
For the quarterly period ended			March 31, ~~2021~~2022


For the transition period from						to

CORPORATE OFFICE PROPERTIES TRUST

(Exact name of registrant as specified in its charter)


Maryland						23-2947217
(State or other jurisdiction of						(IRS Employer
incorporation or organization)						Identification No.)


6711 Columbia Gateway Drive, Suite 300, Columbia, MD			21046
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (443) 285-5400

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares of beneficial interest, $0.01 par value	OFC	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes☒No

As of April 22, ~~2021, 112,326,054~~2022, 112,414,849 of Corporate Office Properties Trust’s Common Shares of Beneficial Interest, $0.01 par value, were issued and outstanding.

PART I: FINANCIAL INFORMATION

~~ITEM~~Item 1. Financial Statements

See accompanying notes to consolidated financial statements.

Corporate Office Properties Trust and Subsidiaries

Consolidated Statements of Operations

(in thousands, except per share data)

(1) Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust.

See accompanying notes to consolidated financial statements.

Corporate Office Properties Trust (“COPT”) and subsidiaries (collectively, the “Company”, “we” or “us”) is a fully-integrated and self-managed real estate investment trust (“REIT”). We own, manage, lease, develop and selectively acquire office and data center properties. The majority of our portfolio is in locations that support the United States Government (“USG”) and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what we believe are growing, durable, priority missions (“Defense/IT Locations”). We also own a portfolio of office properties located in select urban/urban-like submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (“Regional Office”). As of March 31, ~~2021,~~2022, our properties included the following:

•~~182~~188 properties totaling ~~21.0~~22.0 million square feet comprised of ~~16.3~~17.0 million square feet in ~~156~~161 office properties and ~~4.7~~5.0 million square feet in 2627 single-tenant data center ~~shell properties (“data center shells”).~~shells. We owned 1719 of these data center shells through unconsolidated real estate joint ventures;

•~~a wholesale data center with a critical load of 19.25 megawatts;~~

•1011 properties under development (8 office properties and 23 data center shells), including 32 partially-operational properties, that we estimate will total approximately ~~1.4~~1.7 million square feet upon completion; and

•approximately ~~820~~710 acres of land controlled for future development that we believe could be developed into approximately ~~10.4~~8.7 million square feet and 43 acres of other land.

We conduct almost all of our operations and own almost all of our assets through our operating partnership, Corporate Office Properties, L.P. (“COPLP”) and subsidiaries (collectively, the “Operating Partnership”), of which COPT is the sole general partner. COPLP owns real estate directly and through subsidiary partnerships and limited liability companies (“LLCs”). In addition to owning real estate, COPLP also owns subsidiaries that provide real estate services such as property management, development and construction services primarily for our properties but also for third parties. Some of these services are performed by a taxable REIT subsidiary (“TRS”).

Equity interests in COPLP are in the form of common and preferred units. As of March 31, ~~2021,~~2022, COPT owned ~~98.3%~~98.0% of the outstanding COPLP common units (“common units”) and there were 0no preferred units outstanding. Common units not owned by COPT carry certain redemption rights. The number of common units owned by COPT is equivalent to the number of outstanding common shares of beneficial interest (“common shares”) of COPT, and the entitlement of common units to quarterly distributions and payments in liquidation is substantially the same as that of COPT common shareholders.

COPT’s common shares are publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “OFC”.

2.Summary of Significant Accounting Policies

Basis of Presentation

~~The~~These consolidated financial statements include the accounts of COPT, the Operating Partnership, their subsidiaries and other entities in which COPT has a majority voting interest and control. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if we are deemed to be the primary beneficiary of such entities. We eliminate all intercompany balances and transactions in consolidation.

We use the equity method of accounting when we own an interest in an entity and can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity.

When we own an equity investment in an entity and cannot exert significant influence over its operations, we measure the investment at fair value, with changes recognized through net income. For an investment without a readily determinable fair value, we measure the investment at cost, less any impairments, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer.

These interim financial statements should be read together with the consolidated financial statements and notes thereto as

of and for the year ended December 31, ~~2020~~2021 included in ~~the Company’s and Operating Partnership’s 2020~~our 2021 Annual Report on Form 10-K. The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly state our financial position and results of operations. All adjustments are of a normal recurring nature. The consolidated financial statements have been prepared using the accounting policies described in ~~the Company’s and Operating Partnership’s 2020~~our 2021 Annual Report on Form 10-K as updated for our adoption of recent accounting pronouncements discussed below.

~~Reclassification~~

We reclassified certain amounts from ~~the~~ prior ~~period~~periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or ~~equity.~~equity, including amounts reclassified in conjunction with the transfer of a wholesale data center to discontinued operations in the fourth quarter of 2021. We provide disclosure regarding our discontinued operations in Note 4.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued guidance containing practical expedients for reference rate reform related activities pertaining to debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. In 2020, we elected to apply an expedient to treat any changes in loans resulting from reference rate reform as debt modifications (as opposed to extinguishments) and hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of the hedge accounting expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of this guidance and may apply other elections as applicable as additional changes in the market occur.

3.Fair Value Measurements

Recurring Fair Value Measurements

We have a non-qualified elective deferred compensation plan for Trustees and certain members of our management team that, prior to December 31, 2019, permitted participants to defer up to 100% of their compensation on a pre-tax basis and receive a tax-deferred return on such deferrals. ~~We froze additional entry into the plan effective~~Effective December 31, ~~2019.~~2019, no new investments of deferred compensation were eligible for the plan. The assets held in the plan (comprised primarily of mutual funds and equity securities) and the corresponding liability to the participants are measured at fair value on a recurring basis on our consolidated balance sheets using quoted market prices, as are other marketable securities that we hold. The balance of the plan, which was fully funded and totaled ~~$3.0~~$2.3 million as of March 31, ~~2021,~~2022, is included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets along with an insignificant amount of other marketable securities. The offsetting liability associated with the plan is adjusted to fair value at the end of each accounting period based on the fair value of the plan assets and reported in “other liabilities” on our consolidated balance sheets. The assets of the plan are classified in Level 1 of the fair value hierarchy, while the offsetting liability is classified in Level 2 of the fair value hierarchy.

The fair values of our interest rate derivatives are determined using widely accepted valuation techniques, including a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While we determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our interest rate derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. However, as of March 31, ~~2021,~~2022, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivatives and determined that these adjustments ~~are~~were not significant. As a result, we determined that our interest rate derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets (excluding investing receivables) and accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturities of these instruments. The fair values of our investing receivables, as disclosed in Note 7, were based on the discounted estimated future cash flows of the loans (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans with similar maturities and credit quality, and the estimated cash payments include scheduled principal and interest payments. For our disclosure of debt fair values in Note 9, we estimated the fair value of our unsecured senior notes based on quoted market rates for ~~publicly-traded debt~~our senior notes (categorized within Level 21 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments include scheduled

principal and interest payments. Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment.

For additional fair value information, refer to Note 7 for investing receivables, Note 9 for debt and Note 10 for interest rate derivatives.

The table below sets forth our financial assets and liabilities accounted for at fair value on a recurring basis as of March 31, ~~2021~~2022 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):


Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Marketable securities in deferred compensation plan (1)
Mutual funds	$	2,263	$	—	$	—	$	2,263
Other	59		—		—		59
Other marketable securities (1)	33		—		—		33
Interest rate derivatives (1)	—		1,538		—		1,538
Total assets	$	2,355	$	1,538	$	—	$	3,893
Liabilities:
Deferred compensation plan liability (2)	$	—	$	2,322	$	—	$	2,322
Interest rate derivatives (2)	—		665		—		665
Total liabilities	$	—	$	2,987	$	—	$	2,987

(1)Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.

(2)Included in the line entitled “other liabilities” on our consolidated balance sheet.

Operating properties, net consisted of the following (in thousands):

2022 Dispositions and Discontinued Operations

On January 25, 2022, we sold 9651 Hornbaker Road in Manassas, Virginia, our sole wholesale data center investment, for $222.5 million, resulting in a gain on sale of $28.6 million. This property, a separate reportable segment, is reported herein as discontinued operations. The table below sets forth the components of the property’s assets classified as held for sale on our consolidated balance sheet as of December 31, 2021 (in thousands):



Properties, net	$	191,857
Deferred rent receivable	462
Intangible assets on property acquisitions, net	73
Deferred leasing costs, net	307

Assets held for sale, net	$	192,699

The table below sets forth the property’s results of operations included in discontinued operations on our consolidated statements of operations and its operating and investing cash flows included on our consolidated statements of cash flows (in thousands):


	For the Three Months Ended March 31,
	2022		2021
	(in thousands)
Revenues from real estate operations	$	1,980	$	7,334
Property operating expenses	(971)		(3,698)
Depreciation and amortization associated with real estate operations	—		(2,821)

Gain on sale of real estate	28,564		—
Discontinued operations	29,573		815

Cash flows from operating activities	$	4,463	$	4,387
Cash flows from investing activities	$	220,569	$	(297)

2022 Development Activities

During the three months ended March 31, ~~2021,~~2022, we placed into service ~~46,000~~283,000 square feet in 12 newly-developed ~~property.~~properties. As of March 31, ~~2021,~~2022, we had 1011 properties under development, including 32 partially-operational properties, that we estimate will total ~~1.4~~1.7 million square feet upon completion.

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense

recoveries, lease termination revenue and other revenue from tenants that is not fixed under ~~the lease.~~leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands):

(1)Excludes lease revenue from discontinued operations of which $1.5 million and $5.5 million was fixed and $527,000 and $1.8 million was variable for the three months ended March 31, 2022 and 2021, respectively.

Fixed contractual payments due under our property leases were as follows (in thousands):

As of March 31, 2021
Year Ending December 31, Operating leases Sales-type leases
2021 (1) $ 316,963 $ 662
2022 382,423 960
2023 328,713 960
2024 280,360 960
2025 201,594 960
Thereafter 752,774 4,516
Total contractual payments $ 2,262,827 9,018
Less: Amount representing interest (2,511)
Net investment in sales-type leases $ 6,507


	As of March 31, 2022
Year Ending December 31,	Operating leases		Sales-type leases

2022 (1)	$	329,371	$	720
2023	412,129		960
2024	363,829		960
2025	276,356		960
2026	212,571		960
Thereafter	1,032,507		3,556
Total contractual payments	$	2,626,763	8,116
Less: Amount representing interest			(2,051)
Net investment in sales-type leases			$	6,065

(1)Represents the nine months ending December 31, ~~2021.~~2022.

As of March 31, ~~2021,~~2022, our balance sheet included ~~$79.9~~$40.8 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating ~~or developing,~~ with various expiration dates. Our property right-of-use assets consisted of the following (in thousands):

~~Property~~Our property lease liabilities reported on our consolidated balance sheets consisted of the following (in thousands):

~~The table below sets forth the weighted average terms and discount rates of our property leases as~~As of March 31, ~~2021:~~

2022, our operating leases had a weighted average remaining lease term of 52 years and a weighted average discount rate of 7.19%. The table below presents our total property lease cost (in thousands):

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

Payments on property operating leases were due as follows (in thousands):


Year Ending December 31,	March 31, 2022
2022 (1)	$	2,518
2023	3,399
2024	3,451
2025	1,797
2026	1,578
Thereafter	125,934
Total lease payments	138,677
Less: Amount representing interest	(108,948)
Lease liability	$	29,729

(1)Represents the nine months ending December 31, ~~2021.~~2022.

6.Real Estate Joint Ventures

Consolidated Real Estate Joint Ventures

The table below sets forth information pertaining to our investments in consolidated real estate joint ventures as of March 31, ~~2021~~2022 (dollars in thousands):

(1)Excludes amounts eliminated in consolidation.

(2)~~While net~~We fund all capital requirements. Our partner generally receives distributions of the first $1.2 million of annual operating cash ~~flow distributions~~flows and we receive the remainder.

