================================================================================UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
Washington, D.C. 20549FORM 10-K
(Mark(Mark one)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31,
19992002or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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
0-20047 CORPORATE OFFICE PROPERTIES TRUST (Exact1-14023Corporate Office Properties Trust
(Exact name of registrant as specified in its charter)
MARYLAND 23-2947217 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 8815 CENTRE PARK DRIVE, SUITE 400 21045 COLUMBIA, MD (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 SHARE OF BENEFICIAL INTEREST, NEW YORK STOCK EXCHANGE $0.01 PAR VALUE SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARE OF BENEFICIAL INTEREST NEW YORK STOCK EXCHANGE $0.01 PAR VALUE
Maryland
23-2947217
(State or other jurisdiction of
incorporation or organization)(IRS Employer
Identification No.)8815 Centre Park Drive, Suite 400
Columbia, MD21045
(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
Securities registered pursuant to Section 12(g) of the Act:
NONENoneIndicate by check mark whether the registrant (1)
registranthas 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.[X]ý Yes[ ]o NoIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(Section(§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best ofRegistrant'sRegistrant’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.[ ]ýIndicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). ý Yes o No
The aggregate market value of the voting
stockand nonvoting common equity held by non-affiliates of the registrant was$74,850,000approximately $310.9 million based on the closing price ofsuch Sharesthe common shares of beneficial interest on the New York Stock Exchange onMarch 14, 2000.June 28, 2002; 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 March14, 2000 17,658,54625, 2003, 23,764,124 shares of theRegistrant's Common SharesRegistrant’s common shares ofBeneficial Interest,beneficial interest, $0.01 par value, were outstanding.Portions of the annual shareholder report for the year ended December 31,
19992002 are incorporated by reference into Parts I and II of this report and portions of the proxy statement of the Registrant for its20002003 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
FORWARD-LOOKING STATEMENTS
This Form 10-K contains
"forward-looking"“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 thebusiness. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Theseuse of words such as “may,” “will,” “should,” “expect,” “estimate” or other comparable terminology. Forward-looking statements arenot guarantees of future performance, events or results and involve potentialinherently subject to risks anduncertainties. Accordingly,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 differmaterially. We undertake no obligation to publicly update anymaterially from those discussed in the forward-lookingstatements, whether as a result of new information, future events or otherwise.statements. Importantfactsfactors that may affect these expectations, estimatesorand 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 anddevelopment;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 our joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with our objectives; governmental actions andinitiativesinitiatives; and environmental requirements. For further information on factors that could impact 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
OUR COMPANY
Corporate Office Properties Trust ("COPT") isGeneral. We are a
fully integratedfully-integrated and self-managed real estate investment trust("REIT"(“REIT”). We focusthat focuses principally on the ownership, management, leasing, acquisition and development of suburban officebuildingsproperties located in select submarkets in the Mid-Atlantic region of the United States. As of December 31,1999, we: - - owned 77 suburban2002, we owned:•110 office properties in Maryland, Pennsylvania,
andNew Jersey and Virginia containing approximately5.98.9 million rentable square feet- - owned two retail properties containing approximately 191,000 rentable square feet, - - achieved a 97.5% occupancy rate on our properties, - - had construction underway on five new buildings totaling approximately 407,000 square feetin operations that were49% pre-leased and redevelopment underway on a 57,000 square foot existing building93% occupied;•land parcels totaling 124 acres that
was 100% pre-leased, and - - owned options to purchase 72 acres of landwere contiguous to certain of ourofficeoperating propertiesfrom related parties.and potentially developable into approximately 2.0 million square feet; and•interests in five real estate joint ventures, which in aggregate were constructing five buildings to contain approximately 281,000 square feet and developing two additional land parcels totaling 14 acres.
We conduct almost all of our operations through our
Operating Partnership,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 has three subsidiaries: Corporate Realty Management, LLC (“CRM”), Corporate Development Services, LLC (“CDS”) and Corporate Cooling and Controls, LLC (“CCC”). CRM manages our properties and also provides corporate facilities management for select third parties. CDS provides construction and development services predominantly to us. CCC provides heating and air conditioning installation, maintenance and repair services. COMI owned 100% of these subsidiaries as of December 31, 2002.Interests in our Operating Partnership are in the form of
Commoncommon andPreferred Units.preferred units. As of December 31,1999,2002, we owned approximately60%71% of the outstandingCommon Unitscommon units and approximately70%81% of the outstandingPreferred Units.preferred units. The remainingCommoncommon andPreferred Unitspreferred units in our Operating Partnership were owned by third parties, which included certain of our officers andtrustees. The Operating Partnership also owns the principal economic interest and, collectively with our Chief Executive Officer and Chief Operating Officer, 49.5% of the voting stock of Corporate Office Management, Inc. ("COMI"). COMI provides us with asset management and managerial, financial and legal support. COMI also has three subsidiaries: Corporate Realty Management, LLC ("CRM"), Corporate Development Services, LLC ("CDS") and Martin G. Knott and Associates, LLC ("MGK"). CRM manages approximately 16.6 million square feet for us and for third parties as of December 31, 1999 and also provides corporate facilities management. CDS provides construction and development services predominantly to us. MGK provides heating and air conditioning maintenance and repair services. COMI owns 75% of CRM, 100% of CDS and 80% of MGK.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
federalFederal 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 itcurrentlydistribute to its shareholders at least95%90% of its annual taxable income (excluding net capital gains).Our executive offices are located at 8815 Centre Park Drive, Suite 400, Columbia,
MDMaryland 21045 and our telephone number is (410) 730-9092.3SIGNIFICANT 1999 DEVELOPMENTS During 1999, we acquired 29 suburban office properties. A summaryCorporate Office Properties Trust’s Internet address is www.copt.com. The information on our Internet site is not part of
these acquisitions follows (dollars in thousands):
Number Date of of Total Rentable Initial Project Name Location Acquisition Buildings Square Feet Cost - --------------------------------- -------------------- ----------- ----------- -------------- --------Airport Square XXI Linthicum, MD 2/23/99 1 67,913 $ 6,751 Parkway Crossing Properties Hanover, MD 4/16/99 2 99,026 9,524 Commons Corporate Center (1) Hanover, MD 4/28/99 8 250,413 25,442 Princeton Executive Center Monmouth Junction, NJ 6/24/99 1 61,300 6,020 Gateway Central (2) Harrisburg, PA 8/12/99 3 55,726 5,960 Gateway International (3) Linthicum, MD 11/18/99 2 198,438 24,316 Corporate Gateway Center (4) Harrisburg, PA 12/3/99 9 417,138 40,082 Timonium Business Park Timonium, MD 12/21/99 2 233,623 30,001 Brown's Wharf (5) Baltimore, MD 12/21/99 1 103,670 10,607(1) Does not include $400 allocated to projects under construction and $50 relating to land under a ground lease. (2) Acquired 89% ownership interest from an officer and Trusteethis report. We make available on our Internet site free ofours. (3) Does not include $1,973 allocated to projects under construction. (4) Acquired 49% interestcharge our annual report onSeptember 15, 1999. Acquired remaining 51% interest on December 3, 1999. (5) The Brown's Wharf property was sold on 6/24/99 and then contributed into the Operating Partnership by the purchaser on 12/21/99 (see Note 4 to the consolidated financial statements as of and for the year ended December 31, 1999 included in Exhibit 13.1 to thisForm 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K andincorporated by reference).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 2002 Developments
During
1999,2002,wealso acquired sixcompleted the following:•Acquired nine office buildings totaling 839,364 square feet for $107.3 million, three parcels of land
that are contiguous to certain of our operating propertiesfor $8.2 million and a57,000 square foot warehouse facilityleasehold interest carrying a right to purchase an additional parcel of land for $466,000. Of the office buildings acquired, two were located inSouth Brunswick, New Jersey that we are redeveloping into office space. During 1999, we completedNorthern Virginia, six in the Baltimore/Washington Corridor and one in Suburban Washington, D.C. These acquisitions were financed using $62.6 million in borrowings from our secured revolving credit facility with Bankers Trust Company (the “Revolving Credit Facility”), $46.7 million from new and assumed mortgage loans and cash reserves for the balance.•Completed the construction of
twofive office buildings in the Baltimore/Washington Corridor totaling202,219410,551 squarefeet. The office buildings are located in Annapolis Junction, Maryland and Columbia, Maryland.feet (excluding the construction activities of unconsolidated real estate joint ventures). Costs incurred on thesepropertiesbuildings through December 31,19992002 totaled$23.2$66.0 million.We also completed an expansion project that increased the rentable square footage of one of our properties by 6,350 square feet. As ofOn December 31,19992002, we also had construction activities underway onfiveone newbuildingsbuilding totaling 123,743 square feet that was 60% operational andredevelopment underway on63% leased. We estimate that land and construction costs upon completion of this project will total approximately $23.1 million, of which $21.1 million was incurred through December 31, 2002.•Sold an
existing building. We sold nine properties during 1999office building and three land parcels for$53.5$10.6 million,generatingproviding $2.3 million in mortgage loans to the purchasers. The net proceeds from these sales afterproperty level debt repayments,transaction costs andoperating revenue and cost pro rations of $31.2 million. A summary of these sales follows (dollars in thousands):
Property Date of Total Rentable Sales Project Name Location Type (1) Sale Square Feet Price - --------------------- ------------------ -------- ------- -------------- ---------Cranberry Square Westminster, MD R 1/22/99 139,988 $ 18,900 Delafield Retail Delafield, WI R 2/26/99 52,800 3,303 Indianapolis Retail Indianapolis, IN R 3/09/99 67,541 5,735 Plymouth Retail Plymouth, MN R 3/09/99 67,510 5,465 Glendale Retail Glendale, WI R 5/04/99 36,248 1,900 Peru Retail Peru, IL R 6/16/99 60,232 3,750 Browns Wharf (2) Baltimore, MD O 6/24/99 103,670 10,575 Oconomowoc Retail Oconomowoc, WI R 6/25/99 39,272 2,575 Brandon One Riveria Beach, MD O 12/30/99 38,513 1,260(1) "R" indicates retail property; "O" indicates office property. (2) The Brown's Wharf property was sold on 6/24/99 and then contributed intotheOperating Partnershiploans provided bythe purchaser on 12/21/99 (see Note 4us to theconsolidated financial statements aspurchasers totaled $7.5 million. We realized $1.7 million in gains from these sales.•Participated in an offering of
and for the year ended December 31, 1999 included in Exhibit 13.1 to this Form 10-K and incorporated by reference). 4A summary10,961,000 common shares ofour significant financing activities during 1999 follows: - - we completed the sale of 1,250,000 Series B Cumulative Redeemable Preferred Sharesbeneficial interest (“common shares”) to the public at a price of$25.00$12.04 pershare, - -share; Constellation Real Estate, Inc. (“Constellation”) sold 8,876,172 of these shares and weissued 974,662 Series C Preferred Units insold 2,084,828 of these shares. With the completion of this transaction, Constellation, which had been our largest shareholder, no longer owns any of our shares. We contributed the net proceeds from the shares sold by us to our Operating Partnershipvalued at $25.00 per share, - - we issued 577,251 Common Unitsinourexchange for 2,084,828 common units. The Operating Partnership- - we received $165.2used most of the proceeds to pay down our Revolving Credit Facility.•Obtained $213.8 million in borrowings from new
borrowing arrangements,mortgage loans, including $160.8 million in fixed-rate, long-term mortgage loans that bear interest at a weighted average interest rate of 6.49% and- -had a weighted average term of 8.0 years. We used $116.8 million of the proceeds from these borrowings to repay other loans, $51.3 million to finance acquisitions, $40.8 million to pay down our Revolving Credit Facility and the balance to fund cash reserves.•Entered into an interest rate swap agreement with SunTrust Bank that fixes the one-month LIBOR base rate at 2.31% on a notional amount of $50.0 million. This swap agreement became effective on January 2, 2003 and carries a two-year term.
Subsequent Events
From January 1, 2003 to March 20, 2003, we
obtainedcompleted the following:•Entered into an interest rate swap agreement with Deutsche Bank AG that fixes the one-month LIBOR base rate at 1.52% on a notional amount of $50.0 million. This swap agreement became effective on January 7, 2003 and carries a one-year term.
•Entered into a secured revolving credit agreement with Wachovia Bank, National Association, for a maximum principal amount of $25.0 million
line of credit with Prudential Securities Credit Corporation bearingthat carries an interest rate of LIBOR plus1.5%1.65% to 2.15%, depending onoutstandingthe amount of debt we carry relative to our total assets. The credit facility matures in two years, although individual borrowings(no borrowings were madeunderthisthe loanduring 1999). SUBSEQUENT EVENT On February 10, 2000, we enteredmature one year from the borrowing date.•Completed the first phase of a $29.8 million, 108-acre land parcel purchase from Constellation. The first phase was acquired for $21.0 million using primarily an $18.4 million seller-provided mortgage loan.
•Acquired an office building located in Annapolis, Maryland totaling approximately 155,000 square feet for $18.0 million. This acquisition was financed primarily using proceeds from our Revolving Credit Facility.
