COPT Completes Data Center Joint Venture

Download as PDF

COLUMBIA, Md.--(BUSINESS WIRE)-- Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announces the formation of GI-COPT DC Partnership LLC, a 50/50 joint venture with an affiliate of GI Partners, a leading private investment firm. The venture acquired six of COPT’s existing, single-tenant, data center properties that contain a total of 962,000 square feet. The unconsolidated venture raised $60 million of 10-year mortgages that bear interest at 3.4% to finance approximately 40% of the value of the properties. GI Partners’ affiliate purchased its interest in the venture for approximately $44 million. COPT realized $104 million in proceeds from these transactions.

“We are excited and honored to embark on this new relationship with GI Partners,” stated Stephen E. Budorick, COPT’s President & Chief Executive Officer. “This venture demonstrates the strength of demand for strategically located data center properties leased to high credit tenants, as well as the value creation inherent in our Defense/IT development business.”

About GI Partners

Founded in 2001, GI Partners is a leading private investment firm managing over $12 billion in capital commitments through private equity and real estate strategies for recognized institutional investors across the globe. GI Partners’ real estate team invests across a number of property types and investment strategies, including data centers, corporate campuses, industrial buildings, multi-family residential, and senior living facilities. For more information on GI Partners, please visit www.gipartners.com.

Company Information

COPT is an office REIT that owns, manages, develops and selectively acquires office and data center properties in locations that support United States Government agencies and their contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing priority missions (“Defense/IT Locations”). COPT also owns a complementary portfolio of traditional Class-A office properties located in select urban/urban-like submarkets within its regional footprint (“Regional Office Properties”). As of March 31, 2016, COPT derived 86% of core portfolio annualized revenue from Defense/IT Locations and 14% from its Regional Office Properties. As of March 31, 2016, COPT’s core portfolio of 153 office properties encompassed 16.6 million square feet and was 93.3% leased.

Forward-Looking Information

This press release may contain “forward-looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company’s current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Accordingly, the Company 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:

  • general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability and property values;
  • adverse changes in the real estate markets including, among other things, increased competition with other companies;
  • governmental actions and initiatives, including risks associated with the impact of a prolonged government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases, and/or a curtailment of demand for additional space by the Company's strategic customers;
  • the Company’s ability to borrow on favorable terms;
  • risks of real estate acquisition and development activities, 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;
  • changes in the Company’s plans for properties or views of market economic conditions or failure to obtain development rights, either of which could result in recognition of significant impairment losses;
  • the Company’s ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships;
  • the Company's ability to achieve projected results;
  • the dilutive effects of issuing additional common shares; and
  • environmental requirements.

The Company undertakes no obligation to update or supplement any forward-looking statements. For further information, please refer to the Company’s filings with the Securities and Exchange Commission, particularly the section entitled “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Corporate Office Properties Trust
IR Contacts:
Stephanie Krewson-Kelly, 443-285-5453
stephanie.kelly@copt.com
or
Michelle Layne, 443-285-5452
michelle.layne@copt.com

Source: Corporate Office Properties Trust

Released July 21, 2016