Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 23, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-14023 | |
Entity Registrant Name | COPT DEFENSE PROPERTIES | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 23-2947217 | |
Entity Address, Address Line One | 6711 Columbia Gateway Drive | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Columbia | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 21046 | |
City Area Code | 443 | |
Local Phone Number | 285-5400 | |
Entity Information, Former Legal or Registered Name | CORPORATE OFFICE PROPERTIES TRUST | |
Title of 12(b) Security | Common Shares of beneficial interest, $0.01 par value | |
Trading Symbol | CDP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 112,546,290 | |
Entity Central Index Key | 0000860546 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Properties, net: | ||
Operating properties, net | $ 3,148,434 | $ 3,258,899 |
Projects in development or held for future development | 319,763 | 297,499 |
Total properties, net | 3,468,197 | 3,556,398 |
Property - operating right-of-use assets | 40,487 | 37,020 |
Assets held for sale, net | 0 | 161,286 |
Cash and cash equivalents | 204,238 | 12,337 |
Investment in unconsolidated real estate joint ventures | 41,495 | 21,460 |
Accounts receivable, net | 40,211 | 43,334 |
Deferred rent receivable | 142,041 | 125,147 |
Lease incentives, net | 60,506 | 49,757 |
Deferred leasing costs (net of accumulated amortization of $39,298 and $35,270, respectively) | 68,033 | 69,339 |
Prepaid expenses and other assets, net | 86,514 | 96,576 |
Total assets | 4,239,257 | 4,257,275 |
Liabilities: | ||
Debt, net | 2,415,783 | 2,231,794 |
Accounts payable and accrued expenses | 135,605 | 157,998 |
Rents received in advance and security deposits | 32,063 | 30,016 |
Dividends and distributions payable | 32,645 | 31,400 |
Deferred revenue associated with operating leases | 24,590 | 11,004 |
Property - operating lease liabilities | 32,940 | 28,759 |
Other liabilities | 17,936 | 18,556 |
Total liabilities | 2,691,562 | 2,509,527 |
Commitments and contingencies (Note 17) | ||
Redeemable noncontrolling interests | 21,822 | 26,293 |
Shareholders’ equity: | ||
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,547,846 at September 30, 2023 and 112,423,893 at December 31, 2022) | 1,125 | 1,124 |
Additional paid-in capital | 2,489,717 | 2,486,116 |
Cumulative distributions in excess of net income | (1,010,885) | (807,508) |
Accumulated other comprehensive income | 6,094 | 2,071 |
Total shareholders’ equity | 1,486,051 | 1,681,803 |
Noncontrolling interests in subsidiaries: | ||
Common units in COPT Defense Properties, L.P. (“CDPLP”) | 25,337 | 25,808 |
Other consolidated entities | 14,485 | 13,844 |
Noncontrolling interests in subsidiaries | 39,822 | 39,652 |
Total equity | 1,525,873 | 1,721,455 |
Total liabilities, redeemable noncontrolling interests and equity | 4,239,257 | 4,257,275 |
Investing Receivables | ||
Properties, net: | ||
Investing receivables (net of allowance for credit losses of $3,623 and $2,794, respectively) | $ 87,535 | $ 84,621 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accumulated amortization of deferred leasing costs | $ 39,298 | $ 35,270 |
Common Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares of beneficial interest, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common Shares of beneficial interest, shares issued (in shares) | 112,547,846 | 112,423,893 |
Common Shares of beneficial interest, shares outstanding (in shares) | 112,547,846 | 112,423,893 |
Investing Receivables | ||
Investing receivable allowance for credit loss | $ 3,623 | $ 2,794 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Revenues | |||||
Lease revenue | $ 155,268 | $ 146,481 | $ 459,510 | $ 430,147 | |
Other property revenue | 1,339 | 1,206 | 3,731 | 3,066 | |
Construction contract and other service revenues | 11,949 | 34,813 | 42,012 | 130,570 | |
Total revenues | 168,556 | 182,500 | 505,253 | 563,783 | |
Operating expenses | |||||
Property operating expenses | 61,788 | 57,663 | 182,808 | 168,960 | |
Depreciation and amortization associated with real estate operations | 37,620 | 35,247 | 112,215 | 104,323 | |
Construction contract and other service expenses | 11,493 | 33,555 | 40,249 | 126,509 | |
Impairment losses | 252,797 | 0 | 252,797 | 0 | |
General, administrative, leasing and other expenses | 10,576 | 9,450 | 31,424 | 27,833 | |
Total operating expenses | 374,274 | 135,915 | 619,493 | 427,625 | |
Interest expense | (17,798) | (15,123) | (50,759) | (44,355) | |
Interest and other income, net | 2,529 | 597 | 6,928 | 4,399 | |
Gain on sales of real estate | 0 | 16 | 49,392 | 12 | |
Loss on early extinguishment of debt | 0 | 0 | 0 | (342) | |
(Loss) income from continuing operations before equity in (loss) income of unconsolidated entities and income taxes | (220,987) | 32,075 | (108,679) | 95,872 | |
Equity in (loss) income of unconsolidated entities | (68) | 308 | (21) | 1,514 | |
Income tax expense | (152) | (67) | (467) | (224) | |
(Loss) income from continuing operations | (221,207) | 32,316 | (109,167) | 97,162 | |
Discontinued operations | 0 | 0 | 0 | 29,573 | |
Net (loss) income | (221,207) | 32,316 | (109,167) | 126,735 | |
Net loss (income) attributable to noncontrolling interests: | |||||
Common units in CDPLP | 3,691 | (476) | 1,882 | (1,828) | |
Other consolidated entities | 1,329 | (919) | 164 | (2,357) | |
Net (loss) income attributable to common shareholders | $ (216,187) | $ 30,921 | $ (107,121) | $ 122,550 | |
Basic earnings per common share: | |||||
(Loss) income from continuing operations - basic (in dollars per share) | [1] | $ (1.94) | $ 0.28 | $ (0.96) | $ 0.83 |
Discontinued operations - basic (in dollars per share) | [1] | 0 | 0 | 0 | 0.26 |
Net (loss) income attributable to common shareholders - basic (in dollars per share) | [1] | (1.94) | 0.28 | (0.96) | 1.09 |
Diluted earnings per common share: | |||||
(Loss) income from continuing operations - diluted (in dollars per share) | [1] | (1.94) | 0.27 | (0.96) | 0.83 |
Discontinued operations - diluted (in dollars per share) | [1] | 0 | 0 | 0 | 0.25 |
Net (loss) income attributable to common shareholders - diluted (in dollars per share) | [1] | $ (1.94) | $ 0.27 | $ (0.96) | $ 1.08 |
[1]Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (221,207) | $ 32,316 | $ (109,167) | $ 126,735 |
Other comprehensive income: | ||||
Unrealized income on interest rate derivatives | 2,042 | 1,101 | 6,816 | 4,646 |
Reclassification adjustments on interest rate derivatives recognized in interest expense | (1,146) | (77) | (2,711) | 1,680 |
Total other comprehensive income | 896 | 1,024 | 4,105 | 6,326 |
Comprehensive (loss) income | (220,311) | 33,340 | (105,062) | 133,061 |
Comprehensive loss (income) attributable to noncontrolling interests | 4,994 | (1,593) | 1,964 | (4,820) |
Comprehensive (loss) income attributable to common shareholders | $ (215,317) | $ 31,747 | $ (103,098) | $ 128,241 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Balance at Dec. 31, 2021 | $ 1,657,075 | $ 1,123 | $ 2,481,539 | $ (856,863) | $ (3,059) | $ 34,335 |
Increase (Decrease) in Shareholders' Equity | ||||||
Redemption of common units | (462) | (462) | ||||
Share-based compensation issuance, net of redemptions | 7,112 | 1 | 3,066 | 4,045 | ||
Redemption of vested equity awards | (1,168) | (1,168) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of CDPLP | 0 | (77) | 77 | |||
Comprehensive (loss) income | 130,961 | 122,550 | 5,691 | 2,720 | ||
Dividends | (92,759) | (92,759) | ||||
Distributions to owners of common units in CDPLP | (1,412) | (1,412) | ||||
Distributions to noncontrolling interests in other consolidated entities | (23) | (23) | ||||
Adjustments for changes in fair value of redeemable noncontrolling interests | 1,342 | 1,342 | ||||
Reclassification of redeemable noncontrolling interests to equity | 0 | |||||
Balance at Sep. 30, 2022 | 1,700,666 | 1,124 | 2,484,702 | (827,072) | 2,632 | 39,280 |
Balance at Jun. 30, 2022 | 1,695,951 | 1,124 | 2,481,139 | (827,076) | 1,806 | 38,958 |
Increase (Decrease) in Shareholders' Equity | ||||||
Redemption of common units | (86) | (86) | ||||
Share-based compensation issuance, net of redemptions | 2,434 | 1,045 | 1,389 | |||
Redemption of vested equity awards | (48) | (48) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of CDPLP | 0 | 1,301 | (1,301) | |||
Comprehensive (loss) income | 32,546 | 30,921 | 826 | 799 | ||
Dividends | (30,917) | (30,917) | ||||
Distributions to owners of common units in CDPLP | (471) | (471) | ||||
Distributions to noncontrolling interests in other consolidated entities | (8) | (8) | ||||
Adjustments for changes in fair value of redeemable noncontrolling interests | 1,265 | 1,265 | ||||
Balance at Sep. 30, 2022 | 1,700,666 | 1,124 | 2,484,702 | (827,072) | 2,632 | 39,280 |
Balance at Dec. 31, 2022 | 1,721,455 | 1,124 | 2,486,116 | (807,508) | 2,071 | 39,652 |
Increase (Decrease) in Shareholders' Equity | ||||||
Redemption of common units | (540) | (540) | ||||
Share-based compensation issuance, net of redemptions | 6,636 | 1 | 3,092 | 3,543 | ||
Redemption of vested equity awards | (1,199) | (1,199) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of CDPLP | 0 | 22 | (22) | |||
Comprehensive (loss) income | (106,918) | (107,121) | 4,023 | (3,820) | ||
Dividends | (96,256) | (96,256) | ||||
Distributions to owners of common units in CDPLP | (1,639) | (1,639) | ||||
Distributions to noncontrolling interests in other consolidated entities | (22) | (22) | ||||
Adjustments for changes in fair value of redeemable noncontrolling interests | 1,686 | 1,686 | ||||
Reclassification of redeemable noncontrolling interests to equity | 2,670 | 2,670 | ||||
Balance at Sep. 30, 2023 | 1,525,873 | 1,125 | 2,489,717 | (1,010,885) | 6,094 | 39,822 |
Balance at Jun. 30, 2023 | 1,776,695 | 1,125 | 2,486,996 | (762,617) | 5,224 | 45,967 |
Increase (Decrease) in Shareholders' Equity | ||||||
Redemption of common units | (86) | (86) | ||||
Share-based compensation issuance, net of redemptions | 2,459 | 1,052 | 1,407 | |||
Redemption of vested equity awards | (48) | (48) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of CDPLP | 0 | 1,324 | (1,324) | |||
Comprehensive (loss) income | (220,905) | (216,187) | 870 | (5,588) | ||
Dividends | (32,081) | (32,081) | ||||
Distributions to owners of common units in CDPLP | (547) | (547) | ||||
Distributions to noncontrolling interests in other consolidated entities | (7) | (7) | ||||
Adjustments for changes in fair value of redeemable noncontrolling interests | 393 | 393 | ||||
Balance at Sep. 30, 2023 | $ 1,525,873 | $ 1,125 | $ 2,489,717 | $ (1,010,885) | $ 6,094 | $ 39,822 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Beginning balance (in shares) | 112,538,555 | 112,424,671 | 112,423,893 | 112,327,533 |
Share-based compensation issued (redeemed), net of redemptions (issuances) (in shares) | 9,291 | (1,408) | 123,953 | 95,730 |
Ending balance (in shares) | 112,547,846 | 112,423,263 | 112,547,846 | 112,423,263 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Revenues from real estate operations received | $ 476,679 | $ 431,447 |
Construction contract and other service revenues received | 59,245 | 130,710 |
Property operating expenses paid | (183,061) | (179,306) |
Construction contract and other service expenses paid | (51,220) | (128,428) |
General, administrative, leasing and other expenses paid | (24,739) | (24,630) |
Interest expense paid | (42,829) | (37,561) |
Lease incentives paid | (21,072) | (8,360) |
Sales-type lease costs paid | (7,236) | 0 |
Other | 3,869 | 3,262 |
Net cash provided by operating activities | 209,636 | 187,134 |
Cash flows from investing activities | ||
Development and redevelopment of properties | (211,100) | (223,298) |
Tenant improvements on operating properties | (57,020) | (22,550) |
Other capital improvements on operating properties | (13,310) | (28,705) |
Proceeds from sale of properties | 189,506 | 220,810 |
Investing receivables funded | (213) | (19,000) |
Leasing costs paid | (10,698) | (10,544) |
Other | 988 | 852 |
Net cash used in investing activities | (101,847) | (82,435) |
Proceeds from debt | ||
Revolving Credit Facility | 291,000 | 451,000 |
Unsecured senior notes | 336,375 | 0 |
Repayments of debt | ||
Revolving Credit Facility | (427,000) | (254,000) |
Term loan facility | 0 | (200,000) |
Scheduled principal amortization | (2,289) | (2,469) |
Other debt repayments | (15,902) | 0 |
Common share dividends paid | (95,095) | (92,731) |
Other | (6,055) | (7,417) |
Net cash provided by (used in) financing activities | 81,034 | (105,617) |
Net increase (decrease) in cash and cash equivalents and restricted cash | 188,823 | (918) |
Cash and cash equivalents and restricted cash | ||
Cash and cash equivalents and restricted cash at beginning of period | 16,509 | 17,316 |
Cash and cash equivalents and restricted cash at end of period | 205,332 | 16,398 |
Reconciliation of net (loss) income to net cash provided by operating activities: | ||
Net (loss) income | (109,167) | 126,735 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and other amortization | 114,041 | 106,084 |
Impairment losses | 252,797 | 0 |
Amortization of deferred financing costs and net debt discounts | 3,889 | 3,503 |
Increase in deferred rent receivable | (2,899) | (13,660) |
Gain on sales of real estate | (49,392) | (28,576) |
Share-based compensation | 6,226 | 6,542 |
Other | (2,382) | (2,238) |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 3,111 | 2,098 |
Increase in lease incentives and prepaid expenses and other assets, net | (3,199) | (7,646) |
Decrease in accounts payable, accrued expenses and other liabilities | (5,436) | (2,502) |
Increase (decrease) in rents received in advance and security deposits | 2,047 | (3,206) |
Net cash provided by operating activities | 209,636 | 187,134 |
Reconciliation of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents at beginning of period | 12,337 | 13,262 |
Restricted cash at beginning of period | 4,172 | 4,054 |
Cash and cash equivalents and restricted cash at beginning of period | 16,509 | 17,316 |
Cash and cash equivalents at end of period | 204,238 | 12,643 |
Restricted cash at end of period | 1,094 | 3,755 |
Cash and cash equivalents and restricted cash at end of period | 205,332 | 16,398 |
Supplemental schedule of non-cash investing and financing activities: | ||
Decrease in accrued capital improvements, leasing and other investing activity costs | (18,931) | (21,401) |
Recognition of operating right-of-use assets and related lease liabilities | 6,714 | 683 |
Recognition of finance right-of-use assets and related lease liabilities | 434 | 0 |
Investment in unconsolidated real estate joint venture retained in property disposition | 21,121 | 0 |
Increase in fair value of derivatives applied to accumulated other comprehensive income and noncontrolling interests | 4,105 | 5,901 |
Dividends/distributions payable | 32,645 | 31,407 |
Adjustments to noncontrolling interests resulting from changes in CDPLP ownership | (22) | 77 |
Decrease in redeemable noncontrolling interests and increase in equity to adjust for changes in fair value of redeemable noncontrolling interests | (1,686) | (1,342) |
Reclassification of redeemable noncontrolling interests to equity | $ 2,670 | $ 0 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization COPT Defense Properties (“CDP”) and subsidiaries (collectively, the “Company”, “we” or “us”) is a fully-integrated and self-managed real estate investment trust (“REIT”) focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions (which we refer to herein as our Defense/IT Portfolio). Our tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. In September 2023, we changed our name from Corporate Office Properties Trust to COPT Defense Properties to better describe our investment strategy’s focus on locations serving our country’s priority defense activities. As of September 30, 2023, our Defense/IT Portfolio included: • 188 operating properties totaling 21.3 million square feet comprised of 15.8 million square feet in 159 office properties and 5.5 million square feet in 29 single-tenant data center shells. We owned 24 of these data center shells through unconsolidated real estate joint ventures; • six properties under development (three office properties and three data center shells) that will total approximately 971,000 square feet upon completion; and • approximately 670 acres of land controlled that we believe could be developed into approximately 8.1 million square feet. We also owned eight other operating properties totaling 2.1 million square feet and approximately 50 acres of other developable land in the Greater Washington, DC/Baltimore region as of September 30, 2023. We conduct almost all of our operations and own almost all of our assets through our operating partnership, COPT Defense Properties, L.P. (“CDPLP”) and subsidiaries (collectively, the “Operating Partnership”), of which CDP is the sole general partner. CDPLP owns real estate directly and through subsidiary partnerships and limited liability companies (“LLCs”). In addition to owning real estate, CDPLP 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”). In September 2023, we changed CDPLP’s name from Corporate Office Properties, L.P. to COPT Defense Properties, L.P. Equity interests in CDPLP are in the form of common and preferred units. As of September 30, 2023, CDP owned 97.9% of the outstanding CDPLP common units (“common units”) and there were no preferred units outstanding. Common units not owned by CDP carry certain redemption rights. The number of common units owned by CDP is equivalent to the number of outstanding common shares of beneficial interest (“common shares”) of CDP, and the entitlement of common units to quarterly distributions and payments in liquidation is substantially the same as that of CDP common shareholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation These consolidated financial statements include the accounts of CDP, the Operating Partnership, their subsidiaries and other entities in which CDP 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, 2022 included in our 2022 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 Reclassifications We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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. Effective December 31, 2019, no new investments of deferred compensation were eligible for the plan. The assets held in the plan (comprised of mutual funds) 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. The balance of the plan, which was fully funded and totaled $1.7 million as of September 30, 2023, is included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. 