Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 22, 2013 | |
Entity Information [Line Items] | ||
Entity Registrant Name | CORPORATE OFFICE PROPERTIES TRUST | |
Entity Central Index Key | 860546 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 87,381,395 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Corporate Office Properties, L.P. | ||
Entity Information [Line Items] | ||
Entity Registrant Name | CORPORATE OFFICE PROPERTIES, L.P. | |
Entity Central Index Key | 1577966 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Properties, net: | ||
Operating properties, net | $2,713,579 | $2,597,666 |
Projects in development or held for future development | 526,167 | 565,378 |
Total properties, net | 3,239,746 | 3,163,044 |
Assets held for sale, net | 133,984 | 140,229 |
Cash and cash equivalents | 27,318 | 10,594 |
Restricted cash and marketable securities | 14,698 | 21,557 |
Accounts receivable (net of allowance for doubtful accounts of $5,344 and $4,694, respectively) | 17,724 | 19,247 |
Deferred rent receivable | 90,104 | 85,802 |
Intangible assets on real estate acquisitions, net | 64,372 | 75,879 |
Deferred leasing and financing costs, net | 63,246 | 59,952 |
Mortgage and other investing receivables | 40,321 | 33,396 |
Prepaid expenses and other assets | 64,075 | 44,059 |
Total assets | 3,755,588 | 3,653,759 |
Liabilities: | ||
Debt, net | 2,135,031 | 2,019,168 |
Accounts payable and accrued expenses | 85,291 | 97,922 |
Rents received in advance and security deposits | 28,539 | 27,632 |
Dividends/Distributions payable | 29,077 | 28,698 |
Deferred revenue associated with operating leases | 8,545 | 11,995 |
Distributions received in excess of investment in unconsolidated real estate joint venture | 6,420 | 6,420 |
Interest rate derivatives | 3,595 | 6,185 |
Other liabilities | 8,234 | 8,942 |
Total liabilities | 2,304,732 | 2,206,962 |
Commitments and contingencies (Note 17) | ||
Redeemable noncontrolling interest | 16,789 | 10,298 |
Corporate Office Properties Trust’s shareholders’ equity: | ||
Preferred Shares of beneficial interest at liquidation preference ($0.01 par value; 25,000,000 shares authorized; shares issued and outstanding of 9,431,667 at September 30, 2013 and 12,821,667 at December 31, 2012) | 249,083 | 333,833 |
Common Shares of beneficial interest | 874 | 809 |
Additional paid-in capital | 1,812,801 | 1,653,672 |
Cumulative distributions in excess of net income | -700,368 | -617,455 |
Accumulated other comprehensive income (loss) | 2,925 | -5,435 |
Total Corporate Office Properties Trust’s shareholders’ equity | 1,365,315 | 1,365,424 |
Noncontrolling interests in subsidiaries: | ||
Common units in COPLP | 50,815 | 52,122 |
Preferred units in COPLP | 8,800 | 8,800 |
Other consolidated entities | 9,137 | 10,153 |
Noncontrolling interests in subsidiaries | 68,752 | 71,075 |
Total equity | 1,434,067 | 1,436,499 |
Total liabilities, redeemable noncontrolling interest and equity | 3,755,588 | 3,653,759 |
Corporate Office Properties, L.P. | ||
Properties, net: | ||
Operating properties, net | 2,713,579 | 2,597,666 |
Projects in development or held for future development | 526,167 | 565,378 |
Total properties, net | 3,239,746 | 3,163,044 |
Assets held for sale, net | 133,984 | 140,229 |
Cash and cash equivalents | 27,318 | 10,594 |
Restricted cash and marketable securities | 7,517 | 14,781 |
Accounts receivable (net of allowance for doubtful accounts of $5,344 and $4,694, respectively) | 17,724 | 19,247 |
Deferred rent receivable | 90,104 | 85,802 |
Intangible assets on real estate acquisitions, net | 64,372 | 75,879 |
Deferred leasing and financing costs, net | 63,246 | 59,952 |
Mortgage and other investing receivables | 40,321 | 33,396 |
Prepaid expenses and other assets | 64,075 | 44,059 |
Total assets | 3,748,407 | 3,646,983 |
Liabilities: | ||
Debt, net | 2,135,031 | 2,019,168 |
Accounts payable and accrued expenses | 85,291 | 97,922 |
Rents received in advance and security deposits | 28,539 | 27,632 |
Dividends/Distributions payable | 29,077 | 28,698 |
Deferred revenue associated with operating leases | 8,545 | 11,995 |
Distributions received in excess of investment in unconsolidated real estate joint venture | 6,420 | 6,420 |
Interest rate derivatives | 3,595 | 6,185 |
Other liabilities | 1,053 | 2,166 |
Total liabilities | 2,297,551 | 2,200,186 |
Commitments and contingencies (Note 17) | ||
Redeemable noncontrolling interest | 16,789 | 10,298 |
Corporate Office Properties Trust’s shareholders’ equity: | ||
Common Shares of beneficial interest | 1,163,977 | 1,089,391 |
Accumulated other comprehensive income (loss) | 3,026 | -5,708 |
Total Corporate Office Properties Trust’s shareholders’ equity | 1,424,886 | 1,426,316 |
Noncontrolling interests in subsidiaries: | ||
Noncontrolling interests in subsidiaries | 9,181 | 10,183 |
Total equity | 1,434,067 | 1,436,499 |
Total liabilities, redeemable noncontrolling interest and equity | 3,748,407 | 3,646,983 |
Corporate Office Properties, L.P. | General Partner | ||
Corporate Office Properties Trust’s shareholders’ equity: | ||
Preferred partners' capital accounts | 249,083 | 333,833 |
Corporate Office Properties, L.P. | Limited Partner | ||
Corporate Office Properties Trust’s shareholders’ equity: | ||
Preferred partners' capital accounts | $8,800 | $8,800 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $5,344 | $4,694 |
Preferred Shares of beneficial interest, par value (in dollars per share) | $0.01 | $0.01 |
Preferred Shares of beneficial interest, shares authorized | 25,000,000 | 25,000,000 |
Preferred Shares of beneficial interest, shares issued | 9,431,667 | 12,821,667 |
Preferred Shares of beneficial interest, shares outstanding | 9,431,667 | 12,821,667 |
Common Shares of beneficial interest, par value (in dollars per share) | $0.01 | $0.01 |
Common Shares of beneficial interest, shares authorized | 125,000,000 | 125,000,000 |
Common Shares of beneficial interest, shares issued | 87,381,395 | 80,952,986 |
Common Shares of beneficial interest, shares outstanding | 87,381,395 | 80,952,986 |
Consolidated_Balance_Sheets_Pa1
Consolidated Balance Sheets (Parenthetical 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $5,344 | $4,694 |
Common Shares of beneficial interest, shares outstanding | 87,381,395 | 80,952,986 |
Corporate Office Properties, L.P. | ||
Allowance for doubtful accounts | $5,344 | $4,694 |
Corporate Office Properties, L.P. | General Partner | ||
Preferred Units, Outstanding | 9,431,667 | 12,821,667 |
Common Shares of beneficial interest, shares outstanding | 87,381,395 | 80,952,986 |
Corporate Office Properties, L.P. | Limited Partner | ||
Preferred Units, Outstanding | 352,000 | 352,000 |
Common Shares of beneficial interest, shares outstanding | 3,978,154 | 4,067,542 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Revenues | ||||||||
Rental revenue | $97,442 | $92,287 | $289,628 | $271,634 | ||||
Tenant recoveries and other real estate operations revenue | 21,598 | 22,075 | 65,499 | 63,597 | ||||
Construction contract and other service revenues | 16,991 | 15,283 | 52,048 | 53,812 | ||||
Total revenues | 136,031 | 129,645 | 407,175 | 389,043 | ||||
Expenses | ||||||||
Property operating expenses | 43,482 | 41,474 | 129,409 | 122,102 | ||||
Depreciation and amortization associated with real estate operations | 29,210 | 28,604 | 86,239 | 84,633 | ||||
Construction contract and other service expenses | 16,306 | 14,410 | 49,165 | 51,302 | ||||
Impairment losses | 16,300 | 46,096 | 16,300 | 41,260 | ||||
General, administrative and leasing expenses | 8,027 | 6,377 | 22,430 | 24,797 | ||||
Business development expenses and land carry costs | 1,383 | 1,632 | 4,069 | 4,506 | ||||
Total operating expenses | 114,708 | 138,593 | 307,612 | 328,600 | ||||
Operating income (loss) | 21,323 | -8,948 | 99,563 | 60,443 | ||||
Interest expense | -21,242 | -23,239 | -66,851 | -71,909 | ||||
Interest and other (loss) income | -3 | 1,095 | 2,949 | 3,152 | ||||
Loss on early extinguishment of debt | -374 | -768 | -27,028 | -937 | ||||
(Loss) income from continuing operations before equity in income (loss) of unconsolidated entities and income taxes | -296 | -31,860 | 8,633 | -9,251 | ||||
Equity in income (loss) of unconsolidated entities | 44 | -246 | 211 | -522 | ||||
Income tax expense | -24 | -106 | -61 | -327 | ||||
(Loss) income from continuing operations | -276 | -32,212 | 8,783 | -10,100 | ||||
Discontinued operations | -1,724 | 11,447 | -2,594 | 11,410 | ||||
(Loss) income before gain on sales of real estate | -2,000 | -20,765 | 6,189 | 1,310 | ||||
Gain on sales of real estate | 0 | 0 | 2,683 | 21 | ||||
Net (loss) income | -2,000 | -20,765 | 8,872 | 1,331 | ||||
Net loss (income) attributable to noncontrolling interests: | ||||||||
Common units in COPLP | 232 | 1,533 | 474 | 738 | ||||
Preferred units in COPLP | -165 | -165 | -495 | -495 | ||||
Other consolidated entities | -1,031 | 235 | -2,160 | 864 | ||||
Net (loss) income attributable to COPT | -2,964 | -19,162 | 6,691 | 2,438 | ||||
Preferred share/unit dividends/distributions | -4,490 | -6,546 | -15,481 | -14,738 | ||||
Issuance costs associated with redeemed preferred shares/units | 0 | -1,827 | -2,904 | -1,827 | ||||
Net loss attributable to COPT common shareholders | -7,454 | -27,535 | -11,694 | -14,127 | ||||
Net (loss) income attributable to COPT: | ||||||||
(Loss) income from continuing operations | -1,266 | -29,963 | 9,327 | -8,369 | ||||
Discontinued operations, net | -1,698 | 10,801 | -2,636 | 10,807 | ||||
Net (loss) income attributable to COPT | -2,964 | -19,162 | 6,691 | 2,438 | ||||
Basic earnings per common share | ||||||||
Loss from continuing operations | ($0.07) | [1] | ($0.54) | [1] | ($0.11) | [1] | ($0.35) | [1] |
Discontinued operations | ($0.02) | [1] | $0.15 | [1] | ($0.03) | [1] | $0.15 | [1] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [1] | ($0.39) | [1] | ($0.14) | [1] | ($0.20) | [1] |
Diluted earnings per common share | ||||||||
Loss from continuing operations | ($0.07) | [1] | ($0.54) | [1] | ($0.11) | [1] | ($0.35) | [1] |
Discontinued operations | ($0.02) | [1] | $0.15 | [1] | ($0.03) | [1] | $0.15 | [1] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [1] | ($0.39) | [1] | ($0.14) | [1] | ($0.20) | [1] |
Dividends/distributions declared per common share/unit | $0.28 | $0.28 | $0.83 | $0.83 | ||||
Corporate Office Properties, L.P. | ||||||||
Revenues | ||||||||
Rental revenue | 97,442 | 92,287 | 289,628 | 271,634 | ||||
Tenant recoveries and other real estate operations revenue | 21,598 | 22,075 | 65,499 | 63,597 | ||||
Construction contract and other service revenues | 16,991 | 15,283 | 52,048 | 53,812 | ||||
Total revenues | 136,031 | 129,645 | 407,175 | 389,043 | ||||
Expenses | ||||||||
Property operating expenses | 43,482 | 41,474 | 129,409 | 122,102 | ||||
Depreciation and amortization associated with real estate operations | 29,210 | 28,604 | 86,239 | 84,633 | ||||
Construction contract and other service expenses | 16,306 | 14,410 | 49,165 | 51,302 | ||||
Impairment losses | 16,300 | 46,096 | 16,300 | 41,260 | ||||
General, administrative and leasing expenses | 8,027 | 6,377 | 22,430 | 24,797 | ||||
Business development expenses and land carry costs | 1,383 | 1,632 | 4,069 | 4,506 | ||||
Total operating expenses | 114,708 | 138,593 | 307,612 | 328,600 | ||||
Operating income (loss) | 21,323 | -8,948 | 99,563 | 60,443 | ||||
Interest expense | -21,242 | -23,239 | -66,851 | -71,909 | ||||
Interest and other (loss) income | -3 | 1,095 | 2,949 | 3,152 | ||||
Loss on early extinguishment of debt | -374 | -768 | -27,028 | -937 | ||||
(Loss) income from continuing operations before equity in income (loss) of unconsolidated entities and income taxes | -296 | -31,860 | 8,633 | -9,251 | ||||
Equity in income (loss) of unconsolidated entities | 44 | -246 | 211 | -522 | ||||
Income tax expense | -24 | -106 | -61 | -327 | ||||
(Loss) income from continuing operations | -276 | -32,212 | 8,783 | -10,100 | ||||
Discontinued operations | -1,724 | 11,447 | -2,594 | 11,410 | ||||
(Loss) income before gain on sales of real estate | -2,000 | -20,765 | 6,189 | 1,310 | ||||
Gain on sales of real estate | 0 | 0 | 2,683 | 21 | ||||
Net (loss) income | -2,000 | -20,765 | 8,872 | 1,331 | ||||
Net loss (income) attributable to noncontrolling interests: | ||||||||
Net (income) loss attributable to noncontrolling interests in consolidated entities | -1,035 | -404 | -2,172 | 167 | ||||
Net (loss) income attributable to COPT | -3,035 | -21,169 | 6,700 | 1,498 | ||||
Preferred share/unit dividends/distributions | -4,655 | -6,711 | -15,976 | -15,233 | ||||
Issuance costs associated with redeemed preferred shares/units | 0 | -1,827 | -2,904 | -1,827 | ||||
Net loss attributable to COPT common shareholders | -7,690 | -29,707 | -12,180 | -15,562 | ||||
Net (loss) income attributable to COPT: | ||||||||
(Loss) income from continuing operations | -1,262 | -31,969 | 9,441 | -9,250 | ||||
Discontinued operations, net | -1,773 | 10,800 | -2,741 | 10,748 | ||||
Net (loss) income attributable to COPT | ($3,035) | ($21,169) | $6,700 | $1,498 | ||||
Basic earnings per common share | ||||||||
Loss from continuing operations | ($0.07) | [2] | ($0.54) | [2] | ($0.11) | [2] | ($0.35) | [2] |
Discontinued operations | ($0.02) | [2] | $0.15 | [2] | ($0.03) | [2] | $0.14 | [2] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [2] | ($0.39) | [2] | ($0.14) | [2] | ($0.21) | [2] |
Diluted earnings per common share | ||||||||
Loss from continuing operations | ($0.07) | [2] | ($0.54) | [2] | ($0.11) | [2] | ($0.35) | [2] |
Discontinued operations | ($0.02) | [2] | $0.15 | [2] | ($0.03) | [2] | $0.14 | [2] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [2] | ($0.39) | [2] | ($0.14) | [2] | ($0.21) | [2] |
Dividends/distributions declared per common share/unit | $0.28 | $0.28 | $0.83 | $0.83 | ||||
[1] | Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust. | |||||||
[2] | Basic and diluted earnings per common unit are calculated based on amounts attributable to common unitholders of Corporate Office Properties, L.P. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net (loss) income | ($2,000) | ($20,765) | $8,872 | $1,331 |
Other comprehensive (loss) income | ||||
Unrealized (losses) gains on interest rate derivatives | -2,482 | -2,760 | 5,810 | -7,386 |
Losses on interest rate derivatives included in net (loss) income | 689 | 632 | 2,021 | 3,034 |
Equity in other comprehensive income of equity method investee | 1,070 | 0 | 1,070 | 0 |
Other comprehensive (loss) income | -723 | -2,128 | 8,901 | -4,352 |
Comprehensive (loss) income | -2,723 | -22,893 | 17,773 | -3,021 |
Comprehensive (income) loss attributable to noncontrolling interests | -948 | 1,763 | -2,722 | 1,509 |
Comprehensive (loss) income attributable to COPT | -3,671 | -21,130 | 15,051 | -1,512 |
Corporate Office Properties, L.P. | ||||
Net (loss) income | -2,000 | -20,765 | 8,872 | 1,331 |
Other comprehensive (loss) income | ||||
Unrealized (losses) gains on interest rate derivatives | -2,482 | -2,760 | 5,810 | -7,386 |
Losses on interest rate derivatives included in net (loss) income | 689 | 632 | 2,021 | 3,034 |
Equity in other comprehensive income of equity method investee | 1,070 | 0 | 1,070 | 0 |
Other comprehensive (loss) income | -723 | -2,128 | 8,901 | -4,352 |
Comprehensive (loss) income | -2,723 | -22,893 | 17,773 | -3,021 |
Comprehensive (income) loss attributable to noncontrolling interests | -1,050 | -360 | -2,339 | 336 |
Comprehensive (loss) income attributable to COPT | ($3,773) | ($23,253) | $15,434 | ($2,685) |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | Preferred Shares | Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. |
In Thousands, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Common Shares | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Limited Partner | Limited Partner | General Partner | General Partner |
USD ($) | USD ($) | USD ($) | Preferred Shares | Preferred Shares | |||||||||||
USD ($) | USD ($) | ||||||||||||||
Balance at Dec. 31, 2011 | $1,205,899 | $216,333 | $720 | $1,451,078 | ($534,041) | ($1,733) | $73,542 | $1,205,899 | $972,107 | ($1,837) | $10,496 | $8,800 | $216,333 | ||
Balance (in units/ shares) at Dec. 31, 2011 | 72,011,324 | 76,313,112 | |||||||||||||
Balance (preferred units) at Dec. 31, 2011 | 352,000 | 8,121,667 | |||||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||
Conversion of common units to common shares (94,550 and 310,889 for the nine months ended September 30, 2012 and 2013, respectively) | 1 | 1,187 | -1,188 | ||||||||||||
Shares issued to the public (in dollars) | 165,662 | 172,500 | -6,838 | 165,662 | -6,838 | 172,500 | |||||||||
Shares issued to the public (in units/ shares) | 6,900,000 | ||||||||||||||
Stock redeemed or called during period (in units/ shares) | -2,200,000 | ||||||||||||||
Stock redeemed or called during period, value | -55,000 | -55,000 | 1,827 | -1,827 | -55,000 | -55,000 | |||||||||
Costs associated with common units/shares issued to the public | -5 | -5 | -5 | -5 | |||||||||||
Exercise of share options (in units/shares) | 44,624 | 44,624 | |||||||||||||
Exercise of share options (in dollars) | 666 | 666 | 666 | 666 | |||||||||||
Share-based compensation (in units/shares) | 142,914 | ||||||||||||||
Share-based compensation | 9,192 | 1 | 9,191 | 9,192 | 9,192 | ||||||||||
Restricted common unts/shares redemptions | -135,777 | -135,777 | |||||||||||||
Restricted common units/shares redemptions (in dollars) | -3,279 | -3,279 | -3,279 | -3,279 | |||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 373 | -373 | |||||||||||||
Comprehensive income (loss) | -1,218 | 2,438 | -3,955 | 299 | -1,218 | -13,735 | -4,182 | 1,466 | 495 | 14,738 | |||||
Dividends/Distributions | -74,203 | -74,203 | -78,196 | -62,963 | -495 | -14,738 | |||||||||
Distributions to owners of common and preferred units in COPLP | -3,993 | -3,993 | |||||||||||||
Contributions from noncontrolling interests | -1,602 | -1,602 | |||||||||||||
Distributions to noncontrolling interests | -648 | -648 | -648 | -648 | |||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | -2,827 | -2,827 | -2,827 | -2,827 | |||||||||||
Increase in tax benefit from share-based compensation | 43 | 43 | 43 | 43 | |||||||||||
Balance at Sep. 30, 2012 | 1,240,289 | 333,833 | 722 | 1,451,416 | -607,633 | -5,688 | 67,639 | 1,240,289 | 893,963 | -6,019 | 9,712 | 8,800 | 333,833 | ||
Balance (in units/ shares) at Sep. 30, 2012 | 72,157,635 | 76,364,873 | |||||||||||||
Balance (preferred units) at Sep. 30, 2012 | 352,000 | 12,821,667 | |||||||||||||
Balance at Dec. 31, 2012 | 1,436,499 | 333,833 | 809 | 1,653,672 | -617,455 | -5,435 | 71,075 | 1,436,499 | 1,089,391 | -5,708 | 10,183 | 8,800 | 333,833 | ||
Balance (in units/ shares) at Dec. 31, 2012 | 80,952,986 | 85,020,528 | 4,067,542 | 80,952,986 | |||||||||||
Balance (preferred units) at Dec. 31, 2012 | 352,000 | 352,000 | 12,821,667 | 12,821,667 | |||||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||
Conversion of common units to common shares (94,550 and 310,889 for the nine months ended September 30, 2012 and 2013, respectively) | 3 | 3,988 | -3,991 | ||||||||||||
Shares issued to the public (in dollars) | 117,961 | 45 | 117,916 | 117,961 | 117,961 | ||||||||||
Shares issued to the public (in units/ shares) | 4,485,000 | ||||||||||||||
Stock redeemed or called during period (in units/ shares) | -3,390,000 | ||||||||||||||
Stock redeemed or called during period, value | -84,750 | -84,750 | 2,904 | -2,904 | -84,750 | -84,750 | |||||||||
Issuance of common units resulting from common shares issued under at-the-market program (in units) | 1,500,000 | ||||||||||||||
Issuance of common units resulting from common shares issued under at-the-market program (in dollars) | 38,447 | 15 | 38,432 | 38,447 | 38,447 | ||||||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units | 1,369 | -1,296 | 2,665 | ||||||||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units (in units) | 221,501 | ||||||||||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units (in dollars) | 1,369 | 3,899 | -2,530 | ||||||||||||
Exercise of share options (in units/shares) | 32,756 | 32,756 | |||||||||||||
Exercise of share options (in dollars) | 642 | 642 | 642 | 642 | |||||||||||
Share-based compensation (in units/shares) | 171,287 | ||||||||||||||
Share-based compensation | 5,702 | 2 | 5,700 | 5,702 | 5,702 | ||||||||||
Restricted common unts/shares redemptions | -71,523 | -71,523 | |||||||||||||
Restricted common units/shares redemptions (in dollars) | -1,848 | -1,848 | -1,848 | -1,848 | |||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | -773 | 773 | |||||||||||||
Comprehensive income (loss) | 16,885 | 6,691 | 8,360 | 1,834 | 16,885 | -9,276 | 8,734 | 1,451 | 495 | 15,481 | |||||
Dividends/Distributions | -86,700 | -86,700 | -90,381 | -74,405 | -495 | -15,481 | |||||||||
Distributions to owners of common and preferred units in COPLP | -3,681 | -3,681 | |||||||||||||
Contributions from noncontrolling interests | 85 | 85 | 85 | 85 | |||||||||||
Distributions to noncontrolling interests | -8 | -8 | -8 | -8 | |||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interest | -6,414 | -6,414 | -6,414 | -6,414 | |||||||||||
Increase in tax benefit from share-based compensation | -122 | -122 | -122 | -122 | |||||||||||
Balance at Sep. 30, 2013 | $1,434,067 | $249,083 | $874 | $1,812,801 | ($700,368) | $2,925 | $68,752 | $1,434,067 | $1,163,977 | $3,026 | $9,181 | $8,800 | $249,083 | ||
Balance (in units/ shares) at Sep. 30, 2013 | 87,381,395 | 91,359,549 | 3,978,154 | 87,381,395 | |||||||||||
Balance (preferred units) at Sep. 30, 2013 | 352,000 | 352,000 | 9,431,667 | 9,431,667 |
Consolidated_Statements_of_Equ1
Consolidated Statements of Equity (Parenthetical) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Balance (in units/ shares) | 80,952,986 | 72,011,324 |
Conversion of common units to common shares | 310,889 | 94,550 |
Exercise of share options (in units/shares) | 32,756 | 44,624 |
Restricted common units/shares redemptions | 71,523 | 135,777 |
Balance (in units/ shares) | 87,381,395 | 72,157,635 |
Preferred Shares | ||
Shares issued to the public (in units/ shares) | 6,900,000 | |
Stock redeemed or called during period (in units/ shares) | 3,390,000 | 2,200,000,000 |
Common Shares | ||
Shares issued to the public (in units/ shares) | 4,485,000 | |
Common shares issued to public under at-the-market program | ||
Shares issued to the public (in units/ shares) | 1,500,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities | ||
Revenues from real estate operations received | $359,431 | $363,877 |
Construction contract and other service revenues received | 48,877 | 58,637 |
Property operating expenses paid | -133,799 | -133,375 |
Construction contract and other service expenses paid | -53,191 | -50,438 |
General, administrative, leasing, business development and land carry costs paid | -20,681 | -18,526 |
Interest expense paid | -59,052 | -63,811 |
Previously accreted interest expense paid | -11,116 | 0 |
Settlement of interest rate derivatives | 0 | -29,738 |
Proceeds from sale of trading marketable securities | 298 | 18,975 |
Exit costs on property dispositions | -186 | -4,066 |
Payments in connection with early extinguishment of debt | -23,969 | -2,637 |
Interest and other income received | 391 | 786 |
Income taxes paid | 6 | -8 |
Net cash provided by operating activities | 107,009 | 139,676 |
Cash flows from investing activities | ||
Construction, development and redevelopment | -156,820 | -107,621 |
Tenant improvements on operating properties | -15,868 | -20,924 |
Other capital improvements on operating properties | -17,528 | -9,571 |
Acquisitions of operating properties | 0 | -48,308 |
Proceeds from dispositions of properties | 12,447 | 290,607 |
Mortgage and other loan receivables funded or acquired | -4,111 | -11,603 |
Leasing costs paid | -9,366 | -7,289 |
Other | 4,401 | -1,527 |
Net cash (used in) provided by investing activities | -186,845 | 83,764 |
Proceeds from debt | ||
Revolving Credit Facility | 457,000 | 262,000 |
Unsecured senior notes | 592,413 | 0 |
Other debt proceeds | 82,886 | 399,296 |
Repayments of debt | ||
Revolving Credit Facility | -457,000 | -844,000 |
Scheduled principal amortization | -7,229 | -9,094 |
Other debt repayments | -542,532 | -51,850 |
Deferred financing costs paid | -9,001 | -3,210 |
Net proceeds from issuance of preferred shares/units | 0 | 165,662 |
Net proceeds from issuance of common shares/units | 157,307 | 661 |
Redemption of preferred shares/units | -84,750 | -55,000 |
Common share/unit dividends/distributions paid | -69,451 | -69,325 |
Preferred share/unit dividends/distributions paid | -16,845 | -12,345 |
Distributions paid to noncontrolling interests in COPLP | -3,705 | -4,510 |
Restricted share redemptions | -1,848 | -3,279 |
Other | -685 | 1,004 |
Net cash provided by (used in) financing activities | 96,560 | -223,990 |
Net increase (decrease) in cash and cash equivalents | 16,724 | -550 |
Cash and cash equivalents | ||
Beginning of period | 10,594 | 5,559 |
End of period | 27,318 | 5,009 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 8,872 | 1,331 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 87,956 | 95,248 |
Impairment losses | 30,940 | 60,593 |
Settlement of previously accreted interest expense | -11,116 | 0 |
Amortization of deferred financing costs | 4,292 | 4,696 |
Increase in deferred rent receivable | -7,995 | -7,939 |
Amortization of net debt discounts | 1,207 | 2,357 |
Gain on sales of real estate | -2,683 | -20,969 |
Share-based compensation | 4,869 | 8,262 |
Loss (gain) on early extinguishment of debt | 3,059 | -3,436 |
Other | -2,284 | -459 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 1,523 | 10,063 |
Decrease in restricted cash and marketable securities | 418 | 15,051 |
(Increase) decrease in prepaid expenses and other assets | -12,974 | 1,532 |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | 18 | 4,124 |
Increase (decrease) in rents received in advance and security deposits | 907 | -2,775 |
Decrease in interest rate derivatives in connection with cash settlement | 0 | -28,003 |
Net cash provided by operating activities | 107,009 | 139,676 |
Supplemental schedule of non-cash investing and financing activities: | ||
Decrease in accrued capital improvements, leasing and other investing activity costs | -13,094 | -11,627 |
Decrease in property in connection with surrender of property in settlement of debt | 0 | 12,812 |
Decrease in debt in connection with surrender of property in settlement of debt | 0 | 16,304 |
Increase (decrease) in fair value of derivatives applied to accumulated other comprehensive income (loss) and noncontrolling interests | 7,785 | -4,398 |
Equity in other comprehensive income of an equity method investee | 1,070 | 0 |
Dividends/distributions payable | 29,077 | 26,954 |
COPLP common units issued to acquire property and noncontrolling interest in other consolidated entity | 5,194 | 0 |
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | 3,991 | 1,188 |
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | 773 | 373 |
Increase in redeemable noncontrolling interest and decrease in shareholders’ equity to carry redeemable noncontrolling interest at fair value | 6,414 | 2,827 |
Corporate Office Properties, L.P. | ||
Cash flows from operating activities | ||
Revenues from real estate operations received | 359,431 | 363,877 |
Construction contract and other service revenues received | 48,877 | 58,637 |
Property operating expenses paid | -133,799 | -133,375 |
Construction contract and other service expenses paid | -53,191 | -50,438 |
General, administrative, leasing, business development and land carry costs paid | -20,681 | -18,526 |
Interest expense paid | -59,052 | -63,811 |
Previously accreted interest expense paid | -11,116 | 0 |
Settlement of interest rate derivatives | 0 | -29,738 |
Proceeds from sale of trading marketable securities | 298 | 18,975 |
Exit costs on property dispositions | -186 | -4,066 |
Payments in connection with early extinguishment of debt | -23,969 | -2,637 |
Interest and other income received | 391 | 786 |
Income taxes paid | 6 | -8 |
Net cash provided by operating activities | 107,009 | 139,676 |
Cash flows from investing activities | ||
Construction, development and redevelopment | -156,820 | -107,621 |
Tenant improvements on operating properties | -15,868 | -20,924 |
Other capital improvements on operating properties | -17,528 | -9,571 |
Acquisitions of operating properties | 0 | -48,308 |
Proceeds from dispositions of properties | 12,447 | 290,607 |
Mortgage and other loan receivables funded or acquired | -4,111 | -11,603 |
Leasing costs paid | -9,366 | -7,289 |
Other | 4,401 | -1,527 |
Net cash (used in) provided by investing activities | -186,845 | 83,764 |
Proceeds from debt | ||
Revolving Credit Facility | 457,000 | 262,000 |
Unsecured senior notes | 592,413 | 0 |
Other debt proceeds | 82,886 | 399,296 |
Repayments of debt | ||
Revolving Credit Facility | -457,000 | -844,000 |
Scheduled principal amortization | -7,229 | -9,094 |
Other debt repayments | -542,532 | -51,850 |
Deferred financing costs paid | -9,001 | -3,210 |
Net proceeds from issuance of preferred shares/units | 0 | 165,662 |
Net proceeds from issuance of common shares/units | 157,307 | 661 |
Redemption of preferred shares/units | -84,750 | -55,000 |
Common share/unit dividends/distributions paid | -72,661 | -73,340 |
Preferred share/unit dividends/distributions paid | -17,340 | -12,840 |
Restricted share redemptions | -1,848 | -3,279 |
Other | -685 | 1,004 |
Net cash provided by (used in) financing activities | 96,560 | -223,990 |
Net increase (decrease) in cash and cash equivalents | 16,724 | -550 |
Cash and cash equivalents | ||
Beginning of period | 10,594 | 5,559 |
End of period | 27,318 | 5,009 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 8,872 | 1,331 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 87,956 | 95,248 |
Impairment losses | 30,940 | 60,593 |
Settlement of previously accreted interest expense | -11,116 | 0 |
