COPT Defense Properties (CDP) Citi’s Miami Global Property CEO Conference 2026 summary

Company Overview and Strategic Positioning

• Specializes in mission-critical real estate supporting U.S. national defense, with 207 properties mainly adjacent to defense installations in Maryland, Virginia, Alabama, and Texas.

• Over 90% of annualized rental revenue comes from Defense/IT properties, with the U.S. government and defense contractors as primary tenants.

• 80% of the Defense/IT portfolio is high-security, including SCIF improvements and Antiterrorism/Force Protection construction.

• Non-defense assets make up just 10% of revenue and are targeted for recycling as market conditions allow.

• Competitive advantages include a credentialed workforce, deep development expertise, and advantaged land positions near mission-critical installations.

Achievements and Financial Performance

• FFOPS increased by 34% (5.0% CAGR) and AFFO by 33% (4.9% CAGR) over six years, with a 16.4% dividend increase in the last four years.

• Portfolio size grew by 31%, with 96% of $1.9B developments leased and occupancy up 110 bps overall.

• Sector-leading tenant retention with a 5- and 10-year average of 79%, and improved pricing power with positive cash rent spreads.

• Self-funding achieved, generating post-dividend cash flow to support $275M annual investments on a leverage-neutral basis.

• Balance sheet strengthened: $400M senior notes issued at 95 bps spread, average interest rate lowered by 60 bps, and fixed charge coverage ratio up 0.6x.

Leasing Activity, Development, and Demand Drivers

• Defense budget impacts leasing with a typical 12–18 month lag, but the Golden Dome program is accelerating demand, aiming for functionality by 2028.

• Golden Dome has already resulted in new leases and is expected to drive significant leasing activity in 2024.

• Space Command’s relocation to Huntsville is expected to generate new build-to-suit leases, with major activity starting in 18–24 months.

• Most new development is build-to-suit, but inventory is maintained in highly leased markets to support growth.

• Development is paced by pre-leasing thresholds, but permit-ready buildings allow for rapid response to demand.