CORPORATE OFFICE PROPERTIES TRUST
INDEX TO SUPPLEMENTAL INFORMATION (UNAUDITED)
MARCH 31, 2001
HIGHLIGHTS AND DISCUSSION PAGE
Reporting Period Highlights - First Quarter 2001....................................................1
Subsequent Events...................................................................................2
FINANCIAL STATEMENTS
Quarterly Selected Financial Summary Data...........................................................3
Quarterly Consolidated Balance Sheets...............................................................4
Quarterly Consolidated Statements of Operations and Funds From Operations (FFO).....................5
Quarterly Consolidated Statements of Operations and FFO per Diluted Share...........................6
Quarterly Consolidated Statements of Operations and FFO as a Percentage of Total Revenues...........7
SELECTED FINANCIAL ANALYSES
Quarterly Equity Analysis...........................................................................8
Quarterly Valuation Analysis........................................................................9
Quarterly Debt Analysis............................................................................10
Quarterly Operating Ratios.........................................................................11
Quarterly Dividend Analysis........................................................................12
Investor Composition and Analyst Coverage..........................................................13
Debt Maturity Schedule - March 31, 2001............................................................14
PORTFOLIO SUMMARY
Property Summary by Region - March 31, 2001........................................................15
Property Occupancy Rates by Region by Quarter......................................................17
Top Twenty Office Tenants as of March 31, 2001.....................................................18
Total Rental Revenue and Net Operating Income by Geographic Region by Quarter......................19
Same Office Property Cash and GAAP Net Operating Income by Quarter.................................20
Office Lease Expiration Analysis by Year...........................................................21
Quarterly Office Renewal Analysis..................................................................22
Acquisition Summary as of March 31, 2001...........................................................24
Development Summary as of March 31, 2001...........................................................25
TO MEMBERS OF THE INVESTMENT COMMUNITY:
We prepared this supplemental information package to provide you with additional
detail on our properties and operations. The information in this package is
unaudited, filed with the Securities and Exchange Commission and should be read
in conjunction with our quarterly and annual reports. If you have any questions
or comments, please contact Ms. Sara L. Grootwassink, Vice President, Finance
and Investor Relations at (410) 992-7324 or sara.grootwassink@copt.com.
REPORTING PERIOD HIGHLIGHTS - FIRST QUARTER 2001
FINANCIAL RESULTS
o Reported FFO - diluted of $10,102,000 or $.31 per share/unit for the first
quarter of 2001 as compared to $8,900,000 or $.28 per share/unit for the
comparable 2000 period, representing an increase of 10.7% per share/unit.
FFO - diluted increased $1,202,000, or 13.5%, over the comparable 2000
period.
o Reported AFFO - diluted of $8,296,000 or $.25 per share/unit for the first
quarter of 2001 as compared to $7,429,000 or $.23 per share/unit for the
comparable 2000 period, representing an increase of 8.7% per share/unit.
FINANCING AND CAPITAL TRANSACTIONS
o We expanded our Deutsche Bank revolving credit facility capacity to $125.0
million and extended the maturity date for three years through March 2004.
o In January 2001, we issued 544,000 Series D convertible preferred shares
with a liquidation value of $25.00 per share, raising $12.0 million. The
preferred shares have a 4% coupon and are convertible into common shares at
a ratio of 2.2 to 1.
o We closed on two seven-year, 7.90%, permanent loans totaling $39.6 million
which generated excess funds of $6.0 million after repayment of outstanding
debt.
o Our debt to market capitalization is 57.5% and our debt to undepreciated
book value of real estate assets is 59.1% as of March 31, 2001. We achieved
an EBITDA interest coverage ratio of 2.38x for this quarter.
o We expanded our analyst coverage with the addition of Ferris, Baker Watts,
Incorporated in March 2001, which initiated coverage with a Buy rating.
OPERATIONS
o We renewed 98.6% of our office leases (based upon square footage)
representing 84,972 square feet with an average capital cost of $6.88 per
square foot during the 1st quarter. We realized increases in base and total
rents on a straight-line basis of 20.4% and 18.2%, respectively, as
measured from the GAAP straight-line rent in effect preceding the renewal
date. Base and total rent on a cash basis increased 13.0% and 11.1%,
respectively, on this renewed and retenanted space.
o Overall occupancy was 97.0% as of March 31, 2001. Occupancy rates exceeded
97.7% in the Baltimore/Washington Corridor, which represents 62.0% of our
office square footage and 64.5% of our total office revenues for the 1st
quarter of 2001. We were 98.4% leased as of March 31, 2001 for our office
portfolio.
o Weighted average lease term of our office portfolio is 4.7 years as of
March 31, 2001, with an average contractual rental rate (including tenant
reimbursements for operating costs) of $17.34 per square foot.
1
ACQUISITION
o Through a 40% interest in a joint venture agreement, we acquired five
properties totaling 314,594 square feet in the BWI Airport submarket.
Including these five joint venture properties, our market share increased
to 54% of this submarket and to 87% of the Airport Square Business Park.
These properties are 97.9% leased and were acquired for an average cost of
$107 per square foot.
CONSTRUCTION
o In January 2001, we delivered a 78,460 square foot building in Columbia
Gateway Business Park, improving our market share to 28% of this submarket.
This property is 87% leased primarily to Sun Microsystems (45%) and
Coca-Cola Company (35%).
SUBSEQUENT EVENTS
o In April 2001, we issued 1,150,000 Series E cumulative redeemable preferred
shares with a liquidation value of $25.00 per share, raising $28,750,000 in
gross proceeds. These Series E preferred shares have a 10.25% coupon and
can be redeemed at our option subsequent to July 15, 2006. Net proceeds
were primarily used to pay down our Deutsche Bank revolving credit
facility.
o We closed a $21.2 million seven-year loan with a fixed interest rate of
7.30%. The proceeds were used to repay $18.4 million of outstanding debt,
eliminating an $18.0 million scheduled maturity in May 2002.
NOTE: THIS SUPPLEMENTAL INFORMATION CONTAINS "FORWARD LOOKING" STATEMENTS, AS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, THAT ARE
BASED ON THE COMPANY'S 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 THE COMPANY'S 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. THE COMPANY UNDERTAKES NO OBLIGATIONS TO PUBLICLY
UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE. FOR FURTHER INFORMATION, PLEASE
REFER TO THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
2
QUARTERLY SELECTED FINANCIAL SUMMARY DATA
(DOLLARS IN THOUSANDS)
2001 2000
---------------------------------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
Total Revenues from Real Estate Operations $ 29,701 $ 28,676 $ 28,039 $ 26,417 $ 25,861
Net Operating Income from Real Estate Operations 21,235 20,536 19,989 18,980 18,253
EBITDA 19,490 19,298 18,559 17,772 16,952
Net Income before Preferred Dividends 3,726 4,087 3,685 3,712 3,649
Preferred Dividends (881) (782) (781) (1,119) (1,120)
-------- -------- -------- -------- --------
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS $ 2,845 $ 3,305 $ 2,904 $ 2,593 $ 2,530
======== ======== ======== ======== ========
Funds From Operations (FFO) - Diluted $ 10,102 $ 9,804 $ 9,550 $ 9,250 $ 8,900
FFO PER DILUTED SHARE $ 0.31 $ 0.31 $ 0.30 $ 0.29 $ 0.28
Adjusted FFO - Diluted (A) $ 8,296 $ 8,228 $ 6,691 $ 7,634 $ 7,429
ADJUSTED FFO PER DILUTED SHARE $ 0.25 $ 0.26 $ 0.23 $ 0.24 $ 0.23
Payout Ratios:
FFO - DILUTED (B) 64.87% 65.67% 67.42% 66.02% 68.95%
AFFO - DILUTED (C) 78.99% 78.25% 87.68% 80.00% 82.61%
TOTAL DIVIDENDS/DISTRIBUTIONS $ 7,334 $ 7,220 $ 7,220 $ 6,888 $ 6,918
(A) For the quarter ended September 30, 2000, the Series C convertible
preferred units were anti-dilutive for AFFO calculations. Thus, in
computing AFFO, the quarterly dividend of $572 was included in the
numerator and the related 2,421 of Series C convertible preferred
units (as if already converted into common shares) were excluded
from the denominator.
(B) Computed by dividing total dividends/distributions (except for dividends on
Series B Cumulative Redeemable Preferred Shares which are subtracted to
calculate FFO) by FFO diluted.
(C) Computed by dividing total dividends/distributions (except for dividends on
Series B Cumulative Redeemable Preferred Shares which are subtracted to
calculate AFFO) by AFFO diluted. In addition, for the quarter ended
September 30, 2000, the quarterly Series C preferred unit dividend of $572
was excluded from the numerator.
