Executives at Columbia-based Corporate Office Properties Trust said Friday that strong leasing should lift performance in the rest of the year, as second-quarter earnings turned positive, after losses during the same period in 2013.
The real estate investment trust, which focuses on renting buildings to government and defense contractors, reported earnings of 2 cents for the three months ending June 30, compared to a loss of 16 cents last year. Its funds from operations per share, the more common metric used within the industry, also increased, to 37 cents, versus 25 cents during the same period last year.
The results were in line with analyst expectations.
CEO Roger A. Waesche, Jr. has maintained for several quarters that 2014 will represent an "inflection point" for the firm and he repeated that prediction Friday, pointing to leases for 91.4 percent of the firm's 16.9 million-square-foot office portfolio.
"Based on leasing and the leasing momentum we are experiencing across the majority of our portfolio, we are highly confident that FFO per share will now trend higher, beginning with this third quarter," he said in a statement.
COPT has been trimming its portfolio to target defense tenants since 2011. The firm said Friday it is closer to the sale of eight parcels in White Marsh, where another development firm has proposed an outlet mall on property owned by COPT. COPT declined to identify the sites in question, but a spokeswoman said the firm already closed deals on three of the eight, two office buildings and a land parcel, all on Mercantile Road, close to White Marsh Mall.
Firm executives narrowed their earnings prediction for the end of year, dropping the top of the range by two cents. They warned analysts that properties in Northern Virginia, which represent 20 percent of its portfolio, will see occupancy drop in the coming months. But the Baltimore-Washington corridor remains strong, they said, thanks to growth in the cyber security and health care industries.
Executives said the firm is trying to reach a 93 percent occupancy rate. Its occupancy rate hovered around 90 percent at the end of June.