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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Corporate Office Properties Trust | NYSE:OFC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 24.94 | 0 | 01:00:00 |
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☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
March 31, 2020
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
|
|
to
|
|
Corporate Office Properties Trust
|
|
Maryland
|
|
23-2947217
|
|
|
(State or other jurisdiction of
|
|
(IRS Employer
|
|
|
incorporation or organization)
|
|
Identification No.)
|
|
|
|
|
|
Corporate Office Properties, L.P.
|
|
Delaware
|
|
23-2930022
|
|
|
(State or other jurisdiction of
|
|
(IRS Employer
|
|
|
incorporation or organization)
|
|
Identification No.)
|
6711 Columbia Gateway Drive
|
,
|
Suite 300
|
,
|
Columbia
|
,
|
MD
|
21046
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Shares of beneficial interest, $0.01 par value
|
OFC
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☒
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
•
|
combined reports better reflect how management, investors and the analyst community view the business as a single operating unit;
|
•
|
combined reports enhance investors’ understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management;
|
•
|
combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and
|
•
|
combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.
|
•
|
consolidated financial statements;
|
•
|
the following notes to the consolidated financial statements:
|
•
|
Note 3, Fair Value Measurements of COPT and subsidiaries and COPLP and subsidiaries;
|
•
|
Note 8, Prepaid Expenses and Other Assets, Net of COPT and subsidiaries and COPLP and subsidiaries; and
|
•
|
Note 16, Earnings per Share of COPT and subsidiaries and Earnings per Unit of COPLP and subsidiaries;
|
•
|
“Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of COPT”; and
|
•
|
“Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of COPLP.”
|
|
PAGE
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March 31,
2020 |
|
December 31,
2019 |
||||
Assets
|
|
|
|
|
|
||
Properties, net:
|
|
|
|
|
|
||
Operating properties, net
|
$
|
2,813,949
|
|
|
$
|
2,772,647
|
|
Projects in development or held for future development
|
605,679
|
|
|
568,239
|
|
||
Total properties, net
|
3,419,628
|
|
|
3,340,886
|
|
||
Property - operating right-of-use assets
|
27,793
|
|
|
27,864
|
|
||
Property - finance right-of-use assets
|
40,450
|
|
|
40,458
|
|
||
Cash and cash equivalents
|
159,061
|
|
|
14,733
|
|
||
Investment in unconsolidated real estate joint ventures
|
51,220
|
|
|
51,949
|
|
||
Accounts receivable, net
|
30,317
|
|
|
35,444
|
|
||
Deferred rent receivable
|
89,690
|
|
|
87,736
|
|
||
Intangible assets on real estate acquisitions, net
|
26,078
|
|
|
27,392
|
|
||
Deferred leasing costs (net of accumulated amortization of $34,613 and $33,782, respectively)
|
58,608
|
|
|
58,392
|
|
||
Investing receivables (net of allowance for credit losses of $3,598 at March 31, 2020)
|
71,197
|
|
|
73,523
|
|
||
Prepaid expenses and other assets, net
|
80,415
|
|
|
96,076
|
|
||
Total assets
|
$
|
4,054,457
|
|
|
$
|
3,854,453
|
|
Liabilities and equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Debt, net
|
$
|
2,076,839
|
|
|
$
|
1,831,139
|
|
Accounts payable and accrued expenses
|
128,441
|
|
|
148,746
|
|
||
Rents received in advance and security deposits
|
33,323
|
|
|
33,620
|
|
||
Dividends and distributions payable
|
31,301
|
|
|
31,263
|
|
||
Deferred revenue associated with operating leases
|
6,972
|
|
|
7,361
|
|
||
Property - operating lease liabilities
|
17,365
|
|
|
17,317
|
|
||
Interest rate derivatives
|
63,232
|
|
|
25,682
|
|
||
Other liabilities
|
8,886
|
|
|
10,649
|
|
||
Total liabilities
|
2,366,359
|
|
|
2,105,777
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
22,912
|
|
|
29,431
|
|
||
Equity:
|
|
|
|
|
|
||
Corporate Office Properties Trust’s shareholders’ equity:
|
|
|
|
|
|
||
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,169,463 at March 31, 2020 and 112,068,705 at December 31, 2019)
|
1,122
|
|
|
1,121
|
|
||
Additional paid-in capital
|
2,476,677
|
|
|
2,481,558
|
|
||
Cumulative distributions in excess of net income
|
(790,600
|
)
|
|
(778,275
|
)
|
||
Accumulated other comprehensive loss
|
(62,201
|
)
|
|
(25,444
|
)
|
||
Total Corporate Office Properties Trust’s shareholders’ equity
|
1,624,998
|
|
|
1,678,960
|
|
||
Noncontrolling interests in subsidiaries:
|
|
|
|
|
|
||
Common units in COPLP
|
19,600
|
|
|
19,597
|
|
||
Preferred units in COPLP
|
8,800
|
|
|
8,800
|
|
||
Other consolidated entities
|
11,788
|
|
|
11,888
|
|
||
Noncontrolling interests in subsidiaries
|
40,188
|
|
|
40,285
|
|
||
Total equity
|
1,665,186
|
|
|
1,719,245
|
|
||
Total liabilities, redeemable noncontrolling interests and equity
|
$
|
4,054,457
|
|
|
$
|
3,854,453
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
|
|
||
Lease revenue
|
$
|
131,012
|
|
|
$
|
130,903
|
|
Other property revenue
|
1,104
|
|
|
1,087
|
|
||
Construction contract and other service revenues
|
13,681
|
|
|
16,950
|
|
||
Total revenues
|
145,797
|
|
|
148,940
|
|
||
Operating expenses
|
|
|
|
|
|
||
Property operating expenses
|
49,999
|
|
|
49,445
|
|
||
Depreciation and amortization associated with real estate operations
|
32,596
|
|
|
34,796
|
|
||
Construction contract and other service expenses
|
13,121
|
|
|
16,326
|
|
||
General, administrative and leasing expenses
|
7,486
|
|
|
8,751
|
|
||
Business development expenses and land carry costs
|
1,118
|
|
|
1,113
|
|
||
Total operating expenses
|
104,320
|
|
|
110,431
|
|
||
Interest expense
|
(16,840
|
)
|
|
(18,674
|
)
|
||
Interest and other income
|
1,205
|
|
|
2,286
|
|
||
Credit loss expense
|
(689
|
)
|
|
—
|
|
||
Gain on sales of real estate
|
5
|
|
|
—
|
|
||
Income before equity in income of unconsolidated entities and income taxes
|
25,158
|
|
|
22,121
|
|
||
Equity in income of unconsolidated entities
|
441
|
|
|
391
|
|
||
Income tax expense
|
(49
|
)
|
|
(194
|
)
|
||
Net income
|
25,550
|
|
|
22,318
|
|
||
Net income attributable to noncontrolling interests:
|
|
|
|
|
|
||
Common units in COPLP
|
(287
|
)
|
|
(257
|
)
|
||
Preferred units in COPLP
|
(77
|
)
|
|
(165
|
)
|
||
Other consolidated entities
|
(1,132
|
)
|
|
(1,037
|
)
|
||
Net income attributable to COPT common shareholders
|
$
|
24,054
|
|
|
$
|
20,859
|
|
|
|
|
|
||||
Earnings per common share: (1)
|
|
|
|
|
|
||
Net income attributable to COPT common shareholders - basic
|
$
|
0.21
|
|
|
$
|
0.19
|
|
Net income attributable to COPT common shareholders - diluted
|
$
|
0.21
|
|
|
$
|
0.19
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
25,550
|
|
|
$
|
22,318
|
|
Other comprehensive loss:
|
|
|
|
|
|
||
Unrealized loss on interest rate derivatives
|
(37,705
|
)
|
|
(8,845
|
)
|
||
Loss (gain) on interest rate derivatives recognized in interest expense
|
131
|
|
|
(570
|
)
|
||
Total other comprehensive loss
|
(37,574
|
)
|
|
(9,415
|
)
|
||
Comprehensive (loss) income
|
(12,024
|
)
|
|
12,903
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(679
|
)
|
|
(1,344
|
)
|
||
Comprehensive (loss) income attributable to COPT
|
$
|
(12,703
|
)
|
|
$
|
11,559
|
|
|
|
Common
Shares
|
|
Additional
Paid-in
Capital
|
|
Cumulative
Distributions in
Excess of Net
Income
|
|
Accumulated
Other
Comprehensive Loss
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||
For the Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2018 (110,241,868 common shares outstanding)
|
|
$
|
1,102
|
|
|
$
|
2,431,355
|
|
|
$
|
(846,808
|
)
|
|
$
|
(238
|
)
|
|
$
|
41,637
|
|
|
$
|
1,627,048
|
|
Conversion of common units to common shares (5,500 shares)
|
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
||||||
Common shares issued under forward equity sale agreements (1,614,087 shares)
|
|
16
|
|
|
46,438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,454
|
|
||||||
Share-based compensation (78,335 shares issued, net of redemptions)
|
|
1
|
|
|
1,562
|
|
|
—
|
|
|
—
|
|
|
239
|
|
|
1,802
|
|
||||||
Redemption of vested equity awards
|
|
—
|
|
|
(1,817
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,817
|
)
|
||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP
|
|
—
|
|
|
(1,322
|
)
|
|
—
|
|
|
—
|
|
|
1,322
|
|
|
—
|
|
||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
20,859
|
|
|
(9,300
|
)
|
|
669
|
|
|
12,228
|
|
||||||
Dividends
|
|
—
|
|
|
—
|
|
|
(30,754
|
)
|
|
—
|
|
|
—
|
|
|
(30,754
|
)
|
||||||
Distributions to owners of common and preferred units in COPLP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(550
|
)
|
|
(550
|
)
|
||||||
Contributions from noncontrolling interests in other consolidated entities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,570
|
|
|
2,570
|
|
||||||
Distributions to noncontrolling interests in other consolidated entities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests
|
|
—
|
|
|
(799
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(799
|
)
|
||||||
Balance at March 31, 2019 (111,939,790 common shares outstanding)
|
|
$
|
1,119
|
|
|
$
|
2,475,497
|
|
|
$
|
(856,703
|
)
|
|
$
|
(9,538
|
)
|
|
$
|
45,803
|
|
|
$
|
1,656,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2019 (112,068,705 common shares outstanding)
|
|
$
|
1,121
|
|
|
$
|
2,481,558
|
|
|
$
|
(778,275
|
)
|
|
$
|
(25,444
|
)
|
|
$
|
40,285
|
|
|
$
|
1,719,245
|
|
Cumulative effect of accounting change for adoption of credit loss guidance
|
|
—
|
|
|
—
|
|
|
(5,541
|
)
|
|
—
|
|
|
—
|
|
|
(5,541
|
)
|
||||||
Balance at December 31, 2019, as adjusted
|
|
