CDP - Earnings call transcript Q4 2024 | COPT Defense Properties

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Operator

Welcome to the COPT Defense Properties Fourth Quarter and Full Year 2024 Results Conference Call.

As a reminder, today's call is being recorded.

At this time, I will turn the call over to Venkat Kommineni, COPT Defense's Vice President of Investor Relations. Mr. Kommineni, please go ahead.

Venkat Kommineni

Dan. you, Thank Defense COPT quarter full and Welcome Properties results. year to Fourth on President are CEO Brett available information the package. today our me presentation and press of website release, results, Steve are and With supplemental President Budorick, CEO; and and Vice Snider, [indiscernible] our Executive

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

Stephen E. Budorick

year Thank you -- for XXXX the was another outstanding company.

Our midpoint by metrics as of we -- very of share and represents our plan ] of comparability, met target as resilient per still share grew $X.XX major for initial over $X.XX adjusted guidance. every business of yet increase XXXX's results per was nonrecurring X%. an proved the or X.X% FFO above again events, a [ outperformed $X.XX healthy

The continue we our XXXX. of annual building of investments, Gateway. our of including San year-over-year, the our level acquisitions in the the space feet achieved had X.X% which of performance committed We of of our XX% strategy differentiate the portfolio increased square is since retention years. NOI in the highest which beginning represented execution the at over capital company XX which XX% vacancy Columbia million And tenant we've cash Antonio highest ever first that We X.X is year. million Same-property and leasing, $XXX executed to new to reported. XXXX in of and increase we

which $X.XX XXXX's establishing $X.XX will which [ address more while are observing exceptional here. or ] approximately financing to of detail in X.X% XXXX, With FFO midpoint, per costs over in we implies increase share $X.XXX also Anthony a results growth the respect at guidance

supplies FFO share X.X% nonrecurring Net growth guidance normalized per of XXXX events, in XXXX.

firm, we presidential dominant the security Trump's is capacity will presidency and national to sufficient basis, expect capability, defense use Union. force. bolstering to need be this saw end the ushering philosophy Similar reminiscent some defense program. second of thoughts the of military implies President very term administration. like X-year a to I'd is now It programs. on deter which Cold and Reagan's dismantling to our military supportive the Ronald Soviet Trump strength in superiority for provide a new in So roughly on of and War defense spending company's nation annual technical and compound peace protect massive of the We X% second growth

operating excluding more our first company That the center square been posting of inauguration. feet annually During and annually, square vacancy only thrive, average X data achieved development strong XX% leases, government than U.S. new term, period, nearly X.X XXX,XXX since over the leasing we square feet feet averaged and It's leasing we under achieved shells, administration. leasing weeks million metrics. XXX,XXX Biden

defense areas naval we President prioritize capabilities. So Front X of expansion particular: in think of missile Space activities, defense, and will

different of our portfolio. All areas supported are of by which

preparations, and we to output the on time is this and X Achieving has our the output, focused be output that mission. those dose, which significant input as we DoD or portfolio capacity requires Early are supports each the administrative think the input indications effectiveness. is Regarding strength of a will increase through value reduce expansion enhancing and and trend Efficiency the Department about continue. expect peace function. processes in thereby outputs these mission streamlining last between lethality. mission years, which each of increased The defense the for Government The and capability, spending year rigorously Congress is will

to help contractors Given with history the along the great achieve government, efficiencies. U.S. government with we working XX-year our the we, potential and those of the nature support our facilities see

So headwinds some recently I'd address GSA regarding also misperception to leases. in common seen a we've which like

government our portfolio and by tenancy. strategy anchored are Our large

to we vast X.X annualized square mission. However, space those for the leased GSA. from revenue, of exposure majority the government leases leases minimal XX% rental The generates million national have activities authority Revenue and of feet. high the U.S. U.S. the totaled our this defense under supports of potential our of XX government procurement