Amortization of deferred financing costs | 4,292 | 4,696 |
Increase in deferred rent receivable | -7,995 | -7,939 |
Amortization of net debt discounts | 1,207 | 2,357 |
Gain on sales of real estate | -2,683 | -20,969 |
Share-based compensation | 4,869 | 8,262 |
Loss (gain) on early extinguishment of debt | 3,059 | -3,436 |
Other | -2,284 | -459 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 1,523 | 10,063 |
Decrease in restricted cash and marketable securities | 822 | 14,399 |
(Increase) decrease in prepaid expenses and other assets | -12,974 | 1,532 |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | -386 | 4,776 |
Increase (decrease) in rents received in advance and security deposits | 907 | -2,775 |
Decrease in interest rate derivatives in connection with cash settlement | 0 | -28,003 |
Net cash provided by operating activities | 107,009 | 139,676 |
Supplemental schedule of non-cash investing and financing activities: | ||
Decrease in accrued capital improvements, leasing and other investing activity costs | -13,094 | -11,627 |
Decrease in property in connection with surrender of property in settlement of debt | 0 | 12,812 |
Decrease in debt in connection with surrender of property in settlement of debt | 0 | 16,304 |
Increase (decrease) in fair value of derivatives applied to accumulated other comprehensive income (loss) and noncontrolling interests | 7,785 | -4,398 |
Equity in other comprehensive income of an equity method investee | 1,070 | 0 |
Dividends/distributions payable | 29,077 | 26,954 |
COPLP common units issued to acquire property and noncontrolling interest in other consolidated entity | 5,194 | 0 |
Increase in redeemable noncontrolling interest and decrease in shareholders’ equity to carry redeemable noncontrolling interest at fair value | $6,414 | $2,827 |
Organization
Organization | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization | Organization | |
Corporate Office Properties Trust (“COPT”) and subsidiaries (collectively, the “Company”) is a fully-integrated and self-managed real estate investment trust (“REIT”). Corporate Office Properties, L.P. (“COPLP”) and subsidiaries (collectively, the “Operating Partnership”) is the entity through which COPT, the sole general partner of COPLP, conducts almost all of its operations and owns almost all of its assets. Unless otherwise expressly stated or the context otherwise requires, “we”, “us” and “our” as used herein refer to each of the Company and the Operating Partnership. We focus primarily on serving the specialized requirements of United States Government agencies and defense contractors, most of whom are engaged in defense information technology and national security related activities. We generally acquire, develop, manage and lease office and data center properties concentrated in large office parks located near knowledge-based government demand drivers and/or in targeted markets or submarkets in the Greater Washington, DC/Baltimore region. As of September 30, 2013, our investments in real estate included the following: | ||
• | 210 operating office properties totaling 19.2 million square feet; | |
• | 11 office properties under, or contractually committed for, construction or approved for redevelopment that we estimate will total approximately 1.5 million square feet upon completion, including one partially operational property included above; | |
• | land held or under pre-construction totaling 1,721 acres (including 56 acres controlled but not owned) that we believe are potentially developable into approximately 20.4 million square feet; and | |
• | a partially operational, wholesale data center which upon completion and stabilization is expected to have a critical load of 18 megawatts. | |
COPLP owns real estate both directly and through subsidiary partnerships and limited liability companies (“LLCs”). In addition to owning real estate, COPLP also owns subsidiaries that provide real estate services such as property management and construction and development services primarily for our properties but also for third parties. | ||
Interests in COPLP are in the form of common and preferred units. As of September 30, 2013, COPT owned 95.6% of the outstanding COPLP common units (“common units”) and 96.4% of the outstanding COPLP preferred units (“preferred units”); the remaining common and preferred units in COPLP were owned by third parties. Three of COPT’s trustees controlled, either directly or through ownership by other entities or family members, 3.4% of COPLP’s common units as of September 30, 2013. Common units in COPLP not owned by COPT carry certain redemption rights. The number of common units in COPLP owned by COPT is equivalent to the number of outstanding common shares of beneficial interest (“common shares”) of COPT, and the entitlement of all COPLP common units to quarterly distributions and payments in liquidation are substantially the same as those of COPT common shareholders. Similarly, in the case of each series of preferred units in COPLP held by COPT, there is a series of preferred shares of beneficial interest (“preferred shares”) that is equivalent in number and carries substantially the same terms as such series of COPLP preferred units. COPT’s common shares are publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “OFC”. | ||
Because COPLP is managed by COPT, and COPT conducts substantially all of its operations through COPLP, we refer to COPT’s executive officers as COPLP’s executive officers, and although, as a partnership, COPLP does not have a board of trustees, we refer to COPT’s Board of Trustees as COPLP’s Board of Trustees. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |||||||||||||||||||||||
Basis of Presentation | ||||||||||||||||||||||||
The COPT consolidated financial statements include the accounts of COPT, the Operating Partnership, their subsidiaries and other entities in which COPT has a majority voting interest and control. The COPLP consolidated financial statements include the accounts of COPLP, its subsidiaries and other entities in which COPLP has a majority voting interest and control. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if they are deemed to be the primary beneficiary of such entities. We eliminate all significant intercompany balances and transactions in consolidation. | ||||||||||||||||||||||||
We use the equity method of accounting when we own an interest in an entity and can exert significant influence over the entity’s operations but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity. | ||||||||||||||||||||||||
We use the cost method of accounting when we own an interest in an entity and cannot exert significant influence over its operations. | ||||||||||||||||||||||||
These interim financial statements should be read together with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2012 for COPT (included in COPT’s 2012 Annual Report on Form 10-K) and COPLP (included in our Current Report on Form 8-K dated July 25, 2013). The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly present our financial position and results of operations. All adjustments are of a normal recurring nature except for the revisions and reclassifications noted below. The consolidated financial statements have been prepared using the accounting policies described in COPT’s 2012 Annual Report on Form 10-K and our Current Report on Form 8-K dated July 25, 2013. | ||||||||||||||||||||||||
Reclassifications | ||||||||||||||||||||||||
We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity. | ||||||||||||||||||||||||
Revisions | ||||||||||||||||||||||||
As reported in COPT’s 2012 Annual Report on Form 10-K, the following errors were identified in 2012: | ||||||||||||||||||||||||
• | the misapplication of accounting guidance related to the recognition of a deferred tax asset resulting from an impairment of assets in the fourth quarter of 2011 that failed to consider a partial reversal of that asset that would result from a cancellation of related inter-company debt in the first quarter of 2012. The effect of this error was an overstatement of our income tax benefit and an understatement of our net loss for the year ended December 31, 2011 of $4.0 million. Based on an evaluation against our projected annual net income at that time, this error was previously reported for COPT as an out-of-period adjustment in the three months ended March 31, 2012; | |||||||||||||||||||||||
• | an over-accrual of incentive compensation cost, the effect of which was an overstatement of general and administrative expenses and an overstatement of net loss for the calendar quarter and year ended December 31, 2011 of $711,000. Based on an evaluation against our projected annual net income at that time, this error was previously reported for COPT as an out-of-period adjustment in the three months ended March 31, 2012; | |||||||||||||||||||||||
• | the misapplication of accounting guidance requiring that we recognize loss allocations to a noncontrolling interest holder in a consolidated real estate joint venture associated with decreases in such holder’s claim on the book value of the joint venture’s assets, despite the fact that the real estate held by the joint venture was under development and the joint venture had no underlying losses. The effect of this error was an understatement for COPT of losses attributable to noncontrolling interests in other consolidated entities of $1.8 million for the nine months ended September 30, 2012 and $1.4 million for the year ended December 31, 2011; and | |||||||||||||||||||||||
• | the misapplication of accounting guidance pertaining to our reporting for a noncontrolling interest in a consolidated real estate joint venture formed in March 2010 for which the holder of such interest has the right to require us to acquire the interest at fair value. Accounting guidance requires that this noncontrolling interest be classified outside of permanent equity and reported at fair value as of the end of each reporting period, with changes in such fair value reported as equity transactions with no impact to net income or comprehensive income. This error resulted in an overstatement of equity and offsetting understatement of the line entitled “redeemable noncontrolling interest” in the mezzanine section of COPT’s consolidated balance sheet of $8.9 million as of December 31, 2011. This error had no effect on COPT’s consolidated statements of operations, including reported net income (losses) or earnings per share. | |||||||||||||||||||||||
With respect to the errors in the first two bullets above, we assessed the materiality of these errors on COPT’s consolidated financial statements in connection with previously filed periodic reports, in accordance with ASC 250 (SEC’s Staff Accounting Bulletin No. 99, “Materiality”), and concluded at such time that the errors were not material to any prior annual or interim periods. In assessing the cumulative effect of all such errors, we have considered ASC 250 (SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”), and accordingly, the financial statements as of, and for the year ended, December 31, 2011 were revised in COPT’s 2012 Annual Report on Form 10-K. We revised COPT amounts pertaining to the first and second quarter of 2012 in COPT’s Form 10-Qs filed on April 30, 2013 and August 1, 2013, respectively, and amounts pertaining to the third quarter and first nine months of 2012 herein. | ||||||||||||||||||||||||
The following are selected line items from COPT’s consolidated financial statements as of, and for the three and nine months ended, September 30, 2012 illustrating the effect of adjustments pertaining to reclassifications and revisions (in thousands): | ||||||||||||||||||||||||
Consolidated Balance Sheet as of September 30, 2012 | ||||||||||||||||||||||||
Per September 30, 2012 10-Q | As Revised | Change | Revisions | |||||||||||||||||||||
Redeemable noncontrolling interest | $ | — | $ | 9,932 | $ | 9,932 | $ | 9,932 | ||||||||||||||||
Additional paid-in capital | $ | 1,455,558 | $ | 1,451,416 | $ | (4,142 | ) | $ | (4,142 | ) | ||||||||||||||
Cumulative distributions in excess of net income | $ | (610,659 | ) | $ | (607,633 | ) | $ | 3,026 | $ | 3,026 | ||||||||||||||
Noncontrolling interests in common units in COPLP | $ | 48,973 | $ | 49,157 | $ | 184 | $ | 184 | ||||||||||||||||
Noncontrolling interests in other consolidated entities | $ | 18,682 | $ | 9,682 | $ | (9,000 | ) | $ | (9,000 | ) | ||||||||||||||
Total equity | $ | 1,250,221 | $ | 1,240,289 | $ | (9,932 | ) | $ | (9,932 | ) | ||||||||||||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,597,656 | $ | 3,597,656 | $ | — | $ | — | ||||||||||||||||
Consolidated Statements of Operations for the | ||||||||||||||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||||||||||||||
Per September 30, 2012 10-Q | Per September 30, 2013 10-Q | Change | Discontinued Operations | Other Reclassifications | Revisions | |||||||||||||||||||
Total revenues | $ | 130,144 | $ | 129,645 | $ | (499 | ) | $ | (499 | ) | $ | — | $ | — | ||||||||||
Expenses | ||||||||||||||||||||||||
Property operating expenses | $ | 42,799 | $ | 41,474 | $ | (1,325 | ) | $ | (9 | ) | $ | (1,316 | ) | $ | — | |||||||||
Depreciation and amortization associated with real estate operations | 28,698 | 28,604 | (94 | ) | (94 | ) | — | — | ||||||||||||||||
Construction contract and other service expenses | 14,410 | 14,410 | — | — | — | — | ||||||||||||||||||
Impairment losses | 46,096 | 46,096 | — | — | — | — | ||||||||||||||||||
General, administrative and leasing expenses | 5,061 | 6,377 | 1,316 | — | 1,316 | — | ||||||||||||||||||
Business development expenses and land carry costs | 1,632 | 1,632 | — | — | — | — | ||||||||||||||||||
Total operating expenses | $ | 138,696 | $ | 138,593 | $ | (103 | ) | $ | (103 | ) | $ | — | $ | — | ||||||||||
Operating loss | $ | (8,552 | ) | $ | (8,948 | ) | $ | (396 | ) | $ | (396 | ) | $ | — | $ | — | ||||||||
Interest expense | $ | (23,239 | ) | $ | (23,239 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Income tax expense | $ | (106 | ) | $ | (106 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Loss from continuing operations | $ | (31,816 | ) | $ | (32,212 | ) | $ | (396 | ) | $ | (396 | ) | $ | — | $ | — | ||||||||
Discontinued operations | $ | 11,051 | $ | 11,447 | $ | 396 | $ | 396 | $ | — | $ | — | ||||||||||||
Net loss | $ | (20,765 | ) | $ | (20,765 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Net loss attributable to noncontrolling interests in common units in COPLP | $ | 1,569 | $ | 1,533 | $ | (36 | ) | $ | — | $ | — | $ | (36 | ) | ||||||||||
Net loss attributable to noncontrolling interests in other consolidated entities | $ | (411 | ) | $ | 235 | $ | 646 | $ | — | $ | — | $ | 646 | |||||||||||
Net loss attributable to COPT | $ | (19,772 | ) | $ | (19,162 | ) | $ | 610 | $ | — | $ | — | $ | 610 | ||||||||||
Basic and diluted earnings per common share: | ||||||||||||||||||||||||
Loss from continuing operations | $ | (0.54 | ) | $ | (0.54 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Discontinued operations | 0.15 | 0.15 | — | — | — | — | ||||||||||||||||||
Net loss attributable to COPT common shareholders | $ | (0.39 | ) | $ | (0.39 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Consolidated Statements of Operations for the | ||||||||||||||||||||||||
Nine Months Ended September 30, 2012 | ||||||||||||||||||||||||
Per September 30, 2012 10-Q | Per September 30, 2013 10-Q | Change | Discontinued Operations | Other Reclassifications | Revisions | |||||||||||||||||||
Total revenues | $ | 390,499 | $ | 389,043 | $ | (1,456 | ) | $ | (1,456 | ) | $ | — | $ | — | ||||||||||
Expenses | ||||||||||||||||||||||||
Property operating expenses | $ | 126,339 | $ | 122,102 | $ | (4,237 | ) | $ | 32 | $ | (4,269 | ) | $ | — | ||||||||||
Depreciation and amortization associated with real estate operations | 84,920 | 84,633 | (287 | ) | (287 | ) | — | — | ||||||||||||||||
Construction contract and other service expenses | 51,302 | 51,302 | — | — | — | — | ||||||||||||||||||
Impairment losses | 41,260 | 41,260 | — | — | — | — | ||||||||||||||||||
General, administrative and leasing expenses | 19,820 | 24,797 | 4,977 | (3 | ) | 4,269 | 711 | |||||||||||||||||
Business development expenses and land carry costs | 4,506 | 4,506 | — | — | — | — | ||||||||||||||||||
Total operating expenses | $ | 328,147 | $ | 328,600 | $ | 453 | $ | (258 | ) | $ | — | $ | 711 | |||||||||||
Operating income | $ | 62,352 | $ | 60,443 | $ | (1,909 | ) | $ | (1,198 | ) | $ | — | $ | (711 | ) | |||||||||
Interest expense | $ | (71,909 | ) | $ | (71,909 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Income tax expense | $ | (4,296 | ) | $ | (327 | ) | $ | 3,969 | $ | — | $ | — | $ | 3,969 | ||||||||||
Loss from continuing operations | $ | (12,160 | ) | $ | (10,100 | ) | $ | 2,060 | $ | (1,198 | ) | $ | — | $ | 3,258 | |||||||||
Discontinued operations | $ | 10,212 | $ | 11,410 | $ | 1,198 | $ | 1,198 | $ | — | $ | — | ||||||||||||
Net (loss) income | $ | (1,927 | ) | $ | 1,331 | $ | 3,258 | $ | — | $ | — | $ | 3,258 | |||||||||||
Net loss attributable to noncontrolling interests in common units in COPLP | $ | 1,020 | $ | 738 | $ | (282 | ) | $ | — | $ | — | $ | (282 | ) | ||||||||||
Net (income) loss attributable to noncontrolling interests in other consolidated entities | $ | (939 | ) | $ | 864 | $ | 1,803 | $ | — | $ | — | $ | 1,803 | |||||||||||
Net (loss) income attributable to COPT | $ | (2,341 | ) | $ | 2,438 | $ | 4,779 | $ | — | $ | — | $ | 4,779 | |||||||||||
Basic and diluted earnings per common share: | ||||||||||||||||||||||||
Loss from continuing operations | $ | (0.40 | ) | $ | (0.35 | ) | $ | 0.05 | $ | (0.02 | ) | $ | — | $ | 0.07 | |||||||||
Discontinued operations | 0.13 | 0.15 | 0.02 | 0.02 | — | — | ||||||||||||||||||
Net loss attributable to COPT common shareholders | $ | (0.27 | ) | $ | (0.20 | ) | $ | 0.07 | $ | — | $ | — | $ | 0.07 | ||||||||||
Recent Accounting Pronouncements | ||||||||||||||||||||||||
We adopted guidance issued by the Financial Accounting Standards Board (“FASB”) effective January 1, 2013 related to the reporting of the effect of significant reclassifications from accumulated other comprehensive income. This guidance requires an entity to report, either parenthetically on the face of the financial statements or in a single footnote, changes in the components of accumulated other comprehensive income for the period. An entity is required to separately report the amount of such changes attributable to reclassifications (and the statements of operations line affected by such reclassifications) and the amount of such changes attributable to current period other comprehensive income. For amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. Our adoption of this guidance did not affect our consolidated financial statements or disclosures. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||||||||||
For a description on how we estimate fair value, see Note 3 to the consolidated financial statements in COPT’s 2012 Annual Report on Form 10-K and Note 3 to the COPLP consolidated financial statements in our Current Report on Form 8-K dated July 25, 2013. | |||||||||||||||||||||||||
Recurring Fair Value Measurements | |||||||||||||||||||||||||
Our partner in a real estate joint venture has the right to require us to acquire its interest at fair value beginning in March 2020; accordingly, we classify the fair value of our partner’s interest as a redeemable noncontrolling interest in the mezzanine section of our consolidated balance sheet. In determining the fair value of our partner’s interest as of September 30, 2013, we used discount rates ranging from 10.0% to 20.0% (15.3% weighted average), which factored in risk appropriate to the level of future property development expected to be undertaken by the joint venture; a significant increase (decrease) in the discount rate used in determining the fair value would result in a significantly (lower) higher fair value. Given our reliance on the unobservable inputs, the valuations are classified in Level 3 of the fair value hierarchy. | |||||||||||||||||||||||||
The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets (excluding investing receivables) and accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturities of these instruments. As discussed in Note 6, we estimated the fair values of our mortgage and other investing receivables based on the discounted estimated future cash flows of the loans (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans with similar maturities and credit quality, and the estimated cash payments include scheduled principal and interest payments. For our disclosure of debt fair values in Note 8 to the consolidated financial statements, we estimated the fair value of our unsecured senior notes and exchangeable senior notes based on quoted market rates for publicly-traded debt (categorized within Level 2 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments include scheduled principal and interest payments. Fair value estimates are made at a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement at such fair value amounts may not be possible and may not be a prudent management decision. | |||||||||||||||||||||||||
For additional fair value information, please refer to Note 6 for mortgage loans receivable, Note 8 for debt and Note 9 for interest rate derivatives. | |||||||||||||||||||||||||
COPT and Subsidiaries | |||||||||||||||||||||||||
The table below sets forth financial assets and liabilities of COPT and its subsidiaries that are accounted for at fair value on a recurring basis as of September 30, 2013 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): | |||||||||||||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | |||||||||||||||||||||
Active Markets for | Observable Inputs(Level 2) | Unobservable Inputs(Level 3) | |||||||||||||||||||||||
Identical Assets(Level 1) | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Marketable securities in deferred compensation plan (1) | |||||||||||||||||||||||||
Mutual funds | $ | 6,753 | $ | — | $ | — | $ | 6,753 | |||||||||||||||||
Common stocks | 217 | — | — | 217 | |||||||||||||||||||||
Other | 211 | — | — | 211 | |||||||||||||||||||||
Common stock (1) | 520 | — | — | 520 | |||||||||||||||||||||
Interest rate derivatives (2) | — | 5,195 | — | 5,195 | |||||||||||||||||||||
Warrants to purchase common stock (2) | — | 301 | — | 301 | |||||||||||||||||||||
Total Assets | $ | 7,701 | $ | 5,496 | $ | — | $ | 13,197 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Deferred compensation plan liability (3) | $ | 7,181 | $ | — | $ | — | $ | 7,181 | |||||||||||||||||
Interest rate derivatives | — | 3,595 | — | 3,595 | |||||||||||||||||||||
Total Liabilities | $ | 7,181 | $ | 3,595 | $ | — | $ | 10,776 | |||||||||||||||||
Redeemable noncontrolling interest | $ | — | $ | — | $ | 16,789 | $ | 16,789 | |||||||||||||||||
(1) Included in the line entitled “restricted cash and marketable securities” on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||
(2) Included in the line entitled “prepaid expenses and other assets” on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||
(3) Included in the line entitled “other liabilities” on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||
COPLP and Subsidiaries | |||||||||||||||||||||||||
The table below sets forth financial assets and liabilities of COPLP and its subsidiaries that are accounted for at fair value on a recurring basis as of September 30, 2013 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): | |||||||||||||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | |||||||||||||||||||||
Active Markets for | Observable Inputs(Level 2) | Unobservable Inputs(Level 3) | |||||||||||||||||||||||
Identical Assets(Level 1) | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Common stock (1) | $ | 520 | $ | — | $ | — | $ | 520 | |||||||||||||||||
Interest rate derivatives (2) | — | 5,195 | — | 5,195 | |||||||||||||||||||||
Warrants to purchase common stock (2) | — | 301 | — | 301 | |||||||||||||||||||||
Total Assets | $ | 520 | $ | 5,496 | $ | — | $ | 6,016 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Interest rate derivatives | $ | — | $ | 3,595 | $ | — | $ | 3,595 | |||||||||||||||||
Redeemable noncontrolling interest | $ | — | $ | — | $ | 16,789 | $ | 16,789 | |||||||||||||||||
(1) Included in the line entitled “restricted cash and marketable securities” on COPLP’s consolidated balance sheet. | |||||||||||||||||||||||||
(2) Included in the line entitled “prepaid expenses and other assets” on COPLP’s consolidated balance sheet. | |||||||||||||||||||||||||
Nonrecurring Fair Value Measurements | |||||||||||||||||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||||||||||
During the nine months ended September 30, 2013, we recognized the following impairment losses: | |||||||||||||||||||||||||
• | for certain of our operating properties serving as collateral for a non recourse loan, we expect that the cash flows that will be generated by the properties will be insufficient to fund debt service requirements on the loan. While we sought to negotiate various alternatives with the lender, during the three months ended September 30, 2013, we determined that the probable outcome will be the conveyance of the properties to the lender to extinguish the loan. We expect that the conveyance will occur in a series of transactions in the fourth quarter of 2013 and the first quarter of 2014. We determined that the carrying amount of certain of these properties located in Colorado Springs, Colorado exceed their fair value, and will not likely be recovered from the cash flows from the operations of the properties over the likely remaining holding period. Accordingly, we recognized non-cash impairment losses of $10.4 million on these properties during the three months ended September 30, 2013; | ||||||||||||||||||||||||
• | $14.8 million (all classified as discontinued operations and including $186,000 in exit costs) in connection with properties and land no longer aligned with our strategy that we sold or have classified as held for sale, most of which was attributable to our continuing negotiations to sell certain properties in Colorado Springs; and | ||||||||||||||||||||||||
• | $5.9 million on two properties in the Greater Baltimore region during the three months ended September 30, 2013. After shortening our expected holding period for these properties during the period, we determined that the carrying amount of the properties will not likely be recovered from the cash flows from the operations and sales of the properties over the shortened period. | ||||||||||||||||||||||||
The table below sets forth the fair value hierarchy of the valuation technique used by us in determining the fair value of the properties (dollars in thousands): | |||||||||||||||||||||||||
Quoted Prices in | Significant | Impairment Losses Recognized (1) | |||||||||||||||||||||||
Active Markets for | Significant Other | Unobservable | Three Months | Nine Months | |||||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | Ended | Ended | |||||||||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | 30-Sep-13 | 30-Sep-13 | |||||||||||||||||||
Assets (2): | |||||||||||||||||||||||||
Properties, net | $ | — | $ | — | $ | 245,535 | $ | 245,535 | $ | 21,888 | $ | 30,940 | |||||||||||||
(1) Represents impairment losses, excluding exit costs incurred of $186,000 for the three months and nine months ended September 30, 2013. | |||||||||||||||||||||||||
(2) Reflects balance sheet classifications of assets at time of fair value measurement, excluding the effect of held for sale classifications. | |||||||||||||||||||||||||
The table below sets forth quantitative information about significant unobservable inputs used for the Level 3 fair value measurements reported above (dollars in thousands): | |||||||||||||||||||||||||
Description | Fair Value on | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||
Measurement Date | |||||||||||||||||||||||||
Properties on which impairment losses were recognized | $ | 245,535 | Bids for property indicative of value | Indicative bids (1) | -1 | ||||||||||||||||||||
Contract of sale | Contract price (1) | -1 | |||||||||||||||||||||||
Discounted cash flow | Discount rate | 10.0% to 11.0% (10.9%) | |||||||||||||||||||||||
Terminal capitalization rate | 9.5% to 10.0% (9.7%) | ||||||||||||||||||||||||
Market rent growth rate | 3.0% (2) | ||||||||||||||||||||||||
Expense growth rate | 3.0% (2) | ||||||||||||||||||||||||
(1) These fair value measurements were developed as a result of negotiations between us and potential, or actual, purchasers of properties. | |||||||||||||||||||||||||
(2) Only one value applied for this unobservable input. | |||||||||||||||||||||||||
Nine Months Ended September 30, 2012 | |||||||||||||||||||||||||
During the nine months ended September 30, 2012, we recognized non-cash impairment losses of $60.6 million for the amount by which the carrying values of certain properties exceeded their estimated fair values. The table below sets forth the fair value hierarchy of the valuation techniques used by us in determining such fair values (dollars in thousands): | |||||||||||||||||||||||||
Quoted Prices in | Significant | Impairment Losses Recognized (1) | |||||||||||||||||||||||
Active Markets for | Significant Other | Unobservable | Three Months | Nine Months | |||||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | Ended | Ended | |||||||||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | 30-Sep-12 | 30-Sep-12 | |||||||||||||||||||
Assets (2): | |||||||||||||||||||||||||
Properties, net | $ | — | $ | — | $ | 369,312 | $ | 369,312 | $ | 52,900 | 60,593 | ||||||||||||||
(1) Represents impairment losses, excluding exit costs incurred of $2.9 million for the three months ended September 30, 2012 and $4.2 million for the nine months ended September 30, 2012. | |||||||||||||||||||||||||
