Corporate Office Properties Trust (COPT)

COPT focuses on environmentally sensitive and sustainable office parks as a key differentiator in its field of commercial development and construction, Linda Seid Frembes learnsAccording to the US Census Bureau, Americans are spending more than 100 hours per year commuting to and from work, and the nationÔÇÖs longest commutes are in urban centers like New York City, Los Angeles and Boston. The trend toward suburban office space in urban submarkets has risen over the last decade, partly to alleviate the frustration of urban commuters. Founded in 1988, Corporate Office Properties Trust (COPT) is a real estate investment trust that acquires, develops, manages and leases suburban office buildings to government agencies and defense contractors, as well as industrial and commercial companies.In addition to development and construction, COPT also provides comprehensive tenant and property management services under its Property Management Services division. COPT Property Management Services focuses on commercial office and corporate facilities, principally within its own portfolio.At its founding, the company was based in Philadelphia, but it is currently based in Columbia, Maryland, after a 1998 merger with Constellation Real Estate, a subsidiary of Baltimore Gas and Electric. Today, COPT owns and operates over 200 properties in Colorado, Maryland, Virginia, Texas, New Jersey and Pennsylvania. Currently there are more than 20 properties in development in the markets of Washington, DC, Colorado Springs, Colorado, and San Antonio, Texas.ÔÇ£Our areas of growth are tenant-centric and often tenant-directed,ÔÇØ says Dwight Taylor, president of development and construction services for COPT. Taylor guides the development and construction activity and identifies new growth opportunities for the company. ÔÇ£Strategically, we concentrate our assets around key submarkets and growth drivers such as government agencies. The challenge is to find these drivers and build around them.ÔÇØTaylor notes that much of the companyÔÇÖs growth outside the greater Washington, DC, area is due to tenant-driven projects such as those in Colorado and Texas. ÔÇ£Our principal focus is building on our relationships, particularly within the government sector, but we donÔÇÖt ignore commercial business opportunities either,ÔÇØ he adds.As of June 30, 2008, the company owned 253 office and data properties totaling 19.1 million rentable square feet, which includes 19 properties totaling 847,000 square feet held through joint ventures. COPT uses its specialty focus on multi-building, technically sophisticated, environmentally sensitive and sustainable office parks as a key differentiator in the broad field of commercial development and construction. While COPTÔÇÖs main business of building suburban office space may seem mundane, it is anything but dull. Taylor says that challenges include the lack of available land, rigid local and state regulations, environmental and community concerns, and fluctuating market conditions. The state of the economy has also created a push on tax levies and fees from municipalities to make up for shortfalls in their own budgets. COPT must constantly educate communities on the net benefits of new commercial development.ÔÇ£We are well capitalized but clearly dependent on market conditions,ÔÇØ says Taylor. ÔÇ£Our projects take a long time between start and finish, and many things can happen during that time.ÔÇØ He notes that a project starting with unzoned raw ground can be three to five years to occupancy and developing on entitled land can take from 18 months to two years.TaylorÔÇÖs barometer on the health of the market centers on occupancy and vacancy numbers, as well as building starts. ÔÇ£We are careful to minimize our vacant space, and not to be so overconfident that we can lease when others cannot,ÔÇØ he says. This is especially true in todayÔÇÖs market, where the office vacancy rate rose to its highest level in two years, according to real estate research firm Reis, Inc.With fierce competition in commercial real estate, especially in a down market, COPT focuses on building great relationships with its builders, contractors, and tenants to achieve and maintain its success. The company also practices forethought in adopting trends like green building practices and certifications such as the Leadership in Energy and Environmental Design (LEED) from the US Green Building Council. Approximately five years ago, COPT made a decision that all construction projects going forward would be built to LEED Silver and above. ÔÇ£We are responsible developers who care about the environment. Back then we recognized that the program would eventually gain momentum and be important in the future,ÔÇØ says Taylor. ÔÇ£Everyone wins if we are stewards of the environment.ÔÇØThe company was recognized in 2005 by the National Association of Industrial and Office Properties (NAIOP), an organization representing commercial real estate executives engaged in industrial, office and mixed-use development. COPT was named its first national Green Development award winner for buildings in the National Business Park, Annapolis Junction, Maryland. At the time of the award, COPT president Randall M. Griffin said: ÔÇ£We are truly honored that our peers in the industry and the US Green Building Council recognize our efforts in this important area. Green development practices are vital to our environment and, as our experience in the field shows, the result is both socially responsible and profitable.ÔÇØThe company currently has 32 buildings either certified or registered for certification, three of which are Gold. In addition, twelve COPT employees also hold the LEED Accredited Professional (LEED-AP) designation, which shows they have demonstrated a thorough understanding of green building practices and principles as well as familiarity with LEED requirements. Also in 2005, the Washington Post named COPT one of the ÔÇ£Top 125 CompaniesÔÇØ in the Washington, DC, area.In 2007 COPT took home the customer service award in the large owner category in the national CEL & Associates, Inc. survey conducted each year with over two million tenants. This was the fourth year in a row that COPT has won this award. ÔÇ£ItÔÇÖs all about customer service and building relationships,ÔÇØ says Taylor.┬á