<PAGE>
EXHIBIT 99.1
SUPPLEMENTAL INFORMATION
(UNAUDITED)
SEPTEMBER 30, 2000
[GRAPHIC OMITTED] CORPORATE
OFFICE
PROPERTIES
<PAGE>
CORPORATE OFFICE PROPERTIES TRUST
INDEX TO SUPPLEMENTAL INFORMATION (UNAUDITED)
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
HIGHLIGHTS AND DISCUSSION PAGE
<S> <C>
Reporting Period Highlights-Third Quarter 2000............................1
FINANCIAL STATEMENTS
Quarterly Selected Financial Summary Data.................................3
Quarterly Consolidated Balance Sheets.....................................4
Quarterly Consolidated Statements of Operations and Funds From
Operations (FFO).......................................................5
Quarterly Consolidated Statements of Operations and FFO per
Diluted Share..........................................................6
Quarterly Consolidated Statements of Operations and FFO as a
Percentage of Total Revenues...........................................7
SELECTED FINANCIAL ANALYSES
Quarterly Equity Analysis.................................................8
Quarterly Valuation Analysis..............................................9
Quarterly Debt Analysis..................................................10
Quarterly Operating Ratios...............................................11
Quarterly Dividend Analysis..............................................12
Investor Composition and Analyst Coverage................................13
Debt Maturity Schedule - September 30, 2000.............................14
PORTFOLIO SUMMARY
Property Summary by Region - September 30, 2000..........................15
Property Occupancy Rates by Region by Quarter............................17
Top Twenty Office Tenants as of September 30, 2000.......................18
Total Rental Revenue and Net Operating Income by Geographic
Region by Quarter.....................................................19
Same Office Property Cash and GAAP Net Operating Income by Quarter.......20
Office Lease Expiration Analysis by Year.................................21
Year to Date and Quarterly Office Renewal Analysis.......................22
Acquisition and Disposition Summary as of September 30, 2000.............24
Development Summary as of September 30, 2000.............................25
</TABLE>
<PAGE>
TO MEMBERS OF THE INVESTMENT COMMUNITY:
We prepared this supplemental information package to provide you with additional
detail on our properties and operations. The information in this package is
unaudited, filed with the Securities and Exchange Commission, and should be read
in conjunction with our quarterly and annual reports. If you have any questions
or comments, please contact Ms. Sara L. Grootwassink, Vice President, Finance
and Investor Relations at (410) 992-7324 or [email protected].
REPORTING PERIOD HIGHLIGHTS - THIRD QUARTER 2000
FINANCIAL RESULTS
- Reported FFO - diluted of $9,550,000 or $.30 per share/unit for the third
quarter of 2000 as compared to $7,842,000 or $.27 per share/unit for the
comparable 1999 period, representing an increase of 11.1% per share/unit. FFO
- diluted increased $1,708,000 or 21.8% over the comparable 1999 period.
- Reported AFFO - diluted of $6,691,000 or $.23 per share/unit for the third
quarter of 2000 as compared to $6,565,000 or $.22 per share/unit for the
comparable 1999 period, representing an increase of 4.5% per share/unit.
- For the nine months ended September 30, 2000, reported FFO - diluted of
$27,700,000 or $.86 per share/unit as compared to $23,161,000 or $.79 per
share/unit for the same nine month period in 1999, representing an increase
of 8.9% per share/unit. Similarly, reported AFFO - diluted of $20,658,000 or
$.69 per share/unit for the same nine month period as compared to $19,237,000
or $.66 per share/unit, representing an increase of 4.5% per share/unit.
FINANCING AND CAPITAL TRANSACTIONS
- On September 28, 2000, Constellation Real Estate, Inc. converted 984,307
Series A preferred shares into 1,845,378 common shares (1.8748 conversion
ratio).
- We increased our common dividend by 5.3% from $.19 to $.20 per
share.
- Our debt to market capitalization is 56.9% and our debt to undepreciated book
value of real estate assets is 59.9% as of September 30, 2000. We achieved an
EBITDA interest coverage ratio of 2.36x for this quarter and 2.40x for the
first nine months of 2000.
- We refinanced two construction loans into a $17,650,000 five-year permanent
loan bearing interest at a fixed rate of 8.3%. In addition, we converted
another construction loan into an $8,000,000 six-year permanent loan bearing
interest at a fixed rate of 8.35%.
- We purchased an interest rate cap on LIBOR of 7.0% on a $50.0 million
notional amount for a one-year period.
OPERATIONS
- We renewed 68.7% of our office leases (based upon square footage)
representing 212,695 square feet with an average capital cost of $12.57 per
square foot during the 3rd quarter. We realized increases in base and total
rents on a straight-line basis of 14.8% and 9.7%, respectively, as measured
from the GAAP straight-line rent in effect preceding the renewal date. Base
and total rent on a cash basis increased 6.5% and 2.0%, respectively, on this
renewed and retenanted space.
- Overall occupancy was 97.3% as of September 30, 2000. Occupancy rates
exceeded 97.5% in the Baltimore/Washington Corridor, which represents 57.9%
of our office square footage and 63.1% of our total office revenues for the
3rd quarter of 2000. We were 98.3% leased as of September 30, 2000 for our
office portfolio.
- Weighted average lease term of our office portfolio is 4.7 years as of
September 30, 2000 with an average contractual rental rate (including tenant
reimbursements for operating costs) of $17.35 per square foot.
- Same office properties constitute 58 buildings of which 63.8% are located in
the Baltimore/Washington Corridor. In the third quarter of 2000, these same
office properties contributed 73.5% of our office portfolio's revenues. Same
property cash NOI increased 5.2% over the third quarter of 1999. This same
property cash NOI represents 77.0% of our third quarter cash NOI.
1
<PAGE>
DEVELOPMENT
- We have 6 buildings under construction totaling approximately 559,218 square
feet with an anticipated cost of $89.2 million and 41.2% pre-leasing. In
July, TASC, Inc., an existing tenant, signed a 61,250 square foot seven-year
lease in the building known as 201 NBP. Coca-Cola Company signed a 27,414
square foot five-year lease at 6750 Alexander Bell, one of our development
properties located in Columbia Gateway Business Park.
- Our 3 properties under development will add 285,000 square feet to our
portfolio and are anticipated to cost $49.8 million. In July, Computer
Sciences Corporation signed a 150,000 square foot ten-year lease for the
entire building known as 211 NBP. We have achieved 56.1% pre-leasing on our
development properties.
- This combined planned growth represents 13.3% of the existing square footage
of our operating properties as of September 30, 2000 and 18.7% of our net
investment in real estate.
SUBSEQUENT EVENTS
- On October 14, 2000, our $100 million Term Credit Facility converted from a
fixed-rate loan to LIBOR plus 175. The maturity date has been extended
through October 13, 2001 with a remaining option to extend for one year.
NOTE: THIS SUPPLEMENTAL INFORMATION CONTAINS "FORWARD LOOKING" STATEMENTS, AS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, THAT ARE BASED
ON THE COMPANY'S CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS ABOUT FUTURE
EVENTS AND FINANCIAL TRENDS AFFECTING THE FINANCIAL CONDITION OF THE BUSINESS.
STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE
COMPANY'S BELIEFS AND EXPECTATIONS, ARE FORWARD-LOOKING STATEMENTS. THESE
STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE, EVENTS OR RESULTS AND
INVOLVE POTENTIAL RISKS AND UNCERTAINTIES. ACCORDINGLY, ACTUAL RESULTS MAY
DIFFER MATERIALLY. THE COMPANY UNDERTAKES NO OBLIGATIONS TO PUBLICLY UPDATE OR
REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION,
FUTURE EVENTS OR OTHERWISE. FOR FURTHER INFORMATION, PLEASE REFER TO THE
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
2
<PAGE>
QUARTERLY SELECTED FINANCIAL SUMMARY DATA
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
----------------------------------- -------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Total Revenues $ 28,039 $ 26,417 $ 25,861 $ 22,587 $ 20,460
Net Operating Income 19,989 18,980 18,253 16,701 14,409
EBITDA 18,559 17,772 16,952 15,728 13,735
Net Income before Preferred Dividends 3,685 3,712 3,649 3,934 4,046
Preferred Dividends (781) (1,119) (1,120) (1,118) (1,060)
-------- -------- -------- -------- --------
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS $ 2,904 $ 2,593 $ 2,530 $ 2,816 $ 2,986
======== ======== ======== ======== ========
Funds From Operations (FFO) - Diluted $ 9,550 $ 9,250 $ 8,900 $ 8,240 $ 7,842
FFO PER DILUTED SHARE $ 0.30 $ 0.29 $ 0.28 $ 0.28 $ 0.27
Adjusted FFO - Diluted(A) $ 6,691 $ 7,634 $ 7,429 $ 6,818 $ 6,565
ADJUSTED FFO PER DILUTED SHARE $ 0.23 $ 0.24 $ 0.23 $ 0.23 $ 0.22
Payout Ratios:
FFO - DILUTED(B) 67.42% 66.02% 68.95% 68.54% 63.90%
AFFO - DILUTED(C) 87.68% 80.00% 82.61% 82.83% 76.33%
TOTAL DIVIDENDS/DISTRIBUTIONS $ 7,220 $ 6,888 $ 6,918 $ 6,427 $ 5,732
</TABLE>
(A) For the quarter ended September 30, 2000, the Series C convertible
preferred units were anti-dilutive for AFFO calculations. Thus, in
computing AFFO, the quarterly dividend of $572 was included in the
numerator and the related 2,421 of Series C convertible preferred units
(as if already converted into common shares) were excluded from the
denominator.
