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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended March 31,June 30, 1998
------------------------------------------------
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-20047
Corporate Office Properties Trust
(Exact name of registrant as specified in its charter)
Maryland 23-2947217
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Logan Square, Suite 1105, Philadelphia, PA 19103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 567-1800
----------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common shares of beneficial interest, .01 par value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. /X/[X] Yes / /[ ] No
At May 7,On August 12, 1998, 9,771,083 shares of the Company's Common Shares of
Beneficial Interest, $.01$0.01 par value, were outstanding.
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Table of Contents
Form 10-Q
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PAGE
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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements:
Consolidated Balance Sheets as of June 30, 1998 (unaudited) and
December 31, 1997 and March 31,
1998 (unaudited) 3
Consolidated Statements of Operations for the three and six
months ended March 31,June 30, 1998 and 1997 and(unaudited) 4
1998 (unaudited)
Consolidated Statements of Cash Flows for the threesix months ended
March 31,June 30, 1998 and 1997 and(unaudited) 5
1998 (unaudited)
Notes to Consolidated Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 910
PART II: OTHER INFORMATION
Item 1: Legal Proceedings 1214
Item 2: Changes in Securities 1214
Item 3: Defaults Upon Senior Securities 1214
Item 4: Submission of Matters to a Vote of Security Holders 1214
Item 5: Other Information 1314
Item 6: Exhibits and Reports on Form 8-K 1314
SIGNATURES 1517
2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Corporate Office Properties Trust
Consolidated Balance Sheet
(Dollars in thousands, except share and per share data)
June 30, December 31,
March 31,1998 1997
1998
-------------------- ---------------------
Assets
(unaudited)
Assets:Assets
Land $ 38,76459,169 $ 38,764
Buildings and improvements 152,945234,717 152,945
Furniture, fixtures and equipment 265 140 222
Less accumulated depreciation (5,479) (3,224) (4,201)
- ---------------------------------------------------------------------- -------------------- ---------------------
Net investments in real estate 288,672 188,625 187,730
Cash and cash equivalents 4,914 3,395
2,346Restricted cash 143 --
Tenant accounts receivable 315 78 41
Deferred rent receivable 1,221 479 837
Deferred financing costs, net 1,220 857 793
Deposit on acquisitions - 600
Prepaid and other assets, net 1,040 100 309
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Total assets $ 193,534297,525 $ 192,656193,534
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Liabilities and shareholders' equity
Liabilities:
Mortgage loans payable $ 114,375144,417 $ 114,301114,375
Accounts payable and accrued expenses 1,282 932 1,018
Rents received in advance and security deposits 1,592 425 294
Dividends/distributions payable 2,706 1,276 1,581
- ---------------------------------------------------------------------- -------------------- ---------------------
Total liabilities 149,997 117,008 117,194
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Minority interests:
Preferred Units 52,500 52,500
Partnership Units 11,999 12,362 12,111
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Total minority interests 64,499 64,862 64,611
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Commitments and contingencies - --- --
Shareholders' equity:
Common Shares of beneficial interest ($.010.01 par value; 45,000,000
authorized, 2,266,0839,771,083 and 2,271,0832,266,083 shares, issued and outstanding at June
30, 1998 and December 31, 1997,
and
March 31, 1998, respectively) 2398 23
Additional paid-in capital 89,287 16,620 16,647
Accumulated deficit (6,356) (4,979) (5,819)
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Total shareholders' equity 83,029 11,664 10,851
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Total liabilities and shareholders' equity $ 193,534297,525 $ 192,656193,534
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See accompanying notes to financial statementsstatements.
3
Corporate Office Properties Trust
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(unaudited)
For the three months ended March 31,
----------------------------------For the six months ended
June 30, June 30,
----------------------------- --------------------------
1998 1997 1998 ----------------- ----------------1997
--------------- ------------- ------------ -------------
Revenues
Rental income $ 7,058 $ 626 $ 4,91911,977 $ 1,252
Tenant recoveries and other income 7 606784 6 1,390 13
- ----------------------------------------------------------------- ----------------- ------------------------------- ------------- ------------ -------------
Total revenues 633 5,5257,842 632 13,367 1,265
- ----------------------------------------------------------------- ----------------- ------------------------------- ------------- ------------ -------------
Expenses
Property operating 1,645 6 8992,544 12
General and administrative 86 299359 90 658 176
Interest expense 308 2,1592,416 307 4,575 615
Amortization of deferred financing costs 83 3 64147 6
Depreciation and other amortization 1,281 139 9772,258 278
Reformation costs --- -- 637 --
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Total expenses 542 5,0355,784 545 10,819 1,087
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Income before minority interests 91 4902,058 87 2,548 178
Minority interests
Preferred Units - (853) -- (1,706) --
Partnership Units - (136)(276) -- (412) --
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Net income (loss) $ 91929 $ (499)87 $ 430 $ 178
- ----------------------------------------------------------------- ----------------- ------------------------------- ------------- ------------ -------------
Earnings (loss) per Share
Basic and Diluted $ .060.12 $ (.22)0.06 $ 0.09 $ 0.13
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See accompanying notes to financial statements.
4
Corporate Office Properties Trust
Consolidated Statements of Cash Flows
(Dollars in thousands)
(unaudited)
For the threesix months ended
March 31,June 30,
----------------------------
1998 1997 1998
------------- --------------
Cash flows from operating activities:
Net income (loss) $ 91430 $ (499)178
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Minority interests - 9892,118 --
Depreciation 139 977and amortization 2,258 278
Amortization of deferred financing costs 3 64
Other amortization (6) -147 6
Increase in deferred rent receivable (17) (358)
Decrease (increase)(742) (33)
Increase in tenant accounts receivable and other assets 1 (172)
(Decrease) increase(1,029) (33)
Increase (decrease) in accounts payable, accrued expenses, rents
received in advance and security deposits 12 (45)1,517 (1)
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Net cash provided by operating activities 223 9564,699 395
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Cash flows from investing activities:
Proceeds from maturity of marketable securities -- 879
Purchase of marketable securities -- (800)
Increase in deposit on acquisitions - (600)
Purchaserestricted cash (143) --
Purchases of furniture and equipment - (82)additions to investments in real estate (95,836) --
Leasing commissions paid (151) --
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Net cash used in(used in) provided by investing activities - (682)(96,130) 79
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Cash flows from financing activities:
Net proceeds from issuance of Common Shares 72,742 --
Dividends paid (623) (355)
Distributions paid (2,235) --
Proceeds from exercise of stock options - 27
Dividends/distributions paid (177) (1,276)mortgage loans payable 23,750 --
Repayments of mortgage loans payable (79) (74)(174) (139)
Deferred financing costs (510) --
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Net cash used inprovided by (used in) financing activities (256) (1,323)92,950 (494)
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Net decreaseincrease (decrease) in cash and cash equivalents (33) (1,049)1,519 (20)
Cash and cash equivalents
Beginning of period 3,395 258 3,395
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End of period $ 2254,914 $ 2,346238
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See accompanying notes to financial statements.
