Corporate Office Properties Trust (
or COPT raised its adjusted FFO per share guidance for the fourth
quarter 2012 and provided its view for the first quarter as well
as full year 2013.
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This Maryland-based real estate investment trust (REIT), which is
scheduled to release its fourth-quarter results on Feb 8, has
increased its fourth quarter 2012 adjusted FFO per share outlook
to a new range of 49-51 cents, from the prior guidance of 45-48
cents. The increase reflects the one-time gain enjoyed by the
company through shedding off its remaining interest in a non-REIT
In addition, the first quarter 2013 FFO per share is expected to
be in the range of 44- 46 cents and full year 2013 FFO will
likely be in the range of $1.83-$1.93. The factors behind 2013
guidance include disposition of remaining non-core assets worth
$160 million to facilitate company's strategic reallocation plan
and an increase in same-office net operating income in the range
On a separate development, earlier this week, COPT announced its
plans to construct a business center - Ashburn Crossing - in
Loudoun County, Virginia for an estimated total investment worth
$42 million. It will comprise two buildings spanning
approximately 315,000 square feet. The move is in line with
COPT's strategy of focusing on new developments in areas with
The construction of the first 200,000 square feet building, named
COPT DC-8, will commence in early 2013. It will be followed by
groundbreaking of the second 115,000 square feet building, named
COPT DC-9, by mid-2014.
The company also signed a lease deal with an unnamed tenant - a
subsidiary of an investment-grade Fortune 500 company - at the
end of 2012 for the two to-be-developed properties. Notably, with
this transaction, COPT's development leasing volume rose to 1.2
million square feet for 2012.
We believe the company's increased expectations of fourth-quarter
earnings reflect its successful execution of ongoing portfolio
restructuring and development activities. Moreover, the
construction of the business center in the upscale region will be
accretive to its earnings in the long run.
The Zacks Consensus Estimate for COPT's fourth-quarter FFO is
currently pegged at 47 cents per share. However, for the company,
which currently holds a Zacks Rank #4 (Sell), the guidance
increase announcement is likely to result in upward revisions in
estimates in the coming days. This, in turn may lead to a
revision in its rank as well. One of its competitors,
Brandywine Realty Trust (
holds a Zacks Rank #2 (Buy).
Note: FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.