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INDEX TO FINANCIAL STATEMENTS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark one)    
ý   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

or

o

 

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 1-14023

LOGO

Corporate Office Properties Trust
(Exact name of registrant as specified in its charter)

Maryland   23-2947217
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer
Identification No.)

6711 Columbia Gateway Drive, Suite 300
Columbia, MD

 

21046
(Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code: (443) 285-5400



Securities registered pursuant to Section 12(b) of the Act:

(Title of Each Class)
 
(Name of Exchange on Which Registered)
Common Shares of beneficial interest, $0.01 par value   New York Stock Exchange
Series G Cumulative Redeemable Preferred Shares of beneficial interest, $0.01 par value   New York Stock Exchange
Series H Cumulative Redeemable Preferred Shares of beneficial interest, $0.01 par value   New York Stock Exchange
Series J Cumulative Redeemable Preferred Shares of beneficial interest, $0.01 par value   New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

          Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ý Yes o No

          Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. o Yes ý No

          Indicate by check mark whether the registrant (1) 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. ý Yes o No

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes o No

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a smaller
reporting company)
  Smaller reporting company o

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) o Yes ý No

          The aggregate market value of the voting and nonvoting common equity held by non-affiliates of the registrant was approximately $1.9 billion, as calculated using the closing price of the common shares of beneficial interest on the New York Stock Exchange and our outstanding shares as of June 30, 2010. For purposes of calculating this amount only, affiliates are defined as Trustees, executive owners and beneficial owners of more than 10% of the registrant's outstanding common shares of beneficial interest, $0.01 par value. At January 28, 2011, 66,938,717 of the registrant's common shares of beneficial interest were outstanding.

          Portions of the annual shareholders' report of the registrant for the year ended December 31, 2010 are incorporated by reference into Parts I and II of this Form 10-K and portions of the proxy statement of the registrant for its 2011 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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Table of Contents

Form 10-K

PART I

       
 

ITEM 1.

 

BUSINESS

 
4
 

ITEM 1A.

 

RISK FACTORS

  9
 

ITEM 1B.

 

UNRESOLVED STAFF COMMENTS

  21
 

ITEM 2.

 

PROPERTIES

  22
 

ITEM 3.

 

LEGAL PROCEEDINGS

  39
 

ITEM 4.

 

REMOVED AND RESERVED

  39

PART II

       
 

ITEM 5.

 

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 
40
 

ITEM 6.

 

SELECTED FINANCIAL DATA

  42
 

ITEM 7.

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  44
 

ITEM 7A.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  74
 

ITEM 8.

 

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

  75
 

ITEM 9.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

  75
 

ITEM 9A.

 

CONTROLS AND PROCEDURES

  75
 

ITEM 9B.

 

OTHER INFORMATION

  76

PART III

       
 

ITEM 10.

 

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 
77
 

ITEM 11.

 

EXECUTIVE COMPENSATION

  77
 

ITEM 12.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

  77
 

ITEM 13.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

  77
 

ITEM 14.

 

PRINCIPAL ACCOUNTANT FEES AND SERVICES

  77

PART IV

       
 

ITEM 15.

 

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 
77

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 and operations of our business. Forward-looking statements can be identified by the use of words such as "may," "will," "should," "could," "believe," "anticipate," "expect," "estimate," "plan" or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, we can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from

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those discussed in the forward-looking statements. Important factors that may affect these expectations, estimates and projections include, but are not limited to:

        For further information on factors that could affect the company and the statements contained herein, you should refer to the section below entitled "Item 1A. Risk Factors." We undertake no obligation to update or supplement forward-looking statements.

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PART I

Item 1.    Business

OUR COMPANY

        General.    We are a specialty office real estate investment trust ("REIT") that focuses primarily on strategic customer relationships and specialized tenant requirements in the United States Government and defense information technology sectors and data centers serving such sectors. We acquire, develop, manage and lease office and data center properties that are typically concentrated in large office parks primarily located adjacent to government demand drivers and/or in strong markets that we believe possess growth opportunities. As of December 31, 2010, our investments in real estate included the following:

        We conduct almost all of our operations through our operating partnership, Corporate Office Properties, L.P. (the "Operating Partnership"), a Delaware limited partnership, of which we are the managing general partner. The Operating Partnership owns real estate both directly and through subsidiary partnerships and limited liability companies ("LLCs"). The Operating Partnership also owns 100% of a number of entities that provide real estate services such as property management, construction and development and heating and air conditioning services primarily for our properties, but also for third parties.

        Interests in our Operating Partnership are in the form of common and preferred units. As of December 31, 2010, we owned 93.6% of the outstanding common units and 95.8% of the outstanding preferred units in our Operating Partnership. The remaining common and preferred units in our Operating Partnership were owned by third parties, which included certain of our Trustees.

        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 distribute to its shareholders at least 90% of its annual taxable income (excluding net capital gains).

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        Our executive offices are located at 6711 Columbia Gateway Drive, Suite 300, Columbia, Maryland 21046 and our telephone number is (443) 285-5400.

        Our Internet address is www.copt.com. We make available on our Internet website free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably possible after we file such material with the Securities and Exchange Commission (the "SEC"). In addition, we have made available on our Internet website under the heading "Corporate Governance" the charters for our Board of Trustees' Audit, Nominating and Corporate Governance and Compensation Committees, as well as our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Code of Ethics for Financial Officers. We intend to make available on our website any future amendments or waivers to our Code of Business Conduct and Ethics and Code of Ethics for Financial Officers within four business days after any such amendments or waivers. The information on our Internet site is not part of this report.

        The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. This Internet website can be accessed at www.sec.gov. The public may also read and copy paper filings that we have made with the SEC at the SEC's Public Reference Room, located at 100 F Street, NE, Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.

Significant 2010 Developments

        During 2010, we:

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        In addition, our Board of Trustees, as part of an ongoing personnel development and succession program, elected Roger A. Waesche, Jr. to serve as President, in addition to his current duties as Chief Operating Officer. Randall M. Griffin, who had served as President and Chief Executive Officer, continued in his role as Chief Executive Officer.

Business and Growth Strategies

        Our primary objectives are to achieve sustainable long-term growth in results of operations and to maximize long-term shareholder value. This section sets forth key components of our business and growth strategies that we have in place to support these objectives.

Business Strategies

        Customer Strategy:    We believe that we differentiate ourselves by being a real estate company that does not view space in properties as its primary commodity. Rather, we focus our operations on serving the needs of our customers and enabling them to be successful. This strategy includes a focus on establishing and nurturing long-term relationships with quality tenants and accommodating their multi-locational needs. It also includes a focus on providing a level of service that exceeds customer expectations both in terms of the quality of the space we provide and our level of responsiveness to their needs. We believe that operating with such an emphasis on service enables us to be the landlord of choice with high quality customers and contributes to high levels of customer loyalty and retention.

        Our focus on customers in the United States Government and defense information technology sectors and data centers serving such sectors is a key aspect of our customer strategy. A high percentage of our revenue is derived from these customers, and we believe that we are well positioned for future growth through such customers for reasons that include the following:

        Market Strategy:    We focus on owning properties where our tenants want to be, which in the case of the United States Government and defense information technology customers is mostly near government demand drivers. We also concentrate our operations in markets and submarkets that are located where we believe we already possess, or can effectively achieve, the critical mass necessary to maximize management efficiencies, operating synergies and competitive advantages through our acquisition, property management, leasing and development activities. The attributes we look for in selecting markets and submarkets include, among others: (1) proximity to large demand drivers; (2) strong demographics; (3) attractiveness to high quality tenants; (4) potential for growth and stability in economic down cycles; (5) future acquisition and development opportunities; and (6) minimal competition from other property owners. We typically focus on owning and operating office properties in large business parks located outside of central business districts. We believe that such parks generally attract long-term, high-quality tenants seeking to attract and retain quality work forces because they are typically situated along major transportation routes with easy access to support services, amenities and residential communities.

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        Capital Strategy:    Our capital strategy is aimed at maintaining a flexible capital structure in order to facilitate growth and performance in the face of differing market conditions in the most cost-effective manner by:

        Sustainability Strategy:    We are focused on developing and operating our properties in a manner that minimizes global impact for the environment and have been committed to this effort since 2003. Our strategy includes:

        We believe that our commitment to sustainability is evident in the fact that as of December 31, 2010, we had ten buildings certified LEED Gold, 13 buildings certified LEED Silver, one building certified LEED, two buildings certified LEED-EB and 31 other buildings registered in the LEED program, and we had 17 professionals on staff who hold the LEED Accredited Professional designation. We also have established an internal goal to have 50% of our portfolio be brought up to LEED certification standards by 2015. We believe that this strategy is important not just because our customers will demand it, but also because it is the right thing to do.

Growth Strategies

        Acquisition and Property Development Strategy:    We pursue acquisition and property development opportunities for properties that support our customer and market strategies discussed above. As a result, the focus of our acquisition and development activities includes properties that are either: (1) located near demand drivers that we believe are attractive to customers in the United States Government and defense information technology sectors and data centers serving such sectors or

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(2) located in markets or submarkets that we believe meet the criteria set forth above in our market strategy. We may also acquire or develop properties that do not align with our customer or market strategies but which we believe provide opportunity for favorable returns on investment given the associated risks.

        We typically seek to make acquisitions at attractive yields and below replacement cost. We also seek to increase operating cash flow of certain acquisitions by repositioning the properties and capitalizing on existing below market leases and expansion opportunities. We pursue development activities as market conditions and leasing opportunities support favorable risk-adjusted returns on investment.

        Internal Growth Strategy:    We aggressively manage our portfolio to maximize the operating performance of each property through: (1) proactive property management and leasing; (2) achieving operating efficiencies through increasing economies of scale and, where possible, aggregating vendor contracts to achieve volume pricing discounts; and (3) renewing tenant leases and re-tenanting at increased rents where market conditions permit.

