000086054612/312025Q1FALSEhttp://fasb.org/us-gaap/2024#PrepaidExpenseAndOtherAssetshttp://fasb.org/us-gaap/2024#PrepaidExpenseAndOtherAssetshttp://fasb.org/us-gaap/2024#OtherLiabilitieshttp://fasb.org/us-gaap/2024#OtherLiabilities0.0334486xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesofc:propertyutr:sqftutr:acrexbrli:pureofc:extensionofc:formofc:percentile_rank00008605462025-01-012025-03-3100008605462025-04-2100008605462025-03-3100008605462024-12-310000860546ofc:InvestingReceivablesMember2025-03-310000860546ofc:InvestingReceivablesMember2024-12-3100008605462024-01-012024-03-3100008605462023-12-310000860546us-gaap:CommonStockMember2023-12-310000860546us-gaap:AdditionalPaidInCapitalMember2023-12-310000860546us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2023-12-310000860546us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310000860546us-gaap:NoncontrollingInterestMember2023-12-310000860546us-gaap:NoncontrollingInterestMember2024-01-012024-03-310000860546us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310000860546us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2024-01-012024-03-310000860546us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-3100008605462024-03-310000860546us-gaap:CommonStockMember2024-03-310000860546us-gaap:AdditionalPaidInCapitalMember2024-03-310000860546us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2024-03-310000860546us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310000860546us-gaap:NoncontrollingInterestMember2024-03-310000860546us-gaap:CommonStockMember2024-12-310000860546us-gaap:AdditionalPaidInCapitalMember2024-12-310000860546us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2024-12-310000860546us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-310000860546us-gaap:NoncontrollingInterestMember2024-12-310000860546us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-310000860546us-gaap:NoncontrollingInterestMember2025-01-012025-03-310000860546us-gaap:CommonStockMember2025-01-012025-03-310000860546us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2025-01-012025-03-310000860546us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-01-012025-03-310000860546us-gaap:CommonStockMember2025-03-310000860546us-gaap:AdditionalPaidInCapitalMember2025-03-310000860546us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2025-03-310000860546us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-310000860546us-gaap:NoncontrollingInterestMember2025-03-310000860546ofc:OperatingPropertiesMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:OfficePropertiesMemberofc:OperatingPropertiesMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:SingleTenantDataCentersMemberofc:OperatingPropertiesMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:UnconsolidatedRealEstateJointVenturesMemberofc:SingleTenantDataCentersMemberofc:OperatingPropertiesMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:PropertiesUnderDevelopmentMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:OfficePropertiesMemberofc:PropertiesUnderDevelopmentMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:SingleTenantDataCentersMemberofc:PropertiesUnderDevelopmentMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:PropertiesUnderDevelopmentPartiallyOperationalofc:DefenseITPortfolioMember2025-03-310000860546ofc:LandControlledForDevelopmentMemberofc:DefenseITPortfolioMember2025-03-310000860546ofc:GreaterWashingtonDCBaltimoreMemberofc:OperatingPropertiesMemberus-gaap:AllOtherSegmentsMember2025-03-310000860546ofc:GreaterWashingtonDCBaltimoreMemberofc:LandControlledForDevelopmentMemberus-gaap:AllOtherSegmentsMember2025-03-310000860546ofc:COPTDefensePropertiesLPMemberofc:COPTDefensePropertiesMemberofc:CommonUnitsMember2025-01-012025-03-310000860546us-gaap:PreferredStockMember2025-03-310000860546us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310000860546us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310000860546us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310000860546us-gaap:FairValueMeasurementsRecurringMember2025-03-310000860546ofc:OperatingPropertiesMemberus-gaap:LandMember2025-03-310000860546ofc:OperatingPropertiesMemberus-gaap:LandMember2024-12-310000860546ofc:OperatingPropertiesMemberus-gaap:BuildingAndBuildingImprovementsMember2025-03-310000860546ofc:OperatingPropertiesMemberus-gaap:BuildingAndBuildingImprovementsMember2024-12-310000860546ofc:OperatingPropertiesMember2025-03-310000860546ofc:OperatingPropertiesMember2024-12-310000860546ofc:LwRedstoneCompanyLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-01-012025-03-310000860546ofc:LwRedstoneCompanyLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:AssetPledgedAsCollateralMemberofc:LwRedstoneCompanyLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:SecuredDebtMemberofc:LwRedstoneCompanyLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546ofc:StevensInvestorsLLCMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-01-012025-03-310000860546ofc:StevensInvestorsLLCMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