(3)As of March 31, 2022, we also had a $112.0 million construction loan to the ~~partners vary depending~~joint venture, which is eliminated in consolidation, that carries an interest rate of LIBOR plus 2.35% and had a balance of $94.5 million; the loan matures on August 11, 2024, and we have priority for repayment in full of borrowings and accrued interest on the ~~source~~loan over partner distributions of ~~the funds distributed,~~any future refinancing proceeds or other available cash flows are generally distributed as follows: (1) cumulative preferred returns of 13.5% on our partner’s $9.0 million in invested capital; (2) cumulative preferred returns of 13.5% on our invested capital; (3) return of our invested capital; (4) return of our partner’s invested capital; and (5) any remaining residual 85% to us and 15% to our partner.flows.

Unconsolidated Real Estate Joint Ventures

The table below sets forth information pertaining to our investments in unconsolidated real estate joint ventures accounted for using the equity method of accounting (dollars in thousands):

(1)Included in the line entitled “investment in unconsolidated real estate joint ventures” on our consolidated balance sheets.

(2)Our investment in B RE COPT DC JV II LLC was lower than our share of the joint venture’s equity by ~~$7.4~~$7.2 million as of both March 31, ~~2021~~2022 and December 31, ~~2020~~2021 due to a difference between our cost basis and our share of the joint venture’s underlying equity in its net assets. We recognize adjustments to our share of the joint venture’s earnings and losses resulting from this basis difference in the underlying assets of the joint venture.

7. Investing Receivables

Investing receivables consisted of the following (in thousands):

The balances above include accrued interest receivable, net of allowance for credit losses, of ~~$601,000~~$386,000 as of March 31, ~~2021~~2022 and ~~$4.8~~$5.3 million as of December 31, ~~2020.~~2021.

Our notes receivable from the City of Huntsville funded infrastructure costs in connection with our LW Redstone Company, LLC joint venture (see Note 6) and carry an interest rate of 9.95%. Our other investing loans receivable carry an interest rate of 8.0%.

The fair value of these receivables was approximately ~~$75~~$85 million as of March 31, ~~2021~~2022 and ~~$73~~$84 million as of December 31, ~~2020.~~2021.

8. Prepaid Expenses and Other Assets, Net

Prepaid expenses and other assets, net consisted of the following (in thousands):

(1)Includes a valuation allowance of $24,000 as of both March 31, 2022 and December 31, 2021.

~~(1)~~(2)Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives.

~~(2)Includes a valuation allowance of $51,000 as of March 31, 2021 and $201,000 as of December 31, 2020.~~

Our debt consisted of the following (dollars in thousands):



	Carrying Value (1) as of
	March 31, 2022		December 31, 2021			March 31, 2022
					Stated Interest Rates		Scheduled Maturity
Mortgage and Other Secured Debt:
Fixed rate mortgage debt	$	86,331	$	86,960		3.82% - 4.62% (2)		2023-2026
Variable rate secured debt	33,636		33,667			LIBOR + 1.45% to 1.55% (3)		2025-2026
Total mortgage and other secured debt	119,967		120,627
Revolving Credit Facility (4)	160,000		76,000			LIBOR + 0.775% to 1.45% (5)		March 2023 (4)
Term Loan Facility (6)	99,855		299,420			LIBOR + 1.00% to 1.65% (7)		December 2022
Unsecured Senior Notes
2.25%, $400,000 aggregate principal	395,751		395,491			2.25% (8)		March 2026
2.00%, $400,000 aggregate principal	396,631		396,512			2.00% (9)		January 2029
2.75%, $600,000 aggregate principal	589,323		589,060			2.75% (10)		April 2031
2.90%, $400,000 aggregate principal	394,542		394,441			2.90% (11)		December 2033
Unsecured note payable	715		753			0% (12)		May 2026
Total debt, net	$	2,156,784	$	2,272,304

(1)The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of ~~$6.7~~$5.1 million as of March 31, ~~2021~~2022 and ~~$5.9~~$5.8 million as of December 31, ~~2020.~~2021.

(2)Certain of the fixed rate mortgages carry interest rates that, upon assumption, were above or below market rates and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $139,000 as of March 31, 2021 and $155,000 as of December 31, 2020.

~~(3)~~The weighted average interest rate on our fixed rate mortgage debt was ~~4.16%~~4.07% as of March 31, ~~2021.~~2022.

~~(4)Includes a construction loan with $25.0 million in remaining borrowing capacity as of March 31, 2021.~~

~~(5)~~(3)The weighted average interest rate on our variable rate secured debt was ~~2.24%~~1.75% as of March 31, ~~2021.~~2022.

~~(6)~~(4)The facility matures in March 2023, with the ability for us to further extend such maturity by 2 six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.075% of the total availability under the facility for each extension period. In connection with this facility, we also have the ability to borrow up to $500.0 million under new term loans from the facility’s lender group provided that there is no default under the facility and subject to the approval of the lenders.

(5)The weighted average interest rate on the Revolving Credit Facility was 1.38% as of March 31, 2022.

(6)We repaid $200.0 million of this loan during the three months ended March 31, 2022.

(7)The interest rate on this loan was ~~1.12%~~1.48% as of March 31, ~~2021.~~2022.

(8)The carrying value of these notes reflects an unamortized discount totaling ~~$331,000~~$3.4 million as of March 31, ~~2021~~2022 and ~~$781,000 as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%. Refer to paragraph below for further disclosure.~~

~~(9)The carrying value of these notes reflectsan unamortized discount totaling $630,000as of March 31, 2021 and $1.6~~$3.6 million as of December 31, ~~2020. The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%. Refer to paragraph below for further disclosure.~~

~~(10)The carrying value of these notes reflects an unamortized discount totaling $1.7 millionas of March 31, 2021 and $1.8 million as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 5.15%.~~

~~(11)The carrying value of these notes reflects an unamortized discount totaling $4.3 million as of March 31, 2021 and $4.5 million as of December 31, 2020.~~2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.48%.

~~(12)~~(9)~~Refer to paragraph below for further disclosure.~~The carrying value of these notes reflects an unamortized discount totaling $2.4 million as of March 31, 2022 and $2.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.09%.

~~(13)~~(10)The carrying value of these notes reflects an unamortized discount totaling $9.2 million as of March 31, 2022 and $9.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.94%.

(11)The carrying value of these notes reflects an unamortized discount totaling $4.5 million as of March 31, 2022 and December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 3.01%.

(12)This note carries an interest rate that, upon assumption, was below market rates and it therefore was recorded at its fair value based on applicable effective interest rates. The carrying value of this note reflects an unamortized discount totaling ~~$147,000~~$96,000 as of March 31, ~~2021~~2022 and ~~$161,000~~$108,000 as of December 31, ~~2020.~~2021.

All debt is owed by the Operating Partnership. While COPT is not directly obligated by any debt, it has guaranteed COPLP’s Revolving Credit Facility, Term Loan Facility and Unsecured Senior Notes.

On March 11, 2021, we issued $600.0 million of 2.75% Senior Notes due 2031 (the “2.75% Notes”) at an initial offering price of 98.95% of their face value. The proceeds from this issuance, after deducting underwriting discounts, but before other offering expenses, were $589.8 million. The notes mature on April 15, 2031. We may redeem the notes, in whole at any time or in part from time to time, at our option, at a redemption price equal to the greater of (1) the aggregate principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to its present value, on a semi-annual basis at an adjusted treasury rate plus a spread of 25 basis points, plus accrued and unpaid interest thereon to the date of redemption. However, if this redemption occurs on or after three months prior to the maturity date, the redemption price

will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date. These notes are unconditionally guaranteed by COPT. The carrying value of these notes reflects an unamortized discount totaling $10.1 million as of March 31, 2021. The effective interest rate under the notes, including amortization of discount and issuance costs, was 2.94%.

~~With regard to our 3.60% Senior Notes due 2023 (the “3.60% Notes”) and 5.25% Senior Notes due 2024 (the “5.25% Notes”), we:~~

•effective March 11, 2021, purchased pursuant to tender offers $184.4 million of 3.60% Notes for $196.7 million and $145.6 million of 5.25% Notes for $164.7 million, plus accrued interest. In connection with these purchases, we recognized a loss on early extinguishment of debt of $33.2 million in the three months ended March 31, 2021; and

•on April 12, 2021, redeemed the remaining $165.6 million of 3.60% Notes for $176.3 million and $104.4 million of 5.25% Notes for $117.7 million, plus accrued interest, and recognized an additional loss on early extinguishment of debt of approximately $25 million.

Certain of our debt instruments require that we comply with a number of restrictive financial covenants. As of March 31, ~~2021,~~2022, we were compliant with these financial covenants.

Our debt matures on the following schedule (in thousands):


Year Ending December 31,	March 31, 2022
2022 (1)	$	102,559
2023	178,953
2024	29,983
2025	23,717
2026	446,300
Thereafter	1,400,000
Total	$	2,181,512	(2)

(1)Represents the nine months ending December 31, 2022.

(2)Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $24.7 million.

We capitalized interest costs of $1.5 million in the three months ended March 31, 2022 and $1.8 million in the three months ended March 31, ~~2021 and $3.4 million in the three months ended March 31, 2020.~~2021.

The following table sets forth information pertaining to the fair value of our debt (in thousands):

10. Interest Rate Derivatives

The following table sets forth the key terms and fair values of our interest rate swap derivatives ~~each of which was designated as a cash flow hedge of interest rate risk~~ (dollars in thousands):


							Fair Value at
Notional Amount			Fixed Rate	Floating Rate Index	Effective Date	Expiration Date	March 31, 2022		December 31, 2021
$	100,000		1.901%	One-Month LIBOR	9/1/2016	12/1/2022	$	(331)	$	(1,361)
$	100,000		1.905%	One-Month LIBOR	9/1/2016	12/1/2022	(334)		(1,365)
$	11,060	(1)	1.678%	One-Month LIBOR	8/1/2019	8/1/2026	307		(234)
$	23,000	(2)	0.573%	One-Month LIBOR	4/1/2020	3/26/2025	1,231		355
$	50,000	(3)	1.908%	One-Month LIBOR	9/1/2016	N/A	—		(684)
							$	873	$	(3,289)

(1)The notional amount of this instrument is scheduled to amortize to $10.0 million.

(2)The notional amount of this instrument is scheduled to amortize to $22.1 million.

(3)We cash settled this swap and accrued interest thereon for $625,000 on January 28, 2022.

Each of these swaps was designated as a cash flow hedge of interest rate risk except for the swap with a $50.0 million notional amount for which we discontinued hedge accounting in December 2021.

The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheets (in thousands):

The ~~tables~~table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands):

Based on the fair value of our derivatives as of March 31, ~~2021,~~2022, we estimate that approximately ~~$4.7 million~~$804,000 of losses will be reclassified from AOCL as an increase to interest expense over the next 12 months.

We have agreements with each of our interest rate derivative counterparties that contain provisions under which, if we default or are capable of being declared in default on defined levels of our indebtedness, we could also be declared in default on our derivative obligations. Failure to comply with the loan covenant provisions could result in our being declared in default on any derivative instrument obligations covered by the agreements. As of March 31, ~~2021,~~2022, we were not in default with any of these provisions. As of March 31, ~~2021,~~2022, the fair value of interest rate derivatives in a liability position related to these agreements was ~~$7.7 million,~~$665,000, excluding the effects of accrued interest and credit valuation adjustments. As of March 31, ~~2021,~~2022, we had not posted any collateral related to these agreements. If we breach any of these provisions, we could be required to settle our obligations under the agreements at their termination value, which was ~~$8.1 million~~$952,000 as of March 31, ~~2021.~~2022.

