Corporate Office Properties Trust : The National Business Park

Corporate

Office

Properties

Trust

PROPERTY TOUR

• The National Business Park Annapolis Junction, Maryland
  September 30, 2020

Table of

Contents

THE NATIONAL BUSINESS PARK

> Park Aerial	pages 4-5
> About the Park/Market	pages 6-9
> 2730 Hercules Road	page 10
> 2691 Technology Drive	page 10
> 2701, 2711, 2721 Technology Drive	page 11
> 308 Sentinel Drive	page 11
> 310 Seninel Way	page 12
> 410, 420, 430 National Business Parkway	page 12
> 540 National Business Parkway	page 13

2

The

National

Business

Park

• Annapolis Junction, Maryland

3

The National Business Park

ANNAPOLIS JUNCTION, MARYLAND

TO BALTIMORE

TO COLUMBIA + I-95N	175
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27	28	26	30
		31				295
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			18			20	19
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		8			7			14

TOWNEPLACE SUITES

BY MARRIOTT

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TECHNOLOGY DRIVE

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RESTAURANTS	EN
+ CREDIT UNION	TINEL
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COURTYARD BY MARRIOTT

TO COLUMBIA + I-95S

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32

I

V E

NORTH

B ALTI M ORE - W ASH I NG TO N P ARK WAY

DIRECT ACCESS

TO FORT MEADE

FORT MEADE

1

295

PROPERTIES

+ DEVELOPABLE* LAND

• 2730 Hercules Road
  2 2691 Technology Drive
  3 2701 Technology Drive
  4 2711 Technology Drive
  5 2721 Technology Drive
  6 2720 Technology Drive
  7 131 National Business Parkway
  8 132 National Business Parkway
  9 133 National Business Parkway
  10 134 National Business Parkway
  11 135 National Business Parkway
  12 140 National Business Parkway
  13 141 National Business Parkway
  14 300 Sentinel Drive
  15 302 Sentinel Drive
  16 304 Sentinel Drive
  17 306 Sentinel Drive
  18 308 Sentinel Drive
  19 310 Sentinel Way
  20 312 Sentinel Way
  21 316 Sentinel Way
  22 318 Sentinel Way
  23 320 Sentinel Way
  24 322 Sentinel Way
  25 324 Sentinel Way
  26 410 National Business Parkway
  27 420 National Business Parkway
  28 430 National Business Parkway
  29 540 National Business Parkway
  30 610 Guardian Way (under development)

• 31 175 acres // 2,000,000 developable SF (remaining undeveloped land for NBP site)

• Not highlighted: 10,100 SF retail center and a

4,500 SF visitor control center.

TO WASHINGTON, DC

5

The National

Business Park

SEGMENT:

Defense/IT

DEMAND DRIVER:

Fort Meade

LOCATION:

Located at the intersection of the Baltimore/Washington Parkway (MD-295) and MD Route 32 in Anne Arundel County, The National Business Park (NBP) is situated midway between Washington, DC, and Baltimore, MD.

HISTORY:

Initially called Camp Annapolis Junction, Fort George G. Meade (Ft. Meade) was established in 1917 as an Army training camp. The Second U.S. Army Headquarters transferred there in 1947 and, in the 1950s, the National Security Agency (NSA) headquarters moved to Ft. Meade. U.S. Cyber Command was established at Ft. Meade in 2010, and the Defense Information Systems Agency (DISA) headquarters relocated to the base in 2011 as part of the 2005 BRAC*. Ft. Meade is a DOD Center of Excellence in Information, Intelligence and Cyber and, based on its level of high-tech employment, ranks #1 in the country out of 140 defense installations.

Often referred to as Ft. Meade's "west campus," NBP is an approximate 500-acre business community 100% owned by COPT that houses the large network of government and contractor businesses serving Ft. Meade. COPT's predecessor company leased its first building (2730 Hercules Road) to the U.S. Government in 1992.

* BRAC stands for Base Realignment And Closure.

MARKET COMPARISON:

EXISTING	Competitive BWI Set*	COPT The National Business Park
PROPERTIES	(Excluding COPT)	Portfolioa
Number of Properties	29	31
Total SF	3,283,692	3,821,000
% Leased	89%	93%
Direct Vacant SF	362,370	275,000b
Direct Asking Rents ($/SF)	$25-$30	Not Disclosed
TTM Net Absorption (SF)	56,110	17,151
UNDER DEVELOPMENT
PROPERTIES
Number of Properties	0	1
Total SF	0	107,000
* Source: CoStar & COPT's IR Department; these are a combination of 21 Class A office buildings and eight	secure office buildings.

a. Includes a 10,100 SF retail center and a 4,500 SF visitor control center, both of which are 100% leased and occupied. b. Includes 310 Sentinel Way, a 191,000 SF project, that the U.S. Government is in the process of leasing.

6

THE NBP TODAY:

At September 30, 2020, The NBP consisted of 31 buildings aggregating 3.8 million SF that were 92.8% leased. The NBP comprises over half of the BWI submarket's Class A space, and has consistently maintained above-market occupancies and rents.