XX,XXX procurement of revenue. representing feet, Our XXX,XXX and of Nearly feet only GSA rental XX% square space GSA square contains exposure court totaling improvements. of district U.S. or XX,XXX skip nearly a annualized houses than system. functions, including another X% or consists DoD X square less feet this XX% leases essential

GSA space a the these be target given As minimis exposure our I reduction. de but we we do feel have, leases will for of is described, unlikely the attributes it's

new proven years, and our opportunities space strength we of past challenging clarity themselves our we've and generated from a strategy the tenants negotiations the portfolio strong, face present over our the to excited that new and period. from the sense of very see strong So confidence of remains our resiliency the our new value Demand in during feel in X We're circumstances, for that and shareholder we've since portfolio lease results the and our election. of administration. and enhanced the

Britt. with call And turn I'll to that, the over

Britt Snider

you, Thank Steve.

create and at compares XX cannot be in business the to secured office continued major retention the skip in sector. relocated. of performance rest ] our our retention [ performed the of fact well spaces. driving our evident for with couple A over tenant which space space features invested the strong Skip factors favorably level of the tenants include demand that strength years. extremely demand security was this to particularly admission operating very highest in XX%, annual rate record was Our The XXXX in

added extraordinary last today. last Evidencing retention backfilled that leases tenant increase XXX,XXX nonrenewals ] in over for further long-term defense of profile. square skip we've continues Defense/IT experienced an and strengthening have Skip, months the over over years, both Moreover, X space our our and we concentration the X with this, contractor feet that demand [

of with XX is which the in XX.X% our occupancy and and a We occupancy investment vacancy short-term IT our of acquired, basis deliberate of XXX,XXX portfolio strategic or the a strong over either square and Net in XX% already points, from quarter we leased XX XX.X% year-over-year. leased defense at the to basis is XXXX of this feet levels ticked reduction activities as finished Today, resulting of is feet portfolio. increased Year-over-year overall to square lease. result down inventory shortly. points this approximately XXX,XXX inventory accumulation be occupancy actually or expected

in occupancy relates reduction activities. short-term The X to investment

square currently occupancy of Columbia XX,XXX the Center of First, in by this have points. on basis feet approximately feet acquired. prospects acquisition XXX,XXX reduced Gateway vacancy At square XX property, Franklin we

advanced this top We are foot negotiations very and in contractor to square execute lease on with defense shortly. expect lesion a a XX,XXX XX

Second, X,XXX Antonio commences lease in feet of quarter But space of vacancy San of Rogers -- square XXXX. leased of acquired. of occupancy Road the reduced by XX that is also XX,XXX the acquisition second the basis XXX% from that and XXX% occupancy in now now points is

property, of the in with a a lease XX awarded X,XXX At million been the only Huntsville, Third, coming Net basis XX,XXX U.S. X.X This in XX,XXX less with all X% of have feet lease availability less entire than square building executed lease fourth space square feet the the Gateway. this square in by of available square on rate XX,XXX at Redstone placing contractor executed we a this be square X remaining foot transactions, points. development into will of the occupancy government during in Rideout foot defense to And than weeks. we impacted Road an these to quarter. square feet park. and this XX,XXX X,XXX which in we've amounts service of foot building

leasing are Rideout demand in phase result Road future to and advance planning next a development capture create inventory the As in required activity, this our and government of executed contractor X,XXX to in order Huntsville. to now the we expected

leasing. turning to vacancy Now

buildings leased XXX,XXX this at Defense/IT our over exceeded the which by feet inventory activity. occupancy. XXX,XXX -- across other within vacancy markets. We with year leasing The or achieved of XX.X%. the our availability portfolio our XX.X% total our at our initial square Our of XXX,XXX during XX% tied extremely of year, represented in we feet. was of of executed XX% well cyber Over beginning and defense of broad-based in vacancy X/X square neighbor enjoyed markets our total activity XX% portfolio. feet leasing target We over available leasing have vacancy our to remain at IT portfolio Notably, the increase our in the to leasing XX% where opportunity executed was greatest

