Real estate company in an expansive mood

A flat commercial real estate market isn't stopping a Maryland real estate company from raising its profile in Colorado Springs.

Corporate Office Properties Trust expects to complete construction next year of a third office building in the InterQuest office and business park, southwest of Interstate 25 and InterQuest Parkway. COPT also will finish construction of a third office building in Patriot Park, on the city's east side, in a few weeks.

At a time when a struggling economy has curtailed other developers' plans, COPT continues to pursue an aggressive strategy of acquiring large parcels in key parts of town and developing office space. It's an approach that gives the company the resources and flexibility to respond to new tenants or existing ones that want to expand or relocate, said George Swintz, COPT's vice president of asset management and leasing in Colorado Springs and a former commercial real estate broker. In the three years since coming to the Springs, COPT has become one of the city's largest office landlords.

"They're serious, thoughtful, long-term players that really understand the fundamentals of the market," said Les Gruen, who heads the Springs-based Urban Strategies consulting firm and is a longtime expert in local commercial real estate. "They're spread out in the right sub-markets. It seems they've done that for very specific reasons."

COPT is a publicly held real estate investment trust that buys and develops land, and constructs, manages and leases Class A, or top-of-the-line, office space. The company's many tenants include government agencies and defense-related businesses, and it typically develops and builds in suburban areas close to government offices and defense contractors. Through the first three quarters of this year, COPT owned 254 office buildings and data centers in five states, and had 19.1 million square feet of space for rent - the equivalent of about 15 malls the size of The Citadel.

Colorado Springs appealed to the company because of the Department of Defense's strong presence in the city, and because of the defense contractors that have located here to serve Air Force Space Command, U.S. Northern Command and Peterson Air Force base, among other military operations, Swintz said. Some of the same defense contractors that are tenants in COPT's Maryland properties have operations in the Springs.

COPT's first major Springs acquisition was its 2005 purchase of the 65-acre Patriot Park office and business center, northwest of Powers Boulevard and Platte Avenue. At Patriot Park, COPT has constructed a two-story, 52,000-square-foot building for Virginia-based defense contractor Scitor Corp. Another three-story, 104,000-square-foot building has been completed and leased to New York-based defense contractor ITT Corp. A third building of three stories and 90,000 square feet is expected to be finished next month.

More buildings are envisioned.

At InterQuest, COPT owns 33 acres. The company has completed construction of 54,000-square-foot and 75,000-square-foot buildings; high-tech firm Plasmon Plc. leases most of the smaller structure. COPT will finish construction in the first quarter of 2009 of a five-story, 145,000-square-foot building on the north side of its InterQuest property.

The company also owns three other buildings at InterQuest and has plans to construct several more, including a pair of 10-story office buildings and smaller retail buildings.

Owning large tracts and multiple buildings, along with controlling the buildings' architecture and design, is a major part of COPT's business model, Swintz said. For example, defense contractor Lockheed Martin, which has multiple Springs' locations, leases space in a COPT building on the city's southeast side. Lockheed Martin is moving from that building to the one that will open next year in InterQuest, which is near two other Lockheed locations in non-COPT properties, Swintz said.

And because COPT is a national landlord, a defense contractor that rents space in one of the company's Maryland buildings won't be surprised with the terms and conditions of a lease for a COPT building in the Springs. COPT's 17 Springs employees have made a couple of trips back east to be schooled in customer service and tenants' needs, Swintz said.

"When a landlord only owns one building or two buildings or three buildings," Swintz said, "it's a lot harder to grow with that landlord. COPT offers a different model."

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