• Supply: Strategically, COPT builds one new contractor building ahead of demand to accomodate fast-emerging demand from defense contractors. In 1Q18, COPT placed 540 NBP into service, a 145,000 SF contractor building that today is 78.8% leased and occupied.
  In the secure portion of the park, COPT placed 310 NBP, a 190,000 SF building, into service in 2016. At December 31, 2019, the building was 29% leased to a U.S. Government user, and the Company is in discussions to lease the remaining floors.

COMPETING OFFICE SUPPLY

• Demand: The NBP continues to enjoy strong renewal rates. During 2019, COPT completed 612,000 SF of renewals, representing a 97% tenant retention rate. Additionally, demand for new and expansion space has increased in recent quarters, and, during 2019, COPT completed 185,000 SF of vacancy leasing.* During the nine months ended 9/30/2020, COPT renewed 529,000 SF, representing a 97.5% retention rate.
• Rents: Due to the park's adjacency to Ft. Meade and the collaborative work environment enabled by its concentration of defense contractors, the NBP has maintained premium rents versus the rest of the submarket. For competitive purposes and for the privacy of its tenants, COPT elects not to disclose its asking rents at the NBP.
• Sales: N/A. COPT has not ever sold, and has no intention of selling any buildings associated with the NBP.

* Includes leasing at 310 NBP.

• Ft. Meade is named for U.S General George G. Meade, who served as

commander of the Army of the Potomac during the U.S. Civil War.

FUN FACT: > Big Band leader, Glenn Miller, attended Officer Training at Ft. Meade during World War II, and ultimately formed The Glenn Miller Army Air Forces Orchestra to provide live and radio broadcast music to support troop morale.

7

COMPETITIVE OFFICE MARKET OVERVIEW*

Excluding COPT's properties, the BWI commercial market contains 29 Class A buildings totaling 3.3 million SF, including eight secure buildings totaling 1 million SF. These non-COPT secure locations have no additional land for development. With the exception of the Annapolis Junction Town Center development located at the Savage MARC Rail Station, BWI supply is car-centric, with limited retail or residential amenities, neither of which is compatible with high security environments.

• Supply: Driven by the ramp-up of signals intelligence activites at Ft. Meade in the wake of the 9/11 Terrorist attack in 2001, the BWI Class A office market grew at a compound annual rate of 9% between 2000 and 2010. During this time frame, the NBP grew at a compound annual rate of 12%, demonstrating how its proximity to Ft. Meade enabled it to capture a disproportionate share of defense contractor and technology demand. (See Figure 1.) No new buildings were under development in 2020.

• Demand: Full-building occupancies from the federal government, and full-building or large block occupancies by defense contractors historically have driven development and absorption in this micromarket. The NBP has maintained significantly higher occupancies, due to its proximity to Ft. Meade and the collaborative work environment created
  by the density of defense contractors. (See Figure 2.) Additionally, The NBP experienced positive net absorption in excess of 90,000 SF in 2019 - 1.6x greater than the market
  - and over 17,000 SF thus far in 2020.
• Rents: Since 2008 when its concentration of defense contractors reached a critical mass, the NBP has maintained premium rents vs. the submarket. (See Figure 3.) COPT does not disclose its asking rents at the NBP.
• Sales: There have been no asset sales comparable to the secured or non-secured buildings at the NBP.

FIGURE 1: GROWTH OF THE BWI OFFICE MARKET** VS. NBP

	8,000
									100%
	7,000
	6,000
(000s)									75%
5,000
SquareFeet		1995-1H19 CAGR in SF:
						Leased%
		▪ BWI Market: 7.0%
-A	4,000		▪ NBP: 10.4%						50%
3,000
Class	2,000
												25%
	1,000
	0												0%
	1995			2000	2010	2019
				BWI SF*		NBP SF		BWI % Leased*		NBP % Leased

• NBP 1 (2730 Hercules Road), NBP 141, and NBP 131 were built in 1990 by COPT's predeccesor company.
• Source: CoStar, Competitive set of Class A supply; COPT information

FIGURE 2: NBP'S OCCUPANCY VS. MARKET**

100%

90%

80%

70%

60%

50%

BWI Class A Office*		NBP

• Excludes the NBP's assets.
• Source: CoStar; COPT information.

FIGURE 3: NBP'S RENT SPREAD VS. MARKET*

$20.00

$15.00

$10.00

$5.00

$0.00

($5.00)

($10.00)

* Source: CoStar; COPT company data

Market rents are those reported in the 4Q of each year; 2020 rent spreads are at September 30, 2020.

8

THE NATIONAL BUSINESS PARK OUTLOOK

The National Business Park will continue to benefit from strong tenant retention and growing demand surrounding Fort Meade from elevated defense spending levels.