•Contributed an office building located in Fairfield, New Jersey into a
$6.9 million construction loan facility with Summit Bank to finance the redevelopment of a 57,000 square foot warehouse facility into office space. This loan bears interest at LIBOR plus 1.75%. The loan matures on February 28, 2001 and may be extendednewly-created joint venture in exchange for atwo-year period, subject20% ownership interest in the joint venture and a cash payment of $20.0 million. We used $3.3 million of the cash proceeds tocertain conditions. OUR OPERATING STRATEGYfund a loan to an entity related to our joint venture partner and most of the balance to pay down our Revolving Credit Facility.4
Corporate Objectives and Strategies
Our primary
businessobjectives are to achieve sustainable long-term growth in funds from operations per share and to maximize long-term shareholder value. We seek to achieve these objectivesby implementing our focused operating and growth strategies. Key elements of this strategy include: SUBURBAN OFFICE FOCUS. We focusthrough focusing on the ownership, management, leasing, acquisition and development of suburban office properties.We believe office buildings currently offer the strongest fundamentalsImportant elements ofany real estate property type, and suburban office properties offer us very attractive investment opportunities. The three key factors driving the strong fundamentals of suburban office propertiesour strategy are(i) increasing rental rates, (ii) low vacancy rates, and (iii) a limited supply of new office product. Additionally, we believe that many companies are relocatingset forth below:Geographic Focus. Our strategy is to
and expanding in, suburban locations because of total lower costs, proximity to residential housing and better quality of life. GEOGRAPHIC AND SUBMARKET FOCUS. We focus on operatingoperate in select, demographically strong and growingmarkets,submarkets within the Mid-Atlantic region,of the United States,where we believe wecan achievehave achieved the critical mass necessary to maximize management efficiencies, operating synergiestenant servicesand competitive advantages through our acquisition, property management and development programs. By focusing withinspecific submarketsselected regions where our management has extensive experience and market knowledge, we believe that we can achievesubmarketregional prominence that will lead to better operating results.OFFICE PARK FOCUS.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.
CORPORATE TENANTS.Corporate Tenants. We focus on leasing our office properties to large, high-quality
corporations withcompanies that are financially sound market leaders in their respective fields and have significant 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 low-cost provider andthelandlord of choice in our targeted markets.ACQUISITION STRATEGIES.Acquisition Strategies. We actively pursue the acquisition of suburban office properties through
oura three-part acquisition strategy. This strategy includes targeting: (i) entity acquisitions of significant portfolios along with their management to establish prominent ownership positions in newsubmarketsneighboring regions and enhance our managementinfrastructure and local expertise,infrastructure; (ii) portfolio purchases to enhance our existing submarket positions as well as enter selective new5submarkets,neighboring regions; and (iii) opportunistic acquisitions of individual properties in our existingsubmarkets.regions. We seek to make acquisitions at attractive yields and below replacement costs. We alsolook atseek to increase cash flow and enhance the underlying value of each acquisitionfor opportunities to repositionthrough repositioning the properties andachieve rental increases through re-leasing activities. PROPERTY DEVELOPMENT STRATEGIES.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
whenas 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 incloseproximity to our existing properties. We believe that developing such sites enhances our ability to effectively meet tenant needs and efficiently provide critical tenant services.THIRD PARTY MANAGEMENT. In additionTenant Services. We seek to
operatingcapitalize on our geographic focus andleasingcritical mass of properties in ourportfolio, we provide, through CRM, property management and a full-range of fee-basedcore regions by providing high level, comprehensive services toa wide variety of institutional owners.our tenants. We conduct our tenant services activities through our subsidiary Service Companies. We believethis activity provides us withthat providing such services is anadditional sourceintegral part ofstable income and gives us competitive advantages. These advantages include enhanced tenant satisfaction and property performance and lead to potential tenant expansions, acquisitions and build-to-suit development opportunities. Additionally, we believe CRM's established infrastructure has the capacity to support a larger asset base and will enhanceour ability toexpand our portfolio in existing and new submarkets without significantly increasing our overhead. TENANT SERVICES. Our investment through COMI in CRM, CDS and MGK has played a vital role in maintaining ourachieve consistently high levels of tenant satisfaction and retention.We believe that further expanding our tenant service capabilities will continue to contribute positively to the operations of our properties and become an additional source of revenue and earnings. During 2000, CRM acquired 100% of the interests in Corporate Realty Advisors, an entity that provides lease audit services. Other services we expect to begin providing in 2000 include energy management and concierge services. INTERNAL GROWTH STRATEGIES.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, (iii) renewing tenant leases and re-tenanting at increased rents where market conditions permit and (iv) expanding our
third party property management business and othertenant 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 POLICYFinancing Policy
We pursue a capitalization strategy aimed at maintaining a flexible capital structure in order to facilitate consistent growth and performance
through all real estate and economicin the face of differing market conditions. Key components of our policyinclude: DEBT STRATEGY.are set forth below:5
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 mature and generallymore stable market,for real estate companies, which providesproviding 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 ratefixed-rate debt, which we believe enhances the stability of our cash flow. On a consolidated basis, we seek to maintain aminimumdebt service coverage ratio of1.6EBITDA (operating income before mortgage and other interest, income taxes, depreciation and amortization) to1.0,debt service (interest expense plus capitalized interest and scheduled principal amortization) in excess of 1.6x, which we believe is generally consistent with the current minimum investment grade requirement for mortgages securing commercial real estate. We believe that this ratio is appropriate for a seasoned portfolio of suburban officeproperties. EQUITY STRATEGY.buildings. However, despite our current intention to maintain this policy, we are not obligated to do so and we may change this policy without shareholder consent.Equity Strategy. When conditions warrant, we issue common and preferred equity. We also seek to maximize the benefits of our Operating
PartnershipPartnership’s organizational structure byemphasizingutilizing, where appropriate, the issuance of units in our Operating Partnershipunitsas 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 PAYABLEMortgage Loans Payable
For information relating to future maturities of our mortgage loans payable, you should refer to the
"Management'ssection entitled “Management’s Discussion and Analysis of Financial Condition and Results ofOperations"Operations” and Note78 totheour Consolidated Financial Statements, both of which are included in Exhibit 13.1 to this Form 10-Kwhich isand are incorporated herein by reference.6INDUSTRY SEGMENTSIndustry Segments
We operate in one industry segment: suburban office real estate. Our suburban office real estate operations have
five segments:six geographical segments all located in the Mid-Atlantic region of the United States: Baltimore/Washington Corridor,office,Greater Philadelphia,office,Northern/Central New Jersey,office,Greater Harrisburg,officePennsylvania, Northern Virginia andretail.Suburban Washington, D.C. For information relating to these geographic segments, you should refer to Note13 of15 to our Consolidated Financial Statements included in Exhibit 13.1 to this Form 10-K which is incorporated herein by reference.EMPLOYEESEmployees
We
together with COMI and its subsidiaries,employed149171 persons as of December 31,1999. COMPETITION2002. We believe that our relations with our employees are good.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,
our competitors are building additional propertiesinthe markets in which our properties are located.turn, led to downward pressure on rental rates. Some ofthesethe properties competingpropertieswith 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 ourproperties. If the market doesregions do notabsorb newly constructed space, market vacancies will increase and market rents may decline. As a result,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 ourproperties and may be forced to lower the rents we charge on leases to compete effectively.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
the amount ofproperties that we have targeted for acquisition, we may not be able to meet our property acquisition and development goals.MAJOR TENANTS6
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, 2002.
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,
1999,2002, ten tenants accounted for45.0%44.1% of our total annualizedoffice rents. Tworental revenue and three of these tenants accounted for approximately23.3%25.2% of our total annualizedoffice rents.rental revenue. Our largest tenant is the United StatesFederal government,Government, two agencies of which lease space in1320 of our office properties. These leases represented approximately15.5%14.2% of our total annualizedoffice rentsrental revenue as of December 31,1999.2002. Generally, these government leases provide for one-year terms or provide for early termination rights. The government may terminate its leases if, among other reasons, the Congress of the United States fails to provide funding. The Congress of the United States has appropriated funds for these leases through September 2003. Our second largest tenant, AT&T Local Services, which combined with its affiliates represented 6.0% of2000.our total annualized rental revenue as of December 31, 2002, occupies space in six of our properties. Thesecondthird largest tenant, Unisys Corporation, represented7.8%5.0% of our total annualizedoffice rentsrental revenue as of December 31,1999 and 16.9% of our 1999 net operating income since Unisys pays all of its property operating expenses directly. Unisys occupies2002, occupying space in three of ourofficeproperties. Ifeither the Federal government or Unisys failsany of our three largest tenants fail to make rental payments to us, or if theFederal governmentUnited 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 expected distributions toshareholdersshareholders.As of December 31, 2002, the United States defense industry (comprised of the United States Government and defense contractors) accounted for approximately 37.6% of our total annualized rental revenue, including most of the 14.2% derived from leases with two agencies of the United States Government as referenced above. We have become increasingly reliant on defense industry tenants, particularly since the events of September 11, 2001. Furthermore, we expect the percentage of our total annualized rental revenue derived from the defense industry to 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 or, in the case of the United States Government, 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 expected distributions to our shareholders.
We rely on the ability of our tenants to pay rent and would be
materiallyharmed 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 adverselyaffected. GEOGRAPHICAL CONCENTRATIONaffect 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, and we may therefore suffer economic harm as a result of adverse conditions in that region. All of our
officeproperties are located in the Mid-Atlantic region of the United States, and56.4%as of December 31, 2002, our properties located in7
the Baltimore/Washington Corridor accounted for 62.2% of our total
revenues forannualized rental revenue. Our properties are also typically concentrated in office parks in which we own most of theyear ended December 31, 1999 was earned from our office properties located in the Baltimore/Washington Corridor.properties. Consequently, we do not have a broadgeographicalgeographic distribution of our properties. As a result, a decline in the real estate market or general economic conditionsgenerallyin the Mid-Atlantic region, the Baltimore/Washington Corridor or the office parks in which our properties are located could havea materialan adverseaffecteffect on ouroperations. DEVELOPMENT AND CONSTRUCTION ACTIVITIESfinancial position, results of operations, cash flows and ability to make expected distributions to our shareholders.We would suffer economic harm if we were unable to renew our leases on favorable terms. When leases expire 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 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, 2002 that were subject to scheduled lease expirations in each of the next five years:
2003
9.3
%
2004
11.6
%
2005
10.6
%
2006
9.8
%
2007
17.2
%
Our government leases generally provide for early termination rights; the percentages reported above assume no exercise of such early termination rights.
We may not be able to compete successfully with other entities that operate in our industry. 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 meet our short-term capital needs.
Our business strategy includes the acquisition of properties, which may be hindered by various circumstances. 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 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 target for acquisition, we may not be able to meet our property acquisition and development goals. Moreover, we may incur costs on unsuccessful acquisitions that we will not be able to recover. The operating performance of our property acquisitions may also fall short of our expectations, which could have an adverse effect on our financial performance and ability to make expected distributions to our shareholders.
We may be unable to execute our plans to develop and construct additional properties. Although the majority of our investments are in currently leased properties,
to a lesser extentwe also develop and construct properties, including somewhichthat are not fully pre-leased. When we develop and construct properties, werunassume therisksrisk thatdevelopmentactual costs will exceed our budgets, that we will experience constructionandor development delays and thatprojectprojected leasing will notoccur. 7ENVIRONMENTAL MATTERSoccur, any of which could adversely affect our financial performance and ability to make expected 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. 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
8
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
certainhazardous 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 similar reasons.VariousIn addition, various lawsalsoimpose 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 liabilitywhether or noton an entity even if the facilityis or everwas not owned or operated by the entity.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, 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 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 fines being levied 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 2003. Due largely to the terrorist attacks on September 11, 2001, the insurance industry is reportedly changing its risk assessment approach and cost structure. These 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 higher debt levels than most other REITs. However, these high 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, 2002, our total outstanding debt was $705.1 million. Our debt to total market capitalization was 54.4% based upon the $14.03 closing per share market price of our common shares on December 31, 2002. Total market capitalization is the sum of (1) total debt, (2) the value of all outstanding common shares and common units in our Operating Partnership at the $14.03 market price and (3) the total liquidation value of preferred shares and preferred units in our Operating Partnership.
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:
9
•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
person. 8ITEMdebt 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.
If short-term interest rates were to rise, our debt service payments would increase, which would lower our net income and could decrease our distributions to our shareholders. We use interest rate swap and interest rate cap agreements to reduce the impact of interest rate changes. As of December 31, 2002, we had an interest rate swap agreement in place on a notional amount of $100.0 million; this agreement expired in January 2003. We had two new swap agreements become effective in January 2003 on a total notional amount of $100.0 million. Decreases in interest rates would result in increased interest payments due under interest rate swap agreements in place and could result in the Company’s management recognizing a loss and remitting a payment to unwind such agreements. As of December 31, 2002, approximately 31.8% of our total debt had adjustable interest rates, excluding effects of the outstanding interest rate swap agreement; this percentage would decrease to 17.6% when including the effect of the interest rate swap agreement in effect at December 31, 2002.
We must refinance our mortgage debt in the future. As of December 31, 2002, our scheduled debt payments over the next five years, including maturities, were as follows:
Year
Amount
(in thousands)
2003
$
104,718
(1)
2004
163,052
(2)
2005
25,913
2006
69,610
2007
59,736
(1) Includes maturities of $10.9 million in April, $16.0 million in August and $36.0 million in November, each of which may be extended for a one-year period, subject to certain conditions; also includes a $12.0 million maturity in July that may be extended for two six-month terms, subject to certain conditions.
(2) Includes maturities of $128.0 million in March and $25.8 million in August, each of which may 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.
10
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 and Series C Preferred Units in our Operating Partnership.
