COPT DEFENSE PROPERTIES
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
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, 2026 · Filed Nov 4, 2026
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 2026-06-30; filed 2026-08-03.
0000860546-26-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0000860546-26-000048
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 116 previous paragraphs and 115 current paragraphs.
87 unchanged; 26 reworded; 2 added; 2 removed; 1 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 (2)
Current report
During the nine months ended September 30, 2026, we:
Current report
As of September 30, 2026, we had:
Removed paragraphs (2)
Previous report
During the six months ended June 30, 2026, we:
Previous report
General, administrative, leasing, and other expenses increased due in large part to higher compensation-related expenses in the current period.
Reworded paragraphs (26)
Previous wording
•finished the period with our portfolio 94.1% occupied and 95.6% leased;
Current wording
•finished the period with our portfolio 94.0% occupied and 95.0% leased;
Previous wording
•achieved a tenant retention rate of 84.4%, which was driven by our Defense/IT Portfolio;
Current wording
•achieved a tenant retention rate of 80.0%;
Previous wording
During the six months ended June 30, 2026, we leased 2.2 million square feet, including: 1.5 million square feet of renewal leasing (representing a tenant retention rate of 84.4%); 231,000 square feet of vacant space leasing; and 416,000 square feet of investment space leasing.
Current wording
During the nine months ended September 30, 2026, we leased 3.0 million square feet, including: 2.1 million square feet of renewal leasing (representing a tenant retention rate of 80.0%); 453,000 square feet of vacant space leasing; and 491,000 square feet of investment space leasing.
Previous wording
Our Same Property pool consisted of 203 properties, comprising 97.1% of our portfolio’s square footage as of June 30, 2026 and 95.8% of NOI from real estate operations for the six months then ended. This pool of properties changed from the pool used for purposes of comparing 2025 and 2024 in our 2025 Annual Report on Form 10-K due to the addition of three properties placed in service and 100% operational on or before January 1, 2025 and two properties acquired in 2024.
Current wording
Our Same Property pool consisted of 203 properties, comprising 97.1% of our portfolio’s square footage as of September 30, 2026 and 95.5% of NOI from real estate operations for the nine months then ended. This pool of properties changed from the pool used for purposes of comparing 2025 and 2024 in our 2025 Annual Report on Form 10-K due to the addition of three properties placed in service and 100% operational on or before January 1, 2025 and two properties acquired in 2024.
Previous wording
Construction contract and other service revenues and expenses decreased in the current period due to a lower volume of construction activity for one of our tenants. Construction contract activity is inherently subject to significant variability depending on the volume and nature of projects undertaken by us primarily on behalf of tenants. Service operations are an ancillary component of our overall operations that typically contribute an insignificant amount of income relative to our real estate operations.
Current wording
Construction contract and other service revenues and expenses increased in the current period due in large part to a higher volume of construction activity for one of our tenants. Construction contract activity is inherently subject to significant variability depending on the volume and nature of projects undertaken by us primarily on behalf of tenants. Service operations are an ancillary component of our overall operations that typically contribute an insignificant amount of income relative to our real estate operations.
Previous wording
Interest expense increased in the current period due primarily to a higher interest rate on $400.0 million of our unsecured senior notes due to the refinancing of our 2.25% Notes that matured on March 16, 2026 with our 4.50% Senior Notes due 2030 (the “4.50% Notes”) issued in October 2025.
Current wording
Interest expense increased in the current period due primarily to a higher interest rate on $400.0 million of our unsecured senior notes due to the refinancing of our 2.25% Notes that matured on March 16, 2026 with our 4.50% Senior Notes due 2030 (the “4.50% Notes”) issued in October 2025 and higher outstanding borrowings under our Revolving Credit Facility.
Previous wording
The gain on sales of real estate recognized in the current period was due to our sale of non-operating properties in Aberdeen, Maryland.
Current wording
The gain on sales of real estate was due to our sales of non-operating properties in the current and prior periods.
Previous wording
Comparison of Statements of Operations for the Six Months Ended June 30, 2026 and 2025
Current wording
Comparison of Statements of Operations for the Nine Months Ended September 30, 2026 and 2025
Previous wording
•the increase for our Same Properties was due primarily 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 utility expenses and real estate taxes, due to in large part to our recognition in 2025 of prior year taxes refunded upon successful appeal, the effect of which was mostly offset by increased tenant expense reimbursements;
Current wording
•the increase for our Same Properties was due primarily 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 utility expenses and real estate taxes, the effect of which was mostly offset by increased tenant expense reimbursements;
Previous wording
Construction contract and other service revenue and expenses decreased in the current period due primarily to a lower volume of construction activity for one of our tenants.
