COLUMBIA, MD-When an office/flex building in Silver Spring, MD traded last month for $21.3 million, the industry took note: there are relatively few such assets in the submarket and it is even rarer that they trade. However the sale represented more than just an offbeat transaction—the seller was Corporate Office Properties Trust and the 228,179-square foot building, located at 11800 Tech Rd., was part of its non-core portfolio that it is selling off in a strategic plan.
For the first half of the year, the Columbia, MD-based REIT has sold a total of $138.2 million worth of properties under its Strategic Allocation Plan, which it first announced in April 2011. Its 2011 sales include adjacent land to the properties, which aggregate some 776,500 square feet. These buildings were 70.5% leased at the time of sale, and delivered proceeds of $115.1 million.
Since the plan’s launch, COPT has sold $214.8 million of properties and adjacent land totaling approximately 1.7 million operational square feet. It has realized net proceeds of $184.6 million. The properties represent 21.4% of COPT's total leases but only 7.6% of its consolidated operating square feet in place at March 31, 2012.
COPT, as evidenced by its performance last year, clearly has experienced its share of struggles after the financial crash and recession. Hence the strategic plan: one of its goals is to shed assets that are more management-intensive due to their smaller average tenant size, according to a prepared statement released by president and CEO Roger A. Waesche, Jr. earlier this year. “We’re also improving our balance-sheet flexibility, since we’ve realized significant net proceeds to date, $38 million of which was received in the first quarter from non-revenue generating properties.”
Meanwhile, the REIT is concentrating on other ways of shoring up its balance sheet—namely, by increasing its capital. Last month COPT reaped approximately $166 million from a public offering of 6.9 million preferred shares.
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