(B) Computed by dividing total dividends/distributions (except for dividends
on Series B Cumulative Redeemable Preferred Shares which are subtracted to
calculate FFO) by FFO diluted.
(C) Computed by dividing total dividends/distributions (except for dividends
on Series B Cumulative Redeemable Preferred Shares which are subtracted to
calculate AFFO) by AFFO diluted. In addition, for the quarter ended
September 30, 2000, the quarterly Series C preferred unit dividend of $572
was excluded from the numerator.
3
<PAGE>
QUARTERLY CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
2000 1999
----------------------------------- -------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in real estate:
Land - operational $ 136,723 $ 141,646 $ 137,075 $ 135,640 $ 112,810
Land - development 21,888 15,888 16,332 13,158 10,150
Construction in progress 21,579 20,300 25,832 20,667 16,203
Buildings and improvements 585,067 575,531 551,332 544,968 452,810
Furniture, fixtures and equipment 345 345 345 335 335
Less: accumulated depreciation (29,639) (25,650) (22,027) (18,279) (14,960)
--------- --------- --------- --------- ---------
NET INVESTMENT IN REAL ESTATE 735,963 728,060 708,889 696,489 577,348
Cash and cash equivalents 3,259 630 869 2,376 957
Restricted cash 2,007 2,903 2,507 2,041 1,064
Accounts receivable, net 3,571 3,386 2,080 1,928 1,887
Investment in and advances to other unconsolidated entities 4,074 4,095 4,393 3,661 1,697
Investment in and advances to real estate joint ventures 8,606 -- -- -- 37,199
Deferred rent receivable 7,882 6,010 5,378 4,634 4,000
Deferred charges, net 12,667 10,953 8,133 7,525 5,592
Prepaid and other assets 6,836 4,197 2,551 2,380 3,377
--------- --------- --------- --------- ---------
TOTAL ASSETS $ 784,865 $ 760,234 $ 734,800 $ 721,034 $ 633,121
========= ========= ========= ========= =========
LIABILITIES AND BENEFICIARIES' EQUITY
Liabilities:
Mortgage loans payable $ 465,696 $ 436,679 $ 412,191 $ 399,627 $ 336,643
Accounts payable and accrued expenses 6,435 11,245 7,929 6,597 5,303
Rents received in advance and security deposits 5,351 4,277 4,168 3,776 2,996
Dividends/distributions payable 7,090 6,757 6,787 6,298 5,732
Other liabilities -- -- -- -- 1,393
--------- --------- --------- --------- ---------
TOTAL LIABILITIES 484,572 458,958 431,075 416,298 352,067
--------- --------- --------- --------- ---------
Minority interests:
Preferred Units in the Operating Partnership 24,367 24,367 24,367 24,367 52,500
Common Units in the Operating Partnership 81,402 78,720 80,422 88,170 26,643
Other consolidated partnership 115 109 106 98 90
--------- --------- --------- --------- ---------
TOTAL MINORITY INTERESTS 105,884 103,196 104,895 112,635 79,233
--------- --------- --------- --------- ---------
COMMITMENTS AND CONTINGENCIES -- -- -- -- --
Beneficiaries' equity:
Preferred Shares ($0.01 par value; 5,000,000 authorized);
1,025,000 designated as Series A Convertible Preferred
Shares of beneficial interest (1 share issued as of
September 30, 2000) -- 10 10 10 10
1,725,000 designated as Series B Cumulative Redeemable
Preferred Shares of beneficial interest (1,250,000
issued as of September 30, 2000) 12 12 12 12 12
Common Shares of beneficial interest ($0.01 par value;
45,000,000 authorized, 20,573,136 shares issued as of
September 30, 2000) 206 187 185 176 172
Treasury Shares, at cost (166,600 shares as of
September 30, 2000) (1,415) (1,415) (52) -- --
Additional paid-in capital 209,384 211,978 210,524 202,867 208,725
Accumulated deficit (10,379) (9,293) (8,450) (7,547) (7,098)
Value of unearned restricted Common Share grants (3,399) (3,399) (3,399) (3,417) --
--------- --------- --------- --------- ---------
TOTAL BENEFICIARIES' EQUITY 194,409 198,080 198,830 192,101 201,821
--------- --------- --------- --------- ---------
TOTAL BENEFICIARIES' EQUITY AND MINORITY INTERESTS 300,293 301,276 303,725 304,736 281,054
--------- --------- --------- --------- ---------
TOTAL LIABILITIES AND BENEFICIARIES' EQUITY $ 784,865 $ 760,234 $ 734,800 $ 721,034 $ 633,121
========= ========= ========= ========= =========
</TABLE>
Note: Other unconsolidated entities include Corporate Office Management, Inc.
(COMI), Corporate Development Services, LLC (CDS), Cornucopia Holdings,
LLC, Corporate Management Services, LLC (CMS), Corporate Realty
Management, LLC (CRM) and Martin G. Knott and Associates.
4
<PAGE>
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND FUNDS FROM OPERATIONS (FFO)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------- -------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental revenue $ 23,980 $ 23,154 $ 21,906 $ 19,222 $ 17,471
Tenant recoveries and other revenue 4,059 3,263 3,955 3,365 2,989
-------- -------- -------- -------- --------
TOTAL REVENUES 28,039 26,417 25,861 22,587 20,460
EXPENSES
Property operating 3,596 3,049 2,883 2,278 2,777
Repairs and maintenance 3,018 3,065 3,439 2,485 2,208
Real estate taxes 1,436 1,323 1,286 1,123 1,066
-------- -------- -------- -------- --------
TOTAL PROPERTY EXPENSES 8,050 7,437 7,608 5,886 6,051
NET OPERATING INCOME 19,989 18,980 18,253 16,701 14,409
General and administrative (1,319) (1,160) (1,348) (888) (631)
Equity in (loss) income of unconsolidated entities (111) (48) 47 (85) (43)
-------- -------- -------- -------- --------
EBITDA 18,559 17,772 16,952 15,728 13,735
Interest expense (7,850) (7,404) (6,934) (6,399) (4,990)
Series B Preferred Share dividends (781) (780) (781) (780) (721)
Amortization of deferred financing costs (349) (311) (306) (260) (168)
Depreciation on unconsolidated real estate entities (3) (3) (3) (16) 16
Minority interestholders' share of operations (6) (4) (7) (14) --
Depreciation of corporate FF&E (20) (20) (20) (19) (30)
-------- -------- -------- -------- --------
FUNDS FROM OPERATIONS (FFO) - DILUTED 9,550 9,250 8,900 8,240 7,842
Depreciation and other amortization (4,275) (4,287) (3,853) (3,290) (3,057)
Gain on property sales -- 57 -- -- --
Loss on early extinguishment of debt (109) (42) -- (65) --
Depreciation on unconsolidated real estate entities 3 3 3 16 (16)
Minority interestholders' share of operations 6 4 7 14 --
Series B Preferred Share dividends 781 780 781 780 721
-------- -------- -------- -------- --------
INCOME BEFORE MINORITY INTERESTS
AND PREFERRED SHARE DIVIDENDS 5,956 5,765 5,839 5,695 5,490
MINORITY INTERESTS:
Preferred Units in Operating Partnership (572) (548) (548) (61) (853)
Common Units in Operating Partnership (1,693) (1,501) (1,634) (1,692) (591)
Other consolidated partnership (6) (4) (7) (8) --
Preferred Share dividends (781) (1,119) (1,120) (1,118) (1,060)
-------- -------- -------- -------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 2,904 $ 2,593 $ 2,530 $ 2,816 $ 2,986
======== ======== ======== ======== ========
FUNDS FROM OPERATIONS (FFO) - DILUTED $ 9,550 $ 9,250 $ 8,900 $ 8,240 $ 7,842
Preferred Units in Operating Partnership(1) (572) -- -- -- --
Straight line rents (1,872) (693) (742) (632) (634)
Non-incremental capital expenditures (415) (923) (729) (790) (643)
-------- -------- -------- -------- --------
ADJUSTED FUNDS FROM OPERATIONS - DILUTED $ 6,691 $ 7,634 $ 7,429 $ 6,818 $ 6,565
======== ======== ======== ======== ========
Preferred dividends/distributions(2) 1,353 1,668 1,668 1,179 1,913
Common dividends/distributions 5,867 5,220 5,250 5,248 3,819
-------- -------- -------- -------- --------
TOTAL DIVIDENDS/DISTRIBUTIONS $ 7,220 $ 6,888 $ 6,918 $ 6,427 $ 5,732
======== ======== ======== ======== ========
</TABLE>
(1) For the quarter ended September 30, 2000, the Series C convertible preferred
units were anti-dilutive for AFFO calculations. Thus, in computing AFFO, the
quarterly dividend of $572 was included in the numerator and the related
2,421 of Series C convertible preferred units (as if already converted into
common shares) were excluded from the denominator.
(2) Includes Series B Cumulative Redeemable Preferred Share dividends deducted
for FFO/AFFO computations.
