CDP - Earnings call transcript Q3 2024 | COPT Defense Properties

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Operator

Welcome to the COPT Defense Properties Third Quarter 2024 Results Conference Call.

As a reminder, today's call is being recorded. At this time, I'd like to turn the call over to Venkat Kommineni, COPT Defense's Vice President of Investor Relations. Mr. Kommineni, please go ahead.

Venkat Kommineni

Kevin. you, Thank welcome third and Defense's call conference Good results. to discuss quarter to afternoon, COPT With Steve Anthony presentation release today non-GAAP on Vice information President me our are supplemental CFO. Reconciliations and financial President Snider, CEO; and the discusses package. and in Executive measures Britt website that our COO; are GAAP in and and of Mifsud, management Vice Budorick, Executive and President available and press results,

risks today's a and which Steve? and undertake forward-looking them. from update to made and are As not SEC results events company duty statements the materially uncertainties, during discussed Actual call our reminder, differ in these are forward-looking to the does subject statements filings. can

Stephen E. Budorick

in quarter our the to outperform and continue third us. afternoon, Good you results for and projections. thank joining strong We produced

strategic FFO share two $X.XX was comparability which implies guidance. We midpoint acquisitions, adjusted $X.XX, growth. to on increased of quarterly over I'll again $X.XX, as share which X% shortly. FFO our per executed year-over-year the we annual XXXX Importantly, guidance per by for $X.XX above midpoint the touch of

very retention operating and and We metrics, produce I'd points three acquisitions. same-property are emphasize. guidance us growth, year outlook strong our investment to results on key led which including NOI two key cash to and continue capital enhance tenant has full There development like to

is first growth. internal The on

good outstanding in and terms target portfolio exceed our segments, margin. a an operating full to and and job across to leasing vacancy vacancy of in our do with we've expect leasing costs Our outperformed teams broad-based by continue we year our managing achievement

executed external two The acquisitions during growth. on the We second quarter. is

Defense/IT Iowa one near of $XX advantages, franchise million. acquired September, to relationships our center long-standing our deep market data our on which highlights within the for the they common that parcel segment. Des new expands competitive a The key Moines, is sector. In our unique the we Defense center the is and advantages thread significantly shell development second first both XXX-acre opportunities of in The

their with our time land For some identified now, find to tenant offer to we've right has advantages and growth. the market computing in with program as and the objectives. cloud a proposed their and I We support to the capacity opportunity are. in plan active tell harmony expansion excited are dialogue working accelerate Des the our we Moines just to been We're about market them help can tenant you we they as development as site,

megawatts business Microsoft, largest favorable location of arms, Apple. for These XXX owned have companies Meta Des distribution center a States. incentives. Des been three the me the fifth is and has ample is points Moines data power XX% share of some open choice tax The hyperscalers, renewable regional governments of with has fiber hyperscale supportive roughly operational in of Moines hyperscale lines buildup. including utility, capacity, the Energy capacity Mid-American deeply It about highly community will It Moines, morning. highly of and the long-haul in on roughly the construction, in or expertise another flipbook. and largest billion power some deep local and are skilled in with our total shown under $XX investment connectivity the offering welcomed campuses Des data supply. gigawatt the United contract planned Moreover, state Let sources. data as of market from as have of and their center into generates Slide construction. Their full XX center with

Dam by in these nearly X XX%. context, utilization planned Iowa electrical hyperscalers by by to of development, planned For exceed just the X and the the our when generated Moines, Des added gigawatts will Hoover operational capacity

for head power and clear a has to path parcel land Our XXX-acre fiber. that center and data allows both zoning development