11. Redeemable Noncontrolling Interests

Our partners in 2 real estate joint ventures, LW Redstone Company, LLC and Stevens Investors, LLC, have the right to require us to acquire their respective interests at fair value; accordingly, we classify the fair value of our partners’ interests as redeemable noncontrolling interests in the mezzanine section of our consolidated balance sheets. The table below sets forth the activity for these redeemable noncontrolling interests (in thousands):

We determine the fair value of the interests based on unobservable inputs after considering the assumptions that market participants would make in pricing the interest. We apply a discount rate to the estimated future cash flows allocable to our partners from the properties underlying the respective joint ventures. Estimated cash flows used in such analyses are based on our plans for the properties and our views of market and economic conditions, and consider items such as current and future rental rates, occupancy projections and estimated operating and development expenditures.

As of March 31, ~~2021,~~2022, we had remaining capacity under our at-the-market stock offering program equal to an aggregate gross sales price of $300 million in common share sales.

~~During the three months ended March 31, 2021, certain COPLP limited partners converted 8,054 common units in COPLP for an equal number of common shares.~~

We declared dividends per common share of $0.275 in the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

See Note 16 for disclosure of COPT common share and COPLP common unit activity pertaining to our share-based compensation plans.

13. Credit Losses, Financial Assets and Other Instruments

(1)Included in the line entitled “accounts receivable, net” on our consolidated balance sheets.

(2)The balance as of March 31, 2022 and December 31, 2021 included $154,000 and $218,000, respectively, in the line entitled “accounts receivable, net” and $400,000 and $695,000, respectively, in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. The balance as of March 31, 2021 and December 31, 2020 included $40,000 and $257,000, respectively, in the line entitled “accounts receivable, net” and $474,000 and $386,000, respectively, in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets.

The following table presents the amortized cost basis of our investing receivables, tenant notes receivable and sales-type lease receivables by credit risk classification, by origination year as of March 31, ~~2021~~2022 (in thousands):

Our investment grade credit risk classification represents entities with investment grade credit ratings from ratings agencies (such as Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc. or Fitch Ratings Ltd.), meaning that they are considered to have at least an adequate capacity to meet their financial commitments, with credit risk ranging from minimal to moderate. Our non-investment grade credit risk classification represents entities with either no credit agency credit ratings or ratings deemed to be sub-investment grade; we believe that there is significantly more credit risk associated with this classification. The credit risk classifications of our investing receivables and tenant notes receivable were last updated in March ~~2021.~~2022.

An insignificant portion of the investing and tenant notes receivables set forth above was past due, which we define as being delinquent by more than three months from the due date.

Notes receivable on nonaccrual status as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 were not significant. We did not recognize any interest income on notes receivable on nonaccrual status during the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

14. Information by Business Segment

We have the following reportable segments: Defense/IT Locations; Regional Office; Wholesale Data ~~Center;~~Center (the only property in which we sold on January 25, 2022); and Other. We also report on Defense/IT Locations sub-segments, which include the following: Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”); Northern Virginia Defense/IT ~~Locations;~~Locations (“NoVA Defense/IT”); Lackland Air Force Base (in San Antonio); locations serving the U.S. Navy (“Navy ~~Support Locations”~~Support”), which included properties proximate to the Washington Navy Yard, the Naval Air Station Patuxent River in Maryland and the Naval Surface Warfare Center Dahlgren Division in Virginia; Redstone Arsenal (in Huntsville); and data center shells (properties leased to tenants to be operated as data centers in which the tenants fund the costs for the power, fiber connectivity and data center infrastructure). Our segment reporting included below reflects our retrospective reclassification of: certain activities to our Other reportable segment from our Wholesale Data Center reportable segment in the fourth quarter of 2021; and 2 properties to our NoVA Defense/IT sub-segment from our Regional Office segment in the first quarter of 2022.

We measure the performance of our segments through the measure we define as net operating income from real estate operations (“NOI from real estate operations”), which includes: real estate revenues and property operating expenses; and the net of revenues and property operating expenses of real estate operations owned through unconsolidated real estate joint ventures (“UJVs”) that is allocable to our ownership interest (“UJV NOI allocable to COPT”). Amounts reported for segment assets represent long-lived assets associated with consolidated operating properties (including the carrying value of properties, right-of-use assets, net of related lease liabilities, intangible assets, deferred leasing costs, deferred rents receivable and lease incentives) and the carrying value of investments in UJVs owning operating properties. Amounts reported as additions to long-lived assets represent additions to existing consolidated operating properties, excluding transfers from non-operating properties, which we report separately.

The table below reports segment financial information for our reportable segments (in thousands):

The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands):

The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands):


	For the Three Months Ended March 31,
	2022		2021
Segment property operating expenses	$	58,152	$	56,974
Less: Property operating expenses from discontinued operations (Note 4)	(971)		(3,698)
Total property operating expenses	$	57,181	$	53,276

The following table reconciles UJV NOI allocable to COPT to equity in income of unconsolidated entities as reported on our consolidated statements of operations (in thousands):

As previously discussed, we provide real estate services such as property management, development and construction services primarily for our properties but also for third parties. The primary manner in which we evaluate the operating performance of our service activities is through a measure we define as net operating income from service operations (“NOI from service operations”), which is based on the net of revenues and expenses from these activities. Construction contract and other service revenues and expenses consist primarily of subcontracted costs that are reimbursed to us by the customer along with a management fee. The operating margins from these activities are small relative to the revenue. We believe NOI from service operations is a useful measure in assessing both our level of activity and our profitability in conducting such operations. The table below sets forth the computation of our NOI from service operations (in thousands):

The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to ~~net~~ income (loss) from continuing operations as reported on our consolidated statements of operations (in thousands):

The following table reconciles our segment assets to our consolidated total assets (in thousands):

The accounting policies of the segments are the same as those used to prepare our consolidated financial ~~statements.~~statements, except that discontinued operations are not presented separately for segment purposes. In the segment reporting presented above, we did not allocate interest expense, depreciation and amortization, impairment losses, gain on sales of real estate, loss on early extinguishment of debt and equity in income of unconsolidated entities not included in NOI to our real estate segments since they are not included in the measure of segment profit reviewed by management. We also did not allocate general, administrative and leasing expenses, business development expenses and land carry costs, interest and other income, credit loss (expense) recoveries, ~~(expense),~~ income taxes and noncontrolling interests because these items represent general corporate or non-operating property items not attributable to segments.

15.Construction Contract and Other Service Revenues

We disaggregate our construction contract and other service revenues by compensation arrangement and by service type as we believe it best depicts the nature, timing and uncertainty of our revenue. The table below reports construction contract and other service revenues by compensation arrangement (in thousands):

The table below reports construction contract and other service revenues by service type (in thousands):

We recognized an insignificant amount of revenue in the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 from performance obligations satisfied (or partially satisfied) in previous periods.

Accounts receivable related to our construction contract services is included in accounts receivable, net on our consolidated balance sheets. The beginning and ending balances of accounts receivable related to our construction contracts were as follows (in thousands):

Contract assets, which we refer to herein as construction contract costs in excess of billings, net, are included in prepaid expenses and other assets, net ~~reported~~ on our consolidated balance sheets. The beginning and ending balances of our contract assets were as follows (in thousands):

Contract liabilities are included in other liabilities ~~reported~~ on our consolidated balance sheets. Changes in contract liabilities were as follows (in thousands):

Revenue allocated to the remaining performance obligations under existing contracts as of March 31, ~~2021~~2022 that will be recognized as revenue in future periods was ~~$176.6 million, approximately $74~~$98.9 million, of which we expect to recognize ~~during~~approximately $84 million in the nine months ending December 31, 2022 and most of the remainder ~~of 2021.~~in 2023.

We have 0no deferred incremental costs incurred to obtain or fulfill our construction contracts or other service revenues as of March 31, 2022 and December 31, 2021. We had ~~no significant~~ credit loss ~~expense~~recoveries on construction contracts receivable orand unbilled construction revenue of $372,000 in the three months ended March 31, ~~2021~~2022 and ~~2020.~~$141,000 in the three months ended March 31, 2021.

16. Share-Based Compensation

During the three months ended March 31, ~~2021,~~2022, certain employees ~~and a non-employee member of our Board of Trustees (“Trustee”)~~ were granted a total of ~~139,646~~142,411 restricted common shares with an aggregate grant date fair value of ~~$3.6~~$3.8 million ~~(weighted average of $26.00~~($26.57 per share). Restricted shares granted to employees vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employee remains employed by us. ~~Restricted shares granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in his or her~~

~~position.~~ During the three months ended March 31, ~~2021,~~2022, forfeiture restrictions lapsed on ~~131,573~~120,753 previously issued common shares; these shares had a weighted average grant date fair value of ~~$25.82~~$26.06 per share, and the aggregate intrinsic value of the shares on the vesting dates was ~~$3.4~~$3.2 million.

~~Performance Share Awards (“PSUs”)~~

~~We issued 93,824 common shares on February 3, 2021 to executives in settlement of PSUs granted in 2018, representing 200% of the target awards for those PSUs.~~

Profit Interest Units in COPLP (“PIUs”)

We granted 2 forms of PIUs: time-based PIUs (“TB-PIUs”); and performance-based PIUs (“PB-PIUs”). TB-PIUs are subject to forfeiture restrictions until the end of the requisite service period, at which time the TB-PIUs automatically convert into vested PIUs. PB-PIUs are subject to a market condition in that the number of earned awards are determined at the end of the performance period (as described further below) and then settled in vested PIUs. Vested PIUs carry substantially the same rights to redemption and distributions as non-PIU common units.

TB-PIUs

During the three months ended March 31, ~~2021,~~2022, we granted ~~80,319~~86,202 TB-PIUs with an aggregate grant date fair value of ~~$2.1~~$2.3 million ($~~26.00~~26.57 per TB-PIU) to senior management team members. ~~These~~ TB-PIUs granted to senior management team members vest ~~in equal annual~~based on increments and over ~~a three-year period beginning on~~periods of time set forth under the ~~first anniversary~~terms of the ~~date of grant~~respective awards provided that the employee remains employed by us. Prior to vesting, TB-PIUs carry substantially the same rights to distributions as non-PIU common units but carry no redemption rights. During the three months ended March 31, ~~2021,~~2022, forfeiture restrictions lapsed on ~~32,619~~59,392 previously issued TB-PIUs; these TB-PIUs had a weighted average grant date fair value of ~~$25.55~~$25.75 per unit, and the aggregate intrinsic value of the TB-PIUs on the vesting date was ~~$848,000.~~$1.6 million.

PB-PIUs

On January 1, ~~2021,~~2022, we granted certain senior management team members ~~227,544~~231,838 PB-PIUs with a three-year performance period concluding on the earlier of December 31, ~~2023~~2024 or the date of: (1) termination by us without cause, death or disability of the employee or constructive discharge of the employee (collectively, “qualified termination”); or (2) a sale event. The number of earned awards at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return (“TSR”) relative to a peer group of companies, as set forth in the following schedule:


Percentile Rank						Earned PB-PIUs Payout %
75th or greater						100% of PB-PIUs granted
50th (target)						50% of PB-PIUs granted
25th						25% of PB-PIUs granted
Below 25th						0% of PB-PIUs granted

If the percentile rank exceeds the 25th percentile and is between 2 of the percentile ranks set forth in the table above, then the percentage of the earned awards will be interpolated between the ranges set forth in the table above to reflect any performance between the listed percentiles. If COPT’s TSR during the measurement period is negative, the maximum number of earned awards will be limited to the target level payout percentage. During the performance period, PB-PIUs carry rights to distributions equal to 10% of the distribution rights of non-PIU common units but carry no redemption rights.

At the end of the performance period, we will settle the award by issuing vested PIUs equal to: the number of earned awards; and the excess, if any, of (1) the aggregate distributions that would have been paid with respect to vested PIUs issued in settlement of the earned awards through the date of settlement had such vested PIUs been issued on the grant date over (2) the aggregate distributions made on the PB-PIUs during the performance period, divided by the price of our common shares on the settlement date. If a performance period ends due to a sale event or qualified termination, the number of earned awards is prorated based on the portion of the three-year performance period that has elapsed. If employment is terminated by the employee or by us for cause, all PB-PIUs are forfeited.

