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, 2003

 

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

 

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.)

 

 

 

8815 Centre Park Drive, Suite 400
Columbia, MD

 

21045

(Address of principal executive offices)

 

(Zip Code)

 

 

 

Registrant’s telephone number, including area code:  (410) 730-9092

 

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 B Cumulative Redeemable Preferred Shares of beneficial interest, $0.01 par value

 

New York Stock Exchange

 

 

 

Series E Cumulative Redeemable Preferred Shares of beneficial interest, $0.01 par value

 

New York Stock Exchange

 

 

 

Series F Cumulative Redeemable Preferred 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

 

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

 

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.  ýYes   o No

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  ýYes   o No

 

The aggregate market value of the voting and nonvoting common equity held by non-affiliates of the registrant was approximately $423.2 million, as calculated using the closing price of the common shares of beneficial interest on the New York Stock Exchange on June 30, 2003 and our outstanding shares as of February 27, 2004; for purposes of calculating this amount only, affiliates are defined as Trustees, executive owners and beneficial owners of more than 5% of the Registrant’s outstanding common shares of beneficial interest.  At February 27, 2004, 30,760,165 shares of the Registrant’s common shares of beneficial interest, $0.01 par value, were outstanding.

 

Portions of the annual shareholder report for the year ended December 31, 2003 are incorporated by reference into Parts I and II of this report and portions of the proxy statement of the Registrant for its 2004 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.

 

 



 

Table of Contents

 

Form 10-K

 

PART I

 

 

 

 

 

ITEM 1.

BUSINESS

3

ITEM 2.

PROPERTIES

15

ITEM 3.

LEGAL PROCEEDINGS

23

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

23

 

 

 

PART II

 

 

 

 

 

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

23

ITEM 6.

SELECTED FINANCIAL DATA

23

ITEM 7.

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

23

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

23

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

23

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

23

ITEM 9A.

CONTROLS AND PROCEDURES

23

 

 

 

PART III

 

 

 

 

 

ITEM 10.

TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT

24

ITEM 11.

EXECUTIVE COMPENSATION

24

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

24

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

24

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

24

 

 

 

PART IV

 

 

 

 

 

ITEM 15

EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

24

 

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

 

                  our ability to borrow on favorable terms;

                  general economic and business conditions, which will, among other things, affect office property demand and rents, tenant creditworthiness, interest rates and financing availability;

                  adverse changes in the real estate markets including, among other things, increased competition with other companies;

                  risks of real estate acquisition and development;

                  risks of investing through joint venture structures, including risks that our joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with our objectives;

                  governmental actions and initiatives; and

                  environmental requirements.

 

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

 

2



 

PART I

 

Item 1. Business

 

OUR COMPANY

 

General.  We are a fully-integrated and self-managed real estate investment trust (“REIT”) that focuses principally on the ownership, management, leasing, acquisition and development of suburban office properties located in select submarkets in the Mid-Atlantic region of the United States.  As of December 31, 2003, we owned:

 

                  119 operating office properties in Maryland, Pennsylvania, New Jersey and Virginia containing 10.0 million rentable square feet that were 91.2% occupied (including one owned through a joint venture);

                  four office properties under construction or development that we estimate will total approximately 399,000 square feet upon completion, including two properties owned through joint ventures; and

                  land parcels totaling 224 acres that were contiguous to certain of our operating properties and potentially developable into approximately 3.8 million square feet (including 14 acres potentially developable into approximately 143,000 square feet that we owned through joint ventures).

 

We conduct almost all of our operations through our operating partnership, Corporate Office Properties, L.P. (the “Operating Partnership”), a Delaware limited partnership, for which we are the managing general partner.  Our Operating Partnership owns real estate both directly and through subsidiaries.  The Operating Partnership also owns Corporate Office Management, Inc. (“COMI”) (together with its subsidiaries defined as the “Service Companies”).  COMI owns 100% of three subsidiaries: Corporate Realty Management, LLC (“CRM”), Corporate Development Services, LLC (“CDS”) and Corporate Cooling and Controls, LLC (“CC&C”).  CRM manages most of our properties and also provides corporate facilities management for select third parties.  CDS provides construction and development services predominantly to us.  CC&C provides heating and air conditioning installation, maintenance, repair and controls services.

 

Interests in our Operating Partnership are in the form of preferred and common units.  As of December 31, 2003, we owned 100% of the outstanding preferred units and approximately 75% of the outstanding common units.  The remaining common units in our Operating Partnership were owned by third parties, which included certain of our officers and 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 REIT taxable income (excluding net capital gains).

 

Our executive offices are located at 8815 Centre Park Drive, Suite 400, Columbia, Maryland 21045 and our telephone number is (410) 730-9092.

 

Corporate Office Properties Trust’s Internet address is www.copt.com.  The information on our Internet site is not part of this report.  We make available on our Internet site free of charge our annual report 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.

 

3



 

Significant 2003 Developments

 

During 2003, we completed the following:

 

                  Acquired seven office properties totaling 993,479 square feet for $165.1 million and two parcels of land for $31.8 million.  Of the office buildings acquired, six were located in Northern Virginia and one in the Baltimore/Washington Corridor.  These acquisitions were financed using $83.8 million from borrowings under new mortgage loans; $63.9 million in proceeds from the sale of common shares of beneficial interest (“common shares”) in an underwritten public offering; $33.1 million in borrowings from our secured revolving credit facility with Bankers Trust Company (the “Revolving Credit Facility”); $9.9 million in funds escrowed from previous property sales; and cash reserves for the balance;

 

                  Acquired our joint venture partners’ interest in two joint ventures for $6.2 million.  Through these acquisitions, we acquired three office properties totaling 225,754 square feet and a parcel of land that is contiguous to two of the buildings and assumed $16.5 million in mortgage loans;

 

                  Sold an office property and two land parcels for $21.3 million.  We also contributed a 157,394 square foot office property into a joint venture in exchange for $20.0 million in cash and a 20% interest in the joint venture.  The net proceeds from these transactions after transaction costs totaled $40.2 million;

 

                  Raised $181.0 million from three underwritten public offerings, of which $63.9 million was used to fund a property acquisition and most of the balance of the proceeds used to pay down our Revolving Credit Facility.  These public offerings included the following:

 

                  5,290,000 common shares at a price of $15.03 per share;

                  2,200,000 Series G Preferred Shares at a price of $25.00 per share and annual dividends of 8% of the purchase price; and

                  2,000,000 Series H Preferred Shares at a price of $25.00 per share and annual dividends of 7.5% of the purchase price;

 

                  Redeemed all of the 1,016,662 Series C Preferred Units in our Operating Partnership for $36.1 million using proceeds from a newly acquired mortgage loan.  Prior to this redemption, these units were convertible, subject to certain conditions, into 2,420,672 common units in the Operating Partnership; and

 

                  Obtained $191.2 million in borrowings from new mortgage and other loans, including the following fixed-rate borrowings: (1) a $52.0 million mortgage loan with a seven year term and an interest rate of 5.36%; and (2) two four-year mortgage loans totaling $25.7 million and an interest rate of 3%, although the maturity timeframe of these loans could be accelerated should we commence construction activities on certain land prior to maturity.  We used these borrowings for the following: (1) $83.8 million to finance acquisitions; (2) $45.0 million to repay other loans; (3) $36.1 million to repurchase the Series C Preferred Units in our Operating Partnership described above; (4) $18.4 million to pay down our Revolving Credit Facility; (5) $1.2 million to finance construction activities; and (6) the balance to fund cash reserves.

