Corporate Office Properties Announces Pricing of $175 Million of Exchangeable Senior Notes.

COLUMBIA, Md. -- Corporate Office Properties Trust (COPT) (NYSE:OFC) announced today that its operating partnership, Corporate Office Properties, L.P. (COPLP), has priced its offering of $175 million aggregate principal amount of exchangeable senior notes due 2026. The notes will bear interest at a fixed rate of 3.5%, payable semi-annually beginning March 15, 2007. Up to an additional $25 million aggregate principal amount of notes may be issued, at the option of the initial purchasers, to cover over-allotments, within 30 days of the initial issuance of the notes.

The notes will be senior unsecured obligations of COPLP, which will be fully guaranteed on a senior unsecured basis by COPT. The Company expects to use the net proceeds from the sale of the notes to repay several construction loan facilities, repay borrowings under its unsecured revolving line of credit and for general corporate purposes.

The notes may be exchanged at any time on or after September 20, 2011, and prior thereto only upon the occurrence of specific events. Upon exchange, COPLP will pay cash in an amount equal to the lesser of the exchange value and the aggregate principal amount of the notes to be exchanged, and at the option of COPT, the Company's common shares, cash, or a combination thereof for any excess, at the applicable exchange rate. The notes will be exchangeable into the Company's common shares at an initial exchange rate, subject to adjustment, of 18.4162 shares per $1,000 principal amount of notes (which is equivalent to an initial exchange price of $54.30 per share). The initial exchange price represents a 20% premium over the last reported sale price per share of the Company's common shares on September 12, 2006, which was $45.25 per share.

Prior to September 20, 2011, the notes will not be redeemable at the option of COPLP, except to preserve COPT's status as a real estate investment trust. On or after September 20, 2011, COPLP may redeem all or a portion of the notes at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.

On September 15, 2011, September 15, 2016 or September 15, 2021 and in the event of certain fundamental changes, the holders of the notes may require COPLP to repurchase all or a portion of the notes at a purchase price equal to 100% of the principal amount of the notes plus accrued and unpaid interest.

The offering is expected to close September 18, 2006, subject to customary closing conditions.

The notes will be sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933. The notes and the Company's common shares issuable upon exchange of the notes have not been registered under the Securities Act of 1933, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements. The Company has agreed to file a registration statement regarding resales of the common shares issuable upon exchange of the notes with the Securities and Exchange Commission within 90 days after the closing of this offering. This release shall not constitute an offer to sell or the solicitation of an offer to buy any of these securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Company Information

Corporate Office Properties Trust (COPT) is a fully integrated, self-managed real estate investment trust (REIT) that focuses on the ownership, management, leasing, acquisition and development of suburban office properties located primarily in submarkets within the Greater Washington, DC region. As of June 30, 2006, the Company owned 189 office properties totaling 15.8 million rentable square feet, which included 19 properties totaling 963,000 square feet held through joint ventures. The Company has implemented a core customer expansion strategy that is built around meeting, through acquisitions and development, the multi-location requirements of the Company's existing strategic tenants. The Company's property management services team provides comprehensive property and asset management to company owned properties and select third party clients. The Company's development and construction services team provides a wide range of development and construction management services for company owned properties, as well as land planning, design/build services, consulting, and merchant development to select third party clients. The Company's shares are traded on the New York Stock Exchange under the symbol OFC. More information on Corporate Office Properties Trust can be found on the Internet at www.copt.com.

Forward-Looking Information

This press release may contain "forward-looking" statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company's current expectations, estimates and projections about future events and financial trends affecting the Company. Forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "estimate" or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Accordingly, the Company can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements.

Important factors that may affect these expectations, estimates, and projections include, but are not limited to:

--the Company's ability to borrow on favorable terms;

--general economic and business conditions, which will, among other things, affect office property demand and rents, tenant creditworthiness, interest rates and financing availability;

--adverse changes in the real estate markets including, among other things, increased competition with other companies;

--risk of real estate acquisition and development, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that development or operating costs may be greater than anticipated;

--risks of investing through joint venture structures, including risks that the Company's joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with the Company's objectives;

--our ability to satisfy and operate effectively under federal income tax rules relating to real estate investment trusts and partnerships;

--governmental actions and initiatives; and

--environmental requirements.

The Company undertakes no obligation to update or supplement any forward-looking statements. For further information, please refer to the Company's filings with the Securities and Exchange Commission, particularly the section entitled "Risk Factors" in Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2005.