COPT Defense Properties

Latest Results (04.10.2025):

COPT Defense Properties reported robust financial results for the second quarter of 2025, surpassing earnings and funds from operations (FFO) expectations. The company demonstrated strong leasing activity, high occupancy rates, and raised its full-year guidance, underpinned by favorable defense spending trends.

Earnings and FFO Growth

For Q2 2025, COPT Defense Properties achieved diluted earnings per share (EPS) of $0.34, up from $0.31 in Q2 2024. Funds from operations per share (FFO) stood at $0.68, marking a 6.3% year-over-year increase and exceeding the midpoint of guidance by 2 cents.

Guidance Upgrades

The company raised the midpoint of its 2025 FFO per share guidance by 1 cent to $2.67, anticipating a 3.9% annual growth. Additionally, the midpoint guidance for same property cash NOI growth was increased by 50 basis points to 3.25%, and tenant retention guidance was boosted by 250 basis points to 82.5%.

Strong Leasing Performance

COPT Defense Properties leased 724,000 square feet in Q2 2025 and 1.4 million square feet in the first half of the year, surpassing its annual vacancy leasing target by increasing it from 400,000 to 450,000 square feet. Tenant retention rates were 90% in Q2 and 82% year-to-date.

High Occupancy Rates

The company's total portfolio maintained a 94.0% occupancy rate and 95.6% leased in Q2 2025. Specifically, the Defense/IT portfolio achieved 95.6% occupancy and 96.8% leasing, reflecting continued demand and strong property performance.

Positive Outlook Supported by Defense Spending

COPT Defense Properties expects sustained growth driven by increased defense spending, following the One Big Beautiful Bill Act and the President’s FY 2026 budget request. This favorable environment is anticipated to support ongoing leasing activities, development projects, and earnings growth through 2026.