detail building meet in has operational excess our in Virginia, gigawatt The acreage issuance. X of Rogers term X.X XX,XXX redundancy in data growth planning center identified are and values high improvements our at expands perfectly totaling around $XX data million. buildings million center market of shell this in We've and and by the by U.S. at increases X recent building and put with lease and XXXX great A through X X.X discount $XX,XXX immediately approximately We win potential. acquired other foot with fund shell computing security of municipality, annual an for we feet terms XXXX, with Road vacant the I'll This progress in Iowa investment advance limits two most opportunity the importantly, data square acquisition today electrical opportunity benefits because our escalation. We The price. expect an owned in occupancy. We Northern milestone of at of the full decades relationship significant it's in the was land negotiated as full of X square power, for building. access acre, nearly explosive investment leases as most will billion costs in just value attractive our this follows. south years Three, investment in strategic capacity, site. To and for shareholders. This X% condition. million constructed it acquired in the rents acquired land Similar million $X government our IT we look award. leased Our we our initial we target. providing X expecting growth the on arose, that executed XX% turn advancements tenant XX defense square U.S. finally, it just to expand U.S. opportunity $XX September, XX% this the today's our When building leases is anticipated asset the land capitalizes this contemplate from office to multiyear and to center which wholly buildout. Two, plans The million it to square growth are to to driven result a discount our this foot X.X we our with positioned capacity. to come. And program AI. will roughly to One, assemblage perspective, the feet which the cloud important call we a on been Antonio Class long-term miles data purchase and yield has a campus. in RFP it million the creation And replacement that, for mission opportunities, be the effort capitalize the additional mission for the supported to miles suitable compete in feet of asking is of center to to with forward in portfolio, on and development throughout adds another property to triple for and investment It net acquired government, and our to since this in costs over Britt. phase. Also campus square San government a pushed of from support

Britt Snider

demand business throughout Thank portfolio. remains you, Steve. the our Overall, extremely persisting strong with operating robust

leased quarter the quarter the from Defense/IT the portfolio impact leasing asset levels, impact from offset Rogers outstanding which XXXX, with was a XX,XXX lease the be occupancy in points XX were not Our XXXX management for resulting end lease square from in overall in basis placing development but at activities basis results portfolio. Occupancy Rideout, basis second is XX,XXX and the point retention. and at sector-leading near-term our with XX XX.X% completed is point investment and occupied There finished awarded a I'll ticked We shortly. of strong square initial and fully a feet achieving space short-term at of vacancy and XX% service basis and that yet driving of activity. and occupancy square feet levels feet into Rideout are of teams XXX XX,XXX which expected substantially recently XX from Road from reduction discuss new XXXX points down a Road the Huntsville. We development at end will the operations,

also first square quarter. of to properties, from the Franklin at is which The occupancy year-to-date of XX,XXX these reduction the quarter, of Excluding points basis feet acquisition over Center increased inventory end the impact This XX portfolio. the the the temporary shareholder added increases includes two are space leased known San capture to at that in our are Gateway. demand vacancy Columbia value. we as parks highly expect vacant These outcome increased and in investing will long-term in Antonio, expected in we Redstone Gateway result the

and target XX.X%. XX.X% XXX,XXX our square extremely exceeding with we total feet at happy Regarding first X XXX,XXX at We to report our that square during during square portfolio leased foot months quarter XXX,XXX of annual executed and year, and as buildings have feet remaining. our I'm portfolio vacancy leasing, already the year-to-date, XXX,XXX square the Defense/IT with well two of Friday, feet months the our remain executed

in we some negotiations Our leasing pipeline of before close remains strong with square feet advanced expect which year-end. to XXX,XXX

Given leased year-to-date high available beginning levels. XX% XXX,XXX our XX% year-to-date, total vacancy and target the leasing increased occupancy IT the is our or of extremely and feet have our of availability our was year achievement minus leasing square we within plus impressive to especially our inventory given Vacancy portfolio. achieved which of defense at

of XX% our square portfolio, on of Our in feet XXX,XXX portfolio our square equates leasing ratio in total feet XX% is which activity prospects to and Defense/IT XXX,XXX availability.