5
<PAGE>
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND FFO PER DILUTED SHARE
(SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------------ --------------------------
September 30 June 30 March 31 December 31 September 30
------------ ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental revenue $ 0.75 $ 0.71 $ 0.68 $ 0.65 $ 0.59
Tenant recoveries and other revenue 0.13 0.10 0.12 0.11 0.10
---------- ---------- ---------- ---------- ----------
TOTAL REVENUES 0.88 0.82 0.80 0.76 0.69
EXPENSES
Property operating 0.11 0.09 0.09 0.08 0.09
Repairs and maintenance 0.09 0.09 0.11 0.08 0.07
Real estate taxes 0.04 0.04 0.04 0.04 0.04
---------- ---------- ---------- ---------- ----------
TOTAL PROPERTY EXPENSES 0.25 0.23 0.24 0.20 0.21
NET OPERATING INCOME 0.63 0.59 0.56 0.56 0.49
General and administrative (0.04) (0.04) (0.04) (0.03) (0.02)
Equity in (loss) income of unconsolidated entities (0.00) (0.00) 0.00 (0.00) (0.00)
---------- ---------- ---------- ---------- ----------
EBITDA 0.58 0.55 0.52 0.53 0.47
Interest expense (0.25) (0.23) (0.21) (0.22) (0.17)
Series B Preferred Share dividends (0.02) (0.02) (0.02) (0.03) (0.02)
Amortization of deferred financing costs (0.01) (0.01) (0.01) (0.01) (0.01)
Depreciation on unconsolidated real estate entities (0.00) (0.00) (0.00) (0.00) 0.00
Minority interestholders' share of operations (0.00) (0.00) (0.00) (0.00) --
Depreciation of corporate FF&E (0.00) (0.00) (0.00) (0.00) (0.00)
---------- ---------- ---------- ---------- ----------
FUNDS FROM OPERATIONS (FFO) - DILUTED 0.30 0.29 0.28 0.28 0.27
Depreciation and other amortization (0.13) (0.13) (0.12) (0.11) (0.10)
Gain on property sales -- 0.00 -- -- --
Loss on early extinguishment of debt (0.00) (0.00) -- (0.00) --
Depreciation on unconsolidated real estate entities 0.00 0.00 0.00 0.00 (0.00)
Minority interestholders' share of operations 0.00 0.00 0.00 0.00 --
Series B Preferred Share dividends 0.02 0.02 0.02 0.03 0.02
---------- ---------- ---------- ---------- ----------
INCOME BEFORE MINORITY INTERESTS AND
PREFERRED SHARE DIVIDENDS 0.19 0.18 0.18 0.19 0.19
MINORITY INTERESTS:
Preferred Units in Operating Partnership (0.02) (0.02) (0.02) (0.00) (0.03)
Common Units in Operating Partnership (0.05) (0.05) (0.05) (0.06) (0.02)
Other consolidated partnership (0.00) (0.00) (0.00) (0.00) --
Preferred Share dividends (0.02) (0.03) (0.03) (0.04) (0.04)
---------- ---------- ---------- ---------- ----------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 0.09 $ 0.08 $ 0.08 $ 0.09 $ 0.10
========== ========== ========== ========== ==========
FUNDS FROM OPERATIONS (FFO) - DILUTED $ 0.30 $ 0.29 $ 0.28 $ 0.28 $ 0.27
Preferred Units in Operating Partnership (0.02) -- -- -- --
Straight line rents (0.06) (0.02) (0.02) (0.02) (0.02)
Non-incremental capital expenditures (0.01) (0.03) (0.02) (0.03) (0.02)
---------- ---------- ---------- ---------- ----------
ADJUSTED FUNDS FROM OPERATIONS - DILUTED $ 0.23 $ 0.24 $ 0.23 $ 0.23 $ 0.22
========== ========== ========== ========== ==========
For FFO Computations:
Weighted Average Converted Preferred Shares/Units 2,421 4,642 4,642 2,123 9,345
Weighted Average Common Shares/Units Outstanding 29,561 27,750 27,683 27,620 20,123
---------- ---------- ---------- ---------- ----------
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 31,982 32,393 32,325 29,743 29,468
========== ========== ========== ========== ==========
For AFFO Computations:
Weighted Average Converted Preferred Shares/Units -- 4,642 4,642 2,123 9,345
Weighted Average Common Shares/Units Outstanding 29,561 27,750 27,683 27,620 20,123
---------- ---------- ---------- ---------- ----------
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 29,561 32,393 32,325 29,743 29,468
========== ========== ========== ========== ==========
</TABLE>
6
<PAGE>
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS AND FFO AS A PERCENTAGE OF
TOTAL REVENUES
<TABLE>
<CAPTION>
2000 1999
------------------------------------- --------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental revenue 86% 88% 85% 85% 85%
Tenant recoveries and other revenue 14% 12% 15% 15% 15%
---- ---- ---- ---- ----
TOTAL REVENUES 100% 100% 100% 100% 100%
EXPENSES
Property operating 13% 12% 11% 10% 14%
Repairs and maintenance 11% 12% 13% 11% 11%
Real estate taxes 5% 5% 5% 5% 5%
---- ---- ---- ---- ----
TOTAL PROPERTY EXPENSES 29% 28% 29% 26% 30%
NET OPERATING INCOME 71% 72% 71% 74% 70%
General and administrative (5%) (4%) (5%) (4%) (3%)
Equity in (loss) income of unconsolidated entities (0%) (0%) 0% (0%) (0%)
---- ---- ---- ----
EBITDA 66% 67% 66% 70% 67%
Interest expense (28%) (28%) (27%) (28%) (24%)
Series B Preferred Share dividends (3%) (3%) (3%) (3%) (4%)
Amortization of deferred financing costs (1%) (1%) (1%) (1%) (1%)
Depreciation on unconsolidated real estate entities (0%) (0%) (0%) (0%) 0%
Minority interestholders' share of operations (0%) (0%) (0%) (0%) 0%
Depreciation of corporate FF&E (0%) (0%) (0%) (0%) (0%)
---- ---- ---- ---- ----
FUNDS FROM OPERATIONS (FFO) - DILUTED 34% 35% 34% 36% 38%
Depreciation and other amortization (15%) (16%) (15%) (15%) (15%)
Gain on property sales 0% 0% 0% 0% 0%
Loss on early extinguishment of debt (0%) (0%) 0% (0%) 0%
Depreciation on unconsolidated real estate entities 0% 0% 0% 0% (0%)
Minority interestholders' share of operations 0% 0% 0% 0% 0%
Series B Preferred Share dividends 3% 3% 3% 3% 4%
---- ---- ---- ---- ----
INCOME BEFORE MINORITY INTERESTS AND
PREFERRED SHARE DIVIDENDS 21% 22% 23% 25% 27%
MINORITY INTERESTS:
Preferred Units in Operating Partnership (2%) (2%) (2%) (0%) (4%)
Common Units in Operating Partnership (6%) (6%) (6%) (7%) (3%)
Other consolidated partnership (0%) (0%) (0%) (0%) 0%
Preferred Share dividends (3%) (4%) (4%) (5%) (5%)
---- ---- ---- ---- ----
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS 10% 10% 10% 12% 15%
==== ==== ==== ==== ====
FUNDS FROM OPERATIONS (FFO) - DILUTED 34% 35% 34% 36% 38%
Preferred Units in Operating Partnership (2%) 0% 0% 0% 0%
Straight line rents (7%) (3%) (3%) (3%) (3%)
Non-incremental capital expenditures (1%) (3%) (3%) (3%) (3%)
---- ---- ---- ---- ----
ADJUSTED FUNDS FROM OPERATIONS - DILUTED 24% 29% 29% 30% 32%
==== ==== ==== ==== ====
</TABLE>
7
<PAGE>
QUARTERLY EQUITY ANALYSIS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA, SHARE PRICES AND RATIOS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------- --------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
COMMON EQUITY - END OF QUARTER
Common Shares(1) 20,407 18,544 18,529 17,646 17,174
Common Units 9,388 9,388 9,558 10,435 2,935
-------- -------- -------- -------- --------
TOTAL 29,795 27,932 28,087 28,081 20,109
======== ======== ======== ======== ========
CONVERTIBLE PREFERRED EQUITY - END OF QUARTER
Convertible Series A Preferred Shares Outstanding(2) 0 984 984 984 984
Conversion Ratio 1.8748 1.8748 1.8748 1.8748 1.8748
Common Shares Issued Assuming Conversion 0 1,845 1,845 1,845 1,845
Preferred Share Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
Convertible Initial Preferred Units Outstanding(3) n/a n/a n/a n/a 2,100
Conversion Ratio n/a n/a n/a n/a 3.57
Common Units Issued Assuming Conversion n/a n/a n/a n/a 7,500
Preferred Units Book Value per Unit n/a n/a n/a n/a $ 25.00
Convertible Series C Preferred Units Outstanding(4) 1,017 975 975 975 n/a
Conversion Ratio 2.3810 2.3810 2.3810 2.3810 n/a
Common Units Issued Assuming Conversion 2,421 2,321 2,321 2,321 n/a
Preferred Units Book Value per Unit $ 25.00 $ 25.00 $ 25.00 $ 25.00 n/a
PERPETUAL PREFERRED EQUITY - END OF QUARTER
Redeemable Series B Shares Outstanding 1,250 1,250 1,250 1,250 1,250
Preferred Share Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
WEIGHTED AVERAGE SHARES:
Weighted Average Common Shares Outstanding 19,934 18,014 17,353 17,176 17,037
Weighted Average Preferred Shares Outstanding
Assuming Conversion -- 1,845 1,845 1,845 1,845
Weighted Average Dilutive Options 239 180 50 10 18
Weighted Average Dilutive Warrants(4) -- 476 476 -- --
Weighted Average Common Units 9,388 9,556 10,281 10,435 3,068
Weighted Average Preferred Units
Assuming Conversion 2,421 2,321 2,321 277 7,500
-------- -------- -------- -------- --------
WEIGHTED AVE SHARES/UNITS OUTSTANDING ASSUMING
CONVERSION OF PREFERRED SHARES/UNITS 31,982 32,393 32,325 29,743 29,468
======== ======== ======== ======== ========
COMMON SHARES TRADING VOLUME
Average Daily Volume (Shares) 20 22 19 23 26
Average Daily Volume (Dollars in thousands) $ 188.38 $ 187.74 $ 152.05 $ 174.37 $ 211.87
As a Percentage of Common Shares 0.1% 0.1% 0.1% 0.1% 0.2%
COMMON SHARE PRICE RANGE
Quarterly High $ 10.13 $ 9.25 $ 8.38 $ 8.25 $ 9.00
Quarterly Low $ 8.75 $ 8.00 $ 7.50 $ 7.06 $ 7.00
Quarterly Average $ 9.39 $ 8.72 $ 7.92 $ 7.70 $ 8.08
End of Quarter $ 9.94 $ 9.19 $ 8.19 $ 7.63 $ 7.56
CAPITALIZATION
Liquidation Value of Preferred Shares/Units $ 56,667 $ 80,224 $ 80,224 $ 80,224 $108,358
Market Value of Common Shares/Units 296,088 256,625 229,962 214,118 152,076
-------- -------- -------- -------- --------
TOTAL EQUITY MARKET CAPITALIZATION $352,754 $336,850 $310,187 $294,342 $260,433
======== ======== ======== ======== ========
TOTAL DEBT $465,696 $436,679 $412,191 $399,627 $336,643
======== ======== ======== ======== ========
TOTAL MARKET CAPITALIZATION $818,450 $773,529 $722,378 $693,969 $597,076
======== ======== ======== ======== ========
DEBT TO TOTAL MARKET CAPITALIZATION 56.9% 56.5% 57.1% 57.6% 56.4%
DEBT TO UNDEPRECIATED BOOK VALUE
OF REAL ESTATE ASSETS 59.9% 57.9% 56.4% 55.9% 53.5%
</TABLE>
(1) Net of 166,600 treasury shares as of September 30, 2000.
