The portfolio totals 2.4 million sf. It includes land parcels that total 187 acres, according to a SEC filing by COPT. The bulk of the property--36 operating properties, totaling 1.6 million sf, and 175 acres of land parcels--is located in the White Marsh submarket of North Baltimore County. The remaining assets are in other North Baltimore submarkets and in the Baltimore/Washington Corridor. The transaction is expected to be completed in January 2007. The deal has already been approved by COPT's board of trustees, according to the filing.
Once the deal is complete, COPT will be the largest owner of office properties in White Marsh, which is some 18 miles from the US Army base Aberdeen Proving Ground. According to the filing, COPT is expecting to leverage Aberdeen's proximity for existing and future defense industry tenants. The deal also gives COPT an additional two million sf of developable space.
COPT is financing the purchase by issuing $173.8 million in preferred and common shares. It is assuming existing mortgage loans of approximately $38.1 million, with an average interest rate of 6.1% as well as an existing unsecured loan of $106.1 million, with a variable interest rate of Libor plus 1.2% to 1.6%, which the company expects to repay after closing using borrowings under its revolving credit facility.
Outside of its development activities, many of which have been concentrated in Maryland for the past year. COPT has also been focused on leasing up various holdings when the opportunity arose.
One of its last major portfolio trades occurred this time last year, again in the Baltimore area, when COPT closed on seven buildings totaling about 705,000 sf in Hunt Valley and 14 office properties totaling 402,000 sf in Woodlawn. The 21-asset trade was valued at $124.5 million or $112.00 per sf. At the time Randall Griffin, president and CEO, said in a statement that among the portfolio's benefits was a strategic opportunity to expand in Baltimore County, "given the close proximity to our existing assets where we have a property management team in place."
He went on to say, "We continue to look for acquisitions where we can buy assets below replacement cost and create value over time through additional leasing and property management."
COPT and Nottingham Properties were unable to return calls in time for deadline.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