Our ownership limits are important factors. Our Declaration of Trust limits ownership of our common shares by any single shareholder to 9.8% of the number of the outstanding common shares or 9.8% of the value of the outstanding common shares, whichever is more restrictive. Our Declaration of Trust also limits ownership by any single shareholder of our common and preferred shares in the aggregate to 9.8% of the aggregate value of the outstanding common and preferred shares. We call these restrictions the “Ownership Limit.” Our Declaration of Trust allows our Board of Trustees to exempt shareholders from the Ownership Limit, and our Board of Trustees previously has exempted the foreign trust owning all of our Series D 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 three-year term. Such staggered three-year 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 net 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
11
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 and would impair our ability to raise capital. 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 net capital gain), 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.
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; interest rates; and market perception of our financial condition, performance, dividends and growth potential. Congress could also make changes to the tax laws and regulations that make it less advantageous for investors to invest in REITs.
The average daily trading volume of our common shares during 2002 was approximately 89,000 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 interest 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 Trustees and 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 the common shares or our ability to pay expected dividends or distributions.
12
The following table provides certain information about our office properties as of December 31,
1999:
Total Rental Percentage Percentage Revenue per Year Occupied Total of Total Occupied Built/ Rentable as of Rental Rental Square Feet Major Tenants Property Location Renovated Square Feet 12/31/99(1) Revenue(2) Revenue (3) (4) (10% or more Rentable Sq. Ft.) - ------------------------------------------------------------------------------------------------------------------------------------BALTIMORE/WASHINGTON CORRIDOR: ANNAPOLIS JUNCTION, MD 2730 Hercules Road 1990 240,336 100.00% $4,604,196 4.98% $19.16 U.S. Department of Defense (100%) 134 National Business Pkwy 1999 93,482 100.00% 1,834,249 1.98% 19.62 Booz Allen Hamilton (74%) Ameritrade Holding Corporation (26%) 133 National Business Pkwy 1997 88,666 100.00% 1,737,667 1.87% 19.60 e.spire Communications (67%) Applied Signal Technology (33%) 141 National Business Pkwy 1990 86,964 98.42% 1,508,830 1.63% 17.63 ITT Industries (46%) J.G. Van Dyke & Associates (20%) Harris Data Services Corp (14%) 135 National Business Pkwy 1998 86,863 95.41% 1,566,286 1.69% 18.90 Credit Management Solutions (82%) 131 National Business Pkwy 1990 68,906 98.26% 1,275,170 1.38% 18.83 TASC (36%) e.spire Communications (35%) U.S. Department of Defense (15%) Intel Corporation (12%) LINTHICUM, MD 1306 Concourse Drive 1990 113,831 97.46% 2,218,864 2.39% 20.00 PricewaterhouseCoopers (33%) AT&T Local Services (26%) Quest Communications (13%) 900 Elkridge Landing Road 1982 97,139 100.00% 1,682,665 1.81% 17.32 First Annapolis Consulting (51%) Booz Allen Hamilton (38%) 1199 Winterson Road 1988 96,636 100.00% 1,534,245 1.65% 15.88 U.S. Department of Defense (100%) 1302 Concourse Drive 1996 84,607 86.41% 1,422,386 1.53% 19.46 AETNA US Healthcare (20%) Lucent Technologies (19%) 881 Elkridge Landing Road 1986 73,572 100.00% 866,280 0.93% 11.77 U.S. Department of Defense (100%) 1099 Winterson Road 1988 70,569 100.00% 1,139,244 1.23% 16.14 Preferred Health Network (63%) 1190 Winterson Road 1987 68,567 100.00% 1,148,775 1.24% 16.75 Chesapeake Appraisal (58%) U.S. Department of Defense (15%) Motorola (14%) 849 International Drive 1988 67,976 98.41% 1,158,983 1.25% 17.33 EMC Corporation (13%) Coca Cola Bottling (11%) U.S. Department of Defense (11%) 1201 Winterson Road 1985 67,903 100.00% 684,107 0.74% 10.07 Ciena Corporation (100%) 911 Elkridge Landing Road 1985 67,806 100.00% 1,104,649 1.19% 16.29 U.S. Department of Defense (79%) Nationwide Mutual Insurance (21%) 930 International Drive 1986 57,140 100.00% 626,072 0.68% 10.96 Ciena Corporation (100%) 900 International Drive 1986 57,140 100.00% 632,398 0.68% 11.07 Ciena Corporation (100%) 921 Elkridge Landing Road 1983 54,057 100.00% 861,935 0.93% 15.94 Aerotek (100%) 939 Elkridge Landing Road 1983 51,953 100.00% 796,952 0.86% 15.34 Agency Holding (68%) U.S. Department of Defense (24%) 800 International Drive 1988 50,612 100.00% 736,150 0.79% 14.54 Ciena Corporation (100%) COLUMBIA, MD 7200 Riverwood Drive 1986 160,000 100.00% 2,770,640 2.99% 17.32 U.S. Department of Defense (100%) 6940 Columbia Gateway Drive 1999 108,737 60.51% 1,428,314 1.54% 21.71 Magellan Behavioral Health (26%) Remedy Corporation (14%) Reliance Insurance (13%) 6950 Columbia Gateway Drive 1998 107,778 100.00% 2,214,159 2.39% 20.54 Magellan Behavioral Health (100%) 6740 Alexander Bell Drive 1989/1992 59,569 100.00% 1,355,651 1.46% 22.76 Johns Hopkins University (70%) Amtel Corporation (16%) Sky Alland Research (13%) 8815 Centre Park Drive 1987 53,635 100.00% 1,079,595 1.16% 20.13 Corporate Office Management (25%)9
Total Rental Percentage Percentage Revenue per Year Occupied Total of Total Occupied Built/ Rentable as of Rental Rental Square Feet Major Tenants Property Location Renovated Square Feet 12/31/99(1) Revenue(2) Revenue (3) (4) (10% or more Rentable Sq. Ft.) - ------------------------------------------------------------------------------------------------------------------------------------Lipman, Frizzel & Mitchell (16%) Reap/REMAX (16%) Corporate Realty Management, LLC(13%) H.C. Copeland Associates (10%) 6716 Alexander Bell Drive 1989/1992 51,980 91.18% 827,504 0.89% 17.46 Sun Microsystems (87%) 6760 Alexander Bell Drive 1989/1992 37,248 100.00% 713,441 0.77% 19.15 Cadence Design Systems (65%) HANOVER, MD 7467 Ridge Road 1990 73,773 100.00% 1,532,909 1.65% 20.78 Travelers Casualty and Surety (55%) 7318 Parkway Drive 1984 59,204 100.00% 632,627 0.68% 10.69 U.S. Department of Defense (100%) 1340 Ashton Road 1989 46,400 100.00% 595,351 0.64% 12.83 Lockheed Martin Corporation (100%) 7321 Parkway Drive 1984 39,822 100.00% 657,063 0.71% 16.50 U.S. Department of Defense (100%) 1334 Ashton Road 1989 37,565 96.77% 557,687 0.60% 15.34 Science Applications International Corp. (60%) Merrill Corporation (37%) 1331 Ashton Road 1989 29,936 100.00% 388,490 0.42% 12.98 Booz Allen Hamilton (71%) Aerosol Monitoring (29%) 1350 Dorsey Road 1989 20,021 90.16% 253,713 0.27% 14.06 Aerotek (23%) Noodles (14%) Hunan Pagoda (12%) Electronic System (11%) 1344 Ashton Road 1989 16,865 100.00% 334,004 0.36% 19.80 Titan Systems (28%) Student Travel Services (23%) AMP Corporation (16%) Jani - King of Baltimore (14%) Citizens National Bank (12%) 1341 Ashton Road 1989 15,825 70.87% 114,484 0.12% 10.21 Supertots Childcare (71%) 1343 Ashton Road 1989 9,962 100.00% 120,753 0.13% 12.12 Nauticus Corporation (100%) Pepsi-Cola Bottling (17%) LAUREL, MD 14502 Greenview Drive 1988 71,873 100.00% 1,239,028 1.34% 17.24 Sky Alland Research (26%) Greenman-Pedersen (15%) 14504 Greenview Drive 1985 69,194 88.39% 1,058,220 1.14% 17.30 Great West Life & Annuity (17%) Laurel Consulting Group (16%) Moore USA (11%) TIMONIUM, MD 375 W. Padonia Road 1986 100,804 100.00% 1,579,559 1.70% 15.67 Deutsche Bank Alex. Brown (84%) 9690 Deerco Road 1988 132,819 91.10% 2,483,260 2.68% 20.52 Fireman's Fund Insurance (22%) AirTouch Paging of Virginia (12%) OXON HILL, MD 6009-6011 Oxon Hill Road 1990 181,236 100.00% 3,497,148 3.78% 19.30 U.S. Department of Treasury (47%) Constellation Real Estate (22%) BALTIMORE, MD 1615 - 1629 Thames Street 1989 103,670 100.00% 1,655,549 1.79% 15.97 Johns Hopkins University (37%) --------- --------- ----------- ------- ------- Lista's (14%) Total Baltimore/Washington Corridor 3,332,641 97.08% $56,229,252 60.64% $17.38 --------- --------- ----------- ------- ------- Greater Philadelphia: BLUE BELL, PA 753 Jolly Road 1960/92-94 419,472 100.00% $3,572,761 3.85% $ 8.52 Unisys (100%) 785 Jolly Road 1970/1996 219,065 100.00% 2,618,611 2.82% 11.95 Unisys with 100% sublease to Merck 760 Jolly Road 1974/1994 208,854 100.00% 2,150,891 2.32% 10.30 Unisys (100%) 751 Jolly Road 1960/92-94 112,958 100.00% 962,095 1.04% 8.52 Unisys (100%) --------- --------- ----------- ------- ------- Total Greater Philadelphia 960,349 100.00% $9,304,358 10.03% $ 9.69 --------- --------- ----------- ------- -------10
Total Rental Percentage Percentage Revenue per Year Occupied Total of Total Occupied Built/ Rentable as of Rental Rental Square Feet Major Tenants Property Location Renovated Square Feet 12/31/99(1) Revenue(2) Revenue (3) (4) (10% or more Rentable Sq. Ft.) - ------------------------------------------------------------------------------------------------------------------------------------GREATER HARRISBURG: HARRISBURG, PA 2605 Interstate Drive 1990 84,268 100.00% $1,200,468 1.30% $14.25 Commonwealth of Pennsylvania (56%) Health Central (32%) 6345 Flank Drive 1989 69,443 100.00% 905,718 0.99% 13.04 Allstate Insurance (30%) First Health Services (24%) LWN Enterprises (15%) Coventry Health Care (13%) 6340 Flank Drive 1988 68,200 100.00% 690,578 0.74% 10.13 Lancaster Lebanon (73%) Merkert Enterprises (27%) 2601 Market Place 1989 67,753 100.00% 1,190,262 1.28% 17.57 Penn State Geisinger Systems (36%) Ernst & Young LLP (26%) Texas Eastern Pipeline Company (26%) 5035 Ritter Road 1988 56,556 100.00% 710,352 0.77% 12.56 Commonwealth of Pennsylvania (82%) 6400 Flank Drive 1992 52,439 100.00% 743,503 0.80% 14.18 PA Coalition Against Violence (51%) REM Organization (27%) Mellon Bank (16%) 6360 Flank Drive 1988 46,500 100.00% 634,091 0.68% 13.64 Ikon Office Solutions (20%) Health Spectrum Medical (15%) Sentage / Muth & Mumma (15%) Computer Applications (15%) First Industrial Realty Trust (12%) 6385 Flank Drive 1995 32,800 100.00% 421,094 0.45% 12.84 Cowles Enthusiast Media (34%) Orion Capital Companies (26%) Pitney Bowes (21%) Orion Consulting (11%) 5070 Ritter Road - Building A 1989 32,000 