5
Corporate Office Properties Trust
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
(unaudited)
1. Organization and Formation of Company
Corporate Office Properties Trust (formerly Royale Investments, Inc.)
(the "Company") is a self-administered REIT which focuses on the ownership,
acquisition and management of suburban office buildings. The Company was formed
in 1988 as a Minnesota corporation. The Company has qualified as a real estate
investment trust ("REIT") as defined in the Internal Revenue Code (the "Code").
As of March 31,June 30, 1998, the Company's portfolio included 1731 commercial real estate
properties leased for office and retail purposes.
On October 14, 1997, the Company acquired a portfolio of 10
properties, representing the Mid-Atlantic suburban officeThe Company's operations of The
Shidler Group, a national real estate investment firm (the "Office
Properties"). As result of the acquisition, the Company became the sole
general partner of and obtained a 20.6946% interest in the Common Units
("Partnership Units") ofare conducted primarily through Corporate
Office Properties, L.P. (formerly FCO,
L.P.) (the "Operating Partnership"), a partnership formed to
acquireown real estate both directly and holdthrough subsidiary partnerships and limited
liability companies ("LLCs"). The Company is the sole general partner in the
Operating Partnership and as of June 30, 1998, owned 75.8% of the Operating
Partnership's common partnership interests in partnerships which own the Office Properties (the
"Properties Partnerships"units ("Partnership Units"). The general
partner of several of the Properties
Partnershipssubsidiary partnerships is Corporate Office Properties
Holdings, Inc. (formerly FCO
Holdings, Inc.) ("COP Holdings"COPH"), a wholly owned subsidiary of the Company.
In addition, the Company became self-administered by terminating its external
advisory contract with Crown Advisors, Inc. ("Crown"), and entering into a
new management contract with Glacier Realty LLC ("Glacier") for the existing
retail properties. The Company accounted for the acquisition of the Office
Properties under purchase accounting requirements; therefore, the operating
results of the Company for the three months ended March 31, 1998 are not
directly comparable to the three months ended March 31, 1997.
On January 1, 1998, the Company changed its name to Corporate Office
Properties Trust, Inc. On March 16, 1998, the Company was reformed as a Maryland
real estate investment trust and changed its name to Corporate Office Properties
Trust (the "Reformation"). In connection with the Reformation, 45,000,000 common
shares and 5,000,000 preferred shares were authorized and each share of common
stock was exchanged for one common share of beneficial interest, par $.01$0.01
("Common Share") in Corporate Office Properties Trust. All common stock
references in the financial statements have been restated as Common Shares. This
restatement had no effect on net operations or the amounts presented as
shareholders' equity.
On April 23, 1998, the Company completed the sale of 7,500,000 Common
Shares to the public at a price of $10.50 per share ("the Offering").
On April 30, 1998, the Company acquired 12 office properties
aggregating approximately 815,000 net rentable square feet, using the proceeds
from the Offering.
2. Summary of Significant Accounting Policies
The financial statements have been prepared by the Company without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. In order to conform with
generally accepted accounting principles, management, in preparation of the
Company's financial statements, is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of June 30, 1998 and December 31, 1997, and March 31, 1998, and
the reported amounts of revenues 6
and expenses for the three and six months ended
March 31, 1997June 30, 1998 and 1998.1997. Actual results could differ from those estimates.
In the opinion of the Company, all adjustments (consisting solely of
normal recurring matters, except for $637 of costs associated with the
Reformation) necessary to fairly present the financial position of the Company
as of March 31,June 30, 1998, and the results of its operations for the three and itssix months
ended June 30, 1998 and 1997 and the cash flows for the threesix months ended March 31,June
30, 1998 and 1997 and 1998 have been included. The results of operations for such interim
periods are not necessarily indicative of the results for a full year. For
further information, refer to the Company's consolidated financial statements
and footnotes thereto included in the Annual Report on Form 10-K for the year
ended December 31, 1997.
Basis of Presentation
The consolidated financial statements of the Company at June 30, 1998
and December 31, 1997 and March 31, 1998 include the accounts of the Company, the Operating
Partnership (and its subsidiary partnerships and COP Holdings.LLCs), and COPH.
6
All intercompany transactions and balances have been eliminated in
consolidation. Certain amounts from prior periods have been reclassified to
conform to current year presentation. The reclassifications had no effect on net
operations or shareholders' equity.
The Company, as general partner, controls the Operating Partnership;
therefore consolidated financial reporting and accounting have been applied.
As
of December 31, 1997 and March 31, 1998, minorityMinority interests represent the 81.14%
of the Partnership Units of the Operating Partnership and 100% of the preferred partnership
units ("Preferred UnitsUnits") of the Operating Partnership not owned by the Company,
each of which include certain interests in the Properties Partnerships retained by the Chairman of the Board of
Trustees and the President and Chief Executive Officer of the Company ("Retained
Interests").
Summary of Significant Accounting Policies
Earnings Per Share ("EPS")
Pursuant to SFAS No. 128, the Company has computed basic and diluted
EPS for the three and six months ended March 31, 1997June 30, 1998 and 1998.