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, as disclosed in Note 9, 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 September 30, 2023, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivatives and determined that these adjustments 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 8, we estimated the fair value of our unsecured senior notes based on quoted market rates for our senior notes (categorized within Level 1 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. The table below sets forth our financial assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2023 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Assets: (1) Marketable securities in deferred compensation plan $ 1,748 $ — $ — $ 1,748 Interest rate derivatives — 6,736 — 6,736 Total assets $ 1,748 $ 6,736 $ — $ 8,484 Liabilities: (2) Deferred compensation plan liability $ — $ 1,748 $ — $ 1,748 (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. Nonrecurring Fair Value Measurements As part of our closing process for the three months ended September 30, 2023, we conducted our quarterly review of our portfolio of long-lived assets to be held and used for indicators of impairment. As a result of this process, we shortened the expected holding periods for six operating properties in our Other segment and a parcel of land located in Baltimore, Maryland, Northern Virginia and Washington, D.C. We determined that the carrying amount of the properties would not likely be recovered from the undiscounted cash flows from the operations and sales of the properties over the shortened holding periods. Accordingly, we recognized impairment losses of $252.8 million on these properties during the period. The combined fair value of these properties as of September 30, 2023 was $311.3 million, as determined using significant unobservable inputs (Level 3 of the fair value hierarchy). The table below sets forth quantitative information about significant unobservable inputs used for the Level 3 fair value measurements reported above as of September 30, 2023 (dollars in thousands): Valuation Technique Fair Values on Measurement Date Unobservable Input Range (Weighted Average (1)) Discounted cash flow (2) $ 257,800 Terminal capitalization rate 6.5% - 9.5% (8.0%) Discount rate 7.5% - 10.5% (9.0%) Comparable sales price (3) $ 53,500 Comparable sales price N/A (1) Weighted average calculation based on relative fair value. (2) This technique was used for the operating properties in Baltimore, Maryland and Washington, D.C. For the properties in Baltimore, Maryland, the terminal capitalization rate was 9.5% and the discount rate was 10.5%. For the property in Washington, D.C., the terminal capitalization rate was 6.5% and the discount rate was 7.5%. (3) This technique was used for the operating properties in Northern Virginia and a parcel of land in Baltimore, Maryland. |
Properties, Net
Properties, Net | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Properties, Net | Properties, Net Operating properties, net consisted of the following (in thousands): September 30, December 31, Land $ 476,818 $ 539,809 Buildings and improvements 4,039,089 3,986,524 Less: Accumulated depreciation (1,367,473) (1,267,434) Operating properties, net $ 3,148,434 $ 3,258,899 2023 Dispositions On January 10, 2023, we sold a 90% interest in three data center shell properties in Northern Virginia based on an aggregate property value of $211.3 million and retained a 10% interest in the properties through Redshift JV LLC, a newly-formed joint venture. Our partner in the joint venture acquired the 90% interest from us for $190.2 million. We account for our interest in the joint venture using the equity method of accounting, as described further in Note 6. We recognized a gain on sale Properties, net $ 156,691 Deferred rent receivable 4,595 Assets held for sale, net $ 161,286 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Lessor Arrangements 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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue (1) 2023 2022 2023 2022 Fixed $ 120,408 $ 113,700 $ 354,908 $ 337,558 Variable 34,860 32,781 104,602 92,589 $ 155,268 $ 146,481 $ 459,510 $ 430,147 (1) Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable for the nine months ended September 30, 2022. Lessee Arrangements As of September 30, 2023, our balance sheet included $43.1 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location September 30, December 31, Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 40,487 $ 37,020 Finance leases - Property Prepaid expenses and other assets, net 2,584 2,207 Total right-of-use assets $ 43,071 $ 39,227 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 32,940 $ 28,759 Finance leases - Property Other liabilities 420 — Total lease liabilities $ 33,360 $ 28,759 As of September 30, 2023, our operating leases had a weighted average remaining lease term of 48 years and a weighted average discount rate of 7.31%, while our finance leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 9.14%. The table below presents our total property lease costs (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2023 2022 2023 2022 Operating lease cost Property leases - fixed Property operating expenses $ 1,808 $ 1,031 $ 5,146 $ 3,082 Property leases - variable Property operating expenses 17 16 50 49 Finance lease cost Amortization of property right-of-use assets Property operating expenses 18 7 57 23 Interest on lease liabilities Interest expense 10 — 33 — $ 1,853 $ 1,054 $ 5,286 $ 3,154 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 4,432 $ 2,515 Operating cash flows for financing leases $ 33 $ — Financing cash flows for financing leases $ 14 $ — Payments on property leases were due as follows (in thousands): September 30, 2023 Year Ending December 31, Operating Leases Finance Leases 2023 (1) $ 1,624 $ 15 2024 6,633 61 2025 2,250 63 2026 1,662 65 2027 1,677 66 Thereafter 130,495 366 Total lease payments 144,341 636 Less: Amount representing interest (111,401) (216) Lease liability $ 32,940 $ 420 (1) Represents the three months ending December 31, 2023. |
Leases | Leases Lessor Arrangements 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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue (1) 2023 2022 2023 2022 Fixed $ 120,408 $ 113,700 $ 354,908 $ 337,558 Variable 34,860 32,781 104,602 92,589 $ 155,268 $ 146,481 $ 459,510 $ 430,147 (1) Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable for the nine months ended September 30, 2022. Lessee Arrangements As of September 30, 2023, our balance sheet included $43.1 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location September 30, December 31, Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 40,487 $ 37,020 Finance leases - Property Prepaid expenses and other assets, net 2,584 2,207 Total right-of-use assets $ 43,071 $ 39,227 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 32,940 $ 28,759 Finance leases - Property Other liabilities 420 — Total lease liabilities $ 33,360 $ 28,759 As of September 30, 2023, our operating leases had a weighted average remaining lease term of 48 years and a weighted average discount rate of 7.31%, while our finance leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 9.14%. The table below presents our total property lease costs (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2023 2022 2023 2022 Operating lease cost Property leases - fixed Property operating expenses $ 1,808 $ 1,031 $ 5,146 $ 3,082 Property leases - variable Property operating expenses 17 16 50 49 Finance lease cost Amortization of property right-of-use assets Property operating expenses 18 7 57 23 Interest on lease liabilities Interest expense 10 — 33 — $ 1,853 $ 1,054 $ 5,286 $ 3,154 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 4,432 $ 2,515 Operating cash flows for financing leases $ 33 $ — Financing cash flows for financing leases $ 14 $ — Payments on property leases were due as follows (in thousands): September 30, 2023 Year Ending December 31, Operating Leases Finance Leases 2023 (1) $ 1,624 $ 15 2024 6,633 61 2025 2,250 63 2026 1,662 65 2027 1,677 66 Thereafter 130,495 366 Total lease payments 144,341 636 Less: Amount representing interest (111,401) (216) Lease liability $ 32,940 $ 420 (1) Represents the three months ending December 31, 2023. |
Leases | Leases Lessor Arrangements 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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue (1) 2023 2022 2023 2022 Fixed $ 120,408 $ 113,700 $ 354,908 $ 337,558 Variable 34,860 32,781 104,602 92,589 $ 155,268 $ 146,481 $ 459,510 $ 430,147 (1) Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable for the nine months ended September 30, 2022. Lessee Arrangements As of September 30, 2023, our balance sheet included $43.1 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location September 30, December 31, Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 40,487 $ 37,020 Finance leases - Property Prepaid expenses and other assets, net 2,584 2,207 Total right-of-use assets $ 43,071 $ 39,227 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 32,940 $ 28,759 Finance leases - Property Other liabilities 420 — Total lease liabilities $ 33,360 $ 28,759 As of September 30, 2023, our operating leases had a weighted average remaining lease term of 48 years and a weighted average discount rate of 7.31%, while our finance leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 9.14%. The table below presents our total property lease costs (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2023 2022 2023 2022 Operating lease cost Property leases - fixed Property operating expenses $ 1,808 $ 1,031 $ 5,146 $ 3,082 Property leases - variable Property operating expenses 17 16 50 49 Finance lease cost Amortization of property right-of-use assets Property operating expenses 18 7 57 23 Interest on lease liabilities Interest expense 10 — 33 — $ 1,853 $ 1,054 $ 5,286 $ 3,154 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 4,432 $ 2,515 Operating cash flows for financing leases $ 33 $ — Financing cash flows for financing leases $ 14 $ — Payments on property leases were due as follows (in thousands): September 30, 2023 Year Ending December 31, Operating Leases Finance Leases 2023 (1) $ 1,624 $ 15 2024 6,633 61 2025 2,250 63 2026 1,662 65 2027 1,677 66 Thereafter 130,495 366 Total lease payments 144,341 636 Less: Amount representing interest (111,401) (216) Lease liability $ 32,940 $ 420 (1) Represents the three months ending December 31, 2023. |
Leases | Leases Lessor Arrangements 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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue (1) 2023 2022 2023 2022 Fixed $ 120,408 $ 113,700 $ 354,908 $ 337,558 Variable 34,860 32,781 104,602 92,589 $ 155,268 $ 146,481 $ 459,510 $ 430,147 (1) Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable for the nine months ended September 30, 2022. Lessee Arrangements As of September 30, 2023, our balance sheet included $43.1 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location September 30, December 31, Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 40,487 $ 37,020 Finance leases - Property Prepaid expenses and other assets, net 2,584 2,207 Total right-of-use assets $ 43,071 $ 39,227 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 32,940 $ 28,759 Finance leases - Property Other liabilities 420 — Total lease liabilities $ 33,360 $ 28,759 As of September 30, 2023, our operating leases had a weighted average remaining lease term of 48 years and a weighted average discount rate of 7.31%, while our finance leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 9.14%. The table below presents our total property lease costs (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2023 2022 2023 2022 Operating lease cost Property leases - fixed Property operating expenses $ 1,808 $ 1,031 $ 5,146 $ 3,082 Property leases - variable Property operating expenses 17 16 50 49 Finance lease cost Amortization of property right-of-use assets Property operating expenses 18 7 57 23 Interest on lease liabilities Interest expense 10 — 33 — $ 1,853 $ 1,054 $ 5,286 $ 3,154 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 4,432 $ 2,515 Operating cash flows for financing leases $ 33 $ — Financing cash flows for financing leases $ 14 $ — Payments on property leases were due as follows (in thousands): September 30, 2023 Year Ending December 31, Operating Leases Finance Leases 2023 (1) $ 1,624 $ 15 2024 6,633 61 2025 2,250 63 2026 1,662 65 2027 1,677 66 Thereafter 130,495 366 Total lease payments 144,341 636 Less: Amount representing interest (111,401) (216) Lease liability $ 32,940 $ 420 (1) Represents the three months ending December 31, 2023. |
Real Estate Joint Ventures
Real Estate Joint Ventures | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Real Estate Joint Ventures | Real Estate Joint Ventures Consolidated Real Estate Joint Ventures The table below sets forth information as of September 30, 2023 pertaining to our investments in consolidated real estate joint ventures, which are each variable interest entities (dollars in thousands): Nominal Ownership % September 30, 2023 Date Acquired Total Encumbered Assets Total Liabilities Mortgage Debt Entity Location LW Redstone Company, LLC (1) 3/23/2010 85% Huntsville, Alabama $ 697,483 $ 100,176 $ 109,271 $ 50,939 Stevens Investors, LLC 8/11/2015 95% Washington, DC 126,846 — 1,112 — M Square Associates, LLC 6/26/2007 50% College Park, Maryland 99,395 57,579 49,882 48,931 $ 923,724 $ 157,755 $ 160,265 $ 99,870 (1) We fund all capital requirements. Our partner receives distributions of $1.2 million of annual operating cash flows and we receive the remainder. 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): Date Acquired Nominal Ownership % Number of Properties Carrying Value of Investment (1) Entity September 30, December 31, Redshift JV LLC 1/10/2023 10% 3 $ 21,083 $ — BREIT COPT DC JV LLC 6/20/2019 10% 9 10,870 11,568 Quark JV LLC 12/14/2022 10% 2 6,730 6,758 B RE COPT DC JV III LLC 6/2/2021 10% 2 2,812 3,134 B RE COPT DC JV II LLC (2) 10/30/2020 10% 8 (2,327) (1,459) 24 $ 39,168 $ 20,001 (1) Included $41.5 million and $21.5 million reported in “Investment in unconsolidated real estate joint ventures” as of September 30, 2023 and December 31, 2022, respectively, and $2.3 million and $1.5 million for investments with deficit balances reported in “other liabilities” on our consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. (2) Our investment in B RE COPT DC JV II LLC was lower than our share of the joint venture’s equity by $6.9 million as of September 30, 2023 and $7.0 million as of December 31, 2022 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. As described further in Note 4, on January 10, 2023, we sold a 90% interest in three data center shell properties in Northern Virginia and retained a 10% interest in the properties through Redshift JV LLC, a newly-formed joint venture. We concluded that the joint venture is a variable interest entity. Under the terms of the joint venture agreement, we and our partner receive returns in proportion to our investments, and our maximum exposure to losses is limited to our investment, subject to our share of certain indemnification obligations with respect to nonrecourse debt secured by the properties. The nature of our involvement in the activities of the joint venture does not give us power over decisions that significantly affect its economic performance. |
Investing Receivables
Investing Receivables | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Investing Receivables | Investing Receivables Investing receivables consisted of the following (in thousands): September 30, December 31, Notes receivable from the City of Huntsville $ 74,347 $ 69,703 Other investing loans receivable 16,811 17,712 Amortized cost basis 91,158 87,415 Allowance for credit losses (3,623) (2,794) Investing receivables, net $ 87,535 $ 84,621 The balances above include accrued interest receivable, net of allowance for credit losses, of $4.2 million as of September 30, 2023 and $2.9 million as of December 31, 2022. 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 loan receivable as of September 30, 2023 carries a stated interest rate of 12.0% and matures in 2024. The fair value of these receivables was approximately $92 million as of September 30, 2023 and $87 million as of December 31, 2022. |
Debt, Net
