6711 Columbia Gateway Drive, Suite 300

Columbia, Maryland 21046

Telephone 443-285-5400

Facsimile 443-285-7650

www.copt.com

NYSE: OFC

NEWS RELEASE

FOR IMMEDIATE RELEASE

Contact:

Mary Ellen Fowler

Vice President and Treasurer

443-285-5450

maryellen.fowler@copt.com

•

Earnings per diluted share (“EPS”) of $.15 for the third quarter of 2007 as compared to $.33 per diluted share for the third quarter of 2006. Included in third quarter 2007 net income is gain on sales of real estate net of minority interests of $3.4 million, as compared to $12.7 million included in third quarter 2006. Also included in 2006 net income is an accounting charge of $1.8 million or ($.04) per share reflecting the write-off of initial issuance costs of the Series E preferred shares redeemed July 15, 2006.

•

26.1% increase in Funds from Operations (“FFO”) per diluted share to $.58 or $32.4 million for third quarter 2007 compared to $.46 or $24.3 million for third quarter 2006. Included in the third quarter 2006 FFO was the accounting charge of $1.8 million for the Series E preferred share redemption. Without this charge, FFO per diluted share for the third quarter 2006, as adjusted, would have been $.50 per share representing an increase of 16.0% for the third quarter 2007.

•

24.4% increase in Adjusted Funds from Operations (“AFFO”) diluted to $23.9 million for third quarter 2007 as compared to $19.2 million for third quarter 2006.

•

58.3% Diluted FFO payout ratio, 79.1% Diluted AFFO payout ratio for the quarter.

•

56 acres of land acquired for $10.0 million that can support 800,000 square feet of development located at the north entrance of Aberdeen Proving Ground. The Company’s land inventory totals 1,705 acres that can support 14.6 million square feet of development.

•

$12.6 million of dispositions closed in third quarter 2007, including two buildings located in New Jersey, one non-core building located in the BWI Corridor and a land parcel located in White Marsh.

•

92.8% occupied and 93.2% leased for the Company’s wholly owned portfolio as of September 30, 2007.

•

2.9 million square feet under construction, development and redevelopment for a total projected cost of $535.9 million.

•

73.3% of leases expiring during the quarter were renewed, with a 7.8% increase in total straight line rent for renewed space.

•

10% increase in quarterly common dividend from $.31 to $.34 per share.

•

Eight buildings under construction totaling 856,000 square feet for a total projected cost of $182.0 million, that are 43.1% leased.

•

Twelve buildings under development totaling 1.3 million square feet for a total projected cost of $261.7 million.

•

Three projects under redevelopment totaling 740,000 square feet for a total projected cost of $92.2 million.

•

56 acres of land for $10.0 million that can support 800,000 square feet of office development. The site will be known as Northgate Business Park and is strategically located at the north entrance to Aberdeen Proving Ground in Aberdeen, Maryland.

•

A 50.0% joint venture interest in ArundelPreserve #5, LLC on July 2, 2007, which owns 23 acres of land in Hanover, Maryland that can support up to 455,000 square feet of office development. The first building of 152,000 square feet is under construction with a targeted operational date of second quarter 2009.

•

Two office buildings totaling 32,000 square feet within its Northern/Central New Jersey portfolio for $6.0 million. The Company recognized an aggregate gain of $1.9 million.

•

40,000 square foot office building in the BWI Airport submarket for $5.0 million and recognized a gain of $868,000.

•

3.5 acre parcel of land located in White Marsh, Maryland and recognized a gain of $1.1 million.

•

Increased its borrowing capacity under its unsecured line of credit from $500.0 million to $600.0 million and extended its maturity date to September 30, 2011, which is subject to a one-year extension option. As part of the second amended and restated credit agreement, the Company achieved favorable interest rate pricing ranging from 75 basis points to 125 basis points over LIBOR, depending upon the Company’s leverage ratio.