(2) Reflects balance sheet classifications of assets at time of fair value measurement, excluding the effect of held for sale classifications. | |||||||||||||||||||||||||
The table below sets forth quantitative information about significant unobservable inputs used for the Level 3 fair value measurements reported above (dollars in thousands): | |||||||||||||||||||||||||
Description | Fair Value on | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||
Measurement Date | |||||||||||||||||||||||||
Properties on which impairment losses were recognized | $ | 369,312 | Bid for properties indicative of value | Indicative bid (1) | -1 | ||||||||||||||||||||
Contract of sale | Contract price (1) | -1 | |||||||||||||||||||||||
Discounted cash flow | Discount rate | 10.1% to 11.0% (10.4%) | |||||||||||||||||||||||
Terminal capitalization rate | 8.7% to 10.0% (8.9%) | ||||||||||||||||||||||||
Market rent growth rate | 3.0% (2) | ||||||||||||||||||||||||
Expense growth rate | 3.0% (2) | ||||||||||||||||||||||||
Yield Analysis | Yield | 12% (2) | |||||||||||||||||||||||
Market rent rate | $8.50 per square foot(2) | ||||||||||||||||||||||||
Leasing costs | $20.00 per square foot (2) | ||||||||||||||||||||||||
(1) These fair value measurements were developed as a result of negotiations between us and potential, or actual, purchasers of properties. | |||||||||||||||||||||||||
(2) Only one value applied for this unobservable input. |
Properties_net
Properties, net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Real Estate [Abstract] | ||||||||
Properties, net | Properties, net | |||||||
Operating properties, net consisted of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Land | $ | 436,565 | $ | 427,766 | ||||
Buildings and improvements | 2,889,383 | 2,725,875 | ||||||
Less: accumulated depreciation | (612,369 | ) | (555,975 | ) | ||||
Operating properties, net | $ | 2,713,579 | $ | 2,597,666 | ||||
Projects we had in development or held for future development consisted of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Land | $ | 253,810 | $ | 236,324 | ||||
Construction in progress, excluding land | 272,357 | 329,054 | ||||||
Projects in development or held for future development | $ | 526,167 | $ | 565,378 | ||||
During the nine months ended September 30, 2013, we sold 920 Elkridge Landing Road, a 103,000 square foot office property in Linthicum, Maryland (in the Baltimore/Washington Corridor), for $6.9 million. | ||||||||
2013 Construction Activities | ||||||||
During the nine months ended September 30, 2013, we placed into service an aggregate of 392,000 square feet in four newly constructed office properties located in the Baltimore/Washington Corridor, Northern Virginia and Huntsville, Alabama. As of September 30, 2013, we had nine office properties under construction, or for which we were contractually committed to construct, that we estimate will total 1.3 million square feet upon completion, including four in Northern Virginia, three in Huntsville, Alabama and two in the Baltimore/Washington Corridor. We also had redevelopment underway, or otherwise approved, for two office properties that we estimate will total 235,000 square feet upon completion, including one in Greater Philadelphia and one in the Baltimore/Washington Corridor. |
Real_Estate_Joint_Ventures
Real Estate Joint Ventures | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||
Real Estate Joint Ventures | Real Estate Joint Ventures | ||||||||||||||||||
During the nine months ended September 30, 2013, we had an investment in one unconsolidated real estate joint venture accounted for using the equity method of accounting. Information pertaining to this investment is set forth below (dollars in thousands): | |||||||||||||||||||
Investment Balance at (1) | Date | Nature of | Maximum Exposure | ||||||||||||||||
September 30, 2013 | 31-Dec-12 | Acquired | Ownership | Activity | to Loss (2) | ||||||||||||||
$ | (6,420 | ) | $ | (6,420 | ) | 9/29/05 | 20% | Operates 16 Buildings | $ | — | |||||||||
(1) The carrying amount of our investment in this joint venture was lower than our share of the equity in the joint venture by $3.0 million at September 30, 2013 and $4.5 million at December 31, 2012 due to our deferral of gain on the contribution by us of real estate into the joint venture upon its formation and our discontinuance of loss recognition under the equity method effective October 2012, as discussed below. A difference will continue to exist to the extent the nature of our continuing involvement in the joint venture remains the same and we continue to no longer recognize income or losses under the equity method. | |||||||||||||||||||
(2) Derived from the sum of our investment balance and maximum additional unilateral capital contributions or loans required from us. Not reported above are additional amounts that we and our partner are required to fund when needed by this joint venture; these funding requirements are proportional to our respective ownership percentages. Also not reported above are additional unilateral contributions or loans from us, the amounts of which are uncertain, that we would be required to make if certain contingent events occur (see Note 17). | |||||||||||||||||||
The following table sets forth condensed balance sheets for this unconsolidated real estate joint venture (in thousands): | |||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||
2013 | 2012 | ||||||||||||||||||
Properties, net | $ | 57,222 | $ | 58,460 | |||||||||||||||
Other assets | 6,248 | 4,376 | |||||||||||||||||
Total assets | $ | 63,470 | $ | 62,836 | |||||||||||||||
Liabilities (primarily debt) | $ | 80,424 | $ | 72,693 | |||||||||||||||
Owners’ equity | (16,954 | ) | (9,857 | ) | |||||||||||||||
Total liabilities and owners’ equity | $ | 63,470 | $ | 62,836 | |||||||||||||||
The following table sets forth condensed statements of operations for this unconsolidated real estate joint venture (in thousands): | |||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Revenues | $ | 1,739 | $ | 1,778 | $ | 5,342 | $ | 5,497 | |||||||||||
Property operating expenses | (755 | ) | (758 | ) | (2,250 | ) | (2,219 | ) | |||||||||||
Interest expense | (2,966 | ) | (1,138 | ) | (8,521 | ) | (3,291 | ) | |||||||||||
Depreciation and amortization expense | (575 | ) | (568 | ) | (1,668 | ) | (1,732 | ) | |||||||||||
Net loss | $ | (2,557 | ) | $ | (686 | ) | $ | (7,097 | ) | $ | (1,745 | ) | |||||||
As discussed further in our 2012 Annual Report on Form 10-K and our Current Report on Form 8-K dated July 25, 2013, in 2012, the holder of mortgage debt encumbering all of the joint venture’s properties notified us of the debt’s default, initiated foreclosure proceedings and terminated our property management responsibilities; accordingly, we discontinued recognition of losses on this investment under the equity method effective in October 2012 due to our having neither the obligation nor intent to support the joint venture. | |||||||||||||||||||
The table below sets forth information pertaining to our investments in consolidated real estate joint ventures at September 30, 2013 (dollars in thousands): | |||||||||||||||||||
Ownership | September 30, 2013 | -1 | |||||||||||||||||
Date | % at | Total | Pledged | Total | |||||||||||||||
Acquired | 9/30/13 | Nature of Activity | Assets | Assets | Liabilities | ||||||||||||||
LW Redstone Company, LLC | 3/23/10 | 85% | Developing business park (2) | $ | 114,141 | $ | 45,209 | $ | 22,141 | ||||||||||
M Square Associates, LLC | 6/26/07 | 50% | Operating two buildings and developing others (3) | 60,879 | 47,854 | 41,463 | |||||||||||||
COPT-FD Indian Head, LLC | 10/23/06 | 75% | Holding land parcel (4) | 6,447 | — | — | |||||||||||||
MOR Forbes 2 LLC | 12/24/02 | 50% | Operating one building (5) | 4,132 | — | 90 | |||||||||||||
$ | 185,599 | $ | 93,063 | $ | 63,694 | ||||||||||||||
(1) Excludes amounts eliminated in consolidation. | |||||||||||||||||||
(2) This joint venture’s property is in Huntsville, Alabama. | |||||||||||||||||||
(3) This joint venture’s properties are in College Park, Maryland (in the Suburban Maryland region). | |||||||||||||||||||
(4) This joint venture’s property is in Charles County, Maryland. In 2012, the joint venture exercised its option under a development agreement to require Charles County to repurchase the land parcel at its original acquisition cost. Under the terms of the agreement with Charles County, the repurchase is expected to occur by August 2014. | |||||||||||||||||||
(5) This joint venture’s property is in Lanham, Maryland (in the Suburban Maryland region). | |||||||||||||||||||
These ventures include only ones in which parties other than COPLP and COPT own interests. During the periods included herein, we also owned a controlling interest in Arundel Preserve #5, LLC, a consolidated real estate joint venture owning property in Hanover Maryland (in the Baltimore/Washington Corridor), until September 17, 2013, at which time we acquired our partner’s noncontrolling interest, along with incremental additional land value in the venture, in exchange for 221,501 common units in COPLP valued at $5.2 million. | |||||||||||||||||||
Our commitments and contingencies pertaining to our real estate joint ventures are disclosed in Note 17. |
Mortgage_and_Other_Investing_R
Mortgage and Other Investing Receivables | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Receivables [Abstract] | ||||||||
Mortgage and Other Investing Receivables | Mortgage and Other Investing Receivables | |||||||
Mortgage and other investing receivables consisted of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Notes receivable from City of Huntsville | $ | 40,321 | $ | 33,252 | ||||
Mortgage loan receivable | — | 144 | ||||||
$ | 40,321 | $ | 33,396 | |||||
Our notes receivable from the City of Huntsville funded infrastructure costs in connection with our LW Redstone Company, LLC joint venture (see Note 5). We did not have an allowance for credit losses in connection with our notes receivable at September 30, 2013 or December 31, 2012. The fair value of these receivables approximated their carrying amounts at September 30, 2013 and December 31, 2012. |
Prepaid_Expenses_and_Other_Ass
Prepaid Expenses and Other Assets | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Prepaid Expense and Other Assets [Abstract] | ||||||||
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets | |||||||
Prepaid expenses and other assets consisted of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Prepaid expenses | $ | 23,552 | $ | 19,270 | ||||
Lease incentives | 8,751 | 5,578 | ||||||
Furniture, fixtures and equipment, net | 6,705 | 7,991 | ||||||
Deferred tax asset | 6,222 | 6,612 | ||||||
Construction contract costs incurred in excess of billings | 5,465 | — | ||||||
Interest rate derivatives | 5,195 | — | ||||||
Other equity method investments | 4,928 | 2,425 | ||||||
Other assets | 3,257 | 2,183 | ||||||
Prepaid expenses and other assets | $ | 64,075 | $ | 44,059 | ||||
Other assets, as reported above, include operating notes receivable due from tenants with terms exceeding one year totaling $186,000 at September 30, 2013 and $271,000 at December 31, 2012. We carried allowances for estimated losses for most of these balances. |
Debt
Debt | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Debt | Debt | |||||||||||||||
Our debt consisted of the following (dollars in thousands): | ||||||||||||||||
Maximum | ||||||||||||||||
Availability at | Carrying Value at | Scheduled Maturity | ||||||||||||||
September 30, | September 30, | December 31, | Stated Interest Rates at | Dates at | ||||||||||||
2013 | 2013 | 2012 | September 30, 2013 | September 30, 2013 | ||||||||||||
Mortgage and Other Secured Loans: | ||||||||||||||||
Fixed rate mortgage loans (1) | N/A | $ | 882,311 | $ | 948,414 | 3.96% - 7.87% (2) | 2014-2034 | |||||||||
Variable rate secured loan | N/A | 37,894 | 38,475 | LIBOR + 2.25% (3) | 11/2/15 | |||||||||||
Other construction loan facilities | $ | 26,150 | — | 29,557 | N/A | N/A | ||||||||||
Total mortgage and other secured loans | 920,205 | 1,016,446 | ||||||||||||||
Revolving Credit Facility (4) | 800,000 | — | — | LIBOR + 0.975% to 1.75% (5) | 7/1/17 | |||||||||||
Term Loan Facilities (6) | (6 | ) | 620,000 | 770,000 | LIBOR + 1.10% to 2.60% (7) | 2015-2019 | ||||||||||
Unsecured Senior Notes (8) | ||||||||||||||||
3.600% Senior Notes | N/A | 347,183 | — | 3.60% | 5/15/23 | |||||||||||
5.250% Senior Notes | N/A | 245,360 | — | 5.25% | 2/15/24 | |||||||||||
Unsecured notes payable | N/A | 1,723 | 1,788 | 0% (9) | 5/1/26 | |||||||||||
4.25% Exchangeable Senior Notes (10) | N/A | 560 | 230,934 | 4.25% | 4/15/30 | |||||||||||
Total debt, net | $ | 2,135,031 | $ | 2,019,168 | ||||||||||||
(1) | Several of the fixed rate mortgages carry interest rates that were above or below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $465,000 at September 30, 2013 and $1.3 million at December 31, 2012. | |||||||||||||||
-2 | The weighted average interest rate on these loans was 5.98% at September 30, 2013. | |||||||||||||||
(3) | The interest rate on the loan outstanding was 2.43% at September 30, 2013. | |||||||||||||||
-4 | Refer to the paragraph below for disclosure pertaining to the Revolving Credit Facility. | |||||||||||||||
-5 | The weighted average interest rate on the Revolving Credit Facility was 1.45% at September 30, 2013. | |||||||||||||||
(6) | We have the ability to borrow an aggregate of an additional $180.0 million under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. | |||||||||||||||
(7) | The weighted average interest rate on these loans was 1.80% at September 30, 2013. | |||||||||||||||
-8 | Refer to the paragraphs below for disclosure pertaining to these notes. | |||||||||||||||
(9) | These notes carry interest rates that were below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying value of these notes reflects an unamortized discount totaling $788,000 at September 30, 2013 and $873,000 at December 31, 2012. | |||||||||||||||
(10) | As described further in our 2012 Annual Report on Form 10-K, these notes have an exchange settlement feature that provides that the notes may, under certain circumstances, be exchangeable for cash and, at COPLP’s discretion, COPT common shares at an exchange rate (subject to adjustment) of 20.8513 shares per one thousand dollar principal amount of the notes (exchange rate is as of September 30, 2013 and is equivalent to an exchange price of $47.96 per common share). During the nine months ended September 30, 2013, we repaid $239.4 million principal amount of these notes and recognized a $25.9 million loss on early extinguishment of debt. The carrying value of these notes included a principal amount of $575,000 and an unamortized discount totaling $15,000 at September 30, 2013 and a principal amount of $240.0 million and an unamortized discount totaling $9.1 million at December 31, 2012. The effective interest rate under the notes, including amortization of the issuance costs, was 6.05%. Because the closing price of our common shares at September 30, 2013 and December 31, 2012 was less than the exchange price per common share applicable to these notes, the if-converted value of the notes did not exceed the principal amount. The table below sets forth interest expense recognized on these notes before deductions for amounts capitalized (in thousands): | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Interest expense at stated interest rate | $ | 6 | $ | 2,550 | $ | 4,201 | $ | 7,650 | ||||||||
Interest expense associated with amortization of discount | 2 | 919 | 1,613 | 2,717 | ||||||||||||
Total | $ | 8 | $ | 3,469 | $ | 5,814 | $ | 10,367 | ||||||||
All debt is owed by the Operating Partnership. While COPT is not directly obligated by any debt, it has guaranteed our Revolving Credit Facility, Term Loan Facilities, Unsecured Senior Notes and 4.25% Exchangeable Senior Notes. | ||||||||||||||||
On July 16, 2013, we entered into an amendment to our credit agreement providing for an unsecured revolving credit facility (the “Revolving Credit Facility”). The amendment extended the maturity date of the facility from September 2014 to July 2017, with the ability for us to extend such maturity by one year at our option, provided that there is no default under the facility and we pay an extension fee of 0.15% of the total availability of the facility. The amendment also changed the interest rate on the facility to be based on LIBOR (customarily the 30-day rate) plus 0.975% to 1.750%, as determined by the credit ratings assigned to COPLP by Standard & Poor’s Rating Services, Moody’s Investor Services, Inc. or Fitch Ratings Ltd. (collectively, the “Ratings Agencies”). Also on July 16, 2013, we entered into amendments on $550.0 million in existing unsecured term loan agreements with the same group of lenders as the Revolving Credit Facility that added one year in extension options and changed the interest rate applicable to the facilities to be based on LIBOR (customarily the 30-day rate) plus 1.10% to 2.00%, as determined by the credit ratings assigned to COPLP by the Ratings Agencies. | ||||||||||||||||
During the nine months ended September 30, 2013, we issued the following senior notes: | ||||||||||||||||
• | a $350.0 million aggregate principal amount of 3.600% Senior Notes at an initial offering price of 99.816% of their face value on May 6, 2013, resulting in proceeds, after deducting discounts of the initial purchasers of the notes, but before other offering expenses, of $347.1 million. The notes mature on May 15, 2023. The carrying value of these notes reflects an unamortized discount totaling $2.8 million at September 30, 2013. The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%; and | |||||||||||||||
• | a $250.0 million aggregate principal amount of 5.250% Senior Notes at an initial offering price of 98.783% of their face value on September 16, 2013, resulting in proceeds, after deducting discounts of the initial purchasers of the notes, but before other offering expenses, of $245.3 million. The notes mature on February 15, 2024. The carrying value of these notes reflects an unamortized discount totaling $4.6 million at September 30, 2013. The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%. | |||||||||||||||
We may redeem these notes, in whole at any time or in part from time to time, at our option, at a redemption price equal to the greater of (1) the aggregate principal amount of the notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to its present value, on a semi-annual basis at an adjusted treasury rate plus a spread (30 basis points for the 3.600% Senior Notes and 40 basis points for the 5.250% Senior Notes), plus, in each case, accrued and unpaid interest thereon to the date of redemption. However, in each case, if this redemption occurs on or after three months prior to the maturity date, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date. These notes are unconditionally guaranteed by COPT. | ||||||||||||||||
We capitalized interest costs of $2.2 million in the three months ended September 30, 2013, $3.4 million in the three months ended September 30, 2012, $6.7 million in the nine months ended September 30, 2013 and $10.8 million in the nine months ended September 30, 2012. | ||||||||||||||||
The following table sets forth information pertaining to the fair value of our debt (in thousands): | ||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Fixed-rate debt | ||||||||||||||||
Unsecured Senior Notes | $ | 592,543 | $ | 579,654 | $ | — | $ | — | ||||||||
4.25% Exchangeable Senior Notes | 560 | 575 | 230,934 | 240,282 | ||||||||||||
Other fixed-rate debt | 884,034 | 812,246 | 950,202 | 968,180 | ||||||||||||
Variable-rate debt | 657,894 | 661,593 | 838,032 | 845,558 | ||||||||||||
$ | 2,135,031 | $ | 2,054,068 | $ | 2,019,168 | $ | 2,054,020 | |||||||||
Interest_Rate_Derivatives
Interest Rate Derivatives | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||
Interest Rate Derivatives | Interest Rate Derivatives | ||||||||||||||||||
The following table sets forth the key terms and fair values of our interest rate swap derivatives (dollars in thousands): | |||||||||||||||||||
Fair Value at | |||||||||||||||||||
Notional Amount | Fixed Rate | Floating Rate Index | Effective Date | Expiration Date | September 30, | December 31, | |||||||||||||
2013 | 2012 | ||||||||||||||||||
$ | 100,000 | 0.61% | One-Month LIBOR | 1/3/12 | 9/1/14 | $ | (365 | ) | $ | (594 | ) | ||||||||
100,000 | 0.61% | One-Month LIBOR | 1/3/12 | 9/1/14 | (362 | ) | (591 | ) | |||||||||||
100,000 | 0.83% | One-Month LIBOR | 1/3/12 | 9/1/15 | (963 | ) | (1,313 | ) | |||||||||||
100,000 | 0.83% | One-Month LIBOR | 1/3/12 | 9/1/15 | (963 | ) | (1,313 | ) | |||||||||||
37,894 | -1 | 3.83% | One-Month LIBOR + 2.25% | 11/2/10 | 11/2/15 | (933 | ) | (1,268 | ) | ||||||||||
100,000 | 0.81% | One-Month LIBOR | 9/2/14 | 9/1/16 | 1 | (263 | ) | ||||||||||||
100,000 | 0.81% | One-Month LIBOR | 9/2/14 | 9/1/16 | (9 | ) | (272 | ) | |||||||||||
100,000 | 1.67% | One-Month LIBOR | 9/1/15 | 8/1/19 | 2,685 | (154 | ) | ||||||||||||
100,000 | 1.73% | One-Month LIBOR | 9/1/15 | 8/1/19 | 2,509 | (417 | ) | ||||||||||||
$ | 1,600 | $ | (6,185 | ) | |||||||||||||||
-1 | The notional amount of this instrument is scheduled to amortize to $36.2 million. | ||||||||||||||||||
Each of the one-month LIBOR interest rate swaps set forth in the table above was designated as cash flow hedges of interest rate risk. | |||||||||||||||||||
The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheet (in thousands): | |||||||||||||||||||
September 30, 2013 | 31-Dec-12 | ||||||||||||||||||
Derivatives | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Interest rate swaps designated as cash flow hedges | Prepaid expenses and other assets | $ | 5,195 | Prepaid expenses and other assets | $ | — | |||||||||||||
Interest rate swaps designated as cash flow hedges | Interest rate derivatives | (3,595 | ) | Interest rate derivatives | (6,185 | ) | |||||||||||||
The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): | |||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Amount of (loss) gain recognized in accumulated other comprehensive income (loss) (“AOCI”) (effective portion) | $ | (2,482 | ) | $ | (2,760 | ) | $ | 5,810 | $ | (7,386 | ) | ||||||||
Amount of loss reclassified from AOCI into interest expense (effective portion) | 689 | 632 | 2,021 | 3,034 | |||||||||||||||
Over the next 12 months, we estimate that approximately $2.6 million of losses will be reclassified from AOCI to interest expense. | |||||||||||||||||||
We have agreements with each of our interest rate derivative counterparties that contain provisions under which, if we default or are capable of being declared in default on any of our indebtedness, we could also be declared in default on our derivative obligations. These agreements also incorporate the loan covenant provisions of our indebtedness with a lender affiliate of the derivative counterparties. Failure to comply with the loan covenant provisions could result in our being declared in default on any derivative instrument obligations covered by the agreements. As of September 30, 2013, the fair value of interest rate derivatives in a liability position related to these agreements was $3.6 million, excluding the effects of accrued interest. As of September 30, 2013, we had not posted any collateral related to these agreements. We are not in default with any of these provisions. If we breached any of these provisions, we could be required to settle our obligations under the agreements at their termination value of $3.8 million. |
Redeemable_Noncontrolling_Inte
Redeemable Noncontrolling Interest | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest | ||||||||
The table below sets forth activity in our redeemable noncontrolling interest (in thousands): | |||||||||
Nine Months Ended September 30, | |||||||||
2013 | 2012 | ||||||||
Beginning balance | $ | 10,298 | $ | 8,908 | |||||
Distribution to noncontrolling interest | (811 | ) | — | ||||||
Net income (loss) attributable to noncontrolling interest | 888 | (1,803 | ) | ||||||
Adjustment to arrive at fair value of interest | 6,414 | 2,827 | |||||||
Ending balance | $ | 16,789 | $ | 9,932 | |||||
Equity
Equity | 9 Months Ended |
Sep. 30, 2013 | |
Equity [Abstract] | |
Equity | Equity |
On April 22, 2013, COPT redeemed all of its outstanding 7.625% Series J Preferred Shares of beneficial interest (the “Series J Preferred Shares”) at a price of $25 per share, or $84.8 million in the aggregate, plus accrued and unpaid dividends thereon through the date of redemption. Concurrently, COPLP redeemed the Series J Preferred Units previously owned by COPT that carried terms substantially the same as the Series J Preferred Shares. At the time of the redemption, we recognized a $2.9 million decrease to net income available to common shareholders/unitholders pertaining to the original issuance costs incurred on these securities. | |
On March 19, 2013, COPT completed a public offering of 4,485,000 common shares at a price of $26.34 per share for net proceeds of $118.1 million (after underwriter discounts but before offering expenses) that were contributed to COPLP in exchange for 4,485,000 common units. | |
On July 15, 2013, COPT issued 1.5 million common shares at a weighted average price of $26.05 per share under its at-the-market (“ATM”) stock offering program established in October 2012, representing its first issuance under the ATM program. Net proceeds from the shares issued totaled $38.5 million, after payment of $586,000 in commissions to sales agents. The proceeds from the shares issued were contributed to COPLP in exchange for 1.5 million common units. COPT’s remaining capacity under the ATM Plan is an aggregate gross sales price of $110.9 million in stock sales. | |
During the nine months ended September 30, 2013, certain COPLP limited partners redeemed 310,889 common units in COPLP for common shares in COPT on the basis of one common share for each common unit. | |
See Note 13 for disclosure of COPT common share and COPLP common unit activity pertaining to our share-based compensation plans. |
Information_by_Business_Segmen
Information by Business Segment | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Information by Business Segment | Information by Business Segment | |||||||||||||||||||||||||||||||||||||||||||||||
We have ten reportable operating office property segments (comprised of: the Baltimore/Washington Corridor; Northern Virginia; San Antonio; Washington, DC — Capitol Riverfront; St. Mary’s and King George Counties; Greater Baltimore; Suburban Maryland; Colorado Springs; Greater Philadelphia; and other). We also have an operating wholesale data center segment. The table below reports segment financial information for our reportable segments (in thousands). We measure the performance of our segments through the measure we define as NOI from real estate operations, which is derived by subtracting property operating expenses from revenues from real estate operations. | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating Office Property Segments | ||||||||||||||||||||||||||||||||||||||||||||||||
Baltimore/ | Northern | San | Washington, | St. Mary’s & | Greater | Suburban | Colorado | Greater | Other | Operating | Total | |||||||||||||||||||||||||||||||||||||
Washington | Virginia | Antonio | DC - Capitol | King George | Baltimore | Maryland | Springs | Philadelphia | Wholesale | |||||||||||||||||||||||||||||||||||||||
Corridor | Riverfront | Counties | Data Center | |||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 57,226 | $ | 23,062 | $ | 7,898 | $ | 4,295 | $ | 4,270 | $ | 10,703 | $ | 2,332 | $ | 6,622 | $ | 3,258 | $ | 3,819 | $ | 1,076 | $ | 124,561 | ||||||||||||||||||||||||
Property operating expenses | 18,780 | 7,999 | 4,061 | 1,946 | 1,299 | 4,143 | 862 | 2,371 | 924 | 654 | 1,846 | 44,885 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 38,446 | $ | 15,063 | $ | 3,837 | $ | 2,349 | $ | 2,971 | $ | 6,560 | $ | 1,470 | $ | 4,251 | $ | 2,334 | $ | 3,165 | $ | (770 | ) | $ | 79,676 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 7,204 | $ | 2,459 | $ | 251 | $ | 86 | $ | 630 | $ | 1,707 | $ | 88 | $ | 1,413 | $ | 102 | $ | (84 | ) | $ | 86 | $ | 13,942 | |||||||||||||||||||||||
Transfers from non-operating properties | $ | 8,706 | $ | 26,355 | $ | — | $ | — | $ | — | $ | 9 | $ | (183 | ) | $ | 1,860 | $ | 3,414 | $ | (33 | ) | $ | 2,714 | $ | 42,842 | ||||||||||||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 55,799 | $ | 20,363 | $ | 8,125 | $ | 4,389 | $ | 4,085 | $ | 11,918 | $ | 2,371 | $ | 6,278 | $ | 2,541 | $ | 3,589 | $ | 1,806 | $ | 121,264 | ||||||||||||||||||||||||
Property operating expenses | 18,534 | 7,115 | 4,272 | 1,924 | 1,241 | 4,539 | 1,041 | 2,432 | 663 | 686 | 1,252 | 43,699 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 37,265 | $ | 13,248 | $ | 3,853 | $ | 2,465 | $ | 2,844 | $ | 7,379 | $ | 1,330 | $ | 3,846 | $ | 1,878 | $ | 2,903 | $ | 554 | $ | 77,565 | ||||||||||||||||||||||||
Additions to long-lived assets | $ | 4,454 | $ | 54,781 | $ | — | $ | 414 | $ | 355 | $ | 1,055 | $ | 36 | $ | 548 | $ | 195 | $ | (35 | ) | $ | — | $ | 61,803 | |||||||||||||||||||||||
Transfers from non-operating properties | $ | 12,431 | $ | 12,979 | $ | — | $ | — | $ | 24 | $ | 99 | $ | (88 | ) | $ | 315 | $ | 1,843 | $ | 548 | $ | (5 | ) | $ | 28,146 | ||||||||||||||||||||||
Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 171,049 | $ | 68,992 | $ | 24,019 | $ | 12,716 | $ | 12,355 | $ | 32,246 | $ | 6,809 | $ | 19,874 | $ | 8,529 | $ | 10,878 | $ | 4,446 | $ | 371,913 | ||||||||||||||||||||||||
Property operating expenses | 57,030 | 24,020 | 12,427 | 5,769 | 3,715 | 12,408 | 2,393 | 7,014 | 2,482 | 1,667 | 4,680 | 133,605 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 114,019 | $ | 44,972 | $ | 11,592 | $ | 6,947 | $ | 8,640 | $ | 19,838 | $ | 4,416 | $ | 12,860 | $ | 6,047 | $ | 9,211 | $ | (234 | ) | $ | 238,308 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 14,029 | $ | 6,699 | $ | 268 | $ | 484 | $ | 1,634 | $ | 1,761 | $ | 143 | $ | 2,323 | $ | 387 | $ | 3,588 | $ | 262 | $ | 31,578 | ||||||||||||||||||||||||
