Corporate Office Properties Trust CEO Stephen Budorick

COLUMBIA, MD–Development is now the financial backbone for Corporate Office Properties Trust. Indeed, the REIT does not plan to make any acquisitions this year; nor did it make any last year.

In its newly-released financials for the fourth quarter of 2016 and the full year, COPT reports that in Q4 it placed 155,000 square feet of development into service that was fully leased by the end of the year. During 2016 it placed 700,000 square feet into service that was 93% leased by year's end.

The REIT has $41 million of future annual cash NOI embedded in 13 development projects — $19 million of which is contractual. Spec development is in the plans as well, albeit not immediately, as this chart shows.

Finally, its shadow development pipeline has between 700,000‒1.1 million square feet of mostly build-to-suit opportunities throughout our portfolio.

And if the numbers don't convince, the REIT's own words should.

As we begin 2017, we have completed our management restructuring, including a new COO, and are allocating more resources into business development to capitalize on our growing pipeline of low-risk development opportunities.

The next hire COPT will hopefully announce will be someone to oversee build-to-suit development, a role held by the former president Wayne Lingafelter. COPT and Lingafelter entered into a separation agreement in March 2016.

An analyst asked about this vacancy during the REIT's last earnings call in October. An update might be coming in today's call, especially since COPT has brought on board its new COO since the subject was last raised. COPT directed GlobeSt.com to the SEC filing on the separation but was otherwise unable to respond with more details.

This is what CEO Steve Budorick has to say when asked last year.

So we are recruiting that. We have a very solid team that remains with the Company. Anthony and I are co-managing and coordinating their activities currently. Our new COO will be empowered to oversee that activity when he comes on board. And after we on-board the COO, we will finish recruiting for a replacement.

Finally, its shadow development pipeline has between 700,000‒1.1 million square feet of mostly build-to-suit opportunities throughout our portfolio.

And if the numbers don't convince, the REIT's own words should.

As we begin 2017, we have completed our management restructuring, including a new COO, and are allocating more resources into business development to capitalize on our growing pipeline of low-risk development opportunities.

This is what CEO Steve Budorick has to say when asked last year.

So we are recruiting that. We have a very solid team that remains with the Company. Anthony and I are co-managing and coordinating their activities currently. Our new COO will be empowered to oversee that activity when he comes on board. And after we on-board the COO, we will finish recruiting for a replacement.

Instant Insights /

So Who Is Heading Up Build-to-Suit Development at COPT?

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