Debt, Net | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt, Net | Debt, Net Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of September 30, 2023 September 30, December 31, 2022 Stated Interest Rates Scheduled Maturity Mortgage and Other Secured Debt: Fixed rate mortgage debt $ 66,870 $ 84,433 3.82% to 4.62% (2) 2024-2026 Variable rate secured debt 33,000 33,318 SOFR + 0.10% + 1.45% to 1.55% (3) 2025-2026 Total mortgage and other secured debt 99,870 117,751 Revolving Credit Facility 75,000 211,000 SOFR + 0.10% + 0.725% to 1.400% (4) October 2026 (5) Term Loan Facility 124,205 123,948 SOFR + 0.10% + 0.850% to 1.700% (6) January 2026 (7) Unsecured Senior Notes 2.25%, $400,000 aggregate principal 397,339 396,539 2.25% (8) March 2026 5.25%, $345,000 aggregate principal 335,450 — 5.25% (9) September 2028 2.00%, $400,000 aggregate principal 397,350 396,988 2.00% (10) January 2029 2.75%, $600,000 aggregate principal 590,937 590,123 2.75% (11) April 2031 2.90%, $400,000 aggregate principal 395,160 394,848 2.90% (12) December 2033 Unsecured note payable 472 597 0% (13) May 2026 Total debt, net $ 2,415,783 $ 2,231,794 (1) The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $5.6 million as of September 30, 2023 and $5.4 million as of December 31, 2022. (2) The weighted average interest rate on our fixed rate mortgage debt was 4.10% as of September 30, 2023. (3) Including the effect of interest rate swaps that hedge the risk of interest rate changes, the weighted average interest rate on our variable rate secured debt as of September 30, 2023 was 2.45%; excluding the effect of these swaps, the weighted average interest rate on this debt as of September 30, 2023 was 6.92%. (4) The weighted average interest rate on the Revolving Credit Facility was 6.48% as of September 30, 2023, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9). (5) The facility matures in October 2026, with the ability for us to extend such maturity by two six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.0625% of the total availability under the facility for each extension period. (6) The interest rate on this loan was 6.73% as of September 30, 2023, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9). (7) This facility matures in January 2026, with the ability for us to extend such maturity by two 12-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.125% of the outstanding loan balance for each extension period. (8) The carrying value of these notes reflects unamortized discounts and commissions totaling $2.2 million as of September 30, 2023 and $2.8 million as of December 31, 2022. The effective interest rate under the notes, including amortization of the such costs, was 2.48%. (9) The carrying value of these notes reflects unamortized commissions totaling $8.5 million as of September 30, 2023. The effective interest rate under the notes, including amortization of such costs, was 5.83%. Refer to the paragraphs below for further disclosure. (10) The carrying value of these notes reflects unamortized discounts and commissions totaling $1.9 million as of September 30, 2023 and $2.1 million as of December 31, 2022. The effective interest rate under the notes, including amortization of such costs, was 2.09%. (11) The carrying value of these notes reflects unamortized discounts and commissions totaling $7.9 million as of September 30, 2023 and $8.5 million as of December 31, 2022. The effective interest rate under the notes, including amortization of such costs, was 2.94%. (12) The carrying value of these notes reflects unamortized discounts and commissions totaling $4.0 million as of September 30, 2023 and $4.2 million as of December 31, 2022. The effective interest rate under the notes, including amortization of such costs, was 3.01%. (13) 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 $39,000 as of September 30, 2023 and $65,000 as of December 31, 2022. All debt is owed by the Operating Partnership. While CDP is not directly obligated by any debt, it has guaranteed CDPLP’s Revolving Credit Facility, Term Loan Facility and Unsecured Senior Notes. On September 12, 2023, we issued $345.0 million aggregate principal amount of 5.25% Exchangeable Senior Notes due 2028 (the “5.25% Notes”) in a private placement. The proceeds from this issuance, after deducting the initial purchasers’ commissions, but before other offering expenses, were $336.4 million. The notes bear interest at a rate of 5.25% per year, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2024. The notes mature on September 15, 2028 unless earlier exchanged, redeemed or repurchased. Prior to the close of business on the business day immediately preceding June 15, 2028, the notes will be exchangeable at the option of the noteholders only in the event of certain circumstances and during certain periods defined under the terms of the notes. On or after June 15, 2028, the notes will be exchangeable at the option of the holders at any time prior to the close of business on the business day immediately preceding the maturity date. Upon exchange, the principal amount of notes is payable in cash. The remainder of the exchange obligation, if any, as determined based on the exchange price per common share at the time of settlement, is payable in cash, common shares or a combination thereof at our election. The exchange rate of the notes initially equaled 33.3739 of our common shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $29.96 per common share). The exchange rate is subject to adjustment upon the occurrence of some events, but will not be adjusted for any accrued and unpaid interest. We may redeem the notes at our option, in whole or in part, on any business day on or after September 21, 2026, and prior to the 51st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common shares has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. These notes are unconditionally guaranteed by CDP. The table below sets forth interest expense recognized on these notes for the three and nine months ended September 30, 2023 (in thousands): Interest expense at stated interest rate $ 956 Interest expense associated with amortization of debt discount and issuance costs 124 Total $ 1,080 Certain of our debt instruments require that we comply with a number of restrictive financial covenants. As of September 30, 2023, we were compliant with these financial covenants. Our debt matures on the following schedule (in thousands): Year Ending December 31, September 30, 2023 2023 (1) $ 763 2024 29,983 2025 23,717 2026 646,300 2027 — Thereafter 1,745,000 Total $ 2,445,763 (2) (1) Represents the three months ending December 31, 2023. (2) Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $30.0 million. We capitalized interest costs of $1.5 million in the three months ended September 30, 2023, $2.0 million in the three months ended September 30, 2022, $3.5 million in the nine months ended September 30, 2023 and $4.9 million in the nine months ended September 30, 2022. The following table sets forth information pertaining to the fair value of our debt (in thousands): September 30, 2023 December 31, 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Fixed-rate debt Unsecured Senior Notes $ 2,116,236 $ 1,777,178 $ 1,778,498 $ 1,433,561 Other fixed-rate debt 67,342 62,661 85,030 80,330 Variable-rate debt 232,205 232,385 368,266 367,896 $ 2,415,783 $ 2,072,224 $ 2,231,794 $ 1,881,787 |
Interest Rate Derivatives
Interest Rate Derivatives | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Derivatives | Interest Rate Derivatives The following table sets forth the key terms and fair values of our interest rate swap derivatives (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date September 30, December 31, $ 10,700 (1) 1.678% SOFR + 0.10% 8/1/2019 8/1/2026 $ 833 $ 806 $ 22,550 (2) 0.573% SOFR + 0.10% 4/1/2020 3/26/2025 1,490 1,825 $ 150,000 3.742% One-Month SOFR 2/1/2023 2/2/2026 3,313 — $ 50,000 3.747% One-Month SOFR 2/1/2023 2/2/2026 1,100 — $ 6,736 $ 2,631 (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. Each of these swaps was designated as a cash flow hedge of interest rate risk. 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): Fair Value at Derivatives Balance Sheet Location September 30, December 31, Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets, net $ 6,736 $ 2,631 The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): Amount of Income Amount of Income (Loss) Reclassified from AOCI into Interest Expense on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 2023 2022 2023 2022 Interest rate derivatives $ 2,042 $ 1,101 $ 6,816 $ 4,646 $ 1,146 $ 77 $ 2,711 $ (1,680) Based on the fair value of our derivatives as of September 30, 2023, we estimate that approximately $4.5 million of gains will be reclassified from accumulated other comprehensive income (“ AOCI”) as a decrease to interest expense over the next 12 months. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests Redeemable noncontrolling interests on our consolidated balance sheets includes the ownership interests of our partners in LW Redstone Company, LLC and Stevens Investors, LLC due to the partners’ rights to require us to acquire their interests. Effective in June 2023, these rights expired for our Stevens Investors, LLC partners, which resulted in our reclassification of their interests from redeemable noncontrolling interests to the noncontrolling interests in subsidiaries section of equity. The table below sets forth the activity for redeemable noncontrolling interests (in thousands): For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 26,293 $ 26,898 Distributions to noncontrolling interests (1,971) (2,209) Net income attributable to noncontrolling interests 1,856 2,100 Adjustments for changes in fair value of interests (1,686) (1,342) Reclassification of Stevens Investors, LLC interests to equity (2,670) — Ending balance $ 21,822 $ 25,447 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | Equity As of September 30, 2023, we had remaining capacity under our at-the-market stock offering program equal to an aggregate gross sales price of $300 million in common shares. We declared dividends per common share of $0.285 in the three months ended September 30, 2023, $0.275 in the three months ended September 30, 2022, $0.855 in the nine months ended September 30, 2023 and $0.825 in the nine months ended September 30, 2022. See Note 15 for disclosure of common share activity pertaining to our share-based compensation plans. |
Information by Business Segment
Information by Business Segment | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Information by Business Segment | Information by Business SegmentWe have the following reportable segments: Defense/IT Portfolio, which we referred to as Defense/IT Locations in prior reporting periods; Wholesale Data Center (the only property in which we sold on January 25, 2022); and Other. We also report on Defense/IT Portfolio sub-segments, which include the following: Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”); Northern Virginia Defense/IT Locations (“NoVA Defense/IT”); Lackland Air Force Base (in San Antonio); locations serving the U.S. Navy (“Navy 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). In the third quarter of 2023, we retrospectively reclassified to our Other reportable segment a portfolio of office properties located in the Greater Washington, DC/Baltimore region that we previously reported as a separate reportable segment referred to as Regional Office.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 CDP”). 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): Defense/IT Portfolio Fort Meade/BW Corridor NoVA Defense/IT Lackland Air Force Base Navy Support Redstone Arsenal Data Center Shells Total Defense/IT Portfolio Wholesale Other Total Three Months Ended September 30, 2023 Revenues from real estate operations $ 73,350 $ 20,333 $ 16,193 $ 8,190 $ 13,768 $ 6,811 $ 138,645 $ — $ 17,962 $ 156,607 Property operating expenses (25,216) (7,900) (8,567) (3,933) (4,948) (678) (51,242) — (10,546) (61,788) UJV NOI allocable to CDP — — — — — 1,675 1,675 — — 1,675 NOI from real estate operations $ 48,134 $ 12,433 $ 7,626 $ 4,257 $ 8,820 $ 7,808 $ 89,078 $ — $ 7,416 $ 96,494 Additions to long-lived assets $ 7,057 $ 4,639 $ — $ 1,201 $ 8,566 $ — $ 21,463 $ — $ 4,567 $ 26,030 Transfers from non-operating properties $ 983 $ 95 $ 51 $ 1 $ 63,025 $ 58,405 $ 122,560 $ — $ 102 $ 122,662 Three Months Ended September 30, 2022 Revenues from real estate operations $ 69,209 $ 18,611 $ 15,951 $ 8,253 $ 9,976 $ 9,069 $ 131,069 $ — $ 16,618 $ 147,687 Property operating expenses (24,450) (6,776) (8,281) (3,665) (4,324) (1,116) (48,612) — (9,051) (57,663) UJV NOI allocable to CDP — — — — — 1,072 1,072 — — 1,072 NOI from real estate operations $ 44,759 $ 11,835 $ 7,670 $ 4,588 $ 5,652 $ 9,025 $ 83,529 $ — $ 7,567 $ 91,096 Additions to long-lived assets $ 9,076 $ 1,454 $ — $ 734 $ 1,573 $ — $ 12,837 $ — $ 6,865 $ 19,702 Transfers from non-operating properties $ 1,039 $ 345 $ 129 $ 27 $ 267 $ 2,986 $ 4,793 $ — $ 348 $ 5,141 Nine Months Ended September 30, 2023 Revenues from real estate operations $ 215,303 $ 60,003 $ 49,393 $ 24,233 $ 40,160 $ 19,790 $ 408,882 $ — $ 54,359 $ 463,241 Property operating expenses (73,924) (23,155) (26,463) (10,992) (14,334) (2,015) (150,883) — (31,925) (182,808) UJV NOI allocable to CDP — — — — — 4,988 4,988 — — 4,988 NOI from real estate operations $ 141,379 $ 36,848 $ 22,930 $ 13,241 $ 25,826 $ 22,763 $ 262,987 $ — $ 22,434 $ 285,421 Additions to long-lived assets $ 42,838 $ 14,994 $ 62 $ 2,269 $ 17,339 $ — $ 77,502 $ — $ 12,572 $ 90,074 Transfers from non-operating properties $ 11,392 $ 582 $ 96 $ 2,651 $ 81,352 $ 63,653 $ 159,726 $ — $ 129 $ 159,855 Segment assets at September 30, 2023 $ 1,397,107 $ 486,561 $ 190,344 $ 163,630 $ 548,201 $ 382,693 $ 3,168,536 $ — $ 310,828 $ 3,479,364 Nine Months Ended September 30, 2022 Revenues from real estate operations $ 204,012 $ 55,290 $ 45,793 $ 24,507 $ 28,479 $ 25,714 $ 383,795 $ 1,980 $ 49,418 $ 435,193 Property operating expenses (73,733) (19,802) (22,873) (10,466) (11,690) (3,315) (141,879) (975) (27,077) (169,931) UJV NOI allocable to CDP — — — — — 3,232 3,232 — — 3,232 NOI from real estate operations $ 130,279 $ 35,488 $ 22,920 $ 14,041 $ 16,789 $ 25,631 $ 245,148 $ 1,005 $ 22,341 $ 268,494 Additions to long-lived assets $ 33,202 $ 6,184 $ — $ 2,124 $ 2,032 $ — $ 43,542 $ (35) $ 14,825 $ 58,332 Transfers from non-operating properties $ 7,176 $ 1,582 $ 1,068 $ 6,325 $ 20,380 $ 89,862 $ 126,393 $ — $ 649 $ 127,042 Segment assets at September 30, 2022 $ 1,325,703 $ 487,032 $ 195,612 $ 170,574 $ 314,156 $ 436,908 $ 2,929,985 $ — $ 538,633 $ 3,468,618 The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Segment revenues from real estate operations $ 156,607 $ 147,687 $ 463,241 $ 435,193 Construction contract and other service revenues 11,949 34,813 42,012 130,570 Less: Revenues from discontinued operations — — — (1,980) Total revenues $ 168,556 $ 182,500 $ 505,253 $ 563,783 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 September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Segment property operating expenses $ 61,788 $ 57,663 $ 182,808 $ 169,931 Less: Property operating expenses from discontinued operations — — — (971) Total property operating expenses $ 61,788 $ 57,663 $ 182,808 $ 168,960 The following table reconciles UJV NOI allocable to CDP to equity in (loss) income of unconsolidated entities as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 UJV NOI allocable to CDP $ 1,675 $ 1,072 $ 4,988 $ 3,232 Less: Income from UJV allocable to CDP attributable to depreciation and amortization expense and interest expense (1,743) (762) (5,006) (2,280) Add: Equity in (loss) income of unconsolidated non-real estate entities — (2) (3) 562 Equity in (loss) income of unconsolidated entities $ (68) $ 308 $ (21) $ 1,514 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): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Construction contract and other service revenues $ 11,949 $ 34,813 $ 42,012 $ 130,570 Construction contract and other service expenses (11,493) (33,555) (40,249) (126,509) NOI from service operations $ 456 $ 1,258 $ 1,763 $ 4,061 The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to (loss) income from continuing operations as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 NOI from real estate operations $ 96,494 $ 91,096 $ 285,421 $ 268,494 NOI from service operations 456 1,258 1,763 4,061 Depreciation and other amortization associated with real estate operations (37,620) (35,247) (112,215) (104,323) Impairment losses (252,797) — (252,797) — General, administrative, leasing and other expenses (10,576) (9,450) (31,424) (27,833) Interest expense (17,798) (15,123) (50,759) (44,355) Interest and other income, net 2,529 597 6,928 4,399 Gain on sales of real estate — 16 49,392 12 Loss on early extinguishment of debt — — — (342) Equity in (loss) income of unconsolidated entities (68) 308 (21) 1,514 UJV NOI allocable to CDP included in equity in (loss) income of unconsolidated entities (1,675) (1,072) (4,988) (3,232) Income tax expense (152) (67) (467) (224) Revenues from real estate operations from discontinued operations — — — (1,980) Property operating expenses from discontinued operations — — — 971 (Loss) income from continuing operations $ (221,207) $ 32,316 $ (109,167) $ 97,162 The following table reconciles our segment assets to our consolidated total assets (in thousands): September 30, September 30, Segment assets $ 3,479,364 $ 3,468,618 Operating properties lease liabilities included in segment assets 33,360 29,088 Non-operating property assets 324,168 531,838 Other assets 402,365 239,785 Total consolidated assets $ 4,239,257 $ 4,269,329 The accounting policies of the segments are the same as those used to prepare our consolidated financial 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 (loss) 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, leasing and other expenses, interest and other income, net, income taxes and noncontrolling interests because these items represent general corporate or non-operating property items not attributable to segments. |
Construction Contract and Other
Construction Contract and Other Service Revenues | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Construction Contract and Other Service Revenues | Construction Contract and Other Service Revenues We disaggregate in the table below our construction contract and other service revenues by compensation arrangement as we believe it best depicts the nature, timing and uncertainty of our revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Construction contract revenue: Firm fixed price $ 6,616 $ 3,121 $ 21,898 $ 9,822 Guaranteed maximum price 2,817 27,928 11,561 112,354 Cost-plus fee 2,205 3,196 7,472 6,757 Other 311 568 1,081 1,637 $ 11,949 $ 34,813 $ 42,012 $ 130,570 We recognized an insignificant amount of revenue in the three and nine months ended September 30, 2023 and 2022 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): For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 7,618 $ 7,193 Ending balance $ 5,367 $ 6,283 Contract assets are included in prepaid expenses and other assets, net on our consolidated balance sheets. The beginning and ending balances of our contract assets were as follows (in thousands): For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 22,331 $ 22,384 Ending balance $ 8,356 $ 26,562 Contract liabilities are included in other liabilities on our consolidated balance sheets. Changes in contract liabilities were as follows (in thousands): For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 2,867 $ 2,499 Ending balance $ 3,938 $ 5,846 Portion of beginning balance recognized in revenue during: Three months ended September 30, $ 64 $ 14 Nine months ended September 30, $ 164 $ 204 Revenue allocated to the remaining performance obligations under existing contracts as of September 30, 2023 that will be recognized as revenue in future periods was $75.7 million, of which we expect to recognize approximately $23 million in the three months ending December 31, 2023 and the remainder in 2024. We have no deferred incremental costs incurred to obtain or fulfill our construction contracts or other service revenues as of September 30, 2023 and December 31, 2022. Credit loss expense or recoveries on construction contracts receivable and unbilled construction revenue was insignificant for the three and nine months ended September 30, 2023. Credit loss recoveries on construction contracts receivable and unbilled construction revenue was $369,000 and $461,000 for the three and nine months ended September 30, 2022, respectively. |
