Stephen Budorick, president and CEO, Corporate Office Properties Trust (NYSE: OFC), participated in a video interview in conjunction with Nareit’s REITweek: Virtual Investor Conference (held June 2-4).
COPT is an office REIT with tenants that concentrate on Department of Defense-related missions. Budorick noted that 65% of lease space has facilities that handle the highest level of secret government information, while another 20% has extremely high levels of security requirements as well. The remaining 15% represents marquee tenants in finance, medicine, and insurance.
Budorick pointed out that 85% of its tenant base is essential and needs to be in their office space. “If anything, in the advent of new standards, they would need to expand not contract…we’re in great shape considering the environment,” he added.
Budorick also discussed the outlook for development leasing, after COPT achieved a record 2.2 million square feet of leasing in 2019 in response to increased defense spending. COPT is still in a position to achieve 1 million square feet or more of development leasing in 2020, he said. Between 2011 and 2018, COPT averaged about 900,000 square feet of new development leasing each year.
As for potential tenant design changes in response to the coronavirus crisis, Budorick said they remain “largely speculative” for now.