Transfers from non-operating properties | $ | 37,270 | $ | 37,209 | $ | — | $ | — | $ | 12 | $ | 113 | $ | 337 | $ | 4,540 | $ | 28,031 | $ | 20,925 | $ | 69,163 | $ | 197,600 | ||||||||||||||||||||||||
Segment assets at September 30, 2013 | $ | 1,223,246 | $ | 593,335 | $ | 118,701 | $ | 99,852 | $ | 96,679 | $ | 305,947 | $ | 52,726 | $ | 159,578 | $ | 105,112 | $ | 130,598 | $ | 168,039 | $ | 3,053,813 | ||||||||||||||||||||||||
Nine Months Ended September 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 167,726 | $ | 57,974 | $ | 23,563 | $ | 12,515 | $ | 12,436 | $ | 41,954 | $ | 12,680 | $ | 18,880 | $ | 7,171 | $ | 10,977 | $ | 4,660 | $ | 370,536 | ||||||||||||||||||||||||
Property operating expenses | 56,677 | 21,270 | 11,998 | 5,485 | 3,524 | 15,911 | 5,357 | 6,754 | 1,851 | 2,088 | 3,378 | 134,293 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 111,049 | $ | 36,704 | $ | 11,565 | $ | 7,030 | $ | 8,912 | $ | 26,043 | $ | 7,323 | $ | 12,126 | $ | 5,320 | $ | 8,889 | $ | 1,282 | $ | 236,243 | ||||||||||||||||||||||||
Additions to long-lived assets | $ | 9,393 | $ | 57,161 | $ | 259 | $ | 116 | $ | 815 | $ | 5,390 | $ | 1,219 | $ | 1,334 | $ | 285 | $ | 124 | $ | 11 | $ | 76,107 | ||||||||||||||||||||||||
Transfers from non-operating properties | $ | 42,488 | $ | 12,979 | $ | 464 | $ | — | $ | 218 | $ | 493 | $ | 793 | $ | 2,611 | $ | 11,233 | $ | 394 | $ | 57,675 | $ | 129,348 | ||||||||||||||||||||||||
Segment assets at September 30, 2012 | $ | 1,187,700 | $ | 535,521 | $ | 119,752 | $ | 106,090 | $ | 97,977 | $ | 283,996 | $ | 53,395 | $ | 173,918 | $ | 66,301 | $ | 111,426 | $ | 100,471 | $ | 2,836,547 | ||||||||||||||||||||||||
The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
Segment revenues from real estate operations | $ | 124,561 | $ | 121,264 | $ | 371,913 | $ | 370,536 | ||||||||||||||||||||||||||||||||||||||||
Construction contract and other service revenues | 16,991 | 15,283 | 52,048 | 53,812 | ||||||||||||||||||||||||||||||||||||||||||||
Less: Revenues from discontinued operations (Note 15) | (5,521 | ) | (6,902 | ) | (16,786 | ) | (35,305 | ) | ||||||||||||||||||||||||||||||||||||||||
Total revenues | $ | 136,031 | $ | 129,645 | $ | 407,175 | $ | 389,043 | ||||||||||||||||||||||||||||||||||||||||
The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
Segment property operating expenses | $ | 44,885 | $ | 43,699 | $ | 133,605 | $ | 134,293 | ||||||||||||||||||||||||||||||||||||||||
Less: Property operating expenses from discontinued operations (Note 15) | (1,403 | ) | (2,225 | ) | (4,196 | ) | (12,191 | ) | ||||||||||||||||||||||||||||||||||||||||
Total property operating expenses | $ | 43,482 | $ | 41,474 | $ | 129,409 | $ | 122,102 | ||||||||||||||||||||||||||||||||||||||||
As previously discussed, we provide real estate services such as property management and construction and development services primarily for our properties but also for third parties. The primary manner in which we evaluate the operating performance of our service activities is through a measure we define as net operating income from service operations (“NOI from service operations”), which is based on the net of revenues and expenses from these activities. Construction contract and other service revenues and expenses consist primarily of subcontracted costs that are reimbursed to us by the customer along with a management fee. The operating margins from these activities are small relative to the revenue. We believe NOI from service operations is a useful measure in assessing both our level of activity and our profitability in conducting such operations. The table below sets forth the computation of our NOI from service operations (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
Construction contract and other service revenues | $ | 16,991 | $ | 15,283 | $ | 52,048 | $ | 53,812 | ||||||||||||||||||||||||||||||||||||||||
Construction contract and other service expenses | (16,306 | ) | (14,410 | ) | (49,165 | ) | (51,302 | ) | ||||||||||||||||||||||||||||||||||||||||
NOI from service operations | $ | 685 | $ | 873 | $ | 2,883 | $ | 2,510 | ||||||||||||||||||||||||||||||||||||||||
The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to (loss) income from continuing operations as reported on our consolidated statements of operations (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 79,676 | $ | 77,565 | $ | 238,308 | $ | 236,243 | ||||||||||||||||||||||||||||||||||||||||
NOI from service operations | 685 | 873 | 2,883 | 2,510 | ||||||||||||||||||||||||||||||||||||||||||||
Interest and other (loss) income | (3 | ) | 1,095 | 2,949 | 3,152 | |||||||||||||||||||||||||||||||||||||||||||
Equity in income (loss) of unconsolidated entities | 44 | (246 | ) | 211 | (522 | ) | ||||||||||||||||||||||||||||||||||||||||||
Income tax expense | (24 | ) | (106 | ) | (61 | ) | (327 | ) | ||||||||||||||||||||||||||||||||||||||||
Other adjustments: | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and other amortization associated with real estate operations | (29,210 | ) | (28,604 | ) | (86,239 | ) | (84,633 | ) | ||||||||||||||||||||||||||||||||||||||||
Impairment losses | (16,300 | ) | (46,096 | ) | (16,300 | ) | (41,260 | ) | ||||||||||||||||||||||||||||||||||||||||
General, administrative and leasing expenses | (8,027 | ) | (6,377 | ) | (22,430 | ) | (24,797 | ) | ||||||||||||||||||||||||||||||||||||||||
Business development expenses and land carry costs | (1,383 | ) | (1,632 | ) | (4,069 | ) | (4,506 | ) | ||||||||||||||||||||||||||||||||||||||||
Interest expense on continuing operations | (21,242 | ) | (23,239 | ) | (66,851 | ) | (71,909 | ) | ||||||||||||||||||||||||||||||||||||||||
NOI from discontinued operations | (4,118 | ) | (4,677 | ) | (12,590 | ) | (23,114 | ) | ||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | (374 | ) | (768 | ) | (27,028 | ) | (937 | ) | ||||||||||||||||||||||||||||||||||||||||
(Loss) income from continuing operations | $ | (276 | ) | $ | (32,212 | ) | $ | 8,783 | $ | (10,100 | ) | |||||||||||||||||||||||||||||||||||||
The following table reconciles our segment assets to COPT’s consolidated total assets (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 3,053,813 | $ | 2,836,547 | ||||||||||||||||||||||||||||||||||||||||||||
Non-operating property assets | 530,389 | 616,526 | ||||||||||||||||||||||||||||||||||||||||||||||
Other assets | 171,386 | 144,583 | ||||||||||||||||||||||||||||||||||||||||||||||
Total COPT consolidated assets | $ | 3,755,588 | $ | 3,597,656 | ||||||||||||||||||||||||||||||||||||||||||||
The accounting policies of the segments are the same as those used to prepare our consolidated financial statements, except that discontinued operations are not presented separately for segment purposes. In the segment reporting presented above, we did not allocate interest expense, depreciation and amortization and impairment losses to our real estate segments since they are not included in the measure of segment profit reviewed by management. We also did not allocate general and administrative expenses, business development expenses and land carry costs, interest and other income, equity in loss of unconsolidated entities, income taxes and noncontrolling interests because these items represent general corporate or non-operating property items not attributable to segments. |
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | ||
Sep. 30, 2013 | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Share-Based Compensation | Share-Based Compensation | ||
Performance Share Units (“PSUs”) | |||
On March 1, 2013, our Board of Trustees granted 69,579 PSUs with an aggregate grant date fair value of $1.9 million to executives. The PSUs have a performance period beginning on January 1, 2013 and concluding on the earlier of December 31, 2015 or the date of: (1) termination by us without cause, death or disability of the executive or constructive discharge of the executive (collectively, “qualified termination”); or (2) a sale event. The number of PSUs earned (“earned PSUs”) at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return relative to a peer group of companies, as set forth in the following schedule: | |||
Percentile Rank | Earned PSUs Payout % | ||
75th or greater | 200% of PSUs granted | ||
50th | 100% of PSUs granted | ||
25th | 50% of PSUs granted | ||
Below 25th | 0% of PSUs granted | ||
If the percentile rank exceeds the 25th percentile and is between two of the percentile ranks set forth in the table above, then the percentage of the earned PSUs will be interpolated between the ranges set forth in the table above to reflect any performance between the listed percentiles. At the end of the performance period, we, in settlement of the award, will issue a number of fully-vested COPT common shares equal to the sum of: | |||
• | the number of earned PSUs in settlement of the award plan; plus | ||
• | the aggregate dividends that would have been paid with respect to the common shares issued in settlement of the earned PSUs through the date of settlement had such shares been issued on the grant date, divided by the share price on such settlement date, as defined under the terms of the agreement. | ||
If a performance period ends due to a sale event or qualified termination, the number of earned PSUs is prorated based on the portion of the three-year performance period that has elapsed. If employment is terminated by the employee or by us for cause, all PSUs are forfeited. PSUs do not carry voting rights. | |||
We computed a grant date fair value of $26.84 per PSU using a Monte Carlo model, which included assumptions of, among other things, the following: baseline common share value of $25.85; expected volatility for COPT common shares of 29.5%; and a risk-free interest rate of 0.33%. We are recognizing the grant date fair value in connection with these PSU awards over the performance period. | |||
The PSUs granted to our executives on March 1, 2012 and March 3, 2011, as described in COPT’s 2012 Annual Report on Form 10-K and our Current Report on Form 8-K dated July 25, 2013, were outstanding at September 30, 2013. | |||
Restricted Shares | |||
During the nine months ended September 30, 2013, certain employees as well as nonemployee members of our Board of Trustees were granted a total of 177,510 restricted shares with an aggregate grant date fair value of $4.7 million (weighted average of $26.24 per share). Restricted shares granted to employees vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employees remain employed by us. The grants of restricted shares to nonemployee Trustees vest on the first anniversary of the grant date provided that the Trustee remains in his or her position. During the nine months ended September 30, 2013, forfeiture restrictions lapsed on 222,381 previously issued common shares; these shares had a weighted average grant date fair value of $31.54 per share, and the aggregate intrinsic value of the shares on the vesting dates was $5.9 million. | |||
Options | |||
During the nine months ended September 30, 2013, 32,756 options to purchase common shares (“options”) were exercised. The weighted average exercise price of these options was $19.45 per share, and the aggregate intrinsic value of the options exercised was $237,000. |
Income_Taxes
Income Taxes | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||
Income Taxes | Income Taxes | |||||||||||||||
We own a taxable REIT subsidiary (“TRS”) that is subject to Federal and state income taxes. Our TRS’s provision for income taxes consisted of the following (in thousands): | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Deferred | ||||||||||||||||
Federal | $ | (20 | ) | $ | (87 | ) | $ | (50 | ) | $ | (267 | ) | ||||
State | (4 | ) | (19 | ) | (11 | ) | (60 | ) | ||||||||
Total income tax expense | $ | (24 | ) | $ | (106 | ) | $ | (61 | ) | $ | (327 | ) | ||||
Items in our TRS contributing to temporary differences that lead to deferred taxes include depreciation and amortization, share-based compensation, certain accrued compensation, compensation paid in the form of contributions to a deferred nonqualified compensation plan and net operating losses that are not deductible until future periods. | ||||||||||||||||
Our TRS’s combined Federal and state effective tax rate was 36.7% for the three and nine months ended September 30, 2013 and 38.6% for the three and nine months ended September 30, 2012. |
Discontinued_Operations_and_As
Discontinued Operations and Assets Held for Sale | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||
Discontinued Operations and Assets Held for Sale | Discontinued Operations and Assets Held for Sale | |||||||||||||||
Income from discontinued operations primarily includes revenues and expenses associated with the following: | ||||||||||||||||
• | five properties in White Marsh, Maryland (in the Greater Baltimore region) that were sold on January 30, 2012; | |||||||||||||||
• | 1101 Sentry Gateway in San Antonio that was sold on January 31, 2012; | |||||||||||||||
• | 222 and 224 Schilling Circle in Greater Baltimore that were sold on February 10, 2012; | |||||||||||||||
• | 15 and 45 West Gude Drive in Suburban Maryland that were sold on May 2, 2012; | |||||||||||||||
• | 11800 Tech Road in Suburban Maryland that was sold on June 14, 2012; | |||||||||||||||
• | 400 Professional Drive in Suburban Maryland for which the title to the property was transferred to the mortgage lender on July 2, 2012; | |||||||||||||||
• | 23 operating properties in the Baltimore/Washington Corridor and Greater Baltimore regions that were sold on July 24, 2012; | |||||||||||||||
• | 920 Elkridge Landing Road in the Baltimore/Washington Corridor that was sold on June 25, 2013; and | |||||||||||||||
• | 16 operating properties in Colorado Springs and an operating property in Suburban Maryland classified as held for sale at September 30, 2013. | |||||||||||||||
The table below sets forth the components of discontinued operations reported on our consolidated statements of operations (in thousands): | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenue from real estate operations | $ | 5,521 | $ | 6,902 | $ | 16,786 | $ | 35,305 | ||||||||
Property operating expenses | (1,403 | ) | (2,225 | ) | (4,196 | ) | (12,191 | ) | ||||||||
Depreciation and amortization | — | (2,020 | ) | (158 | ) | (8,744 | ) | |||||||||
Impairment losses | (5,774 | ) | (9,733 | ) | (14,826 | ) | (23,510 | ) | ||||||||
General, administrative and leasing expenses | — | (1 | ) | (1 | ) | (3 | ) | |||||||||
Business development and land carry costs | — | — | — | (24 | ) | |||||||||||
Interest expense | (68 | ) | (127 | ) | (199 | ) | (2,107 | ) | ||||||||
Gain on sales of real estate | — | 16,913 | — | 20,948 | ||||||||||||
Gain on early extinguishment of debt | — | 1,738 | — | 1,736 | ||||||||||||
Discontinued operations | $ | (1,724 | ) | $ | 11,447 | $ | (2,594 | ) | $ | 11,410 | ||||||
The table below sets forth the components of assets held for sale on our consolidated balance sheets (in thousands): | ||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
Properties, net | $ | 121,060 | $ | 128,740 | ||||||||||||
Deferred rent receivable | 4,951 | 4,068 | ||||||||||||||
Intangible assets on real estate acquisitions, net | 4,384 | 4,409 | ||||||||||||||
Deferred leasing costs, net | 3,511 | 2,923 | ||||||||||||||
Lease incentives | 78 | 89 | ||||||||||||||
Assets held for sale, net | $ | 133,984 | $ | 140,229 | ||||||||||||
Earnings_Per_Share_EPS_and_Ear
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||
Earnings Per Share (“EPSâ€) and Earnings Per Unit (“EPUâ€) | Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”) | |||||||||||||||
COPT and Subsidiaries EPS | ||||||||||||||||
We present both basic and diluted EPS. We compute basic EPS by dividing net income available to common shareholders allocable to unrestricted common shares under the two-class method by the weighted average number of unrestricted common shares outstanding during the period. Our computation of diluted EPS is similar except that: | ||||||||||||||||
• | the denominator is increased to include: (1) the weighted average number of potential additional common shares that would have been outstanding if securities that are convertible into our common shares were converted; and (2) the effect of dilutive potential common shares outstanding during the period attributable to share-based compensation using the treasury stock or if-converted methods; and | |||||||||||||||
• | the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common shares that we added to the denominator. | |||||||||||||||
Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data): | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
(Loss) income from continuing operations | $ | (276 | ) | $ | (32,212 | ) | $ | 8,783 | $ | (10,100 | ) | |||||
Gain on sales of real estate, net | — | — | 2,683 | 21 | ||||||||||||
Preferred share dividends | (4,490 | ) | (6,546 | ) | (15,481 | ) | (14,738 | ) | ||||||||
Issuance costs associated with redeemed preferred shares | — | (1,827 | ) | (2,904 | ) | (1,827 | ) | |||||||||
(Loss) income from continuing operations attributable to noncontrolling interests | (990 | ) | 2,249 | (2,139 | ) | 1,710 | ||||||||||
Income from continuing operations attributable to restricted shares | (97 | ) | (111 | ) | (317 | ) | (357 | ) | ||||||||
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders | $ | (5,853 | ) | $ | (38,447 | ) | $ | (9,375 | ) | $ | (25,291 | ) | ||||
Discontinued operations | (1,724 | ) | 11,447 | (2,594 | ) | 11,410 | ||||||||||
Discontinued operations attributable to noncontrolling interests | 26 | (646 | ) | (42 | ) | (603 | ) | |||||||||
Numerator for basic and diluted EPS on net (loss) income attributable to COPT common shareholders | $ | (7,551 | ) | $ | (27,646 | ) | $ | (12,011 | ) | $ | (14,484 | ) | ||||
Denominator for basic and diluted EPS (common shares) | 86,760 | 71,688 | 84,547 | 71,590 | ||||||||||||
Basic EPS: | ||||||||||||||||
Loss from continuing operations attributable to COPT common shareholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPT common shareholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.15 | ||||||||||
Net loss attributable to COPT common shareholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.20 | ) | ||||
Diluted EPS: | ||||||||||||||||
Loss from continuing operations attributable to COPT common shareholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPT common shareholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.15 | ||||||||||
Net loss attributable to COPT common shareholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.20 | ) | ||||
Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands): | ||||||||||||||||
Weighted Average Shares Excluded from Denominator | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Conversion of common units | 3,804 | 4,233 | 3,832 | 4,256 | ||||||||||||
Conversion of Series I Preferred Units | 176 | 176 | 176 | 176 | ||||||||||||
Conversion of Series K Preferred Shares | 434 | 434 | 434 | 434 | ||||||||||||
The following share-based compensation securities were excluded from the computation of diluted EPS because their effect was antidilutive: | ||||||||||||||||
• | weighted average restricted shares for the three months ended September 30, 2013 and 2012 of 377,000 and 420,000, respectively, and for the nine months ended September 30, 2013 and 2012 of 388,000 and 475,000, respectively; and | |||||||||||||||
• | weighted average options for the three months ended September 30, 2013 and 2012 of 613,000 and 752,000, respectively, and for the nine months ended September 30, 2013 and 2012 of 571,000 and 780,000, respectively. | |||||||||||||||
As discussed in Note 8, we have outstanding senior notes that have an exchange settlement feature but did not affect our diluted EPS reported above since the weighted average closing price of our common shares during each of the periods was less than the exchange prices per common share applicable for such periods. | ||||||||||||||||
COPLP and Subsidiaries EPU | ||||||||||||||||
We present both basic and diluted EPU. We compute basic EPU by dividing net income available to common unitholders allocable to unrestricted common units under the two-class method by the weighted average number of unrestricted common units outstanding during the period. Our computation of diluted EPU is similar except that: | ||||||||||||||||
• | the denominator is increased to include: (1) the weighted average number of potential additional common units that would have been outstanding if securities that are convertible into our common units were converted; and (2) the effect of dilutive potential common units outstanding during the period attributable to share-based compensation using the treasury stock or if-converted methods; and | |||||||||||||||
• | the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common units that we added to the denominator. | |||||||||||||||
Summaries of the numerator and denominator for purposes of basic and diluted EPU calculations are set forth below (in thousands, except per unit data): | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
(Loss) income from continuing operations | $ | (276 | ) | $ | (32,212 | ) | $ | 8,783 | $ | (10,100 | ) | |||||
Gain on sales of real estate, net | — | — | 2,683 | 21 | ||||||||||||
Preferred unit distributions | (4,655 | ) | (6,711 | ) | (15,976 | ) | (15,233 | ) | ||||||||
Issuance costs associated with redeemed preferred units | — | (1,827 | ) | (2,904 | ) | (1,827 | ) | |||||||||
(Loss) income from continuing operations attributable to noncontrolling interests | (986 | ) | 243 | (2,025 | ) | 829 | ||||||||||
Income from continuing operations attributable to restricted units | (97 | ) | (111 | ) | (317 | ) | (357 | ) | ||||||||
Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders | $ | (6,014 | ) | $ | (40,618 | ) | $ | (9,756 | ) | $ | (26,667 | ) | ||||
Discontinued operations | (1,724 | ) | 11,447 | (2,594 | ) | 11,410 | ||||||||||
Discontinued operations attributable to noncontrolling interests | (49 | ) | (647 | ) | (147 | ) | (662 | ) | ||||||||
Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders | $ | (7,787 | ) | $ | (29,818 | ) | $ | (12,497 | ) | $ | (15,919 | ) | ||||
Denominator for basic and diluted EPU (common units) | 90,564 | 75,921 | 88,379 | 75,846 | ||||||||||||
Basic EPU: | ||||||||||||||||
Loss from continuing operations attributable to COPLP common unitholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPLP common unitholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.14 | ||||||||||
Net loss attributable to COPLP common unitholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.21 | ) | ||||
Diluted EPU: | ||||||||||||||||
Loss from continuing operations attributable to COPLP common unitholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPLP common unitholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.14 | ||||||||||
Net loss attributable to COPLP common unitholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.21 | ) | ||||
Our diluted EPU computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPU for the respective periods (in thousands): | ||||||||||||||||
Weighted Average Units Excluded from Denominator | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2013 | 2012 | |||||||||||||
Conversion of Series I Preferred Units | 176 | 176 | 176 | 176 | ||||||||||||
Conversion of Series K Preferred Units | 434 | 434 | 434 | 434 | ||||||||||||
The following share-based compensation securities were excluded from the computation of diluted EPU because their effect was antidilutive: | ||||||||||||||||
• | weighted average restricted units for the three months ended September 30, 2013 and 2012 of 377,000 and 420,000, respectively, and for the nine months ended September 30, 2013 and 2012 of 388,000 and 475,000, respectively; and | |||||||||||||||
• | weighted average options for the three months ended September 30, 2013 and 2012 of 613,000 and 752,0000, respectively, and for the nine months ended September 30, 2013 and 2012 of 571,000 and 780,000, respectively. | |||||||||||||||
As discussed in Note 8, we have outstanding senior notes that have an exchange settlement feature but did not affect our diluted EPU reported above since the weighted average closing price of COPT’s common shares during each of the periods was less than the exchange prices per common share applicable for such periods. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Commitments and Contingencies | |
Litigation | ||
In the normal course of business, we are involved in legal actions arising from our ownership and administration of properties. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management does not anticipate that any liabilities that may result from such proceedings will have a materially adverse effect on our financial position, operations or liquidity. Our assessment of the potential outcomes of these matters involves significant judgment and is subject to change based on future developments. | ||
Environmental | ||
We are subject to various Federal, state and local environmental regulations related to our property ownership and operation. We have performed environmental assessments of our properties, the results of which have not revealed any environmental liability that we believe would have a materially adverse effect on our financial position, operations or liquidity. | ||
Joint Ventures | ||
In connection with our 2005 contribution of properties to an unconsolidated partnership in which we hold a partnership interest, we entered into standard nonrecourse loan guarantees (environmental indemnifications and guarantees against fraud and misrepresentation, and springing guarantees of partnership debt in the event of a voluntary bankruptcy of the partnership). The maximum amount we could be required to pay under the guarantees as of September 30, 2013 totaled approximately $64 million for outstanding debt, plus interest and penalties associated with such debt. We are entitled to recover 80% of any amounts paid under the guarantees from an affiliate of our partner pursuant to an indemnification agreement. In 2012, the holder of the mortgage debt encumbering all of the joint venture’s properties initiated foreclosure proceedings. Management considered this event and estimates that the aggregate fair value of the guarantees would not exceed the amounts included in distributions received in excess of investment in unconsolidated real estate joint venture reported on the consolidated balance sheets. | ||
We may be required to make our pro rata share of additional investments in our real estate joint ventures (generally based on our percentage ownership) in the event that additional funds are needed. In the event that the other members of these joint ventures do not pay their share of investments when additional funds are needed, we may then deem it appropriate to make even larger investments in these joint ventures. | ||
Tax Incremental Financing Obligation | ||
In August 2010, Anne Arundel County, Maryland issued $30 million in tax incremental financing bonds to third-party investors in order to finance public improvements needed in connection with our project known as National Business Park North. The real estate taxes on increases in assessed value of a development district encompassing National Business Park North are to be transferred to a special fund pledged to the repayment of the bonds. We recognized a $2.5 million liability through September 30, 2013 representing the estimated fair value of our obligation to fund through a special tax any future shortfalls between debt service on the bonds and real estate taxes available to repay the bonds. | ||
Environmental Indemnity Agreement | ||
We agreed to provide certain environmental indemnifications in connection with a lease and subsequent sale of three New Jersey properties. The prior owner of the properties, a Fortune 100 company that is responsible for groundwater contamination at such properties, previously agreed to indemnify us for (1) direct losses incurred in connection with the contamination and (2) its failure to perform remediation activities required by the State of New Jersey, up to the point that the state declares the remediation to be complete. Under the environmental indemnification agreement, we agreed to the following: | ||
• | to indemnify the tenant against losses covered under the prior owner’s indemnity agreement if the prior owner fails to indemnify the tenant for such losses. This indemnification is capped at $5.0 million in perpetuity after the State of New Jersey declares the remediation to be complete; | |
• | to indemnify the tenant for consequential damages (e.g., business interruption) at one of the buildings in perpetuity and another of the buildings through 2025. This indemnification is limited to $12.5 million; and | |
• | to pay 50% of additional costs related to construction and environmental regulatory activities incurred by the tenant as a result of the indemnified environmental condition of the properties. This indemnification is limited to $300,000 annually and $1.5 million in the aggregate. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation | |
The COPT consolidated financial statements include the accounts of COPT, the Operating Partnership, their subsidiaries and other entities in which COPT has a majority voting interest and control. The COPLP consolidated financial statements include the accounts of COPLP, its subsidiaries and other entities in which COPLP has a majority voting interest and control. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if they are deemed to be the primary beneficiary of such entities. We eliminate all significant intercompany balances and transactions in consolidation. | ||