•

Placed into service the 103,000 square feet development property located at 201 Technology Park Drive in Lebanon, Virginia. This building is leased through 2022 to Northrop Grumman Corporation and will house both the Virginia Information Technologies Agency (VITA) and Northrop Grumman operations.

•

Executed a swap for an aggregate notional amount of $50.0 million at a fixed one-month LIBOR rate of 4.33%, which commenced October 23, 2007 and expires October 23, 2009.

•

the Company’s 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;

•

risk of real estate acquisition and development, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that development or operating costs may be greater than anticipated;

•

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

•

our ability to satisfy and operate effectively under federal income tax rules relating to real estate investment trusts and partnerships;

•

governmental actions and initiatives; and

•

environmental requirements.

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Amounts in thousands, except per share data)

Three Months Ended

September 30,

2007

2006

Revenues

Real estate revenues

$

94,564

$

76,869

Service operations revenues

10,957

14,791

Total revenues

105,521

91,660

Expenses

Property operating expenses

31,642

24,983

Depreciation and other amortization associated with real estate operations

26,587

21,510

Service operations expenses

10,313

13,960

General and administrative expenses

5,423

4,226

Total operating expenses

73,965

64,679

Operating income

31,556

26,981

Interest expense

(21,000

)

(17,678

)

Amortization of deferred financing costs

(901

)

(736

)

Income from continuing operations before equity in (loss) income of unconsolidated entities, income taxes and minority interests

9,655

8,567

Equity in (loss) income of unconsolidated entities

(46

)

15

Income tax expense

(197

)

(202

)

Income from continuing operations before minority interests

9,412

8,380

Minority interests in income from continuing operations

(961

)

(873

)

Income from continuing operations

8,451

7,507

Income from discontinued operations, net of minority interests

1,942

12,483

Income before gain on sales of real estate

10,393

19,990

Gain on sales of real estate, net

1,038

597

Net income

11,431

20,587

Preferred share dividends

(4,025

)

(4,307

)

Issuance costs associated with redeemed preferred shares

—

(1,829

)

Net income available to common shareholders

$

7,406

$

14,451

Earnings per share “EPS” computation

Numerator

$

7,406

$

14,451

Denominator:

Weighted average common shares - basic

46,781

42,197

Dilutive effect of share-based compensation awards

1,005

1,649

Weighted average common shares - diluted

47,786

43,846

EPS

Basic

$

0.16

$

0.34

Diluted

$

0.15

$

0.33

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Amounts in thousands, except per share data and ratios)

Three Months Ended

September 30,

2007

2006

Net income

$

11,431

$

20,587

Add: Real estate-related depreciation and amortization

26,266

21,305

Add: Depreciation and amortization on unconsolidated real estate entities

166

362

Less: Depreciation and amortization allocable to minority interests in other consolidated entities

(48

)

(36

)

Less: Gain on sales of real estate, excluding development portion

(2,789

)

(15,262

)

Less: Issuance costs associated with redeemable preferred shares

—

(1,829

)

Funds from operations (“FFO”)

35,026

25,127

Add: Minority interests-common units in the Operating Partnership

1,351

3,509

Less: Preferred share dividends

(4,025

)

(4,307

)

Funds from Operations - basic and diluted (“Basic and Diluted FFO”)

32,352

24,329

Less: Straight-line rent adjustments

(3,247

)

(2,819

)

Less: Recurring capital expenditures

(4,664

)

(3,890

)

Less: Amortization of deferred market rental revenue

(585

)

(276

)

Add: Issuance costs associated with redeemable preferred shares

—

1,829

Adjusted Funds from Operations - diluted (“Diluted AFFO”)