:AssetPledgedAsCollateralMemberofc:StevensInvestorsLLCMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:SecuredDebtMemberofc:StevensInvestorsLLCMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546ofc:MSquareAssociatesLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-01-012025-03-310000860546ofc:MSquareAssociatesLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:AssetPledgedAsCollateralMemberofc:MSquareAssociatesLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:SecuredDebtMemberofc:MSquareAssociatesLlcMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:AssetPledgedAsCollateralMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546us-gaap:SecuredDebtMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2025-03-310000860546ofc:LwRedstoneCompanyLlcMember2025-01-012025-03-310000860546ofc:RedshiftJVLLCMember2025-03-310000860546ofc:RedshiftJVLLCMember2024-12-310000860546ofc:BREITCOPTDCJVLLCMember2025-03-310000860546ofc:BREITCOPTDCJVLLCMember2024-12-310000860546ofc:QuarkJVLLCMember2025-03-310000860546ofc:QuarkJVLLCMember2024-12-310000860546ofc:BRECOPTDCJVIIILLCMember2025-03-310000860546ofc:BRECOPTDCJVIIILLCMember2024-12-310000860546ofc:BRECOPTDCJVIILLCMember2025-03-310000860546ofc:BRECOPTDCJVIILLCMember2024-12-310000860546ofc:UnconsolidatedRealEstateJointVenturesMember2025-03-310000860546ofc:UnconsolidatedRealEstateJointVenturesMember2024-12-310000860546ofc:InvestmentsInAndAdvanceToAffiliatesSubsidiariesAssociatesAndJointVenturesMemberofc:UnconsolidatedRealEstateJointVenturesMember2025-03-310000860546ofc:InvestmentsInAndAdvanceToAffiliatesSubsidiariesAssociatesAndJointVenturesMemberofc:UnconsolidatedRealEstateJointVenturesMember2024-12-310000860546us-gaap:OtherLiabilitiesMemberofc:UnconsolidatedRealEstateJointVenturesMember2025-03-310000860546us-gaap:OtherLiabilitiesMemberofc:UnconsolidatedRealEstateJointVenturesMember2024-12-310000860546ofc:NotesReceivableFromCityOfHuntsvilleMemberofc:InvestingReceivablesMember2025-03-310000860546ofc:NotesReceivableFromCityOfHuntsvilleMemberofc:InvestingReceivablesMember2024-12-310000860546ofc:OtherInvestingLoansReceivablesMemberofc:InvestingReceivablesMember2025-03-310000860546ofc:OtherInvestingLoansReceivablesMemberofc:InvestingReceivablesMember2024-12-310000860546ofc:NotesReceivableFromCityOfHuntsvilleMemberofc:LwRedstoneCompanyLlcMemberofc:InvestingReceivablesMember2025-03-310000860546ofc:OtherInvestingLoansReceivablesMemberofc:InvestingReceivablesMembersrt:MinimumMember2025-03-310000860546ofc:OtherInvestingLoansReceivablesMemberofc:InvestingReceivablesMembersrt:MaximumMember2025-03-310000860546ofc:FixedRateSecuredDebtMemberus-gaap:SecuredDebtMember2025-03-310000860546ofc:FixedRateSecuredDebtMemberus-gaap:SecuredDebtMember2024-12-310000860546ofc:VariableRateDebtMemberus-gaap:SecuredDebtMember2025-03-310000860546ofc:VariableRateDebtMemberus-gaap:SecuredDebtMember2024-12-310000860546ofc:VariableRateDebtMemberus-gaap:SecuredDebtMember2025-01-012025-03-310000860546ofc:VariableRateDebtMemberus-gaap:SecuredDebtMembersrt:MinimumMember2025-01-012025-03-310000860546ofc:VariableRateDebtMemberus-gaap:SecuredDebtMembersrt:MaximumMember2025-01-012025-03-310000860546us-gaap:SecuredDebtMember2025-03-310000860546us-gaap:SecuredDebtMember2024-12-310000860546us-gaap:RevolvingCreditFacilityMember2025-03-310000860546us-gaap:RevolvingCreditFacilityMember2024-12-310000860546us-gaap:RevolvingCreditFacilityMember2025-01-012025-03-310000860546us-gaap:RevolvingCreditFacilityMembersrt:MinimumMember2025-01-012025-03-310000860546us-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2025-01-012025-03-310000860546ofc:TermLoanFacilityMember2025-03-310000860546ofc:TermLoanFacilityMember2024-12-310000860546ofc:TermLoanFacilityMember2025-01-012025-03-310000860546ofc:TermLoanFacilityMembersrt:MinimumMember2025-01-012025-03-310000860546ofc:TermLoanFacilityMembersrt:MaximumMember2025-01-012025-03-310000860546ofc:A225SeniorNotesMemberus-gaap:SeniorNotesMember2025-03-310000860546ofc:A225SeniorNotesMemberus-gaap:SeniorNotesMember2024-12-310000860546ofc:A525SeniorNotesMemberus-gaap:SeniorNotesMember2025-03-310000860546ofc:A525SeniorNotesMemberus-gaap:SeniorNotesMember2024-12-310000860546ofc:A200SeniorNotesMemberus-gaap:SeniorNotesMember2025-03-310000860546ofc:A200SeniorNotesMemberus-gaap:SeniorNotesMember2024-12-310000860546ofc:A275SeniorNotesMemberus-gaap:SeniorNotesMember2025-03-310000860546ofc:A275SeniorNotesMemberus-gaap:SeniorNotesMember2024-12-310000860546ofc:A290SeniorNotesMemberus-gaap:SeniorNotesMember2025-03-310000860546ofc:A290SeniorNotesMemberus-gaap:SeniorNotesMember2024-12-310000860546us-gaap:NotesPayableOtherPayablesMember2025-03-310000860546us-gaap:NotesPayableOtherPayablesMember2024-12-310000860546us-gaap:LoansPayableMember2025-03-310000860546us-gaap:LoansPayableMember2024-12-310000860546ofc:VariableRateDebtMemberus-gaap:SecuredDebtMemberus-gaap:InterestRateSwapMember2025-03-310000860546ofc:A525SeniorNotesMember2025-01-012025-03-310000860546ofc:A525SeniorNotesMember2024-01-012024-03-310