Industry Segments

        We operate in two primary industries: commercial office real estate and wholesale data centers. We classify our properties containing data center space as commercial office real estate when tenants significantly funded the data center infrastructure costs. At December 31, 2010, our commercial office real estate operations had nine primary geographical segments, as set forth below:

        As of December 31, 2010, 153 of our wholly owned office properties were located in what is widely known as the Greater Washington, DC region, which includes the first five regions set forth above, and 66 were located in neighboring Greater Baltimore. At December 31, 2010, we also owned 21 wholly owned office properties in Colorado Springs and eight in San Antonio. In addition, we owned two office properties as of December 31, 2010 in Greater Philadelphia that are considered non-core to the Company. Our wholesale data center, which is comprised of one property in Manassas, Virginia, is reported as a separate segment.

        For information relating to our segments, you should refer to Note 16 to our consolidated financial statements, which is included in a separate section at the end of this Annual Report on Form 10-K beginning on page F-1.

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Employees

        As of December 31, 2010, we had 411 employees, none of whom were parties to collective bargaining agreements. We believe that our relations with our employees are good.

Competition

        The commercial real estate market is highly competitive. Numerous commercial properties compete with our properties for tenants. Some of the properties competing with ours may be newer or have more desirable locations, or the competing properties' owners may be willing to accept lower rents than are acceptable to us. We also compete with our own tenants, many of whom have the right to sublease their space. The competitive environment for leasing is affected considerably by a number of factors including, among other things, changes in economic factors and supply of and demand for space. These factors may make it difficult for us to lease existing vacant space and space associated with future lease expirations at rental rates that are sufficient to meeting our short-term capital needs.

        We also compete for the acquisition of commercial properties with many entities, including other publicly-traded commercial REITs. Many of our competitors for such acquisitions 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 properties that we have targeted for acquisition, we may not be able to meet our property acquisition goals.

Item 1A.    Risk Factors

        Set forth below are risks and uncertainties relating to our business and the ownership of our securities. You should carefully consider each of these risks and uncertainties and all of the information in this Annual Report on Form 10-K and its Exhibits, including our consolidated financial statements and notes thereto for the year ended December 31, 2010, which are included in a separate section at the end of this report beginning on page F-1.

        Our performance and value are subject to risks associated with our properties and with the real estate industry.    Real estate investments are subject to various risks and fluctuations in value and demand, many of which are beyond our control. Our economic performance and the value of our real estate assets may decline due to conditions in the general economy and the real estate business which, in turn, could have an adverse effect on our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders. These conditions include, but are not limited to:

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        We may suffer adverse consequences as a result of recent and future economic events.    Since the latter part of 2007, the United States and world economies have struggled through difficult conditions, including a significant recession. This slowdown has had devastating effects on the capital markets, with tightening credit availability. The commercial real estate industry was affected by these events over the last four years and, we believe, will likely continue to be affected at least through 2011. These events could adversely affect us in numerous ways discussed throughout this Annual Report on Form 10-K. The real estate industry in general has encountered increased difficulty in obtaining capital to fund growth activities, such as acquisitions and development costs, debt repayments and other capital requirements. As a result, the level of risk that we may not be able to obtain new financing for acquisitions, development activities, refinancing of existing debt or other capital requirements at reasonable terms, if at all, has increased. We believe that there is an increased likelihood in the current economic climate of tenants encountering financial difficulties, including bankruptcy, insolvency or general downturn of business, and as a result there is an increased likelihood of such tenants defaulting in their lease obligations to us. We also expect that our leasing activities will be adversely affected, with an increased likelihood of our being unsuccessful in renewing tenants, renewing tenants on terms less favorable to us or being unable to lease newly constructed properties. As a result, the conditions brought about by these economic events could collectively have an adverse effect on our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We are dependent on external sources of capital for future growth.    Because we are a REIT, we must distribute at least 90% of our annual taxable income to our shareholders. Due to this requirement, we are not able to significantly fund our acquisition, construction and development activities using cash flow from operations. Therefore, 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 debt, equity issuances of common shares, preferred shares, common and preferred units in our Operating Partnership or joint venture funding. These capital sources may not be available on favorable terms or at all. Since the United States financial markets have recently experienced extreme volatility and, as a result, credit markets have tightened considerably, the level of risk that we may not be able to obtain new financing for acquisitions, development activities or other capital requirements at reasonable terms, if at all, has increased. Moreover, additional debt financing may substantially increase our leverage and subject us to covenants that restrict management's flexibility in directing our operations, and additional equity offerings may result in substantial dilution of our shareholders' interests. Our inability to obtain capital when needed could have a material adverse effect on our ability to expand our business and fund other cash requirements.

        We use our Revolving Credit Facility to initially finance much of our investing and financing activities. We also use a construction loan agreement with an aggregate commitment by the lenders that is restorable (the "Revolving Construction Facility") and other credit facilities to fund a significant portion of our construction activities. Our lenders under these and other facilities could, for financial hardship or other reasons, fail to honor their commitments to fund our requests for borrowings under these facilities. In the event that one or more lenders under these facilities are not able or willing to

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fund a borrowing request, it would adversely affect our ability to access borrowing capacity under these facilities, which would in turn adversely affect our financial condition, cash flows and ability to make expected distributions to our shareholders.

        We may suffer adverse consequences as a result of our reliance on rental revenues for our income.    We earn revenue from renting our properties. Our operating costs do not necessarily fluctuate in relation to changes in our rental revenue. This means that our costs will not necessarily decline and may increase even if our revenues decline.

        For new tenants or upon lease expiration for existing tenants, we generally must make improvements and pay other leasing 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 revenue sufficient to meeting 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, in which case our operations could be adversely affected. Moreover, there may be less or no cash available for distributions to our shareholders.

        In addition, the competitive environment for leasing is affected considerably by a number of factors including, among other things, changes due to economic factors such as supply and demand. These factors may make it difficult for us to lease existing vacant space and space associated with future lease expirations at rental rates that are sufficient to meeting our short-term capital needs.

        We rely on the ability of our tenants to pay rent and would be harmed by their inability to do so.    Our performance depends on the ability of our tenants to fulfill their lease obligations by paying their rental payments in a timely manner. If one or more of our major tenants, or a number of our smaller tenants, were to experience financial difficulties, including bankruptcy, insolvency or general downturn of business, there could be an adverse effect on financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may be adversely affected by developments concerning some of our major tenants and sector concentrations.    As of December 31, 2010, our 20 largest tenants accounted for 58.1% of the total annualized rental revenue of our wholly owned office properties, and our four largest of these tenants accounted for 64.2% of that total. We compute the annualized rental revenue by multiplying by 12 the sum of monthly contractual base rents and estimated monthly expense reimbursements under active leases in our portfolio of wholly owned properties as of December 31, 2010. Information regarding our four largest tenants is set forth below:

Tenant
  Annualized
Rental Revenue at
December 31, 2010
  Percentage of Total
Annualized Rental
Revenue of Wholly
Owned Office Properties
  Number
of Leases
 
 
  (in thousands)
   
   
 

United States of America

  $ 95,049     21.1 %   74  

Northrop Grumman Corporation(1)

    32,857     7.3 %   17  

Booz Allen Hamilton, Inc. 

    21,311     4.7 %   8  

Computer Sciences Corporation(1)

    18,788     4.2 %   6  

(1)
Includes affiliated organizations and agencies and predecessor companies.

        Most of our leases with the United States Government provide for a series of one-year terms or provide for early termination rights. The United States Government may terminate its leases if, among other reasons, the United States Congress fails to provide funding. If any of our four largest tenants fail to make rental payments to us or if the United States Government elects to terminate several of its

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leases and the space cannot be re-leased on satisfactory terms, there would be an adverse effect on our financial performance and ability to make distributions to our shareholders.

        As of December 31, 2010, our properties that were occupied primarily by tenants in the United States Government and defense information technology sectors and data centers serving such sectors accounted for 58.7% of the total annualized rental revenue of our wholly owned office properties. We expect to increase our reliance on these sectors for revenue. A reduction in government spending targeting these sectors could affect the ability of these tenants to fulfill lease obligations or decrease the likelihood that these tenants will renew their leases. Moreover, a reduction in government spending targeting these sectors could limit our future growth. Such occurrences could have an adverse effect on our results of operations, financial condition, cash flows and ability to make distributions to our shareholders. We generally classify the revenue from our leases into this sector grouping based solely on management's knowledge of the tenants' operations in leased space. Occasionally, classifications require subjective and complex judgments. We do not use independent sources such as Standard Industrial Classification codes for classifying our revenue into sector groupings and if we did, the resulting groupings would be materially different.

        Most of our properties are geographically concentrated in the Mid-Atlantic region, particularly in the Greater Washington, DC region and neighboring Greater Baltimore, or in particular office parks. We may suffer economic harm in the event of a decline in the real estate market or general economic conditions in those regions or parks. Most of our properties are located in the Mid-Atlantic region of the United States and, as of December 31, 2010, our properties located in the Greater Washington, DC region and neighboring Greater Baltimore accounted for a combined 85.4% of our total annualized rental revenue from wholly owned office properties. Our properties are also typically concentrated in office parks in which we own most of the properties. Consequently, we do not have a broad geographic distribution of our properties. As a result, a decline in the real estate market or general economic conditions in the Mid-Atlantic region, the Greater Washington, DC region or the office parks in which our properties are located could have an adverse effect on our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We would suffer economic harm if we were unable to renew our leases on favorable terms.    When leases expire, our tenants may not renew or may renew on terms less favorable to us than the terms of their original leases. If a tenant vacates a property, we can expect to experience a vacancy for some period of time, as well as incur higher leasing costs than we would likely incur if a tenant renews. As a result, our financial performance and ability to make expected distributions to our shareholders could be adversely affected if we experience a high volume of tenant departures at the end of their lease terms. We expect that the effects of the global downturn on our real estate operations will make our leasing activities particularly challenging at least through 2011 and, as a result, there could be an increased likelihood of our being unsuccessful in renewing tenants or renewing on terms less favorable to us than the terms of the original leases. Set forth below are the percentages of total annualized rental revenue from wholly owned office properties as of December 31, 2010 that are subject to scheduled lease expirations in each of the next five years:

2011

    10.4 %

2012

    12.7 %

2013

    13.3 %

2014

    10.9 %

2015

    14.5 %

        As noted above, most of the leases with our largest tenant, the United States Government, provide for consecutive one-year terms or provide for early termination rights. All of the leasing statistics set forth above assume that the United States Government will remain in the space that it leases through

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the end of the respective arrangements, without ending consecutive one-year leases prematurely or exercising early termination rights.