We use the equity method of accounting when we own an interest in an entity and can exert significant influence over the entity’s operations but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity. | ||
We use the cost method of accounting when we own an interest in an entity and cannot exert significant influence over its operations. | ||
These interim financial statements should be read together with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2012 for COPT (included in COPT’s 2012 Annual Report on Form 10-K) and COPLP (included in our Current Report on Form 8-K dated July 25, 2013). The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly present our financial position and results of operations. All adjustments are of a normal recurring nature except for the revisions and reclassifications noted below. The consolidated financial statements have been prepared using the accounting policies described in COPT’s 2012 Annual Report on Form 10-K and our Current Report on Form 8-K dated July 25, 2013. | ||
Reclassifications | Reclassifications | |
We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity. | ||
Revisions | Revisions | |
As reported in COPT’s 2012 Annual Report on Form 10-K, the following errors were identified in 2012: | ||
• | the misapplication of accounting guidance related to the recognition of a deferred tax asset resulting from an impairment of assets in the fourth quarter of 2011 that failed to consider a partial reversal of that asset that would result from a cancellation of related inter-company debt in the first quarter of 2012. The effect of this error was an overstatement of our income tax benefit and an understatement of our net loss for the year ended December 31, 2011 of $4.0 million. Based on an evaluation against our projected annual net income at that time, this error was previously reported for COPT as an out-of-period adjustment in the three months ended March 31, 2012; | |
• | an over-accrual of incentive compensation cost, the effect of which was an overstatement of general and administrative expenses and an overstatement of net loss for the calendar quarter and year ended December 31, 2011 of $711,000. Based on an evaluation against our projected annual net income at that time, this error was previously reported for COPT as an out-of-period adjustment in the three months ended March 31, 2012; | |
• | the misapplication of accounting guidance requiring that we recognize loss allocations to a noncontrolling interest holder in a consolidated real estate joint venture associated with decreases in such holder’s claim on the book value of the joint venture’s assets, despite the fact that the real estate held by the joint venture was under development and the joint venture had no underlying losses. The effect of this error was an understatement for COPT of losses attributable to noncontrolling interests in other consolidated entities of $1.8 million for the nine months ended September 30, 2012 and $1.4 million for the year ended December 31, 2011; and | |
• | the misapplication of accounting guidance pertaining to our reporting for a noncontrolling interest in a consolidated real estate joint venture formed in March 2010 for which the holder of such interest has the right to require us to acquire the interest at fair value. Accounting guidance requires that this noncontrolling interest be classified outside of permanent equity and reported at fair value as of the end of each reporting period, with changes in such fair value reported as equity transactions with no impact to net income or comprehensive income. This error resulted in an overstatement of equity and offsetting understatement of the line entitled “redeemable noncontrolling interest” in the mezzanine section of COPT’s consolidated balance sheet of $8.9 million as of December 31, 2011. This error had no effect on COPT’s consolidated statements of operations, including reported net income (losses) or earnings per share. | |
With respect to the errors in the first two bullets above, we assessed the materiality of these errors on COPT’s consolidated financial statements in connection with previously filed periodic reports, in accordance with ASC 250 (SEC’s Staff Accounting Bulletin No. 99, “Materiality”), and concluded at such time that the errors were not material to any prior annual or interim periods. In assessing the cumulative effect of all such errors, we have considered ASC 250 (SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”), and accordingly, the financial statements as of, and for the year ended, December 31, 2011 were revised in COPT’s 2012 Annual Report on Form 10-K. We revised COPT amounts pertaining to the first and second quarter of 2012 in COPT’s Form 10-Qs filed on April 30, 2013 and August 1, 2013, respectively, and amounts pertaining to the third quarter and first nine months of 2012 herein. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |
We adopted guidance issued by the Financial Accounting Standards Board (“FASB”) effective January 1, 2013 related to the reporting of the effect of significant reclassifications from accumulated other comprehensive income. This guidance requires an entity to report, either parenthetically on the face of the financial statements or in a single footnote, changes in the components of accumulated other comprehensive income for the period. An entity is required to separately report the amount of such changes attributable to reclassifications (and the statements of operations line affected by such reclassifications) and the amount of such changes attributable to current period other comprehensive income. For amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. Our adoption of this guidance did not affect our consolidated financial statements or disclosures. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||
Schedule of adjustments to prior period financial statements | The following are selected line items from COPT’s consolidated financial statements as of, and for the three and nine months ended, September 30, 2012 illustrating the effect of adjustments pertaining to reclassifications and revisions (in thousands): | |||||||||||||||||||||||
Consolidated Balance Sheet as of September 30, 2012 | ||||||||||||||||||||||||
Per September 30, 2012 10-Q | As Revised | Change | Revisions | |||||||||||||||||||||
Redeemable noncontrolling interest | $ | — | $ | 9,932 | $ | 9,932 | $ | 9,932 | ||||||||||||||||
Additional paid-in capital | $ | 1,455,558 | $ | 1,451,416 | $ | (4,142 | ) | $ | (4,142 | ) | ||||||||||||||
Cumulative distributions in excess of net income | $ | (610,659 | ) | $ | (607,633 | ) | $ | 3,026 | $ | 3,026 | ||||||||||||||
Noncontrolling interests in common units in COPLP | $ | 48,973 | $ | 49,157 | $ | 184 | $ | 184 | ||||||||||||||||
Noncontrolling interests in other consolidated entities | $ | 18,682 | $ | 9,682 | $ | (9,000 | ) | $ | (9,000 | ) | ||||||||||||||
Total equity | $ | 1,250,221 | $ | 1,240,289 | $ | (9,932 | ) | $ | (9,932 | ) | ||||||||||||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 3,597,656 | $ | 3,597,656 | $ | — | $ | — | ||||||||||||||||
Consolidated Statements of Operations for the | ||||||||||||||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||||||||||||||
Per September 30, 2012 10-Q | Per September 30, 2013 10-Q | Change | Discontinued Operations | Other Reclassifications | Revisions | |||||||||||||||||||
Total revenues | $ | 130,144 | $ | 129,645 | $ | (499 | ) | $ | (499 | ) | $ | — | $ | — | ||||||||||
Expenses | ||||||||||||||||||||||||
Property operating expenses | $ | 42,799 | $ | 41,474 | $ | (1,325 | ) | $ | (9 | ) | $ | (1,316 | ) | $ | — | |||||||||
Depreciation and amortization associated with real estate operations | 28,698 | 28,604 | (94 | ) | (94 | ) | — | — | ||||||||||||||||
Construction contract and other service expenses | 14,410 | 14,410 | — | — | — | — | ||||||||||||||||||
Impairment losses | 46,096 | 46,096 | — | — | — | — | ||||||||||||||||||
General, administrative and leasing expenses | 5,061 | 6,377 | 1,316 | — | 1,316 | — | ||||||||||||||||||
Business development expenses and land carry costs | 1,632 | 1,632 | — | — | — | — | ||||||||||||||||||
Total operating expenses | $ | 138,696 | $ | 138,593 | $ | (103 | ) | $ | (103 | ) | $ | — | $ | — | ||||||||||
Operating loss | $ | (8,552 | ) | $ | (8,948 | ) | $ | (396 | ) | $ | (396 | ) | $ | — | $ | — | ||||||||
Interest expense | $ | (23,239 | ) | $ | (23,239 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Income tax expense | $ | (106 | ) | $ | (106 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Loss from continuing operations | $ | (31,816 | ) | $ | (32,212 | ) | $ | (396 | ) | $ | (396 | ) | $ | — | $ | — | ||||||||
Discontinued operations | $ | 11,051 | $ | 11,447 | $ | 396 | $ | 396 | $ | — | $ | — | ||||||||||||
Net loss | $ | (20,765 | ) | $ | (20,765 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Net loss attributable to noncontrolling interests in common units in COPLP | $ | 1,569 | $ | 1,533 | $ | (36 | ) | $ | — | $ | — | $ | (36 | ) | ||||||||||
Net loss attributable to noncontrolling interests in other consolidated entities | $ | (411 | ) | $ | 235 | $ | 646 | $ | — | $ | — | $ | 646 | |||||||||||
Net loss attributable to COPT | $ | (19,772 | ) | $ | (19,162 | ) | $ | 610 | $ | — | $ | — | $ | 610 | ||||||||||
Basic and diluted earnings per common share: | ||||||||||||||||||||||||
Loss from continuing operations | $ | (0.54 | ) | $ | (0.54 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Discontinued operations | 0.15 | 0.15 | — | — | — | — | ||||||||||||||||||
Net loss attributable to COPT common shareholders | $ | (0.39 | ) | $ | (0.39 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Consolidated Statements of Operations for the | ||||||||||||||||||||||||
Nine Months Ended September 30, 2012 | ||||||||||||||||||||||||
Per September 30, 2012 10-Q | Per September 30, 2013 10-Q | Change | Discontinued Operations | Other Reclassifications | Revisions | |||||||||||||||||||
Total revenues | $ | 390,499 | $ | 389,043 | $ | (1,456 | ) | $ | (1,456 | ) | $ | — | $ | — | ||||||||||
Expenses | ||||||||||||||||||||||||
Property operating expenses | $ | 126,339 | $ | 122,102 | $ | (4,237 | ) | $ | 32 | $ | (4,269 | ) | $ | — | ||||||||||
Depreciation and amortization associated with real estate operations | 84,920 | 84,633 | (287 | ) | (287 | ) | — | — | ||||||||||||||||
Construction contract and other service expenses | 51,302 | 51,302 | — | — | — | — | ||||||||||||||||||
Impairment losses | 41,260 | 41,260 | — | — | — | — | ||||||||||||||||||
General, administrative and leasing expenses | 19,820 | 24,797 | 4,977 | (3 | ) | 4,269 | 711 | |||||||||||||||||
Business development expenses and land carry costs | 4,506 | 4,506 | — | — | — | — | ||||||||||||||||||
Total operating expenses | $ | 328,147 | $ | 328,600 | $ | 453 | $ | (258 | ) | $ | — | $ | 711 | |||||||||||
Operating income | $ | 62,352 | $ | 60,443 | $ | (1,909 | ) | $ | (1,198 | ) | $ | — | $ | (711 | ) | |||||||||
Interest expense | $ | (71,909 | ) | $ | (71,909 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Income tax expense | $ | (4,296 | ) | $ | (327 | ) | $ | 3,969 | $ | — | $ | — | $ | 3,969 | ||||||||||
Loss from continuing operations | $ | (12,160 | ) | $ | (10,100 | ) | $ | 2,060 | $ | (1,198 | ) | $ | — | $ | 3,258 | |||||||||
Discontinued operations | $ | 10,212 | $ | 11,410 | $ | 1,198 | $ | 1,198 | $ | — | $ | — | ||||||||||||
Net (loss) income | $ | (1,927 | ) | $ | 1,331 | $ | 3,258 | $ | — | $ | — | $ | 3,258 | |||||||||||
Net loss attributable to noncontrolling interests in common units in COPLP | $ | 1,020 | $ | 738 | $ | (282 | ) | $ | — | $ | — | $ | (282 | ) | ||||||||||
Net (income) loss attributable to noncontrolling interests in other consolidated entities | $ | (939 | ) | $ | 864 | $ | 1,803 | $ | — | $ | — | $ | 1,803 | |||||||||||
Net (loss) income attributable to COPT | $ | (2,341 | ) | $ | 2,438 | $ | 4,779 | $ | — | $ | — | $ | 4,779 | |||||||||||
Basic and diluted earnings per common share: | ||||||||||||||||||||||||
Loss from continuing operations | $ | (0.40 | ) | $ | (0.35 | ) | $ | 0.05 | $ | (0.02 | ) | $ | — | $ | 0.07 | |||||||||
Discontinued operations | 0.13 | 0.15 | 0.02 | 0.02 | — | — | ||||||||||||||||||
Net loss attributable to COPT common shareholders | $ | (0.27 | ) | $ | (0.20 | ) | $ | 0.07 | $ | — | $ | — | $ | 0.07 | ||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||
Schedule of fair value assets and liabilities measured on recurring basis | The table below sets forth financial assets and liabilities of COPT and its subsidiaries that are accounted for at fair value on a recurring basis as of September 30, 2013 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): | ||||||||||||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | |||||||||||||||||||||
Active Markets for | Observable Inputs(Level 2) | Unobservable Inputs(Level 3) | |||||||||||||||||||||||
Identical Assets(Level 1) | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Marketable securities in deferred compensation plan (1) | |||||||||||||||||||||||||
Mutual funds | $ | 6,753 | $ | — | $ | — | $ | 6,753 | |||||||||||||||||
Common stocks | 217 | — | — | 217 | |||||||||||||||||||||
Other | 211 | — | — | 211 | |||||||||||||||||||||
Common stock (1) | 520 | — | — | 520 | |||||||||||||||||||||
Interest rate derivatives (2) | — | 5,195 | — | 5,195 | |||||||||||||||||||||
Warrants to purchase common stock (2) | — | 301 | — | 301 | |||||||||||||||||||||
Total Assets | $ | 7,701 | $ | 5,496 | $ | — | $ | 13,197 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Deferred compensation plan liability (3) | $ | 7,181 | $ | — | $ | — | $ | 7,181 | |||||||||||||||||
Interest rate derivatives | — | 3,595 | — | 3,595 | |||||||||||||||||||||
Total Liabilities | $ | 7,181 | $ | 3,595 | $ | — | $ | 10,776 | |||||||||||||||||
Redeemable noncontrolling interest | $ | — | $ | — | $ | 16,789 | $ | 16,789 | |||||||||||||||||
(1) Included in the line entitled “restricted cash and marketable securities” on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||
(2) Included in the line entitled “prepaid expenses and other assets” on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||
(3) Included in the line entitled “other liabilities” on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||
The table below sets forth financial assets and liabilities of COPLP and its subsidiaries that are accounted for at fair value on a recurring basis as of September 30, 2013 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): | |||||||||||||||||||||||||
Description | Quoted Prices in | Significant Other | Significant | Total | |||||||||||||||||||||
Active Markets for | Observable Inputs(Level 2) | Unobservable Inputs(Level 3) | |||||||||||||||||||||||
Identical Assets(Level 1) | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||
Common stock (1) | $ | 520 | $ | — | $ | — | $ | 520 | |||||||||||||||||
Interest rate derivatives (2) | — | 5,195 | — | 5,195 | |||||||||||||||||||||
Warrants to purchase common stock (2) | — | 301 | — | 301 | |||||||||||||||||||||
Total Assets | $ | 520 | $ | 5,496 | $ | — | $ | 6,016 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||||
Interest rate derivatives | $ | — | $ | 3,595 | $ | — | $ | 3,595 | |||||||||||||||||
Redeemable noncontrolling interest | $ | — | $ | — | $ | 16,789 | $ | 16,789 | |||||||||||||||||
(1) Included in the line entitled “restricted cash and marketable securities” on COPLP’s consolidated balance sheet. | |||||||||||||||||||||||||
(2) Included in the line entitled “prepaid expenses and other assets” on COPLP’s consolidated balance sheet. | |||||||||||||||||||||||||
Schedule of fair value hierarchy of impaired properties and other assets associated with such properties | The table below sets forth the fair value hierarchy of the valuation techniques used by us in determining such fair values (dollars in thousands): | ||||||||||||||||||||||||
Quoted Prices in | Significant | Impairment Losses Recognized (1) | |||||||||||||||||||||||
Active Markets for | Significant Other | Unobservable | Three Months | Nine Months | |||||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | Ended | Ended | |||||||||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | 30-Sep-12 | 30-Sep-12 | |||||||||||||||||||
Assets (2): | |||||||||||||||||||||||||
Properties, net | $ | — | $ | — | $ | 369,312 | $ | 369,312 | $ | 52,900 | 60,593 | ||||||||||||||
(1) Represents impairment losses, excluding exit costs incurred of $2.9 million for the three months ended September 30, 2012 and $4.2 million for the nine months ended September 30, 2012. | |||||||||||||||||||||||||
(2) Reflects balance sheet classifications of assets at time of fair value measurement, excluding the effect of held for sale classifications. | |||||||||||||||||||||||||
The table below sets forth the fair value hierarchy of the valuation technique used by us in determining the fair value of the properties (dollars in thousands): | |||||||||||||||||||||||||
Quoted Prices in | Significant | Impairment Losses Recognized (1) | |||||||||||||||||||||||
Active Markets for | Significant Other | Unobservable | Three Months | Nine Months | |||||||||||||||||||||
Identical Assets | Observable Inputs | Inputs | Ended | Ended | |||||||||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | 30-Sep-13 | 30-Sep-13 | |||||||||||||||||||
Assets (2): | |||||||||||||||||||||||||
Properties, net | $ | — | $ | — | $ | 245,535 | $ | 245,535 | $ | 21,888 | $ | 30,940 | |||||||||||||
(1) Represents impairment losses, excluding exit costs incurred of $186,000 for the three months and nine months ended September 30, 2013. | |||||||||||||||||||||||||
(2) Reflects balance sheet classifications of assets at time of fair value measurement, excluding the effect of held for sale classifications. | |||||||||||||||||||||||||
Schedule of quantitative information about significant unobservable inputs used for Level 3 fair value measurements | The table below sets forth quantitative information about significant unobservable inputs used for the Level 3 fair value measurements reported above (dollars in thousands): | ||||||||||||||||||||||||
Description | Fair Value on | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||
Measurement Date | |||||||||||||||||||||||||
Properties on which impairment losses were recognized | $ | 369,312 | Bid for properties indicative of value | Indicative bid (1) | -1 | ||||||||||||||||||||
Contract of sale | Contract price (1) | -1 | |||||||||||||||||||||||
Discounted cash flow | Discount rate | 10.1% to 11.0% (10.4%) | |||||||||||||||||||||||
Terminal capitalization rate | 8.7% to 10.0% (8.9%) | ||||||||||||||||||||||||
Market rent growth rate | 3.0% (2) | ||||||||||||||||||||||||
Expense growth rate | 3.0% (2) | ||||||||||||||||||||||||
Yield Analysis | Yield | 12% (2) | |||||||||||||||||||||||
Market rent rate | $8.50 per square foot(2) | ||||||||||||||||||||||||
Leasing costs | $20.00 per square foot (2) | ||||||||||||||||||||||||
(1) These fair value measurements were developed as a result of negotiations between us and potential, or actual, purchasers of properties. | |||||||||||||||||||||||||
(2) Only one value applied for this unobservable input. | |||||||||||||||||||||||||
The table below sets forth quantitative information about significant unobservable inputs used for the Level 3 fair value measurements reported above (dollars in thousands): | |||||||||||||||||||||||||
Description | Fair Value on | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||||
Measurement Date | |||||||||||||||||||||||||
Properties on which impairment losses were recognized | $ | 245,535 | Bids for property indicative of value | Indicative bids (1) | -1 | ||||||||||||||||||||
Contract of sale | Contract price (1) | -1 | |||||||||||||||||||||||
Discounted cash flow | Discount rate | 10.0% to 11.0% (10.9%) | |||||||||||||||||||||||
Terminal capitalization rate | 9.5% to 10.0% (9.7%) | ||||||||||||||||||||||||
Market rent growth rate | 3.0% (2) | ||||||||||||||||||||||||
Expense growth rate | 3.0% (2) | ||||||||||||||||||||||||
(1) These fair value measurements were developed as a result of negotiations between us and potential, or actual, purchasers of properties. | |||||||||||||||||||||||||
(2) Only one value applied for this unobservable input. |
Properties_net_Tables
Properties, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Real Estate [Abstract] | ||||||||
Schedule of operating properties, net | Operating properties, net consisted of the following (in thousands): | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Land | $ | 436,565 | $ | 427,766 | ||||
Buildings and improvements | 2,889,383 | 2,725,875 | ||||||
Less: accumulated depreciation | (612,369 | ) | (555,975 | ) | ||||
Operating properties, net | $ | 2,713,579 | $ | 2,597,666 | ||||
Schedule of projects in development or held for future development | Projects we had in development or held for future development consisted of the following (in thousands): | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Land | $ | 253,810 | $ | 236,324 | ||||
Construction in progress, excluding land | 272,357 | 329,054 | ||||||
Projects in development or held for future development | $ | 526,167 | $ | 565,378 | ||||
Real_Estate_Joint_Ventures_Tab
Real Estate Joint Ventures (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||
Schedule of information related to the investment in unconsolidated real estate joint venture accounted for using the equity method of accounting | Information pertaining to this investment is set forth below (dollars in thousands): | ||||||||||||||||||
Investment Balance at (1) | Date | Nature of | Maximum Exposure | ||||||||||||||||
September 30, 2013 | 31-Dec-12 | Acquired | Ownership | Activity | to Loss (2) | ||||||||||||||
$ | (6,420 | ) | $ | (6,420 | ) | 9/29/05 | 20% | Operates 16 Buildings | $ | — | |||||||||
(1) The carrying amount of our investment in this joint venture was lower than our share of the equity in the joint venture by $3.0 million at September 30, 2013 and $4.5 million at December 31, 2012 due to our deferral of gain on the contribution by us of real estate into the joint venture upon its formation and our discontinuance of loss recognition under the equity method effective October 2012, as discussed below. A difference will continue to exist to the extent the nature of our continuing involvement in the joint venture remains the same and we continue to no longer recognize income or losses under the equity method. | |||||||||||||||||||
(2) Derived from the sum of our investment balance and maximum additional unilateral capital contributions or loans required from us. Not reported above are additional amounts that we and our partner are required to fund when needed by this joint venture; these funding requirements are proportional to our respective ownership percentages. Also not reported above are additional unilateral contributions or loans from us, the amounts of which are uncertain, that we would be required to make if certain contingent events occur (see Note 17). | |||||||||||||||||||
Schedule of condensed balance sheets for unconsolidated real estate joint venture | The following table sets forth condensed balance sheets for this unconsolidated real estate joint venture (in thousands): | ||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||
2013 | 2012 | ||||||||||||||||||
Properties, net | $ | 57,222 | $ | 58,460 | |||||||||||||||
Other assets | 6,248 | 4,376 | |||||||||||||||||
Total assets | $ | 63,470 | $ | 62,836 | |||||||||||||||
Liabilities (primarily debt) | $ | 80,424 | $ | 72,693 | |||||||||||||||
Owners’ equity | (16,954 | ) | (9,857 | ) | |||||||||||||||
Total liabilities and owners’ equity | $ | 63,470 | $ | 62,836 | |||||||||||||||
Schedule of condensed statements of operations for unconsolidated real estate joint venture | The following table sets forth condensed statements of operations for this unconsolidated real estate joint venture (in thousands): | ||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Revenues | $ | 1,739 | $ | 1,778 | $ | 5,342 | $ | 5,497 | |||||||||||
Property operating expenses | (755 | ) | (758 | ) | (2,250 | ) | (2,219 | ) | |||||||||||
Interest expense | (2,966 | ) | (1,138 | ) | (8,521 | ) | (3,291 | ) | |||||||||||
Depreciation and amortization expense | (575 | ) | (568 | ) | (1,668 | ) | (1,732 | ) | |||||||||||
Net loss | $ | (2,557 | ) | $ | (686 | ) | $ | (7,097 | ) | $ | (1,745 | ) | |||||||
Schedule of information related to investments in consolidated real estate joint ventures | The table below sets forth information pertaining to our investments in consolidated real estate joint ventures at September 30, 2013 (dollars in thousands): | ||||||||||||||||||
Ownership | September 30, 2013 | -1 | |||||||||||||||||
Date | % at | Total | Pledged | Total | |||||||||||||||
Acquired | 9/30/13 | Nature of Activity | Assets | Assets | Liabilities | ||||||||||||||
LW Redstone Company, LLC | 3/23/10 | 85% | Developing business park (2) | $ | 114,141 | $ | 45,209 | $ | 22,141 | ||||||||||
M Square Associates, LLC | 6/26/07 | 50% | Operating two buildings and developing others (3) | 60,879 | 47,854 | 41,463 | |||||||||||||
COPT-FD Indian Head, LLC | 10/23/06 | 75% | Holding land parcel (4) | 6,447 | — | — | |||||||||||||
MOR Forbes 2 LLC | 12/24/02 | 50% | Operating one building (5) | 4,132 | — | 90 | |||||||||||||
$ | 185,599 | $ | 93,063 | $ | 63,694 | ||||||||||||||
(1) Excludes amounts eliminated in consolidation. | |||||||||||||||||||
(2) This joint venture’s property is in Huntsville, Alabama. | |||||||||||||||||||
(3) This joint venture’s properties are in College Park, Maryland (in the Suburban Maryland region). | |||||||||||||||||||
(4) This joint venture’s property is in Charles County, Maryland. In 2012, the joint venture exercised its option under a development agreement to require Charles County to repurchase the land parcel at its original acquisition cost. Under the terms of the agreement with Charles County, the repurchase is expected to occur by August 2014. | |||||||||||||||||||
(5) This joint venture’s property is in Lanham, Maryland (in the Suburban Maryland region). |
Mortgage_and_Other_Investing_R1
Mortgage and Other Investing Receivables (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Receivables [Abstract] | ||||||||
Mortgage and other investing receivables | Mortgage and other investing receivables consisted of the following (in thousands): | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Notes receivable from City of Huntsville | $ | 40,321 | $ | 33,252 | ||||
Mortgage loan receivable | — | 144 | ||||||
$ | 40,321 | $ | 33,396 | |||||
Prepaid_Expenses_and_Other_Ass1
Prepaid Expenses and Other Assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Prepaid Expense and Other Assets [Abstract] | ||||||||
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets consisted of the following (in thousands): | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Prepaid expenses | $ | 23,552 | $ | 19,270 | ||||
Lease incentives | 8,751 | 5,578 | ||||||
Furniture, fixtures and equipment, net | 6,705 | 7,991 | ||||||
Deferred tax asset | 6,222 | 6,612 | ||||||
Construction contract costs incurred in excess of billings | 5,465 | — | ||||||
Interest rate derivatives | 5,195 | — | ||||||
Other equity method investments | 4,928 | 2,425 | ||||||
Other assets | 3,257 | 2,183 | ||||||
Prepaid expenses and other assets | $ | 64,075 | $ | 44,059 | ||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Schedule of debt | Our debt consisted of the following (dollars in thousands): | |||||||||||||||
Maximum | ||||||||||||||||
Availability at | Carrying Value at | Scheduled Maturity | ||||||||||||||
September 30, | September 30, | December 31, | Stated Interest Rates at | Dates at | ||||||||||||
2013 | 2013 | 2012 | September 30, 2013 | September 30, 2013 | ||||||||||||
Mortgage and Other Secured Loans: | ||||||||||||||||
Fixed rate mortgage loans (1) | N/A | $ | 882,311 | $ | 948,414 | 3.96% - 7.87% (2) | 2014-2034 | |||||||||
Variable rate secured loan | N/A | 37,894 | 38,475 | LIBOR + 2.25% (3) | 11/2/15 | |||||||||||
Other construction loan facilities | $ | 26,150 | — | 29,557 | N/A | N/A | ||||||||||
Total mortgage and other secured loans | 920,205 | 1,016,446 | ||||||||||||||
Revolving Credit Facility (4) | 800,000 | — | — | LIBOR + 0.975% to 1.75% (5) | 7/1/17 | |||||||||||
Term Loan Facilities (6) | (6 | ) | 620,000 | 770,000 | LIBOR + 1.10% to 2.60% (7) | 2015-2019 | ||||||||||
Unsecured Senior Notes (8) | ||||||||||||||||
3.600% Senior Notes | N/A | 347,183 | — | 3.60% | 5/15/23 | |||||||||||
5.250% Senior Notes | N/A | 245,360 | — | 5.25% | 2/15/24 | |||||||||||
Unsecured notes payable | N/A | 1,723 | 1,788 | 0% (9) | 5/1/26 | |||||||||||
4.25% Exchangeable Senior Notes (10) | N/A | 560 | 230,934 | 4.25% | 4/15/30 | |||||||||||
Total debt, net | $ | 2,135,031 | $ | 2,019,168 | ||||||||||||
(1) | Several of the fixed rate mortgages carry interest rates that were above or below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $465,000 at September 30, 2013 and $1.3 million at December 31, 2012. | |||||||||||||||
-2 | The weighted average interest rate on these loans was 5.98% at September 30, 2013. | |||||||||||||||
(3) | The interest rate on the loan outstanding was 2.43% at September 30, 2013. | |||||||||||||||
-4 | Refer to the paragraph below for disclosure pertaining to the Revolving Credit Facility. | |||||||||||||||
-5 | The weighted average interest rate on the Revolving Credit Facility was 1.45% at September 30, 2013. | |||||||||||||||
(6) | We have the ability to borrow an aggregate of an additional $180.0 million under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. | |||||||||||||||
(7) | The weighted average interest rate on these loans was 1.80% at September 30, 2013. | |||||||||||||||
-8 | Refer to the paragraphs below for disclosure pertaining to these notes. | |||||||||||||||