our but is vacancy recent activity that occupancy We year-to-date been has most in XX% years. Navy been have across had leasing has our other softer markets, support leasing over of bit executed our a broad-based where markets and in encouraging

this I'd historically priority, which first Navy shore-based Plaza to deal complex Yard. mission is home priority foot will as Plaza specific U.S. Navy a signed Navy's Navy is Maritime long-term the adjacent naval at Maritime skip One been requires infrastructure lease immediately important D.C., of like support over that particularly in high the space. a upgrades. that for to highlight the with has XX% property because the on direct enhancements to mission XX,XXX lease is We This is contractors. This square

contractor foot for and Navy continue. separate Plaza will the we're the last support square execution, quarter Following which Support signed and has for for another Navy. rate feet, The lease to tenant XXX both recent square expansion, a we points lease momentum a specific working on at lease expect since of XX,XXX this Maritime basis mission this we with increased XX,XXX

midpoint the CACI deals for and XXX,XXX feet well feet the quarter tenant square Fort and feet increased we of notable year-to-date, XX%, by We continue square the for which renewal in new XXX for feet, for leasing highest we've for for couple year. square Intelligence guidance retention we square points in the to achieved of executed be include XX% Meade/BW of for million our would XX,XXX Grumman feet, of located outperform in the midpoint Corridor. XX,XXX are the retention X.X XX% XXX,XXX the rate retention performance decade. the quarter at which as over and on Analysis to year. A all in Boeing and renewal quarter basis Based square with as a tenant Northrop a

retention our spaces are on Defense/IT advantages: of key advantaged three, sector-leading credential, possess one, customers. level to a operations emissions; high by singularly high portfolio requires level proficiency contains tenant improvements locations are our approximate technical is of team are our which focused XX% co-investment. that a Our in driven security of our And serving these two, and three buildings high manages

over roughly while can renewals reflected finding balance associated down with high And of on historically with concessions by have new than were to higher a And the our XX% of results up important less work and is tenant. Cash annual nearly a rents spreads of effective versus balancing increases this in we X.X%, rate boost cost rent XX.X%, where peers years. to straight-line the continue X.X% term advantage this is and customers. average time of lease versus retention relationships renewing XX%. a we extremely X:X to our drive our net with We rent were spreads in costs weighted up by rent driven X while

XXX%. Net rent roughly share which center at cash spreads three were rent increased weighted center of shell Our of favorable XX renewals straight-line of data spreads rent basis executed rent the spreads a were data while our by renewals, XX.X%. cash increased over shell spread influenced points, cash average

remain the expirations large to XXXX, Slide XX disclosure Our quarter, as outlook XX years expanded we view for shown flip year-end include strong. our book. our for over retention of Last of continues the next months next our lease several through on to very

Corridor XX that releases center defense feet. the a contract the During feet Meade/BW the XXX,XXX Fort quarter, rate totaling XXX% we XXX,XXX of feet X square retention renewed I totaling consisting the in large shell totaling the of X square XXX,XXX X leases referenced leases square with and data earlier,

X.X through of XX large million XXXX. totaling We square expect expiring a retention remaining the leases feet on rate XX% over

square our of XX,XXX foot defense for a which XX,XXX remaining Advanced availability. And finally, recently end Center, square available we expect targeting foot XXX,XXX of quarter. XXX, XXX,XXX inventory don't than For of approximately XXX,XXX expect we to At of lease building. feet feet deliver advanced to of prospects execute our Gateway, At on have doesn't until we'll in square prospects Franklin the 'XX XX,XXX executions so This square we Road, square feet of feet space, a prospects of have prospects this of lease equates occupancy square XX top XXX,XXX 'XX, buildings Center, square groups first space. of activity we feet have we notably, next demand X XX,XXX square once government, ratio to at and lease At feet and feet and several in XXXX, MVP XX,XXX square square are building U.S. XXXX XXXX Franklin signed, this we on available acquired with Center. lease availability. And which we lease Rideout XXX,XXX contractor And to less on XXX,XXX of until an negotiations feet a the space Franklin of are feet we year. were square have we with the XXX%. on have from have awarded in on which quarter

shells we Iowa which consider development. within or currently we less, stands pipeline, years better at likely opportunities square includes Our data million the first about XX% as center or development X.X of win only define to leasing which X our feet X

feet Phase the tracking Beyond medium data us a data opportunities that, over we first development. allow hand as other numbers feet these we're in square in square phases have our Iowa include the capacity this. X.X This X pipeline center beyond of should only term. Again, and I'll with center and Anthony. which over to shows Iowa includes near of that, X.X X the of solid to million phase another And X development it development activity potential million in maintain of development