1,121
|
|
|
2,481,558
|
|
|
(783,816
|
)
|
|
(25,444
|
)
|
|
40,285
|
|
|
1,713,704
|
|
||||||
Conversion of common units to common shares (12,009 shares)
|
|
—
|
|
|
182
|
|
|
—
|
|
|
—
|
|
|
(182
|
)
|
|
—
|
|
||||||
Share-based compensation (88,749 shares issued, net of redemptions)
|
|
1
|
|
|
983
|
|
|
—
|
|
|
—
|
|
|
226
|
|
|
1,210
|
|
||||||
Redemption of vested equity awards
|
|
—
|
|
|
(1,492
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP
|
|
—
|
|
|
(453
|
)
|
|
—
|
|
|
—
|
|
|
453
|
|
|
—
|
|
||||||
Comprehensive loss
|
|
—
|
|
|
—
|
|
|
24,054
|
|
|
(36,757
|
)
|
|
(279
|
)
|
|
(12,982
|
)
|
||||||
Dividends
|
|
—
|
|
|
—
|
|
|
(30,838
|
)
|
|
—
|
|
|
—
|
|
|
(30,838
|
)
|
||||||
Distributions to owners of common and preferred units in COPLP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(420
|
)
|
|
(420
|
)
|
||||||
Contributions from noncontrolling interests in other consolidated entities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
112
|
|
||||||
Distributions to noncontrolling interests in other consolidated entities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests
|
|
—
|
|
|
(4,101
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,101
|
)
|
||||||
Balance at March 31, 2020 (112,169,463 common shares outstanding)
|
|
$
|
1,122
|
|
|
$
|
2,476,677
|
|
|
$
|
(790,600
|
)
|
|
$
|
(62,201
|
)
|
|
$
|
40,188
|
|
|
$
|
1,665,186
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities
|
|
|
|
|
|
||
Revenues from real estate operations received
|
$
|
133,092
|
|
|
$
|
126,569
|
|
Construction contract and other service revenues received
|
24,925
|
|
|
5,904
|
|
||
Property operating expenses paid
|
(46,330
|
)
|
|
(42,974
|
)
|
||
Construction contract and other service expenses paid
|
(17,631
|
)
|
|
(4,614
|
)
|
||
General, administrative, leasing, business development and land carry costs paid
|
(12,371
|
)
|
|
(11,703
|
)
|
||
Interest expense paid
|
(16,767
|
)
|
|
(18,282
|
)
|
||
Lease incentives paid
|
(3,628
|
)
|
|
(1,158
|
)
|
||
Other
|
928
|
|
|
910
|
|
||
Net cash provided by operating activities
|
62,218
|
|
|
54,652
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
||
Development and redevelopment of properties
|
(92,802
|
)
|
|
(100,212
|
)
|
||
Tenant improvements on operating properties
|
(10,446
|
)
|
|
(4,174
|
)
|
||
Other capital improvements on operating properties
|
(5,457
|
)
|
|
(4,476
|
)
|
||
Investing receivables funded
|
—
|
|
|
(11,051
|
)
|
||
Leasing costs paid
|
(5,950
|
)
|
|
(2,539
|
)
|
||
Other
|
192
|
|
|
1,297
|
|
||
Net cash used in investing activities
|
(114,463
|
)
|
|
(121,155
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
||
Proceeds from debt
|
|
|
|
||||
Revolving Credit Facility
|
251,000
|
|
|
123,000
|
|
||
Other debt proceeds
|
181,595
|
|
|
3,350
|
|
||
Repayments of debt
|
|
|
|
||||
Revolving Credit Facility
|
(186,000
|
)
|
|
(74,000
|
)
|
||
Scheduled principal amortization
|
(1,021
|
)
|
|
(1,098
|
)
|
||
Deferred financing costs paid
|
(1,261
|
)
|
|
—
|
|
||
Net proceeds from issuance of common shares
|
—
|
|
|
46,415
|
|
||
Common share dividends paid
|
(30,817
|
)
|
|
(30,287
|
)
|
||
Distributions paid to noncontrolling interests in COPLP
|
(403
|
)
|
|
(553
|
)
|
||
Distributions paid to redeemable noncontrolling interests
|
(11,870
|
)
|
|
—
|
|
||
Redemption of vested equity awards
|
(1,492
|
)
|
|
(1,817
|
)
|
||
Other
|
(2,729
|
)
|
|
1,318
|
|
||
Net cash provided by financing activities
|
197,002
|
|
|
66,328
|
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
144,757
|
|
|
(175
|
)
|
||
Cash and cash equivalents and restricted cash
|
|
|
|
|
|
||
Beginning of period
|
18,130
|
|
|
11,950
|
|
||
End of period
|
$
|
162,887
|
|
|
$
|
11,775
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
25,550
|
|
|
$
|
22,318
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and other amortization
|
33,015
|
|
|
35,229
|
|
||
Amortization of deferred financing costs and net debt discounts
|
961
|
|
|
898
|
|
||
Increase in deferred rent receivable
|
(2,230
|
)
|
|
(2,539
|
)
|
||
Share-based compensation
|
1,389
|
|
|
1,659
|
|
||
Other
|
(52
|
)
|
|
(1,572
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Decrease in accounts receivable
|
4,547
|
|
|
1,033
|
|
||
Decrease (increase) in prepaid expenses and other assets, net
|
15,548
|
|
|
(6,752
|
)
|
||
(Decrease) increase in accounts payable, accrued expenses and other liabilities
|
(16,213
|
)
|
|
8,822
|
|
||
Decrease in rents received in advance and security deposits
|
(297
|
)
|
|
(4,444
|
)
|
||
Net cash provided by operating activities
|
$
|
62,218
|
|
|
$
|
54,652
|
|
Reconciliation of cash and cash equivalents and restricted cash:
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
$
|
14,733
|
|
|
$
|
8,066
|
|
Restricted cash at beginning of period
|
3,397
|
|
|
3,884
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
$
|
18,130
|
|
|
$
|
11,950
|
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
159,061
|
|
|
$
|
7,780
|
|
Restricted cash at end of period
|
3,826
|
|
|
3,995
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
162,887
|
|
|
$
|
11,775
|
|
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||
(Decrease) increase in accrued capital improvements, leasing and other investing activity costs
|
$
|
(4,795
|
)
|
|
$
|
11,329
|
|
Finance right-of-use asset contributed by noncontrolling interest in joint venture
|
$
|
—
|
|
|
$
|
2,570
|
|
Operating right-of-use assets obtained in exchange for operating lease liabilities
|
$
|
—
|
|
|
$
|
276
|
|
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests
|
$
|
(37,573
|
)
|
|
$
|
(9,450
|
)
|
Dividends/distributions payable
|
$
|
31,301
|
|
|
$
|
31,346
|
|
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares
|
$
|
182
|
|
|
$
|
80
|
|
Adjustments to noncontrolling interests resulting from changes in COPLP ownership
|
$
|
453
|
|
|
$
|
1,322
|
|
Increase in redeemable noncontrolling interests and decrease in equity to carry redeemable noncontrolling interests at fair value
|
$
|
4,101
|
|
|
$
|
799
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Assets
|
|
|
|
|
|
||
Properties, net:
|
|
|
|
|
|
||
Operating properties, net
|
$
|
2,813,949
|
|
|
$
|
2,772,647
|
|
Projects in development or held for future development
|
605,679
|
|
|
568,239
|
|
||
Total properties, net
|
3,419,628
|
|
|
3,340,886
|
|
||
Property - operating right-of-use assets
|
27,793
|
|
|
27,864
|
|
||
Property - finance right-of-use assets
|
40,450
|
|
|
40,458
|
|
||
Cash and cash equivalents
|
159,061
|
|
|
14,733
|
|
||
Investment in unconsolidated real estate joint ventures
|
51,220
|
|
|
51,949
|
|
||
Accounts receivable, net
|
30,317
|
|
|
35,444
|
|
||
Deferred rent receivable
|
89,690
|
|
|
87,736
|
|
||
Intangible assets on real estate acquisitions, net
|
26,078
|
|
|
27,392
|
|
||
Deferred leasing costs (net of accumulated amortization of $34,613 and $33,782, respectively)
|
58,608
|
|
|
58,392
|
|
||
Investing receivables (net of allowance for credit losses of $3,598 at March 31, 2020)
|
71,197
|
|
|
73,523
|
|
||
Prepaid expenses and other assets, net
|
78,136
|
|
|
93,016
|
|
||
Total assets
|
$
|
4,052,178
|
|
|
$
|
3,851,393
|
|
Liabilities and equity
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
||
Debt, net
|
$
|
2,076,839
|
|
|
$
|
1,831,139
|
|
Accounts payable and accrued expenses
|
128,441
|
|
|
148,746
|
|
||
Rents received in advance and security deposits
|
33,323
|
|
|
33,620
|
|
||
Distributions payable
|
31,301
|
|
|
31,263
|
|
||
Deferred revenue associated with operating leases
|
6,972
|
|
|
7,361
|
|
||
Property - operating lease liabilities
|
17,365
|
|
|
17,317
|
|
||
Interest rate derivatives
|
63,232
|
|
|
25,682
|
|
||
Other liabilities
|
6,607
|
|
|
7,589
|
|
||
Total liabilities
|
2,364,080
|
|
|
2,102,717
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
22,912
|
|
|
29,431
|
|
||
Equity:
|
|
|
|
|
|
||
Corporate Office Properties, L.P.’s equity:
|
|
|
|
|
|
||
Preferred units held by limited partner, 352,000 preferred units outstanding at March 31, 2020 and December 31, 2019
|
8,800
|
|
|
8,800
|
|
||
Common units, 112,169,463 and 112,068,705 held by the general partner and 1,620,449 and 1,482,425 held by limited partners at March 31, 2020 and December 31, 2019, respectively
|
1,707,395
|
|
|
1,724,159
|
|
||
Accumulated other comprehensive loss
|
(62,843
|
)
|
|
(25,648
|
)
|
||
Total Corporate Office Properties, L.P.’s equity
|
1,653,352
|
|
|
1,707,311
|
|
||
Noncontrolling interests in subsidiaries
|
11,834
|
|
|
11,934
|
|
||
Total equity
|
1,665,186
|
|
|
1,719,245
|
|
||
Total liabilities, redeemable noncontrolling interests and equity
|
$
|
4,052,178
|
|
|
$
|
3,851,393
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues
|
|
|
|
|
|
||
Lease revenue
|
$
|
131,012
|
|
|
$
|
130,903
|
|
Other property revenue
|
1,104
|
|
|
1,087
|
|
||
Construction contract and other service revenues
|
13,681
|
|
|
16,950
|
|
||
Total revenues
|
145,797
|
|
|
148,940
|
|
||
Operating expenses
|
|
|
|
|
|
||
Property operating expenses
|
49,999
|
|
|
49,445
|
|
||
Depreciation and amortization associated with real estate operations
|
32,596
|
|
|
34,796
|
|
||
Construction contract and other service expenses
|
13,121
|
|
|
16,326
|
|
||
General, administrative and leasing expenses
|
7,486
|
|
|
8,751
|
|
||
Business development expenses and land carry costs
|
1,118
|
|
|
1,113
|
|
||
Total operating expenses
|
104,320
|
|
|
110,431
|
|
||
Interest expense
|
(16,840
|
)
|
|
(18,674
|
)
|
||
Interest and other income
|
1,205
|
|
|
2,286
|
|
||
Credit loss expense
|
(689
|
)
|
|
—
|
|