Credit Losses on Financial Asse
Credit Losses on Financial Assets and Other Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Credit Losses on Financial Assets and Other Instruments | Credit Losses on Financial Assets and Other Instruments The table below sets forth the activity for our allowance for credit losses for the nine months ended September 30, 2023 and 2022 (in thousands): Investing Receivables Tenant Notes Other Assets (2) Total December 31, 2022 $ 2,794 $ 778 $ 268 $ 3,840 Credit loss expense (recoveries) (3) 829 (64) (88) 677 Write-offs — (33) — (33) September 30, 2023 $ 3,623 $ 681 $ 180 $ 4,484 December 31, 2021 $ 1,599 $ 1,057 $ 913 $ 3,569 Credit loss expense (recoveries) (3) 2,129 (112) (415) 1,602 September 30, 2022 $ 3,728 $ 945 $ 498 $ 5,171 (1) Included in the line entitled “accounts receivable, net” on our consolidated balance sheets. (2) The balance as of September 30, 2023 and December 31, 2022 included $109,000 and $52,000 in the line entitled “accounts receivable, net” and $71,000 and $216,000 in the line entitled “prepaid expenses and other assets, net”, respectively, on our consolidated balance sheets. (3) Included in the line entitled “interest and other income, net” on our consolidated statements of operations. 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 September 30, 2023 (in thousands): Origination Year 2018 and Earlier 2019 2020 2021 2022 2023 Total Investing receivables: Credit risk classification: Investment grade $ 64,171 $ — $ 2,028 $ 8,141 $ — $ 7 $ 74,347 Non-investment grade — — — — 16,811 — 16,811 Total $ 64,171 $ — $ 2,028 $ 8,141 $ 16,811 $ 7 $ 91,158 Tenant notes receivable: Credit risk classification: Investment grade $ 717 $ 21 $ 136 $ — $ — $ — $ 874 Non-investment grade 144 57 1,466 — — — 1,667 Total $ 861 $ 78 $ 1,602 $ — $ — $ — $ 2,541 Gross write-offs during the nine months ended September 30, 2023 $ 33 $ — $ — $ — $ — $ — $ 33 Sales-type lease receivables: Credit risk classification: Investment grade $ — $ — $ 5,244 $ — $ — $ — $ 5,244 Our investment grade credit risk classification represents entities with investment grade credit ratings from ratings agencies (such as S&P Global Ratings, Moody’s Investors Service, Inc. or Fitch Ratings, Inc.), 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 September 2023. 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 September 30, 2023 and December 31, 2022 were not significant. We did not recognize any interest income on notes receivable on nonaccrual status during the nine months ended September 30, 2023 and 2022. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Restricted Shares The following table summarizes restricted share activity under our share-based compensation plans for the nine months ended September 30, 2023: Number of Shares Weighted Average Grant Date Fair Value Unvested as of December 31, 2022 325,083 $ 26.27 Granted 205,836 $ 25.37 Forfeited (34,593) $ 26.03 Vested (146,611) $ 26.07 Unvested as of September 30, 2023 349,715 $ 25.85 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. The aggregate intrinsic value of restricted shares that vested was $3.7 million for the nine months ended September 30, 2023. Profit Interest Units in CDPLP (“PIUs”) We granted two 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 The following table summarizes TB-PIUs activity under our share-based compensation plans for the nine months ended September 30, 2023: Number of TB-PIUs Weighted Average Grant Date Fair Value Unvested as of December 31, 2022 187,330 $ 26.19 Granted 100,426 $ 25.37 Forfeited (27,182) $ 26.46 Vested (89,633) $ 25.95 Unvested as of September 30, 2023 170,941 $ 25.79 TB-PIUs granted to senior management team members 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. TB-PIUs granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in his or her position. The aggregate intrinsic value of TB-PIUs that vested was $2.3 million for the nine months ended September 30, 2023. PB-PIUs On January 1, 2023, we granted certain senior management team members 275,402 PB-PIUs with a three-year performance period concluding on the earlier of December 31, 2025 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 CDP’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 two 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 CDP’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 $4.3 million ($31.54 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 $25.94; expected volatility for common shares of 35.0%; and a risk-free interest rate of 4.28%. During the nine months ended September 30, 2023, 126,890 PB-PIUs were forfeited; these PB-PIUs had a weighted average grant date fair value per target-level award of $31.49. Based on CDP’s TSR relative to its peer group of companies, for the 2020 PB-PIUs issued to executives that vested on December 31, 2022, we issued 141,152 PIUs in settlement of the PB-PIUs on February 1, 2023. Deferred Share Awards During the nine months ended September 30, 2023, non-employee Trustees were granted 9,046 deferred share awards with an aggregate grant date fair value of $215,000 ($23.75 per share). Deferred share awards vest on the first anniversary of the grant date, provided that the Trustee remains in his or her position. We settle deferred share awards by issuing an equivalent number of common shares upon vesting of the awards or a later date elected by the Trustee (generally upon cessation of being a Trustee). |
Earnings Per Share ("EPS")
Earnings Per Share ("EPS") | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (“EPS”) | Earnings Per Share (“EPS”) We present both basic and diluted EPS. We compute basic EPS by dividing net (loss) 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 September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: (Loss) income from continuing operations $ (221,207) $ 32,316 $ (109,167) $ 97,162 Loss (income) from continuing operations attributable to noncontrolling interests 5,020 (1,395) 2,046 (3,764) Income from continuing operations attributable to share-based compensation awards for basic EPS (992) (91) (1,093) (295) Numerator for basic EPS from continuing operations attributable to common shareholders (217,179) 30,830 (108,214) 93,103 Redeemable noncontrolling interests — (40) — (109) Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS — 16 — 51 Numerator for diluted EPS from continuing operations attributable to common shareholders (217,179) 30,806 (108,214) 93,045 Discontinued operations — — — 29,573 Discontinued operations attributable to noncontrolling interests — — — (421) Income from discontinued operations attributable to share-based compensation awards for diluted EPS — — — (90) Numerator for diluted EPS on net (loss) income attributable to common shareholders $ (217,179) $ 30,806 $ (108,214) $ 122,107 Denominator (all weighted averages): Denominator for basic EPS (common shares) 112,196 112,093 112,170 112,066 Dilutive effect of redeemable noncontrolling interests — 105 — 121 Dilutive effect of share-based compensation awards — 433 — 429 Denominator for diluted EPS (common shares) 112,196 112,631 112,170 112,616 Basic EPS attributable to common shareholders: (Loss) income from continuing operations $ (1.94) $ 0.28 $ (0.96) $ 0.83 Discontinued operations — — — 0.26 Net (loss) income $ (1.94) $ 0.28 $ (0.96) $ 1.09 Diluted EPS attributable to common shareholders: (Loss) income from continuing operations $ (1.94) $ 0.27 $ (0.96) $ 0.83 Discontinued operations — — — 0.25 Net (loss) income $ (1.94) $ 0.27 $ (0.96) $ 1.08 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 September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Conversion of common units 1,520 1,477 1,508 1,446 Conversion of redeemable noncontrolling interests 882 895 980 855 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 September 30, 2023 and 2022 of 423,000 and 399,000, respectively, and for the nine months ended September 30, 2023 and 2022 of 411,000 and 401,000, respectively; • weighted average TB-PIUs for the three months ended September 30, 2023 and 2022 of 171,000 and 192,000, respectively, and for the nine months ended September 30, 2023 and 2022 of 174,000 and 185,000, respectively; • weighted average vested PIUs for the three and nine months ended September 30, 2023 of 170,000 and 148,000, respectively; and • weighted average PB-PIUs for the three and nine months ended September 30, 2023 of 608,000 and 636,000, respectively. As discussed in Note 8, our 5.25% Notes issued on September 12, 2023 have an exchange settlement feature under which the principal amount of notes exchanged is payable in cash, with the remainder of the exchange obligation, if any, as determined based on the exchange price per common share at the time of settlement, payable in cash, common shares or a combination thereof at our election. These notes did not affect our diluted EPS reported above since the weighted average closing price of our common shares for the three and nine months ended September 30, 2023 was less than the exchange price applicable to such periods. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 September 30, 2023, management believes that it is reasonably possible that we could recognize a loss of up to $4.3 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 operations. 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 three 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 most 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 $27 million as of September 30, 2023. 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 September 30, 2023, we do not expect any such future fundings will be required. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements include the accounts of CDP, the Operating Partnership, their subsidiaries and other entities in which CDP 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, 2022 included in our 2022 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 |
Reclassifications | Reclassifications We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities measured on recurring basis | The table below sets forth our financial assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2023 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Assets: (1) Marketable securities in deferred compensation plan $ 1,748 $ — $ — $ 1,748 Interest rate derivatives — 6,736 — 6,736 Total assets $ 1,748 $ 6,736 $ — $ 8,484 Liabilities: (2) Deferred compensation plan liability $ — $ 1,748 $ — $ 1,748 (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. |
Schedule of quantitative information about significant unobservable inputs | The table below sets forth quantitative information about significant unobservable inputs used for the Level 3 fair value measurements reported above as of September 30, 2023 (dollars in thousands): Valuation Technique Fair Values on Measurement Date Unobservable Input Range (Weighted Average (1)) Discounted cash flow (2) $ 257,800 Terminal capitalization rate 6.5% - 9.5% (8.0%) Discount rate 7.5% - 10.5% (9.0%) Comparable sales price (3) $ 53,500 Comparable sales price N/A (1) Weighted average calculation based on relative fair value. (2) This technique was used for the operating properties in Baltimore, Maryland and Washington, D.C. For the properties in Baltimore, Maryland, the terminal capitalization rate was 9.5% and the discount rate was 10.5%. For the property in Washington, D.C., the terminal capitalization rate was 6.5% and the discount rate was 7.5%. (3) This technique was used for the operating properties in Northern Virginia and a parcel of land in Baltimore, Maryland. |
Properties, Net (Tables)
Properties, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of operating properties, net | Operating properties, net consisted of the following (in thousands): September 30, December 31, Land $ 476,818 $ 539,809 Buildings and improvements 4,039,089 3,986,524 Less: Accumulated depreciation (1,367,473) (1,267,434) Operating properties, net $ 3,148,434 $ 3,258,899 |
Schedule of assets held for sale | The table below sets forth the components of the properties’ assets, which were classified as held for sale on our consolidated balance sheet as of December 31, 2022 (in thousands): Properties, net $ 156,691 Deferred rent receivable 4,595 Assets held for sale, net $ 161,286 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of lease revenue recognized between fixed and variable lease revenue | The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue (1) 2023 2022 2023 2022 Fixed $ 120,408 $ 113,700 $ 354,908 $ 337,558 Variable 34,860 32,781 104,602 92,589 $ 155,268 $ 146,481 $ 459,510 $ 430,147 (1) Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable for the nine months ended September 30, 2022. |
Schedule of property right-of-use assets and lease liabilities | Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location September 30, December 31, Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 40,487 $ 37,020 Finance leases - Property Prepaid expenses and other assets, net 2,584 2,207 Total right-of-use assets $ 43,071 $ 39,227 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 32,940 $ 28,759 Finance leases - Property Other liabilities 420 — Total lease liabilities $ 33,360 $ 28,759 |
Schedule of property lease costs and effect of property lease payments on consolidated statements of cash flows | The table below presents our total property lease costs (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2023 2022 2023 2022 Operating lease cost Property leases - fixed Property operating expenses $ 1,808 $ 1,031 $ 5,146 $ 3,082 Property leases - variable Property operating expenses 17 16 50 49 Finance lease cost Amortization of property right-of-use assets Property operating expenses 18 7 57 23 Interest on lease liabilities Interest expense 10 — 33 — $ 1,853 $ 1,054 $ 5,286 $ 3,154 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 4,432 $ 2,515 Operating cash flows for financing leases $ 33 $ — Financing cash flows for financing leases $ 14 $ — |
Schedule of payment due on property leases | Payments on property leases were due as follows (in thousands): September 30, 2023 Year Ending December 31, Operating Leases Finance Leases 2023 (1) $ 1,624 $ 15 2024 6,633 61 2025 2,250 63 2026 1,662 65 2027 1,677 66 Thereafter 130,495 366 Total lease payments 144,341 636 Less: Amount representing interest (111,401) (216) Lease liability $ 32,940 $ 420 (1) Represents the three months ending December 31, 2023. |
Real Estate Joint Ventures (Tab
Real Estate Joint Ventures (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of information related to investments in consolidated real estate joint ventures | The table below sets forth information as of September 30, 2023 pertaining to our investments in consolidated real estate joint ventures, which are each variable interest entities (dollars in thousands): Nominal Ownership % September 30, 2023 Date Acquired Total Encumbered Assets Total Liabilities Mortgage Debt Entity Location LW Redstone Company, LLC (1) 3/23/2010 85% Huntsville, Alabama $ 697,483 $ 100,176 $ 109,271 $ 50,939 Stevens Investors, LLC 8/11/2015 95% Washington, DC 126,846 — 1,112 — M Square Associates, LLC 6/26/2007 50% College Park, Maryland 99,395 57,579 49,882 48,931 $ 923,724 $ 157,755 $ 160,265 $ 99,870 (1) We fund all capital requirements. Our partner receives distributions of $1.2 million of annual operating cash flows and we receive the remainder. |
Schedule of information related to investments in 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): Date Acquired Nominal Ownership % Number of Properties Carrying Value of Investment (1) Entity September 30, December 31, Redshift JV LLC 1/10/2023 10% 3 $ 21,083 $ — BREIT COPT DC JV LLC 6/20/2019 10% 9 10,870 11,568 Quark JV LLC 12/14/2022 10% 2 6,730 6,758 B RE COPT DC JV III LLC 6/2/2021 10% 2 2,812 3,134 B RE COPT DC JV II LLC (2) 10/30/2020 10% 8 (2,327) (1,459) 24 $ 39,168 $ 20,001 (1) Included $41.5 million and $21.5 million reported in “Investment in unconsolidated real estate joint ventures” as of September 30, 2023 and December 31, 2022, respectively, and $2.3 million and $1.5 million for investments with deficit balances reported in “other liabilities” on our consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. |
Investing Receivables (Tables)
Investing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of investing receivables | Investing receivables consisted of the following (in thousands): September 30, December 31, Notes receivable from the City of Huntsville $ 74,347 $ 69,703 Other investing loans receivable 16,811 17,712 Amortized cost basis 91,158 87,415 Allowance for credit losses (3,623) (2,794) Investing receivables, net $ 87,535 $ 84,621 |
Debt, Net (Tables)
