Columbia Property Trust CEO Sees Improvement in National Office Fundamentals

Nelson Mills, president and CEO of Columbia Property Trust (NYSE: CXP), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.

Columbia Property Trust invests in and manages commercial class-A office properties in primary markets within the United States. Founded in 2003, the company went public in October 2013.

Mills reviewed the outlook for fundamentals across the various markets in which Columbia Property operates. San Francisco continues to be “arguably the hottest market in the country in terms of rental fundamentals,” he said. Meanwhile, fundamentals in Columbia Property’s second-largest market, Washington, D.C., are “challenging,” Mills added. Fundamentals in Columbia Property’s other markets, which include Atlanta, Chicago, New York, Dallas, Denver and Los Angeles, lie somewhere in the middle, he observed.

“Nationally, we’re seeing some modest improvement in office sector fundamentals,” Mills said.

Columbia Property has been actively repositioning its portfolio in recent years. During the past three years, the company sold $1.6 billion of assets and bought four new assets totaling about $1.3 billion, Mills noted.

“We’ve been reducing the number of markets and moving to what we believe are the best markets in the country…we’ve got just a bit more to go in that regard,” Mills said.

Columbia Property is planning an additional $500 million to $600 million in dispositions and acquisitions next year. “That’s not to say we won’t sell other assets in the future, but that really completes the original plan to transition the portfolio to better, fewer markets,” he added.

Mills also highlighted the main design trends that are impacting the company’s strategy. The move to decrease tenant space continues, he said, as well as changes in the configuration of space to match the needs of tenants working in more creative fields. A second major trend, according to Mills, is the desire to “live, work and play” in an urban setting that offers a large number of amenities.