With more offices embracing telecommuting as a result of COVID-19, there are many questions about the future of working collaboratively in an office space. Nevins & Associates President and CEO, David Nevins sat down with Stephen Budorick, President and CEO of Corporate Office Properties Trust (COPT), to talk about the future of office spaces, COPT’s recent record-breaking leasing streak, and how the pandemic has affected COPT’s work in communities. Below is a condensed version of their conversation:

David Nevins: COPT recently announced that it ended 2019 with record-breaking leasing volume. How has the focus on office leasing for cybersecurity and tech impacted COPT’s operations?

SB: COPT set new records in multiple areas, but the biggest record we achieved was in new development leasing. Since I joined COPT in 2011, we have averaged over 900,000 square feet of new development. In 2019, we set a new goal of achieving one million square feet of new development. I’m proud to say COPT surpassed that goal and actually doubled it by achieving 2.2 million square feet of development leasing. To put that into perspective, our new development leasing represented about 15 percent of the size of our operating portfolio in one year.

Our development leasing goal for 2020 is one million square feet. We expected it to be well under last year’s record, as we cleared a lot of opportunity off the table. As we sit here over a quarter into the pandemic, I remain optimistic and feel that COPT’s goal is more than achievable. Today, we’ve done about 276,000 square feet of development leasing, so we are blessed to still be on-track despite the pandemic. From a business impact standpoint, we’ve been concentrating further and deeper on defense. As of today, over 88% of our revenue comes from the defense and IT sector. In the next year or so, we are working to drive that 88% above 90%.

DN: Baltimore investments at 100 Light and 250 West Pratt street – are they working out so far?

SB: Our Baltimore investments are working out extremely well for us, even considering the current pandemic. Since safety remains a high priority, a larger portion of those properties’ tenants are working remotely than at our defense sector buildings. The two iconic properties in Baltimore have tremendous attributes that support high occupancies. Our redevelopment of the ground floor and conference center at 250 West Pratt has been very well received, and the property is positioned as well as any in the CBD. Overall, these properties have been great investments and we are happy to have them.

DN: There is a conflicting stance on office space with the rise of working from home. What is your thought on the future of office space?

SB: Telecommuting has occurred and reoccurred cyclically for decades. In the end, an employer is making a trade off between short term cost savings and long term culture and communication benefits. My belief is that collaboration and culture dominate over cost and, in the end, will prevail. There has been and always will be variations of telecommuting, but workplaces truly thrive on face to face communications and social interactions.

DN: Are there any special projects you are looking forward to?

SB: One of our most exciting projects is our development in Huntsville, AL, named Redstone Gateway. Our development site there is thriving. In 2019 and year to date we completed over 750,000 square feet of new development leasing with the U.S. Government and defense contractors alike. This is one of COPT’s fastest growing developments, and it will have 1.6 million square feet of operational properties by mid-year 2021. The project has both secure government and defense contractor capacity, with advantaged amenities.

With regards to this year, COPT had a solid first quarter leasing and, as mentioned previously, despite the pandemic, we have had an even stronger quarter at Redstone Gateway, as large leases we started negotiating before the pandemic came to fruition. Most important, the strengths of the Baltimore-Washington DC corridor defense demand are as high as I’ve seen it since about 2013.

DN: How has the COPT leadership team adapted to the increasing demand for sustainability in office design over the years?

SB: I’m proud to say that COPT has truly been a leader in sustainability. Since 2005, we’ve completed 62 new buildings and 7.6 million square feet that were all LEED silver rated or better. In total, we’ve done 69 LEED development projects. In addition to those new buildings, over the last six or seven years, we’ve taken the initiative to redevelop older buildings and bring them up to speed with sustainability practices. We also embarked to participate in the GRESB Survey (Global Real Estate Sustainability Benchmark) which is a benchmark on real estate companies’ sustainability. Our dedication to sustainability has led us to a Green Star ranking for four consecutive years, which is the highest rating they have.

DN: In late 2019, you helped open an interactive play and learning space at the United Way Ben Center at Benjamin Franklin High School in Baltimore to help provide a clean and safe space for students to foster outdoor learning. Tell us a little bit more about COPT’s community efforts.

SB: Although COPT is a quiet company, we’ve been contributors to the community for over 20 years. Each year, we give local grants to nonprofits that our employees choose. These nonprofits support local efforts from education, to health and housing. We also grant every employee eight hours of paid time to volunteer. Each year, our employees complete 1500 to 1800 hours of volunteer work combined. In addition to these efforts, we also incentivize our employees to pay $10 to dress down on Fridays -- we then match their $10 and give it to a new charity every month.

We do a lot of work with students, whether it’s through internships or supporting local education charities. We frequently support nonprofits such as YEARUP, Cristo Rey, Highlandtown Elementary/Middle School, Big Brothers Big Sisters and more. We make a real effort to make sure that significant funds are targeted to the city of Baltimore.

COPT has a long history of supporting the United Way chapters where we operate, and in particular the United Way of Central Maryland. UWCM is a major factor in creating family stability in our communities, and the Ben Center, in particular, is a game-changing program for student-parents to continue their education and become great parents. One of our team members, Tom Kelley, embraced this need and coordinated with several other companies to contribute a safe and educational playground at the Center.

With the ongoing pandemic, we have made contributions to several hospitals to feed and support our front-line medical teams and provide safety equipment in needy communities.