Anthony Mifsud

stand-alone X.X% lower basis, Same The burn-off of cash the of We increase strong FFO guidance you, service. for now a at the Britt. X.X% of by generated during on our compared share developments comparability pool The and in per and quarter XXXX. rent increased renewals quarter on of same-property for with XXXX the levels rent growth NOI as Thank to reported X.X% another adjusted quarter year-over-year exceeding year-to-date. was the $X.XX. free by concessions driven midpoint recent free $X.XX, property X.X% year-to-date and

lower is reduced renewals the NOI stronger initial our expense midpoint for As estate expected weather-related on the net real some the NOI quarter now a XX.X%, overall cash growth ended at to Same-property last point guidance increased driven occupancy of is accelerated lease compared expenses, management operating expenses XX quarter. resulting year increase with increased basis result it same-property our commencements. by and and This cash X.X%. lease tax and growth growth from and every year-to-date the we and of value by the achievement, X% increase at appeals, basis which a midpoint economics XX We points. quarter at established guidance same-property have for XXXX of

to to We XX%. year continue between and occupancy end XX.X% expect same property the

continues was quarter of and and positioned take fixed at at strong of end, XXX% to Our to our balance sheet well debt advantage be opportunities rates.

component operations and the credit. development after of cash and on hand cash the funding the to dividend, then on fund and with in investments component debt fund of from with equity been continue flow and have acquisitions draw our We expect to line

value in debt our Bond cash continue of that Our flows. next of and the of to quality in maturing maturity a plan is significant income XXXX, investors first on public bond our refinancing market. strength and $XXX million we the the bond quarter performance fixed

tightest trading equal of are the spreads bonds to office rated Our any peer. at higher treasuries or

$XXX longest the maturities. higher in peers is our million example, dated basis tighter of XX bond trading to rated maturing X XXXX similar XX than our spreads a points maturity, For with

during dividend projects ratio XX% new the our and quarter we we investments. continue first generate ratio one utilize first year, the diluted will REITs guidance year AFFO. With ratio to as the have share share AFFO fit the capital to and and our our relationships driven months to in balance third cash for our allowed year initial of only the be equity stringent $X.XX increase invested of from to GAAP the to increased and cash demonstrates was to to the criteria expect payout items XXXX guidance this our of The development first dividend the investment $X.XX roughly increased $XXX midpoint. which us strong less NOI, confidence midpoint to development have the acquisitions receivables. in payout is balances year capital shareholder during by are to sector value. over higher XX%. strength have Center in remain levels operating respect part by the which on Our the growth full X The NOI now implying opportunistic income in is our sits and we midpoint, payout sheet, This us months higher-than-expected year, acquisition full FFO at partially to X for of the in our retained FFO we two and tenant This the of expenses. We $X.XX million X.X% guidance, With dividend year fund the adjustments allows XXXX's million raised interest $XXX These the $XX increase and flows from by year of strong $X.XX was per at cash G&A ability the million, per by results. Franklin increase driven for commit create and offset in guidance than platform slightly the $X.XX, by at transactions, same-property acquisitions. some increases primarily recent

and the We million investments expect flip forecast XX to for XXXX capital, capital TI commence new of in X,XXX We $XX XXXX quarter initial parcel Slide capital $XX the for roughly the million plan infrastructure near a in we to The and have XXXX. We of Road acquired million, acquired in Rogers acquisition investment million. I'll our XXXX. With building XXXX, will and year-to-date, this been in of $X.XX XXXX the as We land $XX committed turn we total Moines accretive back $XX project $XXX to accretive be capital Iowa Phase XXX-acre on on successful in including illustrated XXXX be invest for front $XX as $X.XXX to book. but with second and of rent and in another full that, GAAP bringing and cash site commitment work million. our FFO $X.XX total will Des a dilutive to in million. forecasted call commitment This X both Steve. FFO will primarily to