||
Gain on sales of real estate
|
5
|
|
|
—
|
|
||
Income before equity in income of unconsolidated entities and income taxes
|
25,158
|
|
|
22,121
|
|
||
Equity in income of unconsolidated entities
|
441
|
|
|
391
|
|
||
Income tax expense
|
(49
|
)
|
|
(194
|
)
|
||
Net income
|
25,550
|
|
|
22,318
|
|
||
Net income attributable to noncontrolling interests in consolidated entities
|
(1,132
|
)
|
|
(1,037
|
)
|
||
Net income attributable to COPLP
|
24,418
|
|
|
21,281
|
|
||
Preferred unit distributions
|
(77
|
)
|
|
(165
|
)
|
||
Net income attributable to COPLP common unitholders
|
$
|
24,341
|
|
|
$
|
21,116
|
|
|
|
|
|
||||
Earnings per common unit: (1)
|
|
|
|
|
|
||
Net income attributable to COPLP common unitholders - basic
|
$
|
0.21
|
|
|
$
|
0.19
|
|
Net income attributable to COPLP common unitholders - diluted
|
$
|
0.21
|
|
|
$
|
0.19
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
25,550
|
|
|
$
|
22,318
|
|
Other comprehensive loss:
|
|
|
|
|
|
||
Unrealized loss on interest rate derivatives
|
(37,705
|
)
|
|
(8,845
|
)
|
||
Loss (gain) on interest rate derivatives recognized in interest expense
|
131
|
|
|
(570
|
)
|
||
Total other comprehensive loss
|
(37,574
|
)
|
|
(9,415
|
)
|
||
Comprehensive (loss) income
|
(12,024
|
)
|
|
12,903
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(753
|
)
|
|
(1,037
|
)
|
||
Comprehensive (loss) income attributable to COPLP
|
$
|
(12,777
|
)
|
|
$
|
11,866
|
|
|
Limited Partner Preferred Units
|
|
Common Units
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling Interests in Subsidiaries
|
|
|
||||||||||||||||
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
|
|
|
Total Equity
|
||||||||||||||
For the Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2018
|
352,000
|
|
|
$
|
8,800
|
|
|
111,574,754
|
|
|
$
|
1,604,655
|
|
|
$
|
(121
|
)
|
|
$
|
13,714
|
|
|
$
|
1,627,048
|
|
Issuance of common units resulting from common shares issued under COPT forward equity sale agreements
|
—
|
|
|
—
|
|
|
1,614,087
|
|
|
46,454
|
|
|
—
|
|
|
—
|
|
|
46,454
|
|
|||||
Share-based compensation (units net of redemption)
|
—
|
|
|
—
|
|
|
326,973
|
|
|
1,802
|
|
|
—
|
|
|
—
|
|
|
1,802
|
|
|||||
Redemptions of vested equity awards
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,817
|
)
|
|
—
|
|
|
—
|
|
|
(1,817
|
)
|
|||||
Comprehensive income
|
—
|
|
|
165
|
|
|
—
|
|
|
21,116
|
|
|
(9,415
|
)
|
|
362
|
|
|
12,228
|
|
|||||
Distributions to owners of common and preferred units
|
—
|
|
|
(165
|
)
|
|
—
|
|
|
(31,139
|
)
|
|
—
|
|
|
—
|
|
|
(31,304
|
)
|
|||||
Contributions from noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,570
|
|
|
2,570
|
|
|||||
Distributions to noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||
Adjustment to arrive at fair value of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(799
|
)
|
|
—
|
|
|
—
|
|
|
(799
|
)
|
|||||
Balance at March 31, 2019
|
352,000
|
|
|
$
|
8,800
|
|
|
113,515,814
|
|
|
$
|
1,640,272
|
|
|
$
|
(9,536
|
)
|
|
$
|
16,642
|
|
|
$
|
1,656,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2019
|
352,000
|
|
|
$
|
8,800
|
|
|
113,551,130
|
|
|
$
|
1,724,159
|
|
|
$
|
(25,648
|
)
|
|
$
|
11,934
|
|
|
$
|
1,719,245
|
|
Cumulative effect of accounting change for adoption of credit loss guidance
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,541
|
)
|
|
—
|
|
|
—
|
|
|
(5,541
|
)
|
|||||
Balance at December 31, 2019, as adjusted
|
352,000
|
|
|
8,800
|
|
|
113,551,130
|
|
|
1,718,618
|
|
|
(25,648
|
)
|
|
11,934
|
|
|
1,713,704
|
|
|||||
Share-based compensation (units net of redemption)
|
—
|
|
|
—
|
|
|
238,782
|
|
|
1,210
|
|
|
—
|
|
|
—
|
|
|
1,210
|
|
|||||
Redemptions of vested equity awards
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
|||||
Comprehensive loss
|
—
|
|
|
77
|
|
|
—
|
|
|
24,341
|
|
|
(37,195
|
)
|
|
(205
|
)
|
|
(12,982
|
)
|
|||||
Distributions to owners of common and preferred units
|
—
|
|
|
(77
|
)
|
|
—
|
|
|
(31,181
|
)
|
|
—
|
|
|
—
|
|
|
(31,258
|
)
|
|||||
Contributions from noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
112
|
|
|||||
Distributions to noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||
Adjustment to arrive at fair value of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,101
|
)
|
|
—
|
|
|
—
|
|
|
(4,101
|
)
|
|||||
Balance at March 31, 2020
|
352,000
|
|
|
$
|
8,800
|
|
|
113,789,912
|
|
|
$
|
1,707,395
|
|
|
$
|
(62,843
|
)
|
|
$
|
11,834
|
|
|
$
|
1,665,186
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities
|
|
|
|
|
|
||
Revenues from real estate operations received
|
$
|
133,092
|
|
|
$
|
126,569
|
|
Construction contract and other service revenues received
|
24,925
|
|
|
5,904
|
|
||
Property operating expenses paid
|
(46,330
|
)
|
|
(42,974
|
)
|
||
Construction contract and other service expenses paid
|
(17,631
|
)
|
|
(4,614
|
)
|
||
General, administrative, leasing, business development and land carry costs paid
|
(12,371
|
)
|
|
(11,703
|
)
|
||
Interest expense paid
|
(16,767
|
)
|
|
(18,282
|
)
|
||
Lease incentives paid
|
(3,628
|
)
|
|
(1,158
|
)
|
||
Other
|
928
|
|
|
910
|
|
||
Net cash provided by operating activities
|
62,218
|
|
|
54,652
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
||
Development and redevelopment of properties
|
(92,802
|
)
|
|
(100,212
|
)
|
||
Tenant improvements on operating properties
|
(10,446
|
)
|
|
(4,174
|
)
|
||
Other capital improvements on operating properties
|
(5,457
|
)
|
|
(4,476
|
)
|
||
Investing receivables funded
|
—
|
|
|
(11,051
|
)
|
||
Leasing costs paid
|
(5,950
|
)
|
|
(2,539
|
)
|
||
Other
|
192
|
|
|
1,297
|
|
||
Net cash used in investing activities
|
(114,463
|
)
|
|
(121,155
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
||
Proceeds from debt
|
|
|
|
||||
Revolving Credit Facility
|
251,000
|
|
|
123,000
|
|
||
Other debt proceeds
|
181,595
|
|
|
3,350
|
|
||
Repayments of debt
|
|
|
|
||||
Revolving Credit Facility
|
(186,000
|
)
|
|
(74,000
|
)
|
||
Scheduled principal amortization
|
(1,021
|
)
|
|
(1,098
|
)
|
||
Deferred financing costs paid
|
(1,261
|
)
|
|
—
|
|
||
Net proceeds from issuance of common units
|
—
|
|
|
46,415
|
|
||
Common unit distributions paid
|
(31,143
|
)
|
|
(30,675
|
)
|
||
Distributions paid to redeemable noncontrolling interests
|
(11,870
|
)
|
|
—
|
|
||
Redemption of vested equity awards
|
(1,492
|
)
|
|
(1,817
|
)
|
||
Other
|
(2,806
|
)
|
|
1,153
|
|
||
Net cash provided by financing activities
|
197,002
|
|
|
66,328
|
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
144,757
|
|
|
(175
|
)
|
||
Cash and cash equivalents and restricted cash
|
|
|
|
|
|
||
Beginning of period
|
18,130
|
|
|
11,950
|
|
||
End of period
|
$
|
162,887
|
|
|
$
|
11,775
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
25,550
|
|
|
$
|
22,318
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and other amortization
|
33,015
|
|
|
35,229
|
|
||
Amortization of deferred financing costs and net debt discounts
|
961
|
|
|
898
|
|
||
Increase in deferred rent receivable
|
(2,230
|
)
|
|
(2,539
|
)
|
||
Share-based compensation
|
1,389
|
|
|
1,659
|
|
||
Other
|
(52
|
)
|
|
(1,572
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Decrease in accounts receivable
|
4,547
|
|
|
1,033
|
|
||
Decrease (increase) in prepaid expenses and other assets, net
|
14,768
|
|
|
(6,406
|
)
|
||
(Decrease) increase in accounts payable, accrued expenses and other liabilities
|
(15,433
|
)
|
|
8,476
|
|
||
Decrease in rents received in advance and security deposits
|
(297
|
)
|
|
(4,444
|
)
|
||
Net cash provided by operating activities
|
$
|
62,218
|
|
|
$
|
54,652
|
|
Reconciliation of cash and cash equivalents and restricted cash:
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
$
|
14,733
|
|
|
$
|
8,066
|
|
Restricted cash at beginning of period
|
3,397
|
|
|
3,884
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
$
|
18,130
|
|
|
$
|
11,950
|
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
159,061
|
|
|
$
|
7,780
|
|
Restricted cash at end of period
|
3,826
|
|
|
3,995
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
162,887
|
|
|
$
|
11,775
|
|
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||
(Decrease) increase in accrued capital improvements, leasing and other investing activity costs
|
$
|
(4,795
|
)
|
|
$
|
11,329
|
|
Finance right-of-use asset contributed by noncontrolling interest in joint venture
|
$
|
—
|
|
|
$
|
2,570
|
|
Operating right-of-use assets obtained in exchange for operating lease liabilities
|
$
|
—
|
|
|
$
|
276
|
|
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests
|
$
|
(37,573
|
)
|
|
$
|
(9,450
|
)
|
Distributions payable
|
$
|
31,301
|
|
|
$
|
31,346
|
|
Increase in redeemable noncontrolling interests and decrease in equity to carry redeemable noncontrolling interests at fair value
|
$
|
4,101
|
|
|
$
|
799
|
|
•
|
171 properties totaling 19.4 million square feet comprised of 15.4 million square feet in 148 office properties and 4.0 million square feet in 23 single-tenant data center shell properties (“data center shells”). We owned 15 of these data center shells through unconsolidated real estate joint ventures;
|
•
|
a wholesale data center with a critical load of 19.25 megawatts;
|
•
|
14 properties under development or redevelopment (11 office properties and three data center shells) that we estimate will total approximately 2.3 million square feet upon completion, including one partially-operational property; and
|
•
|
approximately 900 acres of land controlled for future development that we believe could be developed into approximately 11.2 million square feet and 43 acres of other land.
