COPT Completes Exit from Colorado Springs and Resolves $146.5 Million Secured Loan

  COPT Completes Exit from Colorado Springs and Resolves $146.5 Million
  Secured Loan

Business Wire

COLUMBIA, Md. -- December 27, 2013

Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC)
announced that it completed the transfer of 14 operating properties in
satisfaction of $146.5 million of secured indebtedness. In total, the
properties contained 1.0 million square feet and were 73% occupied. Nine of
the properties are located in Linthicum, MD, and five are in Colorado Springs,
CO.

Combined with the Company’s prior disposition of 15 operating properties in
Colorado (see press release dated December 13, 2013), COPT has completed its
strategic exit from the Colorado Springs market. Together, the 20 Colorado
Springs assets totaled 1.6 million square feet and were disposed of for a
total of $177 million.

NAREIT FFOPS Guidance for 2013 Revised Upward

In the fourth quarter of 2013 the Company expects to recognize a non-cash
accounting gain estimated to be approximately $67 million (or $0.74 per
diluted share), representing the difference between the face value of the
$146.5 million secured debt over the book value of the properties at the date
of the transfer. This gain affects the Company’s previously issued fourth
quarter and full year 2013 FFO per share (“FFOPS”), per NAREIT, and earnings
per share (“EPS”), but not its FFOPS, as adjusted for comparability.


                                Quarter Ending         Year Ending
                                 December 31, 2013       December 31, 2013
                                 Low        High        Low        High
                                                                     
EPS                              $ 0.88      $ 0.90      $ 0.73      $ 0.75
Real estate depreciation and       0.33        0.33        1.31        1.31
amortization
Impairments and exit costs on
previously depreciated            -         -         0.35      0.35  
properties
                                                                     
FFOPS, NAREIT definition           1.21        1.23        2.39        2.41
                                                                     
Net gains on early                 (0.74 )     (0.74 )     (0.43 )     (0.43 )
extinguishment of debt
Gains on sales of                  -           -           (0.03 )     (0.03 )
non-operating properties
Issuance costs of redeemed        -         -         0.03      0.03  
preferred shares
                                                                     
FFOPS, as adjusted for           $ 0.47     $ 0.49     $ 1.96     $ 1.98  
comparability


Accordingly, management is increasing its previous guidance for the fourth
quarter and full year 2013 FFOPS, per NAREIT, from prior ranges of between
$0.47–$0.49 and $1.65–$1.67, respectively, to new ranges of between
$1.21–$1.23 and $2.39–$2.41. Management is affirming its previous guidance for
the fourth quarter and full year 2013 FFOPS, as adjusted for comparability. A
reconciliation of projected diluted EPS to projected FFOPS for the quarter
ending and the year ending December 31, 2013 is provided in the table above.

Company Information

COPT is an office REIT that focuses primarily on serving the specialized
requirements of U.S. Government agencies and defense contractors, most of
which are engaged in defense information technology and national
security-related activities. As of September 30, 2013, COPT derived 64% of its
annualized revenue from its strategic tenant niche properties and 21% from its
regional office properties. The Company generally acquires, develops, manages
and leases office and data center properties concentrated in large office
parks primarily located near knowledge-based government demand drivers and/or
in targeted markets or submarkets in the Greater Washington, DC/Baltimore
region. As of September 30, 2013, the Company’s consolidated portfolio
consisted of 210 office properties totaling 19.2  million rentable square
feet. COPT is an S&P MidCap 400 company.

Forward-Looking Information

This press release may contain “forward-looking” statements, as defined in
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, that are based on the Company’s current expectations,
estimates and projections about future events and financial trends affecting
the Company. Forward-looking statements can be identified by the use of words
such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,”
“estimate,” “plan” or other comparable terminology. Forward-looking statements
are inherently subject to risks and uncertainties, many of which the Company
cannot predict with accuracy and some of which the Company might not even
anticipate. Accordingly, the Company can give no assurance that these
expectations, estimates and projections will be achieved. Future events and
actual results may differ materially from those discussed in the
forward-looking statements.

Important factors that may affect these expectations, estimates, and
projections include, but are not limited to:

  *general economic and business conditions, which will, among other things,
    affect office property and data center demand and rents, tenant
    creditworthiness, interest rates, financing availability and property
    values;
  *adverse changes in the real estate markets including, among other things,
    increased competition with other companies;
  *governmental actions and initiatives, including risks associated with the
    impact of a government shutdown or budgetary reductions or impasses, such
    as a reduction in rental revenues, non-renewal of leases, and/or a
    curtailment of demand for additional space by the Company's strategic
    customers;
  *the Company’s ability to borrow on favorable terms;
  *risks of real estate acquisition and development activities, including,
    among other things, risks that development projects may not be completed
    on schedule, that tenants may not take occupancy or pay rent or that
    development or operating costs may be greater than anticipated;
  *the Company’s ability to sell properties included in its Strategic
    Reallocation Plan;
  *risks of investing through joint venture structures, including risks that
    the Company’s joint venture partners may not fulfill their financial
    obligations as investors or may take actions that are inconsistent with
    the Company’s objectives;
  *changes in the Company’s plans for properties or views of market economic
    conditions or failure to obtain development rights, either of which could
    result in recognition of significant impairment losses;
  *the Company’s ability to satisfy and operate effectively under Federal
    income tax rules relating to real estate investment trusts and
    partnerships;
  *the Company's ability to achieve projected results;
  *the dilutive effects of issuing additional common shares; and
  *environmental requirements.

The Company undertakes no obligation to update or supplement any
forward-looking statements. For further information, please refer to the
Company’s filings with the Securities and Exchange Commission, particularly
the section entitled “Risk Factors” in Item 1A of the Company’s Annual Report
on Form 10-K for the year ended December 31, 2012.

Contact:

Corporate Office Properties Trust
IR Contacts:
Stephanie Krewson,443-285-5453
stephanie.krewson@copt.com
or
Michelle Layne,443-285-5452
michelle.layne@copt.com
 
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