3
QUARTERLY CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
2001
-------- -----------
MARCH 31 DECEMBER 31
-------- -----------
ASSETS
Investment in real estate:
Land - operational $ 140,620 $ 140,018
Land - development 24,683 19,069
Construction in progress 22,228 17,489
Buildings and improvements 615,586 604,666
Investment in and advances to real estate joint ventures 6,877 3,616
Less: accumulated depreciation (37,652) (33,271)
--------- ---------
NET INVESTMENT IN REAL ESTATE 772,342 751,587
Cash and cash equivalents 3,806 4,981
Restricted cash 4,468 2,703
Accounts receivable, net 5,519 3,245
Investment in and advances to other unconsolidated entities 2,159 6,124
Deferred rent receivable 9,335 8,644
Deferred charges, net 15,550 12,905
Prepaid and other assets 6,726 4,501
Furniture, fixtures and equipment, net of accumulated depreciation 1,807 147
--------- ---------
TOTAL ASSETS $ 821,712 $ 794,837
========= =========
LIABILITIES AND BENEFICIARIES' EQUITY
Liabilities:
Mortgage loans payable $ 478,913 $ 474,349
Accounts payable and accrued expenses 10,889 10,227
Rents received in advance and security deposits 4,236 3,883
Dividends/distributions payable 7,203 7,090
Fair value of derivatives 1,993 --
Other liabilities 10,243 --
--------- ---------
TOTAL LIABILITIES 513,477 495,549
--------- ---------
Minority interests:
Preferred Units in the Operating Partnership 24,367 24,367
Common Units in the Operating Partnership 80,467 81,069
Other consolidated partnership 166 124
--------- ---------
TOTAL MINORITY INTERESTS 105,000 105,560
--------- ---------
COMMITMENTS AND CONTINGENCIES
Beneficiaries' equity:
Preferred Shares ($0.01 par value; 5,000,000 authorized);
1,025,000 designated as Series A Convertible Preferred
Shares of beneficial interest (1 share issued
as of March 31, 2001) -- --
1,725,000 designated as Series B Cumulative Redeemable Preferred Shares of
beneficial interest (1,250,000 shares issued as of March 31, 2001) 13 12
544,000 designated as Series D Cumulative Redeemable Preferred Shares of
beneficial interest (544,000 shares issued as of March 31, 2001) 5 --
Common Shares of beneficial interest ($0.01 par value; 45,000,000 authorized,
20,595,537 shares issued as of March 31, 2001) 207 206
Treasury Shares, at cost (166,600 shares as of March 31, 2001) (1,415) (1,415)
Additional paid-in capital 221,682 209,388
Accumulated deficit (12,222) (11,064)
Value of unearned restricted Common Share grants (3,042) (3,399)
Accumulated comprehensive loss (1,993) --
--------- ---------
TOTAL BENEFICIARIES' EQUITY 203,235 193,728
--------- ---------
TOTAL BENEFICIARIES' EQUITY AND MINORITY INTERESTS 308,235 299,288
--------- ---------
TOTAL LIABILITIES AND BENEFICIARIES' EQUITY $ 821,712 $ 794,837
========= =========
2000
---------------------------------------
SEPTEMBER 30 JUNE 30 MARCH 31
------------ ------- --------
ASSETS
Investment in real estate:
Land - operational $ 136,723 $ 141,646 $ 137,075
Land - development 21,888 15,888 16,332
Construction in progress 21,579 20,300 25,832
Buildings and improvements 585,067 575,531 551,332
Investment in and advances to real estate joint ventures 8,606 -- --
Less: accumulated depreciation (29,460) (25,490) (21,885)
--------- --------- ---------
NET INVESTMENT IN REAL ESTATE 744,403 727,875 708,686
Cash and cash equivalents 3,259 630 869
Restricted cash 2,007 2,903 2,507
Accounts receivable, net 3,571 3,386 2,080
Investment in and advances to other unconsolidated entities 4,074 4,095 4,393
Deferred rent receivable 7,882 6,010 5,378
Deferred charges, net 12,667 10,953 8,133
Prepaid and other assets 6,836 4,197 2,551
Furniture, fixtures and equipment, net of accumulated depreciation 166 185 203
--------- --------- ---------
TOTAL ASSETS $ 784,865 $ 760,234 $ 734,800
========= ========= =========
LIABILITIES AND BENEFICIARIES' EQUITY
Liabilities:
Mortgage loans payable $ 465,696 $ 436,679 $ 412,191
Accounts payable and accrued expenses 6,435 11,245 7,929
Rents received in advance and security deposits 5,351 4,277 4,168
Dividends/distributions payable 7,090 6,757 6,787
Fair value of derivatives -- -- --
Other liabilities -- -- --
--------- --------- ---------
TOTAL LIABILITIES 484,572 458,958 431,075
--------- --------- ---------
Minority interests:
Preferred Units in the Operating Partnership 24,367 24,367 24,367
Common Units in the Operating Partnership 81,402 78,720 80,422
Other consolidated partnership 115 109 106
--------- --------- ---------
TOTAL MINORITY INTERESTS 105,884 103,196 104,895
--------- --------- ---------
COMMITMENTS AND CONTINGENCIES -- -- --
Beneficiaries' equity:
Preferred Shares ($0.01 par value; 5,000,000 authorized);
1,025,000 designated as Series A Convertible Preferred Shares
of beneficial interest (1 share issued as of March 31, 2001) -- 10 10
1,725,000 designated as Series B Cumulative Redeemable Preferred Shares of
beneficial interest (1,250,000 shares issued as of March 31, 2001) 12 12 12
544,000 designated as Series D Cumulative Redeemable Preferred Shares of
beneficial interest (544,000 shares issued as of March 31, 2001) -- -- --
Common Shares of beneficial interest ($0.01 par value; 45,000,000 authorized,
20,595,537 shares issued as of March 31, 2001) 206 187 185
Treasury Shares, at cost (166,600 shares as of March 31, 2001) (1,415) (1,415) (52)
Additional paid-in capital 209,384 211,978 210,524
Accumulated deficit (10,379) (9,293) (8,450)
Value of unearned restricted Common Share grants (3,399) (3,399) (3,399)
Accumulated comprehensive loss -- -- --
--------- --------- ---------
TOTAL BENEFICIARIES' EQUITY 194,409 198,080 198,830
--------- --------- ---------
TOTAL BENEFICIARIES' EQUITY AND MINORITY INTERESTS 300,293 301,276 303,725
--------- --------- ---------
TOTAL LIABILITIES AND BENEFICIARIES' EQUITY $ 784,865 $ 760,234 $ 734,800
========= ========= =========
Note: Prior to January 1, 2001, other unconsolidated entities include Corporate
Office Services, Inc. (COS); Corporate Office Management, Inc. (COMI);
Corporate Development Services, LLC (CDS); MediTract, LLC; Corporate
Management Services, LLC (CMS); Corporate Realty Management, LLC (CRM); and
Martin G. Knott and Associates, LLC (MGK). Subsequent to January 1, 2001,
other unconsolidated entities consist solely of Meditract, LLC and Paragon
Smart Technologies, LLC.
4
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND FUNDS FROM OPERATIONS (FFO)
(DOLLARS AND UNITS IN THOUSANDS)
2001 2000
-------- ------------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
REVENUES
Rental revenue $ 25,619 $ 24,269 $ 23,980 $ 23,154 $ 21,906
Tenant recoveries and other revenue 4,082 4,407 4,059 3,263 3,955
-------- -------- -------- -------- --------
TOTAL REVENUES FROM REAL ESTATE OPERATIONS 29,701 28,676 28,039 26,417 25,861
EXPENSES
Property operating 3,448 3,220 3,596 3,049 2,883
Repairs and maintenance 3,518 3,491 3,018 3,065 3,439
Real estate taxes 1,500 1,429 1,436 1,323 1,286
-------- -------- -------- -------- --------
TOTAL PROPERTY EXPENSES FROM REAL ESTATE OPERATIONS 8,466 8,140 8,050 7,437 7,608
NET OPERATING INCOME FROM REAL ESTATE OPERATIONS 21,235 20,536 19,989 18,980 18,253
General and administrative (1,446) (1,040) (1,319) (1,160) (1,348)
Equity in income of unconsol. real estate joint venture 30 -- -- -- --
Earnings from service companies (329) -- -- -- --
Equity in (loss) income of other unconsolidated entities -- (198) (111) (48) 47
-------- -------- -------- -------- --------
EBITDA 19,490 19,298 18,559 17,772 16,952
Interest expense (8,194) (8,266) (7,850) (7,404) (6,934)
Series B Preferred Share dividends (781) (782) (781) (780) (781)
Amortization of deferred financing costs (383) (416) (349) (311) (306)
Income tax benefit 122 -- -- -- --
Income on options assumed to be converted (61) -- -- -- --
Depreciation on unconsolidated real estate entities (4) (4) (3) (3) (3)
Minority interestholders' share of operations 4 (9) (6) (4) (7)
Depreciation of corporate FF&E (91) (17) (20) (20) (20)
-------- -------- -------- -------- --------
FUNDS FROM OPERATIONS (FFO) - DILUTED 10,102 9,804 9,550 9,250 8,900
Depreciation and other amortization (4,809) (4,485) (4,275) (4,287) (3,853)
Gain on property sales -- 50 -- 57 --
Loss on early extinguishment of debt (106) (2) (109) (42) --
Cumulative effect adjustment for accounting change (263) -- -- -- --
Income on options assumed to be converted 61 -- -- -- --
Depreciation on unconsolidated real estate entities 4 4 3 3 3
Minority interestholders' share of operations (4) 9 6 4 7
Series B Preferred Share dividends 781 782 781 780 781
-------- -------- -------- -------- --------
INCOME BEFORE MINORITY INTERESTS
AND PREFERRED SHARE DIVIDENDS 5,766 6,162 5,956 5,765 5,839
MINORITY INTERESTS:
Preferred Units in Operating Partnership (572) (572) (572) (548) (548)
Common Units in Operating Partnership (1,472) (1,494) (1,693) (1,501) (1,634)
Other consolidated partnership 4 (9) (6) (4) (7)
Preferred Share dividends (881) (782) (781) (1,119) (1,120)
-------- -------- -------- -------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 2,845 $ 3,305 $ 2,904 $ 2,593 $ 2,530
-------- -------- -------- -------- --------
FUNDS FROM OPERATIONS (FFO) - DILUTED $ 10,102 $ 9,804 $ 9,550 $ 9,250 $ 8,900
Preferred Units in Operating Partnership (1) -- -- (572) -- --
Straight line rents (690) (800) (1,872) (693) (742)
Non-incremental capital expenditures (1,116) (776) (415) (923) (729)
-------- -------- -------- -------- --------
ADJUSTED FUNDS FROM OPERATIONS - DILUTED $ 8,296 $ 8,228 $ 6,691 $ 7,634 $ 7,429
-------- -------- -------- -------- --------
Preferred dividends/distributions (2) 1,453 1,353 1,353 1,668 1,668
Common dividends/distributions 5,881 5,867 5,867 5,220 5,250
-------- -------- -------- -------- --------
TOTAL DIVIDENDS/DISTRIBUTIONS $ 7,334 $ 7,220 $ 7,220 $ 6,888 $ 6,918
-------- -------- -------- -------- --------
(1) For the quarter ended September 30, 2000, the Series C convertible preferred
units were anti-dilutive for AFFO calculations. Thus, in computing AFFO, the
quarterly dividend of $572 was included in the numerator and the related
2,421 of Series C convertible preferred units (as if already converted into
common shares) were excluded from the denominator.