100.00% 466,700 0.50% 14.58 Maryland Casualty Company (100%) 6405 Flank Drive 1991 32,000 100.00% 433,156 0.47% 13.54 Cowles Enthusiast Media (100%) 6380 Flank Drive 1991 32,000 87.50% 388,691 0.42% 13.88 McCormick, Taylor & Associates (21%) Myers & Stauffer (17%) Critical Care System (13%) SV Research (12%) 5070 Ritter Road - Coram (10%) Building B 1989 28,000 81.09% 258,284 0.28% 11.38 Vale National Training Center (63%) Pennsylvania Trauma System Foundation (18%) 95 Shannon Road 1999 21,976 100.00% 282,071 0.30% 12.84 New World Pasta (100%) 75 Shannon Road 1999 20,887 81.45% 222,609 0.24% 13.09 McCormick, Taylor & Associates (81%) 85 Shannon Road 1999 12,863 100.00% 165,102 0.18% 12.84 New World Pasta (100%) --------- --------- ----------- ------- ------- Total Greater Harrisburg 657,685 98.00% $8,712,679 9.40% $13.52 --------- --------- ----------- ------- ------- Northern/Central New Jersey: SOUTH BRUNSICK, NJ 431 Ridge Road 1958/1998 170,000 100.00% $3,369,678 3.64% $19.82 IBM with 84% sublease to AT&T Local 429 Ridge Road 1966/1996 142,385 100.00% 2,762,313 2.98% 19.40 AT&T Local Services (100%) 437 Ridge Road 1962/1996 30,000 100.00% 559,344 0.60% 18.64 IBM with 100% sublease to AT&T Local (100%) CRANBURY, NJ 19 Commerce 1989 65,277 100.00% 1,304,572 1.41% 19.99 The Associated Press (100%) 104 Interchange Plaza 1990 47,142 100.00% 1,046,886 1.13% 22.21 Turner Construction Company (24%) Utica Mutual Insurance Company (15%) Laborer's International Union (13%) Lanier Worldwide (12%) Somerset Real Estate Management (10%) 101 Interchange Plaza 1985 44,185 87.47% 874,400 0.94% 22.63 Ford Motor Credit Company (21%) Arquest (16%) Middlesex County Improvement Authority112002:
Total Rental Percentage Percentage Revenue per Year Occupied Total of Total Occupied Built/ Rentable as of Rental Rental Square Feet Major Tenants Property Location Renovated Square Feet 12/31/99(1) Revenue(2) Revenue (3) (4) (10% or more Rentable Sq. Ft.) - ------------------------------------------------------------------------------------------------------------------------------------(13%) Trans Union Corporation (11%) 47 Commerce 1992/1998 41,398 100.00% 483,603 0.52% 11.68 Somfy Systems (100%) 3 Centre Drive 1987 20,436 100.00% 372,219 0.40% 18.21 Matrix Development Group (100%) 7 Centre Drive 1989 19,466 100.00% 401,020 0.43% 20.60 Paradise Software (22%) System Freight (17%) Compugen (12%) 8 Centre Drive 1986 16,199 100.00% 348,249 0.38% 21.50 AON Risk Services (100%) 2 Centre Drive 1989 16,132 100.00% 418,438 0.45% 25.94 Summit Bancorp (100%) FAIRFIELD, NJ 695 Route 46 1990 158,348 83.59% 2,528,021 2.73% 19.10 Pearson (22%) United Healthcare Services (15%) The Museum Company (12%) Dean Witter Reynolds (12%) 710 Route 46 1985 101,791 94.28% 1,745,021 1.88% 18.18 Midsco (19%) Radian International, LLC (12%) Continental Casualty (12%) Lincoln Financial Group (11%) MONMOUTH, NJ 4301 Route 1 1986 61,300 100.00% 1,176,212 1.27% 19.19 Guest Supply (38%) ---------- --------- ----------- ------- ------- eCOM Server (16%) Ikon Office Solutions (16%) Total Northern/Central New Jersey 934,059 96.00% $17,389,976 18.76% $19.39 ---------- --------- ----------- ------- ------- TOTAL OFFICE PROPERTIES 5,884,734 97.49% $91,636,265 98.83% $15.97 ---------- --------- ----------- ------- -------
Property and Location
Submarket
Year
Built/
Renovated
Rentable
Square
Feet
Occupancy(1)
Total
Rental
Revenue(2)
Total Rental
Revenue per
Occupied
Square Foot (2) (3)
Major Tenants
(10% or more of Rentable Square Feet)Baltimore/Washington Corridor:(4)
2730 Hercules Road
Annapolis Junction, MD
BWI Airport
1990
240,336
100.0
%
$
5,494,249
$
22.86
United States of America (100%)
2711 Technology Drive
Annapolis Junction, MD
BWI Airport
2002
152,000
100.0
%
3,625,200
23.85
Computer Sciences Corporation (100%)
132 National Business Parkway
Annapolis Junction, MD
BWI Airport
2000
118,456
100.0
%
2,529,523
21.35
Ameritrade Holding Corp. (66%);
Computer Sciences Corporation (26%)
2721 Technology Drive
Annapolis Junction, MD
BWI Airport
2000
118,093
100.0
%
2,784,596
23.58
General Dynamics Government Corp. (78%);
United States of America (22%)
2701 Technology Drive
Annapolis Junction, MD
BWI Airport
2001
117,450
100.0
%
2,933,675
24.98
Northrop Grumman Systems (62%);
Titan Systems Corporation (38%)
1306 Concourse Drive
Linthicum, MD
BWI Airport
1990
114,046
96.6
%
2,361,820
21.43
IBM (33%);
Qwest Communications (21%);
AT&T Local Services (13%)
1304 Concourse Drive
Linthicum, MD
BWI Airport
2002
102,964
62.9
%
1,483,405
22.91
Northrop Grumman Corporation (53%);
Debtscape (10%)
870-880 Elkridge Landing Road
Linthicum, MD
BWI Airport
1981
101,785
5.5
%
120,738
21.46
¾
900 Elkridge Landing Road
Linthicum, MD
BWI Airport
1982
97,261
100.0
%
1,866,029
19.19
First Annapolis Consulting (51%);
Booz Allen Hamilton (46%)
1199 Winterson Road
Linthicum, MD
BWI Airport
1988
96,636
100.0
%
1,372,231
14.20
United States of America (100%)
920 Elkridge Landing Road
Linthicum, MD
BWI Airport
1982
96,566
100.0
%
1,460,375
15.12
Ciena Corporation (100%)
134 National Business Parkway
Annapolis Junction, MD
BWI Airport
1999
93,482
100.0
%
2,016,788
21.57
Booz Allen Hamilton (100%)
133 National Business Parkway
Annapolis Junction, MD
BWI Airport
1997
88,666
100.0
%
1,819,547
20.52
United States of America (34%);
Applied Signal Technology, Inc. (33%);
Lockheed Martin Corporation (33%)
141 National Business Parkway
Annapolis Junction, MD
BWI Airport
1990
86,964
100.0
%
1,747,951
20.10
ITT Industries (48%);
Getronics Government Solutions (20%);
Harris Data Services Corp. (14%)
135 National Business Parkway
Annapolis Junction, MD
BWI Airport
1998
86,863
100.0
%
1,777,181
20.46
First American Credit Mgmt. Solutions (82%)
1302 Concourse Drive
Linthicum, MD
BWI Airport
1996
84,607
87.1
%
1,704,121
23.13
Lucent Technologies (31%);
Aetna US Healthcare (20%);
American Express Travel Related Srvs, Inc. (13%)
7467 Ridge Road
Hanover, MD
BWI Airport
1990
74,273
94.3
%
1,432,182
20.44
Travelers Bank & Trust, FSB (49%);
Pro Object (32%);
The Mitre Corporation (13%)
7240 Parkway Drive
Hanover, MD
BWI Airport
1985
74,156
93.9
%
1,369,864
19.67
Deloitte & Touche USA, LLP (21%);
Delmarva Foundation for Medical Research (21%);
Nevamar Company (12%)
881 Elkridge Landing Road
Linthicum, MD
BWI Airport
1986
73,572
100.0
%
1,231,558
16.74
United States of America (100%)
13
Property and Location
Submarket
Year
Built/
Renovated
Rentable
Square
Feet
Occupancy(1)
Total
Rental
Revenue(2)
Total Rental
Revenue per
Occupied
Square Foot (2) (3)
Major Tenants
(10% or more of Rentable Square Feet)1099 Winterson Road
Linthicum, MD
BWI Airport
1988
71,076
100.0
%
1,324,235
18.63
Preferred Health Network (62%)
131 National Business Parkway
Annapolis Junction, MD
BWI Airport
1990
69,039
100.0
%
1,542,116
22.34
Conquest Information Technologies, Inc. (71%);
United States of America (17%);
Intel Corporation (12%)
849 International Drive
Linthicum, MD
BWI Airport
1988
68,758
89.3
%
1,271,943
20.71
First Service Networks, Inc. (13%);
Raytheon Company (11%);
United States of America (11%);
Dames & Moore (10%)
1190 Winterson Road
Linthicum, MD
BWI Airport
1987
68,746
45.2
%
636,375
20.49
United States of America (15%);
General Dynamics (14%);
Travelers Bank & Trust, FSB (14%)
911 Elkridge Landing Road
Linthicum, MD
BWI Airport
1985
68,296
100.0
%
1,262,178
18.48
United States of America (100%)
1201 Winterson Road
Linthicum, MD
BWI Airport
1985
67,903
100.0
%
926,812
13.65
Ciena Corporation (100%)
999 Corporate Boulevard
Linthicum, MD
BWI Airport
2000
67,351
78.7
%
1,278,488
24.13
RAG American Coal Holding (71%)
7318 Parkway Drive
Hanover, MD
BWI Airport
1984
59,204
100.0
%
828,940
14.00
United States of America (100%)
901 Elkridge Landing Road
Linthicum, MD
BWI Airport
1984
57,308
79.3
%
723,470
15.93
State of Maryland (61%);
Institute for Operations Research and Management Sciences (14%)
7320 Parkway Drive
Hanover, MD
BWI Airport
1983
57,176
77.1
%
595,004
13.50
Baltimore Gas & Electric (27%);
Atlantic Coast Training (24%);
Northrop Grumman Corporation (18%)
900 International Drive
Linthicum, MD
BWI Airport
1986
57,140
100.0
%
709,092
12.41
Ciena Corporation (100%)
930 International Drive
Linthicum, MD
BWI Airport
1986
57,140
100.0
%
687,553
12.03
Ciena Corporation (100%)
891 Elkridge Landing Road
Linthicum, MD
BWI Airport
1984
56,489
86.6
%
999,858
20.44
NCO Financial Systems (52%);
Metropolitan Life Insurance Co. (26%)
921 Elkridge Landing Road
Linthicum, MD
BWI Airport
1983
54,175
0.0
%
¾
¾
¾
939 Elkridge Landing Road
Linthicum, MD
BWI Airport
1983
53,031
100.0
%
902,908
17.03
First Service Networks, Inc. (36%);
Agency Holding Company (34%);
United States of America (23%)
938 Elkridge Landing Road
Linthicum, MD
BWI Airport
1984
52,988
100.0
%
932,077
17.59
United States of America (100%)
940 Elkridge Landing Road
Linthicum, MD
BWI Airport
1984
51,704
100.0
%
741,356
14.34
Cadmus Journal Services (100%)
800 International Drive
Linthicum, MD
BWI Airport
1988
50,979
100.0
%
805,586
15.80
Raytheon E-Systems, Inc. (100%)
1340 Ashton Road
Hanover, MD
BWI Airport
1989
46,400
100.0
%
812,457
17.51
Lockheed Martin Corp. (100%)
7321 Parkway Drive
Hanover, MD
BWI Airport
1984
39,822
100.0
%
699,063
17.55
United States of America (100%)
14
Property and Location
Submarket
Year
Built/
Renovated
Rentable
Square
Feet
Occupancy(1)
Total
Rental
Revenue(2)
Total Rental
Revenue per
Occupied
Square Foot (2) (3)
Major Tenants
(10% or more of Rentable Square Feet)1334 Ashton Road
Hanover, MD
BWI Airport
1989
37,565
96.8
%
682,283
18.77
Science Applications International (60%);
Parsons Transportation Group (37%)
1331 Ashton Road
Hanover, MD
BWI Airport
1989
29,936
100.0
%
437,927
14.63
Booz Allen Hamilton (71%);
Aerosol Monitoring & Analysis (29%)
1350 Dorsey Road
Hanover, MD
BWI Airport
1989
19,992
100.0
%
332,015
16.61
Aerotek, Inc. (23%);
Noodles, Inc. (14%);
Hunan Pagoda (12%);
C.G. Menk & Associates, Inc. (11%);
Corestaff Support Services, Inc. (10%)
1344 Ashton Road
Hanover, MD
BWI Airport
1989
17,076
77.3
%
347,624
26.34
Engineering Solutions, Inc. (19%);
AMP Corporation (16%);
Dialysis Corporation of America (14%);
Citizens National Bank (12%);
NETg Security, Inc. (10%)
1341 Ashton Road
Hanover, MD
BWI Airport
1989
15,841
100.0
%
269,235
17.00
Supertots Childcare, Inc. (71%);
The Devereux Foundation (29%)
