COPT Defense Announces Q3 2025 Results

10/30/2025 – 04:16 PM

EPS of $0.37

FFO per Share, as Adjusted for Comparability, of $0.69

6.2% FFO per Share Growth Year-over-Year

2-cents above the Midpoint of Guidance

Increased Midpoint of 2025 FFO per Share Guidance by 3-cents to $2.70

Implies 5.1% FFO per Share Growth for the Year

Same Property Cash NOI Increased 4.6% in both 3Q25 and Year-to-Date

Increased Midpoint of 2025 Guidance for the Year by 75 basis points to 4.0%

Continued Strong Occupancy and Leased Levels

Total Portfolio 93.9% Occupied and 95.7% Leased

Highest Leased Rate in 20 Years

Defense/IT Portfolio 95.4% Occupied and 97.0% Leased

Increased Midpoint of 2025 Guidance for Same Property Year-End Occupancy by 20 basis points to 94.2%

3Q25 Leasing Outperformed Expectations; On Track to Exceed Already Increased 2025 Goals

Total Leasing in 3Q25 and YTD of 971,000 SF and 2.3 million SF, respectively

Vacancy Leasing in 3Q25 and YTD of 78,000 SF and 432,000 SF, respectively

Increased Annual Target to 500,000 SF from 450,000 SF

Tenant Retention of 82% in both 3Q25 and YTD

Investment Leasing in 3Q25 and YTD of 101,000 SF and 203,000 SF, respectively

Success in Capital Deployment

Over the Past 5 Weeks, Committed $72M of Capital to a Build-to-Suit Development Project and a Building Acquisition

Capital Commitment to New Investments YTD is $124M

COLUMBIA, Md.–(BUSINESS WIRE)–COPT Defense Properties (CDP), a REIT specializing in properties near U.S. defense installations, today announced its financial results for the third quarter ended September 30, 2025. The company exceeded expectations, driven by strong leasing activity and strategic capital deployment.

Management Highlights

“Our Defense/IT investment strategy, focused on locations near priority U.S. defense installations, continues to deliver exceptional results,” commented Stephen E. Budorick, President & Chief Executive Officer of COPT Defense. “FFO per share exceeded the midpoint of our guidance range by $0.02. As a result, we are raising the midpoint of our 2025 FFO per share guidance by $0.03 to $2.70, an implied year-over-year growth of 5.1%, and $0.04 above our initial guidance.” This revised guidance reflects the company’s confidence in its operational execution and the enduring demand for its specialized properties.

The company has also updated guidance on cash NOI growth, cash rent spreads and occupancy, reflecting strength across key metrics. COPT Defense is increasingly optimistic about vacancy leasing, raising target by 11%, driven by tenant demand in support of strategic missions. Further bolstering its financial position, COPT successfully closed on three financings in October, pre-funding the 2026 bond maturity and providing $400 million of additional liquidity for external growth initiatives.

Strategic Capital Allocation and Market Dynamics

The company allocated $72 million in capital to new investments in September and October, reinforcing strategic alliances further solidifying COPT’s portfolio with existing tenants. These investments include a 101,000 square foot build-to-suit development for Yulista at Redstone Gateway in Huntsville, Alabama, and a 142,000 square foot office building acquisition in Chantilly, Virginia, which is fully leased to a top 20 national contractor, further exceeding development yield thresholds and driving FFO growth. Westfields submarket serves as a strategic asset, underscoring tenant demand as well as the mission-critical need to expand the company’s market, as occupancy remains high with supply constrained. These actions demonstrate a forward-looking capital strategy and value creation for stakeholders by COPT.

Looking ahead, COPT Defense aims to sustain FFO per share growth of over 4% between 2023 and 2026. This target speaks to the durability of COPT Defense’s market position and the importance of assets near mission-critical facilities.

Third Quarter 2025 Financial Results

* **Earnings per Share (EPS):** Diluted EPS was $0.37 for the quarter, compared to $0.32 for the same period in 2024.
* **Funds From Operations (FFO):** Diluted FFOPS, as adjusted for comparability, reached $0.69, compared to $0.65 in 3Q24. This performance was $0.02 above the midpoint of previous guidance.

Operational Performance Highlights

* **Portfolio Summary:** Occupancy was 93.9% for the total portfolio of 24.6 million square feet and 95.7%leased. The Defense/IT Portfolio, comprising 22.6 million square feet, reached 95.4% occupancy and 97.0% leased with a continued strong occupancy of Defense/IT Portfolio, and the current highest leased ratings in two decades.
* **Same Property Performance:** Same Property portfolio of 23.9 million square feet reached 94.3% occupancy and 95.8% leased, also experiencing a 4.6% increase in cash NOI compared to 3Q24.
* **Leasing Activity:** The Company leased 971,000 square feet comprised of renewals, vacancy leasing, and investment leasing and retention rates also outperformed. The lease terms are 5.4 years on renewals, 8.6 years on vacancy leasing, and 12.6 years on investment, indicating increased performance.

Investment Activity

* **Development Pipeline:** The Company’s development pipeline consists of five properties totaling 812,000 square feet that were 68% leased as of October 30, 2025. These projects represent a total estimated investment of $311 million, of which $154 million was spent as of September 30, 2025.
* **Acquisition:** On October 30, 2025, the Company acquired Stonegate I at 15050 Conference Center Drive in Chantilly, Virginia, a 142,000 square foot Class A office building for a gross purchase price of $40.2 million. The building is fully leased to a top 20 U.S. Government defense contractor.

Balance Sheet and Capital Transactions

* The Company issued $400 million of 4.50% Senior Notes due 2030 to repay existing debt and enhance liquidity.
* An amendment to the credit agreement increased the Revolving Credit Facility from $600 million to $800 million and extended the maturity date to October 2029.
* The Company has a secured revolving credit agreement for $200 million to fund property development activities.

2025 Outlook

The company is increasing its full-year EPS guidance from $1.30-$1.34 to $1.35-$1.37. Diluted FFOPS are expected to be in the range of $2.69-$2.71, reflecting COPT Defense’s robust operational performance and strategic positioning.

#### About COPT Defense Properties

COPT Defense Properties, an S&P MidCap 400 Company, is a REIT and a dominant owner of properties near key U.S. military bases. COPT Defense tenants include both government and defense contractors, often demanding high-security property enhancements. Currently, the Defense/IT Portfolio of 198 properties, encompassing 22.6 million square feet, is 97.0% leased as of September 30, 2025.