(2) Includes Series B Cumulative Redeemable Preferred Share dividends deducted
for FFO/AFFO computations.
5
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND FFO PER DILUTED SHARE
(SHARES IN THOUSANDS)
2001 2000
-------- ------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
REVENUES
Rental revenue $ 0.78 $ 0.76 $ 0.75 $ 0.71 $ 0.68
Tenant recoveries and other revenue 0.12 0.14 0.13 0.10 0.12
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES FROM REAL ESTATE OPERATIONS 0.90 0.90 0.88 0.82 0.80
EXPENSES
Property operating 0.10 0.10 0.11 0.09 0.09
Repairs and maintenance 0.11 0.11 0.09 0.09 0.11
Real estate taxes 0.05 0.04 0.04 0.04 0.04
---------- ---------- ---------- ---------- ----------
TOTAL PROPERTY EXPENSES FROM REAL ESTATE OPERATIONS 0.26 0.25 0.25 0.23 0.24
NET OPERATING INCOME FROM REAL ESTATE OPERATIONS 0.64 0.64 0.63 0.59 0.56
General and administrative (0.04) (0.03) (0.04) (0.04) (0.04)
Equity in income of unconsol. real estate joint venture 0.00 -- -- -- --
Earnings from service companies (0.01) -- -- -- --
Equity in (loss) income of other unconsolidated entities -- (0.01) (0.00) (0.00) 0.00
---------- ---------- ---------- ---------- ----------
EBITDA 0.59 0.60 0.58 0.55 0.52
Interest expense (0.25) (0.26) (0.25) (0.23) (0.21)
Series B Preferred Share dividends (0.02) (0.02) (0.02) (0.02) (0.02)
Amortization of deferred financing costs (0.01) (0.01) (0.01) (0.01) (0.01)
Income tax benefit 0.00 -- -- -- --
Income on options assumed to be converted (0.00) -- -- -- --
Depreciation on unconsolidated real estate entities (0.00) (0.00) (0.00) (0.00) (0.00)
Minority interestholders' share of operations 0.00 (0.00) (0.00) (0.00) (0.00)
Depreciation of corporate FF&E (0.00) (0.00) (0.00) (0.00) (0.00)
---------- ---------- ---------- ---------- ----------
FUNDS FROM OPERATIONS (FFO) - DILUTED 0.31 0.31 0.30 0.29 0.28
Depreciation and other amortization (0.15) (0.14) (0.13) (0.13) (0.12)
Gain on property sales -- 0.00 -- 0.00 --
Loss on early extinguishment of debt (0.00) (0.00) (0.00) (0.00) --
Cumulative effect adjustment for accounting change (0.01) -- -- -- --
Income on options assumed to be converted 0.00 -- -- -- --
Depreciation on unconsolidated real estate entities 0.00 0.00 0.00 0.00 0.00
Minority interestholders' share of operations (0.00) 0.00 0.00 0.00 0.00
Series B Preferred Share dividends 0.02 0.02 0.02 0.02 0.02
---------- ---------- ---------- ---------- ----------
INCOME BEFORE MINORITY INTERESTS AND
PREFERRED SHARE DIVIDENDS 0.18 0.19 0.19 0.18 0.18
MINORITY INTERESTS:
Preferred Units in Operating Partnership (0.02) (0.02) (0.02) (0.02) (0.02)
Common Units in Operating Partnership (0.04) (0.05) (0.05) (0.05) (0.05)
Other consolidated partnership 0.00 (0.00) (0.00) (0.00) (0.00)
Preferred Share dividends (0.03) (0.02) (0.02) (0.03) (0.03)
---------- ---------- ---------- ---------- ----------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 0.09 $ 0.10 $ 0.09 $ 0.08 $ 0.08
========== ========== ========== ========== ==========
FUNDS FROM OPERATIONS (FFO) - DILUTED $ 0.31 $ 0.31 $ 0.30 $ 0.29 $ 0.28
Preferred Units in Operating Partnership -- -- (0.02) -- --
Straight line rents (0.02) (0.02) (0.06) (0.02) (0.02)
Non-incremental capital expenditures (0.03) (0.02) (0.01) (0.03) (0.02)
---------- ---------- ---------- ---------- ----------
ADJUSTED FUNDS FROM OPERATIONS - DILUTED $ 0.25 $ 0.26 $ 0.23 $ 0.24 $ 0.23
========== ========== ========== ========== ==========
For FFO Computations:
Weighted Average Converted Preferred Shares/Units 3,299 2,421 2,421 4,642 4,642
Weighted Average Common Shares/Units Outstanding 29,643 29,611 29,561 27,750 27,683
---------- ---------- ---------- ---------- ----------
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 32,942 32,032 31,982 32,393 32,325
========== ========== ========== ========== ==========
For AFFO Computations:
Weighted Average Converted Preferred Shares/Units 3,299 2,421 -- 4,642 4,642
Weighted Average Common Shares/Units Outstanding 29,643 29,611 29,561 27,750 27,683
---------- ---------- ---------- ---------- ----------
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 32,942 32,032 29,561 32,393 32,325
========== ========== ========== ========== ==========
6
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS
AND FFO AS A PERCENTAGE OF TOTAL REVENUES
2001 2000
-------- --------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
REVENUES
Rental revenue 86% 85% 86% 88% 85%
Tenant recoveries and other revenue 14% 15% 14% 12% 15%
--- --- --- --- ---
TOTAL REVENUES FROM REAL ESTATE OPERATIONS 100% 100% 100% 100% 100%
EXPENSES
Property operating 12% 11% 13% 12% 11%
Repairs and maintenance 12% 12% 11% 12% 13%
Real estate taxes 5% 5% 5% 5% 5%
--- --- --- --- ---
TOTAL PROPERTY EXPENSES FROM REAL ESTATE OPERATIONS 29% 28% 29% 28% 29%
NET OPERATING INCOME FROM REAL ESTATE OPERATIONS 71% 72% 71% 72% 71%
General and administrative (5%) (4%) (5%) (4%) (5%)
Equity in income of unconsol. real estate joint venture 0% 0% 0% 0% 0%
Earnings from service companies (1%) 0% 0% 0% 0%
Equity in (loss) income of other unconsolidated entities 0% (1%) (0%) (0%) 0%
--- --- --- --- ---
EBITDA 66% 67% 66% 67% 66%
Interest expense (28%) (29%) (28%) (28%) (27%)
Series B Preferred Share dividends (3%) (3%) (3%) (3%) (3%)
Amortization of deferred financing costs (1%) (1%) (1%) (1%) (1%)
Income tax benefit 0% 0% 0% 0% 0%
Income on options assumed to be converted (0%) 0% 0% 0% 0%
Depreciation on unconsolidated real estate entities (0%) (0%) (0%) (0%) (0%)
Minority interestholders' share of operations 0% (0%) (0%) (0%) (0%)
Depreciation of corporate FF&E (0%) (0%) (0%) (0%) (0%)
--- --- --- --- ---
FUNDS FROM OPERATIONS (FFO) - DILUTED 34% 34% 34% 35% 34%
Depreciation and other amortization (16%) (16%) (15%) (16%) (15%)
Gain on property sales 0% 0% 0% 0% 0%
Loss on early extinguishment of debt (0%) (0%) (0%) (0%) 0%
Cumulative effect adjustment for accounting change (1%) 0% 0% 0% 0%
Income on options assumed to be converted 0% 0% 0% 0% 0%
Depreciation on unconsolidated real estate entities 0% 0% 0% 0% 0%
Minority interestholders' share of operations (0%) 0% 0% 0% 0%
Series B Preferred Share dividends 3% 3% 3% 3% 3%
--- --- --- --- ---
INCOME BEFORE MINORITY INTERESTS AND
PREFERRED SHARE DIVIDENDS 19% 21% 21% 22% 23%
MINORITY INTERESTS:
Preferred Units in Operating Partnership (2%) (2%) (2%) (2%) (2%)
Common Units in Operating Partnership (5%) (5%) (6%) (6%) (6%)
Other consolidated partnership 0% (0%) (0%) (0%) (0%)
Preferred Share dividends (3%) (3%) (3%) (4%) (4%)
--- --- --- --- ---
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS 10% 12% 10% 10% 10%
=== === === === ===
FUNDS FROM OPERATIONS (FFO) - DILUTED 34% 34% 34% 35% 34%
Preferred Units in Operating Partnership 0% 0% (2%) 0% 0%
Straight line rents (2%) (3%) (7%) (3%) (3%)
Non-incremental capital expenditures (4%) (3%) (1%) (3%) (3%)
ADJUSTED FUNDS FROM OPERATIONS - DILUTED 28% 29% 24% 29% 29%
=== === === === ===
7
QUARTERLY EQUITY ANALYSIS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA, SHARE PRICES AND RATIOS)
2001 2000
-------- --------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
COMMON EQUITY - END OF QUARTER
Common Shares (1) 20,429 20,409 20,407 18,544 18,529
Common Units 9,388 9,388 9,388 9,388 9,558
-------- -------- -------- -------- --------
TOTAL 29,817 29,797 29,795 27,932 28,087
-------- -------- -------- -------- --------
CONVERTIBLE PREFERRED EQUITY - END OF QUARTER
Convertible Series A Preferred Shares Outstanding (2) 0 0 0 984 984
Conversion Ratio 1.8748 1.8748 1.8748 1.8748 1.8748
Common Shares Issued Assuming Conversion 0 0 0 1,845 1,845
Preferred Share Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