year entirely over of feet forward at a represents the our 'XX, available year. portfolio. set We've of Defense/IT vacancy executed XXX,XXX of beginning already the of square again, Looking we've square leasing this inventory total this leasing into vacancy XX,XXX and X/X target in feet

which feet Our negotiations, with close expect we over to next leasing the in XXX pipeline over strong is few square months. advanced

our ratio square to square were square of square in by over little X.X prospects which was Nearly roughly on feet availability. X square multiple a nondefense nearly expected a feet for large which XXXX. feet. tenant reported healthy X relates nonrenewal And in totaling which million equates of square Our the will of XX% small increase feet XXX,XXX total In activity contraction to XX,XXX a XX,XXX to quarter, leasing relates feet of in activity portfolio, pipeline availability first previously we feet. million have XX,XXX nonrenewals, a

for outperform we the to strong fourth and continue with with We executed in leasing. exceptionally an XXX,XXX feet year retention also quarter tenant retention feet million rate. executed XX%, square X.X square We in the of renewal XX%

feet. X square in included the few square for our feet Redstone For Research notable for the renewed Applied contractor among A General was XXX,XXX retention quarter, Georgia square Gateway, the for feet, Corridor, renewals Tech included tenants Dynamics Fort large XX,XXX XX,XXX and square XX%. in Northrop deals XX,XXX Grumman Meade/BW quarter feet. Raytheon defense At which

executed full roughly and tenants. the with vacancy For of was existing leasing year, investment XX%

in as and to both tenants existing ability attract provides our as our new Our stability relationships results. both growth tenants and well with and operating retain portfolio expand

outlook remains several retention over next years Our for solid. the

in and X assumes nearly feet of term administrative to XXX,XXX to a midpoint from government, do extended retention, Our square square tenant This we year the XXXX which to backlog. XXXX includes for into million guidance leases government scheduled feet short due have XX%, this expire XXXX.

continue XXXX. feet square this expirations, XXX,XXX approximately also and process government term will short into like backlog expect will the impacting of We which

of XXX% be expect we To government fully this be inventory renewed. clear, to

acceleration total forecast. concentrate net on the portfolio, For XXXX retention expirations. X.X Any XX% feet up retention is our and to government to square of the of million our provides extensions range short-term guidance government timing based backlog and the XX%

our large XX% We XXXX. year-end list projected of our provide our turning retention lease at We to look mid-XXXX that a over on rate card on leases large retention final achieved these Slide and feet XX% book. between flip topic retention Now our on target. the square large XX X.X that report final our is expire of and exceeding leases, on that this we've million

U.S. feet a this XXX,XXX for to our of X.X set we on this included XX, we and square these XXX% million the expire At of mid-XXXX lease provide square square expect X leases XXX% in space. million Slide X.X The feet space. XX% Thus that on Overall, of large million far, projected leases XX totaled leases feet look the over square between remaining over accounts approximately that outlook XX% X of which for expiring and total, On feet that space. the of continue XX,XXX feet, XX and government that and square rate we square period, of we beginning we million year-end future retained space. X on totaling to expect XXXX. retention we and totaling feet had to retention leases of retention have leases

to development. Moving on

Our XX% of development feet yet active which XXX,XXX active million. pre-leased totaled and a pipeline developments $XXX total or are not represent of square stabilized investment

square building pipeline we foot XXX,XXX ratio an square that Gateway XXX%. space, signed development square on XXX,XXX activity of XX,XXX in prospects which feet X of including buildings, equates At Huntsville, XX,XXX a to of feet Our inventory available have square Advanced roughly square lease X,XXX XX defense with We have have feet in quarter. that less feet now prospects, remaining XXX, XXX,XXX the MVP feet we top of to than during space. lease. At available Parsons, of contractor fourth square a XXX,XXX

early We of year of the both and expect will half and materialize demand leasing towards back government contractors this the this from part XXXX. in

currently stands we development will win within years XXX,XXX Our opportunities to square or as consider define pipeline, X XX% which less, about leasing better -- or we at feet.

