COPT DEFENSE PROPERTIES
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 4, 2025
CDP$32.87+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000860546-25-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0000860546-25-000048
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 118 current paragraphs.
82 unchanged; 18 reworded; 18 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
During the nine months ended September 30, 2025, we:
Current report
Subsequent to September 30, 2025, we:
Current report
•issued $400.0 million of 4.50% Notes at an initial offering price of 99.46% of their face value on October 2, 2025, resulting in proceeds, after deducting underwriting discounts and commissions, but before other offering expenses, of $395.5 million. The net proceeds from the notes were used for general corporate purposes, including paying down amounts outstanding under our Revolving Credit Facility and pre-funding the repayment at maturity of our 2.25% Senior Notes due 2026, which resulted in a portion of the net proceeds being invested in interest-bearing accounts pending such use;
Current report
•entered into an amendment to the existing credit agreement underlying our Revolving Credit Facility and Term Loan Facility on October 6, 2025. The resulting Amended Credit Agreement provided for: an increase in the aggregate lender commitment under our Revolving Credit Facility from $600.0 million to $800.0 million; extended the previous maturity date of our Revolving Credit Facility by approximately three years; and changed the facilities’ interest and quarterly fee terms under the agreement;
Current report
•entered into the Revolving Development Facility, with an initial aggregate lender commitment of $200.0 million, on October 16, 2025. The net proceeds from our initial borrowing under this facility totaled approximately $154 million, which were used for general corporate purposes, including paying down amounts outstanding under our Revolving Credit Facility; and
Current report
•acquired 15050 Conference Center Drive, a 142,000 square foot property in Chantilly, Virginia that was 100% leased, for a gross purchase price of approximately $40 million on October 30, 2025.
Current report
Gain on Sales of Real Estate
Current report
We recognized a gain on sale of real estate of $3.0 million in the current period in connection with our sale of an undeveloped land parcel.
Current report
Gain on Sales of Real Estate
Current report
Refer to our explanation for the three-month periods.
Current report
Net cash flow used in investing activities decreased $46.0 million when comparing the nine months ended September 30, 2025 and 2024 due primarily to distributions of debt refinancing proceeds from two of our unconsolidated real estate joint ventures in the current period and our acquisition of two operating properties in the prior period.
Current report
As of September 30, 2025, we had:
Current report
Following the completion of the capital events described in the section above entitled “Overview,” we had:
Current report
•significantly higher cash and cash equivalents due to a portion of the net proceeds from our 4.50% Notes issuance being invested in interest-bearing accounts;
Current report
•a Revolving Credit Facility with a maximum borrowing capacity of $800.0 million (increased from $600.0 million), substantially all of which was available after paying down the facility using proceeds from our 4.50% Notes issuance and the initial borrowing under our Revolving Development Facility; and
Current report
•a Revolving Development Facility with a maximum borrowing capacity of $200.0 million, approximately $44 million of which was available as of October 16, 2025.
Current report
We expect to use our Revolving Development Facility to fund most of our property development cash requirements and subsequently pay it down as development properties are placed into service using cash available from operations, any excess available cash and cash equivalents and borrowings from our Revolving Credit Facility. We expect to use our Revolving Credit Facility to initially fund most of the cash requirements from our other investing activities, including development cash requirements in excess of Revolving Development Facility available borrowings, as well as pay downs of the Revolving Development Facility discussed above and certain debt balloon payments due upon maturity; we expect to pay down this facility using cash available from operations and proceeds from financing and/or investing activities, such as long-term borrowings, equity issuances and sales of interests in properties.
Current report
Beyond 2025, we expect to fund property development activities and, potentially, opportunistic acquisitions of operating properties using, in part, available cash flow from operations, with the balance funded using any remaining excess available cash and cash equivalents and borrowings under our Revolving Development Facility and Revolving Credit Facility.
Removed paragraphs (2)
Previous report
During the six months ended June 30, 2025, we:
Previous report
Net cash flow used in investing activities increased $16.3 million when comparing the six months ended June 30, 2025 and 2024 due primarily to cash paid for properties in development or held for future development and funding of investing receivables, which was partially offset by our acquisition of an operating property in the prior period.
Reworded paragraphs (18)
Previous wording
finished the period with our portfolio 94.0% occupied and 95.6% leased; and
Current wording
•finished the period with our portfolio 93.9% occupied and 95.7% leased; and
Previous wording
During the six months ended June 30, 2025, we leased 1.4 million square feet, including: 915,000 square feet of renewal leasing (representing a tenant retention rate of 81.9%); 353,000 square feet of vacant space leasing; and 103,000 square feet of investment space leasing.
Current wording
During the nine months ended September 30, 2025, we leased 2.3 million square feet, including: 1.7 million square feet of renewal leasing (representing a tenant retention rate of 81.9%); 432,000 square feet of vacant space leasing; and 203,000 square feet of investment space leasing.
Previous wording
Our Same Property pool consisted of 198 properties, comprising 97.1% of our portfolio’s square footage as of June 30, 2025. This pool of properties changed from the pool used for purposes of comparing 2024 and 2023 in our 2024 Annual Report on Form 10-K due to the addition of six properties placed in service and 100% operational on or before January 1, 2024 and three properties owned through a UJV that was formed in 2023.
Current wording
Our Same Property pool consisted of 198 properties, comprising 97.0% of our portfolio’s square footage as of September 30, 2025. This pool of properties changed from the pool used for purposes of comparing 2024 and 2023 in our 2024 Annual Report on Form 10-K due to the addition of six properties placed in service and 100% operational on or before January 1, 2024 and three properties owned through a UJV that was formed in 2023.
