In a move that will accelerate its breakneck pace of acquisitions around Baltimore-Washington International Airport, a Philadelphia real estate investment trust is preparing to spend about $25 million to buy two upscale office buildings, sources said yesterday.
Corporate Office Properties Trust's pending purchase of the Gateway International buildings in Linthicum will add to its position as one of the biggest commercial landlords in Anne Arundel County.
In the past 17 months, COPT has spent more than $420 million to buy and develop 42 buildings in the Baltimore suburbs.
The Gateway International buildings will add 209,000 square feet to COPT's Anne Arundel portfolio, which contains 3.1 million square feet -- a quarter of all the office space in the county.
COPT officials declined to comment on the pending purchase of the buildings at 1302 and 1306 Concourse Drive, but indicated that the four- and five-story projects fit the business strategy of the real estate investment trust.
"We buy exclusively suburban office projects, and our strategy is to be the dominant player in select sub-markets," said Randall M. Griffin, COPT's president and chief operating officer. "In the Baltimore-Washington corridor, we currently own three times as much space as our nearest competitor, and we hope to add to that dominance."
The Gateway International project also will allow COPT to develop new space. A six-acre tract that will be included in the purchase could accommodate anoth- er building of about 100,000 square feet.
COPT has more than $64 million worth of development under way, which will add 447,000 square feet to its portfolio, according to the REIT's most recent annual shareholder report.
The Gateway transaction between COPT and Texas-based Prentiss Properties Trust is expected to close next month, sources said.
Prentiss acquired the buildings in August 1997 for $22.4 million from Mid-Atlantic Realty Trust, said David P. Scheffenacker Jr., president of Preston Partners Inc., the Lutherville real estate firm Prentiss has retained to sell the buildings. He declined to comment on the COPT transaction.
For COPT, the Gateway International deal represents the second time it has bought properties from a REIT working to shed assets. In May, COPT committed to spending $27 million for two Timonium office buildings owned by Highwoods Properties Inc., a North Carolina trust under pressure from Wall Street to sell its holdings.
The Gateway International buildings, which were completed in 1986 and 1990, are 98 percent leased to AT&T; Corp., Lucent Technologies Inc., Pricewater-houseCoopers, and others.
"I've always been a believer in projects around the airport," said F. Patrick Hughes, chief executive officer of MART, whose predecessor company developed the 34-acre Gateway International business park. "The only reason we sold the office buildings was because we're not in that business. They are very well-designed, good looking and well-constructed projects."
Pub Date: 10/02/99