to term. With X.X turning Anthony. it allow million Beyond that, that, the potential maintain we're square solid hand over I'll development activity and development feet medium opportunities. us of over near should pipeline to in a This

Anthony Mifsud

Britt. tax favorable We higher retention XXXX costs. development net lower seasonal outcomes, as including of income you, levels, from and lower estate expenses, real several operating Thank primarily at $X.XX. reported year renewal appeals FFO for adjusted concession higher fees. comparability The utility and share per Successful interest and properties benefited

fourth the per the at quarter, For was which adjusted our FFO as for share guidance. $X.XX, we reported midpoint of comparability of

our cash free leases, burn-off, as renewal items placed same rent lower-than-expected property expenses. benefit rent X.X% lower occupancy in seasonal was rent several off of an that real increases of same-property burn points in Several are generated expenses, rent tax NOI. items, on into and increase the service impacted which results This such the primarily by development driven basis of outcomes in XXXX, and favorable of positively in embedded escalations XXXX the free During of cash a included appeals XX operating all the leases these increase of operating portfolio growth XXXX, estate impact our the virtually lower net from free concessions. nonrecurring

those same-property basis Excluding XX up XXXX increase last have gains normalized These basis Northern were a up XX year-over-year compared a XXX XXX is and cash increase basis over X.X% and level up sequentially sequentially year-over-year. Fort which decade. basis point Corridor basis items, basis the Meade/BW and occupancy Virginia, the XXX up points largely driven and occupancy year XX.X%, points with and XX year-over-year points points our by with occupancy highest to at Same-property a point increased is ended would quarter, in NOI

Our continues year-end, remained positioned take fixed be at opportunities and well to balance and XXX% at of advantage to our sheet fortified debt of rates.

We component our development XX% increase line debt remain rate modestly year our as draw below on debt variable of credit the expect to exposure throughout the the to we of but spend. fund

to cash the expect equity been fund with of and our on flow funding component operations from have to a basis. We the investments after dividend continue leverage-neutral

performance guidance, in healthy another expect of year to With we respect XXXX.

service per $X.XX share We $X.XX $X.XX. are the from and partially XXXX from debt venture-related $X.XX expense portfolio from per $X.XX by growth FFO X.X% midpoint and This and net from developments placed into of takes $X.XX $X.XX expenses. into share in lower establishing projected $X.XX XXXX. other interest offset higher at to a range at XXXX operations balance is higher and a of increase during The and Implying account interest NOI, income midpoint.

Same-property cash increase projected at to X.XX% NOI the midpoint. is

same-property the mentioned, previously onetime normalized cash X.X% exclude NOI X.X% NOI Continuing As over would with items, at increased same-property XXXX. I to normalized in that cash midpoint XXXX. methodology increase XXXX,

the the the expect We approximately Occupancy will and to were XXXX XX% in XX.X%. to nonrenewals a property then few previously quarter and same reported, the during back contractions, first tick due which leases dip occupancy XX.X% in -- year end year as commence. up between of

X.X%. rent with of spreads roughly retention tenant the expect escalations range, we to at cash flat be XX% midpoint addition, XX% In on in average the to renewals

and year-over-year which income, $X.XX we interest other decline, by driven X is a factors. Regarding are forecasting

income fund earned cash that decline. from XXXX note on cash our normalized to offering. acquisition balance, exchangeable year-over-year throughout spend. XXXX, the of the from cash which and fall year, our drew more the a excess contributes we In development proceeds we the last maintain we -- debt to XXXX expect interest Out cash First, component to

of of the in the December, our for action. XXXX. million note million, in this believe maturity of the XXXX we maturing its prudent paid an of XXXX. and We additional ahead course March our include expect paydown $XX Second, City prefunding $XXX is X.XX% of plan assumptions Huntsville prefunding the of down receivable bond capital liquidity in Guidance

fourth outstanding issuance will temporarily in proceeds down we proceeds the the to Our as the excess line quarter and a the on assumes $XXX the use balance credit hold bond guidance pay million of and cash.