|
•
|
investing receivables, as disclosed in Note 7;
|
•
|
tenant notes receivable;
|
•
|
other assets comprised of non-lease revenue related accounts receivable (primarily from construction contract services) and contract assets from unbilled construction contract revenue; and
|
•
|
off-balance sheet credit exposures, which included $4.8 million in unfunded commitments to fund tenant loans and a tax incremental financing obligation disclosed in Note 17.
|
|
For the Three Months Ended March 31, 2020
|
||||||||||||||||||
|
Investing Receivables
|
|
Tenant Notes
Receivable (1)
|
|
Other Assets (2)
|
|
Off-Balance Sheet Credit Exposures (3)
|
|
Total
|
||||||||||
December 31, 2019
|
$
|
—
|
|
|
$
|
(97
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(97
|
)
|
Cumulative effect of change for adoption of credit loss guidance
|
(3,732
|
)
|
|
(325
|
)
|
|
(144
|
)
|
|
(1,340
|
)
|
|
(5,541
|
)
|
|||||
Credit loss expense
|
134
|
|
|
23
|
|
|
(77
|
)
|
|
(769
|
)
|
|
(689
|
)
|
|||||
March 31, 2020
|
$
|
(3,598
|
)
|
|
$
|
(399
|
)
|
|
$
|
(221
|
)
|
|
$
|
(2,109
|
)
|
|
$
|
(6,327
|
)
|
(1)
|
Included in the line entitled “accounts receivable, net” on our consolidated balance sheets.
|
|
Origination Year
|
|
|
||||||||||||||||||||||||
|
2015 and Earlier
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Total as of March 31, 2020
|
||||||||||||||
Investing receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Credit risk classification:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment grade
|
$
|
59,833
|
|
|
$
|
—
|
|
|
$
|
866
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60,699
|
|
Non-investment grade
|
3,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,076
|
|
|
—
|
|
|
14,096
|
|
|||||||
Total
|
$
|
62,853
|
|
|
$
|
—
|
|
|
$
|
866
|
|
|
$
|
—
|
|
|
$
|
11,076
|
|
|
$
|
—
|
|
|
$
|
74,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Tenant notes receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Credit risk classification:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment grade
|
$
|
21
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
1,100
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
1,299
|
|
Non-investment grade
|
97
|
|
|
219
|
|
|
—
|
|
|
185
|
|
|
2,079
|
|
|
—
|
|
|
2,580
|
|
|||||||
Total
|
$
|
118
|
|
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
1,285
|
|
|
$
|
2,179
|
|
|
$
|
—
|
|
|
$
|
3,879
|
|
Description
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable securities in deferred compensation plan (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds
|
|
$
|
2,260
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,260
|
|
Other
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Mutual funds (1)
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Total assets
|
|
$
|
2,289
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,289
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred compensation plan liability (2)
|
|
$
|
—
|
|
|
$
|
2,279
|
|
|
$
|
—
|
|
|
$
|
2,279
|
|
Interest rate derivatives
|
|
—
|
|
|
63,232
|
|
|
—
|
|
|
63,232
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
65,511
|
|
|
$
|
—
|
|
|
$
|
65,511
|
|
Description
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds (1)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate derivatives
|
|
$
|
—
|
|
|
$
|
63,232
|
|
|
$
|
—
|
|
|
$
|
63,232
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Land
|
$
|
489,744
|
|
|
$
|
472,976
|
|
Buildings and improvements
|
3,359,908
|
|
|
3,306,791
|
|
||
Less: Accumulated depreciation
|
(1,035,703
|
)
|
|
(1,007,120
|
)
|
||
Operating properties, net
|
$
|
2,813,949
|
|
|
$
|
2,772,647
|
|
|
|
For the Three Months Ended March 31,
|
||||||
Lease revenue
|
|
2020
|
|
2019
|
||||
Fixed
|
|
$
|
104,109
|
|
|
$
|
104,644
|
|
Variable
|
|
26,903
|
|
|
26,259
|
|
||
|
|
$
|
131,012
|
|
|
$
|
130,903
|
|
Year Ending December 31,
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
2020 (1)
|
|
$
|
301,914
|
|
|
$
|
388,310
|
|
2021
|
|
357,747
|
|
|
336,482
|
|
||
2022
|
|
319,239
|
|
|
299,356
|
|
||
2023
|
|
264,865
|
|
|
245,661
|
|
||
2024
|
|
214,797
|
|
|
195,246
|
|
||
Thereafter
|
|
548,049
|
|
|
474,741
|
|
||
|
|
$
|
2,006,611
|
|
|
$
|
1,939,796
|
|
•
|
$37.8 million for land on which we are developing an office property in Washington, DC through our Stevens Investors, LLC joint venture, virtually all of the rent on which was previously paid. This lease has a 96-year remaining term, and we possess a bargain purchase option that we expect to exercise in 2020;
|
•
|
$10.3 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 80 years;
|
•
|
$6.5 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 29 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;
|
•
|
$6.6 million for land in a research park in College Park, Maryland under four leases through our M Square Associates, LLC joint venture all of the rent on which was previously paid. These leases had remaining terms ranging from 63 to 74 years;
|
•
|
$4.8 million for land in a business park in Huntsville, Alabama under nine leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 43 to 50 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance; and
|
•
|
$2.3 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 48 years, all of the rent on which was previously paid.
|
Leases
|
|
Balance Sheet Location
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Right-of-use assets
|
|
|
|
|
|
|
||||
Operating leases - Property
|
|
Property - operating right-of-use assets
|
|
$
|
27,793
|
|
|
$
|
27,864
|
|
Finance leases - Property
|
|
Property - finance right-of-use assets
|
|
40,450
|
|
|
40,458
|
|
||
Total right-of-use assets
|
|
|
|
$
|
68,243
|
|
|
$
|
68,322
|
|
Leases
|
|
Balance Sheet Location
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Lease liabilities
|
|
|
|
|
|
|
||||
Operating leases - Property
|
|
Property - operating lease liabilities
|
|
$
|
17,365
|
|
|
$
|
17,317
|
|
Finance leases - Property
|
|
Other liabilities
|
|
702
|
|
|
702
|
|
||
Total lease liabilities
|
|
|
|
$
|
18,067
|
|
|
$
|
18,019
|
|
Weighted average remaining lease term
|
|
|
|
Operating leases
|
|
68 years
|
|
Finance leases
|
|
< 1 year
|
|
Weighted average discount rate
|
|
|
|
Operating leases
|
|
7.33
|
%
|
Finance leases
|
|
3.62
|
%
|
|
|
|
|
For the Three Months Ended March 31,
|
||||||
Lease cost
|
|
Statement of Operations Location
|
|
2020
|
|
2019
|
||||
Operating lease cost
|
|
|
|
|
|
|
||||
Property leases
|
|
Property operating expenses
|
|
$
|
431
|
|
|
$
|
413
|
|
Finance lease cost
|
|
|
|
|
|
|
||||
Amortization of property right-of-use assets
|
|
Property operating expenses
|
|
9
|
|
|
—
|
|
||
|
|
|
|
$
|
440
|
|
|
$
|
413
|
|
|
|
For the Three Months Ended March 31,
|
||||||
Supplemental cash flow information
|
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
||||
Operating cash flows for operating leases
|
|
$
|
311
|
|
|
$
|
228
|
|
Financing cash flows for financing leases
|
|
$
|
—
|
|
|
$
|
52
|
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||||||||||||||||||
Year Ending December 31,
|
|
Operating leases
|
|
Finance leases
|
|
Total
|
|
Operating leases
|
|
Finance leases
|
|
Total
|
||||||||||||
2020 (1)
|
|
$
|
826
|
|
|
$
|
674
|
|
|
$
|
1,500
|
|
|
$
|
1,092
|
|
|
$
|
674
|
|
|
$
|
1,766
|
|
2021
|
|
1,138
|
|
|
14
|
|
|
1,152
|
|
|
1,138
|
|
|
14
|
|
|
1,152
|
|
||||||
2022
|
|
1,162
|
|
|
14
|
|
|
1,176
|
|
|
1,162
|
|
|
14
|
|
|
1,176
|
|
||||||
2023
|
|
1,167
|
|
|
—
|
|
|
1,167
|
|
|
1,167
|
|
|
—
|
|
|
1,167
|
|
||||||
2024
|
|
1,173
|
|
|
—
|
|
|
1,173
|
|
|
1,173
|
|
|
—
|
|
|
1,173
|
|
||||||
Thereafter
|
|
100,609
|
|
|
—
|
|
|
100,609
|
|
|
100,609
|
|
|
—
|
|
|
100,609
|
|
||||||
Total lease payments
|
|
106,075
|
|
|
702
|
|
|
106,777
|
|
|
106,341
|
|
|
702
|
|
|
107,043
|
|
||||||
Less: Amount representing interest
|
|
(88,710
|
)
|
|
—
|
|
|
(88,710
|
)
|
|
(89,024
|
)
|
|
—
|
|
|
(89,024
|
)
|
||||||
Lease liability
|
|
$
|
17,365
|
|
|
$
|
702
|
|
|
$
|
18,067
|
|
|
$
|
17,317
|
|
|
$
|
702
|
|
|
$
|
18,019
|
|
|
|
|
|
|
|
|
|
March 31, 2020 (1)
|
||||||||||
|
|
Date Acquired
|
|
Nominal Ownership %
|
|
|
|
Total Assets
|
|
Encumbered Assets
|
|
Total Liabilities
|
||||||
Entity
|
|
|
|
Location
|
|
|
|
|||||||||||
LW Redstone Company, LLC
|
|
3/23/2010
|
|
85%
|
|
Huntsville, Alabama
|
|
$
|
285,673
|
|
|
$
|
111,839
|
|
|
$
|
100,415
|
|
M Square Associates, LLC
|
|
6/26/2007
|
|
50%
|
|
College Park, Maryland
|
|
91,205
|
|
|
63,318
|
|
|
56,396
|
|
|||
Stevens Investors, LLC
|
|
8/11/2015
|
|
95%
|
|
Washington, DC
|
|
135,861
|
|
|
135,175
|
|
|
64,621
|
|
|||
|
|
|
|
|
|
|
|
$
|
512,739
|
|
|
$
|
310,332
|
|
|
$
|
221,432
|
|
(1)
|
Excludes amounts eliminated in consolidation.