(2) Converted September 28, 2000.
(3) Converted October 1, 1999.
(4) Eliminated a warrant to acquire a maximum of 476,200 common units in
exchange for the issuance of 42,000 Series C convertible preferred units in
July 2000.
8
<PAGE>
QUARTERLY VALUATION ANALYSIS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------- --------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
PRICING MULTIPLES
NOI Multiple
(Market value of Common Equity + Avg Preferred
Share/Units+ Avg Total Debt) / Ann. NOI 10.05x 10.10x 9.80x 10.16x 9.61x
EBITDA Multiple
(Market value of Common Equity + Avg Preferred
Share/Units + Avg Total Debt) / Ann. EBITDA 10.83x 10.79x 10.55x 10.80x 10.08x
FFO Multiple
(Quarter End Common Share Price / Ann. FFO - diluted) 8.32x 8.04x 7.43x 6.88x 7.10x
AFFO Multiple
(Quarter End Common Share Price / Ann. AFFO - diluted) 10.98x 9.75x 8.91x 8.32x 8.49x
NOI Yield
(Ann. NOI / (Market value of Common Equity + Avg
Preferred Share/Units + Avg Debt)) 9.95% 9.90% 10.21% 9.85% 10.41%
EBITDA Yield
(Ann. EBITDA / (Market value of Common Equity + Avg
Preferred Share/Units + Avg Debt)) 9.24% 9.27% 9.48% 9.25% 9.92%
FFO Yield
(Ann. FFO / Quarter End Common Share Price) 12.02% 12.43% 13.45% 14.53% 14.08%
AFFO Yield
(Ann. AFFO / Quarter End Common Share Price) 9.11% 10.26% 11.23% 12.03% 11.78%
Total Market Capitalization Per Square Foot
((Market Value of Common Stock + Preferred Share/Units +
Total Debt ) / GLA)(1) $ 128.86 $ 121.76 $ 118.79 $ 114.21 $ 109.48
RETURNS
Yield on Real Estate Owned - NOI
(Ann. NOI / Avg. Adjusted Gross Real Estate Investment)(2) 11.11% 10.80% 10.66% 10.41% 10.36%
Yield on Real Estate Owned - EBITDA
(Ann. EBITDA / Avg. Adjusted Gross Real Estate Investment)(2) 10.31% 10.11% 9.90% 9.78% 9.88%
Return on Book Value of Average Equity & Minority Interest
(Ann. EBTDA / Avg. Equity & Minority Interest) 14.24% 13.71% 13.17% 12.74% 13.14%
</TABLE>
(1) Excludes square footage of assets under development or under construction.
(2) Excludes land-development and construction in progress but includes
investment in real estate joint ventures.
9
<PAGE>
QUARTERLY DEBT ANALYSIS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------- --------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
DEBT OUTSTANDING
Mortgage Loans $338,063 $313,325 $ 319,624 $ 317,392 $287,005
Construction Loans 25,586 38,669 29,067 24,735 13,438
Revolving Credit Facility 4,761 -- -- -- --
Secured Revolving Credit Facility 97,285 84,685 63,500 57,500 36,200
-------- -------- --------- --------- --------
$465,695 $436,679 $ 412,191 $ 399,627 $336,643
======== ======== ========= ========= ========
AVERAGE OUTSTANDING BALANCE
Mortgage Loans $319,745 $318,249 $ 317,436 $ 288,515 $235,130
Construction Loans 37,700 34,145 26,551 18,825 12,206
Revolving Credit Facility 2,381 -- -- -- --
Secured Revolving Credit Facility 91,239 77,794 61,199 54,048 61,648
-------- -------- --------- --------- --------
$451,065 $430,188 $ 405,186 $ 361,388 $308,984
======== ======== ========= ========= ========
INTEREST RATE STRUCTURE
Fixed $305,614 $277,575 $ 283,624 $ 281,253 $285,620
Variable 60,081 109,104 128,567 118,374 51,023
Variable Subject to Interest Rate Protection(1), (2) 100,000 50,000 -- -- --
-------- -------- --------- --------- --------
$465,695 $436,679 $ 412,191 $ 399,627 $336,643
======== ======== ========= ========= ========
% of Fixed Rate Loans 65.63% 63.56% 68.81% 70.38% 84.84%
% of Variable Rate Loans 34.37% 36.44% 31.19% 29.62% 15.16%
-------- -------- --------- --------- --------
100.00% 100.00% 100.00% 100.00% 100.00%
======== ======== ========= ========= ========
AVERAGE INTERESTS RATES
Mortgage & Construction Loans 7.62% 7.52% 7.53% 7.45% 7.18%
Revolving Credit Facility 8.12% n/a n/a n/a n/a
Secured Revolving Credit Facility 8.33% 8.11% 7.68% 7.61% 7.13%
Total Weighted Average 7.64% 7.58% 7.55% 7.48% 7.17%
DEBT RATIOS
Debt to Total Market Capitalization 56.9% 56.5% 57.1% 57.6% 56.4%
Debt to Undepreciated Book Value of Real Estate Assets 59.9% 57.9% 56.4% 55.9% 53.5%
COVERAGE RATIOS (EXCLUDING CAPITALIZED INTEREST)
Interest Coverage - NOI 2.55x 2.56x 2.63x 2.61x 2.89x
(NOI / Interest)
Interest Coverage - EBITDA 2.36x 2.40x 2.44x 2.46x 2.75x
(EBITDA / Interest)
Interest Coverage - EBITDA - YTD 2.40x 2.42x 2.44x 2.56x 2.60x
(EBITDA / Interest - Year-to-date)
Debt Service Coverage - NOI 2.28x 2.32x 2.35x 2.32x 2.59x
(NOI / (Interest + Principal Amortization))
Debt Service Coverage - EBITDA 2.11x 2.17x 2.18x 2.18x 2.47x
(EBITDA / (Interest + Principal Amortization))
Fixed Charge Coverage - NOI 2.17x 2.09x 2.12x 2.20x 2.09x
(NOI / (Interest + Preferred Distribution))
Fixed Charge Coverage - EBITDA 2.02x 1.96x 1.97x 2.08x 1.99x
(EBITDA / (Interest + Preferred Distribution))
</TABLE>
(1) We purchased a $50 million 2-year cap on LIBOR at a rate of 7.7% which
expires May 31, 2002.
(2) We purchased a $50 million 1-year cap on LIBOR at a rate of 7.0% which
expires October 13, 2001.