(9) | These notes carry interest rates that were below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying value of these notes reflects an unamortized discount totaling $788,000 at September 30, 2013 and $873,000 at December 31, 2012. | |||||||||||||||
(10) | As described further in our 2012 Annual Report on Form 10-K, these notes have an exchange settlement feature that provides that the notes may, under certain circumstances, be exchangeable for cash and, at COPLP’s discretion, COPT common shares at an exchange rate (subject to adjustment) of 20.8513 shares per one thousand dollar principal amount of the notes (exchange rate is as of September 30, 2013 and is equivalent to an exchange price of $47.96 per common share). During the nine months ended September 30, 2013, we repaid $239.4 million principal amount of these notes and recognized a $25.9 million loss on early extinguishment of debt. The carrying value of these notes included a principal amount of $575,000 and an unamortized discount totaling $15,000 at September 30, 2013 and a principal amount of $240.0 million and an unamortized discount totaling $9.1 million at December 31, 2012. The effective interest rate under the notes, including amortization of the issuance costs, was 6.05%. Because the closing price of our common shares at September 30, 2013 and December 31, 2012 was less than the exchange price per common share applicable to these notes, the if-converted value of the notes did not exceed the principal amount. The table below sets forth interest expense recognized on these notes before deductions for amounts capitalized (in thousands): | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Interest expense at stated interest rate | $ | 6 | $ | 2,550 | $ | 4,201 | $ | 7,650 | ||||||||
Interest expense associated with amortization of discount | 2 | 919 | 1,613 | 2,717 | ||||||||||||
Total | $ | 8 | $ | 3,469 | $ | 5,814 | $ | 10,367 | ||||||||
Schedule of the fair value of debt | The following table sets forth information pertaining to the fair value of our debt (in thousands): | |||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Fixed-rate debt | ||||||||||||||||
Unsecured Senior Notes | $ | 592,543 | $ | 579,654 | $ | — | $ | — | ||||||||
4.25% Exchangeable Senior Notes | 560 | 575 | 230,934 | 240,282 | ||||||||||||
Other fixed-rate debt | 884,034 | 812,246 | 950,202 | 968,180 | ||||||||||||
Variable-rate debt | 657,894 | 661,593 | 838,032 | 845,558 | ||||||||||||
$ | 2,135,031 | $ | 2,054,068 | $ | 2,019,168 | $ | 2,054,020 | |||||||||
Interest_Rate_Derivatives_Tabl
Interest Rate Derivatives (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||
Schedule of key terms and fair values of interest rate swap derivatives | The following table sets forth the key terms and fair values of our interest rate swap derivatives (dollars in thousands): | ||||||||||||||||||
Fair Value at | |||||||||||||||||||
Notional Amount | Fixed Rate | Floating Rate Index | Effective Date | Expiration Date | September 30, | December 31, | |||||||||||||
2013 | 2012 | ||||||||||||||||||
$ | 100,000 | 0.61% | One-Month LIBOR | 1/3/12 | 9/1/14 | $ | (365 | ) | $ | (594 | ) | ||||||||
100,000 | 0.61% | One-Month LIBOR | 1/3/12 | 9/1/14 | (362 | ) | (591 | ) | |||||||||||
100,000 | 0.83% | One-Month LIBOR | 1/3/12 | 9/1/15 | (963 | ) | (1,313 | ) | |||||||||||
100,000 | 0.83% | One-Month LIBOR | 1/3/12 | 9/1/15 | (963 | ) | (1,313 | ) | |||||||||||
37,894 | -1 | 3.83% | One-Month LIBOR + 2.25% | 11/2/10 | 11/2/15 | (933 | ) | (1,268 | ) | ||||||||||
100,000 | 0.81% | One-Month LIBOR | 9/2/14 | 9/1/16 | 1 | (263 | ) | ||||||||||||
100,000 | 0.81% | One-Month LIBOR | 9/2/14 | 9/1/16 | (9 | ) | (272 | ) | |||||||||||
100,000 | 1.67% | One-Month LIBOR | 9/1/15 | 8/1/19 | 2,685 | (154 | ) | ||||||||||||
100,000 | 1.73% | One-Month LIBOR | 9/1/15 | 8/1/19 | 2,509 | (417 | ) | ||||||||||||
$ | 1,600 | $ | (6,185 | ) | |||||||||||||||
-1 | The notional amount of this instrument is scheduled to amortize to $36.2 million. | ||||||||||||||||||
Schedule of fair value and balance sheet classification of interest rate derivatives | The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheet (in thousands): | ||||||||||||||||||
September 30, 2013 | 31-Dec-12 | ||||||||||||||||||
Derivatives | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Interest rate swaps designated as cash flow hedges | Prepaid expenses and other assets | $ | 5,195 | Prepaid expenses and other assets | $ | — | |||||||||||||
Interest rate swaps designated as cash flow hedges | Interest rate derivatives | (3,595 | ) | Interest rate derivatives | (6,185 | ) | |||||||||||||
Schedule of effect of interest rate derivatives on consolidated statements of operations and comprehensive income | The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): | ||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Amount of (loss) gain recognized in accumulated other comprehensive income (loss) (“AOCI”) (effective portion) | $ | (2,482 | ) | $ | (2,760 | ) | $ | 5,810 | $ | (7,386 | ) | ||||||||
Amount of loss reclassified from AOCI into interest expense (effective portion) | 689 | 632 | 2,021 | 3,034 | |||||||||||||||
Redeemable_Noncontrolling_Inte1
Redeemable Noncontrolling Interest (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Noncontrolling Interest [Abstract] | |||||||||
Schedule of activity for redeemable noncontrolling interest | The table below sets forth activity in our redeemable noncontrolling interest (in thousands): | ||||||||
Nine Months Ended September 30, | |||||||||
2013 | 2012 | ||||||||
Beginning balance | $ | 10,298 | $ | 8,908 | |||||
Distribution to noncontrolling interest | (811 | ) | — | ||||||
Net income (loss) attributable to noncontrolling interest | 888 | (1,803 | ) | ||||||
Adjustment to arrive at fair value of interest | 6,414 | 2,827 | |||||||
Ending balance | $ | 16,789 | $ | 9,932 | |||||
Information_by_Business_Segmen1
Information by Business Segment (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment financial information for real estate operations | The table below reports segment financial information for our reportable segments (in thousands). We measure the performance of our segments through the measure we define as NOI from real estate operations, which is derived by subtracting property operating expenses from revenues from real estate operations. | |||||||||||||||||||||||||||||||||||||||||||||||
Operating Office Property Segments | ||||||||||||||||||||||||||||||||||||||||||||||||
Baltimore/ | Northern | San | Washington, | St. Mary’s & | Greater | Suburban | Colorado | Greater | Other | Operating | Total | |||||||||||||||||||||||||||||||||||||
Washington | Virginia | Antonio | DC - Capitol | King George | Baltimore | Maryland | Springs | Philadelphia | Wholesale | |||||||||||||||||||||||||||||||||||||||
Corridor | Riverfront | Counties | Data Center | |||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 57,226 | $ | 23,062 | $ | 7,898 | $ | 4,295 | $ | 4,270 | $ | 10,703 | $ | 2,332 | $ | 6,622 | $ | 3,258 | $ | 3,819 | $ | 1,076 | $ | 124,561 | ||||||||||||||||||||||||
Property operating expenses | 18,780 | 7,999 | 4,061 | 1,946 | 1,299 | 4,143 | 862 | 2,371 | 924 | 654 | 1,846 | 44,885 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 38,446 | $ | 15,063 | $ | 3,837 | $ | 2,349 | $ | 2,971 | $ | 6,560 | $ | 1,470 | $ | 4,251 | $ | 2,334 | $ | 3,165 | $ | (770 | ) | $ | 79,676 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 7,204 | $ | 2,459 | $ | 251 | $ | 86 | $ | 630 | $ | 1,707 | $ | 88 | $ | 1,413 | $ | 102 | $ | (84 | ) | $ | 86 | $ | 13,942 | |||||||||||||||||||||||
Transfers from non-operating properties | $ | 8,706 | $ | 26,355 | $ | — | $ | — | $ | — | $ | 9 | $ | (183 | ) | $ | 1,860 | $ | 3,414 | $ | (33 | ) | $ | 2,714 | $ | 42,842 | ||||||||||||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 55,799 | $ | 20,363 | $ | 8,125 | $ | 4,389 | $ | 4,085 | $ | 11,918 | $ | 2,371 | $ | 6,278 | $ | 2,541 | $ | 3,589 | $ | 1,806 | $ | 121,264 | ||||||||||||||||||||||||
Property operating expenses | 18,534 | 7,115 | 4,272 | 1,924 | 1,241 | 4,539 | 1,041 | 2,432 | 663 | 686 | 1,252 | 43,699 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 37,265 | $ | 13,248 | $ | 3,853 | $ | 2,465 | $ | 2,844 | $ | 7,379 | $ | 1,330 | $ | 3,846 | $ | 1,878 | $ | 2,903 | $ | 554 | $ | 77,565 | ||||||||||||||||||||||||
Additions to long-lived assets | $ | 4,454 | $ | 54,781 | $ | — | $ | 414 | $ | 355 | $ | 1,055 | $ | 36 | $ | 548 | $ | 195 | $ | (35 | ) | $ | — | $ | 61,803 | |||||||||||||||||||||||
Transfers from non-operating properties | $ | 12,431 | $ | 12,979 | $ | — | $ | — | $ | 24 | $ | 99 | $ | (88 | ) | $ | 315 | $ | 1,843 | $ | 548 | $ | (5 | ) | $ | 28,146 | ||||||||||||||||||||||
Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 171,049 | $ | 68,992 | $ | 24,019 | $ | 12,716 | $ | 12,355 | $ | 32,246 | $ | 6,809 | $ | 19,874 | $ | 8,529 | $ | 10,878 | $ | 4,446 | $ | 371,913 | ||||||||||||||||||||||||
Property operating expenses | 57,030 | 24,020 | 12,427 | 5,769 | 3,715 | 12,408 | 2,393 | 7,014 | 2,482 | 1,667 | 4,680 | 133,605 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 114,019 | $ | 44,972 | $ | 11,592 | $ | 6,947 | $ | 8,640 | $ | 19,838 | $ | 4,416 | $ | 12,860 | $ | 6,047 | $ | 9,211 | $ | (234 | ) | $ | 238,308 | |||||||||||||||||||||||
Additions to long-lived assets | $ | 14,029 | $ | 6,699 | $ | 268 | $ | 484 | $ | 1,634 | $ | 1,761 | $ | 143 | $ | 2,323 | $ | 387 | $ | 3,588 | $ | 262 | $ | 31,578 | ||||||||||||||||||||||||
Transfers from non-operating properties | $ | 37,270 | $ | 37,209 | $ | — | $ | — | $ | 12 | $ | 113 | $ | 337 | $ | 4,540 | $ | 28,031 | $ | 20,925 | $ | 69,163 | $ | 197,600 | ||||||||||||||||||||||||
Segment assets at September 30, 2013 | $ | 1,223,246 | $ | 593,335 | $ | 118,701 | $ | 99,852 | $ | 96,679 | $ | 305,947 | $ | 52,726 | $ | 159,578 | $ | 105,112 | $ | 130,598 | $ | 168,039 | $ | 3,053,813 | ||||||||||||||||||||||||
Nine Months Ended September 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | 167,726 | $ | 57,974 | $ | 23,563 | $ | 12,515 | $ | 12,436 | $ | 41,954 | $ | 12,680 | $ | 18,880 | $ | 7,171 | $ | 10,977 | $ | 4,660 | $ | 370,536 | ||||||||||||||||||||||||
Property operating expenses | 56,677 | 21,270 | 11,998 | 5,485 | 3,524 | 15,911 | 5,357 | 6,754 | 1,851 | 2,088 | 3,378 | 134,293 | ||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 111,049 | $ | 36,704 | $ | 11,565 | $ | 7,030 | $ | 8,912 | $ | 26,043 | $ | 7,323 | $ | 12,126 | $ | 5,320 | $ | 8,889 | $ | 1,282 | $ | 236,243 | ||||||||||||||||||||||||
Additions to long-lived assets | $ | 9,393 | $ | 57,161 | $ | 259 | $ | 116 | $ | 815 | $ | 5,390 | $ | 1,219 | $ | 1,334 | $ | 285 | $ | 124 | $ | 11 | $ | 76,107 | ||||||||||||||||||||||||
Transfers from non-operating properties | $ | 42,488 | $ | 12,979 | $ | 464 | $ | — | $ | 218 | $ | 493 | $ | 793 | $ | 2,611 | $ | 11,233 | $ | 394 | $ | 57,675 | $ | 129,348 | ||||||||||||||||||||||||
Segment assets at September 30, 2012 | $ | 1,187,700 | $ | 535,521 | $ | 119,752 | $ | 106,090 | $ | 97,977 | $ | 283,996 | $ | 53,395 | $ | 173,918 | $ | 66,301 | $ | 111,426 | $ | 100,471 | $ | 2,836,547 | ||||||||||||||||||||||||
Schedule of reconciliation of segment revenues to total revenues | The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
Segment revenues from real estate operations | $ | 124,561 | $ | 121,264 | $ | 371,913 | $ | 370,536 | ||||||||||||||||||||||||||||||||||||||||
Construction contract and other service revenues | 16,991 | 15,283 | 52,048 | 53,812 | ||||||||||||||||||||||||||||||||||||||||||||
Less: Revenues from discontinued operations (Note 15) | (5,521 | ) | (6,902 | ) | (16,786 | ) | (35,305 | ) | ||||||||||||||||||||||||||||||||||||||||
Total revenues | $ | 136,031 | $ | 129,645 | $ | 407,175 | $ | 389,043 | ||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of segment property operating expenses to total property operating expenses | The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
Segment property operating expenses | $ | 44,885 | $ | 43,699 | $ | 133,605 | $ | 134,293 | ||||||||||||||||||||||||||||||||||||||||
Less: Property operating expenses from discontinued operations (Note 15) | (1,403 | ) | (2,225 | ) | (4,196 | ) | (12,191 | ) | ||||||||||||||||||||||||||||||||||||||||
Total property operating expenses | $ | 43,482 | $ | 41,474 | $ | 129,409 | $ | 122,102 | ||||||||||||||||||||||||||||||||||||||||
Schedule of computation of net operating income from service operations | The table below sets forth the computation of our NOI from service operations (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
Construction contract and other service revenues | $ | 16,991 | $ | 15,283 | $ | 52,048 | $ | 53,812 | ||||||||||||||||||||||||||||||||||||||||
Construction contract and other service expenses | (16,306 | ) | (14,410 | ) | (49,165 | ) | (51,302 | ) | ||||||||||||||||||||||||||||||||||||||||
NOI from service operations | $ | 685 | $ | 873 | $ | 2,883 | $ | 2,510 | ||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of net operating income from real estate operations and service operations to (loss) income from continuing operations | The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to (loss) income from continuing operations as reported on our consolidated statements of operations (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | 79,676 | $ | 77,565 | $ | 238,308 | $ | 236,243 | ||||||||||||||||||||||||||||||||||||||||
NOI from service operations | 685 | 873 | 2,883 | 2,510 | ||||||||||||||||||||||||||||||||||||||||||||
Interest and other (loss) income | (3 | ) | 1,095 | 2,949 | 3,152 | |||||||||||||||||||||||||||||||||||||||||||
Equity in income (loss) of unconsolidated entities | 44 | (246 | ) | 211 | (522 | ) | ||||||||||||||||||||||||||||||||||||||||||
Income tax expense | (24 | ) | (106 | ) | (61 | ) | (327 | ) | ||||||||||||||||||||||||||||||||||||||||
Other adjustments: | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and other amortization associated with real estate operations | (29,210 | ) | (28,604 | ) | (86,239 | ) | (84,633 | ) | ||||||||||||||||||||||||||||||||||||||||
Impairment losses | (16,300 | ) | (46,096 | ) | (16,300 | ) | (41,260 | ) | ||||||||||||||||||||||||||||||||||||||||
General, administrative and leasing expenses | (8,027 | ) | (6,377 | ) | (22,430 | ) | (24,797 | ) | ||||||||||||||||||||||||||||||||||||||||
Business development expenses and land carry costs | (1,383 | ) | (1,632 | ) | (4,069 | ) | (4,506 | ) | ||||||||||||||||||||||||||||||||||||||||
Interest expense on continuing operations | (21,242 | ) | (23,239 | ) | (66,851 | ) | (71,909 | ) | ||||||||||||||||||||||||||||||||||||||||
NOI from discontinued operations | (4,118 | ) | (4,677 | ) | (12,590 | ) | (23,114 | ) | ||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | (374 | ) | (768 | ) | (27,028 | ) | (937 | ) | ||||||||||||||||||||||||||||||||||||||||
(Loss) income from continuing operations | $ | (276 | ) | $ | (32,212 | ) | $ | 8,783 | $ | (10,100 | ) | |||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of segment assets to total assets | The following table reconciles our segment assets to COPT’s consolidated total assets (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
Segment assets | $ | 3,053,813 | $ | 2,836,547 | ||||||||||||||||||||||||||||||||||||||||||||
Non-operating property assets | 530,389 | 616,526 | ||||||||||||||||||||||||||||||||||||||||||||||
Other assets | 171,386 | 144,583 | ||||||||||||||||||||||||||||||||||||||||||||||
Total COPT consolidated assets | $ | 3,755,588 | $ | 3,597,656 | ||||||||||||||||||||||||||||||||||||||||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Schedule of payouts for defined performance under performance-based awards of share-based compensation | The number of PSUs earned (“earned PSUs”) at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return relative to a peer group of companies, as set forth in the following schedule: | ||
Percentile Rank | Earned PSUs Payout % | ||
75th or greater | 200% of PSUs granted | ||
50th | 100% of PSUs granted | ||
25th | 50% of PSUs granted | ||
Below 25th | 0% of PSUs granted |
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||
Components of provision for income tax | Our TRS’s provision for income taxes consisted of the following (in thousands): | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Deferred | ||||||||||||||||
Federal | $ | (20 | ) | $ | (87 | ) | $ | (50 | ) | $ | (267 | ) | ||||
State | (4 | ) | (19 | ) | (11 | ) | (60 | ) | ||||||||
Total income tax expense | $ | (24 | ) | $ | (106 | ) | $ | (61 | ) | $ | (327 | ) |
Discontinued_Operations_and_As1
Discontinued Operations and Assets Held for Sale (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||
Components of discontinued operations | The table below sets forth the components of discontinued operations reported on our consolidated statements of operations (in thousands): | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenue from real estate operations | $ | 5,521 | $ | 6,902 | $ | 16,786 | $ | 35,305 | ||||||||
Property operating expenses | (1,403 | ) | (2,225 | ) | (4,196 | ) | (12,191 | ) | ||||||||
Depreciation and amortization | — | (2,020 | ) | (158 | ) | (8,744 | ) | |||||||||
Impairment losses | (5,774 | ) | (9,733 | ) | (14,826 | ) | (23,510 | ) | ||||||||
General, administrative and leasing expenses | — | (1 | ) | (1 | ) | (3 | ) | |||||||||
Business development and land carry costs | — | — | — | (24 | ) | |||||||||||
Interest expense | (68 | ) | (127 | ) | (199 | ) | (2,107 | ) | ||||||||
Gain on sales of real estate | — | 16,913 | — | 20,948 | ||||||||||||
Gain on early extinguishment of debt | — | 1,738 | — | 1,736 | ||||||||||||
Discontinued operations | $ | (1,724 | ) | $ | 11,447 | $ | (2,594 | ) | $ | 11,410 | ||||||
Components of assets held for sale | The table below sets forth the components of assets held for sale on our consolidated balance sheets (in thousands): | |||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||
Properties, net | $ | 121,060 | $ | 128,740 | ||||||||||||
Deferred rent receivable | 4,951 | 4,068 | ||||||||||||||
Intangible assets on real estate acquisitions, net | 4,384 | 4,409 | ||||||||||||||
Deferred leasing costs, net | 3,511 | 2,923 | ||||||||||||||
Lease incentives | 78 | 89 | ||||||||||||||
Assets held for sale, net | $ | 133,984 | $ | 140,229 | ||||||||||||
Earnings_Per_Share_EPS_and_Ear1
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share [Line Items] | ||||||||||||||||
Summary of calculation of numerator and denominator in basic and diluted earnings per share | Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data): | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
(Loss) income from continuing operations | $ | (276 | ) | $ | (32,212 | ) | $ | 8,783 | $ | (10,100 | ) | |||||
Gain on sales of real estate, net | — | — | 2,683 | 21 | ||||||||||||
Preferred share dividends | (4,490 | ) | (6,546 | ) | (15,481 | ) | (14,738 | ) | ||||||||
Issuance costs associated with redeemed preferred shares | — | (1,827 | ) | (2,904 | ) | (1,827 | ) | |||||||||
(Loss) income from continuing operations attributable to noncontrolling interests | (990 | ) | 2,249 | (2,139 | ) | 1,710 | ||||||||||
Income from continuing operations attributable to restricted shares | (97 | ) | (111 | ) | (317 | ) | (357 | ) | ||||||||
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders | $ | (5,853 | ) | $ | (38,447 | ) | $ | (9,375 | ) | $ | (25,291 | ) | ||||
Discontinued operations | (1,724 | ) | 11,447 | (2,594 | ) | 11,410 | ||||||||||
Discontinued operations attributable to noncontrolling interests | 26 | (646 | ) | (42 | ) | (603 | ) | |||||||||
Numerator for basic and diluted EPS on net (loss) income attributable to COPT common shareholders | $ | (7,551 | ) | $ | (27,646 | ) | $ | (12,011 | ) | $ | (14,484 | ) | ||||
Denominator for basic and diluted EPS (common shares) | 86,760 | 71,688 | 84,547 | 71,590 | ||||||||||||
Basic EPS: | ||||||||||||||||
Loss from continuing operations attributable to COPT common shareholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPT common shareholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.15 | ||||||||||
Net loss attributable to COPT common shareholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.20 | ) | ||||
Diluted EPS: | ||||||||||||||||
Loss from continuing operations attributable to COPT common shareholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPT common shareholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.15 | ||||||||||
Net loss attributable to COPT common shareholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.20 | ) | ||||
Schedule of securities excluded from computation of diluted earnings per share | Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands): | |||||||||||||||
Weighted Average Shares Excluded from Denominator | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Conversion of common units | 3,804 | 4,233 | 3,832 | 4,256 | ||||||||||||
Conversion of Series I Preferred Units | 176 | 176 | 176 | 176 | ||||||||||||
Conversion of Series K Preferred Shares | 434 | 434 | 434 | 434 | ||||||||||||
Corporate Office Properties, L.P. | ||||||||||||||||
Earnings Per Share [Line Items] | ||||||||||||||||
Summary of calculation of numerator and denominator in basic and diluted earnings per share | Summaries of the numerator and denominator for purposes of basic and diluted EPU calculations are set forth below (in thousands, except per unit data): | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
(Loss) income from continuing operations | $ | (276 | ) | $ | (32,212 | ) | $ | 8,783 | $ | (10,100 | ) | |||||
Gain on sales of real estate, net | — | — | 2,683 | 21 | ||||||||||||
Preferred unit distributions | (4,655 | ) | (6,711 | ) | (15,976 | ) | (15,233 | ) | ||||||||
Issuance costs associated with redeemed preferred units | — | (1,827 | ) | (2,904 | ) | (1,827 | ) | |||||||||
(Loss) income from continuing operations attributable to noncontrolling interests | (986 | ) | 243 | (2,025 | ) | 829 | ||||||||||
Income from continuing operations attributable to restricted units | (97 | ) | (111 | ) | (317 | ) | (357 | ) | ||||||||
Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders | $ | (6,014 | ) | $ | (40,618 | ) | $ | (9,756 | ) | $ | (26,667 | ) | ||||
Discontinued operations | (1,724 | ) | 11,447 | (2,594 | ) | 11,410 | ||||||||||
Discontinued operations attributable to noncontrolling interests | (49 | ) | (647 | ) | (147 | ) | (662 | ) | ||||||||
Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders | $ | (7,787 | ) | $ | (29,818 | ) | $ | (12,497 | ) | $ | (15,919 | ) | ||||
Denominator for basic and diluted EPU (common units) | 90,564 | 75,921 | 88,379 | 75,846 | ||||||||||||
Basic EPU: | ||||||||||||||||
Loss from continuing operations attributable to COPLP common unitholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPLP common unitholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.14 | ||||||||||
Net loss attributable to COPLP common unitholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.21 | ) | ||||
Diluted EPU: | ||||||||||||||||
Loss from continuing operations attributable to COPLP common unitholders | $ | (0.07 | ) | $ | (0.54 | ) | $ | (0.11 | ) | $ | (0.35 | ) | ||||
Discontinued operations attributable to COPLP common unitholders | (0.02 | ) | 0.15 | (0.03 | ) | 0.14 | ||||||||||
Net loss attributable to COPLP common unitholders | $ | (0.09 | ) | $ | (0.39 | ) | $ | (0.14 | ) | $ | (0.21 | ) | ||||
Schedule of securities excluded from computation of diluted earnings per share | Our diluted EPU computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPU for the respective periods (in thousands): | |||||||||||||||
Weighted Average Units Excluded from Denominator | ||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2013 | 2012 | |||||||||||||
Conversion of Series I Preferred Units | 176 | 176 | 176 | 176 | ||||||||||||
Conversion of Series K Preferred Units | 434 | 434 | 434 | 434 | ||||||||||||
Organization_Details
Organization (Details) | 9 Months Ended |
Sep. 30, 2013 | |
sqft | |
acre | |
Operating office properties | |
Investments in real estate | |
Number of real estate properties | 210 |
Square footage of real estate properties (in square feet) | 19,200,000 |
Office propertiesunder, or contractually committed for, construction or approved for redevelopment | |
Investments in real estate | |
Number of real estate properties | 11 |
Square footage of real estate properties (in square feet) | 1,500,000 |
Office properties under construction or redevelopment which are partially operational | |
Investments in real estate | |
Number of real estate properties | 1 |
Land held or under pre-construction | |
Investments in real estate | |
Area of land held or under pre-construction (in acres) | 1,721 |
Area of land parcels controlled but not owned (in acres) | 56 |
Developable square footage of real estate properties (in square feet) | 20,400,000 |
Partially operational, wholesale data center | |
Investments in real estate | |
The expected stabilization critical load after completion of development (in megawatts) | 18 |
Organization_Details_2
Organization (Details 2) (Corporate Office Properties, L.P.) | 9 Months Ended |
Sep. 30, 2013 | |
Trustee | |
Common Units | |
Forms of ownership in Operating Partnership and ownership percentage by the entity | |
Percentage ownership in operating partnership | 95.60% |
Number of trustees controlling additional common units | 3 |
Additional percentage of common units controlled by trustees (as a percent) | 3.40% |
Preferred Units | |
Forms of ownership in Operating Partnership and ownership percentage by the entity | |
Percentage ownership in operating partnership | 96.40% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Sep. 30, 2012 | Dec. 31, 2011 | Dec. 31, 2011 |
Scenario, Previously Reported | Scenario, Previously Reported | Misapplication Of Accounting Guidance Related To Recognition Of Deferred Tax Asset | Over accrual Of Incentive Compensation Cost | Misapplication of Accounting Guidance Related to Recognization of Losses Related to Consolidated Real Estate Joint Ventures [Member] | Misapplication of Accounting Guidance Related to Recognization of Losses Related to Consolidated Real Estate Joint Ventures [Member] | Misapplication of Accounting Guidance Related to Reporting for a Noncontrolling Interest in a Consolidated Real Estate Joint Venture [Member] | ||||||
Scenario, Previously Reported | Scenario, Previously Reported | Scenario, Previously Reported | Scenario, Previously Reported | Scenario, Previously Reported | ||||||||
Net (loss) income | ($2,000) | ($20,765) | $8,872 | $1,331 | ($20,765) | ($1,927) | ($4,000) | $711 | ($1,800) | ($1,400) | ||
Redeemable noncontrolling interest | $16,789 | $9,932 | $16,789 | $9,932 | $10,298 | $0 | $0 | $8,900 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies 2 (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Redeemable noncontrolling interest | $16,789 | $9,932 | $16,789 | $9,932 | $10,298 | |
Additional paid-in capital | 1,812,801 | 1,451,416 | 1,812,801 | 1,451,416 | 1,653,672 | |
Cumulative distributions in excess of net income | -700,368 | -607,633 | -700,368 | -607,633 | -617,455 | |
Noncontrolling interests in common units in COPLP | 50,815 | 49,157 | 50,815 | 49,157 | 52,122 | |
Noncontrolling interests in other consolidated entities | 9,137 | 9,682 | 9,137 | 9,682 | 10,153 | |
Total equity | 1,434,067 | 1,240,289 | 1,434,067 | 1,240,289 | 1,436,499 | 1,205,899 |
Total liabilities, redeemable noncontrolling interest and equity | 3,755,588 | 3,597,656 | 3,755,588 | 3,597,656 | 3,653,759 | |
Total revenues | 136,031 | 129,645 | 407,175 | 389,043 | ||
Expenses | ||||||
Property operating expenses | 43,482 | 41,474 | 129,409 | 122,102 | ||
Depreciation and amortization associated with real estate operations | 29,210 | 28,604 | 86,239 | 84,633 | ||
Construction contract and other service expenses | 16,306 | 14,410 | 49,165 | 51,302 | ||
Impairment losses | 16,300 | 46,096 | 16,300 | 41,260 | ||
General, administrative and leasing expenses | 6,377 | 24,797 | ||||
Business development expenses and land carry costs | 1,383 | 1,632 | 4,069 | 4,506 | ||
Total operating expenses | 114,708 | 138,593 | 307,612 | 328,600 | ||
Operating income (loss) | 21,323 | -8,948 | 99,563 | 60,443 | ||
Interest expense | -21,242 | -23,239 | -66,851 | -71,909 | ||
Income tax expense | -24 | -106 | -61 | -327 | ||
Loss from continuing operations | -276 | -32,212 | 8,783 | -10,100 | ||
Discontinued operations | -1,724 | 11,447 | -2,594 | 11,410 | ||
Net (loss) income | -2,000 | -20,765 | 8,872 | 1,331 | ||
Net loss attributable to noncontrolling interests in common units in COPLP | 232 | 1,533 | 474 | 738 | ||
Net loss attributable to noncontrolling interests in other consolidated entities | -1,031 | 235 | -2,160 | 864 | ||
Net loss attributable to COPT | -2,964 | -19,162 | 6,691 | 2,438 | ||
Basic and diluted earnings per common share: | ||||||
Income from continuing operations (in dollars per share) | ($0.54) | ($0.35) | ||||
Income from discontinued operations (in dollars per share) | $0.15 | $0.15 | ||||
Net income attributable to COPT common shareholders (in dollars per share) | ($0.39) | ($0.20) | ||||
Scenario, Previously Reported | ||||||
Redeemable noncontrolling interest | 0 | 0 | ||||
Additional paid-in capital | 1,455,558 | 1,455,558 | ||||
Cumulative distributions in excess of net income | -610,659 | -610,659 | ||||
Noncontrolling interests in common units in COPLP | 48,973 | 48,973 | ||||
Noncontrolling interests in other consolidated entities | 18,682 | 18,682 | ||||
Total equity | 1,250,221 | 1,250,221 | ||||
Total liabilities, redeemable noncontrolling interest and equity | 3,597,656 | 3,597,656 | ||||
Total revenues | 130,144 | 390,499 | ||||
Expenses | ||||||
Property operating expenses | 42,799 | 126,339 | ||||
Depreciation and amortization associated with real estate operations | 28,698 | 84,920 | ||||
Construction contract and other service expenses | 14,410 | 51,302 | ||||