Convertible Series D Preferred Shares Outstanding (3) 544 n/a n/a n/a n/a
Conversion Ratio 2.2000 n/a n/a n/a n/a
Common Shares Issued Assuming Conversion 1,197 n/a n/a n/a n/a
Preferred Share Book Value $ 25.00 n/a n/a n/a n/a
Convertible Series C Preferred Units Outstanding (4) 1,017 1,017 1,017 975 975
Conversion Ratio 2.3810 2.3810 2.3810 2.3810 2.3810
Common Units Issued Assuming Conversion 2,421 2,421 2,421 2,321 2,321
Preferred Units Book Value per Unit $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
PERPETUAL PREFERRED EQUITY - END OF QUARTER
Redeemable Series B Shares Outstanding 1,250 1,250 1,250 1,250 1,250
Preferred Share Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
WEIGHTED AVERAGE SHARES:
Weighted Average Common Shares Outstanding 19,982 19,947 19,934 18,014 17,353
Weighted Average Preferred Shares Outstanding
Assuming Conversion 878 -- -- 1,845 1,845
Weighted Average Dilutive Options 273 276 239 180 50
Weighted Average Dilutive Warrants (4) -- -- -- 476 476
Weighted Average Common Units 9,388 9,388 9,388 9,556 10,281
Weighted Average Preferred Units
Assuming Conversion 2,421 2,421 2,421 2,321 2,321
-------- -------- -------- -------- --------
WEIGHTED AVG. SHARES/UNITS OUTSTANDING ASSUMING
CONVERSION OF PREFERRED SHARES/UNITS 32,942 32,032 31,982 32,393 32,325
-------- -------- -------- -------- --------
COMMON SHARES TRADING VOLUME
Average Daily Volume (Shares) 21 13 20 22 19
Average Daily Volume (Dollars in thousands) $ 198.00 $ 122.20 $ 188.38 $ 187.74 $ 152.05
As a Percentage of Common Shares 0.1% 0.1% 0.1% 0.1% 0.1%
COMMON SHARE PRICE RANGE
Quarterly High $ 9.98 $ 10.00 $ 10.13 $ 9.25 $ 8.38
Quarterly Low $ 9.03 $ 8.94 $ 8.75 $ 8.00 $ 7.50
Quarterly Average $ 9.59 $ 9.63 $ 9.39 $ 8.72 $ 7.92
End of Quarter $ 9.51 $ 9.94 $ 9.94 $ 9.19 $ 8.19
CAPITALIZATION
Liquidation Value of Preferred Shares/Units $ 70,267 $ 56,667 $ 56,667 $ 80,224 $ 80,224
Market Value of Common Shares/Units 283,560 296,106 296,088 256,625 229,962
-------- -------- -------- -------- --------
TOTAL EQUITY MARKET CAPITALIZATION $353,826 $352,773 $352,754 $336,850 $310,187
======== ======== ======== ======== ========
TOTAL DEBT $478,913 $474,349 $465,696 $436,679 $412,191
======== ======== ======== ======== ========
TOTAL MARKET CAPITALIZATION $832,739 $827,122 $818,450 $773,529 $722,378
======== ======== ======== ======== ========
DEBT TO TOTAL MARKET CAPITALIZATION 57.5% 57.3% 56.9% 56.5% 57.1%
DEBT TO UNDEPRECIATED BOOK VALUE
OF REAL ESTATE ASSETS 59.1% 60.4% 60.0% 58.0% 56.4%
- ----------------
(1) Net of 166,600 treasury shares as of March 31, 2001.
(2) Converted September 28, 2000 except for 1 Convertible
Series A preferred share.
(3) We issued 544,000 Convertible Series D preferred shares on January 25, 2001.
(4) Eliminated a warrant to acquire a maximum of 476,200 common units in
exchange for the issuance of 42,000 Series C convertible preferred units
in July 2000.
8
QUARTERLY VALUATION ANALYSIS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA AND RATIOS)
2001 2000
-------- ------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
PRICING MULTIPLES
NOI Multiple
(Market value of Common Equity + Avg. Preferred
Share/Units+ Avg. Total Debt) / Ann. NOI 9.76x 9.99x 10.05x 10.10x 9.80x
EBITDA Multiple
(Market value of Common Equity + Avg. Preferred
Share/Units + Avg. Total Debt) / Ann. EBITDA 10.64x 10.63x 10.83x 10.79x 10.55x
FFO Multiple
(Quarter End Common Share Price / Ann. FFO - diluted) 7.75x 8.12x 8.32x 8.04x 7.43x
AFFO Multiple
(Quarter End Common Share Price / Ann. AFFO - diluted) 9.44x 9.67x 10.98x 9.75x 8.91x
NOI Yield
(Ann. NOI / (Market value of Common Equity + Avg
Preferred Share/Units + Avg. Debt)) 10.24% 10.01% 9.95% 9.90% 10.21%
EBITDA Yield
(Ann. EBITDA / (Market value of Common Equity + Avg
Preferred Share/Units + Avg. Debt)) 9.40% 9.41% 9.24% 9.27% 9.48%
FFO Yield
(Ann. FFO / Quarter End Common Share Price) 12.90% 12.32% 12.02% 12.43% 13.45%
AFFO Yield
(Ann. AFFO / Quarter End Common Share Price) 10.59% 10.34% 9.11% 10.26% 11.23%
Total Market Capitalization Per Square Foot
((Market Value of Common Stock + Preferred Share/Units +
Total Debt ) / GLA) (1) $124.70 $127.79 $128.86 $121.76 $118.79
RETURNS
Yield on Real Estate Owned - NOI
(Ann. NOI / Avg. Adjusted Gross Real Estate Investment) (2) 11.30% 11.16% 11.07% 10.80% 10.67%
Yield on Real Estate Owned - EBITDA
(Ann. EBITDA / Avg. Adjusted Gross Real Estate Investment) (2) 10.37% 10.49% 10.28% 10.12% 9.91%
Return on Book Value of Average Equity & Minority Interest
(Ann. EBTDA / Avg. Equity & Minority Interest) 14.87% 14.72% 14.24% 13.71% 13.17%
(1) Excludes square footage of assets under development, under construction or
held in a joint venture.
(2) Excludes land-development, construction in progress and investment in
development real estate joint ventures as these assets are not yet income
generating.
9
QUARTERLY DEBT ANALYSIS
(DOLLARS IN THOUSANDS)
2001 2000
-------- -----------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
DEBT OUTSTANDING
Mortgage Loans $ 356,872 $ 329,955 $ 338,063 $ 313,325 $ 319,624
Construction Loans 18,950 33,058 25,586 38,669 29,067
Revolving Credit Facility 29,091 29,091 4,761 -- --
Secured Revolving Credit Facility 74,000 82,245 97,285 84,685 63,500
---------- ---------- --------- --------- ---------
$ 478,913 $ 474,349 $ 465,695 $ 436,679 $ 412,191
========== ========== ========= ========= =========
AVERAGE OUTSTANDING BALANCE
Mortgage Loans $ 344,023 $ 325,971 $ 319,745 $ 318,249 $ 317,436
Construction Loans 26,967 28,277 37,700 34,145 26,551
Revolving Credit Facility 29,091 22,545 2,381 -- --
Secured Revolving Credit Facility 75,507 90,910 91,239 77,794 61,199
---------- ---------- --------- --------- ---------
$ 475,588 $ 467,703 $ 451,065 $ 430,188 $ 405,186
========== ========== ========= ========= =========
INTEREST RATE STRUCTURE
Fixed $ 240,501 $ 201,715 $ 305,614 $ 277,575 $ 283,624
Variable 13,412 147,634 60,081 109,104 128,567
Variable Subject to Interest Rate Protection (1 - 4) 225,000 125,000 100,000 50,000 --
---------- ---------- --------- --------- ---------
$ 478,913 $ 474,349 $ 465,695 $ 436,679 $ 412,191
========== ========== ========= ========= =========
% of Fixed Rate Loans (A) 50.22% 42.52% 65.63% 63.56% 68.81%
% of Variable Rate Loans 49.78% 57.48% 34.37% 36.44% 31.19%
---------- ---------- --------- --------- ---------
100.00% 100.00% 100.00% 100.00% 100.00%
========== ========== ========= ========= =========
(A) Excludes interest rate protection agreements.
AVERAGE INTERESTS RATES
Mortgage & Construction Loans 7.44% 7.84% 7.62% 7.52% 7.53%
Revolving Credit Facility 7.31% 8.17% 8.12% n/a n/a
Secured Revolving Credit Facility 7.85% 8.38% 8.33% 8.11% 7.68%
Total Weighted Average 7.50% 7.96% 7.64% 7.58% 7.55%
DEBT RATIOS
Debt to Total Market Capitalization 57.5% 57.3% 56.9% 56.5% 57.1%
Debt to Undepreciated Book Value of Real Estate Assets 59.1% 60.4% 60.0% 58.0% 56.4%
COVERAGE RATIOS (EXCLUDING CAPITALIZED INTEREST)
Interest Coverage - NOI 2.59x 2.48x 2.55x 2.56x 2.63x
(NOI / Interest)
Interest Coverage - EBITDA 2.38x 2.33x 2.36x 2.40x 2.44x
(EBITDA / Interest)
Interest Coverage - EBITDA - YTD 2.38x 2.38x 2.40x 2.42x 2.44x
(EBITDA / Interest - Year-to-date)
Debt Service Coverage - NOI 2.32x 2.20x 2.28x 2.32x 2.35x
(NOI / (Interest + Principal Amortization))
Debt Service Coverage - EBITDA 2.13x 2.07x 2.11x 2.17x 2.18x
(EBITDA / (Interest + Principal Amortization))
Fixed Charge Coverage - NOI 2.20x 2.13x 2.17x 2.09x 2.12x
(NOI / (Interest + Preferred Distribution))
Fixed Charge Coverage - EBITDA 2.02x 2.01x 2.02x 1.96x 1.97x
(EBITDA / (Interest + Preferred Distribution))
(1) We purchased a $50 million 2-year cap on LIBOR at a rate of 7.7% which
expires May 31, 2002.