|
|
|
Date Acquired
|
|
Nominal Ownership %
|
|
Number of Properties
|
|
Carrying Value of Investment (1)
|
|||||||
Entity
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
GI-COPT DC Partnership LLC
|
|
7/21/2016
|
|
50%
|
|
6
|
|
|
$
|
37,275
|
|
|
$
|
37,816
|
|
BREIT COPT DC JV LLC
|
|
6/20/2019
|
|
10%
|
|
9
|
|
|
13,945
|
|
|
14,133
|
|
||
|
|
|
|
|
|
15
|
|
|
$
|
51,220
|
|
|
$
|
51,949
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Notes receivable from the City of Huntsville
|
$
|
60,699
|
|
|
$
|
59,427
|
|
Other investing loans receivable
|
14,096
|
|
|
14,096
|
|
||
Amortized cost basis
|
74,795
|
|
|
73,523
|
|
||
Allowance for credit losses
|
(3,598
|
)
|
|
—
|
|
||
Investing receivables, net
|
$
|
71,197
|
|
|
$
|
73,523
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Lease incentives, net
|
$
|
29,026
|
|
|
$
|
28,433
|
|
Prepaid expenses
|
12,482
|
|
|
18,835
|
|
||
Furniture, fixtures and equipment, net
|
7,620
|
|
|
7,823
|
|
||
Construction contract costs in excess of billings, net
|
7,463
|
|
|
17,223
|
|
||
Non-real estate equity investments
|
6,714
|
|
|
6,705
|
|
||
Restricted cash
|
3,826
|
|
|
3,397
|
|
||
Deferred financing costs, net (1)
|
3,351
|
|
|
3,633
|
|
||
Deferred tax asset, net (2)
|
2,279
|
|
|
2,328
|
|
||
Other assets
|
5,375
|
|
|
4,639
|
|
||
Total for COPLP and subsidiaries
|
78,136
|
|
|
93,016
|
|
||
Marketable securities in deferred compensation plan
|
2,279
|
|
|
3,060
|
|
||
Total for COPT and subsidiaries
|
$
|
80,415
|
|
|
$
|
96,076
|
|
|
|
Carrying Value (1) as of
|
|
|
|
|
||||||
|
|
March 31,
2020 |
|
December 31,
2019 |
|
March 31, 2020
|
||||||
|
|
|
|
Stated Interest Rates
|
|
Scheduled Maturity
|
||||||
Mortgage and Other Secured Debt:
|
|
|
|
|
|
|
|
|
|
|
||
Fixed rate mortgage debt (2)
|
|
$
|
142,581
|
|
|
$
|
143,430
|
|
|
3.82% - 4.62% (3)
|
|
2023-2026
|
Variable rate secured debt (4)
|
|
100,003
|
|
|
68,055
|
|
|
LIBOR + 1.45% to 2.35% (5)
|
|
2020-2026
|
||
Total mortgage and other secured debt
|
|
242,584
|
|
|
211,485
|
|
|
|
|
|
||
Revolving Credit Facility (6)
|
|
242,000
|
|
|
177,000
|
|
|
LIBOR + 0.775% to 1.45% (7)
|
|
March 2023 (6)
|
||
Term Loan Facility (8)
|
|
397,863
|
|
|
248,706
|
|
|
LIBOR + 1.00% to 1.65% (9)
|
|
2022
|
||
Unsecured Senior Notes
|
|
|
|
|
|
|
|
|
||||
3.60%, $350,000 aggregate principal
|
|
348,544
|
|
|
348,431
|
|
|
3.60% (10)
|
|
May 2023
|
||
5.25%, $250,000 aggregate principal
|
|
247,785
|
|
|
247,652
|
|
|
5.25% (11)
|
|
February 2024
|
||
3.70%, $300,000 aggregate principal
|
|
299,454
|
|
|
299,324
|
|
|
3.70% (12)
|
|
June 2021
|
||
5.00%, $300,000 aggregate principal
|
|
297,605
|
|
|
297,503
|
|
|
5.00% (13)
|
|
July 2025
|
||
Unsecured note payable
|
|
1,004
|
|
|
1,038
|
|
|
0% (14)
|
|
May 2026
|
||
Total debt, net
|
|
$
|
2,076,839
|
|
|
$
|
1,831,139
|
|
|
|
|
|
(1)
|
The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $6.6 million as of March 31, 2020 and $5.8 million as of December 31, 2019.
|
(2)
|
Certain of the fixed rate mortgages carry interest rates that, upon assumption, were above or below market rates 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 $202,000 as of March 31, 2020 and $217,000 as of December 31, 2019.
|
(3)
|
The weighted average interest rate on our fixed rate mortgage debt was 4.16% as of March 31, 2020.
|
(4)
|
Includes a construction loan with $55.9 million in remaining borrowing capacity as of March 31, 2020.
|
(5)
|
The weighted average interest rate on our variable rate secured debt was 3.77% as of March 31, 2020.
|
(6)
|
The facility matures in March 2023, with the ability for us to further extend such maturity by two six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.075% of the total availability under the facility for each extension period. In connection with this facility, we also have the ability to borrow up to $500.0 million under new term loans from the facility’s lender group provided that there is no default under the facility and subject to the approval of the lenders.
|
(7)
|
The weighted average interest rate on the Revolving Credit Facility was 1.74% as of March 31, 2020.
|
(9)
|
The interest rate on this loan was 2.37% as of March 31, 2020.
|
(10)
|
The carrying value of these notes reflects an unamortized discount totaling $1.0 million as of March 31, 2020 and $1.1 million as of December 31, 2019. The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%.
|
(11)
|
The carrying value of these notes reflects an unamortized discount totaling $2.0 million as of March 31, 2020 and $2.1 million as of December 31, 2019. The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%.
|
(12)
|
The carrying value of these notes reflects an unamortized discount totaling $429,000 as of March 31, 2020 and $534,000 as of December 31, 2019. The effective interest rate under the notes, including amortization of the issuance costs, was 3.85%.
|
(14)
|
This note carries an interest rate that, upon assumption, was below market rates and it therefore was recorded at its fair value based on applicable effective interest rates. The carrying value of this note reflects an unamortized discount totaling $207,000 as of March 31, 2020 and $223,000 as of December 31, 2019.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Fixed-rate debt
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unsecured Senior Notes
|
$
|
1,193,388
|
|
|
$
|
1,223,259
|
|
|
$
|
1,192,910
|
|
|
$
|
1,227,441
|
|
Other fixed-rate debt
|
143,585
|
|
|
142,201
|
|
|
144,468
|
|
|
149,907
|
|
||||
Variable-rate debt
|
739,866
|
|
|
747,039
|
|
|
493,761
|
|
|
495,962
|
|
||||
|
$
|
2,076,839
|
|
|
$
|
2,112,499
|
|
|
$
|
1,831,139
|
|
|
$
|
1,873,310
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
||||||||
Notional Amount
|
|
Fixed Rate
|
|
Floating Rate Index
|
|
Effective Date
|
|
Expiration Date
|
|
March 31,
2020 |
|
December 31,
2019 |
||||||
$
|
12,336
|
|
(1)
|
1.390%
|
|
One-Month LIBOR
|
|
10/13/2015
|
|
10/1/2020
|
|
$
|
(57
|
)
|
|
$
|
23
|
|
100,000
|
|
|
1.901%
|
|
One-Month LIBOR
|
|
9/1/2016
|
|
12/1/2022
|
|
(4,297
|
)
|
|
(1,028
|
)
|
|||
100,000
|
|
|
1.905%
|
|
One-Month LIBOR
|
|
9/1/2016
|
|
12/1/2022
|
|
(4,307
|
)
|
|
(1,037
|
)
|
|||
50,000
|
|
|
1.908%
|
|
One-Month LIBOR
|
|
9/1/2016
|
|
12/1/2022
|
|
(2,157
|
)
|
|
(524
|
)
|
|||
11,200
|
|
(2)
|
1.678%
|
|
One-Month LIBOR
|
|
8/1/2019
|
|
8/1/2026
|
|
(778
|
)
|
|
(20
|
)
|
|||
150,000
|
|
|
0.498%
|
|
One-Month LIBOR
|
|
4/1/2020
|
|
12/31/2020
|
|
(125
|
)
|
|
—
|
|
|||
23,000
|
|
(3)
|
0.573%
|
|
One-Month LIBOR
|
|
4/1/2020
|
|
3/26/2025
|
|
(174
|
)
|
|
—
|
|
|||
75,000
|
|
|
3.176%
|
|
Three-Month LIBOR
|
|
6/30/2020
|
|
6/30/2030
|
|
(18,132
|
)
|
|
(8,640
|
)
|
|||
75,000
|
|
|
3.192%
|
|
Three-Month LIBOR
|
|
6/30/2020
|
|
6/30/2030
|
|
(18,249
|
)
|
|
(8,749
|
)
|
|||
75,000
|
|
|
2.744%
|
|
Three-Month LIBOR
|
|
6/30/2020
|
|
6/30/2030
|
|
(14,956
|
)
|
|
(5,684
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
$
|
(63,232
|
)
|
|
$
|
(25,659
|
)
|
(1)
|
The notional amount of this instrument is scheduled to amortize to $12.1 million.
|
(2)
|
The notional amount of this instrument is scheduled to amortize to $10.0 million.
|
(3)
|
The notional amount of this instrument is scheduled to amortize to $22.1 million.