Debt, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of September 30, 2023 September 30, December 31, 2022 Stated Interest Rates Scheduled Maturity Mortgage and Other Secured Debt: Fixed rate mortgage debt $ 66,870 $ 84,433 3.82% to 4.62% (2) 2024-2026 Variable rate secured debt 33,000 33,318 SOFR + 0.10% + 1.45% to 1.55% (3) 2025-2026 Total mortgage and other secured debt 99,870 117,751 Revolving Credit Facility 75,000 211,000 SOFR + 0.10% + 0.725% to 1.400% (4) October 2026 (5) Term Loan Facility 124,205 123,948 SOFR + 0.10% + 0.850% to 1.700% (6) January 2026 (7) Unsecured Senior Notes 2.25%, $400,000 aggregate principal 397,339 396,539 2.25% (8) March 2026 5.25%, $345,000 aggregate principal 335,450 — 5.25% (9) September 2028 2.00%, $400,000 aggregate principal 397,350 396,988 2.00% (10) January 2029 2.75%, $600,000 aggregate principal 590,937 590,123 2.75% (11) April 2031 2.90%, $400,000 aggregate principal 395,160 394,848 2.90% (12) December 2033 Unsecured note payable 472 597 0% (13) May 2026 Total debt, net $ 2,415,783 $ 2,231,794 (1) The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $5.6 million as of September 30, 2023 and $5.4 million as of December 31, 2022. (2) The weighted average interest rate on our fixed rate mortgage debt was 4.10% as of September 30, 2023. (3) Including the effect of interest rate swaps that hedge the risk of interest rate changes, the weighted average interest rate on our variable rate secured debt as of September 30, 2023 was 2.45%; excluding the effect of these swaps, the weighted average interest rate on this debt as of September 30, 2023 was 6.92%. (4) The weighted average interest rate on the Revolving Credit Facility was 6.48% as of September 30, 2023, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9). (5) The facility matures in October 2026, with the ability for us to extend such maturity by two six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.0625% of the total availability under the facility for each extension period. (6) The interest rate on this loan was 6.73% as of September 30, 2023, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9). (7) This facility matures in January 2026, with the ability for us to extend such maturity by two 12-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.125% of the outstanding loan balance for each extension period. (8) The carrying value of these notes reflects unamortized discounts and commissions totaling $2.2 million as of September 30, 2023 and $2.8 million as of December 31, 2022. The effective interest rate under the notes, including amortization of the such costs, was 2.48%. (9) The carrying value of these notes reflects unamortized commissions totaling $8.5 million as of September 30, 2023. The effective interest rate under the notes, including amortization of such costs, was 5.83%. Refer to the paragraphs below for further disclosure. (10) The carrying value of these notes reflects unamortized discounts and commissions totaling $1.9 million as of September 30, 2023 and $2.1 million as of December 31, 2022. The effective interest rate under the notes, including amortization of such costs, was 2.09%. (11) The carrying value of these notes reflects unamortized discounts and commissions totaling $7.9 million as of September 30, 2023 and $8.5 million as of December 31, 2022. The effective interest rate under the notes, including amortization of such costs, was 2.94%. (12) The carrying value of these notes reflects unamortized discounts and commissions totaling $4.0 million as of September 30, 2023 and $4.2 million as of December 31, 2022. The effective interest rate under the notes, including amortization of such costs, was 3.01%. (13) 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 $39,000 as of September 30, 2023 and $65,000 as of December 31, 2022. |
Schedule of interest expense recognized | The table below sets forth interest expense recognized on these notes for the three and nine months ended September 30, 2023 (in thousands): Interest expense at stated interest rate $ 956 Interest expense associated with amortization of debt discount and issuance costs 124 Total $ 1,080 |
Schedule of debt maturities | Our debt matures on the following schedule (in thousands): Year Ending December 31, September 30, 2023 2023 (1) $ 763 2024 29,983 2025 23,717 2026 646,300 2027 — Thereafter 1,745,000 Total $ 2,445,763 (2) (1) Represents the three months ending December 31, 2023. (2) Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $30.0 million. |
Schedule of fair value of debt | The following table sets forth information pertaining to the fair value of our debt (in thousands): September 30, 2023 December 31, 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Fixed-rate debt Unsecured Senior Notes $ 2,116,236 $ 1,777,178 $ 1,778,498 $ 1,433,561 Other fixed-rate debt 67,342 62,661 85,030 80,330 Variable-rate debt 232,205 232,385 368,266 367,896 $ 2,415,783 $ 2,072,224 $ 2,231,794 $ 1,881,787 |
Interest Rate Derivatives (Tabl
Interest Rate Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of key terms and fair values of interest rate swap derivatives | The following table sets forth the key terms and fair values of our interest rate swap derivatives (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date September 30, December 31, $ 10,700 (1) 1.678% SOFR + 0.10% 8/1/2019 8/1/2026 $ 833 $ 806 $ 22,550 (2) 0.573% SOFR + 0.10% 4/1/2020 3/26/2025 1,490 1,825 $ 150,000 3.742% One-Month SOFR 2/1/2023 2/2/2026 3,313 — $ 50,000 3.747% One-Month SOFR 2/1/2023 2/2/2026 1,100 — $ 6,736 $ 2,631 (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. |
Schedule of fair value and balance sheet classification of interest rate derivatives | 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): Fair Value at Derivatives Balance Sheet Location September 30, December 31, Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets, net $ 6,736 $ 2,631 |
Schedule of effect of interest rate derivatives on consolidated statements of operations and comprehensive income | The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): Amount of Income Amount of Income (Loss) Reclassified from AOCI into Interest Expense on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 2023 2022 2023 2022 Interest rate derivatives $ 2,042 $ 1,101 $ 6,816 $ 4,646 $ 1,146 $ 77 $ 2,711 $ (1,680) |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of activity for redeemable noncontrolling interest | The table below sets forth the activity for redeemable noncontrolling interests (in thousands): For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 26,293 $ 26,898 Distributions to noncontrolling interests (1,971) (2,209) Net income attributable to noncontrolling interests 1,856 2,100 Adjustments for changes in fair value of interests (1,686) (1,342) Reclassification of Stevens Investors, LLC interests to equity (2,670) — Ending balance $ 21,822 $ 25,447 |
Information by Business Segme_2
Information by Business Segment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment financial information for reportable segments | The table below reports segment financial information for our reportable segments (in thousands): Defense/IT Portfolio Fort Meade/BW Corridor NoVA Defense/IT Lackland Air Force Base Navy Support Redstone Arsenal Data Center Shells Total Defense/IT Portfolio Wholesale Other Total Three Months Ended September 30, 2023 Revenues from real estate operations $ 73,350 $ 20,333 $ 16,193 $ 8,190 $ 13,768 $ 6,811 $ 138,645 $ — $ 17,962 $ 156,607 Property operating expenses (25,216) (7,900) (8,567) (3,933) (4,948) (678) (51,242) — (10,546) (61,788) UJV NOI allocable to CDP — — — — — 1,675 1,675 — — 1,675 NOI from real estate operations $ 48,134 $ 12,433 $ 7,626 $ 4,257 $ 8,820 $ 7,808 $ 89,078 $ — $ 7,416 $ 96,494 Additions to long-lived assets $ 7,057 $ 4,639 $ — $ 1,201 $ 8,566 $ — $ 21,463 $ — $ 4,567 $ 26,030 Transfers from non-operating properties $ 983 $ 95 $ 51 $ 1 $ 63,025 $ 58,405 $ 122,560 $ — $ 102 $ 122,662 Three Months Ended September 30, 2022 Revenues from real estate operations $ 69,209 $ 18,611 $ 15,951 $ 8,253 $ 9,976 $ 9,069 $ 131,069 $ — $ 16,618 $ 147,687 Property operating expenses (24,450) (6,776) (8,281) (3,665) (4,324) (1,116) (48,612) — (9,051) (57,663) UJV NOI allocable to CDP — — — — — 1,072 1,072 — — 1,072 NOI from real estate operations $ 44,759 $ 11,835 $ 7,670 $ 4,588 $ 5,652 $ 9,025 $ 83,529 $ — $ 7,567 $ 91,096 Additions to long-lived assets $ 9,076 $ 1,454 $ — $ 734 $ 1,573 $ — $ 12,837 $ — $ 6,865 $ 19,702 Transfers from non-operating properties $ 1,039 $ 345 $ 129 $ 27 $ 267 $ 2,986 $ 4,793 $ — $ 348 $ 5,141 Nine Months Ended September 30, 2023 Revenues from real estate operations $ 215,303 $ 60,003 $ 49,393 $ 24,233 $ 40,160 $ 19,790 $ 408,882 $ — $ 54,359 $ 463,241 Property operating expenses (73,924) (23,155) (26,463) (10,992) (14,334) (2,015) (150,883) — (31,925) (182,808) UJV NOI allocable to CDP — — — — — 4,988 4,988 — — 4,988 NOI from real estate operations $ 141,379 $ 36,848 $ 22,930 $ 13,241 $ 25,826 $ 22,763 $ 262,987 $ — $ 22,434 $ 285,421 Additions to long-lived assets $ 42,838 $ 14,994 $ 62 $ 2,269 $ 17,339 $ — $ 77,502 $ — $ 12,572 $ 90,074 Transfers from non-operating properties $ 11,392 $ 582 $ 96 $ 2,651 $ 81,352 $ 63,653 $ 159,726 $ — $ 129 $ 159,855 Segment assets at September 30, 2023 $ 1,397,107 $ 486,561 $ 190,344 $ 163,630 $ 548,201 $ 382,693 $ 3,168,536 $ — $ 310,828 $ 3,479,364 Nine Months Ended September 30, 2022 Revenues from real estate operations $ 204,012 $ 55,290 $ 45,793 $ 24,507 $ 28,479 $ 25,714 $ 383,795 $ 1,980 $ 49,418 $ 435,193 Property operating expenses (73,733) (19,802) (22,873) (10,466) (11,690) (3,315) (141,879) (975) (27,077) (169,931) UJV NOI allocable to CDP — — — — — 3,232 3,232 — — 3,232 NOI from real estate operations $ 130,279 $ 35,488 $ 22,920 $ 14,041 $ 16,789 $ 25,631 $ 245,148 $ 1,005 $ 22,341 $ 268,494 Additions to long-lived assets $ 33,202 $ 6,184 $ — $ 2,124 $ 2,032 $ — $ 43,542 $ (35) $ 14,825 $ 58,332 Transfers from non-operating properties $ 7,176 $ 1,582 $ 1,068 $ 6,325 $ 20,380 $ 89,862 $ 126,393 $ — $ 649 $ 127,042 Segment assets at September 30, 2022 $ 1,325,703 $ 487,032 $ 195,612 $ 170,574 $ 314,156 $ 436,908 $ 2,929,985 $ — $ 538,633 $ 3,468,618 |
Schedule of reconciliation of segment revenues to total revenues | The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Segment revenues from real estate operations $ 156,607 $ 147,687 $ 463,241 $ 435,193 Construction contract and other service revenues 11,949 34,813 42,012 130,570 Less: Revenues from discontinued operations — — — (1,980) Total revenues $ 168,556 $ 182,500 $ 505,253 $ 563,783 |
Schedule of reconciliation of segment property operating expenses to property operating expenses | 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 September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Segment property operating expenses $ 61,788 $ 57,663 $ 182,808 $ 169,931 Less: Property operating expenses from discontinued operations — — — (971) Total property operating expenses $ 61,788 $ 57,663 $ 182,808 $ 168,960 |
Schedule of reconciliation of UJV NOI allocable to CDP to equity in income of unconsolidated entities | The following table reconciles UJV NOI allocable to CDP to equity in (loss) income of unconsolidated entities as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 UJV NOI allocable to CDP $ 1,675 $ 1,072 $ 4,988 $ 3,232 Less: Income from UJV allocable to CDP attributable to depreciation and amortization expense and interest expense (1,743) (762) (5,006) (2,280) Add: Equity in (loss) income of unconsolidated non-real estate entities — (2) (3) 562 Equity in (loss) income of unconsolidated entities $ (68) $ 308 $ (21) $ 1,514 |
Schedule of computation of net operating income from service operations | The table below sets forth the computation of our NOI from service operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Construction contract and other service revenues $ 11,949 $ 34,813 $ 42,012 $ 130,570 Construction contract and other service expenses (11,493) (33,555) (40,249) (126,509) NOI from service operations $ 456 $ 1,258 $ 1,763 $ 4,061 |
Schedule of reconciliation of net operating income from real estate operations for reportable segments and service operations to (loss) income from continuing operations | The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to (loss) income from continuing operations as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 NOI from real estate operations $ 96,494 $ 91,096 $ 285,421 $ 268,494 NOI from service operations 456 1,258 1,763 4,061 Depreciation and other amortization associated with real estate operations (37,620) (35,247) (112,215) (104,323) Impairment losses (252,797) — (252,797) — General, administrative, leasing and other expenses (10,576) (9,450) (31,424) (27,833) Interest expense (17,798) (15,123) (50,759) (44,355) Interest and other income, net 2,529 597 6,928 4,399 Gain on sales of real estate — 16 49,392 12 Loss on early extinguishment of debt — — — (342) Equity in (loss) income of unconsolidated entities (68) 308 (21) 1,514 UJV NOI allocable to CDP included in equity in (loss) income of unconsolidated entities (1,675) (1,072) (4,988) (3,232) Income tax expense (152) (67) (467) (224) Revenues from real estate operations from discontinued operations — — — (1,980) Property operating expenses from discontinued operations — — — 971 (Loss) income from continuing operations $ (221,207) $ 32,316 $ (109,167) $ 97,162 |
Schedule of reconciliation of segment assets to total assets | The following table reconciles our segment assets to our consolidated total assets (in thousands): September 30, September 30, Segment assets $ 3,479,364 $ 3,468,618 Operating properties lease liabilities included in segment assets 33,360 29,088 Non-operating property assets 324,168 531,838 Other assets 402,365 239,785 Total consolidated assets $ 4,239,257 $ 4,269,329 |
Construction Contract and Oth_2
Construction Contract and Other Service Revenues (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of construction contract and other service revenues by compensation arrangement | We disaggregate in the table below our construction contract and other service revenues by compensation arrangement as we believe it best depicts the nature, timing and uncertainty of our revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Construction contract revenue: Firm fixed price $ 6,616 $ 3,121 $ 21,898 $ 9,822 Guaranteed maximum price 2,817 27,928 11,561 112,354 Cost-plus fee 2,205 3,196 7,472 6,757 Other 311 568 1,081 1,637 $ 11,949 $ 34,813 $ 42,012 $ 130,570 |
Schedule of accounts receivable, contract assets and contract liabilities | The beginning and ending balances of accounts receivable related to our construction contracts were as follows (in thousands): For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 7,618 $ 7,193 Ending balance $ 5,367 $ 6,283 For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 22,331 $ 22,384 Ending balance $ 8,356 $ 26,562 For the Nine Months Ended September 30, 2023 2022 Beginning balance $ 2,867 $ 2,499 Ending balance $ 3,938 $ 5,846 Portion of beginning balance recognized in revenue during: Three months ended September 30, $ 64 $ 14 Nine months ended September 30, $ 164 $ 204 |
Credit Losses on Financial As_2
Credit Losses on Financial Assets and Other Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Schedule of allowance for credit loss | The table below sets forth the activity for our allowance for credit losses for the nine months ended September 30, 2023 and 2022 (in thousands): Investing Receivables Tenant Notes Other Assets (2) Total December 31, 2022 $ 2,794 $ 778 $ 268 $ 3,840 Credit loss expense (recoveries) (3) 829 (64) (88) 677 Write-offs — (33) — (33) September 30, 2023 $ 3,623 $ 681 $ 180 $ 4,484 December 31, 2021 $ 1,599 $ 1,057 $ 913 $ 3,569 Credit loss expense (recoveries) (3) 2,129 (112) (415) 1,602 September 30, 2022 $ 3,728 $ 945 $ 498 $ 5,171 (1) Included in the line entitled “accounts receivable, net” on our consolidated balance sheets. (2) The balance as of September 30, 2023 and December 31, 2022 included $109,000 and $52,000 in the line entitled “accounts receivable, net” and $71,000 and $216,000 in the line entitled “prepaid expenses and other assets, net”, respectively, on our consolidated balance sheets. |
Schedule of credit risk classification | 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 September 30, 2023 (in thousands): Origination Year 2018 and Earlier 2019 2020 2021 2022 2023 Total Investing receivables: Credit risk classification: Investment grade $ 64,171 $ — $ 2,028 $ 8,141 $ — $ 7 $ 74,347 Non-investment grade — — — — 16,811 — 16,811 Total $ 64,171 $ — $ 2,028 $ 8,141 $ 16,811 $ 7 $ 91,158 Tenant notes receivable: Credit risk classification: Investment grade $ 717 $ 21 $ 136 $ — $ — $ — $ 874 Non-investment grade 144 57 1,466 — — — 1,667 Total $ 861 $ 78 $ 1,602 $ — $ — $ — $ 2,541 Gross write-offs during the nine months ended September 30, 2023 $ 33 $ — $ — $ — $ — $ — $ 33 Sales-type lease receivables: Credit risk classification: Investment grade $ — $ — $ 5,244 $ — $ — $ — $ 5,244 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of restricted share and TB-PIU transactions under the entity's share-based compensation plans | The following table summarizes restricted share activity under our share-based compensation plans for the nine months ended September 30, 2023: Number of Shares Weighted Average Grant Date Fair Value Unvested as of December 31, 2022 325,083 $ 26.27 Granted 205,836 $ 25.37 Forfeited (34,593) $ 26.03 Vested (146,611) $ 26.07 Unvested as of September 30, 2023 349,715 $ 25.85 The following table summarizes TB-PIUs activity under our share-based compensation plans for the nine months ended September 30, 2023: Number of TB-PIUs Weighted Average Grant Date Fair Value Unvested as of December 31, 2022 187,330 $ 26.19 Granted 100,426 $ 25.37 Forfeited (27,182) $ 26.46 Vested (89,633) $ 25.95 Unvested as of September 30, 2023 170,941 $ 25.79 |
Schedule of payouts for defined performance under PB-PIUs | The number of earned awards at the end of the performance period will be determined based on the percentile rank of CDP’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 |
Earnings Per Share ("EPS") (Tab