(2) We purchased a $50 million 1-year cap on LIBOR at a rate of 7.0% which
expires October 13, 2001.
(3) We purchased a $25 million 1-year cap on LIBOR at a rate of 7.0% which
expires October 13, 2001.
(4) We executed a $100 million notional amount swap exchanging 30-day floating
LIBOR for LIBOR of 5.76% over a two-year period which expires January 2,
2003.
10
QUARTERLY OPERATING RATIOS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA AND RATIOS)
2001 2000
-------- -------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
OPERATING RATIOS
NOI as a % of Real Estate Revenues
(NOI / (Rental Revenue + Oper. Expense Reimb.)) 71.50% 71.61% 71.29% 71.85% 70.58%
EBITDA as a % of Real Estate Revenues
(EBITDA / (Rental Revenue + Oper. Expense Reimb.)) 65.62% 67.30% 66.19% 67.27% 65.55%
G&A as a % of Real Estate Revenues
(G&A / (Rental Revenue + Oper. Expense Reimb.)) 4.87% 3.63% 4.70% 4.39% 5.21%
G&A as a % of EBITDA
(G&A / EBITDA) 7.42% 5.39% 7.11% 6.53% 7.95%
Quarter end occupancy for entire portfolio 96.95% 97.03% 97.33% 96.66% 97.26%
Quarter end % leased for office portfolio 98.39% 98.17% 98.30% 98.40% 98.00%
Non-Incremental Capital Expenditures $ 1,116 $ 776 $ 415 $ 923 $ 729
Non-Incremental Capital Expenditures per average square feet $ 0.34 $ 0.12 $ 0.07 $ 0.15 $ 0.12
Non-Incremental Capital Expenditures per Diluted Share $ 0.03 $ 0.02 $ 0.01 $ 0.03 $ 0.02
Non-Incremental Capital Expenditures as a % of NOI 5.26% 3.78% 2.08% 4.86% 3.99%
11
QUARTERLY DIVIDEND ANALYSIS
2001 2000
-------- --------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
COMMON SHARE DIVIDENDS
Dividends per share/unit $ 0.20 $ 0.20 $ 0.20 $ 0.19 $ 0.19
Increase over prior quarter 0.0% 0.0% 5.3% 0.0% 0.0%
Increase over prior year 5.3% 5.3% 5.3% 5.6% 5.6%
COMMON DIVIDEND PAYOUT RATIOS
Payout - FFO - Diluted 64.9% 65.7% 67.4% 66.0% 69.0%
((Dividend + Distributions)/FFO)
Payout - AFFO - Diluted 79.0% 78.3% 87.7% 80.0% 82.6%
(Dividend /FAD)
Dividend Coverage - FFO - Diluted 1.54x 1.52x 1.48x 1.51x 1.45x
(FFO /dividends)
Dividend Coverage - AFFO - Diluted 1.27x 1.28x 1.14x 1.25x 1.21x
(AFFO /dividends)
COMMON DIVIDEND YIELDS
Dividend Yield 8.41% 8.05% 8.05% 8.27% 9.28%
SERIES C PREFERRED UNIT DISTRIBUTIONS
Preferred Unit Distributions Per Share $ 0.5625 $ 0.5625 $ 0.5625 $ 0.5625 $ 0.5625
Preferred Unit Distributions Yield 9.00% 9.00% 9.00% 9.00% 9.00%
Quarter End Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
SERIES A PREFERRED SHARE DIVIDENDS
Preferred Share Dividends Per Share $ 0.34375 $ 0.34375 $ 0.34375 $ 0.34375 $ 0.34375
Preferred Share Dividend Yield 5.50% 5.50% 5.50% 5.50% 5.50%
Quarter End Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
SERIES B PREFERRED SHARE DIVIDENDS
Preferred Share Dividends Per Share $ 0.6250 $ 0.6250 $ 0.6250 $ 0.6250 $ 0.6250
Preferred Share Dividend Yield 10.00% 10.00% 10.00% 10.00% 10.00%
Quarter End Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
SERIES D PREFERRED SHARE DIVIDENDS (1)
Preferred Share Dividends Per Share $ 0.2500 n/a n/a n/a n/a
Preferred Share Dividend Yield 4.00% n/a n/a n/a n/a
Quarter End Book Value $ 25.00 n/a n/a n/a n/a
- -----------------
(1) We issued 544,000 of Series D Convertible Preferred Shares on January 25,
2001. Dividend was prorated based upon the number of days outstanding from
date of issuance through quarter end. Prorated dividend was $.1833 per
share.
12
INVESTOR COMPOSITION AND ANALYST COVERAGE
(AS OF MARCH 31, 2001)
AS IF CONVERTED FULLY DILUTED
COMMON COMMON PREFERRED OWNERSHIP
SHAREHOLDER CLASSIFICATION SHARES UNITS SHARES / UNITS TOTAL % OF TOTAL
- -------------------------- ------ ----- --------------- ----- ----------
Constellation Real Estate, Inc. 8,876,171 -- 2 8,876,173 26.55%
Insiders 1,123,628 7,837,937 -- 8,961,565 26.80%
Institutional Ownership 3,679,986 -- -- 3,679,986 11.01%
Other / Retail 6,749,152 1,549,599 3,617,472 11,916,223 35.64%
---------- --------- --------- ---------- ------
20,428,937 9,387,536 3,617,474 33,433,947 100.00%
========== ========= ========= ========== ======
MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31,
RESEARCH COVERAGE 2001 2000 2000 2000 2000
------------- ------------- ------------- ------------- -------------
A. G. Edwards x x x
Deutsche Banc Alex. Brown x x x
Credit Suisse First Boston x x x x x
Ferris, Baker Watts, Incorporated x
Janney Montgomery Scott x x x x x
Tucker Anthony Cleary Gull x x
Johnston, Lemon x x
Legg Mason Wood Walker, Inc. x x x x x
Prudential Securities Incorporated x x x
McDonald Investments x x x x x
SOURCE: INSTITUTIONAL OWNERSHIP WAS OBTAINED FROM FILED FORMS 13(f) AS OF
DECEMBER 31, 2000 PER VICKERS STOCK RESEARCH CORPORATION.
13
DEBT MATURITY SCHEDULE - MARCH 31, 2001
(DOLLARS IN THOUSANDS)
MORTGAGES $125,000
------------ SECURED $50,000
YEAR OF MONTHLY DUE ON CONSTRUCTION (1) TERM CREDIT (2) REVOLVING REVOLVING CREDIT TOTAL SCHEDULED
MATURITY AMORTIZATION MATURITY LOANS FACILITY CREDIT FACILITY FACILITY PAYMENTS
- -------- ------------ -------- ---------------- --------------- --------------- ---------------- ---------------
2001 3,348 7,000 2,000 -- -- 29,091 41,439
2002 4,612 11,565 6,631 90,954 -- -- 113,762
2003 4,575 12,719 3,464 -- -- -- 20,758
2004 4,617 25,762 -- -- 74,000 -- 104,379
2005 4,550 16,368 -- -- -- -- 20,918
2006 4,295 59,975 -- -- -- -- 64,270
2007 3,202 6,142 -- -- -- -- 9,344
2008 2,237 101,806 -- -- -- -- 104,043
-------- -------- -------- -------- -------- -------- --------
$ 31,436 $241,337 $ 12,095 $ 90,954 $ 74,000 $ 29,091 $478,913
======== ======== ======== ======== ======== ======== ========
Notes:
- ------------------
(1) We have the right to extend a $3,623 construction loan for a one-year
period, subject to certain conditions, upon maturity in 2002. The above
table includes this maturity in 2002. The loan balances as of March 31
represent the outstanding balance as of that date.
(2) The Term Credit Facility was extended through October 13, 2001. We have the
right to extend for another one-year period, subject to certain conditions.
This loan has been presented as maturing in October 2002 in the above
table.
We have obtained interest rate protection agreements as follows:
$50 million cap on thirty-day LIBOR at 7.7% expiring in May 2002.
$50 million cap on thirty-day LIBOR at 7.0% expiring in October 2001.
$25 million cap on thirty-day LIBOR at 7.0% expiring in October 2001.
$100 million notional amount swap of thirty-day LIBOR at 5.76% expiring in
January 2003.