|
|
|
|
|
Fair Value at
|
||||||
Derivatives
|
|
Balance Sheet Location
|
|
March 31,
2020 |
|
December 31, 2019
|
||||
Interest rate swaps designated as cash flow hedges
|
|
Prepaid expenses and other assets, net
|
|
$
|
—
|
|
|
$
|
23
|
|
Interest rate swaps designated as cash flow hedges
|
|
Interest rate derivatives (liabilities)
|
|
$
|
(63,232
|
)
|
|
$
|
(25,682
|
)
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Beginning balance
|
|
$
|
29,431
|
|
|
$
|
26,260
|
|
Distributions to noncontrolling interests
|
|
(11,578
|
)
|
|
(349
|
)
|
||
Net income attributable to noncontrolling interests
|
|
958
|
|
|
675
|
|
||
Adjustment to arrive at fair value of interests
|
|
4,101
|
|
|
799
|
|
||
Ending balance
|
|
$
|
22,912
|
|
|
$
|
27,385
|
|
|
Operating Property Segments
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
|
Defense/Information Technology Locations
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
Fort Meade/BW Corridor
|
|
Northern Virginia Defense/IT
|
|
Lackland Air Force Base
|
|
Navy Support Locations
|
|
Redstone Arsenal
|
|
Data Center Shells
|
|
Total Defense/IT Locations
|
|
Regional Office
|
|
Wholesale
Data Center |
|
Other
|
|
Total
|
||||||||||||||||||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenues from real estate operations
|
$
|
64,438
|
|
|
$
|
13,678
|
|
|
$
|
12,076
|
|
|
$
|
8,341
|
|
|
$
|
4,676
|
|
|
$
|
5,577
|
|
|
$
|
108,786
|
|
|
$
|
15,460
|
|
|
$
|
7,172
|
|
|
$
|
698
|
|
|
$
|
132,116
|
|
Property operating expenses
|
(21,222
|
)
|
|
(5,185
|
)
|
|
(6,795
|
)
|
|
(3,285
|
)
|
|
(1,847
|
)
|
|
(657
|
)
|
|
(38,991
|
)
|
|
(7,537
|
)
|
|
(3,233
|
)
|
|
(238
|
)
|
|
(49,999
|
)
|
|||||||||||
UJV NOI allocable to COPT
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,713
|
|
|
1,713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,713
|
|
|||||||||||
NOI from real estate operations
|
$
|
43,216
|
|
|
$
|
8,493
|
|
|
$
|
5,281
|
|
|
$
|
5,056
|
|
|
$
|
2,829
|
|
|
$
|
6,633
|
|
|
$
|
71,508
|
|
|
$
|
7,923
|
|
|
$
|
3,939
|
|
|
$
|
460
|
|
|
$
|
83,830
|
|
Additions to long-lived assets
|
$
|
7,675
|
|
|
$
|
2,691
|
|
|
$
|
—
|
|
|
$
|
1,758
|
|
|
$
|
170
|
|
|
$
|
—
|
|
|
$
|
12,294
|
|
|
$
|
3,357
|
|
|
$
|
878
|
|
|
$
|
65
|
|
|
$
|
16,594
|
|
Transfers from non-operating properties
|
$
|
538
|
|
|
$
|
256
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
1,136
|
|
|
$
|
56,232
|
|
|
$
|
58,177
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,177
|
|
Segment assets at March 31, 2020
|
$
|
1,275,601
|
|
|
$
|
395,108
|
|
|
$
|
145,363
|
|
|
$
|
183,054
|
|
|
$
|
138,797
|
|
|
$
|
334,102
|
|
|
$
|
2,472,025
|
|
|
$
|
390,352
|
|
|
$
|
200,891
|
|
|
$
|
3,677
|
|
|
$
|
3,066,945
|
|
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenues from real estate operations
|
$
|
62,683
|
|
|
$
|
14,831
|
|
|
$
|
11,561
|
|
|
$
|
8,155
|
|
|
$
|
3,939
|
|
|
$
|
7,354
|
|
|
$
|
108,523
|
|
|
$
|
14,833
|
|
|
$
|
7,871
|
|
|
$
|
763
|
|
|
$
|
131,990
|
|
Property operating expenses
|
(22,335
|
)
|
|
(5,292
|
)
|
|
(5,959
|
)
|
|
(3,404
|
)
|
|
(1,539
|
)
|
|
(353
|
)
|
|
(38,882
|
)
|
|
(7,416
|
)
|
|
(2,838
|
)
|
|
(309
|
)
|
|
(49,445
|
)
|
|||||||||||
UJV NOI allocable to COPT
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,219
|
|
|
1,219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,219
|
|
|||||||||||
NOI from real estate operations
|
$
|
40,348
|
|
|
$
|
9,539
|
|
|
$
|
5,602
|
|
|
$
|
4,751
|
|
|
$
|
2,400
|
|
|
$
|
8,220
|
|
|
$
|
70,860
|
|
|
$
|
7,417
|
|
|
$
|
5,033
|
|
|
$
|
454
|
|
|
$
|
83,764
|
|
Additions to long-lived assets
|
$
|
3,935
|
|
|
$
|
1,447
|
|
|
$
|
—
|
|
|
$
|
5,017
|
|
|
$
|
300
|
|
|
$
|
—
|
|
|
$
|
10,699
|
|
|
$
|
3,989
|
|
|
$
|
156
|
|
|
$
|
10
|
|
|
$
|
14,854
|
|
Transfers from non-operating properties
|
$
|
5,040
|
|
|
$
|
4,509
|
|
|
$
|
6,503
|
|
|
$
|
—
|
|
|
$
|
3,635
|
|
|
$
|
19,788
|
|
|
$
|
39,475
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,475
|
|
Segment assets at March 31, 2019
|
$
|
1,279,983
|
|
|
$
|
400,741
|
|
|
$
|
145,697
|
|
|
$
|
189,192
|
|
|
$
|
110,195
|
|
|
$
|
370,447
|
|
|
$
|
2,496,255
|
|
|
$
|
394,001
|
|
|
$
|
213,993
|
|
|
$
|
3,904
|
|
|
$
|
3,108,153
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Segment revenues from real estate operations
|
$
|
132,116
|
|
|
$
|
131,990
|
|
Construction contract and other service revenues
|
13,681
|
|
|
16,950
|
|
||
Total revenues
|
$
|
145,797
|
|
|
$
|
148,940
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
UJV NOI allocable to COPT
|
$
|
1,713
|
|
|
$
|
1,219
|
|
Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense
|
(1,270
|
)
|
|
(827
|
)
|
||
Add: Equity in loss of unconsolidated non-real estate entities
|
(2
|
)
|
|
(1
|
)
|
||
Equity in income of unconsolidated entities
|
$
|
441
|
|
|
$
|
391
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Construction contract and other service revenues
|
$
|
13,681
|
|
|
$
|
16,950
|
|
Construction contract and other service expenses
|
(13,121
|
)
|
|
(16,326
|
)
|
||
NOI from service operations
|
$
|
560
|
|
|
$
|
624
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
NOI from real estate operations
|
$
|
83,830
|
|
|
$
|
83,764
|
|
NOI from service operations
|
560
|
|
|
624
|
|
||
Interest and other income
|
1,205
|
|
|
2,286
|
|
||
Credit loss expense
|
(689
|
)
|
|
—
|
|
||
Gain on sales of real estate
|
5
|
|
|
—
|
|
||
Equity in income of unconsolidated entities
|
441
|
|
|
391
|
|
||
Income tax expense
|
(49
|
)
|
|
(194
|
)
|
||
Depreciation and other amortization associated with real estate operations
|
(32,596
|
)
|
|
(34,796
|
)
|
||
General, administrative and leasing expenses
|
(7,486
|
)
|
|
(8,751
|
)
|
||
Business development expenses and land carry costs
|
(1,118
|
)
|
|
(1,113
|
)
|
||
Interest expense
|
(16,840
|
)
|
|
(18,674
|
)
|
||
Less: UJV NOI allocable to COPT included in equity in income of unconsolidated entities
|
(1,713
|
)
|
|
(1,219
|
)
|
||
Net income
|
$
|
25,550
|
|
|
$
|
22,318
|
|
|
March 31,
2020 |
|
March 31,
2019 |
||||
Segment assets
|
$
|
3,066,945
|
|
|
$
|
3,108,153
|
|
Operating properties lease liabilities included in segment assets
|
17,365
|
|
|
16,342
|
|
||
Non-operating property assets
|
658,978
|
|
|
485,911
|
|
||
Other assets
|
311,169
|
|
|
165,453
|
|
||
Total COPT consolidated assets
|
$
|
4,054,457
|
|
|
$
|
3,775,859
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Construction contract revenue:
|
|
|
|
||||
Guaranteed maximum price
|
$
|
5,044
|
|
|
$
|
12,356
|
|
Firm fixed price
|
5,072
|
|
|
2,325
|
|
||
Cost-plus fee
|
3,309
|
|
|
2,060
|
|
||
Other
|
256
|
|
|
209
|
|
||
|
$
|
13,681
|
|
|
$
|
16,950
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Construction contract revenue:
|
|
|
|
||||
Construction
|
$
|
12,883
|
|
|
$
|
16,489
|
|
Design
|
542
|
|
|
252
|
|
||
Other
|
256
|
|
|
209
|
|
||
|
$
|
13,681
|
|
|
$
|
16,950
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Beginning balance
|
$
|
12,378
|
|
|
$
|
6,701
|
|
Ending balance
|
$
|
10,852
|
|
|
$
|
6,569
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Beginning balance
|
$
|
17,223
|
|
|
$
|
3,189
|
|
Ending balance
|
$
|
7,463
|
|
|
$
|
14,834
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Beginning balance
|
$
|
1,184
|
|
|
$
|
568
|
|
Ending balance
|
$
|
1,417
|
|
|
$
|
1,005
|
|
Portion of beginning balance recognized in revenue during period
|
$
|
646
|
|
|
$
|
439
|
|
Percentile Rank
|
|
Earned Awards Payout %
|
75th or greater
|
|
100% of PB-PIUs granted
|
50th (target)
|
|
50% of PB-PIUs granted
|
25th
|
|
25% of PB-PIUs granted
|
Below 25th
|
|
0% of PB-PIUs granted
|
•
|
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 common shares were converted; and (2) the effect of dilutive potential common shares outstanding during the period attributable to COPT’s forward equity sale agreements, redeemable noncontrolling interests and our 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 add to the denominator.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
|
|
||
Net income attributable to COPT
|
$
|
24,054
|
|
|
$
|
20,859
|
|
Income attributable to share-based compensation awards
|
(105
|
)
|
|
(86
|
)
|
||
Numerator for basic EPS on net income attributable to COPT common shareholders
|
23,949
|
|
|
20,773
|
|
||
Income attributable to share-based compensation awards
|
8
|
|
|
—
|
|
||
Numerator for diluted EPS on net income attributable to COPT common shareholders
|
$
|
23,957
|
|
|
$
|
20,773
|
|
Denominator (all weighted averages):
|
|
|
|
|
|
||
Denominator for basic EPS (common shares)
|
111,724
|
|
|
109,951
|
|
||
Dilutive effect of share-based compensation awards
|
239
|
|
|
267
|
|
||
Denominator for diluted EPS (common shares)
|
111,963
|
|
|
110,218
|
|
||
Basic EPS
|
$
|
0.21
|
|
|
$
|
0.19
|
|
Diluted EPS
|
$
|
0.21
|
|
|
$
|
0.19
|
|
|
Weighted Average Shares Excluded from Denominator
|
||||
|
For the Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
Conversion of common units
|
1,226
|
|
|
1,331
|
|
Conversion of redeemable noncontrolling interests
|
1,011
|
|
|
1,013
|
|
Conversion of Series I preferred units
|
176
|
|
|
176
|
|
•
|
weighted average shares related to COPT’s forward equity sale agreements for the three months ended March 31, 2019 of 1.5 million;
|
•
|
weighted average restricted shares and deferred share awards for the three months ended March 31, 2020 and 2019 of 440,000 and 463,000, respectively;
|
•
|
weighted average options for the three months ended March 31, 2019 of 30,000; and
|
•
|
weighted average unvested TB-PIUs for the three months ended March 31, 2020 and 2019 of 75,000 and 19,000, respectively.
|
•
|
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 COPT’s forward equity sale agreements, redeemable noncontrolling interests and our 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 add to the denominator.