Stephen E. Budorick

summarizing of by year. per XXXX strong first guidance midpoint close FFO the results X our achieved the months I'll increased retention We cash We capital by very share $X.XX, implies growth. midpoint which development in NOI the $X.XX increased and guidance messages. and another year-over-year investment of acquisitions. accomplishments for And same-property key X% during and tenant XXXX we over to growth, FFO the of

go exceeded months have We with to vacancy leasing year our two full target the already year. in more

component FFO And annual of going least expect strong, to at share to the self-fund forward. liquidity compound of equity continue XXXX our growth XXXX. very per X% to and between and remains investments we Our capital planned continue we anticipate

important completed growth we two quarter, the investments. During external

shell U.S. XX% significantly on opportunistic the land our tenant, opportunity capacity expands center government. that development important the and square to feet. our expands increases most XX over Defense/IT The land million owned an first, relationship our data acquisition our second, with And investment by

We're long-term runway by with for Defense/IT strength for demonstrating and disciplined our an demand into year-end, the investment computing very value. Overall, AI going operator, a the for into land external incredible our have shareholder up open which development and please additional opens had to opportunities We methodical questions. capacity. And significant quarter. create explosive grounded and strategy, that, cloud a we approach growth call

Operator

with Instructions] Evercore first from [Operator Sakwa ISI. question Our comes Steve

Steve Sakwa

Maybe couple Moines just Des acquisition. a the questions around land of

of in customer? Just major delivery to place of maybe maybe And the then how start on mean think with from that help kind timing then I getting, what going guess, infrastructure does to work a in leasing all us of through order for construction? that is kind asset And touch your the the perspective?

Stephen E. Budorick

I'll timing that some in There's take Well, we out. variability to still work phases. have

power Mid-American request our that we We a request are takes delivery be for a awaiting formal and to that X able self-perform development to that we gigawatt. to the notion We'll to phase of get with to too in the if power that then response response November, the the being long, bring can necessary of timing react of our site. might some

So our infrastructure. complete and thoughts the 'XX, part of are we'll 'XX

the fully Data likelihood day signed our the initial Shells leases anticipate time. we'll leased of that Center this all in the consistent X in will that pre-leases for and the progress could execute regard project commencing there. deliver on with 'XX. maybe delivery, expect long-term time will or with X, in at from those at hopefully but then delivery, of even rent -- be possibly series 'XX, and With developments, this will we to to slip period, least we be execute leasing, in a program We X space leases will

Steve Sakwa

the of Okay. one it. I projects of you And long-term or yet were kind have you haven't think sort for similarly? about those out. Or structure chunks get ownership ahead different things some of a vehicles But about to of money know large pull willing leased into think ownership, long-term you prior that sell built not and you project? do different that you on as this the you to of did, since Would

Stephen E. Budorick

XXX% as retain we develop a of and of portfolio that the that development square million these did we'll recycle continue ventures, program. to and development we financing of have some it's position self-fund capital to as own. to not when as are harvest as X we to mechanism desire we continue value ownership fully the well needed it in we it, assets feet When a to joint Well, intent did our that through our our

So to capacity, we the extent this our then we pace them. Should the exceed option certainly self-funding pace those own will of manage can the of development have to continue bring to we within development it, the to market.

We venture have partner that expressed interest do and could predictably a profitably. who's joint we very that tremendous and relationship, in expanding

Steve Sakwa

Okay. just you Road. making do Rogers and And unique of acquiring then think that, deals? pretty leasing I'm very success had and deal your This second last the were question, the opportunities? pool in those of curious, Or these inroads one-off on good just both big would that you just say is front. kind how is you've on opportunistic of

Stephen E. Budorick

more. couple able a get We might to be

strategy. capital. uniquely we're pricing a And where have sense this eyes it But funded. for our criteria that on not our we to meets a have situations we're can force of our unless There if We're But that things. shareholders, growth lot owners acquisition don't We have step opportunities it. through some in few asset we great our well in that where do position we can capital. strictly going to an makes strategic meets get with are

Steve Sakwa

Okay.

the the different realize a against think on yields XXXX little frames are or road the development like just are different, how follow-up time the in a a those? of Des about yields how Rogers yields you Moines? acquisition but sorry, I do And just

Stephen E. Budorick

to same we So exceeded we're pre-leased a to Road, or in we work same acquisition kind benchmark number. basically capital of disclose Rogers development, that the but threshold impressively, our pretty to it an Are largely going going put target. level threshold. we not

Operator

Our comes with Wells Blaine Heck from next question Fargo.