 

Subsequent Events

 

From January 1, 2004 to March 5, 2004, the following events took place:

 

                  On February 11, 2004, the holder of our Series D Preferred Shares of beneficial interest converted its preferred shares into 1,196,800 common shares;

 

                  On March 5, 2004, we acquired for $22.4 million a 129,000 square foot office property located in Gaithersburg, Maryland, which is in Montgomery County.  This acquisition was financed using $16.8 million in mortgage loans assumed from the seller and the balance with proceeds from our Revolving Credit Facility;

 

                  We entered into a contract for a new revolving credit facility that is expected to close in March 2004; we expect to use this facility as our primary revolving credit facility to replace the facility with Bankers Trust Company.  The facility is expected to have a maximum principal of $300.0 million, a three-year term (with an additional one-year extension available) and a variable interest rate based on the 30-day LIBOR rate plus 1.25% to 1.55% (as determined by our leverage levels at different points in time).  We also expect the facility to have a fee of 0.125% to 0.25% on the amount of the credit facility that is unused; and

 

4



 

                  We entered into a contract to acquire 10 office properties totaling approximately 535,000 square feet for $65.2 million.  These buildings are located in St. Mary’s County, Maryland.  We expect that these acquisitions will be completed by April 2004 using primarily borrowings under our new revolving credit facility.

 

Corporate Objectives and Strategies

 

Our primary objectives are to achieve sustainable long-term growth in results of operations and to maximize long-term shareholder value.  We seek to achieve these objectives through focusing on the ownership, management, leasing, acquisition and development of suburban office properties.  Important elements of our strategy are set forth below:

 

Geographic Focus.  Our strategy is to operate in select submarkets within the Mid-Atlantic region, where we believe we have achieved the critical mass necessary to maximize management efficiencies, operating synergies and competitive advantages through our acquisition, property management and development programs.  By focusing within selected regions where our management has extensive experience and market knowledge, we believe that we can achieve regional prominence that will lead to better operating results.  The attributes we look for in selecting submarkets include, among others, (1) proximity to large markets, (2) strong demographics, (3) attractiveness to high quality tenants, including our existing tenants, (4) potential for growth and stability in economic down cycles and (5) future acquisition and development opportunities.  When we select a submarket, our strategy generally involves establishing an initial presence by acquiring properties in that submarket and then increasing our ownership through future acquisitions and development until we own a significant portion of the rental space of the same class as our properties in that submarket.

 

Office Park Focus.  We focus on owning and operating properties located in established suburban corporate office parks.  We believe the suburban office park environment generally attracts longer-term tenants, including high-quality corporations seeking to attract and retain quality work forces, because these parks are typically situated along major transportation routes with easy access to support services, amenities and residential communities.

 

High Quality Tenant Focus.  We focus on tenants that are large, financially sound entities with significant long-term space requirements.  To enhance the stability of our cash flow, we typically structure our leases with terms ranging from three to ten years.  We believe that this strategy enables us to establish long-term relationships with quality tenants and, coupled with our geographic and submarket focus, enhances our ability to become the landlord of choice in our targeted markets.  Given the terms of our leases, we monitor the timing of our lease maturities with the goal being that such timing should not be highly concentrated in a given one-year or five-year period.

 

Defense Industry Focus.  A high concentration of our revenues is generated from tenants in the United States defense industry (comprised of the United States Government and defense contractors).  This industry is particularly interested in the submarkets where our properties are located and the types of properties and service that we are able to provide.  We nurture our relationship with tenants in the defense industry, while monitoring our levels of concentration from a business risk perspective.

 

Acquisition Strategies.  We actively pursue the acquisition of suburban office properties through a three-part acquisition strategy.  This strategy includes targeting: (1) entity acquisitions of significant portfolios along with their management to establish prominent ownership positions in new neighboring regions and enhance our management infrastructure; (2) portfolio purchases to enhance our existing submarket positions as well as enter selective new neighboring regions; and (3) opportunistic acquisitions of individual properties in our existing regions.  We seek to make acquisitions at attractive yields and below replacement costs.  We also seek to increase cash flow and enhance the underlying value of each acquisition through repositioning the properties and capitalizing on existing below market leases and expansion opportunities.

 

Property Development Strategies.  We balance our acquisition program through selective development and expansion of suburban office properties as market conditions and leasing opportunities support favorable risk-adjusted returns.  We pursue development opportunities principally in response to the needs of existing and prospective new tenants. We generally develop sites that are in proximity to our existing properties.  We believe that developing such sites enhances our ability to effectively meet tenant needs and efficiently provide critical tenant services.

 

Tenant Services.  We seek to capitalize on our geographic focus and critical mass of properties in our core regions by providing high level, comprehensive services to our tenants.  We conduct most of our tenant services activities through our

 

5



 

subsidiary service companies.  We believe that providing such services is an integral part of our ability to achieve consistently high levels of tenant satisfaction and retention.

 

Internal Growth Strategies.  We aggressively manage our portfolio to maximize the operating performance of each property through: (i) proactive property management and leasing; (ii) achieving operating efficiencies through increasing economies of scale and, where possible, aggregating vendor contracts to achieve volume pricing discounts; (iii) renewing tenant leases and re-tenanting at increased rents where market conditions permit; and (iv) expanding our tenant and real estate service capabilities.  These strategies are designed to promote tenant satisfaction, resulting in higher tenant retention and the attraction of new tenants.

 

Financing Policy

 

We pursue a capitalization strategy aimed at maintaining a flexible capital structure in order to facilitate consistent growth and performance in the face of differing market conditions.  Key components of our policy are set forth below:

 

Debt Strategy.  We primarily utilize property-level mortgage debt as opposed to corporate unsecured debt.  We believe that the commercial mortgage debt market is generally a more stable market, providing us with greater access to capital on a more consistent basis and, generally, on more favorable terms.  Additionally, we seek to utilize long-term, fixed-rate debt, which we believe enhances the stability of our cash flow.  One aspect of how we manage our financing policy involves monitoring the relationship of certain measures of earnings to certain financing cost requirements; these relationships are known as coverage ratios.  The coverage ratios on which our financing policy focuses are debt service coverage ratio and fixed charge coverage ratio, both of which are discussed further in the section of this Form 10-K entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  These coverage ratios are important to us in evaluating whether our operations are sufficient to satisfy the cash flow requirements of our loans and equity holders, including minority interest holders.  Another aspect to our financing policy involves monitoring the relationship of our total variable rate debt to our total assets; this is important to us in limiting the amount of our debt that is subject to future increases in interest rates.  We also closely monitor the timing of our debt maturities to ensure that the maximum maturities of debt in any year, both including and excluding our primary revolving credit facility, do not exceed a defined percentage of total assets.

