COPT Defense Properties (CDP) Q4 2024 earnings summary

Executive summary

• Achieved FFO per share (as adjusted) of $2.57 for 2024, up 6.2% year-over-year, exceeding guidance midpoint, and marking the sixth consecutive year of growth.

• Same Property cash NOI increased 9.1% year-over-year, the highest ever reported, with normalized growth at 3.4%.

• Tenant retention reached 86%, the highest in over 20 years, with 500,000 SF of vacancy leasing executed, exceeding targets.

• Portfolio occupancy ended at 93.6% overall and 95.6% in the Defense/IT segment, with leasing at 95.1% and 96.8% respectively.

• Committed $212 million to new investments, including first building acquisitions since 2015.

Financial highlights

• Q4 FFO per share (as adjusted) was $0.65; full-year FFO per share (as adjusted) was $2.57, both above guidance midpoint.

• Same Property cash NOI up 9.1% year-over-year; Q4 up 10% year-over-year.

• Dividend increased 7.3% since 2022; payout ratio for diluted FFO (as adjusted) was 45.4% for 2024.

• Occupancy in Same Property portfolio ended at 94.1%, highest in over a decade.

• Total revenues for 2024 were $753.3 million, up from $685.0 million in 2023.

Outlook and guidance

• 2025 FFO per share guidance (as adjusted) set at $2.66 midpoint, implying 3.5% growth over 2024; guidance range $2.62–$2.70.

• Same Property cash NOI projected to increase 2.75% at midpoint in 2025; year-end occupancy guidance: 93.5–94.5%.

• Tenant retention guidance for 2025 is 75%-85%, with 3 million SF scheduled to expire.

• Vacancy leasing target for 2025 is 400,000 SF.

• Expect to commit $225–$300 million to new investments and maintain strong liquidity.