quarterly Report on Form 10-Q on November 8,
1999 and incorporated herein by reference).
2.6.1 Contract of Sale, dated August 9, 1999, between Jolly Acres Limited
Partnership and the Operating Partnership (filed herewith).
2.6.2 Amendment to Contract of Sale, dated April 28, 2000, between Jolly
Acres Limited Partnership and the Operating Partnership (filed
herewith).
2.7 Contract of Sale, dated March 14, 2000, between Arbitrage Land Limited
Partnership, Jolly Acres Limited Partnership and the Operating
Partnership (filed herewith).
20
Exhibit
NO. DESCRIPTION
- ------- -----------
3.1 Amended and Restated Declaration of Trust of Registrant (filed with
the Registrant's Registration Statement on Form S-4 (Commission File
No. 333-45649) and incorporated herein by reference).
3.2 Bylaws of Registrant (filed with the Registrant's Registration
Statement on Form S-4 (Commission File No. 333-45649) and incorporated
herein by reference).
4.1 Form of certificate for the Registrant's Common Shares of Beneficial
Interest, $0.01 par value per share (filed with the Registrant's
Registration Statement on Form S-4 (Commission File No. 333-45649) and
incorporated herein by reference).
4.2 Amended and Restated Registration Rights Agreement, dated March 16,
1998, for the benefit of certain shareholders of the Company (filed
with the Company's Quarterly Report on Form 10-Q on August 12, 1998
and incorporated herein by reference).
4.3 Articles Supplementary of Corporate Office Properties Trust Series A
Convertible Preferred Shares, dated September 28, 1998 (filed with the
Company's Current Report on Form 8-K on October 13, 1998 and
incorporated herein by reference).
4.4.1 Second Amended and Restated Limited Partnership Agreement of the
Operating Partnership, dated December 7, 1999 (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
4.4.2 First Amendment to Second Amended and Restated Limited Partnership
Agreement of the Operating Partnership, dated December 21, 1999 (filed
with the Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
4.4.3 Second Amendment to Second Amended and Restated Limited Partnership
Agreement of the Operating Partnership, dated December 21, 1999 (filed
with the Company's Post Effective Amendment No. 2 to Form S-3 dated
November 1, 2000 (Registration Statement No. 333-71807) and
incorporated herein by reference).
4.4.4 Third Amendment to Second Amended and Restated Limited Partnership
Agreement of the Operating Partnership, dated September 29, 2000
(filed with the Company's Post Effective Amendment No. 2 to Form S-3
dated November 1, 2000 (Registration Statement No. 333-71807) and
incorporated herein by reference).
4.5 Articles Supplementary of Corporate Office Properties Trust Series B
Convertible Preferred Shares, dated July 2, 1999 (filed with the
Company's Current Report on Form 8-K on July 7, 1999 and incorporated
herein by reference).
4.6.1 Contribution Rights Agreement, dated June 23, 1999, between the
Operating Partnership and United Properties Group, Incorporated (filed
with the Company's Quarterly Report on Form 10-Q on August 13, 1999
and incorporated herein by reference).
4.6.2 Contribution Agreement, dated December 21, 1999, between United
Properties Group, Incorporated and COPT Acquisitions, Inc. (filed with
the Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
4.7 Articles Supplementary of Corporate Office Properties Trust Series D
Cumulative Convertible Redeemable Preferred Shares, dated January 25,
2001 (filed herewith).
21
Exhibit
NO. DESCRIPTION
- ------- -----------
4.8 Registration Rights Agreement, dated January 25, 2001, for the benefit
of Barony Trust Limited (filed herewith).
10.1 Employment Agreement, dated December 16, 1999, between Corporate
Office Management, Inc., COPT and Clay W. Hamlin, III (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.2 Employment Agreement, dated December 16, 1999, between Corporate
Office Management, Inc., COPT and Randall M. Griffin (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.3 Employment Agreement, dated December 16, 1999, between Corporate
Office Management, Inc., COPT and Roger A. Waesche, Jr. (filed with
the Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.4 Employment Agreement, dated December 16, 1999, between Corporate
Development Services, LLC, COPT and Dwight Taylor (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.5 Employment Agreement, dated December 16, 1999, between Corporate
Realty Management, LLC, COPT and Michael D. Kaiser (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.6 Restricted Share Agreement, dated December 16, 1999, between Corporate
Office Properties Trust and Randall M. Griffin (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.7 Restricted Share Agreement, dated December 16, 1999, between Corporate
Office Properties Trust and Roger A. Waesche, Jr. (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.8 Restricted Share Agreement, dated December 16, 1999, between Corporate
Office Properties Trust and Dwight Taylor (filed with the Company's
Annual Report on Form 10-K on March 16, 2000 and incorporated herein
by reference).