will share proceeds is credit on over will Paying approximately drag the bond in the we basis down FFO drag relative holding modeled, line as of on of points the little projections, guidance excess to net XXX nearly market points. while cash per the a [ current of impact result basis conservative ]. a a in that Based $X.XXX result XXX

We fixed are to market. the access positioned incredibly income well

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

stated a is of million and of XXXX to positive, maturing longest of XX basis is trading points, on our XXX maturities. Our profile. similar maturity $XXX XX conservative the performance currently leverage driven strong Moody's in at odd operating basis higher X and revised higher-rated with in which peers neutral from our spread points And to November, outlook rating spreads our their by

million investments $XXX million XXXX, $XXX spend of commit uses of new capital range our million $XXX million. future capital $XXX in to on projects development Regarding of be to active will expect in expect a we and to to

service million We XXX% projects XXXX into X that data expect of place represent shell investment. which leased center are to $XXX in over capital

a to plan into Huntsville Advanced place service. Gateway also of We in portion X,XXX

very are strong at in leverage debt and the and maturity conservative portfolio our results attractive and confident our upcoming strength continue spread, generate our an profile. of to refinance to ability We a given stability

I'll to turn call Steve. back the that, With

Stephen E. Budorick

So before of let I you list up, wrap achievements. to our refer me

XX%. sector-leading years. inflation over and years tenant on office leading points, by of basis per had our pandemic, put We occupancy we increased our of ISS since vacancy headwinds and by We XX%. our past maintained grew increased And highest massive home, included rate retention Over work by rate climate in COVID XXXX, by XX environment XX highest and [ that Each in XX%. share the which FFO portfolio to the of ] foot years, rate remarkable the the our is given over in a years, global X the we macroeconomic to from XX book. nearly these XX that Slide the AFFO XX% our pretty over despite interest shift level we XX of

accomplishments So driven share our results of We year-over-year, marking our X.X% X.X% of in growth. portfolio close by XXXX, last finally, growth and excellent year the the X key achieved our years. operations. I'll accrued consecutive by messages. strength We delivered in sixth per FFO memorizing dividend over continued We

seventh growth, to guidance per an of and of FFO X.X%. XXXX our expect increase share be We our implies year

demanding XXX,XXX well set portfolio for our at target given vacancy leased how leasing We've square is already. a feet,

strong expect tenant We will at remain retention XX%.

restocking capital thereby of to commit our pipeline. new investments, We million $XXX expect to development

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

So we're off to a to great successful XXXX, start year. forward another and looking in we're highly

please operator, questions. that, open call with And the for

Operator

[Operator from Catherwood first our And Instructions]. Tom question comes BTIG. with

William Catherwood

and to your detailed those? evolve start, And prepared of ahead defense you afternoon, with you, X priorities your that potential. with assets would that good getting there of acquiring inventory consideration remarks, around a the Maybe everyone. lease-up how developments expect Steve, is of terms demand or in you Thank to markets demand in in additional

Stephen E. Budorick

we consideration then will that to it. strong them create among our serve X house support in needing to and space relocate to Huntsville. immediate is standing priorities the And developments a to contractors the definitely believe portfolio that to And contractor potentially we could So affect initial mission subsequently named Colorado Huntsville of the from activities, that up Space Command Springs. development

you The the Gateway, as Space which what -- located in also to and Redstone missile Business has President Defense. significant park equivalent, And Arsenal. system headquartered PEO a defense about Ground that's Huntsville listen expansion is dome known likelihood GMD defense Redstone second well. is is iron our in Missile to antimissile if Trump effect talked The all of as on

OUS quarter error] development reference where [ portfolio, Yard we've was expansion, D.C. priority and next third Southern Washington, [ could the that nice as lease our Navy a Last support an increased . development in to where ] we portfolio capabilities way, the well benefit demand. in program our by support experienced the Then U.S. the is both submarine and to as naval Maryland,

I So miss third? Did I answered think that I the question.

