COLUMBIA, Md.--(BUSINESS WIRE)--Corporate Office Properties Trust (NYSE: OFC) has closed a public offering of 9,200,000 of its common shares, at a price to the public of $31.00 per share. The public offering included 1,200,000 common shares sold pursuant to an option granted to the underwriters to purchase additional shares that was exercised prior to closing.
Wells Fargo Securities, BofA Merrill Lynch, and J.P. Morgan acted as joint book-running managers for the offering. Barclays and Citigroup acted as senior co-managers and BTIG, Capital One Securities, KeyBanc Capital Markets and PNC Capital Markets LLC acted as co-managers for the offering.
In connection with the offering, the Company entered into forward sale agreements with Wells Fargo Bank, with respect to an aggregate of 9,200,000 common shares covered by the offering. As contemplated by the forward sale agreements and the underwriting agreement, Wells Fargo Securities borrowed common shares from third parties and sold 9,200,000 of COPT's common shares to the underwriters.
Pursuant to the terms of the forward sale agreements, and subject to the Company’s right to elect cash or net share settlement under the forward sale agreements, COPT intends to issue and sell, upon physical settlement of such forward sale agreements, 9,200,000 common shares to the Forward Purchaser in exchange for cash proceeds per share equal to the applicable forward sale price, which will initially be $31.00 per share, less underwriting discounts and commissions, and subject to certain adjustments as provided in the forward sale agreements. The Company expects to physically settle the forward sale agreements in full, which settlement or settlements will occur by April 30, 2019.
The Company did not receive any proceeds from the sale of the 9,200,000 common shares in the offering. The Company intends to contribute, directly and indirectly, the net proceeds from any settlement of the forward sale agreements to its operating partnership, Corporate Office Properties, L.P. (the "Operating Partnership"), in exchange for an equivalent number of newly issued common units of limited partnership interests in the Operating Partnership. The Operating Partnership is expected to use any net proceeds to fund development of the buildings that it plans to develop over the next 18 months and/or for general corporate purposes.
Company Information
COPT is an office REIT that owns, manages, develops and selectively acquires office and data center properties in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing priority missions (“Defense/IT Locations”). The Company also owns a portfolio of office properties located in select urban/urban-like submarkets within its regional footprint with durable Class-A office fundamentals and characteristics (“Regional Office Properties”). As of September 30, 2017, the Company derived 87% of core portfolio annualized revenue from Defense/IT Locations and 13% from its Regional Office Properties. As of September 30, 2017 and including six buildings owned through an unconsolidated joint venture, COPT’s core portfolio of 153 office properties encompassed 16.7 million square feet and was 95.1% leased. As of the same date, the Company also owned one wholesale data center with a critical load of 19.25 megawatts.