1343 Ashton Road
Hanover, MD
BWI Airport
1989
9,962
100.0
%
140,349
14.09
Nauticus Corporation (100%)
114 National Business Parkway
Annapolis Junction, MD
BWI Airport
2002
9,717
100.0
%
60,568
6.23
Huff and Puff, Inc. (44%);
Café Joe (39%);
Charm City Concierge (17%)
1615 - 1629 Thames Street
Baltimore, MD
Downtown
1989
104,115
68.0
%
1,364,862
19.27
Johns Hopkins University (39%);
Baltimore City
Community of Science (18%)
7200 Riverwood
Columbia, MD
Howard County
1986
160,000
100.0
%
3,000,720
18.75
United States of America (100%)
Perimeter
9140 Rt. 108(5)
Columbia, MD
Howard County
1974/1985
150,000
100.0
%
1,882,500
12.55
United States of America (100%)
Perimeter
7000 Columbia Gateway Drive
Columbia, MD
Howard County
1999
145,806
100.0
%
1,334,125
9.15
Honeywell International (100%)
Perimeter
6940 Columbia Gateway Drive
Columbia, MD
Howard County
1999
108,737
89.9
%
1,566,765
16.03
Magellan Behavioral Health, Inc. (39%);
Response Services Center (26%);
Peregrine Remedy, Inc. (14%)
Perimeter
6950 Columbia Gateway Drive
Columbia, MD
Howard County
1998
107,778
100.0
%
2,322,064
21.54
Magellan Behavioral Health, Inc. (100%)
Perimeter
7067 Columbia Gateway Drive
Columbia, MD
Howard County
2001
82,953
100.0
%
1,742,408
21.00
Community First Financial (50%);
Allstate Insurance Company (50%)
Perimeter
6750 Alexander Bell Drive
Columbia, MD
Howard County
2001
78,460
93.1
%
1,923,836
26.33
Sun Microsystems, Inc. (45%);
The Coca-Cola Company (35%)
Perimeter
6700 Alexander Bell Drive
Columbia, MD
Howard County
1988
75,650
41.3
%
683,554
21.88
Arbitron, Inc. (26%)
Perimeter
6731 Columbia Gateway Drive(6)
Columbia, MD
Howard County
2002
73,902
100.0
%
1,857,069
25.13
CareFirst Inc. & Subsidiaries (68%);
Perimeter
Washington Mutual Bank (29%)
6740 Alexander Bell Drive
Columbia, MD
Howard County
1992
61,957
88.0
%
1,373,820
25.19
Johns Hopkins University (68%);
Perimeter
Advanced Career Technologies, Inc. (20%)
6716 Alexander Bell Drive
Columbia, MD
Howard County
1990
52,002
89.7
%
886,757
19.01
Sun Microsystems, Inc. (49%);
Rational Software Corp. (15%);
Jefferson Pilot Financial Insurance (11%)
Perimeter
9140 Guilford Road
Columbia, MD
Howard County
1983
41,704
92.9
%
549,140
14.17
Microcosm (21%);
Applied Data Systems (21%);
COACT, Inc. (14%);
NEC Business Network Solutions, Inc. (14%);
Chesapeake Surgical, Ltd. (12%);
Creative Marketing (11%)
Perimeter
15
Property and Location
Submarket
Year
Built/
Renovated
Rentable
Square
Feet
Occupancy(1)
Total
Rental
Revenue(2)
Total Rental
Revenue per
Occupied
Square Foot (2) (3)
Major Tenants
(10% or more of Rentable Square Feet)7065 Columbia Gateway Drive
Columbia, MD
Howard County
2000
38,560
100.0
%
606,163
15.72
Corvis Operations, Inc. (100%)
Perimeter
7063 Columbia Gateway Drive
Columbia, MD
Howard County
2000
36,936
100.0
%
569,553
15.42
Corvis Operations, Inc. (100%)
Perimeter
9160 Guilford Road
Columbia, MD
Howard County
1984
36,528
100.0
%
556,821
15.24
AT&T Corporation (100%)
Perimeter
6760 Alexander Bell Drive
Columbia, MD
Howard County
1991
36,309
39.6
%
286,290
19.92
¾
Perimeter
6708 Alexander Bell Drive
Columbia, MD
Howard County
Perimeter
1988
35,040
100.0
%
634,350
18.10
State Farm Mutual Auto Insurance Co. (100%)
7061 Columbia Gateway Drive
Columbia, MD
Howard County
2000
29,604
82.8
%
582,670
23.77
Manekin, LLC (83%)
Perimeter
6724 Alexander Bell Drive
Columbia, MD
Howard County
2002
28,420
100.0
%
617,636
21.73
Lurgi Lentjes North America (95%)
Perimeter
9150 Guilford Drive
Columbia, MD
Howard County
1984
17,655
100.0
%
273,810
15.51
Essex Corporation (100%)
Perimeter
9130 Guilford Drive
Columbia, MD
Howard County
1984
13,700
100.0
%
234,386
17.11
Chesapeake Research (100%)
Perimeter
14502 Greenview Drive
Laurel, MD
Laurel
1988
71,926
79.6
%
1,133,885
19.80
iSky (20%);
LCC Telecom Management (11%)
14504 Greenview Drive
Laurel, MD
Laurel
1985
69,194
66.7
%
907,093
19.67
Moore USA (11%);
Light Wave Communications (10%)
6009 - 6011 Oxon Hill Road
Oxon Hill, MD
Southern Prince
1990
181,768
100.0
%
3,645,893
20.06
United States of America (65%);
George’s County
NRL Federal Credit Union (10%)
9690 Deereco Road
Timonium, MD
Suburban North
1988
133,737
99.5
%
3,098,194
23.29
Fireman’s Fund Insurance (24%);
Baltimore County
I4Commerce, Inc. (10%)
375 W. Padonia Road
Timonium, MD
Suburban North
1986
101,133
95.9
%
1,603,419
16.53
Deutsche Bank Securities (83%)
Baltimore County
Subtotal/Average
5,406,564
91.0
%
$
94,318,328
$
19.18
Blue Bell/Philadelphia:
753 Jolly Road
Blue Bell
1960/92-94
419,472
100.0
%
$
3,792,811
$
9.04
Unisys (100%)
Blue Bell, PA
785 Jolly Road
Blue Bell
1970/1996
219,065
100.0
%
2,280,799
10.41
Unisys with 100% sublease to Merck
Blue Bell, PA
760 Jolly Road
Blue Bell
1974/1994
208,854
100.0
%
2,778,889
13.31
Unisys (100%)
Blue Bell, PA
751 Jolly Road
Blue Bell
1966/1991
112,958
100.0
%
1,021,352
9.04
Unisys (100%)
Blue Bell, PA
Subtotal/Average
960,349
100.0
%
$
9,873,851
$
10.28
Greater Harrisburg:
2605 Interstate Drive
East Shore
1990
81,187
92.7
%
$
1,317,009
$
17.49
Commonwealth of Pennsylvania (88%)
Harrisburg, PA
6345 Flank Drive
East Shore
1989
69,443
82.1
%
906,011
15.88
Allstate Insurance (30%);
Harrisburg, PA
First Health Services (24%);
Coventry Health Care (18%);
LWN Enterprises (15%)
16
Property and Location
Submarket
Year
Built/
Renovated
Rentable
Square
Feet
Occupancy(1)
Total
Rental
Revenue(2)
Total Rental
Revenue per
Occupied
Square Foot (2) (3)
Major Tenants
(10% or more of Rentable Square Feet)6340 Flank Drive
East Shore
1988
68,200
83.5
%
594,649
10.45
Lancaster Lebanon (84%)
Harrisburg, PA
2601 Market Place
East Shore
1989
66,224
100.0
%
1,151,013
17.38
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. (11%)
6400 Flank Drive
East Shore
1992
52,439
84.0
%
695,872
15.80
Pennsylvania Coalition Against Domestic
Harrisburg, PA
Violence (51%);
The REM Organization (27%)
6360 Flank Drive
East Shore
1988
46,500
97.7
%
671,562
14.79
Ikon Office Solutions, Inc. (22%);
Harrisburg, PA
Computer Applications (20%);
Sentage Corp. d/b/a Dental Services Group (15%);
Health Spectrum Medical (15%)
6385 Flank Drive
East Shore
1995
32,921
63.0
%
330,604
15.94
Cowles Enthusiast Media (34%);
Harrisburg, PA
Imagistics International (11%)
CGI Information Systems & Management (11%)
6380 Flank Drive
East Shore
1991
32,613
86.2
%
374,305
13.32
Myers & Stauffer (16%);
Harrisburg, PA
Verizon Network Integration Corp. (14%);
Lorom America, Inc. (14%);
Day Enterprises, Inc. (12%);
Critical Care Systems, Inc. (12%);
U-Conn Technology USA (10%)
6405 Flank Drive
East Shore
1991
32,000
100.0
%
514,239
16.07
Cowles Enthusiast Media (100%)
Harrisburg, PA
95 Shannon Road
East Shore
1999
21,976
100.0
%
363,085
16.52
New World Pasta (100%)
Harrisburg, PA
75 Shannon Road
East Shore
1999
20,887
100.0
%
353,578
16.93
McCormick, Taylor & Assoc. (100%)
Harrisburg, PA
6375 Flank Drive
East Shore
2000
19,783
100.0
%
340,388
17.21
Orion Capital Companies (71%);
Harrisburg, PA
McCormick, Taylor & Assoc. (29%)
85 Shannon Road
East Shore
1999
12,863
100.0
%
212,521
16.52
New World Pasta (100%)
Harrisburg, PA
5035 Ritter Road
West Shore
1988
56,556
100.0
%
812,854
14.37
Commonwealth of Pennsylvania (82%);
Mechanicsburg, PA
PA Continuing Legal Education Board (10%)
5070 Ritter Road - Building A
West Shore
1989
32,309
77.5
%
388,449
15.51
Maryland Casualty Co. (62%);
Mechanicsburg, PA
Commonwealth of Pennsylvania (15%)
5070 Ritter Road - Building B
West Shore
1989
28,039
100.0
%
358,223
12.78
Vale National Training Center (63%);
Mechanicsburg, PA
Pennsylvania Trauma Systems Foundation (18%);
Paytime, Inc. (15%)
Subtotal/Average
673,940
90.6
%
$
9,384,362
$
15.36
Northern/Central New Jersey:
431 Ridge Road
Exit 8A -
1958/1998
170,000
100.0
%
$
3,401,124
$
20.01
AT&T Local Services (100%)
Dayton, NJ
Cranbury
429 Ridge Road
Exit 8A -
1966/1996
142,385
100.0
%
2,843,655
19.97
AT&T Local Services (100%)
Dayton, NJ
Cranbury
17
Property and Location
Submarket
Year
Built/
Renovated
Rentable
Square
Feet
Occupancy(1)
Total
Rental
Revenue(2)
Total Rental
Revenue per
Occupied
Square Foot (2) (3)
Major Tenants
(10% or more of Rentable Square Feet)68 Culver Road
Exit 8A -
2000
57,280
100.0
%
1,227,238
21.43
AT&T Local Services (100%)
Dayton, NJ
Cranbury
437 Ridge Road
Exit 8A -
1962/1996
30,000
100.0
%
795,000
26.50
AT&T Local Services (100%)
Dayton, NJ
Cranbury
104 Interchange Plaza
Exit 8A -
1990
47,677
100.0
%
1,066,236
22.36
Turner Construction Co. (35%);
Cranbury, NJ
Cranbury
Laborer’s International Union (28%);
Lanier Worldwide (12%)
101 Interchange Plaza
Exit 8A -
1985
43,621
96.0
%
943,284
22.53
Ford Motor Credit Co. (21%);
Cranbury, NJ
Cranbury
CSX Transportation, Inc. (18%);
Arquest, Inc. (16%);
Middlesex County Improve. Auth. (13%)
47 Commerce
Exit 8A -
1992/1998
41,398
100.0
%
503,393
12.16
Somfy Systems, Inc. (100%)
Cranbury, NJ
Cranbury
7 Centre Drive
Exit 8A -
1989
19,466
100.0
%
447,400
22.98
Compugen, Inc. (29%);
Jamesburg, NJ
Cranbury
Systems Freight (22%)
8 Centre Drive
Exit 8A -
1986
16,199
45.4
%
174,961
23.78
Medical World Communications (45%)
Jamesburg, NJ
Cranbury
2 Centre Drive
Exit 8A -
1989
16,132
100.0
%
417,741
25.90
Fleet National Bank (100%)
Jamesburg, NJ
Cranbury
4301 Route 1
Monmouth
1986
61,327
83.9
%
1,016,809
19.77
Guest Supply, Inc. (47%);
Monmouth Junction, NJ
Junction
Ikon Office Solutions (14%);
Foster & Adoptive Family Services (10%)
695 Rt. 46
Wayne
1990
157,394
95.7
%
3,166,148
21.02
ADT Security Services, Inc. (26%);
Fairfield, NJ
The Museum Company (16%);
JP Morgan Chase Bank (15%);
Dean Witter Reynolds (13%)
710 Rt. 46
Wayne
1985
101,263
70.4
%
1,498,546
21.01
Ericsson, Inc. (13%);
Fairfield, NJ
Green Point Mortgage (10%)
Subtotal/Average
904,142
93.7
%
$
17,501,535
$
20.66
Northern Virginia:
15000 Conference Center Drive
Dulles South
1989
470,406
99.6
%
$
9,765,284
$
20.85
Dyncorp Information Systems, LLC (52%);
Chantilly, VA
General Dynamics Government Corp. (15%);
Verizon Realty Corporation (13%);
Genuity, Inc. (10%)
15059 Conference Center Drive
Dulles South
2000
145,192
92.6
%
3,548,801
26.39
The Boeing Company (55%);
Chantilly, VA
Booz-Allen & Hamilton, Inc. (18%)
15049 Conference Center Drive
Dulles South
1997
145,053
100.0
%
3,753,671
25.88
The Aerospace Corporation (92%)
Chantilly, VA
Subtotal/Average
760,651
98.3
%
$
17,067,756
$
22.82
Suburban Washington D.C.