William Catherwood

and ] comp be if That leases. their is an appreciate to your be on was indirect focus focus [ Dosist to Or kind on could there of or thoughts increased great. on that And impact there's DoD-related likely I the businesses? GSA contractor outside your put also But customers? an

Stephen E. Budorick

Well, it's interesting.

to it focused methods service comments manufacturers opportunity their move and to to larger mood solution in be contractor, you dollar earnings they less of the in of on companies and the If transition to competitive, for, they're efficient the that for look Dosist efficient really well part the looking you the the to is the is streamlining that their make more calls, believe contractor value this won't traditions procurement if at protesting. of are positioned have look -- they specific, believe I DoD more then efficiencies less and at procurement to that most on more the from But kind the an spent process at the mission. industry move really in bring

William Catherwood

you Got one it. provide that and acquired in Can for me. the center And quarter on then applications Appreciate your power? of Iowa data last last an you for status thought. update land I

Stephen E. Budorick

Yes. request. of news through got requests sheet of last a have initial a less to they've variety term discussions kind and news in have we're from in specificity, those We're for the power. more power to of our They through a of got specific working timing from last on and a We're month. global then clear company a bring with -- in is working an but The us path excited. queued -- we kind some on up sequence is good work the customer standpoint. gigawatt. is regarding response Good the We

Operator

Our Michael Citi. comes next with question from Griffin

Michael Griffin

different that case. and impact business, foresee that being potential factions you this Republican majority I know the issue But And given could and deal appropriations have, razor of the a for the reaching deferred of year. were that do the sort in precedent your budget for Congress Maybe just the there's going March, to spend until expectations installed defense middle of was this if or there. any delays? continued

Stephen E. Budorick

end initial comes I election can anything the there's spending. now. year happen. a budget, say the of There's significant increase in after dramatic believe, could to the around May, happen of Trump to which the promotion right that all continuing get resolution primarily effort to housing that I it the when way that a is, think history the in because that I'll this, occurred victory, center DoD potentially Well, longest lot

So I'm But support to not increase be. really smart funding today, point how that final to enough that of negotiations percentage there's into predict X bipartisan the the DoD translates can't authorization. to over and years, last our lower been a amazing and DoD the we broad I a of the level recognition full GDP probably than that even spending at we're should say

an said when see so And increase. is you'll I done, and all think

Britt Snider

is whatsoever. conversations Hi, just our direct showing with that Greg, is, add mean, thing on are the to this I one mean, I slowdown no customers Britt.

potentially fact, the military expansion with opposite that customers In of with contractors. and their

from we're there seeing themselves. any be slowdown So the out may but stuff gets customers some that figured here. not process

Michael Griffin

government differences and of any that be result power of with to understand landlord segues about that as seen this with increases. question. of sector tenant my could kind the have to of pricing, but take relationship well and greater from you any pricing. you next are look as they're customers, push your understand and kind renewal And think a ability sensitive the price push ability particularly leasing obviously, Britt, perspective? the pricing sort as on you private about demand? a into to But base, give side, But noticing you you I rates have I pricing it

Anthony Mifsud

many then successful back and Yes. doing can. last push is cost going really we to it which I were rent benefit retention, cash times, continue mean that on pointed out we a we very reducing just we spread. those, mean we're the where in on But focused But concessions I year. over to also as initially massive

that. to take we we're So opportunities so, do where rate sense it push losing not tenants. can to We'll those we're risk but when makes going on focused very