10.9 Restricted Share Agreement, dated December 16, 1999, between Corporate
Office Properties Trust and Michael D. Kaiser (filed with the
Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.10.1 Corporate Office Properties Trust 1998 Long Term Incentive Plan (filed
with the Registrant's Registration Statement on Form S-4 (Commission
File No. 333-45649) and incorporated herein by reference).
10.10.2 Amendment No. 1 to Corporate Office Properties Trust 1998 Long Term
Incentive Plan (filed with the Company's Quarterly Report on Form 10-Q
on August 13, 1999 and incorporated herein by reference).
10.11 Stock Option Plan for Directors (filed with Royale Investments, Inc.'s
Form 10-KSB for the year ended December 31, 1993 (Commission File No.
0-20047) and incorporated herein by reference).
22
Exhibit
NO. DESCRIPTION
- ------- -----------
10.12 Senior Secured Credit Agreement, dated October 13, 1997, (filed with
the Company's Current Report on Form 8-K on October 29, 1997, and
incorporated herein by reference).
10.13 Senior Secured Revolving Credit Agreement, dated May 28, 1998, between
the Company, the Operating Partnership, Any Mortgaged Property
Subsidiary and Bankers Trust Company (filed with the Company's Current
Report on Form 8-K on June 10, 1998 and incorporated herein by
reference).
10.14 Promissory Note, dated October 22, 1998, between Teachers Insurance
and Annuity Association of America and the Operating Partnership
(filed with the Company's Quarterly Report on Form 10-Q on November
13, 1998 and incorporated herein by reference).
10.15 Indemnity Deed of Trust, Assignment of Leases and Rents and Security
Agreement, dated October 22, 1998, by affiliates of the Operating
Partnership for the benefit of Teachers Insurance and Annuity
Association of America (filed with the Company's Quarterly Report on
Form 10-Q on November 13, 1998 and incorporated herein by reference).
10.16 Promissory Note, dated September 30, 1999, between Teachers Insurance
and Annuity Association of America and the Operating Partnership
(filed with the Company's Quarterly Report on Form 10-Q on November 8,
1999 and incorporated herein by reference).
10.17 Indemnity Deed of Trust, Assignment of Leases and Rents and Security
Agreement, dated September 30, 1999, by affiliates of the Operating
Partnership for the benefit of Teachers Insurance and Annuity
Association of America (filed with the Company's Quarterly Report on
Form 10-Q on November 8, 1999 and incorporated herein by reference).
10.18 Revolving Credit Agreement, dated December 29, 1999, between Corporate
Office Properties, L.P. and Prudential Securities Credit Corp. (filed
with the Company's Annual Report on Form 10-K on March 16, 2000 and
incorporated herein by reference).
10.19 Letter Agreement for Interest Rate Swap Transaction, dated December
26, 2000, between Corporate Office Properties, L.P. and Deutsche Bank
AG (filed herewith).
10.20 Lease Agreement between Blue Bell Investment Company, L.P. and Unisys
Corporation dated March 12, 1997 with respect to lot A (filed with the
Registrant's Registration Statement on Form S-4 (Commission File No.
333-45649) and incorporated herein by reference).
10.21 Lease Agreement between Blue Bell Investment Company, L.P. and Unisys
Corporation, dated March 12, 1997, with respect to lot B (filed with
the Registrant's Registration Statement on Form S-4 (Commission File
No. 333-45649) and incorporated herein by reference).
10.22 Lease Agreement between Blue Bell Investment Company, L.P. and Unisys
Corporation, dated March 12, 1997, with respect to lot C (filed with
the Registrant's Registration Statement on Form S-4 (Commission File
No. 333-45649) and incorporated herein by reference).
