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COLUMBIA, MD-Corporate Office Properties has teamed up with Opportunity Invest LLC in a joint venture that will focus on acquiring warehouse properties predominantly located in the Greater Washington, DC area for redevelopment into class A office properties The joint venture, COPT Opportunity Invest I LLC, will spend up to $300 million on purchases, two of which have already closed.

In establishing the joint venture, COPT made an initial investment of $900,000 and will have ownership of an 80% to 93% interest in the properties acquired by COPT Opportunity. Opportunity Invest made an initial contribution of $100,000 for the JV's formation.

"This joint venture with Opportunity Invest will allow the company to invest in redevelopment properties that we would typically not have an opportunity to own," COPT president and CEO Randall M. Griffin says. "We believe there is demand for this product type and price point in our markets, which further solidifies our strong market position."

COPT Opportunity's first purchase was a 140,000-sf Herndon, VA property consisting of a 61,000-sf office structure attached to a 79,000-sf warehouse. The $12-million acquisition involved a sale-and-partial leaseback arrangement in which seller and tenant Hubbell Inc. will maintain its headquarters in 78,000 sf of space for a five-year term. The joint venture is planning to spend $10 million to convert the existing warehouse into an office facility and to erect a new 55,000-sf condominium warehouse for lease or purchase.

COPT Opportunity has also acquired a 472,000-sf warehouse in the Baltimore Commons Business Park in Hanover for $18.8 million. The 19-acre property, which had been the Michelin North America Inc. distribution center, will be transformed into a 325,000-sf office facility divided into two structures. COPT Opportunity expects the transformation and lease-up will cost an estimated $33.6 million. Redevelopment and lease-up of the Herndon and Hanover properties are on target for completion in two years and two-and-one-half years, respectively.

Instant Insights /

New JV To Make $300M in Warehouse Purchases and Conversions

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