10
<PAGE>
QUARTERLY OPERATING RATIOS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------- --------------------------
September 30 June 30 March 31 December 31 September 30
------------ --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
OPERATING RATIOS
NOI as a % of Real Estate Revenues
(NOI / (Rental Revenue + Oper. Expense Reimb.)) 71.29% 71.85% 70.58% 73.94% 70.43%
EBITDA as a % of Real Estate Revenues
(EBITDA / (Rental Revenue + Oper. Expense Reimb.)) 66.19% 67.27% 65.55% 69.64% 67.13%
G&A as a % of Real Estate Revenues
(G&A / (Rental Revenue + Oper. Expense Reimb.)) 4.70% 4.39% 5.21% 3.93% 3.08%
G&A as a % of EBITDA
(G&A / EBITDA) 7.11% 6.53% 7.95% 5.65% 4.59%
Quarter end occupancy for entire portfolio 97.33% 96.66% 97.26% 97.46% 97.89%
Non-Incremental Capital Expenditures $ 415 $ 923 $ 729 $ 790 $ 643
Non-Incremental Capital Expenditures per average square feet $ 0.02 $ 0.04 $ 0.03 $ 0.03 $ 0.03
Non-Incremental Capital Expenditures per Diluted Share $ 0.01 $ 0.03 $ 0.02 $ 0.03 $ 0.02
Non-Incremental Capital Expenditures as a % of NOI 2.08% 4.86% 3.99% 4.73% 4.46%
</TABLE>
11
<PAGE>
QUARTERLY DIVIDEND ANALYSIS
<TABLE>
<CAPTION>
2000 1999
----------------------------------------- --------------------------
September 30 June 30 March 31 December 31 September 30
------------ --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
COMMON SHARE DIVIDENDS
Dividends per share/unit $ 0.20 $ 0.19 $ 0.19 $ 0.19 $ 0.19
Increase over prior quarter 5.3% 0.0% 0.0% 0.0% 5.6%
Increase over prior year 5.3% 5.6% 5.6% 5.6% 5.6%
COMMON DIVIDEND PAYOUT RATIOS
Payout - FFO - Diluted 67.4% 66.0% 69.0% 68.5% 63.9%
((Dividend + Distributions)/FFO)
Payout - AFFO - Diluted 87.7% 80.0% 82.6% 82.8% 76.3%
(Dividend /FAD)
Dividend Coverage - FFO - Diluted 1.48x 1.51x 1.45x 1.46x 1.56x
(FFO /dividends)
Dividend Coverage - AFFO - Diluted 1.14x 1.25x 1.21x 1.21x 1.31x
(AFFO /dividends)
COMMON DIVIDEND YIELDS
Dividend Yield 8.05% 8.27% 9.28% 9.97% 10.05%
INITIAL PREFERRED UNIT DISTRIBUTIONS
Preferred Unit Distributions Per Share n/a n/a n/a n/a $ 0.40625
Preferred Unit Distributions Yield n/a n/a n/a n/a 6.50%
Quarter End Book Value n/a n/a n/a n/a $ 25.00
SERIES C PREFERRED UNIT DISTRIBUTIONS
Preferred Unit Distributions Per Share(1) $ 0.5625 $ 0.5625 $ 0.5625 $ 0.0625 n/a
Preferred Unit Distributions Yield 9.00% 9.00% 9.00% 9.00% n/a
Quarter End Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 n/a
SERIES A PREFERRED SHARE DIVIDENDS
Preferred Share Dividends Per Share $ 0.34375 $ 0.34375 $ 0.34375 $ 0.34375 $ 0.34375
Preferred Share Dividend Yield 5.50% 5.50% 5.50% 5.50% 5.50%
Quarter End Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
SERIES B PREFERRED SHARE DIVIDENDS
Preferred Share Dividends Per Share(2) $ 0.6250 $ 0.6250 $ 0.6250 $ 0.6250 $ 0.5774
Preferred Share Dividend Yield 10.00% 10.00% 10.00% 10.00% 10.00%
Quarter End Book Value $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
</TABLE>
(1) Series C Preferred Unit distributions prorated for actual number of days
outstanding in the quarter ended December 31, 1999.
(2) Series B Preferred Shares issued July 7, 1999. Dividend prorated for actual
number of days outstanding in the quarter ended September 30, 1999.
12
<PAGE>
INVESTOR COMPOSITION AND ANALYST COVERAGE
(AS OF SEPTEMBER 30, 2000)
<TABLE>
<CAPTION>
AS IF CONVERTED FULLY DILUTED
COMMON COMMON PREFERRED OWNERSHIP
SHAREHOLDER CLASSIFICATION SHARES UNITS SHARES/UNITS TOTAL % OF TOTAL
-------------------------- ---------- ---------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Constellation Real Estate, Inc. 8,876,171 -- 2 8,876,173 27.55%
Insiders 1,135,609 7,928,842 -- 9,064,451 28.14%
Institutional Ownership 3,787,844 -- -- 3,787,844 11.76%
Other / Retail 6,606,912 1,458,694 2,420,672 10,486,278 32.55%
---------- ---------- ---------- ---------- ----------
20,406,536 9,387,536 2,420,674 32,214,746 100.00%
========== ========== ========== ========== ==========
<CAPTION>
September 30, June 30, March 31, December 31, September 30,
RESEARCH COVERAGE 2000 2000 2000 1999 1999
------------- -------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
A. G. Edwards x x
Deutsche Banc Alex. Brown (1) x x x x x
Donaldson Lufkin & Jenrette Securities Corp. x x x x x
CIBC Oppenheimer (1) x x x x x
Janney Montgomery Scott x x x x x
Tucker Anthony Cleary Gull (1) x x x x x
Johnston, Lemon (1) x x x x x
Legg Mason Wood Walker, Inc. x x x x x
Prudential Securities Incorporated x x x x x
McDonald Investments x x x x
</TABLE>
SOURCE: INSTITUTIONAL OWNERSHIP WAS OBTAINED FROM FILED FORMS 13(F) AS OF JUNE
30, 2000 PER VICKERS STOCK RESEARCH CORPORATION.
(1) These companies have temporarily suspended coverage of our shares as the
previously assigned analyst is no longer employed.
13
<PAGE>
DEBT MATURITY SCHEDULE - SEPTEMBER 30, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MORTGAGES
-------------------------
$100,000
SECURED
YEAR OF MONTHLY DUE ON CONSTRUCTION(1) TERM CREDIT(2) REVOLVING $50,000 REVOLVING TOTAL SCHEDULED
MATURITY AMORTIZATION MATURITY LOANS FACILITY CREDIT FACILITY CREDIT FACILITY(3) PAYMENTS
---------- ------------ --------- --------------- --------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $ 936 $ -- $ 3,101 $ -- $ -- $ -- $ 4,037
2001 3,796 19,176 180 -- 97,285 4,761 125,198
2002 3,725 11,592 11,846 100,000 -- -- 127,163
2003 3,924 -- 10,459 -- -- -- 14,383
2004 4,009 25,762 -- -- -- -- 29,771
2005 3,903 20,308 -- -- -- -- 24,211
2006 3,533 59,975 -- -- -- -- 63,508
2007 2,378 6,142 -- -- -- -- 8,520
2008 2,045 66,860 -- -- -- -- 68,905
-------- -------- -------- -------- -------- -------- --------
$ 28,249 $209,815 $ 25,586 $100,000 $ 97,285 $ 4,761 $465,696
======== ======== ======== ======== ======== ======== ========
</TABLE>
Notes:
----------
(1) We have the right to extend an $8,831 construction loan for a one-year
period, subject to certain conditions, upon maturity in 2001. The above
table includes this maturity of $8,546 in 2002. We also have the right to
extend another construction loan of $6,597 for a one-year period, subject
to certain conditions, upon maturity in 2002. The above table includes
$6,509 in 2003 as a maturity. Finally, a $4,048 construction loan contains
a two-year extension period. A maturity of $3,930 in Year 2003 has been
presented in the above table, as if extended. The remaining $3,009
construction loan matures in May 2002. The loan balances as of September
30, 2000 represent the outstanding balance at that date.
(2) The Term Credit Facility was extended through October 13, 2001. We have the
right to extend for another one-year period, subject to certain conditions.
Effective on October 14, 2000, the interest rate converts to LIBOR plus
175. We purchased a one-year $50 million cap of 7.0% which expires in
October 2001. In addition, we purchased a one-year $25 million cap of 7.0%
which also expires in October 2001. This loan has been presented as
maturing in October 2002 in the above table.
(3) We have borrowed under our $50,000 Revolving Credit Facility which matures
in June 2001. This credit facility bears interest at LIBOR plus 150.