These PB-PIU grants had an aggregate grant date fair value of ~~$3.4~~$3.8 million ($~~30.03~~32.87 per target-level award associated with the grants) which is being recognized over the performance period. The grant date fair value was computed using a Monte Carlo model that included the following assumptions: baseline common share value of ~~$26.08;~~$27.97; expected volatility for common shares of ~~34.7%~~31.7%; and a risk-free interest rate of ~~0.18%~~0.98%.

Based on COPT’s TSR relative to its peer group of companies, for the 2019 PB-PIUs issued to executives that vested on December 31, 2021, we issued 156,104 PIUs in settlement of the PB-PIUs on February 1, 2022.

17. Earnings Per Share (“EPS”)

We present both basic and diluted EPS. We compute basic EPS by dividing net income available to common shareholders allocable to unrestricted common shares under the two-class method by the weighted average number of unrestricted common shares outstanding during the period. Our computation of diluted EPS is similar except that:

•the denominator is increased to include: (1) the weighted average number of potential additional common shares that would have been outstanding if securities that are convertible into common shares were converted; and (2) the effect of dilutive

potential common shares outstanding during the period attributable to redeemable noncontrolling interests and share-based compensation awards using the if-converted or treasury stock methods; and

•the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common shares that we add to the denominator.

Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data):

For the Three Months Ended March 31,
2021 2020
Numerator:
Net (loss) income attributable to COPT $ (6,669) $ 24,054
Income attributable to share-based compensation awards (170) (105)
Numerator for basic EPS on net income attributable to COPT common shareholders (6,839) 23,949
Income attributable to share-based compensation awards 0 8
Numerator for diluted EPS on net income attributable to COPT common shareholders $ (6,839) $ 23,957
Denominator (all weighted averages):
Denominator for basic EPS (common shares) 111,888 111,724
Dilutive effect of share-based compensation awards 0 239
Denominator for diluted EPS (common shares) 111,888 111,963
Basic EPS $ (0.06) $ 0.21
Diluted EPS $ (0.06) $ 0.21


	For the Three Months Ended March 31,
		2022		2021
Numerator:
Income (loss) from continuing operations		$	31,251	$	(6,894)
Income from continuing operations attributable to noncontrolling interests		(1,084)		(580)
Income from continuing operations attributable to share-based compensation awards for basic EPS		(116)		(172)
Numerator for basic EPS from continuing operations attributable to COPT common shareholders		30,051		(7,646)

Redeemable noncontrolling interests		(39)		—


Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS		18		—
Numerator for diluted EPS from continuing operations attributable to COPT common shareholders		30,030		(7,646)
Discontinued operations		29,573		815
Discontinued operations attributable to noncontrolling interests		(421)		(10)
Income from discontinued operations attributable to share-based compensation awards for diluted EPS		(83)		2
Numerator for diluted EPS on net income (loss) attributable to COPT common shareholders		$	59,099	$	(6,839)

Denominator (all weighted averages):
Denominator for basic EPS (common shares)		112,020		111,888


Dilutive effect of redeemable noncontrolling interests		132		—
Dilutive effect of share-based compensation awards		426		—
Denominator for diluted EPS (common shares)		112,578		111,888

Basic EPS:
Income (loss) from continuing operations attributable to COPT common shareholders		$	0.27	$	(0.07)
Discontinued operations attributable to COPT common shareholders		0.26		0.01
Net income (loss) attributable to COPT common shareholders		$	0.53	$	(0.06)
Diluted EPS:
Income (loss) from continuing operations attributable to COPT common shareholders		$	0.27	$	(0.07)
Discontinued operations attributable to COPT common shareholders		0.25		0.01
Net income (loss) attributable to COPT common shareholders		$	0.52	$	(0.06)

Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands):


		Weighted Average Shares Excluded from Denominator
	For the Three Months Ended March 31,
			2022	2021
Conversion of common units			1,384	1,246
Conversion of redeemable noncontrolling interests			806	940

Weighted Average Shares Excluded from Denominator
For the Three Months Ended March 31,
2021 2020
Conversion of common units 1,246 1,226
Conversion of redeemable noncontrolling interests 940 1,011
Conversion of Series I Preferred Units 0 176

The following securities were also excluded from the computation of diluted EPS because their effect was antidilutive:

•weighted average restricted shares and deferred share awards for the three months ended March 31, 2022 and 2021 of 399,000 and ~~2020 of~~ 419,000, ~~and 440,000,~~ respectively;

•weighted average ~~unvested~~ TB-PIUs for the three months ended March 31, 2022 and 2021 of 172,000 and ~~2020 of~~ 131,000, ~~and 75,000,~~ respectively; and

•weighted average ~~unvested~~ PB-PIUs for the three months ended March 31, 2021 of 228,000.

2426

18. Commitments and Contingencies

Litigation and Claims

In the normal course of business, we are subject to legal actions and other claims. We record losses for specific legal proceedings and claims when we determine that a loss is probable and the amount of loss can be reasonably estimated. As of March 31, ~~2021,~~2022, management believes that it is reasonably possible that we could recognize a loss of up to ~~$3.2~~$3.7 million for certain municipal tax claims; while we do not believe this loss would materially affect our financial position or liquidity, it could be material to our results of operations. Management believes that it is also reasonably possible that we could incur losses pursuant to other claims but do not believe such losses would materially affect our financial position, liquidity or results of operations. Our assessment of the potential outcomes of these matters involves significant judgment and is subject to change based on future developments.

Environmental

We are subject to various Federal, state and local environmental regulations related to our property ownership and operation. We have performed environmental assessments of our properties, the results of which have not revealed any environmental liability that we believe would have a materially adverse effect on our financial position, operations or liquidity.

In connection with a lease and subsequent sale in 2008 and 2010 of 3 properties in Dayton, New Jersey, we agreed to provide certain environmental indemnifications limited to $19 million in the aggregate. We have insurance coverage in place to mitigate much of any potential future losses that may result from these indemnification agreements.

Tax Incremental Financing Obligation

Anne Arundel County, Maryland issued tax incremental financing bonds to third-party investors in order to finance public improvements needed in connection with our project known as the National Business Park. These bonds had a remaining principal balance of approximately ~~$33~~$31 million as of March 31, ~~2021.~~2022. The real estate taxes on increases in assessed values post-bond issuance of properties in development districts encompassing the National Business Park are transferred to a special fund pledged to the repayment of the bonds. While we are obligated to fund, through a special tax, any future shortfalls between debt service of the bonds and real estate taxes available to repay the bonds, as of March 31, ~~2021,~~2022, we do not expect any such future fundings will be required.

~~Effects of COVID-19~~

As of the date of this filing, spread of the coronavirus, or COVID-19, continues world- and nation-wide, and is expected to continue at least until vaccinations have been administered to most of the population. Some businesses continue to be hindered to varying extents by the effects of restrictive measures instituted to control spread, operational challenges resulting from social distancing requirements/expectations and/or a reluctance by much of the population to engage in certain activities while the pandemic is still active. In addition, there continues to be significant uncertainty regarding the duration and extent of the pandemic due to such factors such as the resurgence of the virus, emergence of variants in some areas and pace of vaccination efforts. While the pandemic has impacted the operations of much of the commercial real estate industry, we believe that we have been less susceptible to such impact due to our portfolio’s significant concentration in Defense/IT Locations. As a result, we believe that we have not been significantly affected by the pandemic.

~~COVID-19, along with measures instituted to prevent spread, may adversely affect us in many ways, including, but not limited to:~~

•~~disruption of our tenants’ operations, which could adversely affect their ability, or willingness, to sustain their businesses and/or fulfill their lease obligations;~~

•~~our ability to maintain occupancy in our properties and obtain new leases for unoccupied and new development space at favorable terms or at all;~~

•shortages in supply of products or services from our and our tenants’ vendors that are needed for us and our tenants to operate effectively, and which could lead to increased costs for such products and services;

•access to debt and equity capital on attractive terms or at all. Severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our or our tenants’ ability to access capital necessary to fund operations, refinance debt or fund planned investments on a timely basis, and may adversely affect the valuation of financial assets and liabilities;

•~~our and our tenants’ ability to continue or complete planned development, including the potential for delays in the supply of materials or labor necessary for development; and~~

•~~an increase in the pace of businesses implementing remote work arrangements over the long-term, which would adversely effect demand for office space.~~

The extent of the effect on our operations, financial condition and cash flows will be dependent on future developments, including the duration of the pandemic and any future resurgence or variants thereof, the prevalence, strength and duration of restrictive measures and the resulting effects on our tenants, potential future tenants, the commercial real estate industry and the broader economy, all of which are uncertain and difficult to predict.

2627

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

During the three months ended March 31, ~~2021,~~2022, we:

•finished the period with our ~~office and data center shell~~ portfolio ~~93.8%~~92.0% occupied and ~~94.7%~~93.9% leased;

•placed into service ~~46,000~~283,000 square feet in ~~one~~two newly-developed ~~office property~~properties that ~~was~~were 100.0% leased as of March 31, ~~2021;~~2022; and

•~~refinanced certain unsecured senior notes issuances with a new unsecured senior note issuance effective March 11, 2021 by:~~

◦~~issuing $600.0~~sold our wholesale data center for $222.5 million, of 2.75% Notes at an initial offering price of 98.95% of their face value. The proceeds from this issuance, after deducting underwriting discounts but before other offering expenses, were $589.8 million;

◦purchasing pursuant to tender offers $184.4 million of 3.60% Notes for $196.7 million and $145.6 million of 5.25% Notes for $164.7 million, plus accrued interest. In connection with these purchases, we recognized a loss on early extinguishment of debt of $33.2 million in the three months ended March 31, 2021; and

◦~~initiating the redemption of the remaining $165.6 million of 3.60% Notes and $104.4 million of 5.25% Notes, which was completed on April 12, 2021 for $294.0 million, plus accrued interest,~~ resulting in ~~recognition~~a gain on sale of ~~an additional loss on early extinguishment of debt of approximately $25~~$28.6 million.

We ~~initially~~ used the ~~remaining~~ proceeds ~~from~~to repay a portion of of our Term Loan Facility and the ~~2.75% Notes issuance on March 11, 2021~~remainder to repay borrowings under our Revolving Credit Facility and for general corporate purposes. We subsequently used primarily borrowings under our Revolving Credit Facility to fund the redemption of the remaining 3.60% Notes and 5.25% Notes on April 12, 2021.Facility.

With regard to our operating portfolio square footage, occupancy and leasing statistics included below and elsewhere in this Quarterly Report on Form 10-Q, amounts disclosed include information pertaining to properties owned through unconsolidated real estate joint ventures.

We discuss significant factors contributing to changes in our net income in the section below entitled “Results of Operations.” In addition, the section below entitled “Liquidity and Capital Resources” includes discussions of, among other things:

•how we expect to generate and obtain cash for short and long-term capital needs; and

•~~our commitments~~material cash requirements for known contractual and ~~contingencies.~~other obligations.

You should refer to our consolidated financial statements and the notes thereto as you read this section.

This section contains “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995, that are based on our current expectations, estimates and projections about future events and financial trends affecting the financial condition and operations of our business. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan” or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations, estimates and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, we 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~~We caution readers that forward-looking statements reflect our opinion only as of the date on which they were made. You should not place undue reliance on forward-looking statements. The following factors, ~~that may affect these expectations, estimates~~among others, could cause actual results and ~~projections include, but are not limited to:~~future events to differ materially from those set forth or contemplated in the forward-looking statements:

•general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability, construction costs and property values;

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

•risks and uncertainties regarding the impact of the COVID-19 pandemic, and similar pandemics, along with restrictive measures instituted to prevent spread, on our business, the real estate industry and national, regional and local economic conditions;

•governmental actions and initiatives, including risks associated with the impact of a prolonged government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases and/or reduced or delayed demand for additional space by our strategic customers;

•our ability to borrow on favorable terms;

•risks of ~~real estate~~property acquisition and development activities, 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 our joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with our objectives;

•changes in our plans for properties or views of market economic conditions or failure to obtain development rights, either of which could result in recognition of significant impairment losses;

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

•possible adverse changes in tax laws;

•the dilutive effects of issuing additional common shares;

•our ability to achieve projected results;

•security breaches relating to cyber attacks, cyber intrusions or other factors; and

•environmental requirements.