000860546us-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2025-03-310000860546us-gaap:SeniorNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-03-310000860546us-gaap:SeniorNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2024-12-310000860546us-gaap:SeniorNotesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310000860546ofc:OtherFixedRateDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2025-03-310000860546ofc:OtherFixedRateDebtMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-03-310000860546ofc:OtherFixedRateDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2024-12-310000860546ofc:OtherFixedRateDebtMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310000860546ofc:VariableRateDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2025-03-310000860546ofc:VariableRateDebtMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2025-03-310000860546ofc:VariableRateDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2024-12-310000860546ofc:VariableRateDebtMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310000860546us-gaap:CarryingReportedAmountFairValueDisclosureMember2025-03-310000860546us-gaap:EstimateOfFairValueFairValueDisclosureMember2025-03-310000860546us-gaap:CarryingReportedAmountFairValueDisclosureMember2024-12-310000860546us-gaap:EstimateOfFairValueFairValueDisclosureMember2024-12-310000860546ofc:A525SeniorNotesMemberus-gaap:SeniorNotesMember2025-03-312025-03-310000860546ofc:InterestRateSwapEffectiveFebruary20233742Memberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310000860546ofc:InterestRateSwapEffectiveFebruary20233742Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-12-310000860546ofc:InterestRateSwapEffectiveFebruary20233747Memberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310000860546ofc:InterestRateSwapEffectiveFebruary20233747Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-12-310000860546ofc:InterestRateSwapEffectiveAugust12019Memberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310000860546ofc:InterestRateSwapEffectiveAugust12019Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-12-310000860546ofc:InterestRateSwapEffectiveApril20200.573Memberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310000860546ofc:InterestRateSwapEffectiveApril20200.573Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-12-310000860546ofc:PrepaidExpensesandOtherAssetsNetMemberus-gaap:InterestRateSwapMember2025-03-310000860546ofc:PrepaidExpensesandOtherAssetsNetMemberus-gaap:InterestRateSwapMember2024-12-310000860546us-gaap:InterestRateSwapMember2025-01-012025-03-310000860546us-gaap:InterestRateSwapMember2024-01-012024-03-310000860546us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2025-01-012025-03-310000860546us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2024-01-012024-03-310000860546us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310000860546ofc:UnconsolidatedRealEstateJointVenturesOwningOperatingPropertiesMemberofc:DefenseITPortfolioMemberofc:DataCenterShellsMember2025-03-310000860546ofc:UnconsolidatedRealEstateJointVenturesOwningOperatingPropertiesMemberofc:DefenseITPortfolioMemberofc:DataCenterShellsMember2024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:FortMeadeandBaltimoreWashingtonCorridorMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NoVADefenseITMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:LacklandAirForceBaseMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NavySupportMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:RedstoneArsenalMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:DataCenterShellsMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMember2025-01-012025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:FortMeadeandBaltimoreWashingtonCorridorMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NoVADefenseITMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:LacklandAirForceBaseMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NavySupportMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:RedstoneArsenalMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:DataCenterShellsMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMember2025-03-310000860546us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2025-03-310000860546us-gaap:OperatingSegmentsMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:FortMeadeandBaltimoreWashingtonCorridorMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NoVADefenseITMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:LacklandAirForceBaseMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NavySupportMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:RedstoneArsenalMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:DataCenterShellsMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:FortMeadeandBaltimoreWashingtonCorridorMember2024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NoVADefenseITMember2024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:LacklandAirForceBaseMember2024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