11800 Tech Road
Silver Spring
1969/1989
235,866
100.0
%
$
3,589,803
$
15.22
Comcast Cablevision (42%);
Silver Spring, MD
Kaiser Foundation Health Plan (17%);
BioCore Medical Technologies (14%);
Holy Cross Hospital of Silver Spring (12%);
United States of America (11%)
Subtotal/Average
235,866
100.0
%
$
3,589,803
$
15.22
Total/Average
8,941,512
93.0
%
$
151,735,635
$
18.24
18
(1) This percentage is based upon all
occupied spacesigned leases and tenants occupancy as of December 31,1999.2002.(2) Total rental revenue is the monthly contractual base rent as of December 31,
19992002 multiplied by 12 plus the estimated annualized expense reimbursements under existingleases.leases(3)
This percentage represents the individual property's rental revenue to our total rental revenue as of December 31, 1999. (4)This total rent per occupied square foot is theproperty'sproperty’s total rental revenue divided by thatproperty'sproperty’s occupied square feet as of December 31,1999.2002.(4) The
following table provides certain information about our retailBaltimore/Washington Corridor encompasses mostly Anne Arundel and Howard Counties. Included in this region are six propertiesaslocated outside of these counties, including two properties in Laurel, one property in Oxon Hill, two properties in Timonium and one property in Baltimore City.(5) Bookham Technology, Inc. was the tenant in this building until December 31,
1999:
Total Rental Year Rentable Percentage Percentage of Revenue per Built/ Square Occupied as Total Rental Total Rental Occupied Major Tenants Property Location Renovated Feet of 12/31/99(1) Revenue(2) Revenue (3) Square Feet (4) (10% or more Rentable Sq. Ft.) - ------------------------------------------------------------------------------------------------------------------------------------EASTON, MD 322 Marlboro Street 1977/1997 145,203 95.69% $771,626 0.83% $5.55 Acme Markets (34%) Peebles (24%) MINOT, ND 2100 S. Broadway 1993 46,134 100.00% 312,211 0.34% 6.77 Nash-Finch Company (100%) --------- ------- ----------- ------- ------- TOTAL RETAIL PROPERTIES 191,337 96.73% $1,083,837 1.17% $5.86 --------- ------- ----------- ------- ------- GRAND TOTAL 6,076,071 $92,720,102 100.00% ========= =========== =======(1)2002, when it terminated its lease. Thispercentage is based upon all leases signed and tenants occupying asentire building was re-tenanted to the United States of America under a lease that commenced January 1, 2003; the terms of this new lease are included in the above table.(6) This property contains 123,743 square feet, 49,841 square feet of which was under development at December 31,
1999. (2) Total rental revenue is the monthly contractual base rent as of December 31, 1999 multiplied by 12 plus the estimated annualized expense reimbursements under existing leases. (3) This percentage represents the individual property's rental revenue to our total rental revenue as of December 31, 1999. (4) This total rent per occupied square foot is the property's total rental revenue divided by that property's occupied square feet as of December 31, 1999. 122002. 19
Lease Expirations
The following table provides a summary schedule of the lease expirations for leases in place as of December 31,
1999,2002, assuming that none of the tenants exercise renewal options (dollars in thousands, except per square foot amounts):OFFICE AND RETAIL LEASE EXPIRATION ANALYSIS BY YEAR
Percentage Total Rental Square (1) of Total Revenue of Number Footage Percentage of Total Rental Rental Expiring Leases Year of of Leases of Leases Total Occupied Revenue of Revenue per Occupied Expiration (2) Expiring Expiring Square Feet Expiring Leases Expiring Square Foot - --------------------------------------------------------------------------------------------------------------------------2000 106 772,476 13.0% $13,576 14.64% $17.57 2001 70 589,401 10.0% 8,687 9.37% 14.74 2002 76 888,996 15.0% 14,292 15.41% 16.08 2003 69 763,862 12.9% 13,490 14.55% 17.66 2004 53 577,316 9.7% 10,374 11.19% 17.97 2005 10 154,483 2.6% 2,640 2.85% 17.09 2006 6 199,118 3.4% 3,122 3.37% 15.68 2007 6 171,499 2.9% 2,516 2.71% 14.67 2008 11 569,186 9.6% 10,633 11.47% 18.68 2009 11 1,189,625 20.1% 13,078 14.10% 10.99 2010 0 -- 0.0% -- 0.00% 0.00 2011 0 -- 0.0% -- 0.00% 0.00 2012 0 -- 0.0% -- 0.00% 0.00 2013 0 -- 0.0% -- 0.00% 0.00 2014 1 46,134 0.8% 312 0.34% 6.77 ------- --------- -------- -------- -------- Total/Weighted Avg. 419 5,922,096 100.0% $92,720 100.00% $16.14 ======= ========= ======== ======== ========
Year of Lease
Expiration(1)
Number of
Leases
Expiring
Square Footage
of Leases
Expiring
Percentage of
Total Occupied
Square Feet
Total Rental
Revenue of Expiring
Office Leases(2)
Percentage of
Total Office
Rental Revenue
Expiring(2)
Total Rental
Revenue of Expiring
Leases Per Occupied
Square Foot(2)
(in thousands)
2003
101
758,936
9.1
%
$
14,038
9.3
%
$
18.50
2004
74
911,254
11.0
%
17,616
11.6
%
19.33
2005
86
854,941
10.3
%
16,033
10.6
%
18.75
2006
59
814,421
9.8
%
14,917
9.8
%
18.32
2007
73
1,389,010
16.7
%
26,090
17.2
%
18.78
2008
20
750,932
9.0
%
16,071
10.6
%
21.40
2009
17
1,357,102
16.3
%
16,879
11.1
%
12.44
2010
15
777,068
9.3
%
16,612
10.9
%
21.38
2011
3
71,501
0.9
%
1,744
1.1
%
24.40
2012
7
428,474
5.1
%
9,772
6.4
%
22.81
2013
1
150,000
1.8
%
1,883
1.3
%
12.55
Other(3)
14
56,259
0.7
%
81
0.1
%
1.44
Total/Weighted Average.
470
8,319,898
100.0
%
$
151,736
100.0
%
$
18.87
(1)
Total rental revenue is the monthly contractual base rent as of December 31, 1999 multiplied by 12 plus the estimated annualized expense reimbursements under existing leases. (2)Many of our government leases are subject to certain early termination provisionswhichthat are customary to government leases. The year of lease expiration was computed assuming noexercise ofsuch earlyterminations. ITEMtermination rights are exercised. A 150,000 square foot lease with the United States Government commenced January 1, 2003 and expires June 30, 2013, assuming that the government does not exercise its right under the lease to terminate early; this 150,000 square foot lease has been included above since the previous lease with Bookham Techonology, Inc. for the same 150,000 square feet terminated early on December 31, 2002.(2)Total rental revenue is the monthly contractual base rent as of December 31, 2002 multiplied by 12, plus the estimated annualized expense reimbursements under existing leases. Refer to (1) above for the inclusion of the 150,000 square foot lease with the United States Government despite its lease commencement date of January 1, 2003.
(3)Other consists of amenities, including cafeterias, concierge offices and property management space. In addition, month-to-month leases are included in this line item as the exact expiration date is unknown.
20
Item 3.
LEGAL PROCEEDINGSLegal ProceedingsWe are not currently involved in any material litigation nor, to our knowledge, is any material litigation currently threatened against the Company (other than routine litigation arising in the ordinary course of business, substantially all of which is expected to be covered by liability insurance).
ITEMNot applicable.
Information for this item is incorporated herein by reference to the section of Exhibit 13.1 entitled
"Market“Market forRegistrant'sRegistrant’s Common Equity and Related ShareholderMatters". On December 21, 1999, we issued 974,662 Series C Preferred Units in our Operating Partnership in connection with a property acquisition. The issuance of these units is exempt from registration under Section 4 (2) of the Securities Act of 1933, as amended. These units are convertible, subject to certain restrictions, commencing December 21, 2000 into Common Units in the Operating Partnership on the basis of 2.381 Common Units for each Series C Preferred Unit, plus any accrued return. The Common Units would then be exchangeable for Common Shares, subject to certain conditions. ITEMMatters.”Item 6.
SELECTED FINANCIAL DATASelected Financial DataInformation for this item is incorporated herein by reference to the section of Exhibit 13.1 to this Form 10-K entitled
"Selected“Selected FinancialData". ITEMData.”Item 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSManagement’s Discussion and Analysis of Financial Condition and Results of OperationsInformation for this item is incorporated herein by reference to the section of Exhibit 13.1 to this Form 10-K entitled
"Management's“Management’s Discussion and Analysis of Financial Condition and Results ofOperations". ITEMOperations.”Information for this section is incorporated herein by reference to the section of Exhibit 13.1 to this Form 10-K entitled
"Quantitative“Quantitative and Qualitative Disclosures about MarketRisk". ITEMRisk.”Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAFinancial Statements and Supplementary DataInformation for this section is incorporated herein by reference to the
Sectionsection of Exhibit 13.1 to this Form 10-K beginning with the Consolidated Balance Sheets and continuing through the Report of Independent Accountants.None.
Items 10, 11, 12 & 13.
TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT, EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSTrustees and Executive Officers of the Registrant, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Certain Relationships and Related TransactionsFor the information required by Item 10, Item 11, Item 12 and Item 13, you should refer to our definitive proxy statement relating to the
20002003 Annual Meeting of our Shareholders to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Form 10-K.Item 14. Controls and Procedures
An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was carried out by us under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, within 90 days prior to the filing date of this report. Based on that evaluation, the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer concluded that our disclosure controls and
21
procedures are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the such system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Subsequent to the date of the most recent evaluation, there were no significant changes in our internal controls or in other factors that could significantly affect the internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORMItem 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as exhibits to this Form 10-K:
141.
FINANCIAL STATEMENTS.Financial Statements. Audited consolidated balance sheets as of December 31,19992002 and1998,2001, and the related consolidated statements of operations, ofshareholders'shareholders’ equity, and of cash flows for each of the three years in the period ended December 31,19992002 are included in Exhibit 13.1 to this Form 10-K and are incorporated by reference.2.
FINANCIAL STATEMENT SCHEDULE.Financial Statement Schedule. Audited Schedule III-– Real Estate and Accumulated Depreciation is included in Exhibit 13.2 to this Form 10-K and is incorporated by reference.(b) We filed
nothe following Current Reports on Form 8-K in the last quarter of the year ended December 31,1999.2002:Report dated October 23, 2002 containing Item 7 and Item 9 disclosures that were filed in connection with the release of earnings on October 23, 2002. We also through this filing made available certain additional information pertaining to our properties and operations as of and for the period ended September 30, 2002.
Report dated December 16, 2002 containing Item 5 and Item 7 disclosures that were filed in connection with the acquisitions of 7000 Columbia Gateway Drive, 11800 Tech Road, and 15049 and 15059 Conference Center Drive. This report contained financial statements for the properties described therein, as well as certain pro forma financial statements.
(c)
EXHIBITS.Exhibits. Refer to the Exhibit Index that follows. Unless otherwise noted, the file number of all documents incorporated by reference is 1-14023.