We undertake no obligation to publicly update or supplement forward-looking statements.

~~Effects of COVID-19~~

While the pandemic has impacted the operations of much of the commercial real estate industry, we believe that we have been less susceptible to such impact due to our portfolio’s significant concentration in Defense/IT Locations. As a result, we believe that our results of operations have not been significantly affected by the pandemic. For the three months ended March 31, 2021, our:

•Same Properties NOI from real estate operations decreased $922,000 relative to the three months ended March 31, 2020. This decrease included the effect of a $542,000 decrease in parking revenue attributable primarily to the pandemic; and

•lease revenue collections were not significantly affected by the pandemic. After agreeing to deferred payment arrangements for approximately $2.6 million in lease receivables last year, we did not agree to significant additional arrangements in the current period.

While we do not currently expect that the pandemic will significantly affect our future results of operations, financial condition or cash flows, we believe that the impact will be dependent on future developments, including the duration of the pandemic, the prevalence, strength and duration of restrictive measures and the resulting effects on our tenants, potential future tenants, the commercial real estate industry and the broader economy, all of which are uncertain and difficult to predict. Nevertheless, we believe at this time that there is more inherent risk associated with the operations of our Regional Office properties than our Defense/IT Locations.

While we do not believe that our development leasing and ability to renew leases scheduled to expire have been significantly affected by the pandemic, we do believe that the impact of the restrictive measures and the economic uncertainty caused by the pandemic has impacted our timing and volume of vacant space leasing, and may continue to do so in the future.

The pandemic enhances the risk of us being able to stay on pace to complete development and begin operations on schedule due to the potential for delays from: jurisdictional permitting and inspections; factories’ ability to provide materials; and possible labor quarantines. These types of issues have not significantly affected us to date but could in the future, depending on pandemic related developments.

~~We do not expect that we will be required to incur significant additional capital expenditures on existing properties as a result of the pandemic.~~

Occupancy and Leasing

~~Office and Data Center Shell Portfolio~~

The tables below set forth occupancy information pertaining to our portfolio of office and data center shell properties:


		March 31, 2021			December 31, 2020				March 31, 2022			December 31, 2021
Occupancy rates at period end	Occupancy rates at period end							Occupancy rates at period end
Total	Total	93.8		%	94.1		%	Total	92.0		%	92.4		%
Defense/IT Locations:	Defense/IT Locations:							Defense/IT Locations:
Fort Meade/BW Corridor	Fort Meade/BW Corridor	90.4		%	91.0		%	Fort Meade/BW Corridor	90.2		%	90.0		%
Northern Virginia Defense/IT		87.6		%	88.1		%
NoVA Defense/IT								NoVA Defense/IT	88.6		%	89.5		%
Lackland Air Force Base	Lackland Air Force Base	100.0		%	100.0		%	Lackland Air Force Base	100.0		%	100.0		%
Navy Support Locations		96.9		%	97.2		%
Navy Support								Navy Support	92.9		%	93.9		%
Redstone Arsenal	Redstone Arsenal	99.6		%	99.4		%	Redstone Arsenal	91.3		%	90.8		%
Data Center Shells	Data Center Shells	100.0		%	100.0		%	Data Center Shells	100.0		%	100.0		%
Total Defense/IT Locations	Total Defense/IT Locations	94.2		%	94.5		%	Total Defense/IT Locations	93.3		%	93.2		%
Regional Office	Regional Office	92.9		%	92.5		%	Regional Office	81.8		%	87.3		%
Other	Other	68.4		%	68.4		%	Other	66.2		%	66.2		%
Average contractual annual rental rate per square foot at period end (1)		$	31.50		$	31.50
Annualized rental revenue per occupied square foot at period end								Annualized rental revenue per occupied square foot at period end	$	32.59		$	32.47

~~(1)Includes estimated expense reimbursements.~~

Rentable
Square Feet Occupied
Square Feet
(in thousands)
December 31, 2020 20,959 19,722
Vacated upon lease expiration (1) — (169)
Occupancy for new leases — 114
Developed or redeveloped 46 46
Other changes 1 —
March 31, 2021 21,006 19,713


	Rentable Square Feet	Occupied Square Feet
	(in thousands)
December 31, 2021	21,710	20,070
Vacated upon lease expiration (1)	—	(288)
Occupancy for new leases	—	189
Developed	283	283



Other changes	13	—
March 31, 2022	22,006	20,254

(1)Includes lease terminations and space reductions occurring in connection with lease renewals.

During the three months ended March 31, ~~2021,~~2022, we ~~completed 258,000~~leased 871,000 square feet, including: 448,000 square feet of renewal leasing, ~~including: renewed leases on 154,000~~representing a tenant retention rate of 64.0%; 157,000 square feet ~~representing 51.8%~~ of vacant space leasing; and 265,000 square feet of development leasing.

Annualized rental revenue is a measure that we use to evaluate the ~~square footage~~source of our rental revenue as of a point in time. It is computed by multiplying by 12 the sum of monthly contractual base rents and estimated monthly expense reimbursements under active leases as of a point in time (ignoring free rent then in effect and rent associated with tenant funded landlord assets). Our computation of annualized rental revenue excludes the effect of lease ~~expirations (including~~incentives. We consider annualized rental revenue to be a useful measure for analyzing revenue sources because, since it is point-in-time based, it does not contain increases and decreases in revenue associated with periods in which lease terms were not in effect; historical revenue under generally accepted accounting principles in the United States of America (“GAAP”) does contain such fluctuations. We find the measure particularly useful for leasing, tenant, segment and industry analysis. Tenant retention rate is a measure we use that represents the percentage of square feet renewed in a period relative to the total square feet scheduled to expire in that period; we include the effect of early ~~renewals); 93,000 square feet of vacant space; and 11,000 square feet of development space.~~

~~Wholesale Data Center~~

~~Our 19.25 megawatt wholesale data center was 86.7% leased as of March 31, 2021 and December 31, 2020. An 11.25 megawatt lease that expired~~renewals in ~~August 2020 remains in place until renewed by both parties or terminated by either party.~~this measure.

Results of Operations

We evaluate the operating performance of our properties using NOI from real estate operations, our segment performance measure, which ~~includes:~~includes real estate revenues and property operating ~~expenses;~~expenses from continuing and ~~the net of revenues~~discontinued operations and ~~property operating expenses of real estate operations owned through unconsolidated real estate joint ventures (“UJVs”) that is allocable to our ownership interest (“~~UJV NOI allocable to ~~COPT”).~~COPT. We view our NOI from real estate operations as comprising the following primary categories:

•office and data center shell properties:

•stably owned and 100% operational throughout the current and prior year reporting periods being compared. We define these as changes from “Same Properties”;

•developed or redeveloped and placed into service that were not 100% operational throughout the current and prior year reporting periods; and

•disposed; and

•our wholesale data center that we sold on January 25, 2022.

•~~our wholesale data center.~~

In addition to owning properties, we provide construction management and other services. The primary manner in which we evaluate the operating performance of our construction management and other service activities is through a measure we define as NOI from service operations, which is based on the net of the revenues and expenses from these activities. The revenues and expenses from these activities consist primarily of subcontracted costs that are reimbursed to us by customers along with a management fee. The operating margins from these activities are small relative to the revenue. We believe NOI from service operations is a useful measure in assessing both our level of activity and our profitability in conducting such operations.

Since both of the measures discussed above exclude certain items includable in net income, reliance on these measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are considered alongside other GAAP and non-GAAP measures. A reconciliation of NOI from real estate operations and NOI from service operations to ~~net~~ income from continuing operations reported on ~~our~~the consolidated statements of operations is provided in Note 14 to our consolidated financial statements.

Comparison of Statements of Operations for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021

For the Three Months Ended March 31,
2021 2020 Variance
(in thousands)
Revenues
Revenues from real estate operations $ 145,164 $ 132,116 $ 13,048
Construction contract and other service revenues 16,558 13,681 2,877
Total revenues 161,722 145,797 15,925
Operating expenses
Property operating expenses 56,974 49,999 6,975
Depreciation and amortization associated with real estate operations 37,321 32,596 4,725
Construction contract and other service expenses 15,793 13,121 2,672
General, administrative and leasing expenses 8,406 7,486 920
Business development expenses and land carry costs 1,094 1,118 (24)
Total operating expenses 119,588 104,320 15,268
Interest expense (17,519) (16,840) (679)
Interest and other income 1,865 1,205 660
Credit loss recoveries (expense) 907 (689) 1,596
Gain on sales of real estate (490) 5 (495)
Loss on early extinguishment of debt (33,166) — (33,166)
Equity in income of unconsolidated entities 222 441 (219)
Income tax expense (32) (49) 17
Net (loss) income $ (6,079) $ 25,550 $ (31,629)


	For the Three Months Ended March 31,
	2022		2021		Variance
	(in thousands)
Revenues
Revenues from real estate operations	$	142,280	$	137,830	$	4,450
Construction contract and other service revenues	53,200		16,558		36,642
Total revenues	195,480		154,388		41,092
Operating expenses
Property operating expenses	57,181		53,276		3,905
Depreciation and amortization associated with real estate operations	34,264		34,500		(236)
Construction contract and other service expenses	51,650		15,793		35,857

General, administrative and leasing expenses	8,544		8,406		138
Business development expenses and land carry costs	783		1,094		(311)
Total operating expenses	152,422		113,069		39,353
Interest expense	(14,424)		(17,519)		3,095
Interest and other income	1,893		1,865		28
Credit loss recoveries	316		907		(591)
Gain on sales of real estate	15		(490)		505
Loss on early extinguishment of debt	(342)		(33,166)		32,824

Equity in income of unconsolidated entities	888		222		666
Income tax expense	(153)		(32)		(121)
Income (loss) from continuing operations	31,251		(6,894)		38,145
Discontinued operations	29,573		815		28,758
Net income (loss)	$	60,824	$	(6,079)	$	66,903

NOI from Real Estate Operations


		For the Three Months Ended March 31,										For the Three Months Ended March 31,
		2021			2020			Variance				2022			2021			Variance
		(Dollars in thousands, except per square foot data)										(Dollars in thousands, except per square foot data)
Revenues	Revenues										Revenues
Same Properties revenues	Same Properties revenues										Same Properties revenues
Lease revenue, excluding net lease termination revenue and provision for collectability losses	Lease revenue, excluding net lease termination revenue and provision for collectability losses	$	124,010		$	121,617		$	2,393		Lease revenue, excluding net lease termination revenue and provision for collectability losses	$	132,505		$	131,157		$	1,348
Lease termination revenue, net	Lease termination revenue, net	1,362			38			1,324			Lease termination revenue, net	221			1,362			(1,141)
Provision for collectability losses included in lease revenue	Provision for collectability losses included in lease revenue	(124)			(108)			(16)			Provision for collectability losses included in lease revenue	—			(124)			124
Other property revenue	Other property revenue	507			1,098			(591)			Other property revenue	859			507			352
Same Properties total revenues	Same Properties total revenues	125,755			122,645			3,110			Same Properties total revenues	133,585			132,902			683
Developed and redeveloped properties placed in service	Developed and redeveloped properties placed in service	11,318			996			10,322			Developed and redeveloped properties placed in service	7,527			2,409			5,118

Wholesale data center	Wholesale data center	8,090			7,172			918			Wholesale data center	1,980			7,334			(5,354)

