CDP · COPT Defense Properties

COPT Defense Properties reported strong first quarter 2026 results, with diluted FFO per share (as adjusted for comparability) of $0.69, a 6.2% increase from $0.65 in the prior year quarter and $0.01 above the midpoint of management's guidance. Net income rose to $40.1 million from $36.2 million, and total revenue increased to $200.6 million from $187.9 million, driven by higher lease revenue and property operating expense reimbursements. Same Property cash NOI grew 5.4% year-over-year, reflecting robust leasing activity and occupancy gains. The Defense/IT Portfolio remained highly occupied at 95.6% and leased at 96.4%, marking the thirteenth consecutive quarter with occupancy above 94%. Leasing activity was robust: the company leased 1.6 million square feet, including 1.2 million square feet of renewals with a 90.8% retention rate and 3.8% cash rent growth. Investment leasing totaled 384,000 square feet. Management highlighted the full renewal of a 953,000 square foot U.S. Government campus near Lackland Air Force Base as a key driver. The company committed $201 million to two new investments that are 61% pre-leased. On the balance sheet, COPT Defense maintained a strong credit profile with an adjusted EBITDA fixed charge coverage ratio of 4.3x and net debt to in-place adjusted EBITDA of 6.1x. Moody's upgraded the company's credit rating to Baa2 with a Stable outlook in March. Based on first quarter outperformance, management raised the midpoint of full-year 2026 FFO per share guidance by $0.01 to $2.76, implying 1.5% growth. The board also approved a 4.9% increase in the quarterly dividend to $0.32 per share, marking the fourth consecutive annual increase.