Markets are beginning to look up for many of the Southeast’s REITs, and some companies are doing better than ever. To get an inside look at recent developments, Southeast Real Estate Business interviewed several REITS about their current activity in the Southeast.

Liberty Property Trust

Liberty Property Trust recently completed Lakeside One in Greensboro, North Carolina.

Liberty Property Trust (NYSE: LRY) was founded in 1972 as Rouse & Associates and changed its name to Liberty Property Trust in 1994. Based in Malvern, Pennsylvania, the company develops, acquires and manages industrial and office properties primarily in suburban locations. Liberty’s portfolio includes more than 650 properties and more than 50 million square feet of space.

Liberty has several developments underway, according to Larry Gildea, senior vice president and regional director for the Mid-Atlantic region. Lakeside One is a 55,000-square-foot, three-story office building in Greensboro, North Carolina’s Airport submarket. Located in Mendenhall Business Park, the recently completed project has 6,800 square feet available. In the same park, Streamside II is a 31,000-square-foot, single-story office building. This development is a build-to-suit for Paychex, which will occupy 21,500 square feet upon the building’s completion in March.

Liberty Property Trust recently completed its first “green” rehabilitation project. The building is located in Greenville’s One Independence Corporate Park.

One Independence Pointe is a rehabilitation of an 85,000-square-foot, three-story building located in Independence Corporate Park at the intersection of Interstates 85 and 385 in Greenville, South Carolina. This recently completed project was Liberty’s first “green” rehabilitation building. In the same park is a 25,000-square-foot build-to-suit for ITT Educational Services Inc. that will be completed in June. Just south of Greenville, a 260,000-square-foot distribution center is being developed for GlaxoSmithKlein. Located in SouthChase Industrial Park, the building will be completed this month.

Liberty has several developments underway in Virginia. The company is expanding a building for Elizabeth Arden to 400,000 square feet in Roanoke. Just west of Richmond, the three-story, 62,000-square-foot Westgate office building is nearing completion. Progressive Insurance is the lead tenant with 25,000 square feet. Liberty One, a 50,000-square-foot, two-story building, was recently completed in Chesapeake, and it is 100 percent leased.

The Millennium Building is a 75,000-square-foot development in Hunt Valley, Maryland. Millennium Chemical Company is leasing 60,000 square feet and 3,000 square feet remains to be leased. Liberty Place IV in Columbia, Maryland, is a 31,000-square-foot development that is currently 80 percent leased.

In Florida, the company is developing a 35,000-square-foot building at Woodland Corporate Center in Tampa’s Westshore north market. Option One is the sole tenant, and the building will be completed in April. A 75,600-square-foot building was recently completed for Stihl Southeast in Liberty Park at South Center in Orlando. A 15,000-square-foot building for Microlumen was also recently completed at Woodland Corporate Center in Tampa.

Gildea

Recent acquisitions in south Orlando include a 67,000-square-foot flex building in Cypress Park and a 150,000-square-foot industrial building in Beeline Industrial Park. Liberty also has acquired a 100,000-square-foot office building at the Cypress Creek exit of Interstate 95 in Boca Raton, Florida.

Although Gildea feels the markets are looking better, he remains cautious about development. “Right now we’re doing a lot of build-to-suit rather than speculative development,” he says. According to him, Liberty will only undertake development in a submarket with a low vacancy and where Liberty’s occupancy exceeds 93 percent. “These are two criteria to which we religiously adhere,” he says.

Equity One

The last phase of development at The Shops at Skylake in North Miami is a 45,000-square-foot L.A. Fitness scheduled to open by year’s end.

North Miami Beach, Florida-based Equity One (NYSE: EQY) acquires, renovates, develops and manages shopping centers anchored by supermarkets and other necessity-oriented retailers. The company has 181 properties that total approximately 19.6 million square feet.

According to Chaim Katzman, the company’s chairman and chief executive officer, Equity One’s properties are located primarily in metropolitan areas of the South, with a specific focus on high-growth areas in Florida and Texas.

Recent developments by Equity One include Plaza Alegre, an 88,111-square-foot neighborhood shopping center at the corner of Coral Way and SW 147th Avenue in Miami-Dade County, Florida. This recently completed center includes a 44,271-square-foot Publix and a 14,000-square-foot Goodwill Industries super store.

Another major development is Crossroads Square, located at 154 University Dr. in Pembroke Pines, Florida. This 326,307-square-foot retail development will be anchored by Lowe’s and completed by the end of the year. The last phase of development at The Shops at Skylake in North Miami is a 45,000-square-foot L.A. Fitness slated to open by year’s end.