 

Equity Strategy.  When conditions warrant, we issue common and preferred equity.  We also seek to maximize the benefits of our Operating Partnership’s organizational structure by utilizing, where appropriate, the issuance of units in our Operating Partnership as an equity source to finance our property acquisition program.  This strategy provides prospective property sellers the ability to defer taxable gains by receiving our units in lieu of cash and reduces the need for us to access the equity and debt markets.

 

Mortgage Loans Payable

 

For information relating to future maturities of our mortgage loans payable, you should refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 9 to our Consolidated Financial Statements, both of which are included in Exhibit 13.1 to this Form 10-K and are incorporated herein by reference.

 

Industry Segments

 

We operate in one industry segment: suburban office real estate.  Our suburban office real estate operations have six primary geographical segments all located in the Mid-Atlantic region of the United States: Baltimore/Washington Corridor (defined as the Maryland counties of Howard and Anne Arundel), Northern Virginia (defined as Fairfax County, Virginia), Greater Philadelphia, Northern/Central New Jersey, Greater Harrisburg, Pennsylvania, and Suburban Maryland (defined as the Maryland counties of Montgomery and Prince George’s).  For information relating to these geographic segments, you should refer to Note 16 to our Consolidated Financial Statements included in Exhibit 13.1 to this Form 10-K which is incorporated herein by reference.

 

Employees

 

We employed 182 persons as of December 31, 2003.  We believe that our relations with our employees are good.

 

6



 

Competition

 

The commercial real estate market is highly competitive.  Numerous commercial properties compete for tenants with our properties.  We believe that the recent economic slowdown in the United States has adversely affected occupancy rates in our regions and our properties and, in turn, led to downward pressure on rental rates.  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.  If occupancy rates in our regions do not improve or further decline, we may have difficulty leasing both 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 purchase of commercial property with many entities, including other publicly-traded commercial REITs.  Many of our competitors have substantially greater financial resources than ours.  In addition, our competitors may be willing to accept lower returns on their investments.  If our competitors prevent us from buying properties that we have targeted for acquisition, we may not be able to meet our property acquisition and development goals.

 

7



 

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 the risks and uncertainties below and all of the information in this Form 10-K and its Exhibits, including Exhibit 13.1, which sets forth portions of the Annual Report to Shareholders of Corporate Office Properties Trust as of and for the year ended December 31, 2003.

 

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 tenant-related costs for which we may not receive increased rents.  We also make building-related capital improvements for which tenants may not reimburse us.

 

If our properties do not generate revenue sufficient to meet our operating expenses and capital costs, we may have to borrow additional amounts to cover these costs.  In such circumstances, we would likely have lower profits or possibly incur losses.  We may also find in such circumstances that we are unable to borrow to cover such costs, in which case our operations could be adversely affected.  Moreover, there may be less or no cash available for distributions to our shareholders.

 

Adverse developments concerning some of our key tenants could have a negative impact on our revenue.  As of December 31, 2003, 20 tenants accounted for 61.8% of our total annualized rental revenue, and five of these tenants accounted for 35.8% of our total annualized rental revenue. We computed the annualized rental revenue by multiplying by 12 the sum of monthly contractual base rents and estimated monthly expense reimbursements under active leases as of December 31, 2003.  Portfolio annualized rental revenue is annualized rental revenue for our entire portfolio of properties as of a point in time, including both consolidated properties and properties owned through unconsolidated real estate joint ventures as of December 31, 2003.  Information regarding our five largest tenants is set forth below:

 

Tenant

 

Annualized
Rental Revenue at
December 31, 2003

 

Percentage of
Portfolio Annualized
Rental Revenue

 

Number of
Buildings
In Which Tenant
Leased Space

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

United States Government (1)

 

$

26,329

 

14.8

%

21

 

Computer Sciences Corporation (2)

 

11,133

 

6.3

%

3

 

AT&T Corporation (2)

 

9,228

 

5.2

%

7

 

VeriSign, Inc. (3)

 

8,985

 

5.1

%

1

 

Unisys (4)

 

7,745

 

4.4

%

3

 

 


(1)          Generally, the leases with the United States Government provide for one-year terms or provide for early termination rights, as discussed below.  The United States Government may terminate its leases if, among other reasons, the United States Congress fails to provide funding. Congress has appropriated funds for these leases through September 2004.

(2)          Includes affiliated companies and organizations.

(3)          VeriSign, Inc. has the right to terminate the lease with respect to a maximum of 232,268 rentable square feet at designated times from June 2005 through September 2006.

(4)          Unisys subleases some of its space to Merck and Co., Inc. Revenue from this subleased space is not included in total annualized rental revenue for Unisys.

 

If any of our five largest tenants fail to make rental payments to us, or if the United States Government elects to terminate several of its 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.

 

8



 

We classify the revenue from our leases into industry groupings based solely on management’s knowledge of the tenants’ operations in leased space. Occasionally, classifications require subjective and complex judgments. For example, we have a tenant that is considered by many to be in the computer industry; however, since the nature of that tenant’s operations in the space leased from us is focused on providing service to the United States Government’s defense department, we classify the revenue we earn from the lease as United States Government defense/defense contractor industry revenue. We do not use independent sources such as Standard Industrial Classification codes for classifying our revenue into industry groupings and if we did, the resulting groupings would be materially different. As of December 31, 2003, the United States defense industry (comprised of the United States Government and defense contractors) accounted for approximately 39.9% of our portfolio annualized rental revenue. Most of the 14.8% of our annualized rental revenue that we derived from leases with agencies of the United States Government as of December 31, 2003 is included in the 39.9% of our portfolio annualized revenue from the United States defense industry.

 

We have become increasingly reliant on defense industry tenants, particularly due to the increased activity in that sector following the events of September 11, 2001. Furthermore, we expect that the percentage of our total annualized rental revenue derived from the defense industry will continue to increase. A reduction in government spending for defense could affect the ability of these tenants to fulfill lease obligations or decrease the likelihood that these tenants will renew their leases. In the case of the United States Government, a reduction in government spending could result in the early termination of leases. 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 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.  We believe that the recent economic slowdown in the United States has, and could continue to, adversely affect a number of our tenants.  In addition, as noted above, we rely on a few major tenants for a large percentage of our total rental revenue.  If one of our major tenants, or a number of our smaller tenants, were to experience financial difficulties, including bankruptcy, insolvency or general downturn of business, there could be an adverse effect on our financial performance and ability to make expected distributions to shareholders.

