The Interview: Randall M. Griffin has overseen growth of COPT

CEO of Columbia-based commercial developer talks about changes in industry

  • Randall M. Griffin, CEO of Corporate Office Properties Trust
Randall M. Griffin, CEO of Corporate Office Properties Trust (Baltimore Sun )
November 19, 2011|By Lorraine Mirabella, The Baltimore Sun

He's led the Columbia-based company through two recessions and overseen its growth into a nationally known developer with $5 billion in assets and a specialty in high-security buildings for defense agency and defense contractor tenants.

In March, Randall M. Griffin will retire from Corporate Office Properties Trust after nearly 14 years, both as president and chief operating offer and as CEO for the last six years. COPT builds, owns and manages suburban office complexes and specializes in defense agency and contractor tenants. The real estate investment trust has made some high profile acquisitions over the years, such as the 474,000-square-foot Canton Crossing office tower in Baltimore, and now owns 266 office properties. The company has won accolades from tenants, and for five years in a row was named "Best in Industry" among large owners in a national survey of tenant satisfaction.

Griffin, 66, will be succeeded on April 1 by Roger A. Waesche Jr., COPT's president and chief operating officer. Before COPT, Griffin had served as president of former Baltimore Gas and Electric Co. subsidiary Constellation Real Estate Group Inc., which was acquired by COPT in 1998. In a recent interview with The Baltimore Sun, Griffin talked about leading the company and about the future of commercial real estate.

What do you consider your greatest accomplishments during your years heading COPT?

Over those 13 years we were able to … grow the company from a local, unknown company … to one that's nationally known and has done very well. Along the way we became the No. 1 office REIT [real estate investment trust] in shareholder return, No. 1 in dividend increase over 13 years, No. 1 in customer service among the largest owners, as rated by CEL & Associates. And we are the largest company in terms of green buildings. But what I'm most proud of is we've built a team that has a very strong culture, and that culture is built upon giving back to the community.

What has been the biggest driver of the company's growth during your years as CEO and COO?

You could say it was somewhat lucky or well-planned by our predecessor [company]. The initial lease with the U.S. government occurred 19 years ago, and today we have 79 leases with the government, and that's been a major driver. The special agencies and the defense contractors serving them make up 60 percent of the revenues. You don't get into that situation without having been very ethical and trustworthy, and establishing excellent relationships with the government and being technologically sophisticated. These are expensive and complex buildings, and we've gotten good at building them. We are now the largest owner of secured buildings in the country.

What are some of the changes you've seen over the past few decades in the commercial real estate and development industry?

Buildings have gotten much more sophisticated and more environmentally friendly. They have had to adapt to higher parking densities, higher ceilings, much more flexible floor plans. It's become much more expensive to build those buildings. And we've watched the [economic] cycles. The nation has gone through a number of recessions, but this is by far the most severe. In 1986, it was overbuilding … in 2000, the tech bubble and oversupply. This one is lack of demand, not oversupply. At the peak in the 1980s, we were developing 180 million square feet of product and new office buildings a year. It's a fairly radical change in demand; some comes from reduced square footage per person. And the nature of demand has changed as nationally we've seen [an increase] in telecommuting.

How have the needs of tenants changed?

This current generation is much more comfortable with a laptop and sitting at a conference table with eight or 10 people, and there's not as much of a requirement for individual offices. It's a much more collaborative, tech-friendly environment. The [office] environment has become healthier, with more light, improved air quality and the use of recycled material for furniture. For government contractors, you're dealing with classified information, so there is not as much telecommuting. But there are much more technically sophisticated building requirements.

What have been some of the biggest challenges leading a commercial real estate company through the recession?

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