14
<PAGE>
PROPERTY SUMMARY BY REGION - SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SINGLE ANTICIPATED
YEAR BUILT STORY(S) RENTABLE RENTABLE
OR OR SQUARE SQUARE FEET
SUBMARKET STATE RENOVATED MULTI-STORY(M) FEET -DEVELOPMENT
---------- ------ ----------- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
OFFICE PROPERTIES
Baltimore /Washington Corridor
------------------------------
131 National Business Parkway BWI Airport MD 1990 M 68,906
132 National Business Parkway BWI Airport MD 2000 M 118,456
133 National Business Parkway BWI Airport MD 1997 M 88,666
134 National Business Parkway BWI Airport MD 1999 M 93,482
135 National Business Parkway BWI Airport MD 1998 M 86,863
141 National Business Parkway BWI Airport MD 1990 M 86,964
2721 Phoenix Road (221 NBP) BWI Airport MD 2000 M -- 117,888
2701 Phoenix Road (201 NBP)(1) BWI Airport MD 2001 M -- 118,000
2711 Phoenix Road (211 NBP) BWI Airport MD 2001 M -- 150,000
1099 Winterson Road BWI Airport MD 1988 M 70,569
1190 Winterson Road BWI Airport MD 1987 M 68,567
1199 Winterson Road BWI Airport MD 1988 M 96,636
1201 Winterson Road BWI Airport MD 1985 M 67,903
1331 Ashton Road BWI Airport MD 1989 S 29,936
1334 Ashton Road BWI Airport MD 1989 S 37,565
1340 Ashton Road BWI Airport MD 1989 S 46,400
1341 Ashton Road BWI Airport MD 1989 S 15,841
1343 Ashton Road BWI Airport MD 1989 S 9,962
1344 Ashton Road BWI Airport MD 1989 M 16,865
1350 Dorsey Road BWI Airport MD 1989 S 20,021
2730 Hercules Road BWI Airport MD 1990 M 240,336
7240 Parkway Drive BWI Airport MD 1985 M 73,500
7318 Parkway Drive BWI Airport MD 1984 S 59,204
7321 Parkway Drive BWI Airport MD 1984 S 39,822
7467 Ridge Road BWI Airport MD 1990 M 73,756
800 International Drive BWI Airport MD 1988 S 50,979
849 International Drive BWI Airport MD 1988 M 68,186
881 Elkridge Landing Road BWI Airport MD 1986 M 73,572
900 Elkridge Landing Road BWI Airport MD 1982 M 97,139
900 International Drive BWI Airport MD 1986 S 57,140
911 Elkridge Landing Road BWI Airport MD 1985 M 68,297
921 Elkridge Landing Road BWI Airport MD 1983 M 54,057
930 International Drive BWI Airport MD 1986 S 57,140
939 Elkridge Landing Road BWI Airport MD 1983 M 51,953
999 Corporate Boulevard BWI Airport MD 2000 M 67,351
1302 Concourse Drive BWI Airport MD 1996 M 84,607
1304 Concourse Drive BWI Airport MD 2001 M -- 100,000
1306 Concourse Drive BWI Airport MD 1990 M 113,837
1615 and 1629 Thames Street Baltimore City MD 1989 M 103,683
9690 Deereco Road North Baltimore County MD 1988 M 133,702
375 West Padonia Road North Baltimore County MD 1986 M 100,804
6716 Alexander Bell Drive Howard County Perimeter MD 1990 M 51,980
6740 Alexander Bell Drive Howard County Perimeter MD 1992 M 59,563
6750 Alexander Bell Drive Howard County Perimeter MD 2000 M -- 78,630
6760 Alexander Bell Drive Howard County Perimeter MD 1991 M 37,248
6940 Columbia Gateway Drive Howard County Perimeter MD 1999 M 108,737
6950 Columbia Gateway Drive Howard County Perimeter MD 1998 M 107,778
6711 Columbia Gateway Drive Howard County Perimeter MD M -- 125,000
6731 Columbia Gateway Drive Howard County Perimeter MD 2001 M -- 125,000
7200 Riverwood Drive Howard County Perimeter MD 1986 S 160,000
8815 Centre Park Drive Howard County Perimeter MD 1987 M 53,782
14502 Greenview Drive Laurel MD 1988 M 71,873
14504 Greenview Drive Laurel MD 1985 M 69,194
6009 - 6011 Oxon Hill Road Southern Prince George's County MD 1990 M 181,236
--------- ---------
# OF OPERATING BUILDINGS: 47
--
TOTAL BALTIMORE / WASHINGTON CORRIDOR: 3,594,058 814,518
--------- ---------
</TABLE>
(1) This property is owned through a joint venture.
15
<PAGE>
PROPERTY SUMMARY BY REGION - SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SINGLE ANTICIPATED
YEAR BUILT STORY(S) RENTABLE RENTABLE
OR OR SQUARE SQUARE FEET
SUBMARKET STATE RENOVATED MULTI-STORY(M) FEET -DEVELOPMENT
---------- ------ ----------- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
OFFICE PROPERTIES
Greater Philadelphia
--------------------
751 Jolly Road Blue Bell PA 1966/1991 M 112,958
753 Jolly Road Blue Bell PA 1960/1992-94 M 419,472
760 Jolly Road Blue Bell PA 1974/1994 M 208,854
785 Jolly Road Blue Bell PA 1970/1996 M 219,065
------- -------
# OF OPERATING BUILDINGS: 4
-
TOTAL GREATER PHILADELPHIA: 960,349 --
-------- -------
Greater Harrisburg
------------------
2601 Market Place East Shore PA 1989 M 67,753
2605 Interstate Drive East Shore PA 1990 M 84,268
6375 Flank Drive East Shore PA 2000 S 19,700
6385 Flank Drive East Shore PA 1995 S 32,800
75 Shannon Road East Shore PA 1999 S 20,887
85 Shannon Road East Shore PA 1999 S 12,863
95 Shannon Road East Shore PA 1999 S 21,976
6340 Flank Drive East Shore PA 1988 S 68,200
6345 Flank Drive East Shore PA 1989 S 69,443
6360 Flank Drive East Shore PA 1988 S 46,500
6380 Flank Drive East Shore PA 1991 S 32,000
6400 Flank Drive East Shore PA 1992 S 52,439
6405 Flank Drive East Shore PA 1991 S 32,000
5035 Ritter Road West Shore PA 1988 S 56,556
5070 Ritter Road - Building A West Shore PA 1989 S 32,000
5070 Ritter Road - Building B West Shore PA 1989 S 28,000
------ ------
# OF OPERATING BUILDINGS: 15
--
TOTAL GREATER HARRISBURG: 657,685 19,700
------- ------
Northern/Central New Jersey
---------------------------
101 Interchange Plaza Exit 8A -- Cranbury NJ 1985 M 44,185
104 Interchange Plaza Exit 8A -- Cranbury NJ 1990 M 47,142
19 Commerce Exit 8A -- Cranbury NJ 1989 S 65,277
2 Centre Drive Exit 8A -- Cranbury NJ 1989 S 16,132
3 Centre Drive Exit 8A -- Cranbury NJ 1987 S 20,436
429 Ridge Road Exit 8A -- Cranbury NJ 1966/1996 M 142,385
431 Ridge Road Exit 8A -- Cranbury NJ 1958/1998 S 170,000
437 Ridge Road Exit 8A -- Cranbury NJ 1962/1996 S 30,000
47 Commerce Exit 8A -- Cranbury NJ 1992/1998 S 41,398
7 Centre Drive Exit 8A -- Cranbury NJ 1989 S 19,466
8 Centre Drive Exit 8A -- Cranbury NJ 1986 S 16,199
68 Culver Road Exit 8A -- Cranbury NJ 2000 M 57,280
4301 Route 1 Monmouth Junction NJ 1986 M 61,300
695 Route 46 Wayne NJ 1990 M 157,394
710 Route 46 Wayne NJ 1985 M 101,791
------- -------
# OF OPERATING BUILDINGS: 15
TOTAL NORTHERN / CENTRAL NEW JERSEY: -- 990,385
------- -------
TOTAL OFFICE PROPERTIES # OF OPERATING BUILDINGS 81 6,202,477 834,218
-- --------- -------
RETAIL PROPERTIES
322 Marlboro Street Easton MD 1977/1997 S 149,191
114 National Business Parkway BWI Airport MD 2001 S -- 10,000
-- ------
# OF OPERATING BUILDINGS: 1
-
TOTAL RETAIL PROPERTIES 149,191 10,000
------- ------
TOTAL PORTFOLIO # OF OPERATING BUILDINGS: 82 6,351,668 844,218
== ========== =======
</TABLE>
16
<PAGE>
PROPERTY OCCUPANCY RATES BY REGION BY QUARTER
OFFICE
-----------------------------------------------------
<TABLE>
<CAPTION>
Baltimore/ Northern/
Greater Washington Central Greater Total Total
Philadelphia Corridor New Jersey Harrisburg Office Retail Portfolio
------------ -------- ----------- ---------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
SEPTEMBER 30, 2000
Number of Buildings 4 47 15 15 81 1 82
Rentable Square Feet 960,349 3,594,058 990,385 657,685 6,202,477 149,191 6,351,668
Percent Occupied 100.00% 97.79% 96.08% 92.82% 97.33% 97.04% 97.33%
JUNE 30, 2000
Number of Buildings 4 47 15 15 81 1 82
Rentable Square Feet 960,349 3,595,118 990,808 657,685 6,203,960 149,191 6,353,151
Percent Occupied 100.00% 97.38% 92.15% 94.47% 96.64% 97.41% 96.66%
MARCH 31, 2000
Number of Buildings 4 44 14 15 77 2 79
Rentable Square Feet 960,349 3,333,590 934,059 657,685 5,885,683 195,325 6,081,008
Percent Occupied 100.00% 98.20% 92.94% 94.70% 97.27% 96.79% 97.26%
DECEMBER 31, 1999
Number of Buildings 4 44 14 15 77 2 79
Rentable Square Feet 960,349 3,332,641 934,059 657,685 5,884,734 191,337 6,076,071
Percent Occupied 100.00% 97.08% 96.00% 98.00% 97.49% 96.73% 97.46%
SEPTEMBER 30, 1999
Number of Buildings 4 39 14 15 72 2 74
Rentable Square Feet 960,349 2,726,752 933,760 657,685 5,278,546 175,325 5,453,871
Percent Occupied 100.00% 98.43% 94.82% 96.92% 97.89% 97.80% 97.89%
</TABLE>
17
<PAGE>
TOP TWENTY OFFICE TENANTS AS OF SEPTEMBER 30, 2000
(DOLLARS AND SQUARE FEET IN THOUSANDS)
<TABLE>
<CAPTION>
Percentage of Percentage Weighted
Total Total Total of Total Average
Number of Occupied Occupied Rental Rental Remaining
Tenant Leases Square Feet Square Feet Revenue(1) Revenue Lease Term(2)
------ ------ ----------- ----------- ----------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
United States of America (3) 17 868 14.4% $ 14,846 14.6% 4.6
Unisys (4) 3 741 12.3% 7,297 7.2% 8.8
AT&T Local Services & affiliates (5), (6) 3 229 3.8% 4,569 4.5% 6.9
IBM (5) 3 200 3.3% 4,069 4.0% 6.9
Magellan Behaviorial Health, Inc. 2 151 2.5% 3,166 3.1% 3.3
Booz Allen Hamilton 4 129 2.1% 2,457 2.4% 3.3
Ciena Corporation 4 202 3.3% 2,365 2.3% 3.7
Merck & Co., Inc. (4) 1 219 3.6% 2,193 2.2% 8.8
Johns Hopkins University (6) 3 80 1.3% 1,652 1.6% 5.8
Credit Management Solutions, Inc. 1 71 1.2% 1,351 1.3% 8.2
The Associated Press 1 65 1.1% 1,338 1.3% 14.8
Mentor Technologies 1 60 1.0% 1,294 1.3% 2.5
Ameritrade Holding Corporation 1 62 1.0% 1,283 1.3% 9.8
Deutsche Banc Alex. Brown 1 84 1.4% 1,279 1.3% 3.7
Commonwealth of Pennsylvania (6) 4 94 1.6% 1,231 1.2% 1.4
Computer Sciences Corporation 1 56 0.9% 1,193 1.2% 1.4
Raytheon E-Systems (6) 3 65 1.1% 1,170 1.2% 2.7
Aerotek 3 67 1.1% 1,093 1.1% 2.0
RAG American Coal Holding, Inc. 1 48 0.8% 1,071 1.1% 9.7
Traveler's Casualty and Surety Co. 2 42 0.7% 1,046 1.0% 0.3
-------- -------- ----- -------- ----- ----
SUBTOTAL TOP 20 OFFICE TENANTS 59 3,533 58.5% 55,963 55.1% 5.7
All remaining tenants 338 2,504 41.5% 45,557 44.9% 3.4
-------- -------- ----- -------- ----- ----
Total/Weighted Average 397 6,037 100.0% $101,520 100.0% 4.7
======== ======== ===== ======== ===== ====
</TABLE>
(1) Total Rental Revenue is the monthly contractual base rent as of September
30, 2000 multiplied by 12 plus the estimated annualized expense
reimbursements under existing office leases.