 

Our properties are geographically concentrated in the Mid-Atlantic region, particularly in the Baltimore/Washington corridor. We believe that our occupancy rates have been affected as a result of adverse conditions in that region, as well as in the United States generally, and we may suffer economic harm if these conditions continue.  All of our properties are located in the Mid-Atlantic region of the United States, and as of December 31, 2003, our properties located in the Baltimore/Washington Corridor accounted for 53.6% of our total annualized rental revenue.  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 Baltimore/Washington Corridor 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 believe that the recent economic slowdown in the United States has adversely affected occupancy rates in the Mid-Atlantic region and our properties and, in turn, led to downward pressure on rental rates. Average quarter-end occupancy in our portfolio decreased from 93.8% in 2002 to 91.4% in 2003; this decrease reflected a somewhat larger decline in our Baltimore/Washington corridor properties, where average quarter-end occupancy decreased from 92.2% in 2002 to 89.6% in 2003. Lower occupancy rates and the resulting increased competition for tenants in our operating regions placed downward pressure on rental rates in most of these regions, a trend that we believe will affect us further as we attempt to lease vacant space and renew leases scheduled to expire on occupied space. If occupancy rates in our regions do not improve or further decline, we may have difficulty leasing both existing vacant space and space associated with future lease expirations at rental rates that are sufficient to meet our short term capital needs, which could adversely affect our financial position, results of operations, cash flows and ability to make distributions to shareholders.

 

We would suffer economic harm if we were unable to renew our leases on favorable terms.  When leases expire for our properties, our tenants may not renew or may renew on terms less favorable to us than the terms of their original leases.  If a tenant leaves, we can expect to experience a vacancy for some period of time, as well as higher capital costs than if a tenant renews.  As a result, our financial performance and ability to make expected distributions to our shareholders could be adversely

 

9



 

affected if we experience a high volume of tenant departures at the end of their lease terms.  Set forth below are the percentages of total annualized rental revenue as of December 31, 2003 that were subject to scheduled lease expirations in each of the next five years:

 

2004

 

9.0

%

2005

 

10.3

%

2006

 

11.0

%

2007

 

15.0

%

2008

 

14.2

%

 

Most of the leases with our largest tenant, the United States Government, which account for 14.8% of our annualized rental revenue at December 31, 2003, 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 they lease through the end of the respective arrangements, without ending consecutive one-year leases pre-maturely or exercising early termination rights.  We reported the statistics in this manner since we manage our leasing activities using these same assumptions and believe these assumptions to be probable.

 

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 and development goals. Moreover, numerous commercial properties compete for tenants with our properties. Some of the properties competing with ours may have newer or 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 in properties that we own, could have an adverse effect on our financial performance and 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 and construct properties, including some that are not fully pre-leased. When we develop and construct properties, we assume the risk that actual costs will exceed our budgets, that we will experience construction or development delays and that projected leasing will not occur, any of which could adversely affect our financial performance and our ability to make distributions to our shareholders. In addition, we generally do not obtain construction financing commitments until the development stage of a project is complete and construction is about to commence. We may find that we are unable to obtain financing needed to continue with the construction activities for such projects.

 

We may suffer economic harm as a result of the actions of our joint venture partners.  We invest in certain entities in which we are not the exclusive investor or principal decision maker.  As of December 31, 2003, we owned one operating property and four development/construction properties through joint ventures.  Aside from our inability to unilaterally control the operations of these joint ventures, our investments entail the additional risks that (i) the other parties to these investments may not fulfill their financial obligations as investors, in which case we may need to fund such parties’ share of additional capital requirements and (ii) the other parties to these investments may take actions that are inconsistent with our objectives, 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 are subject to possible environmental liabilities.  We are subject to various Federal, state and local environmental laws.  These laws can impose liability on property owners or operators for the costs of removal or remediation of hazardous substances released on a property, even if the property owner was not responsible for 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.

 

10



 

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.  Equity real estate investments like our properties are relatively difficult to sell and convert to cash quickly, especially if market conditions are depressed.  Such illiquidity will tend to limit our ability to vary our portfolio of properties promptly 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 four years. In addition, for certain of our properties that we acquired by issuing units in our Operating Partnership, we are restricted 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 all of these factors, we may be unable to sell a property at an advantageous time.

 

We are 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, and state or local laws relating to zoning, construction and other matters.  These laws may require significant property modifications in the future for which we may not have budgeted 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 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.

 

As a result of the September 11, 2001 terrorist attacks, we may be subject to increased costs of insurance and limitations on coverage. Our portfolio of properties is insured for losses under our property, casualty and umbrella insurance policies through September 2004.  These policies include coverage for acts of terrorism.  Due largely to the terrorist attacks on September 11, 2001, the insurance industry has changed its risk assessment approach and pricing structure.  Continuing changes in the insurance industry 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.

 

We may suffer adverse effects as a result of the indebtedness that we carry and the terms and covenants that relate to this debt.  Our strategy is to operate with slightly higher debt levels than most other REITs.  However, these higher debt levels could make it difficult to obtain additional financing when required and could also make us more vulnerable to an economic downturn.  Most of our properties have been mortgaged to collateralize 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.  As of December 31, 2003, our total outstanding debt was $738.7 million and our debt to total assets (defined as mortgage loans divided by total assets) was 55.5%.

 

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:

 

                  we may not be able to refinance our existing indebtedness or refinance on terms as favorable as the terms of our existing indebtedness;

                  certain debt agreements of our Operating Partnership could restrict the ability of our Operating Partnership to make cash distributions to us, which could result in reduced distributions to our shareholders or the need to incur additional debt to fund these distributions; and

                  if we are unable to pay our debt service on time or are unable to comply with restrictive financial covenants in certain of our mortgage loans, our lenders could foreclose on our properties securing such debt and in some cases other properties and assets that we own.

 

A number of our loans are cross-collateralized, which means that separate groups of properties from our portfolio secure each of these loans.  More importantly, many of our loans are cross-defaulted, which means that failure to pay interest or principal on any of our loans will create a default on certain of our other loans.  Any foreclosure of our properties would result in loss of income and asset value 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, the lender may require payment from our other assets.

 

We use interest rate swap agreements to reduce the impact of changes in interest rates. As of December 31, 2003, we had two interest rate swap agreements in place, each of which is for a notional amount of $50.0 million. One agreement expired in

 

11



 

January 2004 and the other will expire in January 2005. Decreases in interest rates would result in increased interest payments due under interest rate swap agreements in place and could result in the Company recognizing a loss and remitting a payment to unwind such agreements. As of December 31, 2003, approximately 25.7% of our total debt had variable interest rates, excluding effects of the outstanding interest rate swap agreements. This percentage decreases to 12.2% when including the effect of the interest rate swap agreements in effect at December 31, 2003.  If short-term interest rates were to rise, our debt service payments on adjustable rate debt would increase, which would lower our net income and could decrease our distributions to our shareholders.