Earnings Per Share ("EPS") (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of numerator and denominator in basic and diluted earnings per share | 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 September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: (Loss) income from continuing operations $ (221,207) $ 32,316 $ (109,167) $ 97,162 Loss (income) from continuing operations attributable to noncontrolling interests 5,020 (1,395) 2,046 (3,764) Income from continuing operations attributable to share-based compensation awards for basic EPS (992) (91) (1,093) (295) Numerator for basic EPS from continuing operations attributable to common shareholders (217,179) 30,830 (108,214) 93,103 Redeemable noncontrolling interests — (40) — (109) Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS — 16 — 51 Numerator for diluted EPS from continuing operations attributable to common shareholders (217,179) 30,806 (108,214) 93,045 Discontinued operations — — — 29,573 Discontinued operations attributable to noncontrolling interests — — — (421) Income from discontinued operations attributable to share-based compensation awards for diluted EPS — — — (90) Numerator for diluted EPS on net (loss) income attributable to common shareholders $ (217,179) $ 30,806 $ (108,214) $ 122,107 Denominator (all weighted averages): Denominator for basic EPS (common shares) 112,196 112,093 112,170 112,066 Dilutive effect of redeemable noncontrolling interests — 105 — 121 Dilutive effect of share-based compensation awards — 433 — 429 Denominator for diluted EPS (common shares) 112,196 112,631 112,170 112,616 Basic EPS attributable to common shareholders: (Loss) income from continuing operations $ (1.94) $ 0.28 $ (0.96) $ 0.83 Discontinued operations — — — 0.26 Net (loss) income $ (1.94) $ 0.28 $ (0.96) $ 1.09 Diluted EPS attributable to common shareholders: (Loss) income from continuing operations $ (1.94) $ 0.27 $ (0.96) $ 0.83 Discontinued operations — — — 0.25 Net (loss) income $ (1.94) $ 0.27 $ (0.96) $ 1.08 |
Schedule of securities excluded from computation of diluted earnings per share | 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 September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Conversion of common units 1,520 1,477 1,508 1,446 Conversion of redeemable noncontrolling interests 882 895 980 855 |
Organization (Details)
Organization (Details) - 9 months ended Sep. 30, 2023 ft² in Thousands | property | ft² | a | shares |
COPT Defense Properties, L.P. | Preferred Units | ||||
Investments in real estate | ||||
Limited partners' capital account, units outstanding (in units) | shares | 0 | |||
CDP | COPT Defense Properties, L.P. | Common Units | ||||
Investments in real estate | ||||
Percentage ownership in operating partnership | 97.90% | |||
Unconsolidated Real Estate Joint Ventures | ||||
Investments in real estate | ||||
Number of real estate properties | 24 | |||
Operating Properties | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Number of real estate properties | 188 | |||
Area of real estate property (in sqft or acres) | ft² | 21,300 | |||
Operating Properties | Greater Washington, DC/Baltimore | Other | ||||
Investments in real estate | ||||
Number of real estate properties | 8 | |||
Area of real estate property (in sqft or acres) | ft² | 2,100 | |||
Operating Properties | Office Properties | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Number of real estate properties | 159 | |||
Area of real estate property (in sqft or acres) | ft² | 15,800 | |||
Operating Properties | Single-tenant data centers | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Number of real estate properties | 29 | |||
Area of real estate property (in sqft or acres) | ft² | 5,500 | |||
Operating Properties | Single-tenant data centers | Unconsolidated Real Estate Joint Ventures | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Number of real estate properties | 24 | |||
Properties under development | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Number of real estate properties | 6 | |||
Area of real estate property (in sqft or acres) | ft² | 971 | |||
Properties under development | Office Properties | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Number of real estate properties | 3 | |||
Properties under development | Single-tenant data centers | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Number of real estate properties | 3 | |||
Land controlled for development | Defense/IT Portfolio | ||||
Investments in real estate | ||||
Area of real estate property (in sqft or acres) | 8,100 | 670 | ||
Land controlled for development | Greater Washington, DC/Baltimore | Other | ||||
Investments in real estate | ||||
Area of real estate property (in sqft or acres) | a | 50 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) land_parcel property | Dec. 31, 2019 | |
Assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||
Number of impaired parcels of land | land_parcel | 1 | |
Other segment | ||
Assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||
Number of impaired operating real estate properties | property | 6 | |
Impairment losses | $ 252,800 | |
Real estate, fair value disclosure | 311,300 | |
Fair value measurement on a recurring basis | ||
Assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||
Marketable securities in deferred compensation plan | 1,748 | |
Fair value measurement on a recurring basis | Deferred compensation plan | Trustees and Management | ||
Assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||
Maximum percentage of participants' compensation which is deferrable | 100% | |
Marketable securities in deferred compensation plan | $ 1,700 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities, Measured on Recurring Basis (Details) - Fair value measurement on a recurring basis $ in Thousands | Sep. 30, 2023 USD ($) |
Assets: | |
Marketable securities in deferred compensation plan | $ 1,748 |
Interest rate derivatives | 6,736 |
Total assets | 8,484 |
Liabilities: | |
Deferred compensation plan liability | 1,748 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Assets: | |
Marketable securities in deferred compensation plan | 1,748 |
Interest rate derivatives | 0 |
Total assets | 1,748 |
Liabilities: | |
Deferred compensation plan liability | 0 |
Significant Other Observable Inputs (Level 2) | |
Assets: | |
Marketable securities in deferred compensation plan | 0 |
Interest rate derivatives | 6,736 |
Total assets | 6,736 |
Liabilities: | |
Deferred compensation plan liability | 1,748 |
Significant Unobservable Inputs (Level 3) | |
Assets: | |
Marketable securities in deferred compensation plan | 0 |
Interest rate derivatives | 0 |
Total assets | 0 |
Liabilities: | |
Deferred compensation plan liability | $ 0 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information about Significant Unobservable Inputs (Details) - Significant Unobservable Inputs (Level 3) $ in Thousands | Sep. 30, 2023 USD ($) |
Discounted cash flow | Operating Properties | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate, fair value disclosure | $ 257,800 |
Comparable sales price | Operating Properties and Parcel Of Land | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate, fair value disclosure | $ 53,500 |
Terminal capitalization rate | Discounted cash flow | Operating Properties | Baltimore, Maryland | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.095 |
Terminal capitalization rate | Discounted cash flow | Operating Properties | Washington, DC | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.065 |
Discount rate | Discounted cash flow | Operating Properties | Baltimore, Maryland | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.105 |
Discount rate | Discounted cash flow | Operating Properties | Washington, DC | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.075 |
Minimum | Terminal capitalization rate | Discounted cash flow | Operating Properties | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.065 |
Minimum | Discount rate | Discounted cash flow | Operating Properties | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.075 |
Maximum | Terminal capitalization rate | Discounted cash flow | Operating Properties | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.095 |
Maximum | Discount rate | Discounted cash flow | Operating Properties | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.105 |
Weighted Average | Terminal capitalization rate | Discounted cash flow | Operating Properties | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.080 |
Weighted Average | Discount rate | Discounted cash flow | Operating Properties | |
Assets and liabilities measured at fair value on a nonrecurring basis | |
Real estate owned, measurement input | 0.090 |
Properties, Net - Operating Pro
Properties, Net - Operating Properties, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Properties, Net | ||
Operating properties, net | $ 3,148,434 | $ 3,258,899 |
Operating Properties | ||
Operating Properties, Net | ||
Less: Accumulated depreciation | (1,367,473) | (1,267,434) |
Operating properties, net | 3,148,434 | 3,258,899 |
Operating Properties | Land | ||
Operating Properties, Net | ||
Gross | 476,818 | 539,809 |
Operating Properties | Buildings and improvements | ||
Operating Properties, Net | ||
Gross | $ 4,039,089 | $ 3,986,524 |
Properties, Net - Narrative (De
Properties, Net - Narrative (Details) $ in Millions | 9 Months Ended | |
Jan. 10, 2023 USD ($) property | Sep. 30, 2023 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gain on disposal | Gain on sales of real estate | |
Redshift JV LLC | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Nominal Ownership % | 10% | 10% |
Data Center Shells in Northern Virginia | Disposed of by sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Ownership percentage sold | 90% | |
Number of properties sold | property | 3 | |
Transaction value | $ 211.3 | |
Proceeds from sale | $ 190.2 | |
Gain on sale of ownership interest | $ 49.4 |
Properties, Net - Schedule of A
Properties, Net - Schedule of Assets Held for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale, net | $ 0 | $ 161,286 |
Disposed of by sale | Data Center Shells | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Properties, net | 156,691 | |
Deferred rent receivable | 4,595 | |
Assets held for sale, net | $ 161,286 |
Leases - Lease Revenue (Details
Leases - Lease Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessor, Lease, Description [Line Items] | ||||
Lease revenue | $ 155,268 | $ 146,481 | $ 459,510 | $ 430,147 |
Continuing Operations | ||||
Lessor, Lease, Description [Line Items] | ||||
Fixed | 120,408 | 113,700 | 354,908 | 337,558 |
Variable | 34,860 | 32,781 | 104,602 | 92,589 |
Lease revenue | $ 155,268 | $ 146,481 | $ 459,510 | 430,147 |
Discontinued Operations | ||||
Lessor, Lease, Description [Line Items] | ||||
Fixed | 1,500 | |||
Variable | $ 527 |
Leases - Lessee Arrangements (D
Leases - Lessee Arrangements (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
Carrying value of lessee right-of-use asset | $ 43.1 |
Leases - Property Right-of-Use
Leases - Property Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating leases - Property | $ 40,487 | $ 37,020 |
Finance leases - Property | 2,584 | 2,207 |
Total right-of-use assets | 43,071 | 39,227 |
Operating leases - Property | 32,940 | 28,759 |
Finance leases - Property | 420 | 0 |
Total lease liabilities | $ 33,360 | $ 28,759 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other assets, net | Prepaid expenses and other assets, net |
Finance Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 30, 2023 |
Leases [Abstract] | |
Operating leases, weighted average remaining lease term | 48 years |
Operating lease, weighted average discount rate | 7.31% |
Finance leases, weighted average remaining lease term | 9 years |
Finance leases, weighted average discount rate | 9.14% |
Leases - Property Lease Costs (
Leases - Property Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||
Lease costs | $ 1,853 | $ 1,054 | $ 5,286 | $ 3,154 |
Property Operating Expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Property leases - fixed | 1,808 | 1,031 | 5,146 | 3,082 |
Property leases - variable | 17 | 16 | 50 | 49 |
Amortization of property right-of-use assets | 18 | 7 | 57 | 23 |
Interest expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Interest on lease liabilities | $ 10 | $ 0 | $ 33 | $ 0 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 4,432 | $ 2,515 |
Operating cash flows for financing leases | 33 | 0 |
Financing cash flows for financing leases | $ 14 | $ 0 |
Leases - Payment due on propert
Leases - Payment due on property leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2023 | $ 1,624 | |
2024 | 6,633 | |
2025 | 2,250 | |
2026 | 1,662 | |
2027 | 1,677 | |
Thereafter | 130,495 | |
Total lease payments | 144,341 | |
Less: Amount representing interest | (111,401) | |
Lease liability | 32,940 | $ 28,759 |
Finance Leases | ||
2023 | 15 | |
2024 | 61 | |
2025 | 63 | |
2026 | 65 | |
2027 | 66 | |
Thereafter | 366 | |
Total lease payments | 636 | |
Less: Amount representing interest | (216) | |
Lease liability | $ 420 | $ 0 |
Real Estate Joint Ventures - In
Real Estate Joint Ventures - Investments in Consolidated Real Estate Joint Ventures (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 4,239,257 | $ 4,257,275 | $ 4,269,329 |
Total Liabilities | 2,691,562 | $ 2,509,527 | |
LW Redstone Company LLC | |||
Investments in consolidated real estate joint ventures | |||
Preferred distributions of annual operating cash flows to partner | 1,200 | ||
Variable Interest Entity, Primary Beneficiary | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | 923,724 | ||
Total Liabilities | 160,265 | ||
Variable Interest Entity, Primary Beneficiary | Encumbered Assets | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | 157,755 | ||
Variable Interest Entity, Primary Beneficiary | Mortgage Debt | |||
Investments in consolidated real estate joint ventures | |||
Total Liabilities | $ 99,870 | ||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 85% | ||
Total Assets | $ 697,483 | ||
Total Liabilities | 109,271 | ||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company LLC | Encumbered Assets | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | 100,176 | ||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company LLC | Mortgage Debt | |||
Investments in consolidated real estate joint ventures | |||
Total Liabilities | $ 50,939 | ||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 95% | ||
Total Assets | $ 126,846 | ||
Total Liabilities | 1,112 | ||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | Encumbered Assets | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | 0 | ||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | Mortgage Debt | |||
Investments in consolidated real estate joint ventures | |||
Total Liabilities | $ 0 | ||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 50% | ||
Total Assets | $ 99,395 | ||
Total Liabilities | 49,882 | ||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | Encumbered Assets | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | 57,579 | ||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | Mortgage Debt | |||
Investments in consolidated real estate joint ventures | |||
Total Liabilities | $ 48,931 |
Real Estate Joint Ventures - _2
Real Estate Joint Ventures - Investments in Unconsolidated Real Estate Joint Ventures (Details) $ in Thousands | Sep. 30, 2023 USD ($) property | Jan. 10, 2023 | Dec. 31, 2022 USD ($) |
Schedule of Equity Method Investments [Line Items] | |||
Investment in unconsolidated real estate joint ventures | $ 41,495 | $ 21,460 | |
Other liabilities | $ (17,936) | (18,556) | |
Unconsolidated Real Estate Joint Ventures | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of Properties | property | 24 | ||
Carrying value of Investments | $ 39,168 | 20,001 | |
Other liabilities | $ (2,300) | (1,500) | |
Redshift JV LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10% | 10% | |
Number of Properties | property | 3 | ||
Carrying value of Investments | $ 21,083 | 0 | |
BREIT COPT DC JV LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10% | ||
Number of Properties | property | 9 | ||
Carrying value of Investments | $ 10,870 | 11,568 | |
Quark JV LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10% | ||
Number of Properties | property | 2 | ||
Carrying value of Investments | $ 6,730 | 6,758 | |
B RE COPT DC JV III LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10% | ||
Number of Properties | property | 2 | ||
Carrying value of Investments | $ 2,812 | 3,134 | |
B RE COPT DC JV II LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10% | ||
Number of Properties | property | 8 | ||
Carrying value of Investments | $ (2,327) | (1,459) | |
Difference between the joint venture's cost basis and the entity's share of underlying equity in the net assets | $ 6,900 | $ 7,000 |
Real Estate Joint Ventures - Na
Real Estate Joint Ventures - Narrative (Details) - property | Sep. 30, 2023 | Jan. 10, 2023 |
Redshift JV LLC | ||
Real Estate [Line Items] | ||
Nominal ownership percentage | 10% | 10% |
Disposed of by sale | Data Center Shells in Northern Virginia | ||
Real Estate [Line Items] | ||
Ownership percentage sold | 90% | |
Number of properties sold | 3 |
Investing Receivables - Investi
Investing Receivables - Investing Receivables (Details) - Investing Receivables - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amortized cost basis | $ 91,158 | $ 87,415 | ||
Allowance for credit losses | (3,623) | (2,794) | $ (3,728) | $ (1,599) |
Investing receivables, net | 87,535 | 84,621 | ||
Notes receivable from the City of Huntsville | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amortized cost basis | 74,347 | 69,703 | ||
Other investing loans receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amortized cost basis | $ 16,811 | $ 17,712 |
Investing Receivables - Narrati
Investing Receivables - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, fair value disclosure | $ 92 | $ 87 |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued interest receivable, net of allowance for credit losses | $ 4.2 | $ 2.9 |
Investing Receivables | Other investing loans receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate | 12% | |
Investing Receivables | LW Redstone Company LLC | Notes receivable from the City of Huntsville | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate | 9.95% |
Debt, Net - Schedule of Debt (D
Debt, Net - Schedule of Debt (Details) | 9 Months Ended | ||
Sep. 30, 2023 USD ($) extension | Sep. 12, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt | |||
Carrying Value | $ 2,415,783,000 | $ 2,231,794,000 | |
Mortgage and other secured debt | |||
Debt | |||
Carrying Value | 99,870,000 | 117,751,000 | |
Loans payable | |||
Debt | |||
Net deferred financing costs | $ 5,600,000 | 5,400,000 | |