:NavySupportMember2024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:RedstoneArsenalMember2024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMemberofc:DataCenterShellsMember2024-03-310000860546us-gaap:OperatingSegmentsMemberofc:DefenseITPortfolioMember2024-03-310000860546us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-03-310000860546us-gaap:OperatingSegmentsMember2024-03-310000860546us-gaap:CorporateNonSegmentMember2025-01-012025-03-310000860546us-gaap:CorporateNonSegmentMember2024-01-012024-03-310000860546us-gaap:OperatingSegmentsMemberofc:UnconsolidatedJointVenturesWithDeficitBalancesMember2025-03-310000860546us-gaap:OperatingSegmentsMemberofc:UnconsolidatedJointVenturesWithDeficitBalancesMember2024-03-310000860546us-gaap:MaterialReconcilingItemsMember2025-03-310000860546us-gaap:MaterialReconcilingItemsMember2024-03-310000860546us-gaap:CorporateNonSegmentMember2025-03-310000860546us-gaap:CorporateNonSegmentMember2024-03-310000860546us-gaap:FixedPriceContractMember2025-01-012025-03-310000860546us-gaap:FixedPriceContractMember2024-01-012024-03-310000860546ofc:GuaranteedMaximumPriceMember2025-01-012025-03-310000860546ofc:GuaranteedMaximumPriceMember2024-01-012024-03-310000860546ofc:CostplusFeeContractMember2025-01-012025-03-310000860546ofc:CostplusFeeContractMember2024-01-012024-03-310000860546ofc:OtherServicesRevenueMember2025-01-012025-03-310000860546ofc:OtherServicesRevenueMember2024-01-012024-03-310000860546ofc:ConstructionContractRevenueMember2024-12-310000860546ofc:ConstructionContractRevenueMember2023-12-310000860546ofc:ConstructionContractRevenueMember2025-03-310000860546ofc:ConstructionContractRevenueMember2024-03-310000860546ofc:ConstructionContractRevenueMember2025-01-012025-03-310000860546ofc:ConstructionContractRevenueMember2024-01-012024-03-3100008605462025-04-01ofc:ConstructionContractRevenueMember2025-03-310000860546ofc:TenantNotesReceivablesMember2024-12-310000860546us-gaap:OtherAssetsMember2024-12-310000860546ofc:InvestingReceivablesMember2025-01-012025-03-310000860546ofc:TenantNotesReceivablesMember2025-01-012025-03-310000860546us-gaap:OtherAssetsMember2025-01-012025-03-310000860546ofc:TenantNotesReceivablesMember2025-03-310000860546us-gaap:OtherAssetsMember2025-03-310000860546ofc:InvestingReceivablesMember2023-12-310000860546ofc:TenantNotesReceivablesMember2023-12-310000860546us-gaap:OtherAssetsMember2023-12-310000860546ofc:InvestingReceivablesMember2024-01-012024-03-310000860546ofc:TenantNotesReceivablesMember2024-01-012024-03-310000860546us-gaap:OtherAssetsMember2024-01-012024-03-310000860546ofc:InvestingReceivablesMember2024-03-310000860546ofc:TenantNotesReceivablesMember2024-03-310000860546us-gaap:OtherAssetsMember2024-03-310000860546ofc:AccountsReceivableNetMemberus-gaap:OtherAssetsMember2025-03-310000860546ofc:AccountsReceivableNetMemberus-gaap:OtherAssetsMember2024-12-310000860546ofc:PrepaidExpensesandOtherAssetsNetMemberus-gaap:OtherAssetsMember2025-03-310000860546ofc:PrepaidExpensesandOtherAssetsNetMemberus-gaap:OtherAssetsMember2024-12-310000860546ofc:InvestingReceivablesMemberus-gaap:InternalInvestmentGradeMember2025-03-310000860546ofc:InvestingReceivablesMemberus-gaap:InternalNoninvestmentGradeMember2025-03-310000860546ofc:TenantNotesReceivablesMemberus-gaap:InternalInvestmentGradeMember2025-03-310000860546ofc:TenantNotesReceivablesMemberus-gaap:InternalNoninvestmentGradeMember2025-03-310000860546ofc:SalesTypeLeaseReceivablesMemberus-gaap:InternalInvestmentGradeMember2025-03-310000860546us-gaap:RestrictedStockMember2024-12-310000860546us-gaap:RestrictedStockMember2025-01-012025-03-310000860546us-gaap:RestrictedStockMember2025-03-310000860546ofc:ProfitInterestUnitsMember2025-03-310000860546ofc:TimeBasedProfitInterestUnitsMember2024-12-310000860546ofc:TimeBasedProfitInterestUnitsMember2025-01-012025-03-310000860546ofc:TimeBasedProfitInterestUnitsMember2025-03-310000860546ofc:PerformanceBasedProfitInterestUnitsMember2025-01-012025-01-010000860546ofc:PerformanceShareUnitsMember2025-01-012025-01-010000860546ofc:PerformanceBasedAwardsMember2025-01-012025-01-010000860546ofc:TargetLevelMemberofc:PerformanceBasedProfitInterestUnitsMember2025-01-012025-01-010000860546ofc:TargetLevelMemberofc:PerformanceShareUnitsMember2025-01-012025-01-010000860546ofc:PerformanceBasedProfitInterestUnitsMember2025-02-012025-02-010000860546ofc:ExchangeableCommonUnitsMember2025-01-012025-03-310000860546ofc:ExchangeableCommonUnitsMember2024-01-012024-03-310000860546ofc:RedeemableNoncontrollingInterestMember2025-01-012025-03-310000860546ofc:RedeemableNoncontrollingInterestMember2024-01-012024-03-310000860546ofc:RestrictedStockandDeferredSharesMember2025-01-012025-03-310000860546ofc:RestrictedStockandDeferredSharesMember2024-01-012024-03-310000860546ofc:UnvestedTBPIUsMember2025-01-012025-03-310000860546ofc:UnvestedTBPIUsMember2024-01-012024-03-310000860546ofc:WeightedAverageVestedPIUsMember2024-01-012024-03-310000860546ofc:TaxIncrementalFinancingBondMemberofc:AnneArundelCountyMarylandMember2025-03-31