$

23,856

$

19,173

Weighted average shares

Weighted average common shares

46,781

42,197

Conversion of weighted average common units

8,297

8,562

Weighted average common shares/units - basic FFO per share

55,078

50,759

Dilutive effect of share-based compensation awards

1,005

1,649

Weighted average common shares/units - diluted FFO per share

56,083

52,408

Diluted FFO per common share

$

0.58

$

0.46

Dividends/distributions per common share/unit

$

0.34

$

0.31

Earnings payout ratio

217.3

%

91.8

%

Diluted FFO payout ratio

58.3

%

65.4

%

Diluted AFFO payout ratio

79.1

%

83.0

%

EBITDA interest coverage ratio

2.92x

3.60x

EBITDA fixed charge coverage ratio

2.44x

2.89x

Reconciliation of denominators for diluted EPS and diluted FFO per share

Denominator for diluted EPS

47,786

43,846

Weighted average common units

8,297

8,562

Denominator for diluted FFO per share

56,083

52,408

Corporate Office Properties Trust

Summary Financial Data

(unaudited)

(Amounts in thousands, except per share data)

Nine Months Ended

September 30,

2007

2006

Revenues

Real estate revenues

$

274,702

$

216,087

Service operations revenues

32,727

45,240

Total revenues

307,429

261,327

Expenses

Property operating expenses

92,222

67,460

Depreciation and other amortization associated with real estate operations

80,487

58,138

Service operations expenses

31,463

43,125

General and administrative expenses

15,122

11,894

Total operating expenses

219,294

180,617

Operating income

88,135

80,710

Interest expense

(61,261

)

(51,635

)

Amortization of deferred financing costs

(2,706

)

(1,898

)

Gain on sale of non-real estate investment

1,033

—

Income from continuing operations before equity in loss of unconsolidated entities, income taxes and minority interests

25,201

27,177

Equity in loss of unconsolidated entities

(197

)

(40

)

Income tax expense

(480

)

(623

)

Income from continuing operations before minority interests

24,524

26,514

Minority interests in income from continuing operations

(2,341

)

(3,029

)

Income from continuing operations

22,183

23,485

Income from discontinued operations, net of minority interests

1,473

15,423

Income before gain on sales of real estate

23,656

38,908

Gain on sales of real estate, net

1,199

732

Net income

24,855

39,640

Preferred share dividends

(12,043

)

(11,614

)

Issuance costs associated with redeemed preferred shares

—

(1,829

)

Net income available to common shareholders

$

12,812

$

26,197

Earnings per share “EPS” computation

Numerator

$

12,812

$

26,197

Denominator:

Weighted average common shares - basic

46,386

41,134

Dilutive effect of share-based compensation awards

1,180

1,785

Weighted average common shares - diluted

47,566

42,919

EPS

Basic

$

0.28

$

0.64

Diluted

$

0.27

$

0.61

Nine Months Ended

September 30,

2007

2006

Net income

$

24,855

$

39,640

Add: Real estate-related depreciation and amortization

79,653

58,863

Add: Depreciation and amortization on unconsolidated real estate entities

503

565

Less: Depreciation and amortization allocable to minority interests in other consolidated entities

(137

)

(122

)

Less: Gain on sales of real estate, excluding development portion

(2,778

)

(17,715

)

Less: Issuance costs associated with redeemable preferred shares

—

(1,829

)

Funds from operations (“FFO”)

102,096

79,402

Add: Minority interests-common units in the Operating Partnership

2,424

6,072

Less: Preferred share dividends

(12,043

)

(11,614

)

Funds from Operations - basic and diluted (“Basic and Diluted FFO”)

92,477

73,860

Less: Straight-line rent adjustments

(9,042

)

(7,256

)

Less: Recurring capital expenditures

(14,331

)

(10,123

)

Less: Amortization of deferred market rental revenue

(1,569

)

(1,326

)

Add: Issuance costs associated with redeemable preferred shares

—

1,829

Adjusted Funds from Operations - diluted (“Diluted AFFO”)