 

We must refinance our mortgage debt in the future.  As of December 31, 2003, our scheduled debt payments over the next five years, including maturities, were as follows:

 

Year

 

Amount

 

 

 

(in thousands)

 

2004

 

$

176,904

 (1)

2005

 

86,608

 (2)

2006

 

75,858

 

2007

 

69,590

 

2008

 

150,691

 

 

(1)          Includes maturities of $12.8 million in March, $25.8 million in August and $8.1 million in November, each of which may be extended for a one-year period, subject to certain conditions; also includes a $12.7 million maturity in June that may be extended for a six-month period, subject to certain conditions.

(2)          Includes maturities totaling $54.5 million in January that may each be extended for a one-year period, subject to certain conditions.

 

Our operations likely will not generate enough cash flow to repay some or all of this debt without additional borrowings or new equity financings.  If we cannot refinance our debt, extend the repayment dates, or raise additional equity prior to the date 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 be unable to continue to make shareholder distributions at expected levels.  We intend to make regular quarterly cash distributions to our shareholders.  However, distribution levels depend on a number of factors, some of which are beyond our control.

 

Our loan agreements contain provisions that could restrict future distributions.  Our ability to sustain our current distribution level will also be dependent, in part, on other matters including:

 

                  continued property occupancy and timely payment by tenants of rent obligations;

                  the amount of future capital expenditures and expenses relating to our properties;

                  the level of leasing activity and future rental rates;

                  the strength of the commercial real estate market;

                  competition;

                  the costs of compliance with environmental and other laws;

                  our corporate overhead levels;

                  the amount of uninsured losses; and

                  our decision to reinvest in operations rather than distribute available cash.

 

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

 

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

 

12



 

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, and our Board of Trustees previously has exempted the foreign trust owning all of our 4% Series D Cumulative Convertible Redeemable Preferred Shares from the Ownership Limit.

 

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.

 

Our Board of Trustees is divided into three classes of Trustees, which could delay a change of control.  Our Declaration of Trust divides our Board of Trustees into three classes.  The term of one class of the Trustees expires each year, at which time a successor class is elected for a term ending at the third succeeding annual meeting of shareholders.  Such staggered terms make it more difficult for a third party to acquire control of us.

 

The Maryland business statutes also impose potential restrictions on 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.  Our bylaws exempt us from such laws, but our Board of Trustees can change our bylaws at any time to make these provisions applicable to us.

 

Our failure to qualify as a REIT would have adverse tax consequences.  We believe that since 1992 we have qualified for taxation as a REIT for Federal income tax purposes.  We plan to continue to meet the requirements for taxation as a REIT.  Many of these requirements, however, are highly technical and complex.  The determination that we are a REIT requires an analysis of various factual matters and circumstances that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from certain sources that are itemized in the REIT tax laws.  We are also required to distribute to shareholders at least 90% of our REIT taxable income (excluding capital gains).  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.  This would likely have a significant adverse effect on the value of our securities.  In addition, we would no longer be required to make any distributions to our shareholders.

 

We have certain distribution requirements that reduce cash available for other business purposes.  As a REIT, we must distribute 90% of our annual taxable income (excluding capital gains), which limits the amount of cash we have available for other business purposes, including amounts to fund our growth.  Also, it is possible that because of the differences between the time we actually receive revenue or pay expenses and the period during which we report those items for distribution purposes, we may have to borrow funds to meet the 90% distribution requirement.  We may become subject to tax liabilities that adversely affect our operating cash flow and available cash for distribution to shareholders.

 

A number of factors could cause our security prices to decline.  As is the case with any publicly-traded securities, certain factors outside of our control could influence the value of our common and preferred shares.  These conditions include, but are not limited to:

 

                  market perception of REITs in general and office REITs in particular;

                  market perception of REITs relative to other investment opportunities;

                  the level of institutional investor interest in our company;

                  general economic and business conditions;

 

13



 

                  prevailing interest rates; and

                  market perception of our financial condition, performance, dividends and growth potential.

 

Generally, REITs are tax-advantaged relative to C corporations because they are not subject to corporate-level federal income tax on income that they distribute to shareholders. However, Congress recently made changes to the tax laws and regulations that could make it less advantageous for investors to invest in REITs. The Jobs and Growth Tax Relief Reconciliation Act of 2003, or the 2003 Act, provides that generally for taxable years beginning after December 31, 2002 and before December 31, 2008, certain dividends received by domestic individual shareholders from certain C corporations are subject to a reduced rate of tax of up to 15%. Prior to this Act, such dividends received by domestic individual shareholders were generally subject to tax at ordinary income rates, which were as high as 38.6%. In general, the provisions of the Act do not benefit individual shareholders of REITs and could make an investment in a C corporation that is not a REIT more attractive than an investment in a REIT. We cannot predict the effects that this Act may have on the market price for our common or preferred shares.

 

The average daily trading volume of our common shares during 2003 was approximately 96,000 shares, and the average trading volume of our publicly-traded preferred shares is generally insignificant.  As a result, relatively small volumes of transactions could have a pronounced effect on the market price of such shares.

 

We are dependent on external sources of capital for future growth.  As noted above, because we are a REIT, we must distribute 90% of our annual taxable income.  Due to this requirement, we will not be able to 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 loans, equity issuances of common shares, preferred shares, common and preferred units in our Operating Partnership or joint venture funding.  Such capital may not be available on favorable terms or at all.  Moreover, additional debt financing may substantially increase our leverage and 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.

 

Certain of our officers and Trustees have potential conflicts of interest.  Certain of our officers and members of our Board of Trustees own partnership units in our Operating Partnership.  These individuals may have personal interests that conflict with the interests of our shareholders.  For example, if our Operating Partnership sells or refinances certain of the properties that these officers or Trustees contributed to the Operating Partnership, the officers or 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 assure you, however, that these policies will be successful in eliminating the influence of such conflicts, and if they are not successful, decisions could be made that might fail to reflect fully the interests of all of our shareholders.

 

We are dependent on our key personnel, and the loss of any key personnel could have an adverse effect on our operations.  We are dependent on the efforts of our executive officers.  The loss of any of their services could have an adverse effect on our operations.  Although certain of our officers have entered into employment agreements with us, we cannot assure you that they will remain employed with us.

 

We may change our policies without shareholder approval, which could adversely affect our financial condition, results of operations, market price of our common shares or ability to pay distributions.  Our Board of Trustees determines all of our policies, including our investment, financing and distribution policies.  Although our Board of Trustees has no current plans to do so, it may amend or revise these policies at any time without a vote of our shareholders.  Policy changes could adversely affect our financial condition, results of operations, the market price of our securities or distributions.