Previous wording
Comparison of Statements of Operations for the Six Months Ended June 30, 2025 and 2024
Current wording
Comparison of Statements of Operations for the Nine Months Ended September 30, 2025 and 2024
Previous wording
the increase for our Same Properties was due in large part to additional revenue in the current period resulting from increased rental and occupancy rates. Our Same Properties also experienced increased property operating expenses, driven primarily by higher snow removal and utility expenses, the effect of which was mostly offset by increased tenant expense reimbursements and prior year real estate taxes refunded upon appeal. For the increases in our Same Properties by segment, the Defense/IT Portfolio increase was adversely affected by $1.9 million in collectability loss provisions, while our Other segment increase included $2.2 million from refunds of prior year real estate taxes, net of related tenant reimbursements;
Current wording
•the increase for our Same Properties was due in large part to additional revenue in the current period resulting from increased rental and occupancy rates. Our Same Properties also experienced increased property operating expenses, driven primarily by higher snow removal and utility expenses, the effect of which was mostly offset by increased tenant expense reimbursements and prior year real estate taxes refunded upon appeal. For our Same Properties by segment, the Defense/IT Portfolio increase was partially offset by $2.0 million in collectability loss provisions, while our Other segment increase included $2.6 million from refunds of prior year real estate taxes, net of related tenant reimbursements;
Previous wording
The table below sets forth the major components of our additions to properties for the six months ended June 30, 2025 (in thousands):
Current wording
The table below sets forth the major components of our additions to properties for the nine months ended September 30, 2025 (in thousands):
Previous wording
Net cash flow from operating activities decreased $4.9 million when comparing the six months ended June 30, 2025 and 2024, which included offsetting changes in the timing of cash flows from real estate operations and third-party construction projects.
Current wording
Net cash flow from operating activities decreased $1.3 million when comparing the nine months ended September 30, 2025 and 2024.
Previous wording
Net cash flow used in financing activities in the six months ended June 30, 2025 was $27.7 million, and included primarily the following:
Current wording
Net cash flow used in financing activities in the nine months ended September 30, 2025 was $60.4 million, and included primarily the following:
Previous wording
net proceeds from debt borrowings during the period of $44.1 million; and
Current wording
•net proceeds from debt borrowings during the period of $47.6 million; and
Previous wording
dividends to common shareholders of $67.7 million.
Current wording
•dividends to common shareholders of $102.2 million.
Previous wording
Net cash flow used in financing activities in the six months ended June 30, 2024 was $99.4 million, and included primarily the following:
Current wording
Net cash flow used in financing activities in the nine months ended September 30, 2024 was $134.5 million, and included primarily the following:
Previous wording
repayments of debt borrowings during the period of $29.1 million; and
Current wording
•repayments of debt borrowings during the period of $29.5 million; and
Previous wording
dividends to common shareholders of $65.3 million.
Current wording
•dividends to common shareholders of $98.6 million.
Previous wording
As of June 30, 2025, we had $21.3 million in cash and cash equivalents.
Current wording
•$23.7 million in cash and cash equivalents; and
Previous wording
We have a Revolving Credit Facility with a maximum borrowing capacity of $600.0 million. We use this facility to initially fund most of the cash requirements from our investing activities, including property development and acquisition costs, as well as certain debt balloon payments due upon maturity. We then subsequently pay down the facility using cash available from operations and proceeds from financing and/or investing activities, such as long-term borrowings, equity issuances and sales of interests in properties. The facility matures in October 2026 and may be extended 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. Our available borrowing capacity under the facility totaled $480.0 million as of June 30, 2025.
Current wording
•a Revolving Credit Facility with a maximum borrowing capacity of $600.0 million and an available borrowing capacity of $476.0 million.
Previous wording
tenant and capital improvements and leasing costs for operating properties (expected to total approximately $60 million during the remainder of 2025);
Current wording
•tenant and capital improvements and leasing costs for operating properties (expected to total approximately $35 million during the remainder of 2025);
Previous wording
During the remainder of 2025, we expect to spend $115 million to $135 million on costs for properties actively under development, most of which was contractually obligated as of June 30, 2025. During the remainder of 2025 and beyond, we expect to continue to actively develop additional properties and also could opportunistically acquire operating properties. We expect to fund these activities using, in part, available cash flow from operations and any excess available cash and cash equivalents, with the balance funded, at least initially, using borrowings under our Revolving Credit Facility.
Current wording
During the remainder of 2025, we: expect to spend $75 million to $85 million on costs for properties actively under development, most of which was contractually obligated as of September 30, 2025, and additional costs to actively develop additional properties; and funded our acquisition of 15050 Conference Center Drive. We expect to fund these activities using, in part, available cash flow from operations, with the balance funded using borrowings under our Revolving Development Facility and excess available cash and cash equivalents.
Previous wording
We provide disclosure in our consolidated financial statements on our future lessee obligations (expected to be funded primarily by cash flow from operations) in Note 5 and future debt obligations (expected to be refinanced by new debt borrowings or funded by future equity issuances and/or sales of interests in properties) in Note 8.
Current wording
We provide disclosure in our consolidated financial statements on our future lessee obligations (expected to be funded primarily by cash flow from operations) in Note 5 and future debt obligations (expected to be funded by any remaining excess available cash and cash equivalents, refinanced by new debt borrowings or funded by future equity issuances and/or sales of interests in properties) in Note 8.