        We may be adversely affected by trends in the office real estate industry.    Some businesses are rapidly evolving to make employee telecommuting, flexible work schedules, open workplaces and teleconferencing increasingly common. These practices enable businesses to reduce their space requirements. A continuation of the movement towards these practices could over time erode the overall demand for office space and, in turn, place downward pressure on occupancy, rental rates and property valuations, each of which could have an adverse effect on our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may encounter a decline in the value of our real estate.    The value of our real estate could be adversely affected by general economic and market conditions connected to a specific property, a market or submarket, a broader economic region or the office real estate industry. Examples of such conditions include a broader economic recession, declining demand and decreases in market rental rates and/or market values of real estate assets. If our real estate assets decline in value, it could result in our recognition of impairment losses. Moreover, a decline in the value of our real estate could adversely affect the amount of borrowings available to us under credit facilities and other loans, which could, in turn, adversely affect our cash flows and financial condition.

        We may not be able to compete successfully with other entities that operate in our industry.    The commercial real estate market is highly competitive. 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 we do. If our competitors prevent us from buying properties that we target for acquisition, we may not be able to meet our property acquisition goals. Moreover, numerous commercial properties compete for tenants with our properties. Some of the properties competing with ours may be newer or in more desirable locations, or the competing properties' owners may be willing to accept lower rates than are acceptable to us. Competition for property acquisitions, or for tenants of properties that we own, could have an adverse effect on our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may be unable to successfully execute our plans to acquire existing commercial real estate properties.    We intend to acquire existing commercial real estate properties to the extent that suitable acquisitions can be made on advantageous terms. Acquisitions of commercial properties entail risks, such as the risks that we may not be in a position, or have the opportunity in the future, to make suitable property acquisitions on advantageous terms and/or that such acquisitions will fail to perform as expected. The failure of our acquisitions to perform as expected could adversely affect our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may be exposed to unknown liabilities from acquired properties.    We may acquire properties that are subject to liabilities in situations where we have no recourse, or only limited recourse, against the prior owners or other third parties with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle or contest it, which could adversely affect our results of operations and cash flow. Examples of unknown liabilities with respect to acquired properties include, but are not limited to:

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        We may suffer economic harm as a result of making unsuccessful acquisitions in new markets.    We may pursue selective acquisitions of properties in regions where we have not previously owned properties. These acquisitions may entail risks in addition to those we face in other acquisitions where we are familiar with the regions, such as the risk that we do not correctly anticipate conditions or trends in a new market and are therefore not able to operate the acquired property profitably. If this occurs, it could adversely affect our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may be unable to execute our plans to develop and construct additional properties.    Although the majority of our investments are in currently leased properties, we also develop, construct and redevelop properties, including some that are not fully pre-leased. When we develop, construct and redevelop properties, we assume the risk that actual costs will exceed our budgets, that we will experience conditions which delay or preclude project completion and that projected leasing will not occur, any of which could adversely affect our financial performance, results of operations and our ability to make distributions to our shareholders; the risk of projected leasing not occurring has increased as a result of the recent economic conditions. 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 may suffer adverse consequences due to our inexperience in developing, managing and leasing wholesale data centers.    We have significant experience in developing, managing and leasing single user data center space in which tenants significantly funded the data center infrastructure costs. However, we do not have the same depth and length of experience in relation to wholesale data centers, having acquired our first wholesale data center in 2010. This may increase the likelihood of us being unsuccessful in executing our plans with respect to our existing wholesale data center or any such centers that we may acquire or develop in the future. If we are unsuccessful in executing our wholesale data center plans, it could adversely affect our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        Our data centers may become obsolete.    Data centers are much more expensive investments on a per square foot basis than office properties due to the level of infrastructure required to operate the centers. At the same time, technology, industry standards and service requirements for data centers are rapidly evolving and, as a result, the risk of investments we make in data centers becoming obsolete is higher than office properties. Our data centers may become obsolete due to the development of new systems to deliver power to or eliminate heat from the servers housed in the properties. Our data centers could also become obsolete from new server technology that requires less critical load and heat removal than our facilities are designed to provide. In addition, we may not be able to efficiently upgrade or change power and cooling systems to meet new demands or industry standards without incurring significant costs that we may not be able to pass on to our tenants. The obsolescence of our data centers could adversely affect our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        Certain of our properties containing data centers contain space not suitable for lease other than as data centers, which could make it difficult or impractical to reposition them for alternative use. Certain of our properties contain data center space, which is highly specialized space containing extensive electrical and mechanical systems that are designed uniquely to run and maintain banks of computer servers. As a result, in the event we needed to reposition such data center space for another use, major renovations and expenditures could be required.

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        We may suffer adverse effects as a result of the indebtedness that we carry and the terms and covenants that relate to this debt.    Many of our properties are pledged by us to support repayment on indebtedness. In addition, we rely on borrowings to fund some or all of the costs of new property acquisitions, construction and development activities and other items. Our organizational documents do not limit the amount of indebtedness that we may incur.

        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:

        Some of our debt is cross-defaulted, which means that failure to pay interest or principal on the debt above a threshold value will create a default on certain of our other debt. In addition, some of our debt which is cross-defaulted also contains cross-collateralization provisions, which means that the collateral of the debt can also be used as collateral for certain of our other debt. Any foreclosure of our properties could result in loss of income and asset value that would negatively affect our financial condition, results of operations, cash flows and ability to make expected distributions to our shareholders. In addition, if we are in default and the value of the properties securing a loan is less than the loan balance, we may be required to pay the resulting shortfall to the lender using other assets.

        As of December 31, 2010, 22% of our debt had variable interest rates, including the effect of interest rate swaps. If short-term interest rates were to rise, our debt service payments on debt with variable interest rates would increase, which would lower our net income and could decrease our distributions to our shareholders. We use interest rate swap agreements from time to time to reduce the impact of changes in interest rates. Decreases in interest rates would result in increased interest payments due under interest rate swap agreements in place and, in the event we decided to unwind such agreements, could result in our recognizing a loss and remitting a payment.

        We must refinance our debt in the future. As of December 31, 2010, our scheduled debt payments over the next five years, including maturities, were as follows:

Year
  Amount(1)  
 
  (in thousands)
 

2011

  $ 733,739 (2)

2012

    271,390  

2013

    146,049  

2014

    210,225  

2015

    396,473  

(1)
Represents principal maturities only and therefore excludes premiums and discounts.

(2)
Includes $142.3 million in maturities that were extended to 2012 in January 2011 and an additional $311.8 million that may also be extended for one year, subject to certain conditions.

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Our operations likely will not generate enough cash flow to repay some or all of this debt without additional borrowings, equity issuances and/or property sales. If we cannot refinance our debt, extend the repayment dates, or raise additional equity prior to the dates when our debt matures, we would default on our existing debt, which would have an adverse effect on our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may incur additional indebtedness, which may harm our financial position and cash flow and potentially impact our ability to pay dividends on any series of preferred shares.    Our governing documents do not limit us from incurring additional indebtedness and other liabilities. As of December 31, 2010, we had $2.3 billion of consolidated indebtedness outstanding. We may incur additional indebtedness and become more highly leveraged, which could harm our financial position and potentially limit our cash available to pay dividends. As a result, we may not have sufficient funds remaining to satisfy our dividend obligations relating to any series of preferred shares if we incur additional indebtedness.

        We have certain distribution requirements that reduce cash available for other business purposes.    As a REIT, we must distribute at least 90% of our annual taxable income (excluding capital gains), which limits the amount of cash we can retain for other business purposes, including amounts to fund acquisitions and development activity. Also, it is possible that because of the differences between the time we actually receive revenue or pay expenses and the period during which we report those items for distribution purposes, we may have to borrow funds to meet the 90% distribution requirement.

        We may be unable to continue to make shareholder distributions at expected levels.    We expect to make regular quarterly cash distributions to our shareholders. However, our ability to make such distributions depends on a number of factors, some of which are beyond our control. Some of our loan agreements contain provisions that could restrict future distributions. Our ability to make distributions at expected levels will also be dependent, in part, on other matters, including, but not limited to:

In addition, we can make distributions to the holders of our common shares only after we make preferential distributions to holders of our preferred shares.

        Our ability to pay dividends may be limited, and we cannot provide assurance that we will be able to pay dividends regularly.    Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends will depend almost entirely on payments and distributions received on our interests in our Operating Partnership, the payment of which depends in turn on our ability to operate profitably and generate cash flow from our operations. We cannot guarantee that we will be able to pay dividends on a regular quarterly basis in the future. Additionally, the terms of some of the debt to which our Operating Partnership is a party limit its ability to make some types of payments and other distributions to us. This in turn limits our ability to make some types of payments, including payment of dividends on common or preferred shares, unless we meet certain

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financial tests or such payments or dividends are required to maintain our qualification as a REIT. As a result, if we are unable to meet the applicable financial tests, we may not be able to pay dividends on our shares in one or more periods. Furthermore, any new shares of beneficial interest issued will substantially increase the cash required to continue to pay cash dividends at current levels. Any common or preferred shares that may in the future be issued for financing acquisitions, share-based compensation arrangements or otherwise would have a similar effect.

        Our ability to pay dividends on preferred shares is further limited by the requirements of Maryland law.    As a Maryland REIT, we may not under applicable Maryland law make a distribution if either of the following conditions exist after giving effect to the distribution: (1) the REIT would not be able to pay its debts as the debts become due in the usual course of business; or (2) the REIT's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the REIT were dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution. Therefore, we may not make a distribution on any series of preferred shares if either of the above described conditions exists after giving effect to the distribution.