 

14



 

Item 2.  Properties

 

The following table provides certain information about our office properties as of December 31, 2003:

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized

 

 

 

 

 

 

 

Year

 

Rentable

 

 

 

Annualized

 

Rental Revenue

 

Major Tenants

 

 

 

 

 

Built/

 

Square

 

 

 

Rental

 

per Occupied

 

(10% or more of

 

Property and Location

 

Submarket

 

Renovated

 

Feet

 

Occupancy (1)

 

Revenue (2)

 

Square Foot (2) (3)

 

Rentable Square Feet)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Baltimore/Washington Corridor (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2730 Hercules Road

 

BWI Airport

 

1990

 

240,336

 

100.0

%

$

5,291,062

 

$

22.02

 

United States of America (100%)

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2500 Riva Road

 

BWI Airport

 

2000/2001

 

155,000

 

100.0

%

1,935,000

 

12.48

 

USinternetworking, Inc. (100%)

 

Annapolis , MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2711 Technology Drive

 

BWI Airport

 

2002

 

152,000

 

100.0

%

3,714,880

 

24.44

 

Computer Sciences Corporation (100%)

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

140 National Business Parkway

 

BWI Airport

 

2003

 

119,904

 

100.0

%

2,827,336

 

23.58

 

United States of America (100%)

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

132 National Business Parkway

 

BWI Airport

 

2000

 

118,456

 

100.0

%

2,836,317

 

23.94

 

United States of America (48%);

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Computer Sciences Corp. (26%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Harris Corporation (26%)

 

2721 Technology Drive
Annapolis Junction, MD

 

BWI Airport

 

2000

 

118,093

 

100.0

%

2,920,761

 

24.73

 

General Dynamics Government Corp. (78%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States of America (22%)

 

2701 Technology Drive

 

BWI Airport

 

2001

 

117,450

 

100.0

%

3,067,552

 

26.12

 

Northrop Grumman Systems (62%);

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Titan Systems Corporation (38%)

 

1306 Concourse Drive

 

BWI Airport

 

1990

 

114,046

 

97.9

%

2,453,239

 

21.97

 

IBM (33%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Qwest Communications (21%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AT&T Corporation (13%)

 

1304 Concourse Drive

 

BWI Airport

 

2002

 

102,964

 

62.9

%

1,598,214

 

24.69

 

Northrop Grumman Corporation (53%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Debtscape (10%)

 

870-880 Elkridge Landing Road

 

BWI Airport

 

1981

 

101,785

 

5.5

%

135,892

 

24.14

 

 

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

900 Elkridge Landing Road

 

BWI Airport

 

1982

 

97,261

 

97.5

%

1,961,876

 

20.69

 

Booz Allen Hamilton (71%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

First Annapolis Consulting (25%)

 

1199 Winterson Road

 

BWI Airport

 

1988

 

96,636

 

100.0

%

1,886,914

 

19.53

 

United States of America (100%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

920 Elkridge Landing Road

 

BWI Airport

 

1982

 

96,566

 

100.0

%

1,496,229

 

15.49

 

Ciena Corporation (100%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

134 National Business Parkway

 

BWI Airport

 

1999

 

93,482

 

100.0

%

2,069,424

 

22.14

 

Booz Allen Hamilton (100%)

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

133 National Business Parkway

 

BWI Airport

 

1997

 

88,666

 

100.0

%

1,857,941

 

20.95

 

United States of America (34%);

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Applied Signal Technology, Inc. (33%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lockheed Martin Corporation (33%)

 

141 National Business Parkway

 

BWI Airport

 

1990

 

87,318

 

100.0

%

1,877,449

 

21.50

 

ITT Industries (60%);

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

DigitalNet, Inc. (22%)

 

135 National Business Parkway
Annapolis Junction, MD

 

BWI Airport

 

1998

 

86,863

 

100.0

%

1,825,322

 

21.01

 

First American Credit Management Solutions (82%)

 

1302 Concourse Drive

 

BWI Airport

 

1996

 

84,134

 

67.2

%

1,262,107

 

22.34

 

Aetna, Inc. (16%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

American Express Travel Related Services, Inc. (13%)

 

 

15



 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized

 

 

 

 

 

 

 

Year

 

Rentable

 

 

 

Annualized

 

Rental Revenue

 

Major Tenants

 

 

 

 

 

Built/

 

Square

 

 

 

Rental

 

per Occupied

 

(10% or more of

 

Property and Location

 

Submarket

 

Renovated

 

Feet

 

Occupancy (1)

 

Revenue (2)

 

Square Foot (2) (3)

 

Rentable Square Feet)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7467 Ridge Road

 

BWI Airport

 

1990

 

74,273

 

94.3

%

1,493,925

 

21.33

 

Citicorp Trust Bank, FSB (49%);

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Object (32%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Mitre Corporation (13%)

 

7240 Parkway Drive
Hanover, MD

 

BWI Airport

 

1985

 

74,156

 

72.7

%

1,094,704

 

20.30

 

Delmarva Found. for Medical Research (24%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deloitte & Touche, USA (10%)

 

881 Elkridge Landing Road

 

BWI Airport

 

1986

 

73,572

 

100.0

%

1,248,638

 

16.97

 

United States of America (100%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1099 Winterson Road

 

BWI Airport

 

1988

 

71,076

 

94.0

%

1,332,751

 

19.95

 

Preferred Health Network (62%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1190 Winterson Road

 

BWI Airport

 

1987

 

69,529

 

76.9

%

1,398,264

 

26.17

 

The Titan Corporation (44%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

General Dynamics (10%)

 

131 National Business Parkway
Annapolis Junction, MD

 

BWI Airport

 

1990

 

69,039

 

100.0

%

1,643,597

 

23.81

 

Conquest Info.Tech. (The Boeing Co (71%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States of America (17%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intel Corporation (12%)

 

849 International Drive

 

BWI Airport

 

1988

 

68,758

 

94.7

%

1,441,161

 

22.13

 

Computer Associates (17%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

First Service Networks (13%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States of America (13%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dames & Moore (10%)

 

911 Elkridge Landing Road

 

BWI Airport

 

1985

 

68,296

 

100.0

%

1,265,981

 

18.54

 

United States of America (100%

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1201 Winterson Road

 

BWI Airport

 

1985

 

67,903

 

100.0

%

944,812

 

13.91

 

Ciena Corporation (100%

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

999 Corporate Boulevard

 

BWI Airport

 

2000

 

67,351

 

87.6

%

1,358,128

 

23.02

 

RAG American Coal Holding (79%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7318 Parkway Drive

 

BWI Airport

 

1984

 

59,204

 

100.0

%

860,181

 

14.53

 

United States of America (100%)

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7320 Parkway Drive
Hanover, MD

 

BWI Airport

 

1983

 

58,453

 

100.0

%

761,022

 

13.02

 

Science Applications International Corp. (56%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Baltimore Gas & Electric (27%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northrop Grumman Corporation (18%)

 

800 International Drive

 

BWI Airport

 

1988

 

57,612

 

77.9

%

725,216

 

16.16

 

Raytheon E-Systems, Inc. (78%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

901 Elkridge Landing Road

 

BWI Airport

 

1984

 

57,308

 

87.3

%

840,015

 