Line of Credit | Revolving Credit Facility | |||
Debt | |||
Number of extensions | extension | 2 | ||
Extension option period | 6 months | ||
Line of credit facility, extension fee percentage | 0.0625% | ||
Fixed rate mortgage debt | Mortgage and other secured debt | |||
Debt | |||
Carrying Value | $ 66,870,000 | 84,433,000 | |
Weighted average interest rate | 4.10% | ||
Fixed rate mortgage debt | Mortgage and other secured debt | Minimum | |||
Debt | |||
Interest rate | 3.82% | ||
Fixed rate mortgage debt | Mortgage and other secured debt | Maximum | |||
Debt | |||
Interest rate | 4.62% | ||
Variable rate secured debt | Mortgage and other secured debt | |||
Debt | |||
Carrying Value | $ 33,000,000 | 33,318,000 | |
Variable rate secured debt | Mortgage and other secured debt | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, additional spread | 0.10% | ||
Weighted average interest rate | 6.92% | ||
Variable rate secured debt | Mortgage and other secured debt | Secured Overnight Financing Rate | Interest rate swaps | |||
Debt | |||
Weighted average interest rate | 2.45% | ||
Variable rate secured debt | Mortgage and other secured debt | Minimum | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, spread | 1.45% | ||
Variable rate secured debt | Mortgage and other secured debt | Maximum | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, spread | 1.55% | ||
Revolving Credit Facility | |||
Debt | |||
Carrying Value | $ 75,000,000 | 211,000,000 | |
Revolving Credit Facility | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, additional spread | 0.10% | ||
Weighted average interest rate | 6.48% | ||
Revolving Credit Facility | Minimum | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, spread | 0.725% | ||
Revolving Credit Facility | Maximum | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, spread | 1.40% | ||
Term Loan Facility | |||
Debt | |||
Carrying Value | $ 124,205,000 | 123,948,000 | |
Number of extensions | extension | 2 | ||
Extension option period | 12 months | ||
Line of credit facility, extension fee percentage | 0.125% | ||
Term Loan Facility | Secured Overnight Financing Rate | |||
Debt | |||
Interest rate | 6.73% | ||
Variable rate, additional spread | 0.10% | ||
Term Loan Facility | Minimum | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, spread | 0.85% | ||
Term Loan Facility | Maximum | Secured Overnight Financing Rate | |||
Debt | |||
Variable rate, spread | 1.70% | ||
2.25%, $400,000 aggregate principal | Unsecured Senior Notes | |||
Debt | |||
Interest rate | 2.25% | ||
Debt instrument, face amount | $ 400,000,000 | ||
Carrying Value | 397,339,000 | 396,539,000 | |
Unamortized discount included in carrying value | $ 2,200,000 | 2,800,000 | |
Effective interest rate on debt | 2.48% | ||
5.25%, $345,000 aggregate principal | Unsecured Senior Notes | |||
Debt | |||
Interest rate | 5.25% | 5.25% | |
Debt instrument, face amount | $ 345,000,000 | $ 345,000,000 | |
Carrying Value | 335,450,000 | 0 | |
Unamortized discount included in carrying value | $ 8,500,000 | ||
Effective interest rate on debt | 5.83% | ||
2.00%, $400,000 aggregate principal | Unsecured Senior Notes | |||
Debt | |||
Interest rate | 2% | ||
Debt instrument, face amount | $ 400,000,000 | ||
Carrying Value | 397,350,000 | 396,988,000 | |
Unamortized discount included in carrying value | $ 1,900,000 | 2,100,000 | |
Effective interest rate on debt | 2.09% | ||
2.75%, $600,000 aggregate principal | Unsecured Senior Notes | |||
Debt | |||
Interest rate | 2.75% | ||
Debt instrument, face amount | $ 600,000,000 | ||
Carrying Value | 590,937,000 | 590,123,000 | |
Unamortized discount included in carrying value | $ 7,900,000 | 8,500,000 | |
Effective interest rate on debt | 2.94% | ||
2.90%, $400,000 aggregate principal | Unsecured Senior Notes | |||
Debt | |||
Interest rate | 2.90% | ||
Debt instrument, face amount | $ 400,000,000 | ||
Carrying Value | 395,160,000 | 394,848,000 | |
Unamortized discount included in carrying value | $ 4,000,000 | 4,200,000 | |
Effective interest rate on debt | 3.01% | ||
Unsecured note payable | |||
Debt | |||
Interest rate | 0% | ||
Carrying Value | $ 472,000 | 597,000 | |
Unamortized discount included in carrying value | $ 39,000 | $ 65,000 |
Debt, Net - Narrative (Details)
Debt, Net - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 12, 2023 USD ($) day $ / shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Debt | |||||
Interest costs capitalized | $ 1,500,000 | $ 2,000,000 | $ 3,500,000 | $ 4,900,000 | |
5.25%, $345,000 aggregate principal | Unsecured Senior Notes | |||||
Debt | |||||
Debt instrument, face amount | $ 345,000,000 | $ 345,000,000 | $ 345,000,000 | ||
Interest rate | 5.25% | 5.25% | 5.25% | ||
Proceeds from issuance of debt | $ 336,400,000 | ||||
Initial exchange rate per $1000 principal amount of the notes (in shares) | 0.0333739 | ||||
Exchange price per share (in dollars per share) | $ / shares | $ 29.96 | ||||
Threshold percentage of stock price trigger | 130% | ||||
Threshold trading days | day | 20 | ||||
Threshold consecutive trading days | day | 30 | ||||
5.25%, $345,000 aggregate principal | Unsecured Senior Notes | Debt Instrument, Redemption, Period One | |||||
Debt | |||||
Redemption price, percentage | 100% |
Debt, Net - Schedule of Interes
Debt, Net - Schedule of Interest Expense Recognized (Details) - 5.25%, $345,000 aggregate principal - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Debt | ||
Interest expense at stated interest rate | $ 956 | $ 956 |
Interest expense associated with amortization of debt discount and issuance costs | 124 | 124 |
Total | $ 1,080 | $ 1,080 |
Debt, Net - Debt Maturities (De
Debt, Net - Debt Maturities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Schedule on basis of which debt matures | |
2023 | $ 763 |
2024 | 29,983 |
2025 | 23,717 |
2026 | 646,300 |
2027 | 0 |
Thereafter | 1,745,000 |
Total | 2,445,763 |
Net discounts and deferred financing costs | $ 30,000 |
Debt, Net - Fair Value of Debt
Debt, Net - Fair Value of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Carrying Amount | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 2,415,783 | $ 2,231,794 |
Carrying Amount | Unsecured Senior Notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 2,116,236 | 1,778,498 |
Carrying Amount | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 67,342 | 85,030 |
Carrying Amount | Variable-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 232,205 | 368,266 |
Estimated Fair Value | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 2,072,224 | 1,881,787 |
Estimated Fair Value | Unsecured Senior Notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 1,777,178 | 1,433,561 |
Estimated Fair Value | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 62,661 | 80,330 |
Estimated Fair Value | Variable-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 232,385 | $ 367,896 |
Interest Rate Derivatives - Key
Interest Rate Derivatives - Key Terms and Fair Value of Interest Rate Derivative (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair values of interest rate swap derivatives | ||
Fair value of interest rate swaps | $ 6,736 | $ 2,631 |
Designated | Interest rate swap, effective August 1, 2019 | ||
Fair values of interest rate swap derivatives | ||
Notional Amount | $ 10,700 | |
Fixed Rate | 1.678% | |
Fair value of interest rate swaps | $ 833 | 806 |
Notional amount of interest rate derivatives after scheduled amortization | $ 10,000 | |
Designated | Interest rate swap, effective August 1, 2019 | Secured Overnight Financing Rate | ||
Fair values of interest rate swap derivatives | ||
Floating Rate Index | 0.10% | |
Designated | Interest rate swap, effective April 1, 2020 | ||
Fair values of interest rate swap derivatives | ||
Notional Amount | $ 22,550 | |
Fixed Rate | 0.573% | |
Fair value of interest rate swaps | $ 1,490 | 1,825 |
Notional amount of interest rate derivatives after scheduled amortization | $ 22,100 | |
Designated | Interest rate swap, effective April 1, 2020 | Secured Overnight Financing Rate | ||
Fair values of interest rate swap derivatives | ||
Floating Rate Index | 0.10% | |
Designated | Interest rate swap, effective February 1, 2023 3.742% | ||
Fair values of interest rate swap derivatives | ||
Notional Amount | $ 150,000 | |
Fixed Rate | 3.742% | |
Fair value of interest rate swaps | $ 3,313 | 0 |
Designated | Interest rate swap, effective February 1, 2023 3.747% | ||
Fair values of interest rate swap derivatives | ||
Notional Amount | $ 50,000 | |
Fixed Rate | 3.747% | |
Fair value of interest rate swaps | $ 1,100 | $ 0 |
Interest Rate Derivatives - Fai
Interest Rate Derivatives - Fair Value and Classification of Interest Rate Derivatives (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid expenses and other assets, net | Interest rate swaps | ||
Fair value of interest rate derivatives and balance sheet classification | ||
Interest rate swaps designated as cash flow hedges | $ 6,736 | $ 2,631 |
Interest Rate Derivatives - Eff
Interest Rate Derivatives - Effect of Interest Rate Derivatives on Statement of Operations and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | ||||
Amount of Income Recognized in AOCI on Derivatives | $ 2,042 | $ 1,101 | $ 6,816 | $ 4,646 |
Amount of Income (Loss) Reclassified from AOCI into Interest Expense on Statement of Operations | 1,146 | 77 | 2,711 | (1,680) |
Interest rate swaps | ||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | ||||
Amount of Income Recognized in AOCI on Derivatives | 2,042 | 1,101 | 6,816 | 4,646 |
Interest rate swaps | Interest expense | ||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | ||||
Amount of Income (Loss) Reclassified from AOCI into Interest Expense on Statement of Operations | $ 1,146 | $ 77 | $ 2,711 | $ (1,680) |
Interest Rate Derivatives - Nar
Interest Rate Derivatives - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Interest rate swaps | Designated | |
Fair values of interest rate swap derivatives | |
Approximate amount to be reclassified from AOCL to interest expense over the next 12 months | $ 4.5 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 26,293 | $ 26,898 |
Distributions to noncontrolling interests | (1,971) | (2,209) |
Net income attributable to noncontrolling interests | 1,856 | 2,100 |
Adjustments for changes in fair value of interests | (1,686) | (1,342) |
Reclassification of Stevens Investors, LLC interests to equity | (2,670) | 0 |
Ending balance | $ 21,822 | $ 25,447 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity [Abstract] | ||||
At the market, offering program established, aggregate value | $ 300 | $ 300 | ||
Dividends declared per share (in dollars per share) | $ 0.285 | $ 0.275 | $ 0.855 | $ 0.825 |
Information by Business Segme_3
Information by Business Segment - Segment Financial Information for Our Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Segment financial information for real estate operations | |||||
Revenues from real estate operations | $ 168,556 | $ 182,500 | $ 505,253 | $ 563,783 | |
UJV NOI allocable to CDP | 1,675 | 1,072 | 4,988 | 3,232 | |
Segment assets | 4,239,257 | 4,269,329 | 4,239,257 | 4,269,329 | $ 4,257,275 |
Segment assets | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,479,364 | 3,468,618 | 3,479,364 | 3,468,618 | |
Real Estate Operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 156,607 | 147,687 | 463,241 | 435,193 | |
Property operating expenses | (61,788) | (57,663) | (182,808) | (169,931) | |
UJV NOI allocable to CDP | 1,675 | 1,072 | 4,988 | 3,232 | |
NOI from real estate operations | 96,494 | 91,096 | 285,421 | 268,494 | |
Additions to long-lived assets | 26,030 | 19,702 | 90,074 | 58,332 | |
Transfers from non-operating properties | 122,662 | 5,141 | 159,855 | 127,042 | |
Real Estate Operations | Defense/IT Portfolio | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 138,645 | 131,069 | 408,882 | 383,795 | |
Property operating expenses | (51,242) | (48,612) | (150,883) | (141,879) | |
UJV NOI allocable to CDP | 1,675 | 1,072 | 4,988 | 3,232 | |
NOI from real estate operations | 89,078 | 83,529 | 262,987 | 245,148 | |
Additions to long-lived assets | 21,463 | 12,837 | 77,502 | 43,542 | |
Transfers from non-operating properties | 122,560 | 4,793 | 159,726 | 126,393 | |
Real Estate Operations | Defense/IT Portfolio | Fort Meade/BW Corridor | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 73,350 | 69,209 | 215,303 | 204,012 | |
Property operating expenses | (25,216) | (24,450) | (73,924) | (73,733) | |
UJV NOI allocable to CDP | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 48,134 | 44,759 | 141,379 | 130,279 | |
Additions to long-lived assets | 7,057 | 9,076 | 42,838 | 33,202 | |
Transfers from non-operating properties | 983 | 1,039 | 11,392 | 7,176 | |
Real Estate Operations | Defense/IT Portfolio | NoVA Defense/IT | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 20,333 | 18,611 | 60,003 | 55,290 | |
Property operating expenses | (7,900) | (6,776) | (23,155) | (19,802) | |
UJV NOI allocable to CDP | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 12,433 | 11,835 | 36,848 | 35,488 | |
Additions to long-lived assets | 4,639 | 1,454 | 14,994 | 6,184 | |
Transfers from non-operating properties | 95 | 345 | 582 | 1,582 | |
Real Estate Operations | Defense/IT Portfolio | Lackland Air Force Base | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 16,193 | 15,951 | 49,393 | 45,793 | |
Property operating expenses | (8,567) | (8,281) | (26,463) | (22,873) | |
UJV NOI allocable to CDP | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 7,626 | 7,670 | 22,930 | 22,920 | |
Additions to long-lived assets | 0 | 0 | 62 | 0 | |
Transfers from non-operating properties | 51 | 129 | 96 | 1,068 | |
Real Estate Operations | Defense/IT Portfolio | Navy Support | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 8,190 | 8,253 | 24,233 | 24,507 | |
Property operating expenses | (3,933) | (3,665) | (10,992) | (10,466) | |
UJV NOI allocable to CDP | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 4,257 | 4,588 | 13,241 | 14,041 | |
Additions to long-lived assets | 1,201 | 734 | 2,269 | 2,124 | |
Transfers from non-operating properties | 1 | 27 | 2,651 | 6,325 | |
Real Estate Operations | Defense/IT Portfolio | Redstone Arsenal | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 13,768 | 9,976 | 40,160 | 28,479 | |
Property operating expenses | (4,948) | (4,324) | (14,334) | (11,690) | |
UJV NOI allocable to CDP | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 8,820 | 5,652 | 25,826 | 16,789 | |
Additions to long-lived assets | 8,566 | 1,573 | 17,339 | 2,032 | |
Transfers from non-operating properties | 63,025 | 267 | 81,352 | 20,380 | |
Real Estate Operations | Defense/IT Portfolio | Data Center Shells | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 6,811 | 9,069 | 19,790 | 25,714 | |
Property operating expenses | (678) | (1,116) | (2,015) | (3,315) | |
UJV NOI allocable to CDP | 1,675 | 1,072 | 4,988 | 3,232 | |
NOI from real estate operations | 7,808 | 9,025 | 22,763 | 25,631 | |
Additions to long-lived assets | 0 | 0 | 0 | 0 | |
Transfers from non-operating properties | 58,405 | 2,986 | 63,653 | 89,862 | |
Real Estate Operations | Wholesale Data Center | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 0 | 0 | 0 | 1,980 | |
Property operating expenses | 0 | 0 | 0 | (975) | |
UJV NOI allocable to CDP | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 0 | 0 | 0 | 1,005 | |
Additions to long-lived assets | 0 | 0 | 0 | (35) | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Real Estate Operations | Other | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 17,962 | 16,618 | 54,359 | 49,418 | |
Property operating expenses | (10,546) | (9,051) | (31,925) | (27,077) | |
UJV NOI allocable to CDP | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 7,416 | 7,567 | 22,434 | 22,341 | |
Additions to long-lived assets | 4,567 | 6,865 | 12,572 | 14,825 | |
Transfers from non-operating properties | 102 | 348 | 129 | 649 | |
Real Estate Operations | Segment assets | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,479,364 | 3,468,618 | 3,479,364 | 3,468,618 | |
Real Estate Operations | Segment assets | Defense/IT Portfolio | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,168,536 | 2,929,985 | 3,168,536 | 2,929,985 | |
Real Estate Operations | Segment assets | Defense/IT Portfolio | Fort Meade/BW Corridor | |||||
Segment financial information for real estate operations | |||||
Segment assets | 1,397,107 | 1,325,703 | 1,397,107 | 1,325,703 | |
Real Estate Operations | Segment assets | Defense/IT Portfolio | NoVA Defense/IT | |||||
Segment financial information for real estate operations | |||||
Segment assets | 486,561 | 487,032 | 486,561 | 487,032 | |
Real Estate Operations | Segment assets | Defense/IT Portfolio | Lackland Air Force Base | |||||
Segment financial information for real estate operations | |||||
Segment assets | 190,344 | 195,612 | 190,344 | 195,612 | |
Real Estate Operations | Segment assets | Defense/IT Portfolio | Navy Support | |||||
Segment financial information for real estate operations | |||||
Segment assets | 163,630 | 170,574 | 163,630 | 170,574 | |
Real Estate Operations | Segment assets | Defense/IT Portfolio | Redstone Arsenal | |||||
Segment financial information for real estate operations | |||||
Segment assets | 548,201 | 314,156 | 548,201 | 314,156 | |
Real Estate Operations | Segment assets | Defense/IT Portfolio | Data Center Shells | |||||
Segment financial information for real estate operations | |||||
Segment assets | 382,693 | 436,908 | 382,693 | 436,908 | |
Real Estate Operations | Segment assets | Wholesale Data Center | |||||
Segment financial information for real estate operations | |||||
Segment assets | 0 | 0 | 0 | 0 | |
Real Estate Operations | Segment assets | Other | |||||
Segment financial information for real estate operations | |||||
Segment assets | $ 310,828 | $ 538,633 | $ 310,828 | $ 538,633 |
Information by Business Segme_4
Information by Business Segment - Reconciliation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Reconciliation of segment revenues to total revenues | ||||
Construction contract and other service revenues | $ 11,949 | $ 34,813 | $ 42,012 | $ 130,570 |
Less: Revenues from discontinued operations | 0 | 0 | 0 | (1,980) |