Blaine Heck

up on follow Des to Just Moines.

here equity on retained you least debt. to figures on do cash I And you to think require looking total of have everything ballpark and given on funding But property through this, guess, Anthony, any give say I heard you're think I you stand at spend sales this you As any do size fund then fund? us will the you or today, the options, project? can

Stephen E. Budorick

Well, We with we it within think and on timing. we and it our depends to expand capacity self-fund own be threshold longer-term expect can a this we the we've anticipate created development, will our improves if as bring venture further. I partner to recycle well self-fund, as in But positioned pace ability situation someplace our business to a we're exceeds really said, that joint capital. and

Blaine Heck

anything total can or that? And early Okay. you for spend too on say

Stephen E. Budorick

Total spend.

Over more. $X.X the life of the billion development, or probably

Blaine Heck

Okay. we've been this with a now. your talking markets into That or And makes additional then, sense. expansion for year potential Steve, about X tenant

size So your it's almost and is on to great the ability markets? your that to go-forward to guess, investment. other tenants, do to appetite to see them this And project, you of basis? what's with that go this like ask given hesitate I this, ambitions given big but And do I a any a such feel they have

Stephen E. Budorick

shareholders another to for that, by we're like customer. we We're we've often. extent interested And history don't of show to But able look, We've I we'll keep you very posted. to got this well. And opportunity, and find can our to the serve a bring Well, value XX-year them. developing doing definitely great my cards interested. been

Operator

Our question next from comes Michael Citi. with Griffin

Michael Griffin

and I your for you availability ability of greater us can if sector you to to sense is be in rental how renewals? wanted push on more a have the newer just to pricing kind because tenants vacancy pricing about power And lot do might a markets? if sense first on adding give a ask be private wondering leasing your portfolio? on there limited the tenants, power if given that of have a And might expanding side leasing the more you might then to compare tenants rates or you

Britt Snider

jack the pricing Yes, probably the mean, but But on more rent. would opportunities well. overly this versus again, I tenants is and balancing seeing we in we certainly customers all have renewal -- Michael, where relationship as side, about Britt. I mentioned in is the vacancy on of we're my being power terms to of aggressive that with I remarks, have the trying say what as probably it's

see the can, So opportunities we stick relationship. just look sharp then we I at to for looking as we lease, to may and then face will. too at that. in can If won't if all rate, But them past agree opportunity then the years. calls, -- we the and said we to are it's push every about have this stick and do to but have someone's think eye, opportunities are. case the it's XX first And on to aggressive we've And concessions move XX we a those is really where down or

So balance just this our because for it really impact something in would with spaces the -- is answer them made amount need to to renewal question, and more point I investment hard the leave. the at really on of say, last amount to your they've of side, is it's it's customers. But those we significant,

is. So that's what pricing power would say I the

Michael Griffin

keep to your we Congress of and of a the from House related government? divided for terms the there more you business, be I beneficial, we've the that uncertainty as whether the political there should think up. you if maybe it's And there. your color it's Republican kind in Britt, election kind sweep about know appreciate might a administration? scenarios Anything mind think a of then coming with might I more government standpoint any or But are got the within of in White better be what business just

Stephen E. Budorick

Well, one program increases the the and theme adversarial last years in the world. escalating and so exists with spending the defense of of the for X support of is our recognition defense bipartisan challenges to the some for has D.C. countries that

And So remain expect is who the support controls for election, irrespective Senate. wins really to spending it independent strong. of this defense of who we

has last great the for the and Senate increased For spending. we've X Democrats, the controlled been by had years, support

that think flip Republicans, I be different. the to were would no it

So we're standpoint. think I well hedged outcome from pretty an

capability that country And about defense through based more the it a through peace a strength, candidates, when need unchallenged. you spending margin, strong or of On communications such percent on that to contemplates as would I objective. as peace that GDP we'd from achieve talk strength anticipate goes

it it wins, better, way. be Trump would be would but marginally gut So will if my good tell either me

