COLUMBIA, MD-Corporate Office Properties Trust [COPT] reported higher funds from operations and a solid second quarter despite a sluggish economy that is taking its toll on other office REITs, seemingly proving the forecasts of industry observers who have said the company would do well in the economic downturn because of its concentration of government-oriented tenants. In particular, analysts at Milwaukee-based Robert W. Baird & Co. said the REIT’s latest results surpassed their expectations.

COPT’s management team July 29 reported a 7% increase in diluted FFO to $34.2 million and 61 cents in the quarter ending June30, up from $31.8 million and 57 cents per share in the same quarter last year. COPT’s results contrast with those of other office REITs, like Los Angeles-based Maguire Properties and Toronto-based Brookfield Properties Trust [see related story on this page of]. Maguire reported a loss of 110.6 million for the latest quarter, and Brookfield reported a sharp slide in FFO.

The story behind COPT’s numbers is the stability and reliability of government tenants, according to Baird analysts Christopher R. Lucas, Avi Lerner and David S. Nebinski. They say, in part, that COPT is prospering in these uncertain times because it is the “landlord of choice for the federal government and its contractors” for certain markets.

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