14
PROPERTY SUMMARY BY REGION - MARCH 31, 2001
SINGLE ANTICIPATED
STORY (S) OR RENTABLE RENTABLE SQUARE
YEAR BUILT MULTI-STORY SQUARE FEET -
SUBMARKET STATE OR RENOVATED (M) FEET DEVELOPMENT
------------------------ ----- ------------ ------------ -------- ----------------
OFFICE PROPERTIES
BALTIMORE /WASHINGTON CORRIDOR
131 National Business Parkway BWI Airport MD 1990 M 68,906
132 National Business Parkway BWI Airport MD 2000 M 117,568
133 National Business Parkway BWI Airport MD 1997 M 88,666
134 National Business Parkway BWI Airport MD 1999 M 93,482
135 National Business Parkway BWI Airport MD 1998 M 86,863
141 National Business Parkway BWI Airport MD 1990 M 86,964
2721 Phoenix Road (221 NBP) BWI Airport MD 2000 M 117,890
2701 Phoenix Road (201 NBP) (1) BWI Airport MD M 118,000
2711 Phoenix Road (211 NBP) (1) BWI Airport MD M 150,000
1099 Winterson Road BWI Airport MD 1988 M 70,938
1190 Winterson Road BWI Airport MD 1987 M 68,567
1199 Winterson Road BWI Airport MD 1988 M 96,636
1201 Winterson Road BWI Airport MD 1985 M 67,903
1331 Ashton Road BWI Airport MD 1989 S 29,936
1334 Ashton Road BWI Airport MD 1989 S 37,565
1340 Ashton Road BWI Airport MD 1989 S 46,400
1341 Ashton Road BWI Airport MD 1989 S 15,841
1343 Ashton Road BWI Airport MD 1989 S 9,962
1344 Ashton Road BWI Airport MD 1989 M 16,865
1350 Dorsey Road BWI Airport MD 1989 S 19,992
2730 Hercules Road BWI Airport MD 1990 M 240,336
7240 Parkway Drive BWI Airport MD 1985 M 73,500
7318 Parkway Drive BWI Airport MD 1984 S 59,204
7321 Parkway Drive BWI Airport MD 1984 S 39,822
7467 Ridge Road BWI Airport MD 1990 M 73,756
800 International Drive BWI Airport MD 1988 S 50,979
849 International Drive BWI Airport MD 1988 M 68,186
881 Elkridge Landing Road BWI Airport MD 1986 M 73,572
891 Elkridge Landing Road (1) BWI Airport MD 2001 M 56,489
900 Elkridge Landing Road BWI Airport MD 1982 M 97,139
900 International Drive BWI Airport MD 1986 S 57,140
901 Elkridge Landing Road (1) BWI Airport MD 2001 M 56,847
911 Elkridge Landing Road BWI Airport MD 1985 M 68,297
920 Elkridge Landing Road (1) BWI Airport MD 2001 M 96,566
921 Elkridge Landing Road BWI Airport MD 1983 M 54,057
930 International Drive BWI Airport MD 1986 S 57,140
938 Elkridge Landing Road (1) BWI Airport MD 2001 M 52,988
939 Elkridge Landing Road BWI Airport MD 1983 M 53,031
940 Elkridge Landing Road (1) BWI Airport MD 2001 M 51,704
999 Corporate Boulevard BWI Airport MD 2000 M 67,351
1302 Concourse Drive BWI Airport MD 1996 M 84,607
1304 Concourse Drive BWI Airport MD M 100,000
1306 Concourse Drive BWI Airport MD 1990 M 114,046
1615 and 1629 Thames Street Baltimore City MD 1989 M 103,683
9690 Deereco Road North Baltimore County MD 1988 M 133,702
375 West Padonia Road North Baltimore County MD 1986 M 100,804
9140 Route 108 Howard County Perimeter MD 1974/1985 S 150,000
6716 Alexander Bell Drive Howard County Perimeter MD 1990 M 52,002
6740 Alexander Bell Drive Howard County Perimeter MD 1992 M 61,878
6750 Alexander Bell Drive Howard County Perimeter MD 2001 M 78,460
6760 Alexander Bell Drive Howard County Perimeter MD 1991 M 37,248
6940 Columbia Gateway Drive Howard County Perimeter MD 1999 M 108,737
6950 Columbia Gateway Drive Howard County Perimeter MD 1998 M 107,778
6731 Columbia Gateway Drive Howard County Perimeter MD M 122,889
Montpelier Research Phase I (1) Howard County Perimeter MD M 44,000
Robert Fulton Drive - Phase I (1) Howard County Perimeter MD M 144,350
7200 Riverwood Drive Howard County Perimeter MD 1986 S 160,000
8815 Centre Park Drive Howard County Perimeter MD 1987 M 53,782
14502 Greenview Drive Laurel MD 1988 M 71,873
14504 Greenview Drive Laurel MD 1985 M 69,194
6009 - 6011 Oxon Hill Road Southern Prince George's MD 1990 M 181,768
County --------- --------
# OF OPERATING BUILDINGS: 55
----
TOTAL BALTIMORE / WASHINGTON CORRIDOR: 4,258,610 679,239
--------- -------
(1) This property is owned through a joint venture.
15
PROPERTY SUMMARY BY REGION - MARCH 31, 2001
SINGLE ANTICIPATED
STORY (S) OR RENTABLE RENTABLE SQUARE
YEAR BUILT MULTI-STORY SQUARE FEET -
SUBMARKET STATE OR RENOVATED (M) FEET DEVELOPMENT
------------------------ ----- ------------ ------------ -------- ---------------
OFFICE PROPERTIES
GREATER PHILADELPHIA
751 Jolly Road Blue Bell PA 1966/1991 M 112,958
753 Jolly Road Blue Bell PA 1960/1992-94 M 419,472
760 Jolly Road Blue Bell PA 1974/1994 M 208,854
785 Jolly Road Blue Bell PA 1970/1996 M 219,065
--------- ---------
# OF OPERATING BUILDINGS: 4
----
TOTAL GREATER PHILADELPHIA: 960,349 -
--------- ---------
GREATER HARRISBURG
2601 Market Place East Shore PA 1989 M 67,743
2605 Interstate Drive East Shore PA 1990 M 84,268
6375 Flank Drive East Shore PA 2000 S 19,783
6385 Flank Drive East Shore PA 1995 S 32,800
75 Shannon Road East Shore PA 1999 S 20,887
85 Shannon Road East Shore PA 1999 S 12,863
95 Shannon Road East Shore PA 1999 S 21,976
6340 Flank Drive East Shore PA 1988 S 68,200
6345 Flank Drive East Shore PA 1989 S 69,443
6360 Flank Drive East Shore PA 1988 S 46,500
6380 Flank Drive East Shore PA 1991 S 32,000
6400 Flank Drive East Shore PA 1992 S 52,439
6405 Flank Drive East Shore PA 1991 S 32,000
5035 Ritter Road West Shore PA 1988 S 56,556
5070 Ritter Road -Building A West Shore PA 1989 S 32,000
5070 Ritter Road - Building B West Shore PA 1989 S 28,000
--------- ---------
# OF OPERATING BUILDINGS: 16
----
TOTAL GREATER HARRISBURG: 677,458 -
--------- ---------
NORTHERN/CENTRAL NEW JERSEY
101 Interchange Plaza Exit 8A -- Cranbury NJ 1985 M 43,749
104 Interchange Plaza Exit 8A -- Cranbury NJ 1990 M 47,677
19 Commerce Exit 8A -- Cranbury NJ 1989 S 65,277
2 Centre Drive Exit 8A -- Cranbury NJ 1989 S 16,132
429 Ridge Road Exit 8A -- Cranbury NJ 1966/1996 M 142,385
431 Ridge Road Exit 8A -- Cranbury NJ 1958/1998 S 170,000
437 Ridge Road Exit 8A -- Cranbury NJ 1962/1996 S 30,000
47 Commerce Exit 8A -- Cranbury NJ 1992/1998 S 41,398
7 Centre Drive Exit 8A -- Cranbury NJ 1989 S 19,466
8 Centre Drive Exit 8A -- Cranbury NJ 1986 S 16,199
68 Culver Road Exit 8A -- Cranbury NJ 2000 M 57,280
4301 Route 1 Monmouth Junction NJ 1986 M 61,300
695 Route 46 Wayne NJ 1990 M 157,394
710 Route 46 Wayne NJ 1985 M 101,791 -
--------- ---------
# OF OPERATING BUILDINGS: 14
----
TOTAL NORTHERN / CENTRAL NEW JERSEY: 970,048 -
--------- ---------
TOTAL OFFICE PROPERTIES # OF OPERATING BUILDINGS: 89 6,866,465 679,239
---- --------- ---------
RETAIL PROPERTIES
114 National Business Parkway BWI Airport MD S - 10,000
--------- ---------
# OF OPERATING BUILDINGS: 0
----
TOTAL RETAIL PROPERTIES - 10,000
--------- ---------
TOTAL PORTFOLIO # OF OPERATING BUILDINGS: 89 6,866,465 689,239
---- ========= =========
16
PROPERTY OCCUPANCY RATES BY REGION BY QUARTER
OFFICE
-----------------------------------------------------
BALTIMORE / NORTHERN /
GREATER WASHINGTON CENTRAL GREATER TOTAL TOTAL
PHILADELPHIA CORRIDOR NEW JERSEY HARRISBURG OFFICE RETAIL PORTFOLIO
------------- ---------- ----------- ---------- ------ ------ ---------
MARCH 31, 2001
==============
Number of Buildings 4 55 14 16 89 0 89
Rentable Square Feet 960,349 4,258,610 970,048 677,458 6,866,465 - 6,866,465
Percent Occupied 100.00% 97.76% 94.03% 91.75% 96.95% 0% 96.95%
DECEMBER 31, 2000
=================
Number of Buildings 4 49 14 16 83 0 83
Rentable Square Feet 960,349 3,864,766 970,048 677,468 6,472,631 - 6,472,631
Percent Occupied 100.00% 97.84% 93.07% 93.86% 97.03% 0% 97.03%
SEPTEMBER 30, 2000
==================
Number of Buildings 4 47 15 15 81 1 82
Rentable Square Feet 960,349 3,594,058 990,385 657,685 6,202,477 149,191 6,351,668
Percent Occupied 100.00% 97.79% 96.08% 92.82% 97.33% 97.04% 97.33%
JUNE 30, 2000
=============
Number of Buildings 4 47 15 15 81 1 82
Rentable Square Feet 960,349 3,595,118 990,808 657,685 6,203,960 149,191 6,353,151