$

67,535

$

56,984

Weighted average shares

Weighted average common shares

46,386

41,134

Conversion of weighted average common units

8,339

8,516

Weighted average common shares/units - basic FFO per share

54,725

49,650

Dilutive effect of share-based compensation awards

1,180

1,785

Weighted average common shares/units - diluted FFO per share

55,905

51,435

Diluted FFO per common share

$

1.65

$

1.44

Dividends/distributions per common share/unit

$

0.96

$

0.87

Earnings payout ratio

353.1

%

138.9

%

Diluted FFO payout ratio

57.5

%

59.2

%

Diluted AFFO payout ratio

78.7

%

76.8

%

Reconciliation of denominators for diluted EPS and diluted FFO per share

Denominator for diluted EPS

47,566

42,919

Weighted average common units

8,339

8,516

Denominator for diluted FFO per share

55,905

51,435

September 30,

December 31,

2007

2006

Balance Sheet Data (in thousands) (as of period end):

Investment in real estate, net of accumulated depreciation

$

2,584,945

$

2,111,310

Total assets

2,916,023

2,419,601

Debt

1,799,912

1,498,537

Total liabilities

1,951,648

1,629,111

Minority interests

131,607

116,187

Beneficiaries’ equity

832,768

674,303

Debt to Total Assets

61.7

%

61.9

%

Debt to Undepreciated Book Value of Real Estate Assets

60.6

%

62.0

%

Debt to Total Market Capitalization

41.5

%

34.9

%

Property Data (wholly owned properties) (as of period end):

Number of operating properties owned

229

170

Total net rentable square feet owned (in thousands)

17,722

15,050

Occupancy

92.8

%

92.8

%

Reconciliation of denominator for debt to total assets to
denominator for debt to undepreciated book value of
real estate assets

Denominator for debt to total assets

$

2,916,023

$

2,419,601

Assets other than assets included in investment in real estate

(331,078

)

(308,291

)

Accumulated depreciation on real estate assets

270,580

219,574

Intangible assets on real estate acquisitions, net

116,368

87,325

Denominator for debt to undepreciated book value of real estate assets

$

2,971,893

$

2,418,209

Three Months Ended

Nine Months Ended

September 30,

September 30,

2007

2006

2007

2006

Reconciliation of tenant improvements and incentives, capital
improvements and leasing costs for operating properties to
recurring capital expenditures

Total tenant improvements and incentives on operating properties

$

4,605

$

4,552

$

18,795

$

10,742

Total capital improvements on operating properties

2,514

2,276

6,482

7,935

Total leasing costs on operating properties

719

3,416

5,712

5,783

Less: Nonrecurring tenant improvements and incentives on operating properties

(1,887

)

(3,340

)

(11,381

)

(6,373

)

Less: Nonrecurring capital improvements on operating properties

(1,198

)

(467

)

(3,052

)

(4,054

)

Less: Nonrecurring leasing costs incurred on operating properties

(89

)

(2,783

)

(2,281

)

(4,217

)

Add: Recurring improvements on operating properties held through joint ventures

—

236

56

307

Recurring capital expenditures

$

4,664

$

3,890

$

14,331

$

10,123

Three Months Ended

Nine Months Ended

September 30,

September 30,

2007

2006

2007

2006

Reconciliation of dividends for Earnings Payout Ratio to
dividends and distributions for FFO & AFFO Payout Ratio

Common share dividends for earnings payout ratio

$

16,092

$

13,265

$

45,234

$

36,378

Common unit distributions

2,777

2,643

7,905

7,374

Dividends and distributions for FFO & AFFO payout ratio

$

18,869

$

15,908

$

53,139

$

43,752

Reconciliation of numerators for diluted EPS and diluted FFO as reported to numerators for diluted EPS and diluted FFO excluding issuance costs associated with redeemed preferred shares

Numerator for diluted EPS, as reported

$

7,406

$

14,451

$

12,812

$

26,197

Add: Issuance costs associated with redeemed preferred shares

—

1,829

—

1,829

Numerator for diluted EPS, as adjusted

$

7,406

$

16,280

$

12,812

$

28,026

Numerator for diluted FFO, as reported

$

32,352

$

24,329

$

92,477

$

73,860

Add: Issuance costs associated with redeemed preferred shares

—

1,829

—

1,829

Numerator for diluted FFO, as adjusted

$

32,352

$

26,158

$

92,477

$

75,689

Reconciliation of GAAP net income to earnings before interest,
income taxes, depreciation and amortization (“EBITDA”)