Dispositions	Dispositions	(81)			1,299			(1,380)			Dispositions	1			1,681			(1,680)
Other	Other	82			4			78			Other	1,167			838			329
		145,164			132,116			13,048				144,260			145,164			(904)
Property operating expenses	Property operating expenses										Property operating expenses
Same Properties	Same Properties	(50,421)			(46,395)			(4,026)			Same Properties	(54,161)			(51,655)			(2,506)
Developed and redeveloped properties placed in service	Developed and redeveloped properties placed in service	(2,089)			(231)			(1,858)			Developed and redeveloped properties placed in service	(2,065)			(562)			(1,503)

Wholesale data center	Wholesale data center	(4,421)			(3,233)			(1,188)			Wholesale data center	(1,025)			(3,823)			2,798

Dispositions	Dispositions	—			(135)			135			Dispositions	1			(298)			299
Other	Other	(43)			(5)			(38)			Other	(902)			(636)			(266)
		(56,974)			(49,999)			(6,975)				(58,152)			(56,974)			(1,178)

UJV NOI allocable to COPT	UJV NOI allocable to COPT										UJV NOI allocable to COPT
Same Properties	Same Properties	499			505			(6)			Same Properties	926			917			9
Dispositions		—			1,208			(1,208)
Retained interest in newly-formed UJV		418			—			418
Retained interest in newly-formed UJVs											Retained interest in newly-formed UJVs	154			—			154

		917			1,713			(796)				1,080			917			163

NOI from real estate operations	NOI from real estate operations										NOI from real estate operations
Same Properties	Same Properties	75,833			76,755			(922)			Same Properties	80,350			82,164			(1,814)
Developed and redeveloped properties placed in service	Developed and redeveloped properties placed in service	9,229			765			8,464			Developed and redeveloped properties placed in service	5,462			1,847			3,615

Wholesale data center	Wholesale data center	3,669			3,939			(270)			Wholesale data center	955			3,511			(2,556)

Dispositions, net of retained interest in newly-formed UJV		337			2,372			(2,035)
Dispositions, net of retained interest in newly-formed UJVs											Dispositions, net of retained interest in newly-formed UJVs	156			1,383			(1,227)
Other	Other	39			(1)			40			Other	265			202			63
		$	89,107		$	83,830		$	5,277			$	87,188		$	89,107		$	(1,919)

Same Properties NOI from real estate operations by segment	Same Properties NOI from real estate operations by segment										Same Properties NOI from real estate operations by segment
Defense/IT Locations	Defense/IT Locations	$	67,814		$	68,371		$	(557)		Defense/IT Locations	$	73,586		$	74,659		$	(1,073)
Regional Office	Regional Office	7,715			7,923			(208)			Regional Office	6,459			7,201			(742)
Other	Other	304			461			(157)			Other	305			304			1
		$	75,833		$	76,755		$	(922)			$	80,350		$	82,164		$	(1,814)

Same Properties rent statistics	Same Properties rent statistics										Same Properties rent statistics
Average occupancy rate	Average occupancy rate	92.7		%	92.8		%	(0.1		%)	Average occupancy rate	91.7		%	93.6		%	(1.9		%)
Average straight-line rent per occupied square foot (1)	Average straight-line rent per occupied square foot (1)	$	6.40		$	6.41		$	(0.01)		Average straight-line rent per occupied square foot (1)	$	6.45		$	6.40		$	0.05

(1)Includes minimum base rents, net of abatements and lease incentives and excluding lease termination revenue, on a straight-line basis for the periods set forth above.


		PAGE
PART I: FINANCIAL INFORMATION

Item 1:	Financial Statements
Consolidated Financial Statements
	Consolidated Balance Sheets as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 (unaudited)	3
	Consolidated Statements of Operations for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	5
	Consolidated Statements of Equity for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	7






Notes to Consolidated Financial Statements (unaudited)		9
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2728
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	3837
Item 4:	Controls and Procedures	3837

PART II: OTHER INFORMATION

Item 1:	Legal Proceedings	3837
Item 1A:	Risk Factors	3937
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	3938
Item 3:	Defaults Upon Senior Securities	3938
Item 4:	Mine Safety Disclosures	3938
Item 5:	Other Information	3938
Item 6:	Exhibits	4038

SIGNATURES		4139


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets	Assets					Assets
Properties, net:	Properties, net:					Properties, net:
Operating properties, net	Operating properties, net	$	3,106,698	$	3,115,280	Operating properties, net	$	3,167,851	$	3,090,510
Projects in development or held for future development	Projects in development or held for future development	472,556		447,269		Projects in development or held for future development	412,430		442,434
Total properties, net	Total properties, net	3,579,254		3,562,549		Total properties, net	3,580,281		3,532,944
Property - operating right-of-use assets	Property - operating right-of-use assets	39,810		40,570		Property - operating right-of-use assets	38,566		38,361
Property - finance right-of-use assets		40,091		40,425

Assets held for sale, net						Assets held for sale, net	—		192,699
Cash and cash equivalents	Cash and cash equivalents	36,139		18,369		Cash and cash equivalents	19,347		13,262
Investment in unconsolidated real estate joint ventures	Investment in unconsolidated real estate joint ventures	28,934		29,303		Investment in unconsolidated real estate joint ventures	39,440		39,889
Accounts receivable, net	Accounts receivable, net	44,916		41,637		Accounts receivable, net	42,596		40,752
Deferred rent receivable	Deferred rent receivable	98,048		92,876		Deferred rent receivable	114,952		108,926
Intangible assets on real estate acquisitions, net		18,137		19,344
Deferred leasing costs (net of accumulated amortization of $29,854 and $30,375, respectively)		56,508		58,613
Investing receivables (net of allowance for credit losses of $2,080 and $2,851, respectively)		71,831		68,754
Intangible assets on property acquisitions, net						Intangible assets on property acquisitions, net	13,410		14,567
Lease incentives, net						Lease incentives, net	52,089		51,486
Deferred leasing costs (net of accumulated amortization of $32,293 and $31,768, respectively)						Deferred leasing costs (net of accumulated amortization of $32,293 and $31,768, respectively)	65,660		65,850
Investing receivables (net of allowance for credit losses of $1,676 and $1,599, respectively)						Investing receivables (net of allowance for credit losses of $1,676 and $1,599, respectively)	82,417		82,226

Prepaid expenses and other assets, net	Prepaid expenses and other assets, net	99,280		104,583		Prepaid expenses and other assets, net	83,268		81,490
Total assets	Total assets	$	4,112,948	$	4,077,023	Total assets	$	4,132,026	$	4,262,452
Liabilities and equity	Liabilities and equity					Liabilities and equity
Liabilities:	Liabilities:					Liabilities:
Debt, net	Debt, net	$	2,207,903	$	2,086,918	Debt, net	$	2,156,784	$	2,272,304
Accounts payable and accrued expenses	Accounts payable and accrued expenses	96,465		142,717		Accounts payable and accrued expenses	144,974		186,202
Rents received in advance and security deposits	Rents received in advance and security deposits	30,922		33,425		Rents received in advance and security deposits	29,082		32,262
Dividends and distributions payable	Dividends and distributions payable	31,305		31,231		Dividends and distributions payable	31,402		31,299
Deferred revenue associated with operating leases	Deferred revenue associated with operating leases	10,221		10,832		Deferred revenue associated with operating leases	8,241		9,341
Property - operating lease liabilities	Property - operating lease liabilities	30,176		30,746		Property - operating lease liabilities	29,729		29,342

Interest rate derivatives		7,640		9,522

Other liabilities	Other liabilities	15,599		12,490		Other liabilities	14,458		17,729
Total liabilities	Total liabilities	2,430,231		2,357,881		Total liabilities	2,414,670		2,578,479
Commitments and contingencies (Note 18)	Commitments and contingencies (Note 18)	0		0		Commitments and contingencies (Note 18)	0		0
Redeemable noncontrolling interests	Redeemable noncontrolling interests	25,925		25,430		Redeemable noncontrolling interests	26,820		26,898
Equity:	Equity:					Equity:
Corporate Office Properties Trust’s shareholders’ equity:
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,327,234 at March 31, 2021 and 112,181,759 at December 31, 2020)		1,123		1,122
Shareholders’ equity:						Shareholders’ equity:
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,418,811 at March 31, 2022 and 112,327,533 at December 31, 2021)						Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,418,811 at March 31, 2022 and 112,327,533 at December 31, 2021)	1,124		1,123
Additional paid-in capital	Additional paid-in capital	2,476,807		2,478,906		Additional paid-in capital	2,479,119		2,481,539
Cumulative distributions in excess of net income	Cumulative distributions in excess of net income	(847,407)		(809,836)		Cumulative distributions in excess of net income	(828,473)		(856,863)
Accumulated other comprehensive loss		(7,391)		(9,157)
Total Corporate Office Properties Trust’s shareholders’ equity		1,623,132		1,661,035
Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	164		(3,059)
Total shareholders’ equity						Total shareholders’ equity	1,651,934		1,622,740
Noncontrolling interests in subsidiaries:	Noncontrolling interests in subsidiaries:					Noncontrolling interests in subsidiaries:
Common units in COPLP		21,345		20,465
Common units in Corporate Office Properties, L.P. (“COPLP”)						Common units in Corporate Office Properties, L.P. (“COPLP”)	25,285		21,363

Other consolidated entities	Other consolidated entities	12,315		12,212		Other consolidated entities	13,317		12,972
Noncontrolling interests in subsidiaries	Noncontrolling interests in subsidiaries	33,660		32,677		Noncontrolling interests in subsidiaries	38,602		34,335
Total equity	Total equity	1,656,792		1,693,712		Total equity	1,690,536		1,657,075
Total liabilities, redeemable noncontrolling interests and equity	Total liabilities, redeemable noncontrolling interests and equity	$	4,112,948	$	4,077,023	Total liabilities, redeemable noncontrolling interests and equity	$	4,132,026	$	4,262,452


	For the Three Months Ended March 31,
	2021		2020
Net (loss) income	$	(6,079)	$	25,550
Other comprehensive income (loss):
Unrealized income (loss) on interest rate derivatives	784		(37,705)
Reclassification adjustments on interest rate derivatives recognized in interest expense	1,175		131


Total other comprehensive income (loss)	1,959		(37,574)
Comprehensive loss	(4,120)		(12,024)
Comprehensive loss attributable to noncontrolling interests	(783)		(679)
Comprehensive loss attributable to COPT	$	(4,903)	$	(12,703)


	For the Three Months Ended March 31,
		2022		2021
Net income (loss)		$	60,824	$	(6,079)
Other comprehensive income:
Unrealized income on interest rate derivatives		2,537		784
Reclassification adjustments on interest rate derivatives recognized in interest expense		1,003		1,175


Total other comprehensive income		3,540		1,959
Comprehensive income (loss)		64,364		(4,120)
Comprehensive income attributable to noncontrolling interests		(1,822)		(783)
Comprehensive income (loss) attributable to COPT		$	62,542	$	(4,903)


		Common Shares		Additional Paid-in Capital		Cumulative Distributions in Excess of Net Income		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total
For the Three Months Ended March 31, 2020
Balance at December 31, 2019 (112,068,705 common shares outstanding)		$	1,121	$	2,481,558	$	(778,275)	$	(25,444)	$	40,285	$	1,719,245
Cumulative effect of accounting change for adoption of credit loss guidance		—		—		(5,541)		—		—		(5,541)
Balance at December 31, 2019, as adjusted		1,121		2,481,558		(783,816)		(25,444)		40,285		1,713,704

Conversion of common units to common shares (12,009 shares)		—		182		—		—		(182)		0

Share-based compensation (88,749 shares issued, net of redemptions)		1		983		—		—		226		1,210
Redemption of vested equity awards		—		(1,492)		—		—		—		(1,492)
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP		—		(453)		—		—		453		0
Comprehensive loss		—		—		24,054		(36,757)		(279)		(12,982)
Dividends		—		—		(30,838)		—		—		(30,838)
Distributions to owners of common and preferred units in COPLP		—		—		—		—		(420)		(420)
Contributions from noncontrolling interests in other consolidated entities		—		—		—		—		112		112
Distributions to noncontrolling interests in other consolidated entities		—		—		—		—		(7)		(7)
Adjustment to arrive at fair value of redeemable noncontrolling interests		—		(4,101)		—		—		—		(4,101)