(Exact name of registrant as specified in its charter)

 

Registrant’s telephone number, including area code:  (443) 285-5400

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes   ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes   ☒ No

As of April 21, 2025, 112,880,922 of COPT Defense Properties’ Common Shares of Beneficial Interest, $0.01 par value, were issued and outstanding.

 

 

 

 

 

 

 

COPT Defense Properties (“COPT Defense”) and subsidiaries (collectively, the “Company”, “we” or “us”) is a fully-integrated and self-managed real estate investment trust (“REIT”) focused on owning, operating and developing properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions (which we refer to herein as our Defense/IT Portfolio). Our tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements. As of March 31, 2025, our Defense/IT Portfolio included:

>198 operating properties totaling 22.6 million square feet comprised of 16.6 million square feet in 167 office properties and 5.9 million square feet in 31 single-tenant data center shells. We owned 24 of these data center shells through unconsolidated real estate joint ventures;

>five properties under development (three office properties and two data center shells), including one partially-operational property, that will total approximately 756,000 square feet upon completion; and

>approximately 1,010 acres of land controlled that we believe could be developed into approximately 10.8 million square feet.

We also owned six other operating properties totaling 2.0 million square feet and approximately 50 acres of other developable land in the Greater Washington, DC/Baltimore region as of March 31, 2025.