        We may issue additional common or preferred shares that dilute our shareholders' interests.    We may issue additional common shares and preferred shares without shareholder approval. Similarly, we may cause the Operating Partnership to issue its common or preferred units for contributions of cash or property without approval by the limited partners of the Operating Partnership or our shareholders. Our existing shareholders' interests could be diluted if such additional issuances were to occur.

        Real estate investments are illiquid, and we may not be able to sell our properties on a timely basis when we determine it is appropriate to do so.    Real estate investments can be difficult to sell and convert to cash quickly, especially if market conditions are not favorable, and we may find that to be increasingly the case under the current economic conditions due to a lack of credit availability for potential buyers. Such illiquidity could limit our ability to quickly change our portfolio of properties in response to changes in economic or other conditions. Moreover, under certain circumstances, the Internal Revenue Code imposes certain penalties on a REIT that sells property held for less than two years and limits the number of properties it can sell in a given year. In addition, for certain of our properties that we acquired by issuing units in our Operating Partnership, we are restricted by agreements with the sellers of the properties for a certain period of time from entering into transactions (such as the sale or refinancing of the acquired property) that will result in a taxable gain to the sellers without the seller's consent. Due to these factors, we may be unable to sell a property at an advantageous time.

        We may suffer economic harm as a result of the actions of our partners in real estate joint ventures and other investments.    We invest in certain entities in which we are not the exclusive investor or principal decision maker. Investments in such entities may, under certain circumstances, involve risks not present when a third party is not involved, including the possibility that the other parties to these investments might become bankrupt or fail to fund their share of required capital contributions. Our partners in these entities may have economic, tax or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also lead to impasses, for example, as to whether to sell a property, because neither we nor the other parties to these investments may have full control over the entity. In addition, we may in certain circumstances be liable for the actions of the other parties to these investments. Each of these factors could have an adverse effect on our financial condition, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may need to make additional cash outlays to protect our investment in loans we make that are subordinate to other loans.    We have made and may in the future make loans under which we have a

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secured interest in the ownership of a property that is subordinate to other loans on the property. If a default were to occur under the terms of any such loans with us or under the first mortgage loans related to the properties on such loans, we may be in a position where, in order to protect our investment, we would need to either (1) purchase the other loan or (2) foreclose on the ownership interest in the property and repay the first mortgage loan, either of which could have an adverse effect on our financial condition, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may be subject to possible environmental liabilities.    We are subject to various Federal, state and local environmental laws, including air and water quality, hazardous or toxic substances and health and safety. These laws can impose liability on current and prior property owners or operators for the costs of removal or remediation of hazardous substances released on a property, even if the property owner was not responsible for, or even aware of, the release of the hazardous substances. Costs resulting from environmental liability 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 other reasons. Additionally, various laws 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 on an entity even if the facility was not owned or operated by the entity.

        Although most of our properties have been subject to varying degrees of environmental assessment, many of these assessments are limited in scope and may not include or identify all potential environmental liabilities or risks associated with the property. Identification of new compliance concerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, discovery of additional sites, human exposure to the contamination or changes in cleanup or compliance requirements could result in significant costs to us that could have an adverse effect on our financial condition, results of operations, cash flows and ability to make expected distributions to our shareholders.

        Terrorist attacks, such as those of September 11, 2001, may adversely affect the value of our properties, our financial position and cash flows.    We have significant investments in properties located in large metropolitan areas and near military installations. Future terrorist attacks could directly or indirectly damage our properties or cause losses that materially exceed our insurance coverage. After such an attack, tenants in these areas may choose to relocate their businesses to areas of the United States that may be perceived to be less likely targets of future terrorist activity, and fewer customers may choose to patronize businesses in these areas. This in turn would trigger a decrease in the demand for space in these areas, which could increase vacancies in our properties and force us to lease space on less favorable terms. As a result, the occurrence of terrorist attacks could adversely affect our financial position, results of operations, cash flows and ability to make expected distributions to our shareholders.

        We may be subject to other possible liabilities that would adversely affect our financial position and cash flows.    Our properties may be subject to other risks related to current or future laws, including laws benefiting disabled persons, state or local laws relating to zoning, construction, fire and life safety requirements and other matters. These laws may require significant property modifications in the future and could result in the levy of fines 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 that is damaged by a fire or other catastrophic events, including acts of war or, as mentioned above, terrorism. The occurrence of any of these events could have an adverse effect on our financial condition, results of operations, cash flows and ability to make expected distributions to our shareholders.

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        We may be subject to increased costs of insurance and limitations on coverage, particularly regarding acts of terrorism.    Our portfolio of properties is insured for losses under our property, casualty and umbrella insurance policies through September 30, 2011. These policies include coverage for acts of terrorism. Future changes in the insurance industry's risk assessment approach and pricing structure may increase the cost of insuring our properties and decrease the scope of insurance coverage, either of which could adversely affect our financial position and operating results. Most of our loan agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs, or at all, in the future. In addition, if lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance and/or refinance our properties and execute our growth strategies, which, in turn, would have an adverse effect on our financial condition, results of operations, cash flows and ability to make expected distributions to our shareholders.

        Our business could be adversely affected by a negative audit by the United States Government.    Agencies of the United States, including the Defense Contract Audit Agency and various agency Inspectors General, routinely audit and investigate government contractors. These agencies review a contractor's performance under its contracts, cost structure and compliance with applicable laws, regulations, and standards. The United States Government also reviews the adequacy of, and a contractor's compliance with, its internal control systems and policies. Any costs found to be misclassified may be subject to repayment. If an audit or investigation uncovers improper or illegal activities, we may be subject to civil or criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or prohibition from doing business with the United States Government. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us.

        Our ownership limits are important factors.    Our Declaration of Trust 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, whichever is more restrictive. Our Declaration of Trust also limits ownership by any single shareholder of our common and preferred shares in the aggregate to 9.8% of the aggregate value of the outstanding common and preferred shares. We call these restrictions the "Ownership Limit." Our Declaration of Trust allows our Board of Trustees to exempt shareholders from the Ownership Limit. The Ownership Limit and the restrictions on ownership of our common shares may delay or prevent a transaction or a change of control that might involve a premium price for our common shares or otherwise be in the best interest of our shareholders.

        Our Declaration of Trust includes other provisions that may prevent or delay a change of control.    Subject to the requirements of the New York Stock Exchange, our Board of Trustees has the authority, without shareholder approval, to issue additional securities on terms that could delay or prevent a change in control. In addition, our Board of Trustees has the authority to reclassify any of our unissued common shares into preferred shares. Our Board of Trustees may issue preferred shares with such preferences, rights, powers and restrictions as our Board of Trustees may determine, which could also delay or prevent a change in control.

        The Maryland business statutes impose potential restrictions that may discourage a change of control of our company.    Various Maryland laws may have the effect of discouraging offers to acquire us, even if the acquisition would be advantageous to shareholders. Resolutions adopted by our Board of Trustees and/or provisions of our bylaws exempt us from such laws, but our Board of Trustees can alter its resolutions or change our bylaws at any time to make these provisions applicable to us.

        Our failure to qualify as a REIT would have adverse tax consequences, which would substantially reduce funds available to make distributions to our shareholders.    We believe that since 1992 we have

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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 specified in the REIT tax laws. We are also required to distribute to shareholders at least 90% of our REIT taxable income (excluding capital gains). 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 Internal Revenue Service 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 Internal Revenue Service 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. In addition, if we fail to qualify as a REIT, we will no longer be required to pay dividends. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital and would likely have a significant adverse effect on the value of our securities.

        We could face possible adverse changes in tax laws, which may result in an increase in our tax liability.    From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. The shortfall in tax revenues for states and municipalities in recent years may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for payment of dividends.

        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:

        We may experience significant losses and harm to our financial condition if financial institutions holding our cash and cash equivalents file for bankruptcy protection.    We believe that we maintain our cash and cash equivalents with high quality financial institutions. We have not experienced any losses to date on our deposited cash. However, we may incur significant losses and harm to our financial condition in the future if any of these financial institutions files for bankruptcy protection.

        Certain of our Trustees have potential conflicts of interest.    Certain members of our Board of Trustees own partnership units in our Operating Partnership. These individuals may have personal

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interests that conflict with the interests of our shareholders. For example, if our Operating Partnership sells or refinances certain of the properties that these Trustees contributed to the Operating Partnership, the Trustees could suffer adverse tax consequences. Their personal interests could conflict with our interests if such a sale or refinancing would be advantageous to us. We have certain policies in place that are designed to minimize conflicts of interest. We cannot, however, provide assurance 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 of our shareholders.

Item 1B.    Unresolved Staff Comments

        None

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Item 2.    Properties

        The following table provides certain information about our wholly owned office properties as of December 31, 2010:

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 

Baltimore/Washington Corridor:

                                   
 

2730 Hercules Road

  BWI Airport     1990     240,336     100.0 % $ 8,087,504   $ 33.65  
   

Annapolis Junction, MD

                                   
 

300 Sentinel Drive

  BWI Airport     2009     192,562     79.5 %   4,883,794     31.90  
   

Annapolis Junction, MD

                                   
 

304 Sentinel Drive

  BWI Airport     2005     162,647     100.0 %   4,900,519     30.13  
   

Annapolis Junction, MD

                                   
 

306 Sentinel Drive

  BWI Airport     2006     155,883     100.0 %   4,741,283     30.42  
   

Annapolis Junction, MD

                                   
 

2720 Technology Drive

  BWI Airport     2004     156,730     100.0 %   5,174,350     33.01  
   

Annapolis Junction, MD

                                   
 

302 Sentinel Drive

  BWI Airport     2007     153,598     99.6 %   5,073,056     33.16  
   

Annapolis Junction, MD

                                   
 

2711 Technology Drive

  BWI Airport     2002     152,196     100.0 %   4,775,664     31.38  
   

Annapolis Junction, MD

                                   
 

308 Sentinel Drive

  BWI Airport     2010     31,128     100.0 %   1,027,224     33.00  
   

Annapolis Junction, MD

                                   
 

320 Sentinel Way

  BWI Airport     2007     125,681     100.0 %   4,808,650     38.26  
   

Annapolis Junction, MD

                                   
 