Percent Occupied 100.00% 97.38% 92.15% 94.47% 96.64% 97.41% 96.66%
MARCH 31, 2000
==============
Number of Buildings 4 44 14 15 77 2 79
Rentable Square Feet 960,349 3,333,590 934,059 657,685 5,885,683 195,325 6,081,008
Percent Occupied 100.00% 98.20% 92.94% 94.70% 97.27% 96.79% 97.26%
17
TOP TWENTY OFFICE TENANTS AS OF MARCH 31, 2001
(DOLLARS AND SQUARE FEET IN THOUSANDS)
PERCENTAGE OF PERCENTAGE WEIGHTED
TOTAL TOTAL TOTAL TOTAL OF TOTAL AVERAGE
NUMBER OF OCCUPIED OCCUPIED RENTAL RENTAL RENTAL
TENANT LEASES SQUARE FEET SQUARE FEET REVENUE (1) REVENUE LEASE TERM (2)
------ ----------- ----------- ----------- ----------- --------------
United States of America (3) 19 960 14.5% $16,675 14.9% 4.8
AT&T Local Services (4),(5) 6 415 6.3% 7,645 6.8% 7.5
Unisys (6) 3 741 11.2% 7,297 6.5% 8.3
Ciena Corporation 5 298 4.5% 3,791 3.4% 4.2
Magellan Behavioral Health, Inc. 2 151 2.3% 3,259 2.9% 2.8
Booz Allen Hamilton 4 129 1.9% 2,456 2.2% 2.8
Merck & Co., Inc. (6) 1 219 3.3% 2,193 2.0% 8.3
General Dynamics Government Corp. 2 94 1.4% 2,187 2.0% 9.6
Bookham Technology, Inc. 1 150 2.3% 1,870 1.7% 6.8
Commonwealth of Pennsylvania (4) 7 145 2.2% 1,786 1.6% 2.3
Johns Hopkins University (4) 3 80 1.2% 1,696 1.5% 5.5
Sun Microsystems, Inc. 2 61 0.9% 1,403 1.3% 4.8
Credit Management Solutions, Inc. 1 71 1.1% 1,380 1.2% 7.7
The Associated Press 1 65 1.0% 1,347 1.2% 14.3
Ameritrade Holding Corporation 1 62 0.9% 1,304 1.2% 9.3
Deutsche Banc Alex. Brown 1 84 1.3% 1,278 1.1% 3.2
Mentor Technologies 1 60 0.9% 1,275 1.1% 2.0
Raytheon E-Systems (4) 3 65 1.0% 1,189 1.1% 2.2
Computer Sciences Corporation 1 55 0.8% 1,174 1.1% 1.1
Aerotek, Inc. 3 67 1.0% 1,089 1.0% 1.6
----- --------- ------- ---------- --------
SUBTOTAL TOP 20 OFFICE TENANTS 67 3,972 60.0% 62,294 55.8% 5.7
All remaining tenants 355 2,660 40.0% 49,321 44.2% 3.4
----- --------- ------- ---------- --------
Total/Weighted Average 422 6,632 100.0% $111,615 100.0% 4.7
===== ========= ======= ========== ========
(1) Total Rental Revenue is the monthly contractual base rent as of March 31,
2001 multiplied by 12 plus the estimated annualized expense reimbursements
under existing office leases.
(2) The weighting of the lease term was computed using Total Rental Revenue.
(3) Many of our government leases are subject to early termination provisions
which are customary to government leases. The weighted average remaining
lease term was computed assuming no exercise of such early termination
rights.
(4) Includes affiliated organizations or agencies.
(5) AT&T Local Services subleases 173,072 square feet under 2 leases which
expire March 30, 2002. Effective April 1, 2002, this same 173,072 square
feet will become directly leased by AT&T Local Services with expiration
dates ranging from 2006 and 2009. The above weighted average lease term
reflects the expiration date of these direct leases.
(6) Merck & Co., Inc. subleases 219,065 rentable square feet from Unisys'
960,349 leased rentable square feet.
18
TOTAL RENTAL REVENUE BY GEOGRAPHIC REGION BY QUARTER (1)
(DOLLARS IN THOUSANDS)
2001 2000
-------- ---------------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
OFFICE PROPERTIES:
Greater Philadelphia $ 2,506 $ 2,506 $ 2,506 $ 2,506 $ 2,506
Baltimore/Washington Corridor 18,573 17,224 17,197 16,297 15,830
Northern/Central New Jersey 4,922 5,311 5,326 4,969 4,706
Greater Harrisburg 2,789 2,271 2,228 2,275 2,395
-------- -------- -------- -------- --------
Total Office Properties 28,790 27,312 27,257 26,047 25,437
-------- -------- -------- -------- --------
RETAIL PROPERTIES:
Total Retail Properties - 72 261 279 281
-------- -------- -------- -------- --------
TOTAL REGIONAL RENTAL REVENUE $ 28,790 $ 27,384 $ 27,518 $ 26,326 $ 25,718
======== ======== ======== ======== ========
(1) Rental revenue represents GAAP revenue including operating expense
reimbursements, straight line rent adjustments and tenant services
income.
NET OPERATING INCOME BY GEOGRAPHIC REGION BY QUARTER
(DOLLARS IN THOUSANDS)
2001 2000
-------- -----------------------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
OFFICE PROPERTIES:
Greater Philadelphia $ 2,486 $ 2,481 $ 2,482 $ 2,482 $ 2,477
Baltimore/Washington Corridor 12,614 11,571 11,664 11,528 10,681
Northern/Central New Jersey 3,028 3,418 3,458 3,014 2,920
Greater Harrisburg 2,195 1,718 1,683 1,645 1,812
-------- -------- -------- -------- --------
Total Office Properties 20,323 19,188 19,287 18,669 17,890
-------- -------- -------- -------- --------
RETAIL PROPERTIES:
Total Retail Properties - 55 179 222 220
-------- -------- -------- -------- --------
TOTAL REGIONAL NOI $ 20,323 $ 19,243 $ 19,466 $ 18,891 $ 18,110
======== ======== ======== ======== ========
Other income / expenses, net 912 1,293 523 89 143
-------- -------- -------- -------- --------
TOTAL NOI $ 21,235 $ 20,536 $ 19,989 $ 18,980 $ 18,253
======== ======== ======== ======== ========
19
SAME OFFICE PROPERTY CASH NET OPERATING INCOME BY QUARTER (1)
(DOLLARS IN THOUSANDS)
2001 2000
------------ -----------------------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
OFFICE PROPERTIES: (2)
Greater Philadelphia $ 2,352 $ 2,348 $ 2,348 $ 2,302 $ 2,297
Baltimore / Washington Corridor 10,295 10,244 9,957 10,743 9,861
Northern / Central New Jersey 2,656 2,822 2,807 2,357 2,847
Greater Harrisburg 1,681 1,639 1,644 1,595 1,637
----------- ----------- ----------- ----------- -----------
TOTAL OFFICE PROPERTIES $ 16,984 $ 17,053 $ 16,756 $ 16,997 $ 16,642
=========== =========== =========== =========== ===========
SAME OFFICE PROPERTY GAAP NET OPERATING INCOME BY QUARTER (1)
(DOLLARS IN THOUSANDS)
2001 2000
-------- ----------------------------------------------------------------
MARCH 31 DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
-------- ----------- ------------ ------- --------
OFFICE PROPERTIES: (2)
Greater Philadelphia $ 2,486 $ 2,481 $ 2,482 $ 2,482 $ 2,477
Baltimore / Washington Corridor 10,567 10,468 10,450 11,127 10,266
Northern / Central New Jersey 2,810 3,056 2,942 2,409 2,919
Greater Harrisburg 1,713 1,676 1,681 1,643 1,722
----------- ---------- ------------ ----------- -----------
TOTAL OFFICE PROPERTIES $ 17,576 $ 17,681 $ 17,555 $ 17,661 $ 17,384
=========== ========== =========== ========== ===========
(1) Net operating income for same office properties has been presented on a
GAAP basis and a modified cash basis which removes the effect of
straight-line rents from the GAAP net operating income.
(2) Same office properties include buildings owned for a minimum of five
reporting quarters.
20
OFFICE LEASE EXPIRATION ANALYSIS BY YEAR
Percentage Total Rental
Square Total Rental of Total Revenue of
Year of Number Footage Percentage of Revenue of Rental Expiring Leases
Lease of Leases of Leases Total Occupied Expiring Revenue per Occupied
Expiration (1) Expiring Expiring Square Feet Leases (2) Expiring Square Foot
-------------- --------- -------- ----------- ---------- -------- ---------------
($000s)
2001 67 406,401 6.1% $6,866 6.2% $16.89
2002 89 998,595 15.1% 17,028 15.3% 17.05
2003 91 871,867 13.2% 15,998 14.3% 18.35
2004 54 624,342 9.4% 11,774 10.6% 18.86
2005 62 696,323 10.5% 13,285 11.9% 19.08
2006 21 400,409 6.0% 7,197 6.4% 17.97
2007 7 267,227 4.0% 3,907 3.5% 14.62
2008 10 702,622 10.6% 12,505 11.2% 17.80
2009 11 1,209,213 18.2% 13,509 12.1% 11.17
2010 9 389,475 5.9% 8,200 7.3% 21.05
2015 1 65,277 1.0% 1,347 1.2% 20.64
--- --------- ------ -------- ------
TOTAL/WEIGHTED AVERAGE 422 6,631,751 100.0% $111,616 100.0% $17.34
=== ========= ====== ======== ======
NOTE: As of March 31, 2001, the weighted average lease term is 4.7 years.
(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 March 31,
2001 multiplied by 12 plus the estimated annualized expense reimbursements
under existing office leases.