Operator

Paolone question JPMorgan. And our Anthony from next with comes

Anthony Paolone

probably mine, year? to the spending data it the to the that trying back a through then lot to is be going in land just fair going your -- this of that's to Just comments assume parse center not

Stephen E. Budorick

fair. is very That

Anthony Paolone

Okay.

maybe can we go give And projects? for on so color and thoughts us XXXX, might where starts of do you the if you just nature development some what to additional there, your

Stephen E. Budorick

Well, signed government, about the will in for anticipating past we're in of mentioned a lift in space the demand his XX available the been very build-to-suits sure, we're with we the going comments, little we park, that GAXXX months. have Redstone start over the talking to and on advancement lease and our in as some U.S. potentially we've

there. So to plan have in production inventory we

provide tenants multiple the XX secure preparing campus locations, all across force for moreover, as We to And should different are develop on pretty some our to in to occur. the moved days, Defense/IT. solution the in encouraging X it build Command a relocation space Space we've portfolio, last with suits as many

Anthony Paolone

would up hung guidance the just there? this change get in just in to a were the year, or Command that process starts like Space If Huntsville Okay.

Stephen E. Budorick

without all. Well, us. affect overall at least the we will an is numbers at think intent and recognition won't I from don't start it a that our relocation that that would building lease occur to But

Anthony Mifsud

in assumed capital assuming really terms development. for invest there's year, Space to the not the that any capital the we're during there's Tony, And developed Command Yes. vertical of --

Anthony Paolone

Got Okay. then it. one, And last sneak could if just one in. I

that Just sell to that liquidity regional the out or prompt there on front? anything might you're office you side. any kind to over seeing anything on change of

Stephen E. Budorick

is distressed is be it a or activity. occur We don't short about what range No. workouts. I'll would a just really answer. There's rates an to investment deeply occurred sales efficient assets, in see to where And so. cap sales of lot has not getting potentially

early, are high. We continue rates it's to monitor, but too

Operator

Blaine from comes question next Our Wells Heck with Fargo.

Blaine Heck

birthday, happy Great. and Tom.

you through to on whether a you put it. an administration and of properties. potential your just to talk any conversation portfolio? any and news change on think impact point of are Steve, lot to But tenants guess Can susceptible you government for mentioned I a just in changes your see So the finer us there's workforce and you focused these been the whether

Stephen E. Budorick

we missions is the support and by -- GSA do component. have, proactively leases we the risk not our and deeply anything we reviewed addressing we've So at see the

We their form and And have skip group force. a where a under have we have system then they of core overall first are mentioned in GSA a around couple put missions the space because functions of in those a with them. we police correlates interplays and the leases that

don't that tenants. affecting our we see So

Blaine Heck

Very helpful.

mentioned are have confirm or just Britt that 'XX. 'XX And square extend to in tenants you any year that group? somewhat if portfolio of likely whether or additional related to expected that. to expiring move-up leases XXX,XXX sticky near those in from remain into your feet government this there's are options risk the extension Can

Unknown Executive

bit. those that. we really this mean But really is of good this more a happens group, don't little is move the just you could leases the see see year, that. it's single It's administrative changes No, every very just that process. process and that any feel process about Do -- outs amount faster. actually actually -- renewals get we I process help something

not something it's that's So atypical.