318 Sentinel Way

  BWI Airport     2005     125,681     100.0 %   4,303,838     34.24  
   

Annapolis Junction, MD

                                   
 

322 Sentinel Way

  BWI Airport     2006     125,568     100.0 %   4,791,402     38.16  
   

Annapolis Junction, MD

                                   
 

324 Sentinel Way

  BWI Airport     2010     125,118     100.0 %   3,543,967     28.32  
   

Annapolis Junction, MD

                                   
 

140 National Business Parkway

  BWI Airport     2003     119,904     100.0 %   4,041,801     33.71  
   

Annapolis Junction, MD

                                   
 

132 National Business Parkway

  BWI Airport     2000     118,598     100.0 %   3,772,677     31.81  
   

Annapolis Junction, MD

                                   
 

2721 Technology Drive

  BWI Airport     2000     118,093     100.0 %   3,863,446     32.72  
   

Annapolis Junction, MD

                                   
 

2701 Technology Drive

  BWI Airport     2001     117,450     100.0 %   3,671,870     31.26  
   

Annapolis Junction, MD

                                   
 

2691 Technology Drive

  BWI Airport     2005     103,683     100.0 %   3,362,821     32.43  
   

Annapolis Junction, MD

                                   
 

134 National Business Parkway

  BWI Airport     1999     93,482     100.0 %   2,716,807     29.06  
   

Annapolis Junction, MD

                                   
 

135 National Business Parkway

  BWI Airport     1998     87,422     89.0 %   2,586,642     33.25  
   

Annapolis Junction, MD

                                   
 

133 National Business Parkway

  BWI Airport     1997     87,401     100.0 %   2,773,921     31.74  
   

Annapolis Junction, MD

                                   
 

141 National Business Parkway

  BWI Airport     1990     87,206     100.0 %   2,831,278     32.47  
   

Annapolis Junction, MD

                                   
 

131 National Business Parkway

  BWI Airport     1990     69,336     100.0 %   2,210,056     31.87  
   

Annapolis Junction, MD

                                   
 

114 National Business Parkway

  BWI Airport     2002     9,908     100.0 %   231,218     23.34  
   

Annapolis Junction, MD

                                   
 

314 Sentinel Way

  BWI Airport     2008     4,462     100.0 %   203,798     45.67  
   

Annapolis Junction, MD

                                   
 

1550 West Nursery Road

  BWI Airport     2009     162,101     100.0 %   3,366,433     20.77  
   

Linthicum, MD

                                   

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Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

1306 Concourse Drive

  BWI Airport     1990     116,307     68.8 %   1,909,479     23.88  
   

Linthicum, MD

                                   
 

1304 Concourse Drive

  BWI Airport     2002     101,792     78.9 %   2,111,806     26.29  
   

Linthicum, MD

                                   
 

900 Elkridge Landing Road

  BWI Airport     1982     100,824     100.0 %   2,372,295     23.53  
   

Linthicum, MD

                                   
 

880 Elkridge Landing Road

  BWI Airport     1981     99,524     100.0 %   2,197,490     22.08  
   

Linthicum, MD

                                   
 

1199 Winterson Road

  BWI Airport     1988     96,636     100.0 %   2,654,571     27.47  
   

Linthicum, MD

                                   
 

920 Elkridge Landing Road

  BWI Airport     1982     96,566     100.0 %   1,942,773     20.12  
   

Linthicum, MD

                                   
 

1302 Concourse Drive

  BWI Airport     1996     84,053     82.3 %   1,741,674     25.17  
   

Linthicum, MD

                                   
 

881 Elkridge Landing Road

  BWI Airport     1986     73,572     100.0 %   1,784,645     24.26  
   

Linthicum, MD

                                   
 

1099 Winterson Road

  BWI Airport     1988     70,583     31.2 %   520,008     23.59  
   

Linthicum, MD

                                   
 

1190 Winterson Road

  BWI Airport     1987     68,899     93.5 %   1,784,960     27.71  
   

Linthicum, MD

                                   
 

849 International Drive

  BWI Airport     1988     68,768     86.3 %   1,579,873     26.62  
   

Linthicum, MD

                                   
 

911 Elkridge Landing Road

  BWI Airport     1985     68,296     100.0 %   1,580,369     23.14  
   

Linthicum, MD

                                   
 

1201 Winterson Road

  BWI Airport     1985     67,903     100.0 %   1,414,097     20.83  
   

Linthicum, MD

                                   
 

999 Corporate Boulevard

  BWI Airport     2000     66,889     91.8 %   1,812,239     29.52  
   

Linthicum, MD

                                   
 

901 Elkridge Landing Road

  BWI Airport     1984     58,035     50.0 %   858,162     29.57  
   

Linthicum, MD

                                   
 

891 Elkridge Landing Road

  BWI Airport     1984     57,955     91.1 %   1,427,742     27.04  
   

Linthicum, MD

                                   
 

800 International Drive

  BWI Airport     1988     57,379     100.0 %   1,199,164     20.90  
   

Linthicum, MD

                                   
 

930 International Drive

  BWI Airport     1986     57,272     99.8 %   1,066,358     18.66  
   

Linthicum, MD

                                   
 

900 International Drive

  BWI Airport     1986     57,140     100.0 %   889,963     15.58  
   

Linthicum, MD

                                   
 

939 Elkridge Landing Road

  BWI Airport     1983     54,280     51.4 %   483,944     17.34  
   

Linthicum, MD

                                   
 

921 Elkridge Landing Road

  BWI Airport     1983     54,175     100.0 %   1,218,938     22.50  
   

Linthicum, MD

                                   
 

938 Elkridge Landing Road

  BWI Airport     1984     52,988     100.0 %   1,244,578     23.49  
   

Linthicum, MD

                                   
 

870 Elkridge Landing Road

  BWI Airport     1981     5,627     100.0 %   190,854     33.92  
   

Linthicum, MD

                                   
 

7467 Ridge Road

  BWI Airport     1990     74,136     83.1 %   1,436,000     23.31  
   

Hanover, MD

                                   
 

7240 Parkway Drive

  BWI Airport     1985     74,153     79.9 %   1,278,782     21.58  
   

Hanover, MD

                                   
 

7272 Park Circle Drive

  BWI Airport     1991/1996     59,888     79.6 %   999,610     20.97  
   

Hanover, MD

                                   
 

7318 Parkway Drive

  BWI Airport     1984     59,204     100.0 %   1,200,508     20.28  
   

Hanover, MD

                                   
 

7320 Parkway Drive

  BWI Airport     1983     56,964     0.0 %        
   

Hanover, MD

                                   

23


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

1340 Ashton Road

  BWI Airport     1989     45,867     100.0 %   934,899     20.38  
   

Hanover, MD

                                   
 

1362 Mellon Road

  BWI Airport     2006     43,232     58.6 %   572,879     22.61  
   

Hanover, MD

                                   
 

1334 Ashton Road

  BWI Airport     1989     37,317     100.0 %   870,824     23.34  
   

Hanover, MD

                                   
 

1331 Ashton Road

  BWI Airport     1989     28,998     29.5 %   144,125     16.84  
   

Hanover, MD

                                   
 

1350 Dorsey Road

  BWI Airport     1989     18,698     67.2 %   268,575     21.38  
   

Hanover, MD

                                   
 

1344 Ashton Road

  BWI Airport     1989     16,964     100.0 %   499,521     29.45  
   

Hanover, MD

                                   
 

1341 Ashton Road

  BWI Airport     1989     15,947     100.0 %   318,390     19.97  
   

Hanover, MD

                                   
 

1343 Ashton Road

  BWI Airport     1989     9,903     100.0 %   135,968     13.73  
   

Hanover, MD

                                   
 

1348 Ashton Road

  BWI Airport     1988     3,108     100.0 %   75,930     24.43  
   

Hanover, MD

                                   
 

5520 Research Park Drive

  BWI Airport     2009     103,990     39.2 %   1,034,972     25.37  
   

Catonsville, MD

                                   
 

5522 Research Park Drive

  BWI Airport     2007     23,500     100.0 %   781,887     33.27  
   

Catonsville, MD

                                   
 

2500 Riva Road

  Annapolis     2000     155,000     100.0 %   2,217,712     14.31  
   

Annapolis, MD

                                   
 