Balance at March 31, 2020 (112,169,463 common shares outstanding)		$	1,122	$	2,476,677	$	(790,600)	$	(62,201)	$	40,188	$	1,665,186
															Common Shares		Additional Paid-in Capital		Cumulative Distributions in Excess of Net Income		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total
For the Three Months Ended March 31, 2021	For the Three Months Ended March 31, 2021													For the Three Months Ended March 31, 2021
Balance at December 31, 2020 (112,181,759 common shares outstanding)	Balance at December 31, 2020 (112,181,759 common shares outstanding)	$	1,122	$	2,478,906	$	(809,836)	$	(9,157)	$	32,677	$	1,693,712	Balance at December 31, 2020 (112,181,759 common shares outstanding)	$	1,122	$	2,478,906	$	(809,836)	$	(9,157)	$	32,677	$	1,693,712

Conversion of common units to common shares (8,054 shares)	Conversion of common units to common shares (8,054 shares)	—		121		—		—		(121)		0		Conversion of common units to common shares (8,054 shares)	—		121		—		—		(121)		—

Share-based compensation (137,421 shares issued, net of redemptions)	Share-based compensation (137,421 shares issued, net of redemptions)	1		1,097		—		—		917		2,015		Share-based compensation (137,421 shares issued, net of redemptions)	1		1,097		—		—		917		2,015
Redemption of vested equity awards	Redemption of vested equity awards	—		(2,290)		—		—		—		(2,290)		Redemption of vested equity awards	—		(2,290)		—		—		—		(2,290)
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP	Adjustments to noncontrolling interests resulting from changes in ownership of COPLP	—		(545)		—		—		545		0		Adjustments to noncontrolling interests resulting from changes in ownership of COPLP	—		(545)		—		—		545		—
Comprehensive loss	Comprehensive loss	—		—		(6,669)		1,766		371		(4,532)		Comprehensive loss	—		—		(6,669)		1,766		371		(4,532)
Dividends	Dividends	—		—		(30,902)		—		—		(30,902)		Dividends	—		—		(30,902)		—		—		(30,902)
Distributions to owners of common units in COPLP	Distributions to owners of common units in COPLP	—		—		—		—		(398)		(398)		Distributions to owners of common units in COPLP	—		—		—		—		(398)		(398)

Distributions to noncontrolling interests in other consolidated entities	Distributions to noncontrolling interests in other consolidated entities	—		—		—		—		(7)		(7)		Distributions to noncontrolling interests in other consolidated entities	—		—		—		—		(7)		(7)
Adjustment to arrive at fair value of redeemable noncontrolling interests	Adjustment to arrive at fair value of redeemable noncontrolling interests	—		(482)		—		—		—		(482)		Adjustment to arrive at fair value of redeemable noncontrolling interests	—		(482)		—		—		—		(482)
Other	Other	—		—		—		—		(324)		(324)		Other	—		—		—		—		(324)		(324)

Balance at March 31, 2021 (112,327,234 common shares outstanding)	Balance at March 31, 2021 (112,327,234 common shares outstanding)	$	1,123	$	2,476,807	$	(847,407)	$	(7,391)	$	33,660	$	1,656,792	Balance at March 31, 2021 (112,327,234 common shares outstanding)	$	1,123	$	2,476,807	$	(847,407)	$	(7,391)	$	33,660	$	1,656,792

For the Three Months Ended March 31, 2022														For the Three Months Ended March 31, 2022
Balance at December 31, 2021 (112,327,533 common shares outstanding)														Balance at December 31, 2021 (112,327,533 common shares outstanding)	$	1,123	$	2,481,539	$	(856,863)	$	(3,059)	$	34,335	$	1,657,075

Redemption of common units														Redemption of common units	—		—		—		—		(212)		(212)

Share-based compensation (91,278 shares issued, net of redemptions)														Share-based compensation (91,278 shares issued, net of redemptions)	1		1,014		—		—		1,286		2,301
Redemption of vested equity awards														Redemption of vested equity awards	—		(1,059)		—		—		—		(1,059)
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP														Adjustments to noncontrolling interests resulting from changes in ownership of COPLP	—		(2,414)		—		—		2,414		—
Comprehensive income														Comprehensive income	—		—		59,319		3,223		1,255		63,797
Dividends														Dividends	—		—		(30,929)		—		—		(30,929)
Distributions to owners of common units in COPLP														Distributions to owners of common units in COPLP	—		—		—		—		(469)		(469)

Distributions to noncontrolling interests in other consolidated entities														Distributions to noncontrolling interests in other consolidated entities	—		—		—		—		(7)		(7)
Adjustment to arrive at fair value of redeemable noncontrolling interests														Adjustment to arrive at fair value of redeemable noncontrolling interests	—		39		—		—		—		39

Balance at March 31, 2022 (112,418,811 common shares outstanding)														Balance at March 31, 2022 (112,418,811 common shares outstanding)	$	1,124	$	2,479,119	$	(828,473)	$	164	$	38,602	$	1,690,536


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		For the Three Months Ended March 31,					For the Three Months Ended March 31,
Lease revenue(1)	Lease revenue(1)	2021		2020		Lease revenue(1)		2022		2021
Fixed	Fixed	$	112,425	$	104,109	Fixed		$	111,167	$	106,935
Variable	Variable	32,199		26,903		Variable		30,222		30,355
		$	144,624	$	131,012			$	141,389	$	137,290


	As of March 31, 2021
Year Ending December 31,	Operating leases		Sales-type leases

2021 (1)	$	316,963	$	662
2022	382,423		960
2023	328,713		960
2024	280,360		960
2025	201,594		960
Thereafter	752,774		4,516
Total contractual payments	$	2,262,827	9,018
Less: Amount representing interest			(2,511)
Net investment in sales-type leases			$	6,507


Leases	Leases	Balance Sheet Location	March 31, 2021		December 31, 2020		Leases	Balance Sheet Location	March 31, 2022		December 31, 2021
Right-of-use assets	Right-of-use assets						Right-of-use assets
Operating leases - Property	Operating leases - Property	Property - operating right-of-use assets	$	39,810	$	40,570	Operating leases - Property	Property - operating right-of-use assets	$	38,566	$	38,361
Finance leases - Property	Finance leases - Property	Property - finance right-of-use assets	40,091		40,425		Finance leases - Property	Prepaid expenses and other assets, net	2,230		2,238
Total right-of-use assets	Total right-of-use assets		$	79,901	$	80,995	Total right-of-use assets		$	40,796	$	40,599


~~Weighted average remaining lease term~~
~~Operating leases~~	~~50 years~~
~~Finance leases~~	~~< 1 year~~
~~Weighted average discount rate~~
~~Operating leases~~	~~7.16~~	%
~~Finance leases~~	~~3.62~~	%


		Statement of Operations Location		For the Three Months Ended March 31,					Statement of Operations Location					For the Three Months Ended March 31,
Lease cost	Lease cost		2021			2020					Statement of Operations Location				2022				2021
Operating lease cost	Operating lease cost											Operating lease cost
Property leases - fixed	Property leases - fixed	Property operating expenses		$	973		$	427		Property leases - fixed			Property operating expenses				$	1,019			$	973
Property leases - variable	Property leases - variable	Property operating expenses		10			4			Property leases - variable		Property operating expenses				16				10
Finance lease cost	Finance lease cost									Finance lease cost
Amortization of property right-of-use assets	Amortization of property right-of-use assets	Property operating expenses		9			9			Amortization of property right-of-use assets		Property operating expenses				8				9

				$	992		$	440								$	1,043			$	992


		For the Three Months Ended March 31,					For the Three Months Ended March 31,
Supplemental cash flow information	Supplemental cash flow information	2021		2020		Supplemental cash flow information	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	Operating cash flows for operating leases	$	782	$	311	Operating cash flows for operating leases	$	837	$	782


								March 31, 2021 (1)																	Nominal Ownership %										March 31, 2022 (1)
		Date Acquired		Nominal Ownership %				Total Assets			Encumbered Assets					Total Liabilities							Date Acquired										Total Assets					Encumbered Assets				Total Liabilities
Entity	Entity				Location					Entity					Nominal Ownership %				Location
LW Redstone Company, LLC (2)	LW Redstone Company, LLC (2)		3/23/2010		85%		Huntsville, Alabama						$	418,577							$	91,802						$	89,723		LW Redstone Company, LLC (2)			3/23/2010					85%		Huntsville, Alabama				$	512,373	$	88,832	$	95,225
Stevens Investors, LLC(3)	Stevens Investors, LLC(3)	8/11/2015		95%		Washington, DC		161,585			160,137							87,305		Stevens Investors, LLC(3)				8/11/2015			95%			Washington, DC				167,047					—				875
M Square Associates, LLC	M Square Associates, LLC	6/26/2007		50%		College Park, Maryland		101,511			61,909					53,653			M Square Associates, LLC				6/26/2007			50%						College Park, Maryland				103,368				60,202				52,730
								$	681,673		$	313,848				$	230,681																			$	782,788			$	149,034			$	148,830


		Date Acquired		Nominal Ownership %		Number of Properties	Carrying Value of Investment (1)								Date Acquired			Nominal Ownership %		Number of Properties		Carrying Value of Investment (1)
Entity	Entity				March 31, 2021		December 31, 2020		Entity							March 31, 2022					December 31, 2021
B RE COPT DC JV II LLC (2)	B RE COPT DC JV II LLC (2)		10/30/2020			10%	8			$	15,840		$	15,988			B RE COPT DC JV II LLC (2)		10/30/2020		10%			8			$	15,440	$	15,579
BREIT COPT DC JV LLC	BREIT COPT DC JV LLC	6/20/2019		10%		9	13,094			13,315		BREIT COPT DC JV LLC			6/20/2019			10%		9		12,190			12,460
B RE COPT DC JV III LLC												B RE COPT DC JV III LLC			6/2/2021			10%		2		11,810			11,850
						17	$	28,934		$	29,303									19		$	39,440		$	39,889


			Fair Value at						Fair Value at
Derivatives	Derivatives	Balance Sheet Location	March 31, 2021		December 31, 2020		Derivatives	Balance Sheet Location	March 31, 2022		December 31, 2021
Interest rate swaps designated as cash flow hedges	Interest rate swaps designated as cash flow hedges	Prepaid expenses and other assets, net	$	77	$	0	Interest rate swaps designated as cash flow hedges	Prepaid expenses and other assets, net	$	1,538	$	355
Interest rate swaps designated as cash flow hedges	Interest rate swaps designated as cash flow hedges	Interest rate derivatives (liabilities)	$	(7,640)	$	(9,522)	Interest rate swaps designated as cash flow hedges	Other liabilities	$	(665)	$	(2,960)
Interest rate swap not designated							Interest rate swap not designated	Other liabilities	$	—	$	(684)


		Amount of Income (Loss) Recognized in AOCL on Derivatives				Amount of Gain (Loss) Reclassified from AOCL into Interest Expense on Statement of Operations
		For the Three Months Ended March 31,					For the Three Months Ended March 31,						Amount of Income Recognized in AOCL on Derivatives						Amount of Loss Reclassified from AOCL into Interest Expense on Statement of Operations
Derivatives in Hedging Relationships	Derivatives in Hedging Relationships	2021		2020				2021		2020		Derivatives in Hedging Relationships		For the Three Months Ended March 31,						For the Three Months Ended March 31,
Derivatives in Hedging Relationships															2022		2021				2022		2021
	Interest rate derivatives	$	784	$	(37,705)			$	(1,175)	$	(131)	Interest rate derivatives			$	2,537	$	784			$	(1,003)	$	(1,175)


											Investing Receivables		Tenant Notes Receivable (1)		Other Assets (2)		Total
December 31, 2021										December 31, 2021	$	1,599	$	1,057	$	913	$	3,569