The numerator utilized to calculate basic and diluted EPS is the same.1997. The weighted
average common shares outstanding for purposes of basic and diluted EPS
calculations are as follows (in thousands):
March 31,Three months Ended June 30, Six Months Ended June 30,
1998 1997 March 31, 1998 1997
---- ---- ---- ----
Weighted average common shares-basic 7,628 1,420 2,2684,964 1,420
Assumed conversion of stock options - 2621 -- 21 --
Conversion of Preferred Units 7,500 -- -- --
Conversion of Common Units 2,582 -- -- --
----- ----- ----- -----
Weighted average common shares-diluted 17,731 1,420 2,294
===== =====4,985 1,420
----- ----- ----- -----
----- ----- ----- -----
ConvertibleThe diluted EPS computation for the six months ended June 30, 1998 does
not assume conversion of convertible Preferred Units and convertible Partnership
Units since such conversion would have an antidilutive effect on EPS. The
conversion of convertible Preferred Units and convertible Partnership Units into
Common Shares would increase the diluted weighted average common shares
denominator by 7,500,000 and 2,582,000 Common Shares, respectively, for the six
months ended June 30, 1998. Such conversions could potentially dilute EPS in the
future.
Recent Accounting Pronouncements
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131 (`SFAS 131), "Disclosures about Segments of an Enterprise and
Related Information". This statement, effective for financial statements for
fiscal years beginning after December 15, 1997, requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. Generally, financial information is required to be reported
on the basis that it is used internally for evaluating segment performance and
deciding how to allocate resources to segments. While this statement effects
only financial statement disclosures, the Company currently does not expect
adoption of this Statement to have a material effect on the preparation of its
financial statement presentation or related footnote disclosures. SFAS 131 is
not effective for interim financial statements in the initial year of its
application.
In March 1998, the FASB's Emerging Issues Task Force (the "Task Force")
reached consensus on Emerging Issues Task Force Issue No. 97-11, "Accounting for
Internal Costs Relating to Real Estate Property Acquisitions" ("EITF 97-11").
EITF 97-11, effective March 19, 1998, requires that internal costs of
preacquisition activities incurred in connection with the acquisition of an
operating property should be expensed as incurred. The Company does not incur
significant internal costs from preacquisition activities; therefore the
adoption of EITF 97-11 is not expected to have a material effect on the
Company's consolidated statement of operations.
7
3. Acquisitions of Real Estate
On April 30, 1998, the Company, through affiliates of the Operating
Partnership, acquired nine multistory office buildings and three office/flex
buildings in the Baltimore/Washington Corridor in Linthicum, Anne Arundel
County, Maryland (the "Airport Square Properties"). The properties were acquired
for cash at an aggregate purchase price of $72,618, including $1,139 in
transaction costs.
On May 28, 1998, the Company, through affiliates of the Operating
Partnership, acquired two multistory office buildings located in Fairfield, New
Jersey (the "Fairfield Properties"). The properties were acquired at an
aggregate price of $29,405, including $605 in transaction costs, paid through
the assumption of debt of $6,465 and proceeds from the Credit Facility, as
defined below (Note 5).
4. Issuance of Shares and Options
OnIn March 12, 1998, options to purchase an aggregate of 45,000 shares were
granted to an officer and four independent Trustees at a grant price of $12.25
per share. Options relating to 20,000 Common Shares vest one year after the date
of grant and options relating to 25,000 Common Shares vest ratably over 3 years
following the date of grant. The options expire ten years after the date of
grant.
7
4. Related Party Transactions
The Company had employee advances on the balance sheet in the amount of
$14 as of December 31, 1997. All advancesIn January 1998, options to purchase 2,500 shares were repaid in the quarter endedexercised. In
March 31, 1998.
An officer and director of the Company is the director of a company
that received management fees of $20 in the quarter ended March 31, 1998.
The Company has a property management agreement with Glacier, a related
party, which provides for Glacier1998, options to manage the seven net leased retail
properties of the Company for a five year term, which term began in 1997, with a
minimum fee of $250 per annum. Through March 31, 1998 the Company has paid $63
in connection with this agreement.
5. Distributions
On March 16, 1998 the Company declared a distribution of $.15 per
Common Share which was paid on April 15, 1998 to shareholders of record as of
March 31, 1998.
6. Subsequent Eventspurchase an additional 2,500 shares were exercised.
On April 23,27 1998, the Company completed the sale of 7,500,000 Common
Shares to the public at a price of $10.50 per share ("the Offering"(the "Offering"). The Companynet
proceeds were contributed to the Operating Partnership in exchange for 7,500,000
Partnership Units. The Operating Partnership used the proceeds to acquire 7,500,000fund
acquisitions.
5. Mortgage Loans Payable
On May 28, 1998, the Company obtained a $100,000 secured revolving
credit facility (the "Credit Facility") initially collateralized by the Airport
Square Properties and one of the Fairfield Properties. The Credit Facility is a
variable rate loan bearing interest at LIBOR plus 175 basis points and provides
for monthly payments of interest only. A fee of 25 basis points per annum on the
unused amount of the Credit Facility will be payable quarterly, in arrears. As
of June 30, 1998, $23,750 was borrowed under the Credit Facility. In addition,
$5,000 of the Credit Facility was issued as a letter of credit, which the
Company posted as a deposit in connection with the Constellation Transaction as,
defined below (Note 9).
On May 28, 1998, the Company assumed $6,465 in debt collateralized by
one of the Fairfield Properties. The debt bears interest at a fixed rate of
8.29% per annum and provides for monthly payments of principal and interest
totaling $56.
6. Dividends and Distributions
The Company declared a dividend on March 16, 1998 of $0.15 per Common
Share, which was paid on April 15, 1998 to shareholders of record as of March
31, 1998. The Company also declared a dividend on June 2, 1998 of $0.15 per
Common Share which was paid on July 15, 1998 to shareholders of record as of
June 30, 1998.
The Company declared distributions to minority interests holding
Partnership Units and increase
its percentage interest inPreferred Units of $388 and $853, respectively, which were
paid on April 15, 1998. The Company declared distributions to minority interests
holding Partnership Units and Preferred Units of $387 and $853, respectively,
which were paid on July 15, 1998.
8
7. Supplemental Information to Statements of Cash Flows
For the six months ended June 30,
-----------------------------------
1998 1997
----------------- -----------------
Supplemental schedule of non-cash investing and financing activities:
In conjunction with certain property acquisitions the following
assets and liabilities were assumed:
Purchase of real estate $ 6,465 $ --
---------- ----------
Mortgage loans (6,465) --
Proceeds from acquisitions of properties $ -- $ --
---------- ----------
---------- ----------
8. Commitments and Contingencies
On May 14, 1998, the Company entered into a series of agreements
through affiliates of the Operating Partnership with Constellation Real Estate
Group, Inc. ("Constellation") and certain of its affiliates (the "Constellation
Transaction") to approximately 75.8%. As
discussed below, the majorityacquire (i) interests in eighteen operating office and retail
properties, (ii) options and rights of first refusal on 91 acres of land and
(iii) certain assets of Constellation's real estate management subsidiary,
including its 75% interest in Constellation Realty Management, LLC, a real
estate management firm. The total purchase price of the net proceedsConstellation
Transaction is approximately $204,600 to be paid as follows: (i) $107,600 of
cash and/or assumption of debt, (ii) $72,750 of Common Shares (approximately
6,928,000 Common Shares at $10.50 per share) and (iii) $24,250 of Class A
Convertible Preferred Shares (convertible into Common Shares after two years at
the rate of $13.34 per Common Share). A Special Meeting of the Offering were usedshareholders to
vote to approve the Constellation Transaction is scheduled for August 21, 1998.
In connection with the Constellation Transaction, $5,000 of the Credit Facility
was issued as a letter of credit, which the Company posted as a deposit.
Other commitments and contingencies of the Company that existed at
December 31, 1997, are substantially unchanged.
9. Pro Forma Financial Information (Unaudited)
The acquisitions by the Company during 1997 and 1998 were accounted for
investment purposes. Although not exercisedby the purchase method. The results of operations for the properties acquired
have been included in the accompanying consolidated statements of operations
from their respective purchase dates through June 30, 1998.
The following pro forma condensed consolidated financial information of
the Company has been prepared as if the all property acquisitions occurring
during 1997 and 1998 had occurred as of May 7,the beginning of the period, and
therefore include pro forma adjustments as deemed necessary by management. The
pro forma financial information is unaudited and is not necessarily indicative
of the results of which actually would have occurred if the acquisitions had
occurred on January 1, 1997 and 1998, nor does it purport to represent the
underwriters have the right to exercise their over-allotment options, which
(if exercised) would result in the Company issuing up to an additional 1,125,000
Common Shares at a priceresults of $10.50 per share.
On April 30, 1998, the Company acquired 12 office propertiesoperations for an
aggregate cash purchase price of approximately $72 million. The properties
aggregate approximately 815,000 net rentable square feet.
8future periods.
For the six months ended June 30,
--------------------------------------
1998 1997
------------------ -------------------
Pro forma total revenue $ 18,569 $ 16,105
---------- --------
Pro forma net income $ 1,731 $ 721
---------- --------
Pro forma earnings per share - Basic and Diluted $ 0.18 $ 0.07
---------- --------
---------- --------
9
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
(Dollars in thousands, except share and per share data)
This Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1993 and Section 21E of the Securities
Exchange Act of 1934. The words "believe", "expect", "anticipate", "intend",
"estimate" and other expressions which are predictions of or indicate future
events and trends and which do not relate to historical matters identify
forward-looking statements. The Company's actual results could differ materially
from those set forth in the forward-looking statements. Certain factors that
might cause such a difference include the following: real estate investment
considerations, such as the effect of economic and other conditions in the
market area on cash flows and values; the need to renew leases or release space
upon the expiration of current leases, and the ability of a property to generate
revenues sufficient to meet debt service payments and other operating expenses;
and risks associated with borrowings, such as the possibility that the Company
will not have sufficient funds available to make principal payments on
outstanding debt or outstanding debt may be refinanced at higher interest rates
or otherwise on terms less favorable to the Company.
The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with the accompanying
financial statements and notes thereto.
Overview
The Company's results of operations reflect its growth resulting from
the acquisitions of 10 office properties in October 1997, 12 office properties
in April 1998 and 2 office properties in May 1998. The 1998 acquisitions were
financed with the proceeds from the Offering in April 1998, the proceeds of the
Credit Facility and the assumption of debt in connection with the acquisition of
the Fairfield Properties.
Results of Operations
Comparison of the ThreeSix Months Ended March 31,June 30, 1998 and 1997: Total
revenues, which include rental income, recoveries from tenants and other income,
increased from $.6 millionby $12,102 for the quartersix months ended March 31, 1997June 30, 1998 as compared to $5.5
million for the
quarter ended March 31, 1998, an increase of $4.9 million or
773%.corresponding prior year period. Of this increase, $4.3 million$10,725 results from an
increase in base rents, substantially all of which is attributable to the
acquisitioneffects of the Office
Properties.property acquisitions. Tenant recoveries totaled $.6 million in the first quarter of 1998
as compared to none in the first quarter of 1997and other income
increased $1,377 due whollypredominantly to tenant recoveries attributable to leases on the Office Properties.
Totalfrom newly acquired
properties.
Property operating expenses increased from $.54 million for the quarter ended March
31, 1997 to $5.0 million for the quarter ended March 31, 1998, an increase of
829%. Of the total increase of $4.5 million, approximately $3.9 million is
attributable to increased interest expense ($1.9 million), increasedand depreciation and amortization ($.9 million), increased
property expenses ($.9
million), and increased general and administrative expenses ($.2 million),by $4,512 primarily as a result of the acquisitioneffects of the Office Properties. Further, $.6
million represents costs associated with the Reformation on March 16, 1998.
Depreciationproperty acquisitions.
Interest expense and amortization of deferred financing costs increased from $142 for the quarter ended
March 31, 1997 to $1.0 million for the quarter ended March 31, 1998, an increase
of 633%,by
$4,101 as a result of the acquisitiondebt obtained or assumed in connection with certain of the
Office Properties. Interest
expense increased from $.3 million in 1997 to $2.2 million in 1998, an increase
of 601%, primarily as a result of borrowings associated with the acquisition of
the Office Properties, offset slightly by decreased interest expense on the
retail properties' mortgages.Company's acquisitions. General and administrative expenses increased from $86 for the quarter
ended March 31, 1997by $482
due to $299 for the quarter ended March 31, 1998 resulting from the conversion of the Company from an externally-advised REIT to a
self-administered REIT. DuringREIT, which resulted in the first quarteraddition of certain management and
other staffing functions. The operations for the six months ended June 30, 1998
the Company incurredalso included $637 ofin costs associated with the Reformation on March 16, 1998. During the
fourth quarter of 1997, the Company commenced administrative operations. The
Company incurred administrative payroll expenses of $172 and office overhead
expenses of $31 during the quarter ended March 31, 1998 not incurred prior to
the fourth quarter of 1997.
As a result of the above factors, income before minority interests
increased by $2,370. Minority interests represent the portion of the Operating
Partnership which is not owned by the Company. The Company did not have minority
interests in the corresponding prior year period. Earnings per share decreased
by $0.04 per share due to the issuance of Common Shares in October 1997 and in
the Offering of April, 1998 combined with other factors discussed above.
Comparison of the Three Months Ended June 30, 1998 and 1997: Total
revenues, which include rental income, recoveries from $91,tenants and other income,
increased by $7,210 for the quarterthree months ended March 31, 1997 to $490 for the quarter
ended March 31, 1998. Net income decreased from $91 for the quarter ended March
31, 1997 to a net loss of $499 for the quarter ended March 31,June 30, 1998 attributable primarilyas compared to the
existencecorresponding prior year period. Of this increase, $6,432 results from an
increase in base rents, substantially all of minority interests resultingwhich is attributable to the
effects of the property acquisitions. Tenant recoveries and other income
increased $778 due predominantly to tenant recoveries from newly acquired
properties.
10
Property operating expenses and depreciation and amortization increased
by $2,781 primarily as a result of the new structureeffects of the property acquisitions.
Interest expense and amortization of deferred financing costs increased by
$2,189 as a result of debt obtained or assumed in connection with certain of the
Company's acquisitions. General and administrative expenses increased by $269
due to the conversion of the Company followingfrom an externally-advised REIT to a
self-administered REIT, which resulted in the acquisitionaddition of certain management and
other staffing functions.
As a result of the Office Propertiesabove factors, income before minority interests
increased by $1,971. Minority interests represent the portion of the Operating
Partnership which is not owned by the Company. The Company did not have minority
interests in the corresponding period in 1997. Earnings per share increased by
$0.06 per share due to the factors discussed above partially offset by the
effects of the issuance of Common Shares in October, 1997 and the costs associated with Reformation.
9
Offering of
April 1998.
Liquidity and Capital Resources
Historically, cash provided from operations represented the primary
source of liquidity to fund distributions, pay debt service and fund working
capital requirements. The Company expects to continue to meet its short-term
capital needs from property cash flow, including all property expenses, general
and administrative expenses, dividend and distribution requirements and
recurring capital improvements and leasing commissions. The Company does not
anticipate borrowing to meet these requirements.
For the three months ended March 31,In January 1998, the Company declared
distributions totaling $.15paid dividends of $0.125 per Common Share,
amounting to approximately $341.$282, and distributions to minority interests holding Partnership
Units and Preferred Units totaling $274 and $720, respectively. In addition, during this same periodApril 1998,
the Company'sCompany paid dividends of $0.15 per Common Share, amounting to $341, and
distributions declaredto minority interests holding Partnership Units and Preferred
Units totaling $388 and $853, respectively. In July 1998, the Company paid
dividends totaling $0.15 per Common Share, amounting to $1,466, and
distributions to minority interests holding Partnership Units and Preferred
Units amounted to $388$387 and $853, respectively.
On April 23,27, 1998, the Company completed the sale of 7,500,000 Common
Shares to the Publicpublic at a price of $10.50 per share. The Company used the
proceeds to acquire 7,500,000 Partnership Units and increase its percentage
interest in the Operating Partnership to approximately 75.8%. As discussed
below, the majority of the netNet proceeds offrom
the Offering were $72,742, which were used principally by the Company
for investment purposes. Although not exercised asOperating
Partnership on April 30, 1998, to acquire the Airport Square Properties,
consisting of May 7, 1998, the
underwriters have the right to exercise their over-allotment options, which (if
exercised), would resulttwelve office properties in the Company issuing up to an additional 1,125,000
Common Shares at a price of $10.50 per share. SimultaneouslyBaltimore/Washington corridor
totaling approximately 815,000 net rentable square feet. In connection with the
Offering, the Company becameCompany's Shares were listed on the New York Stock Exchange and began
tradingexchange under
the symbol "OFC".
On April 30,May 28, 1998, the Company, through the Operating Partnership,
acquired 12the Fairfield Properties, two multistory office buildings located in
Fairfield, New Jersey totaling approximately 262,000 net rentable square feet.
On May 28, 1998, the Company obtained a $100,000 senior secured
revolving Credit Facility. The Credit Facility is a variable rate loan bearing
interest at LIBOR plus 175 basis points and provides for monthly payments of
interest only. A fee of 25 basis points per annum on the unused amount of the
Credit Facility is payable quarterly, in arrears. On May 28, 1998, the Company
borrowed $23,750 under the Credit Facility to fund a portion of the Fairfield
Properties' acquisition. The Company intends to utilize the remaining balance of
the Credit Facility for acquisitions, renovations, tenant improvements and
leasing commissions. The Credit Facility is collateralized by the Airport Square
Properties and one of the Fairfield Properties.
On May 28, 1998, also in connection with the Fairfield Properties
acquisition, the Company assumed $6,465 in mortgage debt collateralized by one
of the Fairfield Properties. The loan bears interest at a fixed rate of 8.29%
per annum and provides for monthly payments of principal and interest totaling
$56.
11
On May 14, 1998, the Company entered into a series of agreements
through affiliates of the Operating Partnership with Constellation and certain
of its affiliates to acquire (i) interests in eighteen operating office and
retail properties, for an
aggregate cash(ii) options and rights of first refusal on 91 acres of land
and (iii) certain assets of Constellation's real estate management subsidiary,
including its 75% interest in Constellation Realty Management, LLC, a real
estate management firm. The total purchase price of the Constellation
Transaction is approximately $72 million. The properties
aggregate approximately 815,000 net rentable square feet.$204,600 to be paid as follows: (i) $107,600 of
cash and/or assumption of debt, (ii) $72,750 of Common Shares (approximately
6,928,000 Common Shares at $10.50 per share) and (iii) $24,250 of Class A
Convertible Preferred Shares (convertible into Common Shares after two years at
the rate of $13.34 per Common Share). A Special Meeting of the shareholders to
vote to approve the Constellation Transaction is scheduled for August 21, 1998.
This transaction may partially be funded by availability under the Credit
Facility. In addition, the Company is presently negotiating with several lending
institutions regarding additional secured financing to fund the Constellation
Transaction. In connection with the Constellation Transaction, as of June 30,
1998, $5,000 of the Credit Facility was issued as a letter of credit which the
Company posted as a deposit.
To further meet long-term capital needs, the Company is presently
negotiating with Bankers Trust Company, an affiliate of BT Alex. Brown
Incorporated, one of the Underwriters in the Offering,several lending institutions regarding a $100 million
collateralized credit facility,additional secured
financing arrangements, which the Company intends to utilize for additional
acquisitions, renovations, tenant improvements and leasing commissions ("Credit
Facility").commissions.
Acquisitions may also be financed through net cash provided from operations or
equity issuances. There is no assurance that the Company will be able to obtain
such Credit Facilityfinancing or that such Credit Facilityfinancing will be adequate to fund the Company's
acquisition and capital program.
The Company expects to meet its long term liquidity requirements, such
as property acquisitions, scheduled debt maturities, major renovations,
expansions, and other non-recurring capital improvements through long-term
collateralized indebtedness and the issuance of additional equity securities.
The Company intends to finance the acquisition of additional properties through
borrowings under the proposed Credit Facility.
As of March 31, 1998, the Company posted a nonrefundable deposit with
an unrelated party totaling $600 in connection with a future acquisition.
Statement of Cash Flows
During the threesix months ended March 31,June 30, 1998, the Company generated $956$4,699
in cash flow from operating activities (net of nonrecurring Reformation costs of
$637), which together with initialan increase of $4,304 compared to the corresponding prior year period.
This increase is due primarily to the effects of the Company's acquisition of
operating properties. Other sources of cash balancesflow consisted of $3.4 million were
used,(i) $72,742 in part, fornet
proceeds from the Offering and (ii) $23,750 in additional borrowings under the
Company's Credit Facility. During the six months ended June 30, 1998, the
Company's major uses of cash included (i) deposits on potential$95,987 to fund property acquisitions,
of $600,tenant improvements, and leasing commissions and (ii) furniture$2,858 to pay dividends to
shareholders and equipment costs of $82, (iii) distributions to holders of Common
Shares,minority interests holding Partnership Units
and Preferred Units totaling $1.3 million and (iv)
repayments of mortgage loans of $74. As a result, the cash balances decreased by
$1.0 million to $2.3 million.Units.
Funds From Operations
The Company considers Funds From Operation ("FFO") to be helpful to
investors as a measure of the financial performance of an equity REIT. In
accordance with NAREIT's definition, FFO is defined as net in-
10
comeincome (loss)
computed in accordance with GAAP, excluding gains (or losses) from debt
restructuring and sales of property, plus real estate-related depreciation and
amortization and after adjustmentsafteradjustments for unconsolidated partnerships and joint
ventures and extraordinary and nonrecurring items. FFO does not represent cash
generated from operating activities determined in accordance with GAAP and
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of the Company's financial performance or
to cash flow from operating activities (determined in accordance with GAAP) as a
measure of the Company's liquidity, nor is it indicative of funds available to
fund the Company's cash needs, including its ability to make cash distributions.
Other REITs may not define FFO in accordance with the current NAREIT definition
or may interpret the current NAREIT definition differently from the Company. FFO
for the threesix months ended March 31,June 30, 1998 and 1997, and 1998, as calculated in accordance
with the NAREIT definition published in March 1995, are summarized in the
following table (in thousands).
12
Historical
Three Months Ended March 31,
-------------------------------June 30, Six Months Ended June 30,
--------------------------- -------------------------
1998 1997 1998 -------------- --------------1997
---- ---- ---- ----
Income before minority interests............interests ......... $ 912,058 $ 49087 $ 2,548 $ 178
-------- -------- -------- --------
Add: Nonrecurring charge
-Reformation costs ..................... -- -- 637 Reformation costs...........................--
Add: Real estate related depreciation and
amortization................................ 138 972amortization .......................... 1,270 139 2,241 277
Less: Preferred Unit distributions......... -distributions ...... (853) -------------- ---------------- (1,706) --
-------- -------- -------- --------
Funds from operations....................... $ 229 $ 1,246operations .................... 2,475 226 3,720 455
Add: Preferred Unit distributions.......... -distributions ....... 853 -------------- ---------------- 1,706 --
Funds from operations assuming
conversion of Preferred Units.......................... 229Units ......... $ 2,099
-------------- --------------
Weighted average Common Shares/Units
outstanding(1).............................. 1,420 4,850
-------------- --------------
-------------- --------------3,328 $ 226 $ 5,426 $ 455
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average Common Shares/Units
outstanding diluted(2)......................(1) ....................... 10,210 1,420 12,376
-------------- --------------
-------------- --------------7,546 1,420
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average Common Shares/Units
outstanding diluted (2) ............... 17,731 1,420 15,067 1,420
-------- -------- -------- --------
-------- -------- -------- --------
- -------------------------------
(1) Assumes redemption of all Partnership Units, calculated on a weighted
average basis for Common Shares. Includes 282,508 Common Shares
issuable upon redemption of Partnership Units issuable upon the
conversion of the Retained Interests. Excludes the weighted average
effect of the conversion of 186,455 Retained Interests into 186,455
Preferred Units and 1,913,545 Preferred Units, both convertible into an
aggregate of 7,499,940 Partnership Units which are, in turn, redeemable
for
7,499,940 Common Shares.
(2) Assumes redemption of all Partnership Units, calculated on a weighted
average basis for Common Shares. Includes 282,508 Common Shares
issuable upon redemption of Partnership Units issuable upon the
conversion of the Retained Interests. Includes the weighted average
effect of the conversion of 186,455 Retained Interests into 186,455
Preferred Units and 1,913,545 Preferred Units, both convertible into an
aggregate of 7,499,940 Partnership Units which are, in turn, redeemable
for 7,499,940 Common Shares. Includes 70,000 Common Shares and 25,913 shares for the
assumed conversion of stock options (using the Treasury stock method).
11Conversion of convertible Preferred Units and Partnership Units is
assumed in computing the diluted weighted average Common Shares
denominator since such conversion has a dilutive effect on FFO.
13
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not currently involved in any material litigation nor,
to the Company's knowledge, is any material litigation currently threatened
against the Company (other than routine litigation arising in the ordinary
course of business, substantially all of which is expected to be covered by
liability insurance).
ITEM 2. Changes In Securities
Reformation
On March 16, 1998 the Company was reformed as a Maryland real estate
investment trust and changed its name to Corporate Office Properties Trust. In
connection with the Reformation, each share of common stock was exchanged for
one Common Share in Corporate Office Properties Trust. The Reformation was
accomplished by merging Corporate Office Properties Trust, Inc. into a newly
formed Maryland subsidiary corporation (the "Maryland Company") which was the
surviving corporation of the merger and immediately thereafter merged the
Maryland Company into the Company, a newly formed Maryland subsidiary trust, in
each case, pursuant to the merger agreement. The Maryland Company was
incorporated in Maryland on January 21, 1998 and the Company was formed in
Maryland on January 21, 1998, specifically for purposes of the Reformation, and
each had conducted no business and had no material assets or liabilities. The
Reformation had been accomplished through the Company merger followed by the
Trust merger because Minnesota law did not permit the direct merger of a
Minnesota corporation into a Maryland real estate investment trust. The Maryland
Company's and the Company's principal executive offices are each located at One
Logan Square, Suite 1105, Philadelphia, Pennsylvania. The Reformation did not
result in any change in the Company's business, assets or liabilities and did
not result in any relocation of management or other employees.None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission Of Matters To A Vote Of Security Holders
The following matters were submitted to a vote of security holders
during the Company's first quarter.
(a) Meeting type and date Special Meeting of Shareholders held on
March 12, 1998
(b) Directors elected at meeting Not applicable
(c) Description of each matter voted
on at meeting
Resolution to approve the Reformation, Results of votes
in which the Company was reformed as a For 1,492,272.912
Maryland real estate investment trust, Against or withheld 7,699.115
which will be named Corporate Office Abstentions and broker non-votes 9,185.000
Properties Trust.
Resolution to adopt the 1998 long-term Results of votes
incentive plan. For 1,422,037.547
Against or withheld 66,037.480
Abstentions and broker non-votes 21,089.000
12
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
EXHIBIT
NO. DESCRIPTION
------------ ------------------------------------------------------------
99.1 Audited balance sheets2.1 Assignment of the CompanyPartnership Interests dated as of December 31,
1996April 30,
1998 between Airport Square Limited Partnership, Airport
Square Corporation, Camp Meade Corporation and 1995,COPT
Airport Square One LLC and the related statements of income,
changes in stockholders' equity and cash flow for each
of the years in the three-year period ended December 31,
1996COPT Airport Square Two LLC.
(filed with the Company's Current Report on Form 8-K on
January 20,May 14, 1998 and incorporated herein by reference).
2.2 Contribution Agreement between the Company and the
Operating Partnership and certain Constellation affiliates
(filed as Exhibit A of the Company's Schedule 14A
Information on June 26, 1998 and incorporated herein by
reference).
2.3 Service Company Asset Contribution Agreement between the
Company and the Operating Partnership and certain
Constellation affiliates (filed as Exhibit B of the
Company's Schedule 14A Information on June 26, 1998 and
incorporated herein by reference).
2.4 Amended and Restated Limited Partnership Agreement of the
Operating Partnership dated March 16, 1998.
10.1 Assignment of Purchase and Sale Agreement dated as of
April 30, 1998 between Aetna Life Insurance Company and
the Operating Partnership. (filed with the Company's
Current Report on Form 8-K on May 14, 1998 and
incorporated herein by reference).
10.2 Assignment of Loan Purchase and Sale Agreement dated as of
April 30, 1998 between Constellation Real Estate, Inc. and
the Operating Partnership. (filed with the Company's
Current Report on Form 8-K on May 14, 1998 and
incorporated herein by reference).
14
10.3 Purchase and Sale Agreement dated as of April 1, 1998
between Aetna Life Insurance Company and Airport Square
Limited Partnership (filed with the Company's Current
Report on Form 8-K on May 14, 1998 and incorporated herein
by reference).
10.4 Loan Purchase and Sale Agreement dated as of March 13,
1998 between Aetna Life Insurance Company and
Constellation Real Estate, Inc. (filed with the Company's
Current Report on Form 8-K on May 14, 1998 and
incorporated herein by reference).
10.5 Amendment to Loan Purchase and Sale Agreement dated as of
April 16, 1998 between Aetna Life Insurance Company and
Constellation Real Estate, Inc. (filed with the Company's
Current Report on Form 8-K on May 14, 1998 and
incorporated herein by reference).
10.6 Purchase and Sale Agreement dated as of March 4, 1998
between 695 Rt. 46 Realty, LLC, 710 Rt. 46 Realty, LLC and
COPT Acquisitions, Inc. (filed with the Company's Current
Report on Form 8-K on June 10, 1998 and incorporated
herein by reference).
10.7 Letter Amendment to Purchase and Sale Agreement dated as
of March 26, 1998 between 695 Rt. 46 Realty, LLC, 710 Rt.
46 Realty, LLC and COPT Acquisitions, Inc. (filed with the
Company's Current Report on Form 8-K on June 10, 1998 and
incorporated herein by reference).
10.8 Secured Promissory Note dated as of April 29, 1997 between
710 Rt. 46 Realty, LLC and Life Investors Insurance
Company of America (filed with the Company's Current
Report on Form 8-K on June 10, 1998 and incorporated
herein by reference).
10.9 Mortgage and Security Agreement dated as of April 29, 1997
between 710 Rt. 46 Realty, LLC and Life Investors
Insurance Company of America (filed with the Company's
Current Report on Form 8-K on June 10, 1998 and
incorporated herein by reference).
10.10 Senior Secured Revolving Credit Agreement dated as of May
28, 1998 between Corporate Office Properties, L.P.,
Corporate Office Properties Trust, Any Mortgaged Property
Subsidiary and Bankers Trust Company (filed with the
Company's Current Report on Form 8-K on June 10, 1998 and
incorporated herein by reference).
10.11 Option Agreement between the Operating Partnership and
NBP-III, LLC (a Constellation affiliate) (filed as Exhibit
C of the Company's Schedule 14A Information on June 26,
1998 and incorporated herein by reference).
10.12 Option Agreement between the Operating Partnership and
Constellation Gatespring II, LLC (a Constellation
affiliate) (filed as Exhibit D of the Company's Schedule
14A Information on June 26, 1998 and incorporated herein
by reference).
10.13 First Amendment to Option Agreement between the Operating
Partnership and NBP-III, LLC (a Constellation affiliate)
(filed as Exhibit E of the Company's Schedule 14A
Information on June 26, 1998 and incorporated herein by
reference).
10.14 First Amendment to Option Agreement between the Operating
Partnership and Constellation Gatespring II, LLC (a
Constellation affiliate) (filed as Exhibit F of the
Company's Schedule 14A Information on June 26, 1998 and
incorporated herein by reference).
15
10.15 Development Property Acquisition Agreement between the
Operating Partnership and Constellation Properties, Inc.
(a Constellation affiliate) (filed as Exhibit G of the
Company's Schedule 14A Information on June 26, 1998 and
incorporated herein by reference).
10.16 Development Property Acquisition Agreement between the
Operating Partnership and CPI Piney Orchard Village
Center, Inc. (a Constellation affiliate) (filed as Exhibit
H of the Company's Schedule 14A Information on June 26,
1998 and incorporated herein by reference).
10.17 Amended and Restated Registration Rights Agreement dated
March 16, 1998 for the benefit of certain shareholders of
the Company.
27.1 Financial Data Schedule.
99.1 Press release dated May 15, 1998 regarding the Company's
entrance into a series of agreements through affiliates of
the Operating Partnership with Constellation and certain
Constellation affiliates to acquire real estate properties
and service businesses (filed with the Company's Current
Report on Form 8-K on May 29, 1998 and incorporated herein
by reference).
99.2 Press release dated March 6,August 12, 1998 regarding the
Company's earnings for the period ended June 30, 1998
(filed with the Company's Current Report on Form 8-K on
March 6,August 12, 1998 and incorporated herein by reference).
2.1 Agreement and Plan of merger, dated January 31, 1998,
among Corporate Office Properties, Inc, COPT, Inc. and
the Company (filed with the Company's Registration
statement on Form S-4 (Commission File No. 333-45649)
and incorporated herein by reference).
3(i).1 Articles of Amendment to Articles of Incorporation dated
December 23, 1997 (filed with the Company's Current
Report on Form 8-K on January 5, 1998 and incorporated
herein by reference).
4.1 Form of certificate for the Company's Common Shares of
Beneficial Interest, $0.01 par value per share (filed
with the Company's Registration Statement on Form S-4
(Commission File No. 333-45649) and incorporated herein
by references).
16.1 Letter to the Commission from Lurie, Besikof, Lapidus &
Co., LLP dated November 4, 1997 (filed with Company's
Current Report on Form 8-K on November 6, 1997, and
incorporated herein by reference).
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
During the three months ended March 31,June 30, 1998 and through MayAugust 7, 1998 the
Company filed the following:
i. a Current Report of Form 8-K dated January 5,filed May 15, 1998 (Reporting under Items 52
and 7) regarding the Shareholders' approvalCompany's acquisition through affiliates of the
Company's nameOperating Partnership of nine multistory office buildings and three
office/flex buildings located in the Baltimore/Washington corridor
adjacent to Corporate Office Properties Trust Inc.BWI Airport in Linthicum, Anne Arundel County, Maryland.
ii.a Current Report of Form 8-K dated January 20, 1998 (Reporting under
Items 5 and 7) regarding the re-audit of the Company's historical
financial statements as of December 31, 1996 and 1995 and for the years
ended December 31, 1996, 1995 and 1994 by Coopers and Lybrand, L.L.P. The
report of Coopers
13
and Lybrand , L.L.P. was not qualified or modified as
to any matter and, except for disclosures of certain subsequent events,
there were no changes to the Company's filed report under Part II Item 7
in the 1996 Form 10-KSB.
iii. a Current Report of Form 8-K dated January 20,May 29, 1998 (Reporting under Items 5
and 7) regarding the Company's earnings forentrance into a series of agreements
through affiliates of the year ended
December 31, 1997Operating Partnership with Constellation and
certain other financial information.Constellation affiliates to acquire real estate properties and
service businesses.
iii. a Current Report of Form 8-K filed June 10, 1998 (Reporting under Items
2, 5 and 7) regarding the Company's acquisition through affiliates of the
Operating Partnership of two multistory office buildings located in
Fairfield, New Jersey and the Company's procurement of a $100,000 secured
credit facility.
iv.a Current Report of Form 8-K dated January 20,8-KA filed July 7, 1998 (Reporting under(Amending Items 52 and 7)7
as originally filed) regarding the ReformationCompany's acquisition through
affiliates of the Company effective MarchOperating Partnership of two multistory office
buildings located in Fairfield, New Jersey.
v. a Current Report of Form 8-KA filed July 7, 1998 (Amending Items 2 and 7
as originally filed) regarding the Company's acquisition through
affiliates of the Operating Partnership of nine multistory office
buildings and three office/flex buildings located in the
Baltimore/Washington corridor adjacent to BWI Airport in Linthicum, Anne
Arundel County, Maryland.
16 1998.
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORPORATE OFFICE PROPERTIES TRUST
Date May 7,August 12, 1998 By: /s/ Clay W. Hamlin, III
-----------------------
Clay W. Hamlin, III
President and Chief Executive Officer
(Principal Executive Officer)
Date May 7,August 12, 1998 By: /s/ Thomas D. Cassel
--------------------
Thomas D. Cassel
Vice President - Finance and Treasurer
(Principal Financial and Accounting Officer)
15
17