21
QUARTERLY OFFICE RENEWAL ANALYSIS
BALTIMORE/ NORTHERN/
GREATER WASHINGTON CENTRAL GREATER TOTAL
PHILADELPHIA CORRIDOR NEW JERSEY HARRISBURG OFFICE
------------ ---------- ---------- ---------- -------
QUARTER ENDED MARCH 31, 2001:
Expiring Square Feet - 80,677 1,510 4,000 86,187
Vacated Square Feet - 1,215 - - 1,215
Renewed Square Feet - 79,462 1,510 4,000 84,972
Retention Rate (% based upon square feet) 0.00% 98.49% 100.00% 100.00% 98.59%
RENEWAL & RETENANTED SPACE:
Increase in Base Rent - Straight-line 0.00% 23.01% 2.78% -28.63% 20.44%
Increase in Total Rent - Straight-line 0.00% 20.31% 2.03% -18.63% 18.20%
Increase in Base Rent - Cash 0.00% 15.15% 2.78% -30.74% 12.95%
Increase in Total Rent - Cash 0.00% 12.84% 2.03% -20.55% 11.12%
Average Capital Cost per Square Foot $ - $ 7.20 $ 0.42 $ 1.52 $ 6.88
QUARTER ENDED DECEMBER 31, 2000:
Expiring Square Feet - 75,372 3,174 6,623 85,169
Vacated Square Feet - 29,132 - - 29,132
Renewed Square Feet - 46,240 3,174 6,623 56,037
Retention Rate (% based upon square feet) 0.00% 61.35% 100.00% 100.00% 65.80%
RENEWAL & RETENANTED SPACE:
Increase in Base Rent - Straight-line 0.00% 24.55% 21.47% -17.49% 17.74%
Increase in Total Rent - Straight-line 0.00% 15.08% 11.19% -9.98% 10.57%
Increase in Base Rent - Cash 0.00% 18.45% 20.00% -18.85% 13.19%
Increase in Total Rent - Cash 0.00% 9.73% 10.01% -11.15% 6.66%
Average Capital Cost per Square Foot $ - $ 10.27 $ 17.92 $ 1.10 $ 9.720
QUARTER ENDED SEPTEMBER 30, 2000:
Expiring Square Feet - 186,061 116,771 6,757 309,589
Vacated Square Feet - 50,043 40,094 6,757 96,894
Renewed Square Feet - 136,018 76,677 - 212,695
Retention Rate (% based upon square feet) 0.00% 73.10% 65.66% 0.00% 68.70%
RENEWAL & RETENANTED SPACE:
Increase in Base Rent - Straight-line 0.00% 6.31% 32.53% 0.00% 14.75%
Increase in Total Rent - Straight-line 0.00% 4.24% 20.06% 0.00% 9.74%
Increase in Base Rent - Cash 0.00% 3.45% 13.01% 0.00% 6.52%
Increase in Total Rent - Cash 0.00% 1.44% 2.97% 0.00% 1.97%
Average Capital Cost per Square Foot $ - $ 5.32 $ 27.35 $ - $ 12.57
22
BALTIMORE/ NORTHERN/
GREATER WASHINGTON CENTRAL GREATER TOTAL
PHILADELPHIA CORRIDOR NEW JERSEY HARRISBURG OFFICE
------------ ---------- ---------- ---------- -------
QUARTER ENDED JUNE 30, 2000:
Expiring Square Feet -- 71,275 10,322 23,483 105,080
Vacated Square Feet -- 34,644 -- 3,920 38,564
Renewed Square Feet -- 36,631 10,322 19,563 66,516
Retention Rate (% based upon square feet) 0.00% 51.39% 100.00% 83.31% 63.30%
RENEWAL & RETENANTED SPACE:
Increase in Base Rent - Straight-line 0.00% 18.79% 15.87% 4.15% 17.03%
Increase in Total Rent - Straight-line 0.00% 14.10% 4.75% 3.69% 11.05%
Increase in Base Rent - Cash 0.00% 13.92% 14.87% 0.78% 13.14%
Increase in Total Rent - Cash 0.00% 9.43% 3.42% 0.38% 7.33%
Average Capital Cost per Square Foot $ -- 7.40 19.95 4.58 9.85
QUARTER ENDED MARCH 31, 2000:
Expiring Square Feet -- 150,631 21,708 29,123 201,462
Vacated Square Feet -- 39,335 2,783 6,700 48,818
Renewed Square Feet -- 111,296 18,925 22,423 152,644
Retention Rate (% based upon square feet) 0.00% 73.89% 87.18% 76.99% 75.77%
RENEWAL & RETENANTED SPACE:
Increase in Base Rent - Straight-line 0.00% 14.11% 12.66% 15.09% 14.06%
Increase in Total Rent - Straight-line 0.00% 10.72% 7.59% 14.06% 10.63%
Increase in Base Rent - Cash 0.00% 12.14% 12.09% 14.66% 12.38%
Increase in Total Rent - Cash 0.00% 8.81% 7.17% 13.64% 9.05%
Average Capital Cost per Square Foot $ -- 4.25 1.46 3.24 3.84
23
ACQUISITION SUMMARY AS OF MARCH 31, 2001
(Dollars in Thousands)
OCCUPIED SQ. OCCUPANCY MARCH 31, 2001
ACQUISITION FT. AT PERCENTAGE AT OCCUPANCY
SUBMARKET DATE SQUARE FEET ACQUISITION ACQUISITION PERCENTAGE INVESTMENT (1)
--------- ------------ ----------- ----------- ---------- -------------- --------------
JOINT VENTURE PORTFOLIO (2)
920 Elkridge Landing Road BWI Airport 3/21/2001 96,566 96,566 100.0% 100.0% $ 10,939
938 Elkridge Landing Road BWI Airport 3/21/2001 52,988 52,988 100.0% 100.0% 5,941
940 Elkridge Landing Road BWI Airport 3/21/2001 51,704 51,704 100.0% 100.0% 4,904
891 Elkridge Landing Road BWI Airport 3/21/2001 56,489 56,489 100.0% 100.0% 6,129
901 Elkridge Landing Road BWI Airport 3/21/2001 56,847 50,155 88.2% 88.2% 5,705
-------------------- --------
TOTAL 314,594 307,902 97.9% 97.9% $ 33,618
==================== ========
(1) Initial investment recorded by property as of March 31, 2001 for asset
purchase.
(2) We hold a 40% ownership interest in these office properties through a
joint venture agreement.
NOTE: COPT classifies its acquisitions by type -- entity, portfolio or
individual acquisitions. Entity acquisitions are defined as mergers
of significant portfolios of $100 + million with strong management
organizations and a regional presence.
24
DEVELOPMENT SUMMARY AS OF MARCH 31, 2001
(DOLLARS IN THOUSANDS EXCEPT PER SQUARE
FOOT DATA)
PERCENTAGE ANTICIPATED
RENTABLE PRE - LEASED COST PER ANTICIPATED
SQUARE OR RENTABLE ANTICIPATED COST STABILIZATION/
PROPERTY AND LOCATION SUBMARKET FEET COMMITTED SQUARE FOOT COST TO DATE DELIVERY
- --------------------- --------- ---- --------- ----------- ---- ------- --------------
UNDER CONSTRUCTION
Montpelier Research Phase I (1) Howard County
Columbia, Maryland Perimeter 44,000 100.00% $ 114 $ 5,008 $ 4,477 June 2001
2701 Phoenix Road (201 NBP) (2)
Annapolis Junction, MD BWI Airport 118,000 51.91% 155 18,313 8,756 September 2001
1304 Concourse Drive (3)
Linthicum, MD BWI Airport 100,000 0.00% 166 16,572 9,129 October 2001
6731 Columbia Gateway Drive (4) Howard County
Columbia, Maryland Perimeter 122,889 0.00% 176 21,613 9,446 December 2001
2711 Phoenix Road (211 NBP) (5)
Annapolis Junction, MD BWI Airport 150,000 100.00% 174 26,135 5,630 March 2002
---------------------------------------------------------------
TOTAL UNDER CONSTRUCTION: 534,889 47.72% $ 164 $ 87,641 $ 37,438
---------------------------------------------------------------
UNDER DEVELOPMENT
Robert Fulton Drive - Phase I (6) Howard County 144,350 0.00% 116 16,704 5,648 October 2001
Columbia, Maryland Perimeter
114 National Business Parkway
Annapolis Junction, MD BWI Airport 10,000 100.00% 164 1,644 586 December 2001
---------------------------------------------------------------
TOTAL UNDER DEVELOPMENT: 154,350 6.48% $ 119 $ 18,348 $ 6,234
---------------------------------------------------------------
TOTAL / AVERAGE 689,239 38.48% $ 154 $ 105,989 $ 43,672
===============================================================
(1) Effective January 16, 2001, we formed a joint venture to develop and
construct an office building in two phases. Phase I consists of a 44,000
square foot office building, 100% leased to Johns Hopkins University and
is being funded with a $4,400 construction loan of which $3,650 is
outstanding as of March 31, 2001. Phase II represents a planned 19,000
square foot office building not yet under development.
(2) On September 29, 2000, we contributed this development asset into a joint
venture. The joint venture obtained a $13,725 construction loan in October
2000 and $1,667 is outstanding as of March 31, 2001.
(3) We obtained a $11,800 construction loan and $3,623 is outstanding as of
March 31, 2001.
(4) We obtained a $15,750 construction loan. No draws have been made as of March
31, 2001.
(5) On December 15, 2000, we contributed this development asset into a joint
venture. The joint venture has obtained a $20,550 construction loan
commitment. No draws have been made as of March 31, 2001.
(6) We participate in the development of this asset through a joint venture
arrangement. The joint venture has obtained a $14,000 construction loan
and has borrowed $2,486 as of March 31, 2001.