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
|
|
||
Net income attributable to COPLP
|
$
|
24,418
|
|
|
$
|
21,281
|
|
Preferred unit distributions
|
(77
|
)
|
|
(165
|
)
|
||
Income attributable to share-based compensation awards
|
(121
|
)
|
|
(93
|
)
|
||
Numerator for basic and diluted EPU on net income attributable to COPLP common unitholders
|
$
|
24,220
|
|
|
$
|
21,023
|
|
Denominator (all weighted averages):
|
|
|
|
|
|
||
Denominator for basic EPU (common units)
|
112,950
|
|
|
111,282
|
|
||
Dilutive effect of share-based compensation awards
|
239
|
|
|
267
|
|
||
Denominator for diluted EPU (common units)
|
113,189
|
|
|
111,549
|
|
||
Basic EPU
|
$
|
0.21
|
|
|
$
|
0.19
|
|
Diluted EPU
|
$
|
0.21
|
|
|
$
|
0.19
|
|
|
Weighted Average Shares Excluded from Denominator
|
||||
|
For the Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
Conversion of redeemable noncontrolling interests
|
1,011
|
|
|
1,013
|
|
Conversion of Series I preferred units
|
176
|
|
|
176
|
|
•
|
weighted average shares related to COPT’s forward equity sale agreements for the three months ended March 31, 2019 of 1.5 million;
|
•
|
weighted average restricted units and deferred share awards for the three months ended March 31, 2020 and 2019 of 440,000 and 463,000, respectively;
|
•
|
weighted average options for the three months ended March 31, 2019 of 30,000; and
|
•
|
weighted average unvested TB-PIUs for the three months ended March 31, 2020 and 2019 of 75,000 and 19,000, respectively.
|
•
|
our tenants’ operations, which could adversely affect their ability, or willingness, to sustain their businesses and/or fulfill their lease obligations;
|
•
|
our ability to maintain occupancy in our properties and obtain new leases for unoccupied and new development space at favorable terms or at all;
|
•
|
access to debt and equity capital on attractive terms or at all. Severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our or our tenants’ ability to access capital necessary to fund operations, refinance debt or fund planned investments on a timely basis, and may adversely affect the valuation of financial assets and liabilities;
|
•
|
the supply of products or services from our and our tenants’ vendors that are needed for us and our tenants to operate effectively; and
|
•
|
our and our tenants’ ability to continue or complete planned development, including the potential for delays in the supply of materials or labor necessary for development.
|
•
|
finished the period with our office and data center shell portfolio 93.7% occupied and 94.9% leased;
|
•
|
placed into service 230,000 square feet in one newly-developed data center shell property that was 100.0% leased as of March 31, 2020; and
|
•
|
amended an existing term loan facility to increase the loan amount by $150.0 million and reduce the LIBOR interest rate spread on the facility. We used the resulting loan proceeds to repay borrowings under our Revolving Credit Facility that funded development costs.
|
•
|
how we expect to generate cash for short and long-term capital needs; and
|
•
|
our commitments and contingencies.
|
•
|
general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability and property values;
|
•
|
adverse changes in the real estate markets, including, among other things, increased competition with other companies;
|
•
|
risks associated with uncertainties regarding the impact of the COVID-19 pandemic on our business and national, regional and local economic conditions;
|
•
|
governmental actions and initiatives, including risks associated with the impact of a prolonged government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases and/or reduced or delayed demand for additional space by our strategic customers;
|
•
|
our ability to borrow on favorable terms;
|
•
|
risks of real estate acquisition and development activities, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that development or operating costs may be greater than anticipated;
|
•
|
risks of investing through joint venture structures, including risks that our joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with our objectives;
|
•
|
changes in our plans for properties or views of market economic conditions or failure to obtain development rights, either of which could result in recognition of significant impairment losses;
|
•
|
our ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships;
|
•
|
possible adverse changes in tax laws;
|
•
|
the dilutive effects of issuing additional common shares;
|
•
|
our ability to achieve projected results;
|
•
|
security breaches relating to cyber attacks, cyber intrusions or other factors; and
|
•
|
environmental requirements.
|
•
|
concluded that the economic disruption resulting from COVID-19 constituted a significant adverse change in the business climate that could affect the value of our Regional Office properties, which are dependent on commercial office tenants and could suffer increased vacancy as a result. Accordingly, we concluded that these circumstances constituted an indicator of impairment. We performed recovery analyses for each Regional Office property’s asset group and concluded that the carrying values of each asset group was recoverable from its respective estimated undiscounted future cash flows. As a result, no impairment loss was recognized; and
|
•
|
maintained operational service level at our properties, with our property-level building technicians and maintenance employees working on site (with personal protective equipment, social distancing and more frequent cleaning), while most of our corporate headquarters-based employees worked from home.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Occupancy rates at period end
|
|
|
|
|
|
||
Total
|
93.7
|
%
|
|
92.9
|
%
|
||
Defense/IT Locations:
|
|
|
|
||||
Fort Meade/BW Corridor
|
92.4
|
%
|
|
92.4
|
%
|
||
Northern Virginia Defense/IT
|
85.5
|
%
|
|
82.4
|
%
|
||
Lackland Air Force Base
|
100.0
|
%
|
|
100.0
|
%
|
||
Navy Support Locations
|
94.0
|
%
|
|
92.5
|
%
|
||
Redstone Arsenal
|
99.7
|
%
|
|
99.3
|
%
|
||
Data Center Shells
|
100.0
|
%
|
|
100.0
|
%
|
||
Total Defense/IT Locations
|
94.2
|
%
|
|
93.7
|
%
|
||
Regional Office
|
91.4
|
%
|
|
88.1
|
%
|
||
Other
|
64.6
|
%
|
|
73.0
|
%
|
||
Average contractual annual rental rate per square foot at period end (1)
|
$
|
31.42
|
|
|
$
|
31.28
|
|
(1)
|
Includes estimated expense reimbursements.
|
|
Rentable
Square Feet
|
|
Occupied
Square Feet
|
||
|
(in thousands)
|
||||
December 31, 2019
|
19,173
|
|
|
17,816
|
|
Vacated upon lease expiration (1)
|
—
|
|
|
(62
|
)
|
Occupancy for new leases (2)
|
—
|
|
|
180
|
|
Developed or redeveloped
|
230
|
|
|
230
|
|
Other changes
|
(25
|
)
|
|
(3
|
)
|
March 31, 2020
|
19,378
|
|
|
18,161
|
|
(1)
|
Includes lease terminations and space reductions occurring in connection with lease renewals.
|
(2)
|
Excludes occupancy of vacant square feet acquired or developed.
|
•
|
office and data center shell properties:
|
•
|
stably owned and 100% operational throughout the current and prior year reporting periods. We define these as changes from “Same Properties”;
|
•
|
developed or redeveloped and placed into service that were not 100% operational throughout the current and prior year reporting periods; and
|
•
|
disposed; and
|
•
|
our wholesale data center.
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||
Revenues from real estate operations
|
$
|
132,116
|
|
|
$
|
131,990
|
|
|
$
|
126
|
|
Construction contract and other service revenues
|
13,681
|
|
|
16,950
|
|
|
(3,269
|
)
|
|||
Total revenues
|
145,797
|
|
|
148,940
|
|
|
(3,143
|
)
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|||
Property operating expenses
|
49,999
|
|
|
49,445
|
|
|
554
|
|
|||
Depreciation and amortization associated with real estate operations
|
32,596
|
|
|
34,796
|
|
|
(2,200
|
)
|
|||
Construction contract and other service expenses
|
13,121
|
|
|
16,326
|
|
|
(3,205
|
)
|
|||
General, administrative and leasing expenses
|
7,486
|
|
|
8,751
|
|
|
(1,265
|
)
|
|||
Business development expenses and land carry costs
|
1,118
|
|
|
1,113
|
|
|
5
|
|
|||
Total operating expenses
|
104,320
|
|
|
110,431
|
|
|
(6,111
|
)
|
|||
Interest expense
|
(16,840
|
)
|
|
(18,674
|
)
|
|
1,834
|
|
|||
Interest and other income
|
1,205
|
|
|
2,286
|
|
|
(1,081
|
)
|
|||
Credit loss expense
|
(689
|
)
|
|
—
|
|
|
(689
|
)
|
|||
Gain on sales of real estate
|
5
|
|
|
—
|
|
|
5
|
|
|||
Equity in income of unconsolidated entities
|
441
|
|
|
391
|
|
|
50
|
|
|||
Income tax expense
|
(49
|
)
|
|
(194
|
)
|
|
145
|
|
|||
Net income
|
$
|
25,550
|
|
|
$
|
22,318
|
|
|
$
|
3,232
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Variance
|
||||||
|
(Dollars in thousands, except per square foot data)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Same Properties revenues
|
|
|
|
|
|
||||||
Lease revenue, excluding lease termination revenue
|
$
|
118,259
|
|
|
$
|
116,390
|
|
|
$
|
1,869
|
|
Lease termination revenue
|
85
|
|
|
521
|
|
|
(436
|
)
|
|||
Other property revenue
|
1,044
|
|
|
1,042
|
|
|
2
|
|
|||
Same Properties total revenues
|
119,388
|
|
|
117,953
|
|
|
1,435
|
|
|||
Developed and redeveloped properties placed in service
|
5,552
|
|
|
902
|
|
|
4,650
|
|
|||
Wholesale data center
|
7,172
|
|
|
7,871
|
|
|
(699
|
)
|
|||
Dispositions
|
—
|
|
|
4,375
|
|
|
(4,375
|
)
|
|||
Other
|
4
|
|
|
889
|
|
|
(885
|
)
|
|||
|
132,116
|
|
|
131,990
|
|
|
126
|
|
|||
Property operating expenses
|
|
|
|
|
|
||||||
Same Properties
|
(45,645
|
)
|
|
(46,165
|
)
|
|
520
|
|
|||
Developed and redeveloped properties placed in service
|
(1,115
|
)
|
|
(314
|
)
|
|
(801
|
)
|
|||
Wholesale data center
|
(3,233
|
)
|
|
(2,838
|
)
|
|
(395
|
)
|
|||
Dispositions
|
—
|
|
|
(138
|
)
|
|
138
|
|
|||
Other
|
(6
|
)
|
|
10
|
|
|
(16
|
)
|
|||
|
(49,999
|
)
|
|
(49,445
|
)
|
|
(554
|
)
|
|||
|
|
|
|
|
|
||||||
UJV NOI allocable to COPT
|
|
|
|
|
|
||||||
Same Properties
|
1,207
|
|
|
1,219
|
|
|
(12
|
)
|
|||
Retained interests in UJV formed in 2019
|
506
|
|
|
—
|
|
|
506
|
|
|||
|
1,713
|
|
|
1,219
|
|
|
494
|
|
|||
|
|
|
|
|
|
||||||
NOI from real estate operations
|
|
|
|
|
|
||||||
Same Properties
|
74,950
|
|
|
73,007
|
|
|
1,943
|
|
|||
Developed and redeveloped properties placed in service
|
4,437
|
|
|
588
|
|
|
3,849
|
|
|||
Wholesale data center
|
3,939
|
|
|
5,033
|
|
|
(1,094
|
)
|
|||
Dispositions, net of retained interests in UJV formed in 2019
|
506
|
|
|
4,237
|
|
|
(3,731
|
)
|
|||
Other
|
(2
|
)
|
|
899
|
|
|
(901
|
)
|
|||
|
$
|
83,830
|
|
|
$
|
83,764
|
|
|
$
|
66
|
|
|
|
|
|
|
|
||||||
Same Properties NOI from real estate operations by segment
|
|
|
|
|
|
||||||
Defense/IT Locations
|
$
|
66,566
|
|
|
$
|
65,179
|
|
|
$
|
1,387
|
|
Regional Office
|
7,923
|
|
|
7,417
|
|
|
506
|
|
|||
Other
|
461
|
|
|
411
|
|
|
50
|
|
|||
|
$
|
74,950
|
|
|
$
|
73,007
|
|
|
$
|
1,943
|
|
|
|
|
|
|
|
||||||
Same Properties rent statistics
|
|
|
|
|
|
||||||
Average occupancy rate
|
92.3
|
%
|
|
91.6
|
%
|
|
0.7
|
%
|
|||
Average straight-line rent per occupied square foot (1)
|
$
|
6.54
|
|
|
$
|
6.55
|
|
|
$
|
(0.01
|
)
|
(1)
|
Includes minimum base rents, net of abatements, and lease incentives on a straight-line basis for the periods set forth above.