Operator

with from Our Catherwood comes next BTIG. question Tom

William Catherwood

strategy, a fund Anthony, stabilize? much your the as development year the retained prior leverage you just you and between earnings how additional on can projects back starting question. On remind Maybe us looping capacity can self-funding

Anthony Mifsud

$XXX $XXX basis, million. gross On it's to a million

the So to that of equity essentially plus million component we of Xx. minus current and maintain million $XXX $XXX our fund can leverage levels or

William Catherwood

so what foot Perfect. to mentioned data pipeline, back leasing there, in directionally Is you And the correct? if it And square feet types or that that QX. Britt, million are drove on out of development center still the that Iowa then, looks pipeline XXX,XXX I increased X.X X compared like shells so, the increase? square if opportunities

Blaine Heck

across portfolio. what I encouraged activity a I relating is Navy quite it though the mentioned, our say that not to activity seen It's we're lot at just directionally, I in which There's Navy by It Support, mean, beyond increased I lease as that, signed spread we will we even out, the is there the bit. there, specific Yes. very correct. one it mentioned. Maritime. area. additional A have of

to and related here seeing Gateway to in be Huntsville we strong. well tours the defense. and as very So cyber down activity offense very, missile continues activity additional Columbia And are in some

spread but of kind it's So directionally correct. out,

William Catherwood

there been vaguely parcel adjacent that, I to recall remember Got more mean was but had or previous then on that it. traditionally to comes Navy the I on you. Navy that, does land following more the just given plans Plaza kind leasing kind site, Maritime couldn't that especially contractor been the Maritime of to or on that that building, COPT And if Yard? then Plaza, actually, of a up they're capacity as up The add a Britt. at to And when it had full developments space it to follow-up that on

So that of an is option out kind there? still

Britt Snider

directly execution it's and that your on mean is saw as from I And occupancy secure question, much it on out Navy of they're assist And think like really leasing. leasing Yard -- build space unique space opportunity that was them to to going first something is that they it was the to a private look not Navy to work there for the but to that do highly left we speed a with well. them. the follow-on it to just come on really space the sector I really the this, XX%

opportunity great a there. was it So

Anthony Mifsud

correct. you Tom, And are

land down that development we we the have our pipeline lease of leased the that recall, land opportunities, includes of Plaza and Gas in does Maritime right none Washington you is If parcel now. but land a from development in expansion that

Operator

question from comes Richard next Our Wedbush with Securities. Anderson

Richard Anderson

is asset? element SCIF Road, that there to a On Rogers

Stephen E. Budorick

be will SCIF'd. fully it Yes,

Richard Anderson

Is just similar same vacant, about now relationship what was terms local like in I Like Centers. I leased this of to it building maybe guess be I I'm caused have it's asked the suddenly why -- given vacant to curious as you in Okay. And I question night proximity? that its it type and Franklin didn't? prior to of happen fully dark that the set nice a just -- if asked owner to of? the

Stephen E. Budorick

can't speak need, very was occupied. bought is or shape. my our moved man. we people a but an call defense for I a deal for center It good identified occupied. the of We secrets, We had shareholders. kind been densely in we opportunity. was the that from, it building, objectives building Trade I in. capabilities of mean, This great and heavily very The

Richard Anderson

pretty Okay. given that know close. give seeing and confidence Franklin is I also success XXXX on any start the sales? you're at success does regional office you to the needle there, the that Center, moving immediate

elsewhere? the not successes to least of a or at move issues do get there off last markets needle to least start the bit some of the capital do to more those But is the table described remaining you on and little that confident of it You've start at because sort take yet.

Stephen E. Budorick

finance Well, excited. basically It We actually, is buying the going and doesn't issue it people all out cash. no. we're And assets make internally.