Old Annapolis Road

  Howard County     1974/1985     171,436     100.0 %   7,320,399     42.70  
   

Columbia, MD

  Perimeter                                
 

7125 Columbia Gateway Drive

  Howard County     1973/1999     470,249     63.8 %   5,860,672     19.54  
   

Columbia, MD

  Perimeter                                
 

7000 Columbia Gateway Drive

  Howard County     1999     145,806     76.9 %   1,975,915     17.63  
   

Columbia, MD

  Perimeter                                
 

6721 Columbia Gateway Drive

  Howard County     2009     131,451     100.0 %   3,781,845     28.77  
   

Columbia, MD

  Perimeter                                
 

6731 Columbia Gateway Drive

  Howard County     2002     123,847     89.2 %   3,211,304     29.07  
   

Columbia, MD

  Perimeter                                
 

6711 Columbia Gateway Drive

  Howard County     2006-2007     123,599     93.2 %   3,400,641     29.53  
   

Columbia, MD

  Perimeter                                
 

6940 Columbia Gateway Drive

  Howard County     1999     108,822     86.2 %   2,405,306     25.64  
   

Columbia, MD

  Perimeter                                
 

6950 Columbia Gateway Drive

  Howard County     1998     112,861     100.0 %   2,631,046     23.31  
   

Columbia, MD

  Perimeter                                
 

7067 Columbia Gateway Drive

  Howard County     2001     86,027     92.4 %   1,842,907     23.17  
   

Columbia, MD

  Perimeter                                
 

8621 Robert Fulton Drive

  Howard County     2005-2006     86,033     94.2 %   1,734,169     21.40  
   

Columbia, MD

  Perimeter                                
 

6750 Alexander Bell Drive

  Howard County     2001     75,328     86.8 %   1,717,494     26.27  
   

Columbia, MD

  Perimeter                                
 

6700 Alexander Bell Drive

  Howard County     1988     76,347     77.0 %   1,444,917     24.59  
   

Columbia, MD

  Perimeter                                
 

6740 Alexander Bell Drive

  Howard County     1992     63,480     100.0 %   1,813,601     28.57  
   

Columbia, MD

  Perimeter                                
 

7015 Albert Einstein Drive

  Howard County     1999     61,203     100.0 %   1,293,310     21.13  
   

Columbia, MD

  Perimeter                                
 

8671 Robert Fulton Drive

  Howard County     2002     56,350     100.0 %   1,051,310     18.66  
   

Columbia, MD

  Perimeter                                
 

6716 Alexander Bell Drive

  Howard County     1990     52,131     90.6 %   1,100,117     23.29  
   

Columbia, MD

  Perimeter                                

24


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

8661 Robert Fulton Drive

  Howard County     2002     49,307     100.0 %   938,964     19.04  
   

Columbia, MD

  Perimeter                                
 

7142 Columbia Gateway Drive

  Howard County     1994     47,668     100.0 %   716,005     15.02  
   

Columbia, MD

  Perimeter                                
 

7130 Columbia Gateway Drive

  Howard County     1989     46,460     100.0 %   883,181     19.01  
   

Columbia, MD

  Perimeter                                
 

6708 Alexander Bell Drive

  Howard County     1988     39,203     100.0 %   916,824     23.39  
   

Columbia, MD

  Perimeter                                
 

7065 Columbia Gateway Drive

  Howard County     2000     38,560     100.0 %   774,928     20.10  
   

Columbia, MD

  Perimeter                                
 

7138 Columbia Gateway Drive

  Howard County     1990     38,225     100.0 %   863,790     22.60  
   

Columbia, MD

  Perimeter                                
 

7063 Columbia Gateway Drive

  Howard County     2000     36,472     100.0 %   958,645     26.28  
   

Columbia, MD

  Perimeter                                
 

6760 Alexander Bell Drive

  Howard County     1991     36,225     57.8 %   477,243     22.79  
   

Columbia, MD

  Perimeter                                
 

7150 Columbia Gateway Drive

  Howard County     1991     35,812     84.6 %   572,576     18.89  
   

Columbia, MD

  Perimeter                                
 

7061 Columbia Gateway Drive

  Howard County     2000     29,910     83.0 %   586,231     23.62  
   

Columbia, MD

  Perimeter                                
 

6724 Alexander Bell Drive

  Howard County     2001     28,107     94.6 %   707,435     26.60  
   

Columbia, MD

  Perimeter                                
 

7134 Columbia Gateway Drive

  Howard County     1990     21,991     0.0 %        
   

Columbia, MD

  Perimeter                                
 

6741 Columbia Gateway Drive

  Howard County     2008     4,592     100.0 %   123,984     27.00  
   

Columbia, MD

  Perimeter                                
 

7200 Riverwood Drive

  Howard County     1986     160,000     100.0 %   4,400,776     27.50  
   

Columbia, MD

  Perimeter                                
 

7160 Riverwood Drive

  Howard County     2000     61,984     94.6 %   1,718,771     29.32  
   

Columbia, MD

  Perimeter                                
 

9140 Guilford Road

  Howard County     1983     40,286     53.3 %   385,654     17.95  
   

Columbia, MD

  Perimeter                                
 

7150 Riverwood Drive

  Howard County     2000     39,496     100.0 %   780,997     19.77  
   

Columbia, MD

  Perimeter                                
 

9160 Guilford Road

  Howard County     1984     37,034     100.0 %   948,186     25.60  
   

Columbia, MD

  Perimeter                                
 

7170 Riverwood Drive

  Howard County     2000     29,162     65.3 %   359,160     18.87  
   

Columbia, MD

  Perimeter                                
 

9150 Guilford Drive

  Howard County     1984     18,592     100.0 %   366,640     19.72  
   

Columbia, MD

  Perimeter                                
 

10280 Old Columbia Road

  Howard County     1988/2001     16,195     90.5 %   247,579     16.89  
   

Columbia, MD

  Perimeter                                
 

10270 Old Columbia Road

  Howard County     1988/2001     15,910     100.0 %   237,242     14.91  
   

Columbia, MD

  Perimeter                                
 

9130 Guilford Drive

  Howard County     1984     13,700     0.0 %        
   

Columbia, MD

  Perimeter                                
 

10290 Old Columbia Road

  Howard County     1988/2001     10,263     43.9 %   96,897     21.50  
   

Columbia, MD

  Perimeter                                
 

9720 Patuxent Woods Drive

  Howard County     1986/2001     40,004     12.4 %   47,145     9.51  
   

Columbia, MD

  Perimeter                                
 

9740 Patuxent Woods Drive

  Howard County     1986/2001     38,292     100.0 %   567,968     14.83  
   

Columbia, MD

  Perimeter                                
 

9700 Patuxent Woods Drive

  Howard County     1986/2001     31,220     84.2 %   569,376     21.65  
   

Columbia, MD

  Perimeter                                
 

9730 Patuxent Woods Drive

  Howard County     1986/2001     30,485     100.0 %   482,386     15.82  
   

Columbia, MD

  Perimeter                                

25


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

9710 Patuxent Woods Drive

  Howard County     1986/2001     14,778     72.2 %   131,309     12.30  
   

Columbia, MD

  Perimeter                                
 

9020 Mendenhall Court

  Howard County     1982/2005     49,217     88.6 %   651,297     14.94  
   

Columbia, MD

  Perimeter                                

                               
 

Subtotal/Average

              8,432,626     89.5 % $ 201,596,725   $ 26.72  

                               

Northern Virginia:

                                   
 

15000 Conference Center Drive

  Dulles South     1989     471,440     80.4 % $ 9,261,749   $ 24.44  
   

Chantilly, VA

                                   
 

15010 Conference Center Drive

  Dulles South     2006     223,610     100.0 %   6,957,290     31.11  
   

Chantilly, VA

                                   
 

15059 Conference Center Drive

  Dulles South     2000     145,224     98.8 %   4,532,214     31.60  
   

Chantilly, VA

                                   
 

15049 Conference Center Drive

  Dulles South     1997     145,706     99.8 %   4,792,103     32.97  
   

Chantilly, VA

                                   
 

14900 Conference Center Drive

  Dulles South     1999     126,158     76.9 %   2,777,767     28.62  
   

Chantilly, VA

                                   
 

14280 Park Meadow Drive

  Dulles South     1999     114,126     88.3 %   2,701,138     26.80  
   

Chantilly, VA

                                   
 

4851 Stonecroft Boulevard

  Dulles South     2004     88,094     100.0 %   2,604,401     29.56  
   

Chantilly, VA

                                   
 

14850 Conference Center Drive

  Dulles South     2000     72,194     33.4 %   334,537     13.89  
   

Chantilly, VA

                                   
 

14840 Conference Center Drive

  Dulles South     2000     69,710     100.0 %   2,135,089     30.63  
   

Chantilly, VA

                                   
 

13200 Woodland Park Drive

  Herndon     2002     404,665     100.0 %   12,289,923     30.37  
   

Herndon, VA

                                   
 

13454 Sunrise Valley Road

  Herndon     1998     111,816     75.0 %   2,206,231     26.30  
   

Herndon, VA

                                   
 

13450 Sunrise Valley Road

  Herndon     1998     53,776     98.5 %   1,418,577     26.78  
   

Herndon, VA

                                   
 

3120 Fairview Park Drive(4)

  Herndon     2008     7,080     100.0 %   281,705     39.79  
   

Herndon, VA

                                   
 

1751 Pinnacle Drive

  Tysons Corner     1989/1995     260,469     95.6 %   8,688,804     34.88  
   

McLean, VA

                                   
 

1753 Pinnacle Drive

  Tysons Corner     1976/2004     186,707     100.0 %   6,752,584     36.17  
   

McLean, VA

                                   
 

1550 Westbranch Drive

  Tysons Corner     2002     152,240     100.0 %   4,883,163     32.08  
   

McLean, VA

                                   
 

2900 Towerview Road

  Herndon     1982/2008     139,802     100.0 %   2,339,361     16.73  
   

Herndon, VA

                                   

                               
 

Subtotal/Average

              2,772,817     91.9 % $ 74,956,636   $ 29.41  

                               

Suburban Maryland:

                                   
 

11800 Tech Road

  North Silver Spring     1969/1989     228,179     82.6 % $ 3,314,427   $ 17.60  
   

Silver Spring, MD

                                   
 

400 Professional Drive

  Gaithersburg     2000     129,355     61.2 %   2,245,727     28.37  
   

Gaithersburg, MD

                                   
 

110 Thomas Johnson Drive

  Frederick     1987/1999     122,490     100.0 %   2,912,166     23.77  
   

Frederick, MD

                                   
 

45 West Gude Drive

  Rockville     1987     108,588     0.0 %        
   

Rockville, MD

                                   
 

15 West Gude Drive

  Rockville     1986     106,694     100.0 %   2,680,626     25.12  
   

Rockville, MD

                                   

                               
 

Subtotal/Average

              695,306     71.4 % $ 11,152,946   $ 22.45  

                               

26


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 

Washington, DC—Capitol Riverfront:

                                   
 

1201 M Street

  Washington, DC—     2001     200,509     99.8 % $ 8,917,050   $ 44.58  
   

Washington, DC

  Capitol Riverfront                                
 

1220 M Street

  Washington, DC—     2003     161,165     97.0 %   6,804,065     43.54  
   

Washington, DC

  Capitol Riverfront                                

                               
 

Subtotal/Average

              361,674     98.5 % $ 15,721,115   $ 44.13  

                               

St. Mary's & King George Counties:

                                   
 

22309 Exploration Drive

  St. Mary's County     1984/1997     98,860     100.0 % $ 1,489,935   $ 15.07  
   

Lexington Park, MD

                                   
 

22289 Exploration Drive

  St. Mary's County     2000     58,676     100.0 %   1,293,086     22.04  
   

Lexington Park, MD

                                   
 