(2) Weighting of the lease term was computed using Total Rental Revenue.
(3) Many of our government leases are subject to early termination provisions
which are customary to government leases. The weighted average remaining
lease term was computed assuming no exercise of such early termination
rights.
(4) Merck & Co., Inc. subleases 219,065 rentable square feet from Unisys'
960,349 leased rentable square feet.
(5) AT&T Local Services subleases and occupies all of IBM's 200,000 leased
rentable square feet through March 2002. AT&T Local Services has signed
direct leases for such space (except for 26,928 rentable square feet) from
April 1, 2002 through 2006 and 2009. In addition, AT&T Local Services
directly leases 57,280 square feet at our 68 Culver property.
(6) Includes affiliated organizations or agencies.
18
<PAGE>
TOTAL RENTAL REVENUE BY GEOGRAPHIC REGION BY QUARTER (1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
---------------------------------------------- ------------------------------
September 30 June 30 March 31 December 31 September 30
------------ -------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
OFFICE PROPERTIES:
Greater Philadelphia $ 2,506 $ 2,506 $ 2,506 $ 2,506 $ 2,506
Baltimore/Washington Corridor 17,197 16,297 15,830 12,404 11,536
Northern/Central New Jersey 5,326 4,969 4,706 4,866 4,735
Greater Harrisburg 2,228 2,275 2,395 1,924 993
-------- -------- -------- -------- --------
Total Office Properties 27,257 26,047 25,437 21,700 19,770
-------- -------- -------- -------- --------
RETAIL PROPERTIES:
Total Retail Properties 261 279 281 290 347
-------- -------- -------- -------- --------
TOTAL REGIONAL RENTAL REVENUE $ 27,518 $ 26,326 $ 25,718 $ 21,990 $ 20,117
======== ======== ======== ======== ========
</TABLE>
----------
(1) Rental revenue represents GAAP revenue including operating expense
reimbursements, straight line rent adjustments and tenant services income.
NET OPERATING INCOME BY GEOGRAPHIC REGION BY QUARTER
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
---------------------------------------------- ------------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
OFFICE PROPERTIES:
Greater Philadelphia $ 2,482 $ 2,482 $ 2,477 $ 2,490 $ 2,485
Baltimore/Washington Corridor 11,664 11,528 10,681 8,724 7,718
Northern/Central New Jersey 3,458 3,014 2,920 3,065 2,821
Greater Harrisburg 1,683 1,645 1,812 1,591 730
-------- -------- -------- -------- --------
Total Office Properties 19,287 18,669 17,890 15,870 13,754
-------- -------- -------- -------- --------
RETAIL PROPERTIES:
Total Retail Properties 179 222 220 234 311
-------- -------- -------- -------- --------
TOTAL REGIONAL NOI $ 19,466 $ 18,891 $ 18,110 $ 16,104 $ 14,065
======== ======== ======== ======== ========
Other income / expenses, net 523 89 143 597 344
-------- -------- -------- -------- --------
TOTAL NOI $ 19,989 $ 18,980 $ 18,253 $ 16,701 $ 14,409
======== ======== ======== ======== ========
</TABLE>
19
<PAGE>
SAME OFFICE PROPERTY CASH NET OPERATING INCOME BY QUARTER (1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------------- -----------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
OFFICE PROPERTIES: (2)
Greater Philadelphia $ 2,348 $ 2,302 $ 2,297 $ 2,310 $ 2,305
Baltimore / Washington Corridor 7,690 8,314 7,975 7,494 7,223
Northern / Central New Jersey 2,876 2,433 2,851 2,991 2,742
Greater Harrisburg 500 477 541 496 480
------- ------- ------- ------- -------
TOTAL OFFICE PROPERTIES $13,414 $13,526 $13,664 $13,291 $12,750
======= ======= ======= ======= =======
</TABLE>
SAME OFFICE PROPERTY GAAP NET OPERATING INCOME BY QUARTER (1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
------------------------------------------- ----------------------------
September 30 June 30 March 31 December 31 September 30
------------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
OFFICE PROPERTIES: (2)
Greater Philadelphia $ 2,482 $ 2,482 $ 2,477 $ 2,490 $ 2,485
Baltimore / Washington Corridor 7,966 8,532 8,247 7,792 7,547
Northern / Central New Jersey 3,008 2,481 2,920 3,065 2,821
Greater Harrisburg 507 483 548 504 494
-------- ------- ------- -------- --------
TOTAL OFFICE PROPERTIES $ 13,963 $13,978 $14,192 $ 13,851 $ 13,347
======== ======= ======= ======== ========
</TABLE>
(1) Net operating income for same office properties has been presented on a
GAAP basis and a modified cash basis which removes the effect of
straight-line rents from the GAAP net operating income.
(2) Same office properties include buildings owned for a minimum of five
reporting quarters.
20
<PAGE>
OFFICE LEASE EXPIRATION ANALYSIS BY YEAR
<TABLE>
<CAPTION>
Percentage Total Rental
Square Total Rental of Total Revenue of
Year of Number Footage Percentage of Revenue of Rental Expiring Leases
Lease of Leases of Leases Total Occupied Expiring Revenue per Occupied
Expiration (1) Expiring Expiring Square Feet Leases (2) Expiring Square Foot
-------------- -------- -------- ----------- ---------- -------- -----------
($000s)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 33 257,020 4.3% $5,179 5.1% $20.15
2001 65 452,536 7.5% 7,345 7.2% 16.23
2002 80 924,824 15.3% 16,024 15.8% 17.33
2003 86 908,822 15.1% 16,924 16.7% 18.62
2004 46 584,063 9.7% 10,916 10.8% 18.69
2005 47 478,576 7.9% 8,678 8.5% 18.13
2006 7 210,518 3.5% 3,573 3.5% 16.97
2007 7 190,383 3.2% 2,879 2.8% 15.12
2008 9 539,101 8.9% 10,272 10.1% 19.05
2009 11 1,193,500 19.8% 13,449 13.2% 11.27
2010 5 232,393 3.8% 4,943 4.9% 21.27
2015 1 65,277 1.1% 1,338 1.3% 20.50
--- --------- ----- -------- ----- ------
TOTAL/WEIGHTED AVERAGE 397 6,037,013 100.0% $101,520 100.0% $17.35
=== ========= ===== ======== =====
</TABLE>
NOTE: As of September 30, 2000, the weighted average lease term is 4.7 years.
(1) Many of our government leases are subject to certain early termination
provisions which are customary to government leases. The year of lease
expiration was computed assuming no exercise of such early termination
rights.
(2) Total Rental Revenue is the monthly contractual base rent as of
September 30, 2000 multiplied by 12 plus the estimated annualized expense
reimbursements under existing office leases.
