“What keeps me awake at night is world peace,” Rand Griffin, CEO of Corporate Office Properties Trust, confided to his shareholders Thursday.
Griffin was only half-joking. COPT is now the largest Class A office landlord in the Baltimore-Washington corridor, and more than half its tenants are federal defense agencies and their contractors.
During the last decade, the real estate investment trust has seen its dividends and stock value almost quadruple since 2001, the result of a strategy of acquisition and development concentrating on the defense and intelligence sector. Last year?s total shareholder return of 25 percent made it the third highest of the office REITs.
“The shares are one of the higher earning” among the REITs, said Legg Mason analyst John Guinee, and the company has “good underlying growth and returns.”
At National Business Park in Anne Arundel County, COPT owns 15 buildings with 1.8 million square feet of space, fully leased. Virtually all the tenants are contractors to the nearby National Security Agency, the super-secret spy shop to which it is connected by an “employees only” road.
Tenants include Booz Allen Hamilton, Computer Sciences Corp. and NorthropGrummanCorp. After NSA?s big budget bump after the Sept. 11 attacks, COPT was persuading its nondefense tenants like Ameritrade to move to Columbia Gateway buildings to free up space.
In Columbia Gateway, COPT owns 24 buildings; at Airport Square near Baltimore/Washington International Thurgood Marshall Airport, it has 22 buildings; and near the Patuxent River Naval Station, the Navy top-gun test facility, it owns 12 buildings.
COPT?s annual meeting at the Marriott Waterfront in Baltimore attracted only five shareholders, other than company employees, and they seemed satisfied with the company performance. About 185 institutional investors own 91 percent of company shares.
Shareholder Gerry Schmitt, of Baltimore, who bought company shares at around $10 (they closed Thursday at $38.86), was more than happy with the returns, but he?d like to see some of the company?s trustees from outside the real estate industry.
Griffin said the board would like to see more “diversity” on the board ? it lost its only woman last year, and all eight members are older white males ? and because of its focus, they?d like to get someone from the defense sector.