Net income

$

11,431

$

20,587

Interest expense on continuing operations

21,000

17,678

Interest expense on discontinued operations

145

506

Income tax expense

197

202

Real estate-related depreciation and amortization

26,266

21,305

Amortization of deferred financing costs-continuing operations

901

736

Amortization of deferred financing costs-discontinued operations

—

128

Other depreciation and amortization

339

601

Minority interests

1,504

3,636

EBITDA

$

61,783

$

65,379

Reconciliation of interest expense from continuing operations
to the denominators for interest coverage-EBITDA
and fixed charge coverage-EBITDA

Interest expense from continuing operations

$

21,000

$

17,678

Interest expense from discontinued operations

145

506

Denominator for interest coverage-EBITDA

21,145

18,184

Preferred share dividends

4,025

4,307

Preferred unit distributions

165

165

Denominator for fixed charge coverage-EBITDA

$

25,335

$

22,656

Reconciliation of same property net operating income to same property cash net operating income and same property cash net operating income, adjusted for lease termination fees

Same property net operating income

$

50,530

$

50,793

Less: Straight-line rent adjustments

(1,951

)

(2,533

)

Less: Amortization of deferred market rental revenue

(541

)

(159

)

Same property cash net operating income

48,038

48,101

Less: Lease termination fees, gross

(610

)

(1,883

)

Same property cash net operating income, adjusted for lease termination fees

$

47,428

$

46,218

Low

High

Year Ending

December 31, 2007

Reconciliation of numerators

Numerator for projected EPS-diluted

$

18,500

$

19,500

Less: Gain on sales of real estate, excluding development portion (1)

(2,778

)

(2,778

)

Real estate-related depreciation and amortization

105,415

105,415

Minority interests-common units

3,419

3,604

Numerator for projected diluted FFO per share

$

124,556

$

125,741

Reconciliation of denominators

Denominator for projected EPS-diluted

47,630

47,630

Weighted average common units

8,297

8,297

Denominator for projected diluted FFO per share

55,927

55,927

Projected EPS - diluted

$

0.39

$

0.41

Projected diluted FFO per share

$

2.23

$

2.25

Year Ending

December 31, 2008

Reconciliation of numerators (1)

Numerator for projected EPS-diluted

$

28,174

$

32,451

Real estate-related depreciation and amortization (2)

101,983

101,983

Minority interests-common units

5,089

5,862

Numerator for projected diluted FFO per share

$

135,246

$

140,296

Reconciliation of denominators

Denominator for projected EPS-diluted

48,257

48,257

Weighted average common units

8,168

8,168

Denominator for projected diluted FFO per share

56,425

56,425

Projected EPS - diluted

$

0.58

$

0.67

Projected diluted FFO per share

$

2.40

$

2.49

Percentage of

Total

Percentage

Weighted

Total

Total

Annualized

of Total

Average

Number of

Occupied

Occupied

Rental

Annualized Rental

Remaining

Tenant

Leases

Square Feet

Square Feet

Revenue (2) (3)

Revenue

Lease Term (4)

United States of America

(5)

59

2,338,501

14.2

%

$

53,843

15.4

%

6.1

Northrop Grumman Corporation

(6)

16

942,600

5.7

%

23,085

6.6

%

6.8

Booz Allen Hamilton, Inc.

9

723,255

4.4

%

19,643

5.6

%

6.7

Computer Sciences Corporation

(6)

4

454,645

2.8

%

11,446

3.3

%

3.7

Unisys Corporation

(7)

4

760,145

4.6

%

8,843

2.5

%

2.0

L-3 Communications Holdings, Inc.

(6)

4

221,493

1.3

%

8,838

2.5

%

6.2

General Dynamics Corporation

9

284,415

1.7

%

7,249

2.1

%

2.5

Wachovia Corporation