Katzman says Equity One also has been actively acquiring properties. The company purchased Presidential Markets, a 396,408-square-foot retail center located east of Atlanta in Snellville, Georgia, for $47.2 million. The center includes tenants such as Publix, Bed Bath & Beyond and T.J. Maxx. Butler Creek, a 95,597-square-foot retail center in Acworth, Georgia, was purchased by Equity One for $12.1 million. It is anchored by Kroger and includes 35,600 square feet of local tenant space.

Katzman

Sheridan Plaza, a 451,587-square-foot retail center in Hollywood, Florida, was recently purchased for $75.3 million. Anchored by Publix, it is one of the largest open-air retail properties in the state and is currently 98 percent leased. “You don’t see properties like this come to the market often,” says Katzman. “I’m glad we were able to take advantage of this opportunity and add the property to our portfolio.”

He continues, “Florida is one of the most desirable markets in the country for retail investors. Like everybody else, the first 6 months of this year were not great for our tenants. But I believe business is picking up, and I think 2004 will be a good year.”

Corporate Office Properties Trust

Columbia, Maryland-based Corporate Office Properties Trust (NYSE: OFC) was formed in 1988 as Royale Investments Inc. and in 1998, changed its name to Corporate Office Properties Trust (COPT). The company focuses on the ownership, development, management and acquisition of suburban office properties in the Mid-Atlantic region.

Griffin

According to Randall Griffin, president and chief operating officer, COPT owns 118 office properties totaling 9.9 million square feet. “We’re the largest owner of office space between Baltimore and Washington, D.C.,” he says.

The United States government is the company’s largest tenant. “We’re in a unique position where the market is very good and where there’s a demand from the defense and intelligence sector,” says Griffin. “We’re responding to that demand by building.”

One building under construction is Greens III, a three-story, 88,000-square-foot office building at the Westfields Corporate Center in Northern Virginia’s Dulles South submarket. The building will be completed by August 2004 and is 100 percent leased to The Aerospace Corporation.

In Annapolis Junction, Maryland, 220 National Business Park is underway. This 157,000-square-foot build-to-suit for Titan Corporation will deliver in August 2004. In the same city, a five-story, 150,000-square-foot development called 211 National Business Park was recently completed for Computer Sciences Corporation. Griffin also anticipates starting three additional buildings, totaling approximately 500,000 square feet, in this park.

COPT also has been actively acquiring buildings. One example is One Dulles Tower. COPT recently purchased the 404,665-square-foot building for $71.2 million. This 13-story office building is located in Herndon, Virginia, on the Dulles Toll Road and is 100 percent leased to VeriSign.

Griffin says the company will continue to focus on the greater Washington region, with a concentration in Northern Virginia. “There’s a lot of opportunity [in Northern Virginia] in the long range,” he says. “The demographics are excellent, and we plan to be a big player there.”

Developers Diversified Realty Corporation

Developers Diversified Realty Corporation (NYSE: DDR) was originally formed in 1965 as Developers Diversified Group, but the company adopted its current name after going public in 1993. DDR acquires, develops, leases and manages shopping centers. The Cleveland, Ohio-based company owns and manages approximately 400 retail properties in 44 states to total more than 83 million square feet.

According to Scott Schroeder, senior director of marketing and communications at DDR, the company primarily deals with open-air shopping centers between 250,000 and 500,000 square feet. “We are an active development company with nearly 20 projects in various stages of development totaling more than 8.3 million square feet,” says Schroeder.

The Shops at Midtown Miami is a 580,000-square-foot retail center that will front Miami Avenue, a few blocks north of downtown Miami and adjacent to the city’s design district. “With virtually no other big-box retail centers between Dadeland and Aventura, The Shops at Midtown Miami will be the closest and most accessible location for Miami Beach, downtown Miami, the Brickell area and other points of the city,” says Schroeder. The project will be completed by 2006.

The Shops at Jupiter Falls will be a 700,000-square-foot retail development located approximately 12 miles north of West Palm Beach, Florida, at the intersection of Interstate 95 and Indiantown Road. According to Schroeder, this new development will capture nearly all of the largely unclaimed retail market of northern Palm Beach County, one of the fastest growing parts of the country. The expected completion date is 2005.

According to Schroeder, the company recently completed its largest acquisition to date, a merger with JDN Realty Corporation. As a result, DDR has added 15 million square feet to its portfolio. The majority of the assets are located in Texas, Georgia, Tennessee and other southeastern states.

“We are building a history of successes,” says Schroeder. “We have an active development pipeline and we are seeking new investment opportunities in the Southeast.”

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