21
<PAGE>
YEAR TO DATE OFFICE RENEWAL ANALYSIS
<TABLE>
<CAPTION>
Baltimore/ Northern/
Greater Washington Central New Greater Total
Philadelphia Corridor Jersey Harrisburg Office
------------ -------- ------ ---------- ------
<S> <C> <C> <C> <C> <C>
AS OF SEPTEMBER 30, 2000:
Expiring Square Feet -- 407,967 148,801 59,363 616,131
Vacated Square Feet -- 124,022 42,877 17,377 184,276
Renewed Square Feet -- 283,945 105,924 41,986 431,855
Retention Rate (% based upon square feet) 0.00% 69.60% 71.19% 70.73% 70.09%
Renewal & Retenanted Space:
---------------------------
Increase in Base Rent - Straight-line 0.00% 12.49% 20.72% 9.76% 15.31%
Increase in Total Rent - Straight-line 0.00% 9.25% 13.71% 9.09% 10.40%
Increase in Base Rent - Cash 0.00% 9.25% 13.48% 7.87% 10.16%
Increase in Total Rent - Cash 0.00% 6.11% 3.66% 7.27% 5.54%
Average Capital Cost per Square Foot $ -- $ 5.63 $ 21.80 $ 3.82 $ 9.20
<CAPTION>
QUARTERLY OFFICE RENEWAL ANALYSIS
Baltimore/ Northern/
Greater Washington Central New Greater Total
Philadelphia Corridor Jersey Harrisburg Office
------------ -------- ------ ---------- ------
<S> <C> <C> <C> <C> <C>
QUARTER ENDED SEPTEMBER 30, 2000:
Expiring Square Feet -- 186,061 116,771 6,757 309,589
Vacated Square Feet -- 50,043 40,094 6,757 96,894
Renewed Square Feet -- 136,018 76,677 -- 212,695
Retention Rate (% based upon square feet) 0.00% 73.10% 65.66% 0.00% 68.70%
Renewal & Retenanted Space:
---------------------------
Increase in Base Rent - Straight-line 0.00% 6.31% 32.53% 0.00% 14.75%
Increase in Total Rent - Straight-line 0.00% 4.24% 20.06% 0.00% 9.74%
Increase in Base Rent - Cash 0.00% 3.45% 13.01% 0.00% 6.52%
Increase in Total Rent - Cash 0.00% 1.44% 2.97% 0.00% 1.97%
Average Capital Cost per Square Foot $ -- $ 5.32 $ 27.35 $ -- $ 12.57
QUARTER ENDED JUNE 30, 2000:
Expiring Square Feet -- 71,275 10,322 23,483 105,080
Vacated Square Feet -- 34,644 -- 3,920 38,564
Renewed Square Feet -- 36,631 10,322 19,563 66,516
Retention Rate (% based upon square feet) 0.00% 51.39% 100.00% 83.31% 63.30%
Renewal & Retenanted Space:
---------------------------
Increase in Base Rent - Straight-line 0.00% 18.79% 15.87% 4.15% 17.03%
Increase in Total Rent - Straight-line 0.00% 14.10% 4.75% 3.69% 11.05%
Increase in Base Rent - Cash 0.00% 13.92% 14.87% 0.78% 13.14%
Increase in Total Rent - Cash 0.00% 9.43% 3.42% 0.38% 7.33%
Average Capital Cost per Square Foot $ -- $ 7.40 $ 19.95 $ 4.58 $ 9.85
</TABLE>
22
<PAGE>
QUARTERLY OFFICE RENEWAL ANALYSIS
<TABLE>
<CAPTION>
Baltimore/ Northern/
Greater Washington Central New Greater Total
Philadelphia Corridor Jersey Harrisburg Office
------------ -------- ------ ---------- ------
<S> <C> <C> <C> <C> <C>
QUARTER ENDED MARCH 31, 2000:
Expiring Square Feet -- 150,631 21,708 29,123 201,462
Vacated Square Feet -- 39,335 2,783 6,700 48,818
Renewed Square Feet -- 111,296 18,925 22,423 152,644
Retention Rate (% based upon square feet) 0.00% 73.89% 87.18% 76.99% 75.77%
Renewal & Retenanted Space:
---------------------------
Increase in Base Rent - Straight-line 0.00% 14.11% 12.66% 15.09% 14.06%
Increase in Total Rent - Straight-line 0.00% 10.72% 7.59% 14.06% 10.63%
Increase in Base Rent - Cash 0.00% 12.14% 12.09% 14.66% 12.38%
Increase in Total Rent - Cash 0.00% 8.81% 7.17% 13.64% 9.05%
Average Capital Cost per Square Foot $ -- $ 4.25 $ 1.46 $ 3.24 $ 3.84
QUARTER ENDED DECEMBER 31, 1999:
Expiring Square Feet -- 75,165 3,274 89,542 167,981
Vacated Square Feet -- 3,996 3,274 25,567 32,837
Renewed Square Feet -- 71,169 -- 63,975 135,144
Retention Rate (% based upon square feet) 0.00% 94.68% 0.00% 71.45% 80.45%
Renewal & Retenanted Space:
---------------------------
Increase in Base Rent - Straight-line 0.00% 14.45% 39.85% 12.14% 17.90%
Increase in Total Rent - Straight-line 0.00% 13.00% 40.08% 10.85% 16.79%
Increase in Base Rent - Cash 0.00% 9.22% 31.03% 10.36% 13.01%
Increase in Total Rent - Cash 0.00% 7.87% 31.80% 9.25% 12.14%
Average Capital Cost per Square Foot $ -- $ 5.44 $ 37.73 $ 1.39 $ 8.68
QUARTER ENDED SEPTEMBER 30, 1999:
Expiring Square Feet -- 76,786 21,689 -- 98,475
Vacated Square Feet -- 5,578 5,239 -- 10,817
Renewed Square Feet -- 71,208 16,450 -- 87,658
Retention Rate (% based upon square feet) 0.00% 92.74% 75.84% 0.00% 89.02%
Renewal & Retenanted Space:
---------------------------
Increase in Base Rent - Straight-line 0.00% 12.42% 35.58% 0.00% 16.17%
Increase in Total Rent - Straight-line 0.00% 9.26% 20.17% 0.00% 11.10%
Increase in Base Rent - Cash 0.00% 9.76% 33.01% 0.00% 13.54%
Increase in Total Rent - Cash 0.00% 6.97% 7.91% 0.00% 7.13%
Average Capital Cost per Square Foot $ -- $ 8.13 $ 10.70 $ -- $ 8.49
</TABLE>
23
<PAGE>
ACQUISITION SUMMARY AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Occupied Sq. Occupancy September 30,
Ft. At Percentage At 2000 Occupancy Investment
Submarket Acquisition Date Square Feet Acquisition Acquisition Percentage (In Millions) (1)
--------- ---------------- ----------- ------------ -------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
INDIVIDUAL
PARKWAY CROSSING
Hanover, Maryland
7240 Parkway Drive BWI Airport 4/18/2000 73,500 73,500 100.0% 98.3% $7.46
<CAPTION>
DISPOSITION SUMMARY AS OF SEPTEMBER 30, 2000
(Dollars in Thousands)
Gross Debt
Disposition Square Sales Assumption or Net Cash
Submarket Date Feet Proceeds Repayment Proceeds
--------- ---- ---- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
INDIVIDUAL RETAIL PROPERTIES
2100 S. Broadway Minot, ND 6/19/2000 46,134 $2,970 $2,432 $538
</TABLE>
(1) Recorded investment by property as of September 30, 2000.
NOTE: COPT classifies its acquisitions by type -- entity, portfolio or
individual acquisitions. Entity acquisitions are defined as mergers of
significant portfolios of $100 + million with strong management
organizations and a regional presence.
24
<PAGE>
DEVELOPMENT SUMMARY AS OF SEPTEMBER 30, 2000
(DOLLARS IN THOUSANDS EXCEPT PER SQUARE FOOT DATA)
<TABLE>
<CAPTION>
PERCENTAGE ANTICIPATED
RENTABLE PRE - LEASED COST PER ANTICIPATED
SQUARE OR RENTABLE ANTICIPATED INVESTMENT STABILIZATION/
PROPERTY AND LOCATION SUBMARKET FEET COMMITTED SQUARE FOOT COST TO DATE DELIVERY
--------------------- --------- ---- --------- ----------- ---- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
UNDER CONSTRUCTION
6375 Flank Drive
Harrisburg, PA East Shore 19,700 71.61% $ 103 $ 2,038 $ 1,362 October 2000
6750 Alexander Bell Drive (1) Howard County
Columbia, MD Perimeter 78,630 80.53% 163 12,823 9,618 December 2000
2721 Phoenix Road (221 NBP) (2)
Annapolis Junction, MD BWI Airport 117,888 77.90% 152 17,883 12,271 December 2000
1304 Concourse Drive (3)
Linthicum, MD BWI Airport 100,000 0.00% 166 16,572 3,718 August 2001
2701 Phoenix Road (201 NBP) (4)
Annapolis Junction, MD BWI Airport 118,000 51.91% 155 18,313 5,229 September 2001
6731 Columbia Gateway Drive Howard County
Columbia, Maryland Perimeter 125,000 0.00% 173 21,613 4,575 November 2001
------- ----- ------- ------- -------
TOTAL UNDER CONSTRUCTION: 559,218 41.22% $ 160 $89,242 $36,773
------- ----- ------- --------- -------
UNDER DEVELOPMENT
114 National Business Parkway
Annapolis Junction, MD BWI Airport 10,000 100.00% 164 1,644 475 July 2001
2711 Phoenix Road (211 NBP)
Annapolis Junction, MD BWI Airport 150,000 100.00% 174 26,135 1,135 January 2002
6711 Columbia Gateway Drive Howard County
Columbia, Maryland Perimeter 125,000 0.00% 176 22,000 3,958 (5)
------- ----- ------- --------- -------
TOTAL UNDER DEVELOPMENT: 285,000 56.14% $ 175 $ 49,779 $ 5,568
------- ----- ------- --------- -------
TOTAL 844,218 46.26% $ 139,022 $42,341
======= ===== ========= =======
</TABLE>
(1) The Company obtained a $9,325 construction loan and $3,009 is outstanding
as of September 30, 2000.
(2) The Company obtained a $13,440 construction loan and $6,597 is outstanding
as of September 30, 2000.
(3) The Company obtained a $11,800 construction loan. No draws have been made
as of September 30, 2000.
(4) During September 2000, the Company contributed this development asset into
a joint venture. This joint venture obtained a $13,725 construction loan
in October 2000.
(5) Delivery is contingent upon completion and lease-up of 6731 Columbia
Gateway Drive.
25