22299 Exploration Drive

  St. Mary's County     1998     58,363     93.9 %   1,272,775     23.24  
   

Lexington Park, MD

                                   
 

22300 Exploration Drive

  St. Mary's County     1997     44,830     100.0 %   740,600     16.52  
   

Lexington Park, MD

                                   
 

46579 Expedition Drive

  St. Mary's County     2002     61,156     100.0 %   1,393,131     22.78  
   

Lexington Park, MD

                                   
 

46591 Expedition Drive

  St. Mary's County     2005-2006     59,483     100.0 %   1,367,515     22.99  
   

Lexington Park, MD

                                   
 

44425 Pecan Court

  St. Mary's County     1997     58,981     94.2 %   1,131,964     20.38  
   

California, MD

                                   
 

44408 Pecan Court

  St. Mary's County     1986     50,532     0.0 %        
   

California, MD

                                   
 

23535 Cottonwood Parkway

  St. Mary's County     1984     46,656     100.0 %   576,202     12.35  
   

California, MD

                                   
 

44417 Pecan Court

  St. Mary's County     1989     29,053     100.0 %   304,771     10.49  
   

California, MD

                                   
 

44414 Pecan Court

  St. Mary's County     1986     25,444     100.0 %   258,390     10.16  
   

California, MD

                                   
 

44420 Pecan Court

  St. Mary's County     1989     25,200     0.0 %        
   

California, MD

                                   
 

16480 Commerce Drive

  King George County     2000     70,728     100.0 %   1,296,725     18.33  
   

Dahlgren, VA

                                   
 

16541 Commerce Drive

  King George County     1996     36,053     100.0 %   688,662     19.10  
   

King George, VA

                                   
 

16539 Commerce Drive

  King George County     1990     32,076     100.0 %   585,387     18.25  
   

King George, VA

                                   
 

16442 Commerce Drive

  King George County     2002     25,518     0.0 %        
   

Dahlgren, VA

                                   
 

16501 Commerce Drive

  King George County     2002     22,833     100.0 %   482,256     21.12  
   

Dahlgren, VA

                                   
 

16543 Commerce Drive

  King George County     2002     17,370     100.0 %   416,428     23.97  
   

Dahlgren, VA

                                   

                               
 

Subtotal/Average

              821,812     86.8 % $ 13,297,827   $ 18.64  

                               

Greater Baltimore:

                                   
 

11311 McCormick Road

  Hunt Valley/Rte 83     1984/1994     214,704     93.5 % $ 4,643,709   $ 23.14  
   

Hunt Valley, MD

  Corridor                                
 

200 International Circle

  Hunt Valley/Rte 83     1987     125,352     97.1 %   2,690,307     22.11  
   

Hunt Valley, MD

  Corridor                                
 

226 Schilling Circle

  Hunt Valley/Rte 83     1980     97,309     100.0 %   2,401,352     24.68  
   

Hunt Valley, MD

  Corridor                                
 

201 International Circle

  Hunt Valley/Rte 83     1982     78,243     84.1 %   1,536,019     23.35  
   

Hunt Valley, MD

  Corridor                                

27


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

11011 McCormick Road

  Hunt Valley/Rte 83     1974     57,104     24.9 %   269,571     18.96  
   

Hunt Valley, MD

  Corridor                                
 

216 Schilling Circle

  Hunt Valley/Rte 83     1988/2001     35,806     91.8 %   722,790     21.99  
   

Hunt Valley, MD

  Corridor                                
 

222 Schilling Circle

  Hunt Valley/Rte 83     1978/1997     28,618     63.5 %   354,738     19.52  
   

Hunt Valley, MD

  Corridor                                
 

224 Schilling Circle

  Hunt Valley/Rte 83     1978/1997     27,575     79.2 %   421,454     19.31  
   

Hunt Valley, MD

  Corridor                                
 

10150 York Road

  Hunt Valley/Rte 83     1985     174,737     77.1 %   2,534,548     18.81  
   

Hunt Valley, MD

  Corridor                                
 

9690 Deereco Road

  Hunt Valley/Rte 83     1988     133,861     85.5 %   2,934,096     25.64  
   

Timonium, MD

  Corridor                                
 

375 W. Padonia Road

  Hunt Valley/Rte 83     1986     104,885     99.6 %   2,000,112     19.14  
   

Timonium, MD

  Corridor                                
 

7210 Ambassador Road

  Baltimore County     1972     83,435     100.0 %   795,136     9.53  
   

Woodlawn, MD

  Westside                                
 

7152 Windsor Boulevard

  Baltimore County     1986     57,855     100.0 %   969,876     16.76  
   

Woodlawn, MD

  Westside                                
 

21 Governor's Court

  Baltimore County     1981/1995     56,383     70.9 %   634,002     15.86  
   

Woodlawn, MD

  Westside                                
 

7125 Ambassador Road

  Baltimore County     1985     50,604     84.9 %   866,651     20.17  
   

Woodlawn, MD

  Westside                                
 

7104 Ambassador Road

  Baltimore County     1988     30,081     100.0 %   595,662     19.80  
   

Woodlawn, MD

  Westside                                
 

17 Governor's Court

  Baltimore County     1981     14,454     79.2 %   213,845     18.67  
   

Woodlawn, MD

  Westside                                
 

15 Governor's Court

  Baltimore County     1981     14,568     100.0 %   241,902     16.61  
   

Woodlawn, MD

  Westside                                
 

7127 Ambassador Road

  Baltimore County     1985     11,630     62.2 %   150,161     20.75  
   

Woodlawn, MD

  Westside                                
 

7129 Ambassador Road

  Baltimore County     1985     11,075     100.0 %   81,844     7.39  
   

Woodlawn, MD

  Westside                                
 

7108 Ambassador Road

  Baltimore County     1988     8,811     100.0 %   160,039     18.16  
   

Woodlawn, MD

  Westside                                
 

7102 Ambassador Road

  Baltimore County     1988     8,879     100.0 %   149,003     16.78  
   

Woodlawn, MD

  Westside                                
 

7106 Ambassador Road

  Baltimore County     1988     8,899     100.0 %   137,073     15.40  
   

Woodlawn, MD

  Westside                                
 

7131 Ambassador Road

  Baltimore County     1985     7,734     44.2 %   33,844     9.89  
   

Woodlawn, MD

  Westside                                
 

502 Washington Avenue

  Towson     1984     90,435     77.5 %   1,353,535     19.32  
   

Towson, MD

                                   
 

102 West Pennsylvania Avenue

  Towson     1968/2001     49,701     84.9 %   902,784     21.41  
   

Towson, MD

                                   
 

100 West Pennsylvania Avenue

  Towson     1952/1989     20,099     71.7 %   253,146     17.56  
   

Towson, MD

                                   
 

109-111 Allegheny Avenue

  Towson     1971     18,431     100.0 %   302,127     16.39  
   

Towson, MD

                                   
 

1501 South Clinton Street

  Baltimore     2006     474,637     89.82 %   14,963,100     35.10  
   

Baltimore, MD

                                   
 

209 Research Boulevard

  Harford County     2010     47,930     100.00 %   1,360,410     28.38  
   

Aberdeen, MD

                                   
 

210 Research Boulevard

  Harford County     2010     27,551     100.00 %   817,292     29.66  
   

Aberdeen, MD

                                   
 

4940 Campbell Boulevard

  White Marsh     1990     50,415     82.1 %   947,788     22.91  
   

White Marsh, MD

                                   

28


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

8140 Corporate Drive

  White Marsh     2003     76,271     77.0 %   1,618,164     27.54  
   

White Marsh, MD

                                   
 

8110 Corporate Drive

  White Marsh     2001     79,091     95.7 %   1,772,798     23.42  
   

White Marsh, MD

                                   
 

9910 Franklin Square Drive

  White Marsh     2005     57,812     97.3 %   1,275,032     22.66  
   

White Marsh, MD

                                   
 

9920 Franklin Square Drive

  White Marsh     2006     42,891     88.2 %   853,392     22.56  
   

White Marsh, MD

                                   
 

9930 Franklin Square Drive

  White Marsh     2001     39,750     100.0 %   912,035     22.94  
   

White Marsh, MD

                                   
 

9900 Franklin Square Drive

  White Marsh     1999     33,800     100.0 %   580,001     17.16  
   

White Marsh, MD

                                   
 

9940 Franklin Square Drive

  White Marsh     2000     32,242     100.0 %   635,808     19.72  
   

White Marsh, MD

                                   
 

8020 Corporate Drive

  White Marsh     1997     50,796     100.0 %   928,800     18.28  
   

White Marsh, MD

                                   
 

8094 Sandpiper Circle

  White Marsh     1998     49,585     88.7 %   815,265     18.53  
   

White Marsh, MD

                                   
 

8098 Sandpiper Circle

  White Marsh     1998     46,485     100.0 %   850,882     18.30  
   

White Marsh, MD

                                   
 

8010 Corporate Drive

  White Marsh     1998     38,487     92.5 %   664,111     18.65  
   

White Marsh, MD

                                   
 

5355 Nottingham Ridge Road

  White Marsh     2005     35,930     79.58 %   475,646     16.63  
   

White Marsh, MD

                                   
 

5325 Nottingham Ridge Road

  White Marsh     2002     35,678     76.3 %   589,576     21.65  
   

White Marsh, MD

                                   
 

7941-7949 Corporate Drive

  White Marsh     1996     57,782     0.0 %        
   

White Marsh, MD

                                   
 

8007 Corporate Drive

  White Marsh     1995     41,799     84.8 %   634,373     17.89  
   

White Marsh, MD

                                   
 

8019 Corporate Drive

  White Marsh     1990     32,423     75.9 %   508,682     20.67  
   

White Marsh, MD

                                   
 

8013 Corporate Drive

  White Marsh     1990     29,995     27.6 %   131,969     15.94  
   

White Marsh, MD

                                   
 

8003 Corporate Drive

  White Marsh     1999     17,599     43.1 %   182,921     24.11  
   

White Marsh, MD

                                   
 

8015 Corporate Drive

  White Marsh     1990     15,669     87.1 %   279,185     20.45  
   

White Marsh, MD

                                   
 