The NBP has enjoyed strong historical renewal rates:

• Between 2011-2019, the NBP averaged an 86% renewal rate.
• In 2019, 612,000 SF of the expiring 634,000 SF renewed, for a 97% retention rate.
• For the nine months ended September 30, 2020, 97.5% of expiring SF have renewed.

The DOD's FY 2020 base budget of $641 billion was signed into law in December 2019 and represents a $145 billion increase from the fiscal year 2015 budget (the year U.S. defense spending bottomed). Should future defense budgets be embroiled in continuing resolutions or government

shutdowns, the fact that spending will continue at today's elevated levels and that the cybersecurity and signals intelligence defense missions on Ft. Meade remain priorities within the Pentagon, should support continued demand for new and expansion facilities for defense tenants.

Additionally, the ongoing expansion at Ft. Meade, including U.S. Cyber Command's recently delivered $500 million Integrated Cyber Center (ICC) facility*, will continue to generate and support defense contractor activity in the micromarket.

• ICC was formerly referred to as the Joint Operations Center (JOC). Please see COPT's 4-page research flyer, https://investors.copt.com/Cache/1001248824.PDF?O=PDF&T=&Y=&D=&FID=1001248824&iid=103010

9

HIGHLIGHTED COPT PROPERTIES

2730	2691
Hercules	Technology
Road	Drive
PARK AERIAL REFERENCE: 1	PARK AERIAL REFERENCE: 2

- Not Permitted to Publish -

BUILDING STATISTICS:	BUILDING STATISTICS:
> Year Built/Renovated: 1990	> Year Built: 2005
> Rentable SF: 240,300 SF	> Rentable SF: 103,700 SF
> Floors: 12	> Floors: 4
> % Leased: 100%	> % Leased: 100%
> Parking Ratio: 4:1,000 SF	> Parking Ratio: 4:1,000 SF
> LEED Certified: N/A	> LEED Certified: N/A

10

2701, 2711, 2721		308
Technology	Sentinel
Drive	Drive
PARK AERIAL REFERENCE: 3 4 5	PARK AERIAL REFERENCE: 18

2701 BUILDING STATISTICS:	BUILDING STATISTICS:
> Year Built: 2001	> Year Built: 2010
> Rentable SF: 119,000 SF	> Rentable SF: 151,500 SF
> Floors: 4	> Floors: 5
> % Leased: 84%	> % Leased: 100%
> Parking Ratio: 4:1,000 SF	> Parking Ratio: 4:1,000 SF
> LEED Certified: N/A	> LEED Certified: Gold

2711 BUILDING STATISTICS:

• Year Built: 2002
• Rentable SF: 152,100
• Floors: 5
• % Leased: 100%
• Parking Ratio: 4:1,000 SF
• LEED Certified: N/A

2721 BUILDING STATISTICS:

• Year Built: 2000
• Rentable SF: 116,800
• Floors: 4
• % Leased: 88%
• Parking Ratio: 4:1,000 SF
• LEED Certified: N/A

11

HIGHLIGHTED COPT PROPERTIES (CONT.)

310 Sentinel Way

PARK AERIAL REFERENCE: 19

BUILDING STATISTICS:

• Year Built: 2016
• Rentable SF: 191,500 SF
• Floors: 6
• % Leased:* 29%
• Parking Ratio: 4:1,000 SF
• LEED Certified: Gold

Notes:

• We are negotiating with the U.S. Government to lease the remaining four floors in this building.

410, 420, 430 National Business Parkway

PARK AERIAL REFERENCE: 26 27 28

410 BUILDING STATISTICS:

• Year Built: 2012
• Rentable SF: 110,400 SF
• Floors: 4
• % Leased: 100%
• Parking Ratio: 4:1,000 SF
• LEED Certified: Gold

420 BUILDING STATISTICS:

• Year Built: 2013
• Rentable SF: 139,400 SF
• Floors: 5
• % Leased: 79%
• Parking Ratio: 4:1,000 SF
• LEED Certified: Gold

430 BUILDING STATISTICS:

• Year Built: 2011
• Rentable SF: 110,400 SF
• Floors: 4
• % Leased: 89%
• Parking Ratio: 4:1,000 SF
• LEED Certified: Gold

12

540Notes: National

Business

Parkway

PARK AERIAL REFERENCE: 29

BUILDING STATISTICS:

• Year Built: 2017
• Rentable SF: 144,700 SF
• Floors: 5
• % Leased: 79%
• Parking Ratio: 4:1,000 SF
• LEED Certified: Silver

13

INVESTOR RELATIONS

For help with questions about the Company, or for additional corporate information, please contact:

Stephanie Krewson-Kelly

Vice President, Investor Relations

Corporate Office Properties Trust

6711 Columbia Gateway Drive, Suite 300 Columbia, Maryland 21046 Telephone: [phone] Facsimile: 443.285.7650

Email: [e-mail]

EXECUTIVE

OFFICES

6711 Columbia Gateway Drive, Suite 300 Columbia, Maryland 21046 Telephone: [phone] Facsimile: 443.285.7650 www.copt.com // NYSE: OFC