Total revenues | 168,556 | 182,500 | 505,253 | 563,783 |
Operating Expenses [Abstract] | ||||
Less: Property operating expenses from discontinued operations | 0 | 0 | 0 | (971) |
Total property operating expenses | 61,788 | 57,663 | 182,808 | 168,960 |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated entities [Abstract] | ||||
UJV NOI allocable to CDP | 1,675 | 1,072 | 4,988 | 3,232 |
Less: Income from UJV allocable to CDP attributable to depreciation and amortization expense and interest expense | (1,743) | (762) | (5,006) | (2,280) |
Add: Equity in (loss) income of unconsolidated non-real estate entities | 0 | (2) | (3) | 562 |
Equity in (loss) income of unconsolidated entities | (68) | 308 | (21) | 1,514 |
Computation of net operating income from service operations | ||||
Construction contract and other service revenues | 11,949 | 34,813 | 42,012 | 130,570 |
Construction contract and other service expenses | (11,493) | (33,555) | (40,249) | (126,509) |
Real Estate Operations | ||||
Reconciliation of segment revenues to total revenues | ||||
Total revenues | 156,607 | 147,687 | 463,241 | 435,193 |
Operating Expenses [Abstract] | ||||
Property operating expenses | 61,788 | 57,663 | 182,808 | 169,931 |
Less: Property operating expenses from discontinued operations | 0 | 0 | 0 | (971) |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated entities [Abstract] | ||||
UJV NOI allocable to CDP | 1,675 | 1,072 | 4,988 | 3,232 |
Service Operations | ||||
Computation of net operating income from service operations | ||||
NOI from service operations | $ 456 | $ 1,258 | $ 1,763 | $ 4,061 |
Information by Business Segme_5
Information by Business Segment - Reconciliation of NOI from Real Estate Operations and NOI from Service Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment financial information for real estate operations | ||||
Depreciation and other amortization associated with real estate operations | $ (37,620) | $ (35,247) | $ (112,215) | $ (104,323) |
Impairment losses | (252,797) | 0 | (252,797) | 0 |
General, administrative, leasing and other expenses | (10,576) | (9,450) | (31,424) | (27,833) |
Interest expense | (17,798) | (15,123) | (50,759) | (44,355) |
Interest and other income, net | 2,529 | 597 | 6,928 | 4,399 |
Gain on sales of real estate | 0 | 16 | 49,392 | 12 |
Loss on early extinguishment of debt | 0 | 0 | 0 | (342) |
Equity in (loss) income of unconsolidated entities | (68) | 308 | (21) | 1,514 |
UJV NOI allocable to CDP included in equity in (loss) income of unconsolidated entities | (1,675) | (1,072) | (4,988) | (3,232) |
Income tax expense | (152) | (67) | (467) | (224) |
Revenues from real estate operations from discontinued operations | 0 | 0 | 0 | (1,980) |
Property operating expenses from discontinued operations | 0 | 0 | 0 | 971 |
(Loss) income from continuing operations | (221,207) | 32,316 | (109,167) | 97,162 |
Real Estate Operations | ||||
Segment financial information for real estate operations | ||||
NOI from real estate operations | 96,494 | 91,096 | 285,421 | 268,494 |
UJV NOI allocable to CDP included in equity in (loss) income of unconsolidated entities | (1,675) | (1,072) | (4,988) | (3,232) |
Property operating expenses from discontinued operations | 0 | 0 | 0 | 971 |
Service Operations | ||||
Segment financial information for real estate operations | ||||
NOI from service operations | $ 456 | $ 1,258 | $ 1,763 | $ 4,061 |
Information by Business Segme_6
Information by Business Segment - Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Reconciliation of segment assets to total assets | |||
Total consolidated assets | $ 4,239,257 | $ 4,257,275 | $ 4,269,329 |
Operating properties lease liabilities included in segment assets | 33,360 | $ 28,759 | |
Segment assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | 3,479,364 | 3,468,618 | |
Operating properties lease liabilities included in segment assets | 33,360 | 29,088 | |
Non-operating property assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | 324,168 | 531,838 | |
Other assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | $ 402,365 | $ 239,785 |
Construction Contract and Oth_3
Construction Contract and Other Service Revenues - Construction Contracts and Other Service Revenues by Compensation Arrangement and Service Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 11,949 | $ 34,813 | $ 42,012 | $ 130,570 |
Firm fixed price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 6,616 | 3,121 | 21,898 | 9,822 |
Guaranteed maximum price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 2,817 | 27,928 | 11,561 | 112,354 |
Cost-plus fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 2,205 | 3,196 | 7,472 | 6,757 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 311 | $ 568 | $ 1,081 | $ 1,637 |
Construction Contract and Oth_4
Construction Contract and Other Service Revenues - Schedule of Accounts Receivable, Contract Asset and Contract Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Change in Accounts Receivable | ||||
Beginning balance | $ 43,334 | |||
Ending balance | $ 40,211 | 40,211 | ||
Construction Contract Revenue | ||||
Change in Accounts Receivable | ||||
Beginning balance | 7,618 | $ 7,193 | ||
Ending balance | 5,367 | $ 6,283 | 5,367 | 6,283 |
Change in Contract with Customer, Asset | ||||
Beginning balance | 22,331 | 22,384 | ||
Ending balance | 8,356 | 26,562 | 8,356 | 26,562 |
Change in Contract with Customer, Liability | ||||
Beginning balance | 2,867 | 2,499 | ||
Ending balance | 3,938 | 5,846 | 3,938 | 5,846 |
Portion of beginning balance recognized in revenue during the period | $ 64 | $ 14 | $ 164 | $ 204 |
Construction Contract and Oth_5
Construction Contract and Other Service Revenues - Performance Obligation Narrative (Details) - Construction Contract Revenue $ in Millions | Sep. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 75.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 23 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Construction Contract and Oth_6
Construction Contract and Other Service Revenues - Narrative (Details) - Construction Contract Revenue - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Deferred incremental costs | $ 0 | $ 0 | ||
Credit loss recoveries | $ 369,000 | $ 461,000 |
Credit Losses on Financial As_3
Credit Losses on Financial Assets and Other Instruments - Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Credit Losses, Financial Assets and Other Instruments [Roll Forward] | ||
Beginning balance | $ 3,840 | $ 3,569 |
Credit loss expense (recoveries) | 677 | 1,602 |
Write-offs | (33) | |
Ending balance | 4,484 | 5,171 |
Other Assets | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 268 | 913 |
Credit loss expense (recoveries) | (88) | (415) |
Write-offs | 0 | |
Ending balance | 180 | 498 |
Credit Losses, Financial Assets and Other Instruments [Roll Forward] | ||
Accounts receivable, allowance for credit loss | 180 | 498 |
Other Assets | Accounts Receivable, Net | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 52 | |
Ending balance | 109 | |
Credit Losses, Financial Assets and Other Instruments [Roll Forward] | ||
Accounts receivable, allowance for credit loss | 109 | |
Other Assets | Prepaid expenses and other assets, net | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 216 | |
Ending balance | 71 | |
Credit Losses, Financial Assets and Other Instruments [Roll Forward] | ||
Accounts receivable, allowance for credit loss | 71 | |
Investing Receivables | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 2,794 | 1,599 |
Credit loss expense (recoveries) | 829 | 2,129 |
Write-offs | 0 | |
Ending balance | 3,623 | 3,728 |
Tenant Notes Receivable | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 778 | 1,057 |
Credit loss expense (recoveries) | (64) | (112) |
Write-offs | (33) | |
Ending balance | $ 681 | $ 945 |
Credit Losses on Financial As_4
Credit Losses on Financial Assets and Other Instruments - Credit Risk Classification (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Investing Receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | $ 64,171 | |
2019 | 0 | |
2020 | 2,028 | |
2021 | 8,141 | |
2022 | 16,811 | |
2023 | 7 | |
Total | 91,158 | $ 87,415 |
Investing Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | 64,171 | |
2019 | 0 | |
2020 | 2,028 | |
2021 | 8,141 | |
2022 | 0 | |
2023 | 7 | |
Total | 74,347 | |
Investing Receivables | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | 0 | |
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 16,811 | |
2023 | 0 | |
Total | 16,811 | |
Tenant notes receivable: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | 861 | |
2019 | 78 | |
2020 | 1,602 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Total | 2,541 | |
Tenant notes receivable: | Gross Write-Offs | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | 33 | |
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Total | 33 | |
Tenant notes receivable: | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | 717 | |
2019 | 21 | |
2020 | 136 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Total | 874 | |
Tenant notes receivable: | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | 144 | |
2019 | 57 | |
2020 | 1,466 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Total | 1,667 | |
Sales-type lease receivables: | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2018 and Earlier | 0 | |
2019 | 0 | |
2020 | 5,244 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Total | $ 5,244 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Shares and TB-PIUs Activity (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Restricted shares | |
Number of Shares | |
Unvested at the beginning of the period (in shares or units) | shares | 325,083 |
Granted (in shares or units) | shares | 205,836 |
Forfeited (in shares or units) | shares | (34,593) |
Vested (in shares or units) | shares | (146,611) |
Unvested at the end of the period (in shares or units) | shares | 349,715 |
Weighted Average Grant Date Fair Value | |
Unvested at the beginning of the period (in dollars per share or unit) | $ / shares | $ 26.27 |
Granted (in dollars per share or unit) | $ / shares | 25.37 |
Forfeited (in dollars per share or unit) | $ / shares | 26.03 |
Vested (in dollars per share or unit) | $ / shares | 26.07 |
Unvested at the end of the period (in dollars per share or unit) | $ / shares | $ 25.85 |
Time-based PIU's | |
Number of Shares | |
Unvested at the beginning of the period (in shares or units) | shares | 187,330 |
Granted (in shares or units) | shares | 100,426 |
Forfeited (in shares or units) | shares | (27,182) |
Vested (in shares or units) | shares | (89,633) |
Unvested at the end of the period (in shares or units) | shares | 170,941 |
Weighted Average Grant Date Fair Value | |
Unvested at the beginning of the period (in dollars per share or unit) | $ / shares | $ 26.19 |
Granted (in dollars per share or unit) | $ / shares | 25.37 |
Forfeited (in dollars per share or unit) | $ / shares | 26.46 |
Vested (in dollars per share or unit) | $ / shares | 25.95 |
Unvested at the end of the period (in dollars per share or unit) | $ / shares | $ 25.79 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
Feb. 01, 2023 shares | Jan. 01, 2023 USD ($) percentile_rank $ / shares shares | Sep. 30, 2023 USD ($) form $ / shares shares | |
Restricted shares | |||
Share-Based Compensation | |||
Aggregate intrinsic value of awards upon vesting | $ | $ 3,700 | ||
Granted (in shares or units) | shares | 205,836 | ||
Granted (in dollars per share or unit) | $ / shares | $ 25.37 | ||
Shares forfeited (in shares) | shares | 34,593 | ||
Forfeited (in dollars per share or unit) | $ / shares | $ 26.03 | ||
PIUs | |||
Share-Based Compensation | |||
Number of forms of profit interest units | form | 2 | ||
Time-based PIU's | |||
Share-Based Compensation | |||
Aggregate intrinsic value of awards upon vesting | $ | $ 2,300 | ||
Granted (in shares or units) | shares | 100,426 | ||
Granted (in dollars per share or unit) | $ / shares | $ 25.37 | ||
Shares forfeited (in shares) | shares | 27,182 | ||
Forfeited (in dollars per share or unit) | $ / shares | $ 26.46 | ||
Performance-based PIU's | |||
Share-Based Compensation | |||
The number of percentile ranks to fall between to earn interpolated PB-PIUs between such percentile ranks, conditioned on the percentile rank exceeding 25% | percentile_rank | 2 | ||
Percent of award distribution rights | 10% | ||
Award performance period | 3 years | ||
Aggregate grant date fair value | $ | $ 4,300 | ||
Baseline value per common share (in dollars per share) | $ / shares | $ 25.94 | ||
Expected volatility of common shares | 35% | ||
Risk-free interest rate | 4.28% | ||
Shares forfeited (in shares) | shares | 126,890 | ||
Performance-based PIU's | Target Level | |||
Share-Based Compensation | |||
Granted (in dollars per share or unit) | $ / shares | $ 31.54 | ||
Forfeited (in dollars per share or unit) | $ / shares | $ 31.49 | ||
Performance-based PIU's | Senior Management Team Members | |||
Share-Based Compensation | |||
Granted (in shares or units) | shares | 275,402 | ||
Award vesting period | 3 years | ||
Performance-based PIU's | Executives | 2020 PB PIU | |||
Share-Based Compensation | |||
Units issued for awards vested in period (in units) | shares | 141,152 | ||
Deferred Share Awards | |||
Share-Based Compensation | |||
Granted (in shares or units) | shares | 9,046 | ||
Aggregate grant date fair value | $ | $ 215 | ||
Granted (in dollars per share or unit) | $ / shares | $ 23.75 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Payouts for Defined Performance under PB-PIUs (Details) - Performance-based PIU's | Jan. 01, 2023 |
Potential earned PSUs payout for defined levels of performance under awards | |
Earned PB-PIUs payout granted on 75th or greater percentile rank | 100% |
Earned PB-PIUs payout granted on 50th percentile rank | 50% |
Earned PB-PIUs payout granted on 25th percentile rank | 25% |
Earned PB-PIUs payout granted on percentile rank below 25th | 0% |
Earnings Per Share ("EPS") - Sc
Earnings Per Share ("EPS") - Schedule of Calculation Of Numerator and Denominator in Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Numerator: | |||||
(Loss) income from continuing operations | $ (221,207) | $ 32,316 | $ (109,167) | $ 97,162 | |
Loss (income) from continuing operations attributable to noncontrolling interests | 5,020 | (1,395) | 2,046 | (3,764) | |
Income from continuing operations attributable to share-based compensation awards for basic EPS | (992) | (91) | (1,093) | (295) | |
Numerator for basic EPS from continuing operations attributable to common shareholders | (217,179) | 30,830 | (108,214) | 93,103 | |
Redeemable noncontrolling interests | 0 | (40) | 0 | (109) | |
Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS | 0 | 16 | 0 | 51 | |
Numerator for diluted EPS from continuing operations attributable to common shareholders | (217,179) | 30,806 | (108,214) | 93,045 | |
Discontinued operations | 0 | 0 | 0 | 29,573 | |
Discontinued operations attributable to noncontrolling interests | 0 | 0 | 0 | (421) | |
Income from discontinued operations attributable to share-based compensation awards for diluted EPS | 0 | 0 | 0 | (90) | |
Numerator for diluted EPS on net (loss) income attributable to common shareholders | $ (217,179) | $ 30,806 | $ (108,214) | $ 122,107 | |
Denominator (all weighted averages): | |||||
Denominator for basic EPS (common shares) | 112,196 | 112,093 | 112,170 | 112,066 | |
Dilutive effect of redeemable noncontrolling interests (in shares) | 0 | 105 | 0 | 121 | |
Dilutive effect of share-based compensation awards (in shares) | 0 | 433 | 0 | 429 | |
Denominator for diluted EPS (common shares) | 112,196 | 112,631 | 112,170 | 112,616 | |
Basic EPS attributable to common shareholders: | |||||
(Loss) income from continuing operations - basic (in dollars per share) | [1] | $ (1.94) | $ 0.28 | $ (0.96) | $ 0.83 |
Discontinued operations - basic (in dollars per share) | [1] | 0 | 0 | 0 | 0.26 |
Net (loss) income attributable to common shareholders - basic (in dollars per share) | [1] | (1.94) | 0.28 | (0.96) | 1.09 |
Diluted EPS attributable to common shareholders: | |||||
(Loss) income from continuing operations - diluted (in dollars per share) | [1] | (1.94) | 0.27 | (0.96) | 0.83 |
Discontinued operations - diluted (in dollars per share) | 0 | 0 | 0 | 0.25 | |
Net (loss) income attributable to common shareholders - diluted (in dollars per share) | [1] | $ (1.94) | $ 0.27 | $ (0.96) | $ 1.08 |
[1]Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders. |
Earnings Per Share ("EPS") - _2
Earnings Per Share ("EPS") - Schedule of Securities Excluded From Computation Of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Conversion of common units | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1,520 | 1,477 | 1,508 | 1,446 |
Conversion of redeemable noncontrolling interests | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 882 | 895 | 980 | 855 |
Earnings Per Share ("EPS") - Na
Earnings Per Share ("EPS") - Narrative (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 12, 2023 | |
5.25%, $345,000 aggregate principal | Unsecured Senior Notes | |||||
Antidilutive securities | |||||
Interest rate | 5.25% | 5.25% | 5.25% | ||
Weighted average restricted shares and deferred shares | |||||
Antidilutive securities | |||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 423 | 399 | 411 | 401 | |
Weighted average TB-PIUs | |||||
Antidilutive securities | |||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 171 | 192 | 174 | 185 | |
Weighted Average Vested PIUs | |||||
Antidilutive securities | |||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 170 | 148 | |||
Weighted Average PB-PIUs | |||||
Antidilutive securities | |||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 608 | 636 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2023 USD ($) property |
Commitments and Contingencies | |
Estimate of possible loss (up to) | $ 4.3 |
Environmental Indemnity Agreement | |
Number of lease properties which were provided environmental indemnifications | property | 3 |
Maximum environmental indemnification to the tenant against consequential damages after acquisition of property | $ 19 |
Anne Arundel County, Maryland | Tax Incremental Financing Bond | |
Environmental Indemnity Agreement | |
Maximum exposure | $ 27 |