10.23 Project Consulting and Management Agreement, dated September 28, 1998,
between Constellation Properties, Inc. and COMI (filed with the
Company's Current Report on
23
Exhibit
NO. DESCRIPTION
- ------- -----------
Form 8-K on October 13, 1998 and incorporated herein by reference).
10.24 Agreement for Services, dated September 28, 1998, between the Company
and Corporate Office Management, Inc. (filed with the Company's Annual
Report on Form 10-K on March 30, 1999 and incorporated herein by
reference).
10.25.1 Lease Agreement, dated September 28,1998, between St. Barnabas Limited
Partnership and Constellation Properties, Inc. (filed with the
Company's Annual Report on Form 10-K on March 30, 1999 and
incorporated herein by reference).
10.25.2 Fourth Amendment to Agreement of Lease, dated June 12, 2000, between
St. Barnabas, LLC and Constellation Real Estate, Inc. (filed
herewith).
10.26.1 Lease Agreement, dated August 3, 1998, between Constellation Real
Estate, Inc. and Constellation Properties, Inc. (filed with the
Company's Annual Report on Form 10-K on March 30, 1999 and
incorporated herein by reference).
10.26.2 First Amendment to Lease, dated December 30, 1998, between Three
Centre Park, LLC and Constellation Properties, Inc. (filed with the
Company's Annual Report on Form 10-K on March 30, 1999 and
incorporated herein by reference).
10.27 Option agreement, dated March 1998, between Corporate Office
Properties, L.P. and Blue Bell Land, L.P. (filed with the Company's
Annual Report on Form 10-K on March 16, 2000 and incorporated herein
by reference).
10.28 Option agreement, dated March 1998, between Corporate Office
Properties, L.P. and Comcourt Land, L.P. (filed with the Company's
Annual Report on Form 10-K on March 16, 2000 and incorporated herein
by reference).
10.29 Option Agreement, dated September 28, 1998, between Jolly Acres
Limited Partnership, Arbitrage Land Limited Partnership and the
Operating Partnership (filed with the Company's Current Report on Form
8-K on October 13, 1998 and incorporated herein by reference).
13.1 Portions of the Annual Report of Corporate Office Properties Trust as
of and for the year ended December 31, 2000 (filed herewith).
13.2 Schedule III - Real Estate and Accumulated Depreciation as of December
31, 2000 (filed herewith).
21.1 Subsidiaries of Registrant (filed herewith).
23.1 Consent of Independent Accountants (filed herewith).
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CORPORATE OFFICE PROPERTIES TRUST
Date: March 22, 2001 By: /s/ Randall M. Griffin
-------------------------------------------------
Randall M. Griffin
President and Chief Operating Officer
Date: March 22, 2001 By: /s/ Roger A. Waesche, Jr.
-------------------------------------------------
Roger A. Waesche, Jr.
Senior Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
SIGNATURES TITLE DATE
---------- ----- ----
/s/ Jay H. Shidler Chairman of the Board MARCH 22, 2001
- --------------------------------------- and Trustee
(Jay H. Shidler)
/s/ Clay W. Hamlin, III Chief Executive Officer and Trustee MARCH 22, 2001
- ---------------------------------------
(Clay W. Hamlin, III)
/s/ Randall M. Griffin President and Chief Operating Officer MARCH 22, 2001
- ---------------------------------------
(Randall M. Griffin)
/s/ Roger A. Waesche, Jr. Senior Vice President and Chief Financial Officer MARCH 22, 2001
- ---------------------------------------
(Roger A. Waesche)
/s/ Betsy Z. Cohen Trustee MARCH 22, 2001
- ---------------------------------------
(Betsy Z. Cohen)
/s/ Kenneth D. Wethe Trustee MARCH 22, 2001
- ---------------------------------------
(Kenneth D. Wethe)
/s/ Robert L. Denton Trustee MARCH 22, 2001
- ---------------------------------------
(Robert L. Denton)
/s/ Kenneth S. Sweet, Jr. Trustee MARCH 22, 2001
- ---------------------------------------
(Kenneth S. Sweet, Jr.)
/s/ Steven D. Kesler Trustee MARCH 22, 2001
- ----------------------------------------
(Steven D. Kesler)
/s/ Edward A. Crooke Trustee MARCH 22, 2001
- ----------------------------------------
(Edward A. Crooke)
25