16.79

 

State of Maryland (61%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Institute for Operations Research and Management Sciences (14%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States of America (12%)

 

900 International Drive

 

BWI Airport

 

1986

 

57,140

 

100.0

%

755,636

 

13.22

 

Ciena Corporation (100%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

930 International Drive

 

BWI Airport

 

1986

 

57,140

 

100.0

%

708,536

 

12.40

 

Ciena Corporation (100%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

891 Elkridge Landing Road

 

BWI Airport

 

1984

 

56,489

 

27.9

%

318,131

 

20.17

 

Metropolitan Life Insurance Co. (26%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

921 Elkridge Landing Road
Linthicum, MD

 

BWI Airport

 

1983

 

54,175

 

100.0

%

1,002,237

 

18.50

 

Northrop Grumman Corporation (100%)

 

939 Elkridge Landing Road

 

BWI Airport

 

1983

 

53,031

 

100.0

%

922,305

 

17.39

 

First Service Networks, Inc. (36%);

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency Holding Company (34%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States of America (23%)

 

 

16



 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized

 

 

 

 

 

 

 

Year

 

Rentable

 

 

 

Annualized

 

Rental Revenue

 

Major Tenants

 

 

 

 

 

Built/

 

Square

 

 

 

Rental

 

per Occupied

 

(10% or more of

 

Property and Location

 

Submarket

 

Renovated

 

Feet

 

Occupancy (1)

 

Revenue (2)

 

Square Foot (2) (3)

 

Rentable Square Feet)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

938 Elkridge Landing Road

 

BWI Airport

 

1984

 

52,988

 

100.0

%

951,471

 

17.96

 

United States of America (100%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

940 Elkridge Landing Road

 

BWI Airport

 

1984

 

51,704

 

100.0

%

788,629

 

15.25

 

Cadmus Journal Services (100%)

 

Linthicum, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1340 Ashton Road

 

BWI Airport

 

1989

 

46,400

 

100.0

%

850,992

 

18.34

 

General Dynamics (100%)

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7321 Parkway Drive

 

BWI Airport

 

1984

 

39,822

 

100.0

%

731,408

 

18.37

 

United States of America (100%)

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1334 Ashton Road
Hanover, MD

 

BWI Airport

 

1989

 

37,565

 

96.8

%

709,339

 

19.51

 

Science Applications International (60%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Parsons Transportation Group (37%)

 

1331 Ashton Road

 

BWI Airport

 

1989

 

29,936

 

100.0

%

447,073

 

14.93

 

Booz Allen Hamilton (71%);

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerosol Monitoring & Analysis (29%)

 

1350 Dorsey Road

 

BWI Airport

 

1989

 

19,992

 

96.7

%

330,085

 

17.07

 

Aerotek, Inc. (23%);

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Noodles, Inc. (14%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hunan Pagoda (12%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C.G. Menk & Associates, Inc. (11%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corestaff Support Services, Inc. (10%)

 

1344 Ashton Road

 

BWI Airport

 

1989

 

17,061

 

100.0

%

384,802

 

22.55

 

Engineering Solutions, Inc. (41%);

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid-Atlantic Clearing House Association (16%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dialysis Corporation of America (14%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citizens National Bank (12%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edward Kraemer & Sons, Inc. (11%)

 

1341 Ashton Road

 

BWI Airport

 

1989

 

15,841

 

100.0

%

276,499

 

17.45

 

Supertots Childcare, Inc. (71%);

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

The Devereux Foundation (29%)

 

1343 Ashton Road

 

BWI Airport

 

1989

 

9,962

 

100.0

%

146,527

 

14.71

 

Nauticos Corporation (100%)

 

Hanover, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

114 National Business Parkway

 

BWI Airport

 

2002

 

9,717

 

100.0

%

64,585

 

6.65

 

Huff and Puff, Inc. (44%);

 

Annapolis Junction, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Café Joe (39%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charm City Concierge (17%)

 

7200 Riverwood

 

Howard County

 

1986

 

160,000

 

100.0

%

3,183,018

 

19.89

 

United States of America (100%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

9140 Rt. 108

 

Howard County

 

1974/1985

 

150,000

 

100.0

%

4,222,500

 

28.15

 

United States of America (100%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

7000 Columbia Gateway Drive

 

Howard County

 

1999

 

145,806

 

100.0

%

1,353,541

 

9.28

 

Honeywell International (100%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

6731 Columbia Gateway Drive

 

Howard County

 

2002

 

123,743

 

66.5

%

2,158,055

 

26.22

 

CareFirst Inc. & Subsidiaries (40%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Washington Mutual Bank (17%)

 

6940 Columbia Gateway Drive

 

Howard County

 

1999

 

108,847

 

100.0

%

2,403,344

 

22.08

 

Magellan Behavioral Health, Inc. (39%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Ameritrade Holding Corporation (39%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Peregrine Remedy, Inc. (14%)

 

6950 Columbia Gateway Drive

 

Howard County

 

1998

 

107,778

 

100.0

%

2,163,703

 

20.08

 

Magellan Behavioral Health, Inc. (100%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

7067 Columbia Gateway Drive

 

Howard County

 

2001

 

82,953

 

100.0

%

1,807,424

 

21.79

 

Community First Financial (50%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Allstate Insurance Company (50%)

 

6750 Alexander Bell Drive

 

Howard County

 

2001

 

78,460

 

93.1

%

1,973,783

 

27.02

 

Sun Microsystems, Inc. (45%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

The Coca-Cola Company (35%)

 

 

17



 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized

 

 

 

 

 

 

 

Year

 

Rentable

 

 

 

Annualized

 

Rental Revenue

 

Major Tenants

 

 

 

 

 

Built/

 

Square

 

 

 

Rental

 

per Occupied

 

(10% or more of

 

Property and Location

 

Submarket

 

Renovated

 

Feet

 

Occupancy (1)

 

Revenue (2)

 

Square Foot (2) (3)

 

Rentable Square Feet)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6700 Alexander Bell Drive

 

Howard County

 

1988

 

75,655

 

48.4

%

804,663

 

21.99

 

Arbitron, Inc. (26%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

6740 Alexander Bell Drive

 

Howard County

 

1992

 

61,957

 

100.0

%

1,584,850

 

25.58

 

Johns Hopkins University (80%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Advanced Career Technologies, Inc. (20%)

 

8671 Robert Fulton Drive

 

Howard County

 

2001

 

56,350

 

50.9

%

477,165

 

16.63

 

Nucletron Corporation (51%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

6716 Alexander Bell Drive

 

Howard County

 

1990

 

52,002

 

100.0

%

1,161,310

 

22.33

 

Sun Microsystems, Inc. (49%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Rational Software Corp. (15%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Johns Hopkins University (11%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Activ (10%)

 

8661 Robert Fulton Drive

 

Howard County

 

2001

 

49,500

 

46.5

%

370,554

 

16.08

 