EXHIBIT
NO.DESCRIPTION
------------- ----------------------------------------------------------2.1 Agreement3.1.1
Amended and
PlanRestated Declaration ofMerger, dated January 31, 1998, among theTrust of Registrantthe Maryland Company and the Company(filed with theTrust'sRegistrant’s Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference).2.2 Assignment3.1.2
Articles of
Partnership Interests, dated April 30, 1998, between Airport Square Limited Partnership, Airport Square Corporation, Camp Meade CorporationAmended andCOPT Airport Square One LLC and COPT Airport Square Two LLC.Restated Declaration of Trust (filed with theCompany's CurrentCompany’s Annual Report on Form8-K10-K onMay 14, 1998March 22, 2002 and incorporated herein by reference).2.3 Assignment3.1.3
Articles Supplementary of
Purchase and Sale Agreement,Corporate Office Properties Trust Series A Convertible Preferred Shares, datedApril 30,September 28, 1998between Aetna Life Insurance Company and the Operating Partnership.(filed with theCompany's Current Report on Form 8-K on May 14, 1998 and incorporated herein by reference). 2.4 Assignment of Loan Purchase and Sale Agreement, dated April 30, 1998, between Constellation Real Estate, Inc. and the Operating Partnership. (filed with the Company's Current Report on Form 8-K on May 14, 1998 and incorporated herein by reference). 2.5 Purchase and Sale Agreement, dated April 1, 1998, between Aetna Life Insurance Company and Airport Square Limited Partnership (filed with the Company's Current Report on Form 8-K on May 14, 1998 and incorporated herein by reference). 2.6.1 Loan Purchase and Sale Agreement, dated March 13, 1998, between Aetna Life Insurance Company and Constellation Real Estate, Inc. (filed with the Company's Current Report on Form 8-K on May 14, 1998 and incorporated herein by reference). 2.6.2 Amendment to Loan Purchase and Sale Agreement, dated April 16, 1998, between Aetna Life Insurance Company and Constellation Real Estate, Inc. (filed with the Company's Current Report on Form 8-K on May 14, 1998 and incorporated herein by reference). 2.7.1 Purchase and Sale Agreement, dated March 4, 1998, between 695 Rt. 46 Realty, LLC, 710 Rt. 46 Realty, LLC and COPT Acquisitions, Inc. (filed with the Company's Current Report on Form 8-K on June 10, 1998 and incorporated herein by reference). 2.7.2 Letter Amendment to Purchase and Sale Agreement, dated March 26, 1998, between 695 Rt. 46 Realty, LLC, 710 Rt. 46 Realty, LLC and COPT Acquisitions, Inc. (filed with the Company's Current Report on Form 8-K on June 10, 1998 and incorporated herein by reference). 2.8.1 Contribution Agreement between the Company and the Operating Partnership and certain Constellation affiliates (filed as Exhibit A of the Company's Schedule 14A Information on15
EXHIBIT NO. DESCRIPTION ------------- ----------------------------------------------------------June 26, 1998 and incorporated herein by reference). 2.8.2 First Amendment to Contribution Agreement, dated July 16, 1998, between Constellation Properties, Inc. and certain entities controlled by Constellation Properties, Inc. (filed with the Company'sCompany’s Current Report on Form 8-K on October 13, 1998 and incorporated herein by reference).2.8.3 Second Amendment to Contribution Agreement,3.1.4
Articles Supplementary of Corporate Office Properties Trust Series B Convertible Preferred Shares, dated
September 28, 1998, between Constellation Properties, Inc. and certain entities controlled by Constellation Properties, Inc.July 2, 1999 (filed with theCompany'sCompany’s Current Report on Form 8-K onOctober 13, 1998July 7, 1999 and incorporated herein by reference).2.9 Service Company Asset Contribution Agreement between22
EXHIBIT
NO.DESCRIPTION
3.1.5
Articles Supplementary of Corporate Office Properties Trust Series D Cumulative Convertible Redeemable Preferred Shares, dated January 25, 2001 (filed with the
Company and the Operating Partnership and certain Constellation affiliates (filed as Exhibit B of the Company's Schedule 14A InformationCompany’s Annual Report onJune 26, 1998Form 10-K on March 22, 2001 and incorporated herein by reference).2.10.1 Option Agreement,3.1.6
Articles Supplementary of Corporate Office Properties Trust Series E Cumulative Redeemable Preferred Shares, dated
May 14, 1998, between the Operating Partnership and NBP-III, LLC (a Constellation affiliate) (filed as Exhibit C of the Company's Schedule 14A Information on June 26, 1998 and incorporated herein by reference). 2.10.2 First Amendment to Option Agreement, dated June 22, 1998, between the Operating Partnership and NBP-III, LLC (a Constellation affiliate) (filed as Exhibit E of the Company's Schedule 14A Information on June 26, 1998 and incorporated herein by reference). 2.11.1 Option Agreement, dated May 14, 1998, between the Operating Partnership and Constellation Gatespring II, LLC (a Constellation affiliate) (filed as Exhibit D of the Company's Schedule 14A Information on June 26, 1998 and incorporated herein by reference). 2.11.2 First Amendment to Option Agreement, dated June 22, 1998, between the Operating Partnership and Constellation Gatespring II, LLC (a Constellation affiliate) (filed as Exhibit F of the Company's Schedule 14A Information on June 26, 1998 and incorporated herein by reference). 2.12 Option Agreement, dated September 28, 1998, between Jolly Acres Limited Partnership, Arbitrage Land Limited Partnership and the Operating PartnershipApril 3, 2001 (filed with theCompany'sRegistrant’s Current Report on Form 8-K onOctober 13, 1998April 4, 2001 and incorporated herein by reference).2.13 Right3.1.7
Articles Supplementary of
First Refusal Agreement,Corporate Office Properties Trust Series F Cumulative Redeemable Preferred Shares, dated September28, 1998, between Constellation Properties, Inc. and the Operating Partnership13, 2001 (filed with theCompany'sRegistrant’s Current Report on Form 8-K onOctober 13, 1998September 14, 2001 and incorporated herein by reference).2.14 Right of First Refusal Agreement, dated September 28, 1998, between 257 Oxon, LLC and the Operating Partnership (filed with the Company's Current Report on Form 8-K on October 13, 1998 and incorporated herein by reference). 2.15 Contribution Agreement, dated September 30, 1998, between COPT Acquisitions, Inc. and M.O.R. XXIX Associates Limited Partnership (filed with the Company's Current Report on Form 8-K on October 28, 1998 and incorporated herein by reference).16
EXHIBIT NO. DESCRIPTION ------------- ----------------------------------------------------------2.16 Purchase and Sale Agreement, dated September 30, 1998, between New England Life Pension Properties II: A Real Estate Limited Partnership and COPT Acquisitions, Inc. (filed with the Company's Current Report on Form 8-K on October 28, 1998 and incorporated herein by reference). 2.17.1 Sale-Purchase Agreement, dated August 20, 1998 between South Middlesex Industrial Park Associates, L.P. and SM Monroe Associates and COPT Acquisitions, Inc. (filed with the Company's Current Report on Form 8-K on October 28, 1998 and incorporated herein by reference). 2.17.2 First Amendment to Sale-Purchase Agreement, dated October 30, 1998, between South Middlesex Industrial Park Associates, L.P. and SM Monroe Associates, L.P. and COPT Acquisitions, Inc. (filed with the Company's Current Report on Form 8-K on November 16, 1998 and incorporated herein by reference). 2.18 Contribution Agreement, dated December 31, 1998, between the Operating Partnership and M.O.R. 44 Gateway Associates L.P., RA & DM, Inc. and M.R.U. L.P. (filed with the Company's Current Report on Form 8-K on January 14, 1999 and incorporated herein by reference). 2.19.1 Purchase and Sale Agreement, dated December 31, 1998, between Metropolitan Life Insurance Company and Corporate Office Acquisitions, Inc. (filed with the Company's Current Report on Form 8-K on January 14, 1999 and incorporated herein by reference). 2.19.2 Amendment to Purchase and Sale Agreement, dated December 31, 1998, between Metropolitan Life Insurance Company, DPA/Gateway L.P., Corporate Office Acquisitions, Inc., COPT Gateway, LLC and the Operating Partnership (filed with the Company's Current Report on Form 8-K on January 14, 1999 and incorporated herein by reference). 2.20 Contribution Agreement, dated February 24, 1999, between the Operating Partnership and John Parsinen, John D. Parsinen, Jr., Enterprise Nautical, Inc. and Vernon Beck (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 2.21 Agreement to Sell Partnership Interests, dated August 12, 1999, between Gateway Shannon Development Corporation, Clay W. Hamlin, III and COPT Acquisitions, Inc. (filed with the Company's Quarterly Report on Form 10-Q on November 8, 1999 and incorporated herein by reference). 2.22 Agreement of Purchase and Sale, dated July 21, 1999, between First Industrial Financing Partnership, L.P. and COPT Acquisitions, Inc. (filed with the Company's Quarterly Report on Form 10-Q on November 8, 1999 and incorporated herein by reference). 2.23 Contribution Agreement, dated December 21, 1999, between United Properties Group, Incorporated and COPT Acquisitions, Inc. 3.1 Amended and Restated Declaration of Trust3.2
Bylaws of Registrant (filed with the
Registrant'sRegistrant’s Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference).3.2 Bylaws of Registrant (filed with the Registrant's Registration Statement on Form S-417
EXHIBIT NO. DESCRIPTION ------------- ----------------------------------------------------------(Commission File No. 333-45649) and incorporated herein by reference). 4.13.3
Form of certificate for the
Registrant'sRegistrant’s Common Shares of Beneficial Interest, $0.01 par value per share (filed with theRegistrant'sRegistrant’s Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference).4.23.4
Amended and Restated Registration Rights Agreement, dated March 16, 1998, for the benefit of certain shareholders of the Company (filed with the
Company'sCompany’s Quarterly Report on Form 10-Q on August 12, 1998 and incorporated herein by reference).4.3 Articles Supplementary3.5
Registration Rights Agreement, dated January 25, 2001, for the benefit of
Corporate Office PropertiesBarony TrustSeries A Convertible Preferred Shares, dated September 28, 1998Limited (filed with theCompany's CurrentCompany’s Annual Report on Form8-K10-K onOctober 13, 1998March 22, 2001 and incorporated herein by reference).4.4.110.1.1
Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated December 7,
1999. 4.4.21999 (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.1.2
First Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated December 21,
1999. 4.5 Articles Supplementary of Corporate Office Properties Trust Series B Convertible Preferred Shares, dated July 2,1999 (filed with theCompany'sCompany’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.1.3
Second Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated December 21, 1999 (filed with the Company’s Post Effective Amendment No. 2 to Form S-3 dated November 1, 2000 (Registration Statement No. 333-71807) and incorporated herein by reference).
10.1.4
Third Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated September 29, 2000 (filed with the Company’s Post Effective Amendment No. 2 to Form S-3 dated November 1, 2000 (Registration Statement No. 333-71807) and incorporated herein by reference).
10.1.5
Fourth Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated November 27, 2000 (filed herewith).
10.1.6
Fifth Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated January 25, 2001 (filed herewith).
23
EXHIBIT
NO.DESCRIPTION
10.1.7
Sixth Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated April 3, 2001 (filed with the Company’s Current Report on Form 8-K dated March 30, 2001 and incorporated herein by reference).
10.1.8
Seventh Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated August 30, 2001 (filed herewith).
10.1.9
Eighth Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated September 14, 2001 (filed with the Company’s Current Report on
July 7,Form 8-K dated September 6, 2001 and incorporated herein by reference).10.1.10
Ninth Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated October 6, 2001 (filed herewith).
10.1.11
Tenth Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated December 29, 2001 (filed herewith).
10.1.12
Eleventh Amendment to Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated December 15, 2002 (filed herewith).
10.2
Stock Option Plan for Directors (filed with Royale Investments, Inc.’s Form 10-KSB for the year ended December 31, 1993 (Commission File No. 0-20047) and incorporated herein by reference).
10.3.1*
Corporate Office Properties Trust 1998 Long Term Incentive Plan (filed with the Registrant’s Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference).
10.3.2*
Amendment No. 1 to Corporate Office Properties Trust 1998 Long Term Incentive Plan (filed with the Company’s Quarterly Report on Form 10-Q on August 13, 1999 and incorporated herein by reference).
10.110.3.3*
Amendment No. 2 to Corporate Office Properties Trust 1998 Long Term Incentive Plan (filed with the Company’s Annual Report on Form 10-K on March 22, 2002 and incorporated herein by reference).
10.4*
Corporate Office Properties Trust Supplemental Nonqualified Deferred Compensation Plan (filed with the Registrant’s Registration Statement on Form S-8 (Commission File No. 333-87384) and incorporated herein by reference).
10.5*
Employment Agreement, dated December 16, 1999, between Corporate Office Management, Inc., COPT and Clay W. Hamlin,
III. 10.2III (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.6.1*
Employment Agreement, dated December 16, 1999, between Corporate Office Management, Inc., COPT and Randall M.
Griffin. 10.3Griffin (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.6.2*
Employment Agreement, dated September 12, 2002, between the Operating Partnership, COPT and Randall M. Griffin (filed herewith).
10.7.1*
Employment Agreement, dated December 16, 1999, between Corporate Office Management, Inc., COPT and Roger A. Waesche, Jr.
10.4(filed with the Company’s Annual24
EXHIBIT
NO.DESCRIPTION
Report on Form 10-K on March 16, 2000 and incorporated herein by reference).
10.7.2*
Employment Agreement, dated September 12, 2002, between the Operating Partnership, COPT and Roger A. Waesche, Jr. (filed herewith).
10.8*
Employment Agreement, dated December 16, 1999, between Corporate Development Services, LLC, COPT and Dwight
Taylor. 10.5Taylor (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.9*
Employment Agreement, dated December 16, 1999, between Corporate Realty Management, LLC, COPT and Michael D.
Kaiser. 10.6Kaiser (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.10*
Amended and Restated Restricted Share Agreement, dated
December 16, 1999,September 12, 2002, between Corporate Office Properties Trust and Randall M.Griffin. 10.7Griffin (filed with the Company’s Quarterly Report on Form 10-Q on November 14, 2002 and incorporated herein by reference).10.11*
Amended and Restated Restricted Share Agreement, dated
December 16, 1999,September 12, 2002, between Corporate Office Properties Trust and Roger A. Waesche, Jr.10.8(filed with the Company’s Quarterly Report on Form 10-Q on November 14, 2002 and incorporated herein by reference).10.12.1*
Restricted Share Agreement, dated December 16, 1999, between Corporate Office Properties Trust and Dwight
Taylor. 10.9Taylor (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.12.2*
Amendment to Restricted Share Agreement, dated September 12, 2002, between Corporate Office Properties Trust and Dwight Taylor (filed with the Company’s Quarterly Report on Form 10-Q on November 14, 2002 and incorporated herein by reference).
10.13.1*
Restricted Share Agreement, dated December 16, 1999, between Corporate Office Properties Trust and Michael D.
Kaiser.18
EXHIBIT NO. DESCRIPTION ------------- ----------------------------------------------------------10.10 Management agreement between Registrant and Glacier Realty, LLCKaiser (filed with theCompany's CurrentCompany’s Annual Report on Form8-K10-K onOctober 29, 1997,March 16, 2000 and incorporated herein by reference).10.11 Senior Secured Credit10.13.2*
Amendment to Restricted Share Agreement, dated
October 13, 1997, (filed with the Company's Current Report on Form 8-K on October 29, 1997, and incorporated herein by reference). 10.12.1September 12, 2002, between Corporate Office Properties Trust1998 Long Term Incentive Planand Michael D. Kaiser (filed with theRegistrant's Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference). 10.12.2 Amendment No. 1 to Corporate Office Properties Trust 1998 Long Term Incentive Plan (filed with the Company'sCompany’s Quarterly Report on Form 10-Q onAugust 13, 1999November 14, 2002 and incorporated herein by reference).10.13 Stock Option Plan for Directors (filed with Royale Investments, Inc.'s Form 10-KSB for the year ended December 31, 1993 (Commission File No. 0-20047)10.14.1*
Restricted Share Agreement, dated July 2, 2001, between Corporate Office Properties Trust and
incorporated herein 10.14 Lease Agreement between Blue Bell Investment Company, L.P. and Unisys Corporation dated March 12, 1997 with respect to lot ARoger A. Waesche, Jr. (filed with theRegistrant's Registration StatementCompany’s Annual Report on FormS-4 (Commission File No. 333-45649)10-K on March 22, 2002 and incorporated herein by reference).10.15 Lease10.14.2*
Amendment to Restricted Share Agreement, dated July 1, 2002, between
Blue Bell Investment Company, L.P.Corporate Office Properties Trust andUnisys Corporation, dated March 12, 1997, with respect to lot BRoger A. Waesche, Jr. (filed with theRegistrant's Registration StatementCompany’s Quarterly Report on FormS-4 (Commission File No. 333-45649)10-Q on November 14, 2002 and incorporated herein by reference).10.16 Lease Agreement between Blue Bell Investment Company, L.P. and Unisys Corporation, dated March 12, 1997, with respect to lot C (filed with the Registrant's Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference). 10.1710.15.1
Senior Secured Revolving Credit Agreement, dated May 28, 1998, between the Company, the Operating Partnership, Any Mortgaged Property Subsidiary and Bankers Trust Company (filed with the
Company'sCompany’s Current Report on Form 8-K on June 10, 1998 and incorporated herein by reference).10.18 Consulting Services25
EXHIBIT
NO.DESCRIPTION
10.15.2
First Amended and Restated Senior Secured Revolving Credit Agreement, dated
AprilMarch 28,1998,2001, between the Company, the Operating Partnership, Any Mortgaged Property Subsidiary andNet Lease Finance Corp., doing business as Corporate Office ServicesBankers Trust Company (filed with theCompany'sCompany’s Current Report on Form 8-K onOctober 13, 1998September 7, 2001 and incorporated herein by reference).10.19 Project Consulting10.15.3
Second Amended and
ManagementRestated Senior Secured Revolving Credit Agreement, datedSeptember 28, 1998,March 8, 2002, betweenConstellation Properties, Inc.the Company, the Operating Partnership, Any Mortgaged Property Subsidiary andCOMIBankers Trust Company (filed with theCompany's CurrentCompany’s Annual Report on Form8-K10-K onOctober 13, 1998March 22, 2002 and incorporated herein by reference).10.2010.15.4
First Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated July 23, 2002, between the Company, the Operating Partnership, Any Mortgaged Property Subsidiary and Bankers Trust Company (filed herewith).