Impairment losses | 46,096 | 41,260 | ||||
General, administrative and leasing expenses | 5,061 | 19,820 | ||||
Business development expenses and land carry costs | 1,632 | 4,506 | ||||
Total operating expenses | 138,696 | 328,147 | ||||
Operating income (loss) | -8,552 | 62,352 | ||||
Interest expense | -23,239 | -71,909 | ||||
Income tax expense | -106 | -4,296 | ||||
Loss from continuing operations | -31,816 | -12,160 | ||||
Discontinued operations | 11,051 | 10,212 | ||||
Net (loss) income | -20,765 | -1,927 | ||||
Net loss attributable to noncontrolling interests in common units in COPLP | 1,569 | 1,020 | ||||
Net loss attributable to noncontrolling interests in other consolidated entities | -411 | -939 | ||||
Net loss attributable to COPT | -19,772 | -2,341 | ||||
Basic and diluted earnings per common share: | ||||||
Income from continuing operations (in dollars per share) | ($0.54) | ($0.40) | ||||
Income from discontinued operations (in dollars per share) | $0.15 | $0.13 | ||||
Net income attributable to COPT common shareholders (in dollars per share) | ($0.39) | ($0.27) | ||||
Change | ||||||
Redeemable noncontrolling interest | 9,932 | 9,932 | ||||
Additional paid-in capital | -4,142 | -4,142 | ||||
Cumulative distributions in excess of net income | 3,026 | 3,026 | ||||
Noncontrolling interests in common units in COPLP | 184 | 184 | ||||
Noncontrolling interests in other consolidated entities | -9,000 | -9,000 | ||||
Total equity | -9,932 | -9,932 | ||||
Total revenues | -499 | -1,456 | ||||
Expenses | ||||||
Property operating expenses | -1,325 | -4,237 | ||||
Depreciation and amortization associated with real estate operations | -94 | -287 | ||||
General, administrative and leasing expenses | 1,316 | 4,977 | ||||
Total operating expenses | -103 | 453 | ||||
Operating income (loss) | -396 | -1,909 | ||||
Income tax expense | 3,969 | |||||
Loss from continuing operations | -396 | 2,060 | ||||
Discontinued operations | 396 | 1,198 | ||||
Net (loss) income | 3,258 | |||||
Net loss attributable to noncontrolling interests in common units in COPLP | -36 | -282 | ||||
Net loss attributable to noncontrolling interests in other consolidated entities | 646 | 1,803 | ||||
Net loss attributable to COPT | 610 | 4,779 | ||||
Basic and diluted earnings per common share: | ||||||
Income from continuing operations (in dollars per share) | $0.05 | |||||
Income from discontinued operations (in dollars per share) | $0.02 | |||||
Net income attributable to COPT common shareholders (in dollars per share) | $0.07 | |||||
Revisions | ||||||
Redeemable noncontrolling interest | 9,932 | 9,932 | ||||
Additional paid-in capital | -4,142 | -4,142 | ||||
Cumulative distributions in excess of net income | 3,026 | 3,026 | ||||
Noncontrolling interests in common units in COPLP | 184 | 184 | ||||
Noncontrolling interests in other consolidated entities | -9,000 | -9,000 | ||||
Total equity | -9,932 | -9,932 | ||||
Continuing Operations | Reclassifications | ||||||
Expenses | ||||||
Property operating expenses | -1,316 | -4,269 | ||||
General, administrative and leasing expenses | 1,316 | 4,269 | ||||
Continuing Operations | Revisions | ||||||
Expenses | ||||||
General, administrative and leasing expenses | 711 | |||||
Total operating expenses | 711 | |||||
Operating income (loss) | -711 | |||||
Income tax expense | 3,969 | |||||
Loss from continuing operations | 3,258 | |||||
Net (loss) income | 3,258 | |||||
Net loss attributable to noncontrolling interests in common units in COPLP | -36 | -282 | ||||
Net loss attributable to noncontrolling interests in other consolidated entities | 646 | 1,803 | ||||
Net loss attributable to COPT | 610 | 4,779 | ||||
Basic and diluted earnings per common share: | ||||||
Income from continuing operations (in dollars per share) | $0.07 | |||||
Net income attributable to COPT common shareholders (in dollars per share) | $0.07 | |||||
Discontinued Operations | Reclassifications | ||||||
Total revenues | -499 | -1,456 | ||||
Expenses | ||||||
Property operating expenses | -9 | 32 | ||||
Depreciation and amortization associated with real estate operations | -94 | -287 | ||||
General, administrative and leasing expenses | -3 | |||||
Total operating expenses | -103 | -258 | ||||
Operating income (loss) | -396 | -1,198 | ||||
Loss from continuing operations | -396 | -1,198 | ||||
Discontinued operations | $396 | $1,198 | ||||
Basic and diluted earnings per common share: | ||||||
Income from continuing operations (in dollars per share) | ($0.02) | |||||
Income from discontinued operations (in dollars per share) | $0.02 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | ||||||||||||
In Thousands, unless otherwise specified | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Total Estimated Fair Value | Total Estimated Fair Value | Total Estimated Fair Value | Total Estimated Fair Value | Total Estimated Fair Value | Minimum | Maximum | Weighted Average | ||||||||||||||||||
Corporate Office Properties, L.P. | Mutual funds | Common Shares | Other | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Mutual funds | Common Shares | Other | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | Fair value measurement on a recurring basis | ||||||||||||||||||||||
Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||
Marketable securities in deferred compensation plan | $6,753 | [1] | $217 | [1] | $211 | [1] | $6,753 | [1] | $217 | [1] | $211 | [1] | ||||||||||||||||||||||
Common stock | 520 | [1] | 520 | [2] | 520 | [1] | 520 | [2] | ||||||||||||||||||||||||||
Interest rate derivatives | 1,600 | -6,185 | 5,195 | [3] | 5,195 | [4] | 5,195 | [3] | 5,195 | [4] | ||||||||||||||||||||||||
Warrants to purchase common stock | 301 | [3] | 301 | [4] | 301 | [3] | 301 | [4] | ||||||||||||||||||||||||||
Assets | 7,701 | 520 | 5,496 | 5,496 | 0 | 0 | 13,197 | 6,016 | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||
Deferred compensation plan liability | 7,181 | [5] | 7,181 | [5] | ||||||||||||||||||||||||||||||
Interest rate derivatives | 3,595 | 6,185 | 3,595 | 6,185 | 3,595 | 3,595 | 3,595 | 3,595 | ||||||||||||||||||||||||||
Liabilities | 7,181 | 3,595 | 10,776 | |||||||||||||||||||||||||||||||
Redeemable noncontrolling interest | $16,789 | $10,298 | $9,932 | $16,789 | $10,298 | $16,789 | $16,789 | $16,789 | $16,789 | |||||||||||||||||||||||||
Discount rate | 10.00% | 20.00% | 15.30% | |||||||||||||||||||||||||||||||
[1] | Included in the line entitled “restricted cash and marketable securities†on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||||||||||
[2] | Included in the line entitled “restricted cash and marketable securities†on COPLP’s consolidated balance sheet. | |||||||||||||||||||||||||||||||||
[3] | Included in the line entitled “prepaid expenses and other assets†on COPT’s consolidated balance sheet. | |||||||||||||||||||||||||||||||||
[4] | Included in the line entitled “prepaid expenses and other assets†on COPLP’s consolidated balance sheet. | |||||||||||||||||||||||||||||||||
[5] | Included in the line entitled “other liabilities†on COPT’s consolidated balance sheet. |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Impairment losses (recoveries) | $16,300 | $46,096 | $16,300 | $41,260 | ||||
Exit costs on property dispositions | 186 | 4,066 | ||||||
Fair value measurement on a nonrecurring basis | Discontinued Operations | ||||||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Impairment losses (recoveries) | 14,800 | |||||||
Exit costs on property dispositions | 186 | |||||||
Fair value measurement on a nonrecurring basis | Significant Unobservable Inputs (Level 3) | ||||||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Exit costs on property dispositions | 186 | 186 | ||||||
Properties Expected to be Conveyed | Fair value measurement on a nonrecurring basis | ||||||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Impairment losses (recoveries) | 10,400 | |||||||
Other Properties with Shortened Holding Periods | Fair value measurement on a nonrecurring basis | ||||||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Impairment losses (recoveries) | 5,900 | |||||||
Number of Properties, Shortened Holding Period | 2 | |||||||
Properties,net | Fair value measurement on a nonrecurring basis | ||||||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Impairment losses (recoveries) | 21,888 | [1],[2] | 52,900 | [1],[3] | 30,940 | [1],[2] | 60,593 | [1],[3] |
Properties,net | Fair value measurement on a nonrecurring basis | Significant Unobservable Inputs (Level 3) | ||||||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Assets | 245,535 | [1],[4] | 369,312 | [1],[4] | 245,535 | [1],[4] | 369,312 | [1],[4] |
Exit costs on property dispositions | 2,900 | 4,200 | ||||||
Properties,net | Fair value measurement on a nonrecurring basis | Total Estimated Fair Value | ||||||||
Assets and liabilities measured at fair value on a non-recurring basis | ||||||||
Assets | $245,535 | [1] | $369,312 | [1] | $245,535 | [1] | $369,312 | [1] |
[1] | Reflects balance sheet classifications of assets at time of fair value measurement, excluding the effect of held for sale classifications. | |||||||
[2] | Represents impairment losses, excluding exit costs incurred of $186,000 for the three months and nine months ended September 30, 2013. | |||||||
[3] | Represents impairment losses, excluding exit costs incurred of $2.9 million for the three months ended September 30, 2012 and $4.2 million for the nine months ended September 30, 2012. | |||||||
[4] | These fair value measurements were developed as a result of negotiations between us and potential, or actual, purchasers of properties. |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | ||
Discounted Cash Flow Valuation Technique [Member] | ||||
Quantitative information for significant unobservable inputs used for Level 3 fair value measurements | ||||
Discount rate | 10.90% | 10.40% | ||
Terminal capitalization rate | 9.70% | 8.90% | ||
Market rent growth rate | 3.00% | [1] | 3.00% | [1] |
Expense growth rate | 3.00% | [1] | 3.00% | [1] |
Discounted Cash Flow Valuation Technique [Member] | Minimum | ||||
Quantitative information for significant unobservable inputs used for Level 3 fair value measurements | ||||
Discount rate | 10.00% | 10.10% | ||
Terminal capitalization rate | 9.50% | 8.70% | ||
Discounted Cash Flow Valuation Technique [Member] | Maximum | ||||
Quantitative information for significant unobservable inputs used for Level 3 fair value measurements | ||||
Discount rate | 11.00% | 11.00% | ||
Terminal capitalization rate | 10.00% | 10.00% | ||
Yield Analysis Valuation Technique [Member] | ||||
Quantitative information for significant unobservable inputs used for Level 3 fair value measurements | ||||
Yield | 12.00% | [1] | ||
Market rent rate (in dollars per square foot) | 8.5 | [1] | ||
Leasing costs (in dollars per square foot) | 20 | [1] | ||
Fair value measurement on a nonrecurring basis | Significant Unobservable Inputs (Level 3) | Properties,net | ||||
Quantitative information for significant unobservable inputs used for Level 3 fair value measurements | ||||
Fair value on measurement date | 245,535 | [2],[3] | 369,312 | [2],[3] |
[1] | Only one value applied for this unobservable input. | |||
[2] | Reflects balance sheet classifications of assets at time of fair value measurement, excluding the effect of held for sale classifications. | |||
[3] | These fair value measurements were developed as a result of negotiations between us and potential, or actual, purchasers of properties. |
Properties_net_Details
Properties, net (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Properties | ||
Operating properties, net | $2,713,579 | $2,597,666 |
Operating properties, net | ||
Properties | ||
Less: accumulated depreciation | -612,369 | -555,975 |
Operating properties, net | Land | ||
Properties | ||
Gross | 436,565 | 427,766 |
Operating properties, net | Buildings and improvements | ||
Properties | ||
Gross | $2,889,383 | $2,725,875 |
Properties_net_Details_2
Properties, net (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Properties | ||
Projects in development or held for future development | $526,167 | $565,378 |
Projects in development or held for future development | Land in development or held for future development | ||
Properties | ||
Projects in development or held for future development | 253,810 | 236,324 |
Projects in development or held for future development | Construction in progress, excluding land | ||
Properties | ||
Projects in development or held for future development | $272,357 | $329,054 |
Properties_net_Details_3
Properties, net (Details 3) (Linthicum Maryland, USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
sqft | |
Linthicum Maryland | |
Dispositions [Line Items] | |
Square footage of real estate properties (in square feet) | 103,000 |
Sales Price of Operating Properties Sold | $6.90 |
Properties_net_Details_4
Properties, net (Details 4) | 9 Months Ended |
Sep. 30, 2013 | |
Property | |
sqft | |
Newly constructed properties placed in service | |
Construction and Redevelopment Activities | |
Square Feet of Properties Placed in Service | 392,000 |
Number of Real Estate Properties Placed In Service | 4 |
Properties under construction or contractually committed for construction | |
Construction and Redevelopment Activities | |
Number of real estate properties | 9 |
Square footage of real estate properties (in square feet) | 1,300,000 |
Properties under construction or contractually committed for construction | Northern Virginia | |
Construction and Redevelopment Activities | |
Number of real estate properties | 4 |
Properties under construction or contractually committed for construction | Baltimore and Washington Corridor | |
Construction and Redevelopment Activities | |
Number of real estate properties | 2 |
Properties under construction or contractually committed for construction | Huntsville | |
Construction and Redevelopment Activities | |
Number of real estate properties | 3 |
Properties under or approved for redevelopment | |
Construction and Redevelopment Activities | |
Number of real estate properties | 2 |
Square footage of real estate properties (in square feet) | 235,000 |
Properties under or approved for redevelopment | Baltimore and Washington Corridor | |
Construction and Redevelopment Activities | |
Number of real estate properties | 1 |
Properties under or approved for redevelopment | Greater Philadelphia | |
Construction and Redevelopment Activities | |
Number of real estate properties | 1 |
Real_Estate_Joint_Ventures_Det
Real Estate Joint Ventures (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | ||||
Venture | Property | |||||||
Venture | ||||||||
Investments in real estate joint ventures | ||||||||
Investment Balance | ($6,420,000) | ($6,420,000) | ($6,420,000) | |||||
Corporate Office Properties, L.P. | ||||||||
Investments in real estate joint ventures | ||||||||
Investment Balance | -6,420,000 | -6,420,000 | -6,420,000 | |||||
Investments in consolidated real estate joint ventures | ||||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units (in dollars) | 1,369,000 | |||||||
Unconsolidated real estate joint ventures | ||||||||
Investments in real estate joint ventures | ||||||||
Number of unconsolidated real estate joint ventures in which the entity has an interest | 1 | 1 | ||||||
Investment Balance | -6,420,000 | [1] | -6,420,000 | [1] | -6,420,000 | [1] | ||
Ownership (as a percent) | 20.00% | |||||||
Number of buildings operated by the joint venture | 16 | |||||||
Maximum exposure to loss | 0 | [2] | 0 | [2] | ||||
Difference between carrying amount of investment and share of the equity in the joint venture | 3,000,000 | 3,000,000 | 4,500,000 | |||||
Condensed balance sheets for unconsolidated real estate joint venture | ||||||||
Properties, net | 57,222,000 | 57,222,000 | 58,460,000 | |||||
Other assets | 6,248,000 | 6,248,000 | 4,376,000 | |||||
Total assets | 63,470,000 | 63,470,000 | 62,836,000 | |||||
Liabilities (primarily debt) | 80,424,000 | 80,424,000 | 72,693,000 | |||||
Owners' equity | -16,954,000 | -16,954,000 | -9,857,000 | |||||
Total liabilities and owners' equity | 63,470,000 | 63,470,000 | 62,836,000 | |||||
Condensed statements of operations for unconsolidated real estate joint venture | ||||||||
Revenues | 1,739,000 | 1,778,000 | 5,342,000 | 5,497,000 | ||||
Property operating expenses | -755,000 | -758,000 | -2,250,000 | -2,219,000 | ||||
Interest expense | -2,966,000 | -1,138,000 | -8,521,000 | -3,291,000 | ||||
Depreciation and amortization expense | -575,000 | -568,000 | -1,668,000 | -1,732,000 | ||||
Net loss | -2,557,000 | -686,000 | -7,097,000 | -1,745,000 | ||||
Consolidated real estate joint ventures | ||||||||
Investments in consolidated real estate joint ventures | ||||||||
Total Assets | 185,599,000 | [3] | 185,599,000 | [3] | ||||
Pledged Assets | 93,063,000 | [3] | 93,063,000 | [3] | ||||
Total Liabilities | 63,694,000 | [3] | 63,694,000 | [3] | ||||
LW Redstone Company, LLC | ||||||||
Investments in real estate joint ventures | ||||||||
Ownership (as a percent) | 85.00% | |||||||
Investments in consolidated real estate joint ventures | ||||||||
Total Assets | 114,141,000 | [3],[4] | 114,141,000 | [3],[4] | ||||
Pledged Assets | 45,209,000 | [3],[4] | 45,209,000 | [3],[4] | ||||
Total Liabilities | 22,141,000 | [3],[4] | 22,141,000 | [3],[4] | ||||
M Square Associates, LLC | ||||||||
Investments in real estate joint ventures | ||||||||
Ownership (as a percent) | 50.00% | |||||||
Number of buildings operated by the joint venture | 2 | |||||||
Investments in consolidated real estate joint ventures | ||||||||
Total Assets | 60,879,000 | [3],[5] | 60,879,000 | [3],[5] | ||||
Pledged Assets | 47,854,000 | [3],[5] | 47,854,000 | [3],[5] | ||||
Total Liabilities | 41,463,000 | [3],[5] | 41,463,000 | [3],[5] | ||||
COPT-FD Indian Head, LLC | ||||||||
Investments in real estate joint ventures | ||||||||
Ownership (as a percent) | 75.00% | |||||||
Investments in consolidated real estate joint ventures | ||||||||
Total Assets | 6,447,000 | [3],[6] | 6,447,000 | [3],[6] | ||||
MOR Forbes 2 LLC | ||||||||
Investments in real estate joint ventures | ||||||||
Ownership (as a percent) | 50.00% | |||||||
Number of buildings operated by the joint venture | 1 | |||||||
Investments in consolidated real estate joint ventures | ||||||||
Total Assets | 4,132,000 | [3],[7] | 4,132,000 | [3],[7] | ||||
Total Liabilities | 90,000 | [3],[7] | 90,000 | [3],[7] | ||||
Common Shares | Corporate Office Properties, L.P. | ||||||||
Investments in consolidated real estate joint ventures | ||||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units (in units) | 221,501 | |||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units (in dollars) | 3,899,000 | |||||||
Common Shares | Arundel Preserve LLC | ||||||||
Investments in consolidated real estate joint ventures | ||||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units (in units) | 221,501 | |||||||
Acquisition of property and noncontrolling interest in other consolidated entity for COPLP common units (in dollars) | $5,200,000 | |||||||
[1] | The carrying amount of our investment in this joint venture was lower than our share of the equity in the joint venture by $3.0 million at September 30, 2013 and $4.5 million at December 31, 2012 due to our deferral of gain on the contribution by us of real estate into the joint venture upon its formation and our discontinuance of loss recognition under the equity method effective October 2012, as discussed below. A difference will continue to exist to the extent the nature of our continuing involvement in the joint venture remains the same and we continue to no longer recognize income or losses under the equity method. | |||||||
[2] | Derived from the sum of our investment balance and maximum additional unilateral capital contributions or loans required from us. Not reported above are additional amounts that we and our partner are required to fund when needed by this joint venture; these funding requirements are proportional to our respective ownership percentages. Also not reported above are additional unilateral contributions or loans from us, the amounts of which are uncertain, that we would be required to make if certain contingent events occur (see Note 17). | |||||||
[3] | Excludes amounts eliminated in consolidation. | |||||||
[4] | This joint venture’s property is in Huntsville, Alabama. | |||||||
[5] | This joint venture’s properties are in College Park, Maryland (in the Suburban Maryland region). | |||||||
[6] | This joint venture’s property is in Charles County, Maryland. In 2012, the joint venture exercised its option under a development agreement to require Charles County to repurchase the land parcel at its original acquisition cost. Under the terms of the agreement with Charles County, the repurchase is expected to occur by August 2014. | |||||||
[7] | This joint venture’s property is in Lanham, Maryland (in the Suburban Maryland region). |
Mortgage_and_Other_Investing_R2
Mortgage and Other Investing Receivables (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage and other investing receivables | $40,321 | $33,396 |
Notes Receivable from City of Huntsville | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage and other investing receivables | 40,321 | 33,252 |
Mortgage Receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage and other investing receivables | $0 | $144 |
Prepaid_Expenses_and_Other_Ass2
Prepaid Expenses and Other Assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Mortgage and Other Investing Receivables [Line Items] | ||
Prepaid expenses | $23,552 | $19,270 |
Lease incentives | 8,751 | 5,578 |
Furniture, fixtures and equipment, net | 6,705 | 7,991 |
Deferred tax asset | 6,222 | 6,612 |
Construction contract costs incurred in excess of billings | 5,465 | 0 |
Interest rate derivatives | 5,195 | 0 |
Other equity method investments | 4,928 | 2,425 |
Other assets | 3,257 | 2,183 |
Prepaid expenses and other assets | 64,075 | 44,059 |
Long-term Operating Notes Receivable | ||
Mortgage and Other Investing Receivables [Line Items] | ||
Operating Notes Receivable Long-term | $186 | $271 |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | 6-May-13 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 15, 2013 | Sep. 30, 2013 | Sep. 16, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 16, 2013 | Jul. 16, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |||||||||||||||||||||
Mortgage and Other Secured Loans: | Mortgage and Other Secured Loans: | Fixed rate mortgage loans | Fixed rate mortgage loans | Variable rate secured loans | Variable rate secured loans | Other construction loan facilities | Other construction loan facilities | Revolving Credit Facility | Revolving Credit Facility | Term Loan Facility | Term Loan Facility | Unsecured notes payable | Unsecured notes payable | 4.25% Exchangeable Senior Notes | 4.25% Exchangeable Senior Notes | 4.25% Exchangeable Senior Notes | 4.25% Exchangeable Senior Notes | 4.25% Exchangeable Senior Notes | Unsecured senior notes | Unsecured senior notes | Unsecured senior notes | Unsecured senior notes | Unsecured senior notes | Unsecured senior notes | Unsecured senior notes | Unsecured senior notes | Adjusted Treasury | Adjusted Treasury | Amendment Number 1 | Amendment Number 2 | Minimum | Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | Maximum | ||||||||||||||||||||||||||
3.60% Senior Notes | 3.60% Senior Notes | 3.60% Senior Notes | 5.250% Senior Notes | 5.250% Senior Notes | 5.250% Senior Notes | 5.250% Senior Notes | Unsecured senior notes | Unsecured senior notes | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Term Loan Facility | Amendment Number 1 | Amendment Number 2 | Revolving Credit Facility | Term Loan Facility | Amendment Number 1 | Amendment Number 2 | ||||||||||||||||||||||||||||||||||||||||||||||
3.60% Senior Notes | 5.250% Senior Notes | Unsecured notes payable | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan Facility | London Interbank Offered Rate (LIBOR) | Term Loan Facility | London Interbank Offered Rate (LIBOR) | Term Loan Facility | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum Availability | $26,150,000 | $800,000,000 | [1] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value | 2,135,031,000 | 2,135,031,000 | 2,019,168,000 | 920,205,000 | 1,016,446,000 | 882,311,000 | [2] | 948,414,000 | [2] | 37,894,000 | 38,475,000 | 0 | 29,557,000 | 0 | [1] | 0 | [1] | 620,000,000 | [3] | 770,000,000 | [3] | 1,723,000 | [4] | 1,788,000 | [4] | 560,000 | [5] | 560,000 | [5] | 230,934,000 | [5] | 347,183,000 | [4] | 0 | [4] | 245,360,000 | [4] | 0 | [4] | |||||||||||||||||||||||||
Stated interest rate (as a percent) | 0.00% | [6] | 4.25% | 4.25% | 3.60% | 3.60% | 5.25% | 5.25% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stated Interest Rates, low end of range (as a percent) | 3.96% | [7] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stated Interest Rates, high end of range (as a percent) | 7.87% | [7] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of variable rate basis | LIBOR | [8] | LIBOR | [9] | LIBOR | [10] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate, spread (as a percent) | 2.25% | [8] | 0.98% | [9] | 1.10% | [10] | 0.98% | 1.10% | 1.75% | [9] | 2.60% | [10] | 1.75% | 2.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Unamortized premium included in carrying value | 465,000 | 1,300,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average interest rate (as a percent) | 5.98% | 1.45% | 1.80% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate on debt (as a percent) | 2.43% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional borrowing capacity available provided there is no default under the agreement | 180,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible debt principal amount, basis for exchange | 1,000 | 1,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange rate per $1000 principal amount (in common shares) | 20.8513 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange price per common share based on exchange rate (in dollars per share) | $47.96 | $47.96 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of debt repaid | 239,400,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | 374,000 | 768,000 | 27,028,000 | 937,000 | 25,900,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal amount of debt | 575,000 | 575,000 | 240,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective interest rate, including amortization of issuance costs (as a percent) | 6.05% | 6.05% | 3.70% | 5.49% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Months Prior to Loan Maturity Requiring Redemption at Principal Value | 3 months | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption Percentage Within Three Months of Maturity | 100.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense at stated interest rate | 6,000 | 2,550,000 | 4,201,000 | 7,650,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense associated with amortization of discount | 1,207,000 | 2,357,000 | 2,000 | 919,000 | 1,613,000 | 2,717,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total interest expenses | 8,000 | 3,469,000 | 5,814,000 | 10,367,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument extension option, term | 1 year | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extension fee percentage | 0.15% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | 350,000,000 | 250,000,000 | 550,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from issuance of debt | 347,100,000 | 245,300,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt issuance as a percentage of principal amount | 99.82% | 98.78% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis points used in determining redemption price prior to maturity | 30.00% | 40.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unamortized discount included in carrying value | 788,000 | 873,000 | 15,000 | 15,000 | 9,100,000 | 2,800,000 | 4,600,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized interest costs | $2,200,000 | $3,400,000 | $6,700,000 | $10,800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[1] | Refer to the paragraph below for disclosure pertaining to the Revolving Credit Facility. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | Several of the fixed rate mortgages carry interest rates that were above or below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $465,000 at September 30, 2013 and $1.3 million at December 31, 2012. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | We have the ability to borrow an aggregate of an additional $180.0 million under these term loan facilities, provided that there is no default under the facilities and subject to the approval of the lenders. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[4] | Refer to the paragraphs below for disclosure pertaining to these notes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[5] | As described further in our 2012 Annual Report on Form 10-K, these notes have an exchange settlement feature that provides that the notes may, under certain circumstances, be exchangeable for cash and, at COPLP’s discretion, COPT common shares at an exchange rate (subject to adjustment) of 20.8513 shares per one thousand dollar principal amount of the notes (exchange rate is as of September 30, 2013 and is equivalent to an exchange price of $47.96 per common share). During the nine months ended September 30, 2013, we repaid $239.4 million principal amount of these notes and recognized a $25.9 million loss on early extinguishment of debt. The carrying value of these notes included a principal amount of $575,000 and an unamortized discount totaling $15,000 at September 30, 2013 and a principal amount of $240.0 million and an unamortized discount totaling $9.1 million at December 31, 2012. The effective interest rate under the notes, including amortization of the issuance costs, was 6.05%. Because the closing price of our common shares at September 30, 2013 and December 31, 2012 was less than the exchange price per common share applicable to these notes, the if-converted value of the notes did not exceed the principal amount. The table below sets forth interest expense recognized on these notes before deductions for amounts capitalized (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2013 2012 2013 2012Interest expense at stated interest rate$6 $2,550 $4,201 $7,650Interest expense associated with amortization of discount2 919 1,613 2,717Total$8 $3,469 $5,814 $10,367 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[6] | These notes carry interest rates that were below market rates upon assumption and therefore were recorded at their fair value based on applicable effective interest rates. The carrying value of these notes reflects an unamortized discount totaling $788,000 at September 30, 2013 and $873,000 at December 31, 2012. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[7] | The weighted average interest rate on these loans was 5.98% at September 30, 2013. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[8] | The interest rate on the loan outstanding was 2.43% at September 30, 2013. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[9] | The weighted average interest rate on the Revolving Credit Facility was 1.45% at September 30, 2013. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[10] | The weighted average interest rate on these loans was 1.80% at September 30, 2013. |