 

We conduct almost all of our operations and own almost all of our assets through our operating partnership, COPT Defense Properties, L.P. (“CDPLP”) and subsidiaries (collectively, the “Operating Partnership”), of which COPT Defense is the sole general partner. CDPLP owns real estate directly and through subsidiary partnerships and limited liability companies (“LLCs”).  In addition to owning real estate, CDPLP also owns subsidiaries that provide real estate services such as property management, development and construction services primarily for our properties but also for third parties, most of which are tenants. Some of these services are performed by a taxable REIT subsidiary (“TRS”).

Equity interests in CDPLP are in the form of common and preferred units. As of March 31, 2025, COPT Defense owned 97.3% of the outstanding CDPLP common units (“common units”) and there were no preferred units outstanding. Common units not owned by COPT Defense carry certain redemption rights. The number of common units owned by COPT Defense is equivalent to the number of outstanding common shares of beneficial interest (“common shares”) of COPT Defense, and the entitlement of common units to quarterly distributions and payments in liquidation is substantially the same as that of COPT Defense common shareholders.

COPT Defense’s common shares are publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “CDP”.

  

 

 

These consolidated financial statements include the accounts of COPT Defense, the Operating Partnership, their subsidiaries and other entities in which COPT Defense has a majority voting interest and control.  We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if we are deemed to be the primary beneficiary of such entities.  We eliminate all intercompany balances and transactions in consolidation.

We use the equity method of accounting when we own an interest in an entity and can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity.

 

When we own an equity investment in an entity and cannot exert significant influence over its operations, we measure the investment at fair value, with changes recognized through net income. For an investment without a readily determinable fair value, we measure the investment at cost, less any impairments, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer.

These interim financial statements should be read together with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 included in our 2024 Annual Report on Form 10-K.  The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly state our financial position and results of operations.  All adjustments are of a normal recurring nature.  The consolidated financial statements have been prepared using the accounting policies described in our 2024 Annual Report on Form 10-K.

We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity.

Effective for this quarterly report on Form 10-Q, we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) aimed at reducing complexity and diversity in practice in determining whether a profits interest award is accounted for as a share-based payment. Our adoption of this guidance did not change the accounting for any of our share-based compensation award types, and therefore did not affect our consolidated financial statements.

In December 2023, the FASB issued guidance to improve income tax disclosures. This guidance requires enhanced annual disclosures primarily related to existing rate reconciliation and income taxes paid disclosure requirements and is effective for us for our 2025 annual reporting. Early adoption is permitted. We expect to apply this guidance prospectively. We are currently assessing the application of this guidance but do not expect it to materially affect our future related disclosures.

In November 2024, the FASB issued guidance requiring disaggregated disclosure of specified information about certain expense categories included in expense line items on the consolidated statements of operations in the notes to the financial statements. This guidance is effective for us for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The guidance will be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any and all prior periods presented in the financial statements. We are currently assessing the application of this guidance on our future consolidated financial statements.

The fair values of our interest rate derivatives, as disclosed in Note 9, are determined using widely accepted valuation techniques, including a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While we determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our interest rate derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default. However, as of March 31, 2025, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivatives and determined that these adjustments were not significant. As a result, we determined that our interest rate derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets (excluding investing receivables) and accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturities of these instruments.  The fair values of our investing receivables, as disclosed in Note 7, were based on the discounted estimated future cash flows of the loans (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans with similar maturities and credit quality, and the estimated cash payments include scheduled principal and interest payments.  For our disclosure of debt fair values in Note 8, we estimated the fair value of our unsecured senior notes based on quoted market rates for our senior notes (categorized within Level 1 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments include scheduled principal and interest payments.  Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. 

The table below sets forth our financial assets and liabilities accounted for at fair value on a recurring basis as of March 31, 2025 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):

(1)Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.

 

Operating properties, net consisted of the following (in thousands): 

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

As of March 31, 2025, our balance sheet included $56.8 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands):

As of March 31, 2025, our operating leases had a weighted average remaining lease term of 38 years and a weighted average discount rate of 7.3%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

Payments on property leases were due as follows (in thousands):

(1)Represents the nine months ending December 31, 2025.

The table below sets forth information pertaining to our investments in consolidated real estate joint ventures, which are each variable interest entities (dollars in thousands):

(1)We fund all capital requirements. Our partner receives distributions of $1.2 million of annual operating cash flows and we receive the remainder.

The table below sets forth information pertaining to our investments in unconsolidated real estate joint ventures accounted for using the equity method of accounting (dollars in thousands):

(1)Included $39.0 million and $39.4 million reported in “investment in unconsolidated real estate joint ventures” and $3.9 million and $3.4 million for investments with deficit balances reported in “other liabilities” on our consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively.