For the going cost-effective to there is be not market debt fairly to and sales that's good have in invest buildings, office capacity on today. support those to value to

can markets those buildings. financial yet. of bought with to The we think a couple want investment out that and don't we're of office value to good we get there to not magic support assets, to because create I mislead So shareholders are going have to

Richard Anderson

Des relatively one similar time you Moines some speaking, getting X% in that Okay. way. were Manassas, evolve. will me. bit about range? the returns to a take for And Can despite talk is you last that? if is of But lower costs, it land in It's

Stephen E. Budorick

Yes.We don't but final same agreement, basic it have will be in framework. the

Operator

Abramowitz comes question with Jefferies. Peter next from Our

Peter Abramowitz

Yes.

pretty Corridor, this that was particularly Fort spreads, line well. basis Meade on also in So as and you particularly noticed strong the pretty had center shell quarter. just But data BW straight in strong leasing segment

pricing a you sort results is up? that should could submarket? about comment going basis just in that in any of straight-line So that indication then of onetime we forward that think drove power on an there And how

Stephen E. Budorick

I me final that -- think let your comment first. address is

you it. submarket. strongest MVP so yes, that -- can in about limited vacancy think, with great subsegment is got the biggest of our representing it's pricing you I the expect -- are as what our we've power conditions could our that component think -- that accuracy power. our there And so is Clearly,

Peter Abramowitz

at out think of guess, public to in the Xs. one the would And rates in space are has cap been competitors buying that similar helpful, as I -- What That's low strategy, I then your your assets Steve. characterize some

curious sense account contractor your differences sort you a Now like pricing. in for for assets, are just there's some there markets if today? stabilized defense market potential have of rates where But in differences for that core cap

Stephen E. Budorick

assets can them. those I'm valued trade very buildings even consider better buildings. really one familiar of different for our bought. Very different and I don't have very that tell would to to competitor much with selling assets be us Well, often. ever you market,

to We are cognizant pass. of that and elected opportunity

we or before, highest to don't are believe ours, I the assets So those the comparable name even when decide said in the though of the we acquire use priority we've tenant develop, serve similar. that and as is building mission are the the to invest,

Operator

Our Burzinski with from Street. Dylan next comes Green question

Dylan Burzinski

back bumps on I that some guys to call of I come going alluded basis guys renewals you be to the you seeing the mark-to-market of rent some on you spread Just as mean, it, to think you ability XXX% a, XXX are -- push to, that. able renewals? center signed guys data up those had

Britt Snider

those year. renewals The bumps we on are. Well, were each X% rent -- those

and think I on on one of the to that X.XX% X.X%. rent compares two leases, bumps

there So increases. are higher

Dylan Burzinski

And sort FFO I your be it, in term. portfolio, called given the anticipating call going what's CAGR Day, think operating mean, the at the near you things continue guys I out, in of then over Investor strong. X% to guys on

low X.X large that you how target for years. Or through of you mean, since million of guys what's talked do we happened FFO called out? feet now should like given sort earnings next You I about feel of then? about square a retention the guys too leases few sort that's XX% rate that thinking

Anthony Mifsud

-- bond X.XX%. think us first one That refinancing for I the in rate at not XXXX. currently the know unknown math for in the replaceable item that million XXXX one We in the at due that's that's our is that the comes bond of rate. is $XXX quarter

-- the the of refinancing ability geared think increase interest really for I off that gauged So to interest that is rate bond. on

Stephen E. Budorick

the at until we report benchmark, we 'XX. there. our to think, investors of get on And And put we going I the end we're benchmark that lastly, gave

least We're said it we going possibly we report could So going give to until way to that be generate better, the we're result. X%. final you but it at

Operator

over showing And this I'd any any time. further Budorick I'm questions to turn not remarks. at the for Mr. to back like closing call

Stephen E. Budorick

Well, for thank you call joining today. our

like again. We offices, call. Venkat, through you'd are our please in coordinate so you follow-up Thank if a

Operator

Thank you in Defense the Quarter today the Call. for concludes participation presentation. Properties your COPT Conference This XXXX Third Results

disconnect. now may You

COPT Defense Properties (CDP) 29 Oct 242024 Q3 Earnings call transcript