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
|
Variance
|
||||||
|
|
(in thousands)
|
||||||||||
Construction contract and other service revenues
|
|
$
|
13,681
|
|
|
$
|
16,950
|
|
|
$
|
(3,269
|
)
|
Construction contract and other service expenses
|
|
(13,121
|
)
|
|
(16,326
|
)
|
|
3,205
|
|
|||
NOI from service operations
|
|
$
|
560
|
|
|
$
|
624
|
|
|
$
|
(64
|
)
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(Dollars and shares in thousands,
except per share data)
|
||||||
Net income
|
$
|
25,550
|
|
|
$
|
22,318
|
|
Real estate-related depreciation and amortization
|
32,596
|
|
|
34,796
|
|
||
Depreciation and amortization on UJV allocable to COPT
|
818
|
|
|
566
|
|
||
Gain on sales of real estate
|
(5
|
)
|
|
—
|
|
||
FFO
|
58,959
|
|
|
57,680
|
|
||
Noncontrolling interests-preferred units in the Operating Partnership
|
(77
|
)
|
|
(165
|
)
|
||
FFO allocable to other noncontrolling interests
|
(12,015
|
)
|
|
(971
|
)
|
||
Basic FFO allocable to share-based compensation awards
|
(193
|
)
|
|
(185
|
)
|
||
Basic FFO available to common share and common unit holders
|
46,674
|
|
|
56,359
|
|
||
Redeemable noncontrolling interests
|
32
|
|
|
381
|
|
||
Diluted FFO available to common share and common unit holders
|
46,706
|
|
|
56,740
|
|
||
Executive transition costs
|
—
|
|
|
4
|
|
||
Demolition costs on redevelopment and nonrecurring improvements
|
43
|
|
|
44
|
|
||
Dilutive preferred units in the Operating Partnership
|
77
|
|
|
—
|
|
||
FFO allocation to other noncontrolling interests resulting from capital event
|
11,090
|
|
|
—
|
|
||
Diluted FFO comparability adjustments allocable to share-based compensation awards
|
(50
|
)
|
|
—
|
|
||
Diluted FFO available to common share and common unit holders, as adjusted for comparability
|
$
|
57,866
|
|
|
$
|
56,788
|
|
|
|
|
|
||||
Weighted average common shares
|
111,724
|
|
|
109,951
|
|
||
Conversion of weighted average common units
|
1,226
|
|
|
1,331
|
|
||
Weighted average common shares/units - Basic FFO per share
|
112,950
|
|
|
111,282
|
|
||
Dilutive effect of share-based compensation awards
|
239
|
|
|
302
|
|
||
Redeemable noncontrolling interests
|
110
|
|
|
1,013
|
|
||
Weighted average common shares/units - Diluted FFO per share
|
113,299
|
|
|
112,597
|
|
||
Dilutive convertible preferred units
|
176
|
|
|
—
|
|
||
Weighted average common shares/units - Diluted FFO per share, as adjusted for comparability
|
113,475
|
|
|
112,597
|
|
||
|
|
|
|
||||
Diluted FFO per share
|
$
|
0.41
|
|
|
$
|
0.50
|
|
Diluted FFO per share, as adjusted for comparability
|
$
|
0.51
|
|
|
$
|
0.50
|
|
|
|
|
|
||||
Denominator for diluted EPS
|
111,963
|
|
|
110,218
|
|
||
Weighted average common units
|
1,226
|
|
|
1,331
|
|
||
Redeemable noncontrolling interests
|
110
|
|
|
1,013
|
|
||
Anti-dilutive EPS effect of share-based compensation awards
|
—
|
|
|
35
|
|
||
Denominator for diluted FFO per share
|
113,299
|
|
|
112,597
|
|
||
Dilutive convertible preferred units
|
176
|
|
|
—
|
|
||
Denominator for diluted FFO per share, as adjusted for comparability
|
113,475
|
|
|
112,597
|
|
Development and redevelopment
|
$
|
95,365
|
|
Tenant improvements on operating properties (1)
|
9,486
|
|
|
Capital improvements on operating properties
|
2,475
|
|
|
|
$
|
107,326
|
|
•
|
net proceeds from debt borrowings of $245.6 million; offset in part by
|
•
|
dividends and/or distributions to equity holders of $31.2 million.
|
•
|
net proceeds from debt borrowings of $51.3 million; and
|
•
|
net proceeds from the issuance of common shares (or units) of $46.4 million; offset in part by
|
•
|
dividends and/or distributions to equity holders of $30.8 million.
|
|
For the Periods Ending December 31,
|
|
|
||||||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Contractual obligations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Debt (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balloon payments due upon maturity
|
$
|
12,132
|
|
|
$
|
300,000
|
|
|
$
|
456,162
|
|
|
$
|
655,578
|
|
|
$
|
277,649
|
|
|
$
|
367,723
|
|
|
$
|
2,069,244
|
|
Scheduled principal payments (3)
|
3,002
|
|
|
3,955
|
|
|
4,498
|
|
|
3,553
|
|
|
2,334
|
|
|
2,294
|
|
|
19,636
|
|
|||||||
Interest on debt (3)(4)
|
56,607
|
|
|
68,503
|
|
|
62,560
|
|
|
38,021
|
|
|
19,243
|
|
|
10,190
|
|
|
255,124
|
|
|||||||
Development and redevelopment obligations (5)(6)
|
141,256
|
|
|
18,398
|
|
|
501
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
160,155
|
|
|||||||
Third-party construction cost obligations (6)(7)
|
11,231
|
|
|
2,309
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,540
|
|
|||||||
Tenant and other building improvements (3)(6)
|
22,761
|
|
|
26,381
|
|
|
8,757
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,899
|
|
|||||||
Property finance leases (principal and interest) (3)
|
674
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
702
|
|
|||||||
Property operating leases (3)
|
826
|
|
|
1,138
|
|
|
1,162
|
|
|
1,167
|
|
|
1,173
|
|
|
100,609
|
|
|
106,075
|
|
|||||||
Total contractual cash obligations
|
$
|
248,489
|
|
|
$
|
420,698
|
|
|
$
|
533,654
|
|
|
$
|
698,319
|
|
|
$
|
300,399
|
|
|
$
|
480,816
|
|
|
$
|
2,682,375
|
|
(1)
|
The contractual obligations set forth in this table exclude contracts for property operations and certain other contracts entered into in the normal course of business. Also excluded are accruals and payables incurred and interest rate derivative liabilities, which are reflected in our reported liabilities (although debt and lease liabilities are included on the table).
|
(2)
|
Represents scheduled principal amortization payments and maturities only and therefore excludes net debt discounts and deferred financing costs of $12.0 million. As of March 31, 2020, maturities included $242.0 million in 2023 that may be extended to 2024, subject to certain conditions.
|
(3)
|
We expect to pay these items using cash flow from operations.
|
(4)
|
Represents interest costs for our outstanding debt as of March 31, 2020 for the terms of such debt. For variable rate debt, the amounts reflected above used March 31, 2020 interest rates on variable rate debt in computing interest costs for the terms of such debt. We expect to pay these items using cash flow from operations.
|
(5)
|
Represents contractual obligations pertaining to new development and redevelopment activities.
|
(6)
|
Due to the long-term nature of certain development and construction contracts and leases included in these lines, the amounts reported in the table represent our estimate of the timing for the related obligations being payable.
|
(7)
|
Represents contractual obligations pertaining to projects for which we are acting as construction manager on behalf of unrelated parties who are our clients. We expect to be reimbursed in full for these costs by our clients.
|
|
For the Periods Ending December 31,
|
|
|
||||||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate debt (1)
|
$
|
2,799
|
|
|
$
|
303,875
|
|
|
$
|
4,033
|
|
|
$
|
416,590
|
|
|
$
|
279,443
|
|
|
$
|
337,442
|
|
|
$
|
1,344,182
|
|
Weighted average interest rate
|
3.96
|
%
|
|
3.70
|
%
|
|
3.98
|
%
|
|
3.70
|
%
|
|
5.16
|
%
|
|
4.87
|
%
|
|
4.30
|
%
|
|||||||
Variable rate debt (2)
|
$
|
12,336
|
|
|
$
|
80
|
|
|
$
|
456,627
|
|
|
$
|
242,540
|
|
|
$
|
540
|
|
|
$
|
32,575
|
|
|
$
|
744,698
|
|
Weighted average interest rate (3)
|
3.43
|
%
|
|
3.03
|
%
|
|
2.57
|
%
|
|
1.75
|
%
|
|
3.46
|
%
|
|
3.55
|
%
|
|
2.36
|
%
|
(1)
|
Represents principal maturities only and therefore excludes net discounts and deferred financing costs of $12.0 million.
|
(2)
|
As of March 31, 2020, maturities included $242.0 million in 2023 that may be extended to 2024, subject to certain conditions.
|
(3)
|
The amounts reflected above used interest rates as of March 31, 2020 for variable rate debt.
|
•
|
our tenants’ operations, which could adversely affect their ability, or willingness, to sustain their businesses and/or fulfill their lease obligations;
|
•
|
our ability to maintain occupancy in our properties and obtain new leases for unoccupied and new development space at favorable terms or at all;
|
•
|
access to debt and equity capital on attractive terms or at all. Severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our or our tenants’ ability to access capital necessary to fund operations, refinance debt or fund planned investments on a timely basis, and may adversely affect the valuation of financial assets and liabilities;
|
•
|
the supply of products or services from our and our tenants’ vendors that are needed for us and our tenants to operate effectively; and
|
•
|
our and our tenants’ ability to continue or complete planned development, including the potential for delays in the supply of materials or labor necessary for development.
|
(a)
|
During the three months ended March 31, 2020, 12,009 of COPLP’s common units were exchanged for 12,009 COPT common shares in accordance with COPLP’s Third Amended and Restated Limited Partnership Agreement, as amended. The issuance of these common shares was effected in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document (filed herewith).
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document (filed herewith).
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
|
|
|
|
101.LAB
|
|
Inline XBRL Extension Labels Linkbase (filed herewith).
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
CORPORATE OFFICE PROPERTIES TRUST
|
|
CORPORATE OFFICE PROPERTIES, L.P.
|
|
|
|
By: Corporate Office Properties Trust,
|
|
|
|
its General Partner
|
|
|
|
|
|
/s/ Stephen E. Budorick
|
|
/s/ Stephen E. Budorick
|
|
Stephen E. Budorick
|
|
Stephen E. Budorick
|
|
President and Chief Executive Officer
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
/s/ Anthony Mifsud
|
|
/s/ Anthony Mifsud
|
|
Anthony Mifsud
|
|
Anthony Mifsud
|
|
Executive Vice President and Chief Financial Officer
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Dated:
|
May 8, 2020
|
Dated:
|
May 8, 2020
|
1 Year Corporate Office Propert... Chart |
1 Month Corporate Office Propert... Chart |
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