8023 Corporate Drive

  White Marsh     1990     9,486     100.0 %   182,736     19.26  
   

White Marsh, MD

                                   
 

5020 Campbell Boulevard

  White Marsh     1986-1988     43,623     65.2 %   444,271     15.63  
   

White Marsh, MD

                                   
 

5024 Campbell Boulevard

  White Marsh     1986-1988     33,710     60.2 %   344,830     16.98  
   

White Marsh, MD

                                   
 

5026 Campbell Boulevard

  White Marsh     1986-1988     30,163     77.8 %   365,325     15.57  
   

White Marsh, MD

                                   
 

5022 Campbell Boulevard

  White Marsh     1986-1988     26,748     74.7 %   348,054     17.42  
   

White Marsh, MD

                                   
 

10001 Franklin Square Drive

  White Marsh     1997     218,215     100.0 %   1,127,298     5.17  
   

White Marsh, MD

                                   
 

8114 Sandpiper Circle

  White Marsh     1986     45,806     75.8 %   892,640     25.70  
   

White Marsh, MD

                                   
 

4979 Mercantile Road

  White Marsh     1985     51,198     100.0 %   753,911     14.73  
   

White Marsh, MD

                                   
 

4969 Mercantile Road

  White Marsh     1983     47,132     0.0 %        
   

White Marsh, MD

                                   

29


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

7939 Honeygo Boulevard

  White Marsh     1984     28,208     81.7 %   517,254     22.45  
   

White Marsh, MD

                                   
 

8133 Perry Hall Boulevard

  White Marsh     1988     27,996     90.2 %   524,990     20.80  
   

White Marsh, MD

                                   
 

7923 Honeygo Boulevard

  White Marsh     1985     23,481     61.4 %   293,652     20.36  
   

White Marsh, MD

                                   
 

8031 Corporate Drive

  White Marsh     1988/2004     66,000     100.0 %   1,238,328     18.76  
   

White Marsh, MD

                                   
 

8615 Ridgely's Choice Drive

  White Marsh     2005     37,746     58.4 %   466,258     21.16  
   

White Marsh, MD

                                   
 

8029 Corporate Drive

  White Marsh     1988/2004     25,000     100.0 %   476,524     19.06  
   

White Marsh, MD

                                   

                               
 

Subtotal/Average

              3,750,398     85.0 % $ 68,122,627   $ 21.38  

                               

Colorado Springs:

                                   
 

655 Space Center Drive

  Colorado Springs     2008     103,970     100.0 % $ 2,135,769   $ 20.54  
   

Colorado Springs, CO

  East                                
 

985 Space Center Drive

  Colorado Springs     1989     104,028     78.0 %   1,824,943     22.50  
   

Colorado Springs, CO

  East                                
 

565 Space Center Drive

  Colorado Springs     2009     89,899     2.2 %   36,345     18.63  
   

Colorado Springs, CO

  East                                
 

745 Space Center Drive

  Colorado Springs     2006     51,500     100.0 %   1,359,311     26.39  
   

Colorado Springs, CO

  East                                
 

980 Technology Court

  Colorado Springs     1995     33,207     99.9 %   645,475     19.45  
   

Colorado Springs, CO

  East                                
 

525 Babcock Road

  Colorado Springs     1967     14,000     100.0 %   191,559     13.68  
   

Colorado Springs, CO

  East                                
 

1055 North Newport Road

  Colorado Springs     2007-2008     59,763     100.0 %   1,190,948     19.93  
   

Colorado Springs, CO

  East                                
 

3535 Northrop Grumman Point

  Colorado Springs     2008     124,305     100.0 %   2,341,806     18.84  
   

Colorado Springs, CO

  East                                
 

1670 North Newport Road

  Colorado Springs     1986-1987     67,500     56.2 %   795,514     20.97  
   

Colorado Springs, CO

  East                                
 

1915 Aerotech Drive

  Colorado Springs     1985     37,946     34.5 %   238,837     18.26  
   

Colorado Springs, CO

  East                                
 

1925 Aerotech Drive

  Colorado Springs     1985     37,946     60.1 %   494,422     21.67  
   

Colorado Springs, CO

  East                                
 

10807 New Allegiance Drive

  I-25 North Corridor     2009     145,723     41.2 %   1,353,816     22.57  
   

Colorado Springs, CO

                                   
 

12515 Academy Ridge View

  I-25 North Corridor     2006     61,372     100.0 %   1,435,164     23.38  
   

Colorado Springs, CO

                                   
 

9965 Federal Drive

  I-25 North Corridor     1983/2007     74,749     100.0 %   1,233,813     16.51  
   

Colorado Springs, CO

                                   
 

9945 Federal Drive

  I-25 North Corridor     2009     74,005     0.0 %        
   

Colorado Springs, CO

                                   
 

9950 Federal Drive

  I-25 North Corridor     2001     66,223     100.0 %   1,048,213     15.83  
   

Colorado Springs, CO

                                   
 

9925 Federal Drive

  I-25 North Corridor     2008     53,788     81.3 %   697,407     15.95  
   

Colorado Springs, CO

                                   
 

9960 Federal Drive

  I-25 North Corridor     2001     46,948     78.3 %   803,174     21.84  
   

Colorado Springs, CO

                                   
 

5775 Mark Dabling Boulevard

  Colorado Springs     1984     109,678     100.0 %   1,882,027     17.16  
   

Colorado Springs, CO

  Northwest                                
 

5725 Mark Dabling Boulevard

  Colorado Springs     1984     108,976     100.0 %   2,079,346     19.08  
   

Colorado Springs, CO

  Northwest                                

30


Table of Contents

Property and Location
  Submarket   Year Built/
Renovated
  Rentable
Square
Feet
  Occupancy(1)   Annualized
Rental
Revenue(2)
  Annualized
Rental
Revenue per
Occupied
Square
Foot(2)(3)
 
 

5755 Mark Dabling Boulevard

  Colorado Springs     1989     103,400     87.2 %   2,033,358     22.56  
   

Colorado Springs, CO

  Northwest                                

                               
 

Subtotal/Average

              1,568,926     76.2 % $ 23,821,247   $ 19.93  

                               

San Antonio, Texas:

                                   
 

7700 Potranco Road

  San Antonio     1982/1985     508,412     100.0 % $ 16,451,125   $ 32.36  
   

San Antonio, TX

  Northwest                                
 

8000 Potranco Road

  San Antonio     2010     125,005     100.0 %   3,218,879     25.75  
   

San Antonio, TX

  Northwest                                
 

8030 Potranco Road

  San Antonio     2010     125,005     100.0 %   3,218,879     25.75  
   

San Antonio, TX

  Northwest                                
 

7700-5 Potranco Road

  San Antonio     2009     25,056     100.0 %   355,632     14.19  
   

San Antonio, TX

  Northwest                                
 

7700-1 Potranco Road

  San Antonio     2007     8,674     100.0 %   289,539     33.38  
   

San Antonio, TX

  Northwest                                
 

1560 A Cable Ranch Road

  San Antonio     1985/2007     45,935     100.0 %   581,182     12.65  
   

San Antonio, TX

  Northwest                                
 

1560 B Cable Ranch Road

  San Antonio     1985/2006     77,040     100.0 %   1,801,365     23.38  
   

San Antonio, TX

  Northwest                                

                               
 

Subtotal/Average

              915,127     100.0 % $ 25,916,601   $ 28.32  

                               

Greater Philadelphia, Pennsylvania:

                                   
 

785 Jolly Road

  Blue Bell     1996     219,065     100.0 % $ 2,783,362   $ 11.94  
   

Blue Bell, PA

                                   
 

801 Lakeview Drive

  Blue Bell     1994     156,695     100.0 %   4,142,959     17.18  
   

Blue Bell, PA

                                   

                               
 

Subtotal/Average

              375,760     100.0 % $ 6,926,321   $ 18.43  

                               

Other:

                                   
 

11751 Meadowville Lane

  Richmond Southwest     2007     193,000     100.0 % $ 5,639,518   $ 29.22  
   

Chester, VA

                                   
 

201 Technology Park Drive

  Southwest Virginia     2007     102,842     100.0 %   3,416,773     33.22  
   

Lebanon, VA

                                   

                               
 

Subtotal/Average

              295,842     100.0 % $ 9,056,291   $ 30.61  

                               
 

Total/Average

             
19,990,288
   
88.2

%

$

450,568,336
 
$

25.56
 

                               

(1)
This percentage is based upon all rentable square feet under lease terms that were in effect as of December 31, 2010.

(2)
Annualized rental revenue is the monthly contractual base rent as of December 31, 2010 multiplied by 12, plus the estimated annualized expense reimbursements under existing leases. We consider annualized rental revenue to be a useful measure for analyzing revenue sources because, since it is point-in-time based, it does not contain increases and decreases in revenue associated with periods in which lease terms were not in effect; historical revenue under GAAP does contain such fluctuations. We find the measure particularly useful for leasing, tenant, segment and industry analysis.

(3)
Annualized rental revenue per occupied square foot is a property's annualized rental revenue divided by that property's occupied square feet as of December 31, 2010.

(4)
This property, which was shell complete in 2008 and acquired by us in December 2010, contains a total 183,440 square feet. For accounting purposes, this space was 100% operational upon acquisition. For occupancy reporting, we are not including the unoccupied portion of the property in rentable square feet until the earlier of when leases commence on the space or one year from the date of acquisition.

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Table of Contents

        The following table provides certain information about our wholly owned office properties that were under construction, development or redevelopment as of December 31, 2010:

Property and Location
  Submarket   Estimated
Rentable
Square Feet
Upon Completion
  Percentage
Leased at
December 31,
2010
 

Under Construction

                 

Baltimore/Washington Corridor:

                 
 

316 Sentinel Way

  BWI Airport     125,044     0 %
   

Annapolis Junction, MD

                 
 

7205 Riverwood Road

  Howard Co. Perimeter     86,000     0 %
   

Columbia, MD

                 
 

308 Sentinel Drive(1)

  BWI Airport     151,543     98 %
   

Annapolis Junction, MD