Rohde & Schwarz (47%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

9140 Guilford Road

 

Howard County

 

1983

 

41,704

 

100.0

%

608,520

 

14.59

 

Microcosm (21%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Applied Data Systems (21%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COACT, Inc. (21%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEC Business Network Solutions, Inc. (14%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chesapeake Surgical, Ltd. (12%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Creative Marketing (11%)

 

7065 Columbia Gateway Drive

 

Howard County

 

2000

 

38,560

 

0.0

%

¾

 

¾

 

 

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

7063 Columbia Gateway Drive

 

Howard County

 

2000

 

36,936

 

50.9

%

399,479

 

21.25

 

The Boeing Company (51%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

9160 Guilford Road

 

Howard County

 

1984

 

36,528

 

100.0

%

578,179

 

15.83

 

AT&T Corporation (100%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

6760 Alexander Bell Drive

 

Howard County

 

1991

 

36,309

 

61.9

%

443,053

 

19.71

 

MWH Americas, Inc. (14%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Facilities Dynamics Engineering Corporation (11%)

 

6708 Alexander Bell Drive
Columbia, MD

 

Howard County
Perimeter

 

1988

 

35,040

 

100.0

%

708,192

 

20.21

 

State Farm Mutual Auto Insurance Co. (100%)

 

7061 Columbia Gateway Drive

 

Howard County

 

2000

 

29,604

 

100.0

%

674,519

 

22.78

 

Manekin, LLC (83%);

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

Dell Franklin Financial (17%)

 

6724 Alexander Bell Drive

 

Howard County

 

2002

 

28,420

 

100.0

%

620,997

 

21.85

 

Lurgi Lentjes North America (95%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

9150 Guilford Drive

 

Howard County

 

1984

 

17,655

 

100.0

%

285,493

 

16.17

 

Essex Corporation (100%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

9130 Guilford Drive

 

Howard County

 

1984

 

13,700

 

100.0

%

250,930

 

18.32

 

Chesapeake Research (100%)

 

Columbia, MD

 

Perimeter

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal/Average

 

 

 

 

 

5,183,960

 

90.4

%

$

95,047,437

 

$

20.28

 

 

 

Suburban Maryland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11800 Tech Road

 

North Silver

 

1969/1989

 

235,954

 

86.4

%

$

3,213,016

 

$

15.75

 

Comcast Cablevision (42%);

 

Silver Spring, MD

 

Spring

 

 

 

 

 

 

 

 

 

 

 

Kaiser Foundation Health Plan (17%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holy Cross Hospital of Silver Spring (12%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States of America (11%)

 

14502 Greenview Drive

 

Laurel

 

1988

 

71,926

 

70.6

%

986,061

 

19.43

 

iSky (20%);

 

Laurel, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

KCI Technologies, Inc. (13%)

 

14504 Greenview Drive

 

Laurel

 

1985

 

69,194

 

63.6

%

865,565

 

19.66

 

Moore North America Inc. (11%);

 

 

18



 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized

 

 

 

 

 

 

 

Year

 

Rentable

 

 

 

Annualized

 

Rental Revenue

 

Major Tenants

 

 

 

 

 

Built/

 

Square

 

 

 

Rental

 

per Occupied

 

(10% or more of

 

Property and Location

 

Submarket

 

Renovated

 

Feet

 

Occupancy (1)

 

Revenue (2)

 

Square Foot (2) (3)

 

Rentable Square Feet)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Laurel, MD

 

 

 

 

 

 

 

 

 

 

 

 

 

Light Wave Communications (10%)

 

Subtotal/Average

 

 

 

 

 

377,074

 

79.2

%

$

5,064,642

 

$

16.95

 

 

 

Blue Bell/Philadelphia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

753 Jolly Road

 

Blue Bell

 

1960/92-94

 

419,472

 

100.0

%

$

3,869,113

 

$

9.22

 

Unisys (100%)

 

Blue Bell, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

785 Jolly Road

 

Blue Bell

 

1970/1996

 

219,065

 

100.0

%

2,325,845

 

10.62

 

Unisys with 100% sublease to Merck

 

Blue Bell, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

760 Jolly Road

 

Blue Bell

 

1974/1994

 

208,854

 

100.0

%

2,834,467

 

13.57

 

Unisys (100%)

 

Blue Bell, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

751 Jolly Road

 

Blue Bell

 

1966/1991

 

112,958

 

100.0

%

1,041,898

 

9.22

 

Unisys (100%)

 

Blue Bell, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal/Average

 

 

 

 

 

960,349

 

100.0

%

$

10,071,323

 

$

10.49

 

 

 

Greater Harrisburg:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2605 Interstate Drive

 

East Shore

 

1990

 

79,456

 

94.8

%

$

1,332,561

 

$

17.70

 

Commonwealth of Pennsylvania (90%)

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6345 Flank Drive

 

East Shore

 

1989

 

69,443

 

61.9

%

543,779

 

12.66

 

Allstate Insurance (26%);

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

Data Recognition Corporation (18%)

 

6340 Flank Drive

 

East Shore

 

1988

 

68,200

 

77.6

%

600,113

 

11.34

 

Lancaster Lebanon (78%)

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2601 Market Place

 

East Shore

 

1989

 

66,224

 

100.0

%

1,187,373

 

17.93

 

Duke Energy Operating Co. (26%);

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

Ernst & Young, LLP (26%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Albright College (14%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Penn State Geisinger Systems (12%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Groundwater Sciences Corp. (11%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quality Insights of PA, Inc. (10%)

 

6400 Flank Drive
Harrisburg, PA

 

East Shore

 

1992

 

52,439

 

84.0

%

708,410

 

16.09

 

Pennsylvania Coalition Against Domestic Violence (51%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The REM Organization (27%)

 

6360 Flank Drive

 

East Shore

 

1988

 

46,500

 

83.7

%

584,642

 

15.03

 

Ikon Office Solutions, Inc. (22%);

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

Computer Applications (15%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sentage Corp. d/b/a Dental Services Group (15%)

 

6385 Flank Drive

 

East Shore

 

1995

 

32,921

 

63.0

%

334,629

 

16.14

 

Cowles Enthusiast Media (34%);

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

Imagistics International (11%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CGI Information Systems & Management (11%)

 

6380 Flank Drive

 

East Shore

 

1991

 

32,668

 

100.0

%

407,271

 

12.47

 

Critical Care Systems, Inc. (19%);

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancer Recovery Foundation of America (18%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Myers & Stauffer (16%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lorom America, Inc. (14%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon Network Integration Corporation (14%);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Day Specialties (12%)

 

6405 Flank Drive

 

East Shore

 

1991

 

32,000

 

100.0

%

509,360

 

15.92

 

Cowles Enthusiast Media (100%)

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

95 Shannon Road

 

East Shore

 

1999

 

21,976

 

100.0

%

376,083

 

17.11

 

New World Pasta (100%)

 

Harrisburg, PA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19



 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized