COPT Forms New $119 Million Data Center Shells Joint Venture with Blackstone Real Estate

Rhea-AI Summary

Corporate Office Properties Trust (COPT) has formed a joint venture with Blackstone Real Estate, acquiring a 90% interest in two data center shell properties valued at $119 million. COPT will receive approximately $107 million in equity proceeds, which will be allocated to its active development projects, totaling 1.7 million square feet and currently 87% pre-leased. The company primarily focuses on properties that support U.S. Government activities, with 88% of its rental revenue derived from these Defense/IT locations.

Positive

• Joint venture with Blackstone Real Estate enhances capital and development capacity.
• COPT received approximately $107 million, boosting its active development pipeline.

Negative

• None.

Corporate Office Properties Trust (“COPT” or the “Company”) (NYSE: OFC) announces the formation of a new joint venture with funds affiliated with Blackstone Real Estate (the “Joint Venture”). The Joint Venture acquired a 90% interest in two single-tenant, data center shell properties totaling 432,000 square feet and valued at $119 million. COPT received approximately $107 million of equity proceeds it will deploy into its 1.7 million square foot pipeline of active development projects that, as of May 31, 2021, were 87% pre-leased.

About Blackstone Real Estate

Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has $196 billion of investor capital under management. Blackstone is one of the largest property owners in the world, owning and operating assets across every major geography and sector, including logistics, multifamily and single-family housing, office, hospitality and retail. Our opportunistic funds seek to acquire undermanaged, well-located assets across the world. Blackstone’s Core+ strategy invests in substantially stabilized real estate globally through regional open-ended funds focused on high-quality assets and Blackstone Real Estate Income Trust, Inc. (BREIT), a non-listed REIT that invests in U.S. income-generating assets. Blackstone Real Estate also operates one of the leading global real estate debt businesses, providing comprehensive financing solutions across the capital structure and risk spectrum, including management of Blackstone Mortgage Trust (NYSE: BXMT).

About COPT

COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties. The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what it believes are growing, durable, priority missions (“Defense/IT Locations”). The Company also owns a portfolio of office properties located in select urban/urban-like submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (“Regional Office Properties”). As of March 31, 2021, the Company derived 88% of its core portfolio annualized rental revenue from Defense/IT Locations and 12% from its Regional Office Properties. As of the same date and including 17 properties owned through unconsolidated joint ventures, COPT’s core portfolio of 180 office and data center shell properties encompassed 20.8 million square feet and was 94.9% leased; the Company also owned one wholesale data center with a critical load of 19.25 megawatts that was 86.7% leased.

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. Although the Company believes that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, 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 and the Company undertakes no obligation to update or supplement any forward-looking statements.

The areas of risk that may affect these expectations, estimates and projections include, but are not limited to, those risks described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Source: Corporate Office Properties Trust

View source version on businesswire.com: https://www.businesswire.com/news/home/20210602006068/en/

FAQ

What is the significance of COPT's joint venture with Blackstone?

The joint venture allows COPT to acquire a 90% interest in data center properties, enhancing its financial capacity and development efforts.

How much equity did COPT receive from the joint venture?

COPT received approximately $107 million in equity proceeds.

What percentage of COPT's development projects are pre-leased?

As of the announcement, 87% of COPT's active development projects are pre-leased.

What type of properties does COPT own?

COPT primarily owns office and data center properties that support U.S. Government and defense-related activities.

What percentage of COPT's rental revenue comes from Defense/IT locations?

COPT derives 88% of its core portfolio annualized rental revenue from Defense/IT locations.