10.16
Promissory Note, dated October 22, 1998, between Teachers Insurance and Annuity Association of America and the Operating Partnership (filed with the
Company'sCompany’s Quarterly Report on Form 10-Q on November 13, 1998 and incorporated herein by reference).19
EXHIBIT NO. DESCRIPTION ------------- ----------------------------------------------------------10.2110.17
Indemnity Deed of Trust, Assignment of Leases and Rents and Security Agreement, dated October 22, 1998, by affiliates of the Operating Partnership for the benefit of Teachers Insurance and Annuity Association of America (filed with the
Company'sCompany’s Quarterly Report on Form 10-Q on November 13, 1998 and incorporated herein by reference).10.22 Agreement for Services, dated September 28, 1998, between the Company and Corporate Office Management, Inc. (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 10.23.1 Lease Agreement, dated September 28,1998, between St. Barnabas Limited Partnership and Constellation Properties, Inc. (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 10.23.2 First Amendment to Lease, dated December 31, 1998, between St. Barnabas, LLC and Constellation Properties, Inc. (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 10.24.1 Lease Agreement, dated August 3, 1998, between Constellation Real Estate, Inc. and Constellation Properties, Inc. (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 10.24.2 First Amendment to Lease, dated December 30, 1998, between Three Centre Park, LLC and Constellation Properties, Inc. (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 10.25.1 Lease Agreement, dated April 27, 1993, between Constellation Properties, Inc. and Baltimore Gas and Electric Company (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 10.25.2 First Amendment to Lease, dated December 9, 1998, between COPT Brandon, LLC and Baltimore Gas and Electric Company (filed with the Company's Quarterly Report on Form 10-Q on May 14, 1999 and incorporated herein by reference). 10.26 Underwriting Agreement, dated June 29, 1999, between Corporate Office Properties Trust and the underwriters of the Series B Preferred Shares (filed with the Company's Current Report on Form 8-K on July 7, 1999 and incorporated herein by reference). 10.27 Contribution Rights Agreement, dated June 23, 1999, between the Operating Partnership and United Properties Group, Incorporated (filed with the Company's Quarterly Report on Form 10-Q on August 13, 1999 and incorporated herein by reference). 10.2810.18
Promissory Note, dated September 30, 1999, between Teachers Insurance and Annuity Association of America and the Operating Partnership (filed with the
Company'sCompany’s Quarterly Report on Form 10-Q on November 8, 1999 and incorporated herein by reference).10.2910.19
Indemnity Deed of Trust, Assignment of Leases and Rents and Security Agreement, dated September 30, 1999, by affiliates of the Operating Partnership for the benefit of Teachers Insurance and Annuity Association of America (filed with the
Company'sCompany’s Quarterly Report on Form 10-Q on November 8, 1999 and incorporated herein by reference).20
EXHIBIT NO. DESCRIPTION ------------- ----------------------------------------------------------10.30 Revolving Credit10.20
Letter Agreement for Interest Rate Swap Transaction, dated December
29, 1999,26, 2000, between Corporate Office Properties, L.P. andPrudential Securities Credit Corp.Deutsche Bank AG (filed with the Company’s Annual Report on Form 10-K on March 22, 2001 and incorporated herein by reference).10.21.1
Contribution Agreement between the Company and the Operating Partnership and certain Constellation affiliates (filed as Exhibit A of the Company’s Schedule 14A Information on June 26, 1998 and incorporated herein by reference).
10.21.2
First Amendment to Contribution Agreement, dated July 16, 1998, between Constellation Properties, Inc. and certain entities controlled by Constellation Properties, Inc. (filed with the Company’s Current Report on Form 8-K on October 13, 1998 and incorporated herein by reference).
10.21.3
Second Amendment to Contribution Agreement, dated September 28, 1998, between Constellation Properties, Inc. and certain entities controlled by Constellation Properties, Inc. (filed with the Company’s Current Report on Form 8-K on October 13, 1998 and incorporated herein by reference).
10.22
Service Company Asset Contribution Agreement between the Company and the Operating
26
EXHIBIT
NO.DESCRIPTION
Partnership and certain Constellation affiliates (filed as Exhibit B of the Company’s Schedule 14A Information on June 26, 1998 and incorporated herein by reference).
10.23.1
Contribution Rights Agreement, dated June 23, 1999, between the Operating Partnership and United Properties Group, Incorporated (filed with the Company’s Quarterly Report on Form 10-Q on August 13, 1999 and incorporated herein by reference).
10.23.2
Contribution Agreement, dated December 21, 1999, between United Properties Group, Incorporated and COPT Acquisitions, Inc. (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).
10.24.1
Contract of Sale, dated August 9, 1999, between Jolly Acres Limited Partnership and the Operating Partnership (filed with the Company’s Annual Report on Form 10-K on March 22, 2001 and incorporated herein by reference).
10.24.2
Amendment to Contract of Sale, dated April 28, 2000, between Jolly Acres Limited Partnership and the Operating Partnership (filed with the Company’s Annual Report on Form 10-K on March 22, 2001 and incorporated herein by reference).
10.25
Agreement to Sell Partnership Interests, dated August 12, 1999, between Gateway Shannon Development Corporation, Clay W. Hamlin, III and COPT Acquisitions, Inc. (filed with the Company’s Quarterly Report on Form 10-Q on November 8, 1999 and incorporated herein by reference).
10.26
Contract of Sale, dated March 14, 2000, between Arbitrage Land Limited Partnership, Jolly Acres Limited Partnership and the Operating Partnership (filed with the Company’s Annual Report on Form 10-K on March 22, 2001 and incorporated herein by reference).
10.27.1
Lease Agreement, dated August 3, 1998, between Constellation Real Estate, Inc. and Constellation Properties, Inc. (filed with the Company’s Annual Report on Form 10-K on March 30, 1999 and incorporated herein by reference).
10.27.2
First Amendment to Lease, dated December 30, 1998, between Three Centre Park, LLC and Constellation Properties, Inc. (filed with the Company’s Annual Report on Form 10-K on March 30, 1999 and incorporated herein by reference).
10.28
Lease Agreement between Blue Bell Investment Company, L.P. and Unisys Corporation dated March 12, 1997 with respect to lot A (filed with the Registrant’s Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference).
10.29
Lease Agreement between Blue Bell Investment Company, L.P. and Unisys Corporation, dated March 12, 1997, with respect to lot B (filed with the Registrant’s Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference).
10.30
Lease Agreement between Blue Bell Investment Company, L.P. and Unisys Corporation, dated March 12, 1997, with respect to lot C (filed with the Registrant’s Registration Statement on Form S-4 (Commission File No. 333-45649) and incorporated herein by reference).
10.31
Option
agreement,Agreement, dated March 1998, betweenCorporate Office Properties, L.P.the Operating Partnership and Blue Bell Land, L.P. (filed with the Company’s Annual Report on Form 10-K on March 16, 200027
EXHIBIT
NO.DESCRIPTION
and incorporated herein by reference).
10.32
Option
agreement,Agreement, dated March 1998, betweenCorporate Office Properties, L.P.the Operating Partnership and Comcourt Land, L.P. (filed with the Company’s Annual Report on Form 10-K on March 16, 2000 and incorporated herein by reference).10.33
Option Agreement, dated September 28, 1998, between Jolly Acres Limited Partnership, Arbitrage Land Limited Partnership and the Operating Partnership (filed with the Company’s Current Report on Form 8-K on October 13, 1998 and incorporated herein by reference).
10.34
Agreement of Sale, dated December 19, 2002, between Jolly Knolls, LLC and the Operating Partnership (filed herewith).
10.35
Indemnity Deed of Trust Note, dated January 24, 2003, by Corporate Office Properties, LP for the benefit of Jolly Knolls, LLC (filed herewith).
13.1
Portions of the Annual Report of Corporate Office Properties Trust as of and for the year ended December 31,
1999.2002 (filed herewith).13.2
Schedule III
-– Real Estate and Accumulated Depreciation as of December 31,1999.2002 (filed herewith).21.1
Subsidiaries of
Registrant.Registrant (filed herewith).23.1
Consent of Independent
Accountants. 27Accountants (filed herewith).99.1
Certification of the Chief Executive Officer under Title 18, Section 1350 of the United States Code, as adopted under Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
99.2
Certification of the Chief Operating Officer under Title 18, Section 1350 of the United States Code, as adopted under Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
99.3
Certification of the Chief Financial
Data Schedule.Officer under Title 18, Section 1350 of the United States Code, as adopted under Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).* - Indicates a compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K.
28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CORPORATE OFFICE PROPERTIES TRUST Date: March 16, 2000 By: /s/ Randall M. Griffin ------------------------------------------ Randall M. Griffin President and Chief Operating Officer Date: March 16, 2000 By: /s/ Roger A. Waesche, Jr. ------------------------------------------ Roger A. Waesche, Jr. Senior Vice President and Chief Financial Officer 21
CORPORATE OFFICE PROPERTIES TRUST
Date: March 27, 2003
By:
/s/ Randall M. Griffin
Randall M. Griffin
President and Chief Operating Officer
Date: March 27, 2003
By:
/s/ Roger A. Waesche, Jr.
Roger A. Waesche, Jr.
Senior Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signatures
Title
Date
---------- ----- ----/s//s/ Jay H. Shidler
Chairman of the Board and Trustee
March
16, 2000 ------------------------------- (Jay27, 2003(Jay H. Shidler)
and Trustee /s//s/ Clay W. Hamlin, III
Chief Executive Officer and Trustee
March
16, 2000 ------------------------------- (Clay27, 2003(Clay W. Hamlin, III)
Trustee /s//s/ Randall M. Griffin
President and Chief Operating Officer
March
16, 2000 ------------------------------- (Randall27, 2003(Randall M. Griffin)
Officer /s//s/ Roger A. Waesche, Jr.
Senior Vice President and Chief Financial Officer
March
16, 2000 ------------------------------- (Roger27, 2003(Roger A. Waesche)
Financial Officer /s//s/ Betsy Z. Cohen
Trustee
March
16, 2000 ------------------------------- (Betzy27, 2003(Betsy Z. Cohen)
/s//s/ Kenneth D. Wethe
Trustee
March
16, 2000 ------------------------------- (Kenneth27, 2003(Kenneth D. Wethe)
/s//s/ Robert L. Denton
Trustee
March
16, 2000 ------------------------------- (Robert27, 2003(Robert L. Denton)
/s/ William H. Walton Trustee March 16, 2000 ------------------------------- (William H. Walton) /s//s/ Kenneth S. Sweet, Jr.
Trustee
March
16, 2000 ------------------------------- (Kenneth27, 2003(Kenneth S. Sweet, Jr.)
/s//s/ Steven D. Kesler
Trustee
March
16, 2000 ------------------------------- (Steven27, 2003(Steven D. Kesler)
/s/ Edward/s/ Thomas F. Brady
Trustee
March 27, 2003
(Thomas F. Brady)
29
CERTIFICATION
I, Clay W. Hamlin, III, certify that:
1. I have reviewed this annual report on Form 10-K of Corporate Office Properties Trust;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: March 27, 2003
By:
/s/ Clay W. Hamlin, III
Clay W. Hamlin, III
Chief Executive Officer
30
CERTIFICATION
I, Randall M. Griffin, certify that:
1. I have reviewed this annual report on Form 10-K of Corporate Office Properties Trust;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: March 27, 2003
By:
/s/ Randall M. Griffin
Randall M. Griffin
President and
Chief Operating Officer31
CERTIFICATION
I, Roger A. Waesche, Jr., certify that:
1. I have reviewed this annual report on Form 10-K of Corporate Office Properties Trust;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: March 27, 2003
By:
/s/ Roger A.
Crooke Trustee March 16, 2000 ------------------------------- (EdwardWaesche, Jr.Roger A.
Crooke)Waesche, Jr.Senior Vice President and
Chief Financial Officer2232