(2)Our investment in B RE COPT DC JV II LLC was lower than our share of the joint venture’s equity by $6.6 million as of March 31, 2025 and $6.7 million as of December 31, 2024 due to a difference between our cost basis and our share of the joint venture’s underlying equity in its net assets. We recognize adjustments to our share of the joint venture’s earnings and losses resulting from this basis difference in the underlying assets of the joint venture.

Investing receivables consisted of the following (in thousands): 

The balances above include accrued interest receivable, net of allowance for credit losses, of $833,000 as of March 31, 2025 and $3.2 million as of December 31, 2024.

Our notes receivable from the City of Huntsville funded infrastructure costs in connection with our LW Redstone Company, LLC joint venture (see Note 6) and carry an interest rate of 9.95%. Our other investing loans receivable as of March 31, 2025 carry effective interest rates ranging from 12.0% to 14.0% and mature by early 2026.

The fair value of these receivables was approximately $82 million as of March 31, 2025 and $72 million as of December 31, 2024.

 

Our debt consisted of the following (dollars in thousands):

(1)The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $3.6 million as of March 31, 2025 and $4.0 million as of December 31, 2024.

(2)Including the effect of an interest rate swap that hedges the risk of interest rate changes, the weighted average interest rate on our variable-rate secured debt as of March 31, 2025 was 5.07%; excluding the effect of this swap, the weighted average interest rate on this debt as of March 31, 2025 was 5.95%.

(3)Most of this debt may be extended by a 12-month period at our option, provided that there is no default on the debt and we pay an extension fee of 0.10% of the debt balance.

(4)The weighted average interest rate on the Revolving Credit Facility was 5.47% as of March 31, 2025, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9).

(5)The facility matures in October 2026, with the ability for us to extend such maturity by two six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.0625% of the total availability under the facility for each extension period.

(6)The interest rate on this loan was 5.72% as of March 31, 2025, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9).

(7)This facility matures in January 2026, with the ability for us to extend such maturity by two 12-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.125% of the outstanding loan balance for each extension period.

(8)The carrying value of these notes reflects unamortized discounts and commissions totaling $835,000 as of March 31, 2025 and $1.1 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 2.48%.

(9)These notes have an exchange settlement feature under which the notes may, under certain circumstances, be exchangeable at the option of the holders. Upon exchange, the principal amount of notes is payable in cash, with the remainder of the exchange obligation, if any, as determined based on the exchange price per common share at the time of settlement, payable in cash, common shares or a combination thereof at our election. As of March 31, 2025, the exchange rate of the notes equaled 33.4486 of our common shares per $1,000 principal amount of notes (equivalent to an exchange price of approximately $29.90 per common share).

(10)The carrying value of these notes reflects unamortized commissions totaling $6.2 million as of March 31, 2025 and $6.6 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 5.83%.

(11)The carrying value of these notes reflects unamortized discounts and commissions totaling $1.4 million as of March 31, 2025 and $1.5 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 2.09%.

(12)The carrying value of these notes reflects unamortized discounts and commissions totaling $6.4 million as of March 31, 2025 and $6.7 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 2.94%.

(13)The carrying value of these notes reflects unamortized discounts and commissions totaling $3.5 million as of March 31, 2025 and December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 3.01%.

(14)This note carries an interest rate that, upon assumption, was below market rates and it therefore was recorded at its fair value based on applicable effective interest rates.  The carrying value of this note reflects an unamortized discount totaling $7,000 as of March 31, 2025 and $10,000 as of December 31, 2024.

 

All debt is owed by the Operating Partnership. While COPT Defense is not directly obligated by any debt, it has guaranteed CDPLP’s Revolving Credit Facility, Term Loan Facility and Unsecured Senior Notes. All of our mortgage and other secured debt as of March 31, 2025 was for consolidated real estate joint ventures (see Note 6).

The table below sets forth interest expense recognized on the 5.25% Exchangeable Senior Notes due 2028 (the “5.25% Notes”) (in thousands):

Certain of our debt instruments require that we comply with a number of restrictive financial covenants.  As of March 31, 2025, we were compliant with these financial covenants.

Our debt matures on the following schedule (in thousands):

(1)Represents the nine months ending December 31, 2025.

(2)Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $21.9 million.

We capitalized interest costs of $927,000 in the three months ended March 31, 2025 and $589,000 in the three months ended March 31, 2024.