Debt_Details_2
Debt (Details 2) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Carrying amount and estimated fair value of debt | ||||
Carrying Value | $2,135,031 | $2,019,168 | ||
4.25% Exchangeable Senior Notes | ||||
Carrying amount and estimated fair value of debt | ||||
Carrying Value | 560 | [1] | 230,934 | [1] |
Carrying Amount | ||||
Carrying amount and estimated fair value of debt | ||||
Variable-rate debt | 657,894 | 838,032 | ||
Carrying Value | 2,135,031 | 2,019,168 | ||
Carrying Amount | Unsecured senior notes | ||||
Carrying amount and estimated fair value of debt | ||||
Fixed-rate debt | 592,543 | 0 | ||
Carrying Amount | 4.25% Exchangeable Senior Notes | ||||
Carrying amount and estimated fair value of debt | ||||
Fixed-rate debt | 560 | 230,934 | ||
Carrying Amount | Other fixed-rate debt | ||||
Carrying amount and estimated fair value of debt | ||||
Fixed-rate debt | 884,034 | 950,202 | ||
Total Estimated Fair Value | ||||
Carrying amount and estimated fair value of debt | ||||
Variable-rate debt | 661,593 | 845,558 | ||
Carrying Value | 2,054,068 | 2,054,020 | ||
Total Estimated Fair Value | Unsecured senior notes | ||||
Carrying amount and estimated fair value of debt | ||||
Fixed-rate debt | 579,654 | 0 | ||
Total Estimated Fair Value | 4.25% Exchangeable Senior Notes | ||||
Carrying amount and estimated fair value of debt | ||||
Fixed-rate debt | 575 | 240,282 | ||
Total Estimated Fair Value | Other fixed-rate debt | ||||
Carrying amount and estimated fair value of debt | ||||
Fixed-rate debt | $812,246 | $968,180 | ||
[1] | As described further in our 2012 Annual Report on Form 10-K, these notes have an exchange settlement feature that provides that the notes may, under certain circumstances, be exchangeable for cash and, at COPLP’s discretion, COPT common shares at an exchange rate (subject to adjustment) of 20.8513 shares per one thousand dollar principal amount of the notes (exchange rate is as of September 30, 2013 and is equivalent to an exchange price of $47.96 per common share). During the nine months ended September 30, 2013, we repaid $239.4 million principal amount of these notes and recognized a $25.9 million loss on early extinguishment of debt. The carrying value of these notes included a principal amount of $575,000 and an unamortized discount totaling $15,000 at September 30, 2013 and a principal amount of $240.0 million and an unamortized discount totaling $9.1 million at December 31, 2012. The effective interest rate under the notes, including amortization of the issuance costs, was 6.05%. Because the closing price of our common shares at September 30, 2013 and December 31, 2012 was less than the exchange price per common share applicable to these notes, the if-converted value of the notes did not exceed the principal amount. The table below sets forth interest expense recognized on these notes before deductions for amounts capitalized (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2013 2012 2013 2012Interest expense at stated interest rate$6 $2,550 $4,201 $7,650Interest expense associated with amortization of discount2 919 1,613 2,717Total$8 $3,469 $5,814 $10,367 |
Interest_Rate_Derivatives_Deta
Interest Rate Derivatives (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |||
Fair values of interest rate swap derivatives | |||||||
Fair value of interest rate swaps | $1,600,000 | $1,600,000 | ($6,185,000) | ||||
Fair value of interest rate derivatives and balance sheet classification | |||||||
Interest rate derivatives | 5,195,000 | 5,195,000 | 0 | ||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||||
Amount of (loss) gain recognized in accumulated other comprehensive income (loss) (“AOCIâ€) (effective portion) | -2,482,000 | -2,760,000 | 5,810,000 | -7,386,000 | |||
Amount of loss reclassified from AOCI into interest expense (effective portion) | 689,000 | 632,000 | 2,021,000 | 3,034,000 | |||
Interest rate swaps | |||||||
Fair value of interest rate derivatives and balance sheet classification | |||||||
Interest rate derivatives | 5,195,000 | 5,195,000 | 0 | ||||
Fair value of Interest rate swaps classified as interest rate derivatives | -3,595,000 | -3,595,000 | -6,185,000 | ||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||||
Approximate amount to be reclassified from AOCI to interest expense over the next 12 months | 2,600,000 | 2,600,000 | |||||
Interest rate derivatives in liability position, fair value | 3,600,000 | 3,600,000 | |||||
Termination value to settle obligations under interest rate derivative agreements | 3,800,000 | 3,800,000 | |||||
Designated | Interest rate swap, effective date January 3, 2012, swap one | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 0.61% | 0.61% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | -365,000 | -365,000 | -594,000 | ||||
Designated | Interest rate swap, effective date January 3, 2012, swap two | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 0.61% | 0.61% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | -362,000 | -362,000 | -591,000 | ||||
Designated | Interest rate swap, effective date January 3, 2012, swap three | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 0.83% | 0.83% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | -963,000 | -963,000 | -1,313,000 | ||||
Designated | Interest rate swap, effective date January 3, 2012, swap four | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 0.83% | 0.83% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | -963,000 | -963,000 | -1,313,000 | ||||
Designated | Interest rate swap, effective date November 2, 2010 | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 37,894,000 | [1] | 37,894,000 | [1] | |||
Fixed rate (as a percent) | 3.83% | 3.83% | |||||
Floating rate index | One-Month LIBOR + 2.25% | ||||||
Derivative, Basis Spread on Variable Rate | 2.25% | 2.25% | |||||
Fair value of interest rate swaps | -933,000 | -933,000 | -1,268,000 | ||||
Notional amount of interest rate derivatives after scheduled amortization | 36,200,000 | ||||||
Designated | Interest rate swap, effective date September 2, 2014, swap one | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 0.81% | 0.81% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | 1,000 | 1,000 | -263,000 | ||||
Designated | Interest rate swap, effective date September 2, 2014, swap two | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 0.81% | 0.81% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | -9,000 | -9,000 | -272,000 | ||||
Designated | Interest rate swap, effective date September 1, 2015, swap one | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 1.67% | 1.67% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | 2,685,000 | 2,685,000 | -154,000 | ||||
Designated | Interest rate swap, effective date September 1, 2015, swap two | |||||||
Fair values of interest rate swap derivatives | |||||||
Notional Amount | 100,000,000 | 100,000,000 | |||||
Fixed rate (as a percent) | 1.73% | 1.73% | |||||
Floating rate index | One-Month LIBOR | ||||||
Fair value of interest rate swaps | $2,509,000 | $2,509,000 | ($417,000) | ||||
[1] | The notional amount of this instrument is scheduled to amortize to $36.2 million. |
Redeemable_Noncontrolling_Inte2
Redeemable Noncontrolling Interests (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $10,298 | $8,908 |
Distribution to noncontrolling interest | -811 | 0 |
Net income (loss) attributable to noncontrolling interest | 888 | -1,803 |
Adjustment to arrive at fair value of interest | 6,414 | 2,827 |
Ending balance | $16,789 | $9,932 |
Equity_Details
Equity (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||||
Mar. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Apr. 22, 2013 | Mar. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 16, 2013 | Jul. 16, 2013 | |
Series J Preferred Stock | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Corporate Office Properties, L.P. | Common shares issued to public under at-the-market program | Common shares issued to public under at-the-market program | ||||
Corporate Office Properties, L.P. | |||||||||
Class of Stock [Line Items] | |||||||||
Dividend rate | 7.63% | ||||||||
Redemption price per share | $25 | ||||||||
Stock redeemed or called during period, value | $84,750,000 | $55,000,000 | $84,800,000 | $84,750,000 | $55,000,000 | ||||
Issuance costs associated with redeemed preferred shares | 2,900,000 | ||||||||
Shares issued to the public | 4,485,000 | 4,485,000 | 1,500,000 | 1,500,000 | |||||
Shares issued to the public (in dollars per share) | $26.34 | ||||||||
Shares issued to the public (in dollars) | 118,100,000 | 117,961,000 | 165,662,000 | 117,961,000 | 165,662,000 | 38,500,000 | |||
Issuance of stock, weighted average price per share | $26.05 | ||||||||
Payments of Stock Issuance Costs | 586,000 | ||||||||
At Market Stock, Offering Program Established, Remaining Capacity (in dollars) | $110,900,000 | ||||||||
Number of operating partnerships units converted into common shares (in units) | 310,889 | 94,550 | |||||||
Number of common shares for each converted common unit (in shares) | 1 |
Information_by_Business_Segmen2
Information by Business Segment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
segment | segment | ||||
Segment Reporting [Abstract] | |||||
Number of primary office property segments | 10 | 10 | |||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | $124,561 | $121,264 | $371,913 | $370,536 | |
Property operating expenses | 44,885 | 43,699 | 133,605 | 134,293 | |
NOI from real estate operations | 79,676 | 77,565 | 238,308 | 236,243 | |
Additions to long-lived assets | 13,942 | 61,803 | |||
Transfers from non-operating properties | 42,842 | 28,146 | |||
Segment assets | 3,755,588 | 3,597,656 | 3,755,588 | 3,597,656 | 3,653,759 |
Operating Segment Total | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 371,913 | 370,536 | |||
Property operating expenses | 133,605 | 134,293 | |||
NOI from real estate operations | 238,308 | 236,243 | |||
Additions to long-lived assets | 31,578 | 76,107 | |||
Transfers from non-operating properties | 197,600 | 129,348 | |||
Segment assets | 3,053,813 | 2,836,547 | 3,053,813 | 2,836,547 | |
Baltimore and Washington Corridor | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 57,226 | 55,799 | 171,049 | 167,726 | |
Property operating expenses | 18,780 | 18,534 | 57,030 | 56,677 | |
NOI from real estate operations | 38,446 | 37,265 | 114,019 | 111,049 | |
Additions to long-lived assets | 7,204 | 4,454 | 14,029 | 9,393 | |
Transfers from non-operating properties | 8,706 | 12,431 | 37,270 | 42,488 | |
Segment assets | 1,223,246 | 1,187,700 | 1,223,246 | 1,187,700 | |
Northern Virginia | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 23,062 | 20,363 | 68,992 | 57,974 | |
Property operating expenses | 7,999 | 7,115 | 24,020 | 21,270 | |
NOI from real estate operations | 15,063 | 13,248 | 44,972 | 36,704 | |
Additions to long-lived assets | 2,459 | 54,781 | 6,699 | 57,161 | |
Transfers from non-operating properties | 26,355 | 12,979 | 37,209 | 12,979 | |
Segment assets | 593,335 | 535,521 | 593,335 | 535,521 | |
San Antonio | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 7,898 | 8,125 | 24,019 | 23,563 | |
Property operating expenses | 4,061 | 4,272 | 12,427 | 11,998 | |
NOI from real estate operations | 3,837 | 3,853 | 11,592 | 11,565 | |
Additions to long-lived assets | 251 | 0 | 268 | 259 | |
Transfers from non-operating properties | 0 | 0 | 0 | 464 | |
Segment assets | 118,701 | 119,752 | 118,701 | 119,752 | |
Washington, DC - Capitol Riverfront | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 4,295 | 4,389 | 12,716 | 12,515 | |
Property operating expenses | 1,946 | 1,924 | 5,769 | 5,485 | |
NOI from real estate operations | 2,349 | 2,465 | 6,947 | 7,030 | |
Additions to long-lived assets | 86 | 414 | 484 | 116 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Segment assets | 99,852 | 106,090 | 99,852 | 106,090 | |
St. Mary's and King George Counties | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 4,270 | 4,085 | 12,355 | 12,436 | |
Property operating expenses | 1,299 | 1,241 | 3,715 | 3,524 | |
NOI from real estate operations | 2,971 | 2,844 | 8,640 | 8,912 | |
Additions to long-lived assets | 630 | 355 | 1,634 | 815 | |
Transfers from non-operating properties | 0 | 24 | 12 | 218 | |
Segment assets | 96,679 | 97,977 | 96,679 | 97,977 | |
Greater Baltimore | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 10,703 | 11,918 | 32,246 | 41,954 | |
Property operating expenses | 4,143 | 4,539 | 12,408 | 15,911 | |
NOI from real estate operations | 6,560 | 7,379 | 19,838 | 26,043 | |
Additions to long-lived assets | 1,707 | 1,055 | 1,761 | 5,390 | |
Transfers from non-operating properties | 9 | 99 | 113 | 493 | |
Segment assets | 305,947 | 283,996 | 305,947 | 283,996 | |
Suburban Maryland | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 2,332 | 2,371 | 6,809 | 12,680 | |
Property operating expenses | 862 | 1,041 | 2,393 | 5,357 | |
NOI from real estate operations | 1,470 | 1,330 | 4,416 | 7,323 | |
Additions to long-lived assets | 88 | 36 | 143 | 1,219 | |
Transfers from non-operating properties | -183 | -88 | 337 | 793 | |
Segment assets | 52,726 | 53,395 | 52,726 | 53,395 | |
Colorado Springs | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 6,622 | 6,278 | 19,874 | 18,880 | |
Property operating expenses | 2,371 | 2,432 | 7,014 | 6,754 | |
NOI from real estate operations | 4,251 | 3,846 | 12,860 | 12,126 | |
Additions to long-lived assets | 1,413 | 548 | 2,323 | 1,334 | |
Transfers from non-operating properties | 1,860 | 315 | 4,540 | 2,611 | |
Segment assets | 159,578 | 173,918 | 159,578 | 173,918 | |
Greater Philadelphia | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 3,258 | 2,541 | 8,529 | 7,171 | |
Property operating expenses | 924 | 663 | 2,482 | 1,851 | |
NOI from real estate operations | 2,334 | 1,878 | 6,047 | 5,320 | |
Additions to long-lived assets | 102 | 195 | 387 | 285 | |
Transfers from non-operating properties | 3,414 | 1,843 | 28,031 | 11,233 | |
Segment assets | 105,112 | 66,301 | 105,112 | 66,301 | |
Other | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 3,819 | 3,589 | 10,878 | 10,977 | |
Property operating expenses | 654 | 686 | 1,667 | 2,088 | |
NOI from real estate operations | 3,165 | 2,903 | 9,211 | 8,889 | |
Additions to long-lived assets | -84 | -35 | 3,588 | 124 | |
Transfers from non-operating properties | -33 | 548 | 20,925 | 394 | |
Segment assets | 130,598 | 111,426 | 130,598 | 111,426 | |
Wholesale Data Center | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 1,076 | 1,806 | 4,446 | 4,660 | |
Property operating expenses | 1,846 | 1,252 | 4,680 | 3,378 | |
NOI from real estate operations | -770 | 554 | -234 | 1,282 | |
Additions to long-lived assets | 86 | 0 | 262 | 11 | |
Transfers from non-operating properties | 2,714 | -5 | 69,163 | 57,675 | |
Segment assets | $168,039 | $100,471 | $168,039 | $100,471 |
Information_by_Business_Segmen3
Information by Business Segment (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Reconciliation of segment revenues to total revenues | ||||
Segment revenues from real estate operations | $124,561 | $121,264 | $371,913 | $370,536 |
Construction contract and other service revenues | 16,991 | 15,283 | 52,048 | 53,812 |
Less: Revenues from discontinued operations (Note 15) | -5,521 | -6,902 | -16,786 | -35,305 |
Total revenues | 136,031 | 129,645 | 407,175 | 389,043 |
Reconciliation of segment property operating expenses to property operating expenses | ||||
Segment property operating expenses | 44,885 | 43,699 | 133,605 | 134,293 |
Less: Property operating expenses from discontinued operations (Note 15) | -1,403 | -2,225 | -4,196 | -12,191 |
Property operating expenses | 43,482 | 41,474 | 129,409 | 122,102 |
Computation of net operating income from service operations | ||||
Construction contract and other service revenues | 16,991 | 15,283 | 52,048 | 53,812 |
Construction contract and other service expenses | -16,306 | -14,410 | -49,165 | -51,302 |
NOI from service operations | 685 | 873 | 2,883 | 2,510 |
Reconciliation of NOI from real estate operations and NOI from service operations to (loss) income from continuing operations | ||||
NOI from real estate operations | 79,676 | 77,565 | 238,308 | 236,243 |
NOI from service operations | 685 | 873 | 2,883 | 2,510 |
Interest and other (loss) income | -3 | 1,095 | 2,949 | 3,152 |
Equity in income (loss) of unconsolidated entities | 44 | -246 | 211 | -522 |
Income tax expense | -24 | -106 | -61 | -327 |
Other adjustments: | ||||
Depreciation and other amortization associated with real estate operations | -29,210 | -28,604 | -86,239 | -84,633 |
Impairment losses | -16,300 | -46,096 | -16,300 | -41,260 |
General, administrative and leasing expenses | -8,027 | -6,377 | -22,430 | -24,797 |
Business development expenses and land carry costs | -1,383 | -1,632 | -4,069 | -4,506 |
Interest expense on continuing operations | -21,242 | -23,239 | -66,851 | -71,909 |
NOI from discontinued operations | -4,118 | -4,677 | -12,590 | -23,114 |
Loss on early extinguishment of debt | -374 | -768 | -27,028 | -937 |
(Loss) income from continuing operations | ($276) | ($32,212) | $8,783 | ($10,100) |
Information_by_Business_Segmen4
Information by Business Segment (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Reconciliation of segment assets to total assets | |||
Assets | $3,755,588 | $3,653,759 | $3,597,656 |
Segment assets | |||
Reconciliation of segment assets to total assets | |||
Assets | 3,053,813 | 2,836,547 | |
Non-operating property assets | |||
Reconciliation of segment assets to total assets | |||
Assets | 530,389 | 616,526 | |
Other assets | |||
Reconciliation of segment assets to total assets | |||
Assets | $171,386 | $144,583 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Mar. 01, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 01, 2013 | |
Performance share units | Performance share units | Restricted shares | Options | 2013 PSU Grants | |||
Percentile_Rank | Performance share units | ||||||
Potential earned PSUs payout for defined levels of performance under awards | |||||||
Earned PSUs payout (as a percent of PSUs granted) on 75th or greater percentile rank | 200.00% | ||||||
Earned PSUs payout (as a percent of PSUs granted) on 50th percentile rank | 100.00% | ||||||
Earned PSUs payout (as a percent of PSUs granted) on 25th percentile rank | 50.00% | ||||||
Performance share units granted on percentile rank below 25th (as a percent) | 0.00% | ||||||
The number of percentile ranks to fall between to earn interpolated PSUs between such percentile ranks, conditioned on the percentile rank exceeding 25% | 2 | ||||||
Performance period of the award (in years) | 3 years | ||||||
Assumptions used to value stock awards | |||||||
Baseline value per common share (in dollars per share) | $25.85 | ||||||
Expected volatility of common shares (as a percent) | 29.50% | ||||||
Risk-free interest rate (as a percent) | 0.33% | ||||||
Shares | |||||||
Stock awards granted (in shares or units) | 177,510 | 69,579 | |||||
Weighted Average Grant Date Fair Value | |||||||
Aggregate grant date fair value | $1,900,000 | $4,700,000 | |||||
Weighted average grant date fair value (in dollars per share) | $26.84 | $26.24 | |||||
Exercised (in shares) | 32,756 | 44,624 | 32,756 | ||||
Weighted average exercise price (in dollars per share) | $19.45 | ||||||
Aggregate intrinsic value of options exercised (in dollars) | 237,000 | ||||||
Other Share-based Compensation Additional Disclosures | |||||||
Shares vested (in shares) | 222,381 | ||||||
Weighted average fair value of shares vested (in dollars per share) | $31.54 | ||||||
Aggregate intrinsic value of restricted common shares, forfeiture restrictions lapsed | $5,900,000 |
Income_Taxes_Details
Income Taxes (Details) (Taxable REIT Subsidiary [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Taxable REIT Subsidiary [Member] | ||||
Deferred income tax (expense) benefit | ||||
Federal | ($20) | ($87) | ($50) | ($267) |
State | -4 | -19 | -11 | -60 |
Total income tax expense | ($24) | ($106) | ($61) | ($327) |
Effective tax rate (as a percent) | 36.70% | 38.60% | 36.70% | 38.60% |
Discontinued_Operations_and_As2
Discontinued Operations and Assets Held for Sale (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jan. 30, 2012 | Jul. 24, 2012 | Sep. 30, 2013 |
Assets Held-for-sale | Assets Held-for-sale | White Marsh Portfolio Disposition Property | July 2012 Portfolio Disposition | Colorado Springs | ||||||
Property | Property | Assets Held-for-sale | ||||||||
Property | ||||||||||
Properties | ||||||||||
Number of properties sold | 5 | 23 | ||||||||
Number of operating properties classified as held for sale | 16 | |||||||||
Revenue from real estate operations | $5,521 | $6,902 | $16,786 | $35,305 | ||||||
Property operating expenses | -1,403 | -2,225 | -4,196 | -12,191 | ||||||
Depreciation and amortization | 0 | -2,020 | -158 | -8,744 | ||||||
Impairment losses | -5,774 | -9,733 | -14,826 | -23,510 | ||||||
General, administrative and leasing expenses | 0 | -1 | -1 | -3 | ||||||
Business development and land carry costs | 0 | 0 | 0 | -24 | ||||||
Interest expense | -68 | -127 | -199 | -2,107 | ||||||
Gain on sales of real estate | 0 | 16,913 | 0 | 20,948 | ||||||
Gain on early extinguishment of debt | 0 | 1,738 | 0 | 1,736 | ||||||
Discontinued operations | -1,724 | 11,447 | -2,594 | 11,410 | ||||||
Properties, net | 3,239,746 | 3,239,746 | 3,163,044 | 121,060 | 128,740 | |||||
Deferred rent receivable | 90,104 | 90,104 | 85,802 | 4,951 | 4,068 | |||||
Intangible assets on real estate acquisitions, net | 64,372 | 64,372 | 75,879 | 4,384 | 4,409 | |||||
Deferred leasing, net | 3,511 | 2,923 | ||||||||
Lease incentives | 8,751 | 8,751 | 5,578 | 78 | 89 | |||||
Assets held for sale, net | $133,984 | $133,984 | $140,229 | $133,984 | $140,229 |
Earnings_Per_Share_EPS_and_Ear2
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Numerator: | ||||||||
(Loss) income from continuing operations | ($276) | ($32,212) | $8,783 | ($10,100) | ||||
Gain on sales of real estate, net | 0 | 0 | 2,683 | 21 | ||||
Preferred share/unit dividends/distributions | -4,490 | -6,546 | -15,481 | -14,738 | ||||
Issuance costs associated with redeemed preferred shares/units | 0 | -1,827 | -2,904 | -1,827 | ||||
(Loss) income from continuing operations attributable to noncontrolling interests | -990 | 2,249 | -2,139 | 1,710 | ||||
Income from continuing operations attributable to restricted shares | -97 | -111 | -317 | -357 | ||||
Numerator for basic and diluted EPS from continuing operations attributable to COPT common shareholders | -5,853 | -38,447 | -9,375 | -25,291 | ||||
Discontinued operations | -1,724 | 11,447 | -2,594 | 11,410 | ||||
Discontinued operations attributable to noncontrolling interests | 26 | -646 | -42 | -603 | ||||
Numerator for basic and diluted EPS on net (loss) income attributable to COPT common shareholders | -7,551 | -27,646 | -12,011 | -14,484 | ||||
Denominator (all weighted averages): | ||||||||
Denominator for basic and diluted EPS (in shares/units) | 86,760 | 71,688 | 84,547 | 71,590 | ||||
Basic EPS: | ||||||||
Loss from continuing operations | ($0.07) | [1] | ($0.54) | [1] | ($0.11) | [1] | ($0.35) | [1] |
Discontinued operations | ($0.02) | [1] | $0.15 | [1] | ($0.03) | [1] | $0.15 | [1] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [1] | ($0.39) | [1] | ($0.14) | [1] | ($0.20) | [1] |
Diluted EPS: | ||||||||
Loss from continuing operations | ($0.07) | [1] | ($0.54) | [1] | ($0.11) | [1] | ($0.35) | [1] |
Discontinued operations | ($0.02) | [1] | $0.15 | [1] | ($0.03) | [1] | $0.15 | [1] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [1] | ($0.39) | [1] | ($0.14) | [1] | ($0.20) | [1] |
Corporate Office Properties, L.P. | ||||||||
Numerator: | ||||||||
(Loss) income from continuing operations | -276 | -32,212 | 8,783 | -10,100 | ||||
Gain on sales of real estate, net | 0 | 0 | 2,683 | 21 | ||||
Preferred share/unit dividends/distributions | -4,655 | -6,711 | -15,976 | -15,233 | ||||
Issuance costs associated with redeemed preferred shares/units | 0 | -1,827 | -2,904 | -1,827 | ||||
(Loss) income from continuing operations attributable to noncontrolling interests | -986 | 243 | -2,025 | 829 | ||||
Income from continuing operations attributable to restricted shares | -97 | -111 | -317 | -357 | ||||
Numerator for basic and diluted EPU from continuing operations attributable to COPLP common unitholders | -6,014 | -40,618 | -9,756 | -26,667 | ||||
Discontinued operations | -1,724 | 11,447 | -2,594 | 11,410 | ||||
Discontinued operations attributable to noncontrolling interests | -49 | -647 | -147 | -662 | ||||
Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders | ($7,787) | ($29,818) | ($12,497) | ($15,919) | ||||
Denominator (all weighted averages): | ||||||||
Denominator for basic and diluted EPS (in shares/units) | 90,564 | 75,921 | 88,379 | 75,846 | ||||
Basic EPS: | ||||||||
Loss from continuing operations | ($0.07) | [2] | ($0.54) | [2] | ($0.11) | [2] | ($0.35) | [2] |
Discontinued operations | ($0.02) | [2] | $0.15 | [2] | ($0.03) | [2] | $0.14 | [2] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [2] | ($0.39) | [2] | ($0.14) | [2] | ($0.21) | [2] |
Diluted EPS: | ||||||||
Loss from continuing operations | ($0.07) | [2] | ($0.54) | [2] | ($0.11) | [2] | ($0.35) | [2] |
Discontinued operations | ($0.02) | [2] | $0.15 | [2] | ($0.03) | [2] | $0.14 | [2] |
Net income attributable to COPT common shareholders (in dollars per share/unit) | ($0.09) | [2] | ($0.39) | [2] | ($0.14) | [2] | ($0.21) | [2] |
[1] | Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust. | |||||||
[2] | Basic and diluted earnings per common unit are calculated based on amounts attributable to common unitholders of Corporate Office Properties, L.P. |
Earnings_Per_Share_EPS_Details
Earnings Per Share ("EPS") (Details 2) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Conversion of common units | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 3,804 | 4,233 | 3,832 | 4,256 |
Conversion of Series I Preferred Units | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 176 | 176 | 176 | 176 |
Conversion of Series K Preferred Shares | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 434 | 434 | 434 | 434 |
Weighted average restricted shares | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 377 | 420 | 388 | 475 |
Weighted average options | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 613 | 752 | 571 | 780 |
Corporate Office Properties, L.P. | Weighted average restricted shares | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 377 | 420 | 388 | 475 |
Corporate Office Properties, L.P. | Weighted average options | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 613 | 752 | 571 | 780 |
Corporate Office Properties, L.P. | Conversion of Series I Preferred Units | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 176 | 176 | 176 | 176 |
Corporate Office Properties, L.P. | Conversion of Series K Preferred Units | ||||
Antidilutive securities | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 434 | 434 | 434 | 434 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 1 Months Ended | |
Aug. 31, 2010 | Sep. 30, 2013 | |
Property | ||
Tax incremental financing obligation | ||
The amount of tax incremental financing bonds issued by Anne Arundel County, Maryland | $30,000,000 | |
Liability recognized with regard to tax incremental financing obligation at end of current period | 2,500,000 | |
Environmental Indemnity Agreement | ||
Number of lease properties which were provided environmental indemnifications | 3 | |
Environmental indemnification to the tenant against losses covered under prior owner's indemnity agreement | 5,000,000 | |
Maximum environmental indemnification to the tenant against consequential damages after acquisition of property | 12,500,000 | |
Additional costs agreed to be paid by the entity related to construction and environmental regulatory activities (as a percent) | 50.00% | |
Maximum annual additional costs agreed to be paid by the entity related to construction and environmental regulatory activities | 300,000 | |
Maximum additional costs agreed to be paid by the entity related to construction and environmental regulatory activities | 1,500,000 | |
Nonrecourse loan guarantees of unconsolidated partnership | ||
Joint Ventures | ||
Maximum approximate amount required to be paid under the guarantees for outstanding debt, excluding interest and penalties | $64,000,000 | |
Recovery percentage of amount paid under the guarantee | 80.00% |