|
COVER STORY, JUNE 2005
THE SOUTHEAST: A GOOD PLACE FOR REITS
Real estate investment trusts remain active and predict continued growth in the Southeast.
Dawn Pick Benson
Southeast markets are doing well, according to some of the area’s real estate investment trusts (REITs). Columbia, Maryland-based Corporate Office Properties Trust has a record amount of construction underway, and Atlanta-based Post Properties recently announced a new for-sale brand of properties, along with several new conversions and developments. Both companies have an optimistic view of the Southeast, and they predict that its markets will continue to see strong growth in the years to come. To find out more about recent activity in the Southeast, Southeast Real Estate Business recently spoke with both REITs about their new developments and acquisitions.
Corporate Office Properties Trust
Corporate Office Properties Trust (COPT) is a fully integrated, self- managed real estate investment trust that focuses on the ownership, management, leasing, acquisition and development of suburban office properties primarily in the Mid-Atlantic submarkets. According to Rand Griffin, president and CEO of COPT, the company is among the largest owners of suburban office properties in the greater Washington, D.C., area. COPT owns 147 office properties totaling 12.2 million rentable square feet.
So far this year, Griffin says that COPT has acquired approximately $74 million of property. The company’s goal is $200 million of acquisitions and $50 million of sales. “I think we’re well on track,” says Griffin. He also says the company has a record amount of construction currently underway. “We have about 1.2 million square feet currently under construction and another 300,000 square feet under development that we expect to start in the first half of this year.”
At the end of last year, Griffin says that 47 percent of COPT’s revenue came from the intelligence community of the United States government and the defense contractors that service that community. “This is where our growth has been coming from,” says Griffin.
 |
Corporate Office Properties Trust recently purchased Rockville Corporate Center in Rockville, Maryland, for $43.3 million.
|
|
COPT recently has acquired Rockville Corporate Center, a 221,702-square-foot office complex, for $43.3 million. Located in Rockville, Maryland, it is comprised of two four-story, Class A office buildings on 14.5 acres and a 9.7-acre parcel of land that has approvals in place to build approximately 215,000 square feet of space. Celera Genomics will continue to occupy 100 percent of one of the buildings and a portion of the other.
COPT also is active on the development front and recently has formed a joint venture with a limited partnership affiliated with Somerset Construction Company. This joint venture will develop 1.8 million square feet of office space in 13 buildings and on 63 acres of land. Located in a planned mixed-use community to be known as Arundel Preserve in Hanover, Maryland, the project will front MD Route 295, adjacent to the Arundel Mills Mall and midway between COPT’s Airport Square and National Business Park projects. Griffin expects the company to break ground on the development’s first 160,000-square-foot building either this fall or early spring 2006. In addition to the space to be developed by COPT, Arundel Preserve has approximately 300 acres of development that will include about 1,175 homes, 430,000 square feet of retail and 649,500 square feet of commercial space.
Post Properties
Post Properties is a developer and operator of upscale multifamily apartment communities, with a total market capitalization of more than $2 billion. The company operates as a real estate investment trust whose primary business is developing and managing Post brand name apartment communities for its own account. Post owns approximately 24,300 apartment homes in 61 communities.
According to Dave Stockert, CEO at Post Properties, the company is faring well this year and apartment market conditions are recovering nicely. “All of our markets are showing good signs of life in terms of our business,” adds Stockert.
Stockert says Post has a number of goals for 2005. “We have been working to reposition our portfolio to make sure that it is uniformly high quality, and that it is diversified among our cities,” he says. In each of the cities where Post operates, the company has a goal of achieving “critical mass.” “This allows us to leverage the strength of our brand and our efficiency and operations,” says Stockert. He says Post has been working on a number of strategies to do this, such as selling older assets in some of its more highly concentrated markets and looking to reinvest in other markets that it’s trying to build up.
 |
To kick off its new for-sale brand called Post Preferred Homes, Post Properties is converting three of its existing properties into condominiums. The 19-story Post Peachtree in Atlanta will become 121 upscale condominiums called The Peachtree Residences.
|
|
Post recently has launched Post Preferred Homes, a new for-sale brand that allows the company to expand its product to meet the desires of customers who would like to own. The brand has kicked off with three conversions of existing Post properties, located in Atlanta, Tampa and Dallas. The company also has a combined condominium and apartment property underway in Alexandria, Virginia.
In Atlanta, Post Peachtree, a 19-story high-rise along Peachtree Road in Buckhead, will be converted into 121 upscale condominiums called The Peachtree Residences. The building will include flats, two-story townhomes and four penthouses. Units will range from 652 square feet to 2,572 square feet and be priced from the mid $170,000s.
In Tampa, Post Walk at Hyde Park Village will be marketed as Hyde Park Walk. Located in Tampa’s Old Hyde Park Village shopping district, it will offer 134 one- and two-bedroom units and three-bedroom townhomes. Units will range in size from 662 square feet to 2,284 square feet, and will be priced from $135,000 to more than $525,000.
 |
Post Properties is converting Post Walk at Hyde Park Village in Tampa, Florida, into condominiums called Hyde Park Walk.
|
|
Post also is constructing a combination of high-rise apartments and mid-rise condominiums in the master-planned Carlyle submarket in the Washington, D.C., suburb of Alexandria. The first phase will combine 205 luxury apartments in a 12-story building and 145 luxury condominium homes in four- and five-story buildings. The condominiums will be developed in a joint venture with PN Hoffman. Post expects to begin delivering apartment and condominium units in the second quarter of 2006. Post also owns land on the city block adjacent to this development, which would allow for the future construction of a second phase of approximately 325 residential units.
According to Stockert, Post will continue its interest in many Southeast markets.
He sites an article in the Atlanta Journal-Constitution, which reported that by the year 2030, 39.4 percent of the U.S. population will live in the South. “I think it’s a great place,” says Stockert. “We think the Southeast will continue to attract people, jobs and industry.”
©2005 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints
of this article contact Barbara
Sherer at (630) 554-6054.
|