Credit loss (recoveries) expense										Credit loss (recoveries) expense	77		(34)		(359)		(316)

		For the Three Months Ended March 31, 2021
		Investing Receivables		Tenant Notes Receivable (1)		Other Assets (2)		Total
March 31, 2022										March 31, 2022	$	1,676	$	1,023	$	554	$	3,253

December 31, 2020	December 31, 2020	$	2,851	$	1,203	$	643	$	4,697	December 31, 2020	$	2,851	$	1,203	$	643	$	4,697

Credit loss recoveries	Credit loss recoveries	(771)		(7)		(129)		(907)		Credit loss recoveries	(771)		(7)		(129)		(907)

March 31, 2021	March 31, 2021	$	2,080	$	1,196	$	514	$	3,790	March 31, 2021	$	2,080	$	1,196	$	514	$	3,790


		Origination Year												Origination Year
		2016 and Earlier		2017		2018		2019		2020		Total				2017 and Earlier		2018		2019		2020		2021		Total
Investing receivables:	Investing receivables:														Investing receivables:
Credit risk classification:	Credit risk classification:														Credit risk classification:
Investment grade	Investment grade	$	65,884	$	994	$	0	$	0	$	992	$	67,870		Investment grade	$	71,682	$	—	$	—	$	1,715	$	5,656	$	79,053
Non-investment grade	Non-investment grade	0		0		0		6,041		0		6,041			Non-investment grade	—		—		5,040		—		—		5,040
Total	Total	$	65,884	$	994	$	0	$	6,041	$	992	$	73,911		Total	$	71,682	$	—	$	5,040	$	1,715	$	5,656	$	84,093

Tenant notes receivable:	Tenant notes receivable:														Tenant notes receivable:
Credit risk classification:	Credit risk classification:														Credit risk classification:
Investment grade	Investment grade	$	0	$	7	$	997	$	80	$	326	$	1,410		Investment grade	$	—	$	888	$	58	$	252	$	—	$	1,198
Non-investment grade	Non-investment grade	97		150		156		1,790		1,825		4,018			Non-investment grade	194		124		126		1,685		—		2,129
Total	Total	$	97	$	157	$	1,153	$	1,870	$	2,151	$	5,428		Total	$	194	$	1,012	$	184	$	1,937	$	—	$	3,327

Sales-type lease receivables:	Sales-type lease receivables:														Sales-type lease receivables:
Credit risk classification:	Credit risk classification:														Credit risk classification:
Investment grade	Investment grade	$	0	$	0	$	0	$	0	$	6,507	$	6,507		Investment grade	$	—	$	—	$	—	$	6,065	$	—	$	6,065


										Defense/IT Locations
		Defense/Information Technology Locations																										Fort Meade/BW Corridor			NoVA Defense/IT			Lackland Air Force Base			Navy Support			Redstone Arsenal			Data Center Shells			Total Defense/IT Locations			Regional Office			Wholesale Data Center			Other			Total
		Fort Meade/BW Corridor		Northern Virginia Defense/IT		Lackland Air Force Base		Navy Support Locations			Redstone Arsenal		Data Center Shells		Total Defense/IT Locations		Regional Office		Operating Wholesale Data Center		Other		Total

Three Months Ended March 31, 2022																									Three Months Ended March 31, 2022
Revenues from real estate operations																									Revenues from real estate operations		$	67,214		$	18,576		$	14,713		$	8,169		$	9,195		$	7,505		$	125,372		$	15,082		$	1,980		$	1,826		$	144,260
Property operating expenses																									Property operating expenses		(25,784)			(6,869)			(7,072)			(3,471)			(3,735)			(1,010)			(47,941)			(7,930)			(1,025)			(1,256)			(58,152)
UJV NOI allocable to COPT																									UJV NOI allocable to COPT		—			—			—			—			—			1,080			1,080			—			—			—			1,080
NOI from real estate operations																									NOI from real estate operations		$	41,430		$	11,707		$	7,641		$	4,698		$	5,460		$	7,575		$	78,511		$	7,152		$	955		$	570		$	87,188
Additions to long-lived assets																									Additions to long-lived assets		$	11,785		$	2,189		$	—		$	740		$	235		$	—		$	14,949		$	4,333		$	(51)		$	1		$	19,232
Transfers from non-operating properties																									Transfers from non-operating properties		$	5,369		$	319		$	418		$	6,376		$	76		$	81,203		$	93,761		$	271		$	—		$	—		$	94,032
Segment assets at March 31, 2022																									Segment assets at March 31, 2022		$	1,334,119		$	488,479		$	197,406		$	175,176		$	297,974		$	430,447		$	2,923,601		$	536,909		$	—		$	3,901		$	3,464,411
Three Months Ended March 31, 2021	Three Months Ended March 31, 2021																									Three Months Ended March 31, 2021
Revenues from real estate operations	Revenues from real estate operations	$	66,446	$	15,211	$	12,555	$	8,398		$	8,253	$	8,787	$	119,650	$	16,677	$	8,090	$	747	$	145,164		Revenues from real estate operations		$	66,446		$	16,185		$	12,555		$	8,398		$	8,253		$	8,787		$	120,624		$	15,703		$	7,334		$	1,503		$	145,164
Property operating expenses	Property operating expenses	(24,671)		(5,876)		(6,874)		(3,433)			(2,554)		(1,082)		(44,490)		(7,664)		(4,421)		(399)		(56,974)			Property operating expenses		(24,671)			(6,336)			(6,874)			(3,433)			(2,554)			(1,082)			(44,950)			(7,204)			(3,823)			(997)			(56,974)
UJV NOI allocable to COPT	UJV NOI allocable to COPT	0		0		0		0			0		917		917		0		0		0		917			UJV NOI allocable to COPT		—			—			—			—			—			917			917			—			—			—			917
NOI from real estate operations	NOI from real estate operations	$	41,775	$	9,335	$	5,681	$	4,965		$	5,699	$	8,622	$	76,077	$	9,013	$	3,669	$	348	$	89,107		NOI from real estate operations		$	41,775		$	9,849		$	5,681		$	4,965		$	5,699		$	8,622		$	76,591		$	8,499		$	3,511		$	506		$	89,107
Additions to long-lived assets	Additions to long-lived assets	$	6,881	$	285	$	0	$	552		$	258	$	0	$	7,976	$	4,022	$	228	$	4	$	12,230		Additions to long-lived assets		$	6,881		$	298		$	—		$	552		$	258		$	—		$	7,989		$	4,009		$	228		$	4		$	12,230
Transfers from non-operating properties	Transfers from non-operating properties	$	356	$	88	$	51	$	0		$	12,917	$	985	$	14,397	$	357	$	0	$	0	$	14,754		Transfers from non-operating properties		$	356		$	88		$	51		$	—		$	12,917		$	985		$	14,397		$	357		$	—		$	—		$	14,754
Segment assets at March 31, 2021	Segment assets at March 31, 2021	$	1,270,467	$	388,863	$	141,044	$	176,506		$	293,107	$	419,957	$	2,689,944	$	488,117	$	199,245	$	3,496	$	3,380,802		Segment assets at March 31, 2021		$	1,270,467		$	407,528		$	141,044		$	176,506		$	293,107		$	419,957		$	2,708,609		$	469,452		$	199,029		$	3,712		$	3,380,802
Three Months Ended March 31, 2020
Revenues from real estate operations		$	64,438	$	13,678	$	12,076	$	8,341		$	4,676	$	5,577	$	108,786	$	15,460	$	7,172	$	698	$	132,116
Property operating expenses		(21,222)		(5,185)		(6,795)		(3,285)			(1,847)		(657)		(38,991)		(7,537)		(3,233)		(238)		(49,999)
UJV NOI allocable to COPT		0		0		0		0			0		1,713		1,713		0		0		0		1,713
NOI from real estate operations		$	43,216	$	8,493	$	5,281	$	5,056		$	2,829	$	6,633	$	71,508	$	7,923	$	3,939	$	460	$	83,830
Additions to long-lived assets		$	7,675	$	2,691	$	0	$	1,758		$	170	$	0	$	12,294	$	3,357	$	878	$	65	$	16,594
Transfers from non-operating properties		$	538	$	256	$	15	$	0		$	1,136	$	56,232	$	58,177	$	0	$	0	$	0	$	58,177
Segment assets at March 31, 2020		$	1,275,601	$	395,108	$	145,363	$	183,054		$	138,797	$	334,102	$	2,472,025	$	390,352	$	200,891	$	3,677	$	3,066,945


		March 31, 2021		March 31, 2020			March 31, 2022		March 31, 2021
Segment assets	Segment assets	$	3,380,802	$	3,066,945	Segment assets	$	3,464,411	$	3,380,802
Operating properties lease liabilities included in segment assets	Operating properties lease liabilities included in segment assets	30,151		17,365		Operating properties lease liabilities included in segment assets	29,729		30,151
Non-operating property assets	Non-operating property assets	492,230		658,978		Non-operating property assets	419,346		492,230
Other assets	Other assets	209,765		311,169		Other assets	218,540		209,765
Total consolidated assets	Total consolidated assets	$	4,112,948	$	4,054,457	Total consolidated assets	$	4,132,026	$	4,112,948


Development	$	~~40,041~~63,997

Tenant improvements on operating properties (1)	~~5,843~~6,824
Capital improvements on operating properties	~~3,627~~6,832
	$	~~49,511~~77,653


	For the Periods Ending December 31,
	2021		2022		2023		2024		2025		Thereafter		Total
Contractual obligations (1)
Debt (2)
Balloon payments due upon maturity	$	269,961	$	487,022	$	63,578	$	27,649	$	322,100	$	1,045,623	$	2,215,933
Scheduled principal payments (3)	2,993		4,498		3,552		2,334		1,617		677		15,671
Interest on debt (3)(4)	40,531		52,476		44,746		43,018		34,670		89,853		305,294
Development and redevelopment obligations (5)(6)	114,925		6,304		356		—		—		—		121,585
Third-party construction cost obligations (6)(7)	26,430		—		—		—		—		—		26,430
Tenant and other building improvements (3)(6)	23,099		24,898		8,263		—		—		—		56,260
Property finance leases (principal and interest) (3)	14		14		—		—		—		—		28
Property operating leases (3)	2,408		3,297		3,352		3,403		1,749		123,979		138,188
Total contractual cash obligations	$	480,361	$	578,509	$	123,847	$	76,404	$	360,136	$	1,260,132	$	2,879,389


EXHIBIT NO.						DESCRIPTION

~~10.1~~						Second Supplemental Indenture, by and among Corporate Office Properties, L.P., as issuer, Corporate Office Properties Trust, as guarantor, and U.S. Bank National Association, as trustee (filed with the Company’s Current Report on Form 8-K dated March 11, 2021 and incorporated herein by reference).

22.1						List of Subsidiary Issuers and Guaranteed Securities (filed ~~herewith)~~with the C ompany ’s Annual Report on Form 10-K for t he year ended December 31, 2021 and incorporated herein by reference ).

31.1						Certification of the Chief Executive Officer of Corporate Office Properties Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended (filed herewith).

31.2						Certification of the Chief Financial Officer of Corporate Office Properties Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended (filed herewith).

32.1						Certification of the Chief Executive Officer of Corporate Office Properties Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Exchange Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.) (Furnished herewith).

32.2						Certification of the Chief Financial Officer of Corporate Office Properties Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Exchange Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended). (Furnished herewith).

101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document (filed herewith).

101.SCH						Inline XBRL Taxonomy Extension Schema Document (filed herewith).

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).

101.LAB						Inline XBRL Extension Labels Linkbase (filed herewith).

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


			CORPORATE OFFICE PROPERTIES TRUST



			/s/ Stephen E. Budorick
			Stephen E. Budorick
			President and Chief Executive Officer


			/s/ Anthony Mifsud
			Anthony Mifsud
			Executive Vice President and Chief Financial Officer

Dated:			May ~~3, 2021~~9, 2022