Blaine Heck

And contractions then commentary other XX%? the those mentioned be nonrenewals Can Were about profile of and the expected surprises you talk helpful. first quarter tenants XX% on those or And that to helpful. you That's were in think color guys? communicated. any would Okay. Anthony previously other I the

Stephen E. Budorick

that [ that No, feet. been want. an We've XX,XXX out tenant, about we've complex. Gateway, Scare premarketing demand because We of cyber is nondefense deeply several a there. they're been much It's I that system. for And Columbia X-building concentrate for the more nonrenewing in we and strong the to we which ] buildings years. in Blue Cross, Shield our actually moving got his medical so as allows demand headquarters have view we the square have largest know they us skiff tenancy and It's mentioned our Blue opportunity in comments, First

Operator

Our with Securities. Richard question comes next from Anderson Wedbush

Richard Anderson

for I'm Britt, question you X.X And right. saw the feet, like availability on adding at we something some of then you're square million the do availability. year, math the my end as if

there what can what frictional me of on like some for said me I leased. if be a lease level topping is there is as you just should we where of XXX,XXX the [ you Nirvana wrong what point Or correct in guys? or mind? your in ] always think I the portfolio I'm percentage square actually for moment almost the level XXX% natural guess the But expect curious that. question I'm vacancy of feet, you

Britt Snider

kind XX%, mean natural for yes. flat remaining the a I is But gap mean, is occupancy this think the XX% bit, little opportunities Yes. for I there of maybe good but I I us. are assumption, the year think to close a

Richard Anderson

enough good me. That's for

talked events at growth, the XXXX. the you same-store the On X.XX% midpoint, in about onetime

right the ] heard [ think right, path? becomes that Was I it. I X.X% X.X% without

Britt Snider

That's correct.

Richard Anderson

Okay.

get growth, this end terms the So of the to in the any same-store year, the pool internal the noise top range, number of question growth? there I the is to in is guess, around

Anthony Mifsud

is items noise anticipating not last only -- because there the year. any is results The in no off we're you're onetime in XXXX. against noise the amount The projected really for benchmarking

gets to versus [ that ] the the normalizing X.X% last year. So you X.X% for

Richard Anderson

Okay.

you've unlikely you what time Antonio first while. looks be like in you one-off-ish wondering San operating more enough. that growth assets a mentioned -- a And Do Okay. sort pipeline release, for me, or acquisitions? -- and the then of on whether acquisitions land opportunity is center. kind of a done of it's in Franklin some to meaningful story? the I'm And last part the Or Fair see pipeline like of and external are those from

Britt Snider

we This the say, of so but would has meet are I there some we're opportunities Yes. look Britt. Franklin again, all X there yes or I much I to would that looking, it a are criteria. profile. say is out distressed mean to that our at, But X, we're Center seeing taking

Stephen E. Budorick

be fit Yes, mission, willing important we're not got very It's buy. what got to we and believe going is, a be Defense/IT, We've that criteria strict the servicing a programmatic. on we'd use going to to into mission be buy to has point that's nearer to it's and portfolio in our the it.

Operator

Instructions]. [Operator

from with Our next question comes Burzinski Dylan Street. Green

Dylan Burzinski

talked term. to and near guys Just of spend as seeing. to touch development obviously, the you occupied emissions environment demand you future on the I that The about sort strong sort of dollars go portfolio towards itself over wanted prospects. spending is up expect XX% operating mean, today, you're it currently especially relates to

XXXX how beyond, XXXX? mind, we guess, and Or reasonable mean, I pick in with that it in to seem up does thinking will I that spend So the should in starting we development levels about see expect that the be meaningfully that? from

Stephen E. Budorick

average view increased I I say more behaviors be can I'd provided and our We opportunity. some ebb with some to But that brings is we'll there we've to year see optimism confidence in on tenants. the our there's would at will already good. it year. that range this think Well, range the have pretty flow from see what table. administration

Operator

the will Budorick Mr. for I call turn you. back closing remarks. now to Thank

Stephen E. Budorick

call again, you all joining happy thank our for Tom. So and today, birthday,

We are in our offices.

to come up. please you. you'd follow visit, like if Thank So

Operator

Quarter your Defense XXXX Call. concludes for presentation. the today and COPT Year This participation you Full Fourth the Conference Results Properties Thank and

may You day. Good now disconnect.

COPT Defense Properties (CDP) 7 Feb 252024 Q4 Earnings call transcript