The following table sets forth information pertaining to the fair value of our debt (in thousands): 

 

 

The following table sets forth the key terms and fair values of our interest rate swap derivatives (dollars in thousands):

(1)The notional amount of this instrument is scheduled to amortize to $10.0 million.

Each of these swaps was designated as a cash flow hedge of interest rate risk.

The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheets (in thousands):

 

The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands):

Based on the fair value of our derivatives as of March 31, 2025, we estimate that approximately $612,000 of gains will be reclassified from accumulated other comprehensive income (“AOCI”) as a decrease to interest expense over the next 12 months.

We have agreements with each of our interest rate derivative counterparties that contain provisions under which, if we default or are capable of being declared in default on defined levels of our indebtedness, we could also be declared in default on our derivative obligations. Failure to comply with the loan covenant provisions could result in our being declared in default on any derivative instrument obligations covered by the agreements. As of March 31, 2025, we were not in default with any of these provisions. As of March 31, 2025, we did not have any derivatives in liability positions.

Redeemable noncontrolling interest on our consolidated balance sheets included the ownership interest of our partner in LW Redstone Company, LLC due to the partner’s rights to require us to acquire their interest. The table below sets forth the activity for redeemable noncontrolling interest (in thousands):

We determine the fair value of the interest based on unobservable inputs after considering the assumptions that market participants would make in pricing the interest. We apply a discount rate to the estimated future cash flows allocable to our partner from the properties underlying the respective joint venture. Estimated cash flows used in such analyses are based on our plans for the properties and our views of market and economic conditions, and consider items such as current and future rental rates, occupancy projections and estimated operating and development expenditures.

 

As of March 31, 2025, we had remaining capacity under our at-the-market stock offering program equal to an aggregate gross sales price of $300 million in common shares.

We declared dividends per common share of $0.305 in the three months ended March 31, 2025 and $0.295 in the three months ended March 31, 2024

During the three months ended March 31, 2025, a CDPLP limited partner converted 11,589 common units in CDPLP for an equal number of common shares.

See Note 15 for disclosure of common share activity pertaining to our share-based compensation plans.

We have the following reportable segments: Defense/IT Portfolio; and Other. We also report on Defense/IT Portfolio sub-segments, which include the following: Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”); Northern Virginia Defense/IT Locations (“NoVA Defense/IT”); Lackland Air Force Base (in San Antonio, Texas); locations serving the U.S. Navy (“Navy Support”), which included properties proximate to the Washington Navy Yard, the Naval Air Station Patuxent River in Maryland and the Naval Surface Warfare Center Dahlgren Division in Virginia; Redstone Arsenal (in Huntsville, Alabama); and data center shells (properties leased to tenants to be operated as data centers in which the tenants fund the costs for the power, fiber connectivity and data center infrastructure). In the first quarter of 2025, we retrospectively reclassified two properties to our Fort Meade/BW Corridor sub-segment from our Other segment.

We measure the performance of our segments through the measure we define as net operating income from real estate operations (“NOI from real estate operations”), which includes real estate revenues and other segment items, which is comprised of: property operating expenses; and the net of revenues and property operating expenses of real estate operations owned through unconsolidated real estate joint ventures (“UJV” or “UJVs”) that is allocable to our ownership interest (“UJV NOI allocable to COPT Defense”). Property operating expenses represent costs associated with operating our properties, including property taxes, ground rents, utilities, property management, insurance, repairs and exterior and interior maintenance, as well as associated labor and indirect costs.

Our chief operating decision maker uses budget to actual comparisons of operating expense information on a consolidated basis and for our Same Property pool (defined as our properties stably owned and 100% operational throughout both the current and prior year) to manage expenses associated with operating our properties.

Amounts reported for segment assets represent long-lived assets associated with consolidated operating properties (including the carrying value of properties, right-of-use assets, net of related lease liabilities, intangible assets, deferred leasing costs, deferred rents receivable and lease incentives) and the carrying value of investments in UJVs owning operating properties, net of deficit investment balances reported in “other liabilities” on our consolidated balance sheets (which were included in our data center shells sub-segment and totaled $35.1 million and $37.6 million as of March 31, 2025 and 2024, respectively).

Amounts reported as additions to long-lived assets represent additions to existing consolidated operating properties, excluding transfers from non-operating properties, which we report separately.

The table below reports segment financial information for our reportable segments (in thousands):