Current wording
Construction contract and other service revenue and expenses decreased in the current period due in large part to a lower volume of construction activity for one of our tenants.
Previous wording
Interest and other income, net increased in the current period due in large part to net credit loss recoveries recognized on our investing receivables in the current period.
Current wording
Interest and other income, net increased in the current period due in large part to net credit loss recoveries recognized on investing receivables that were repaid in the current period.
Previous wording
The gain on sales of real estate recognized in the current period was primarily due to our sale of non-operating properties in Aberdeen, Maryland.
Current wording
The gain on sales of real estate was due to our sales of non-operating properties in the current and prior periods.
Previous wording
The table below presents the major components of our additions to properties for the six months ended June 30, 2026 (in thousands):
Current wording
The table below presents the major components of our additions to properties for the nine months ended September 30, 2026 (in thousands):
Previous wording
Net cash flow from operating activities increased $27.5 million when comparing the six months ended June 30, 2026 and 2025 due to increased cash flow from real estate operations attributable in large part to increased rental and occupancy rates and growth in our operating portfolio, partially offset by higher cash paid for interest expense due primarily to our issuance in October 2025 of 4.50% Notes to refinance and prefund the repayment at maturity of our 2.25% Notes.
Current wording
Net cash flow from operating activities increased $45.2 million when comparing the nine months ended September 30, 2026 and 2025 due to increased cash flow from real estate operations attributable in large part to increased rental and occupancy rates and growth in our operating portfolio.
Previous wording
Net cash flow used in investing activities increased $36.9 million when comparing the six months ended June 30, 2026 and 2025 due primarily to our acquisition of an investment in a sales-type lease in the current period.
Current wording
Net cash flow used in investing activities increased $36.0 million when comparing the nine months ended September 30, 2026 and 2025 due primarily to our acquisition of an investment in a sales-type lease in the current period and distributions of debt refinancing proceeds from two of our unconsolidated real estate joint ventures in the prior period, partially offset by higher proceeds from sales of non-operating properties in the current period.
Previous wording
Net cash flow used in financing activities in the six months ended June 30, 2026 was $254.3 million, and included primarily the following:
Current wording
Net cash flow used in financing activities in the nine months ended September 30, 2026 was $306.9 million, and included primarily the following:
Previous wording
•net repayments of debt borrowings during the period of $178.3 million, which included our repayment at maturity of $400.0 million in 2.25% Notes; and
Current wording
•net repayments of debt borrowings during the period of $192.3 million, which included our repayment at maturity of $400.0 million in 2.25% Notes; and
Previous wording
•dividends to common shareholders of $70.8 million.
Current wording
•dividends to common shareholders of $107.1 million.
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 of 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
As of June 30, 2026, we had $24.2 million in cash and cash equivalents.
Current wording
•$24.3 million in cash and cash equivalents;
Previous wording
We have a Revolving Credit Facility with a maximum borrowing capacity of $800.0 million. The facility matures in October 2029 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 $528.0 million as of June 30, 2026.
Current wording
•a Revolving Credit Facility with a maximum borrowing capacity of $800.0 million and an available borrowing capacity of $566.0 million; and
Previous wording
We also have a Revolving Development Facility with a maximum borrowing capacity of $200.0 million. The facility matures in October 2029 and may be extended by a 12-month period at our option, provided that there is no default under the facility and we pay an extension fee of 0.250% of the total amount available under the facility. Our available borrowing capacity under the facility totaled $64.0 million as of June 30, 2026.
Current wording
•a Revolving Development Facility with a maximum borrowing capacity of $200.0 million and an available borrowing capacity of $30.0 million.
Previous wording
•tenant and capital improvements and leasing costs for operating properties (expected to total approximately $55 million during the remainder of 2026);
Current wording
•tenant and capital improvements and leasing costs for operating properties (expected to total approximately $40 million during the remainder of 2026);
Previous wording
During the remainder of 2026, we expect to spend $85 million to $105 million on costs for properties actively under development, most of which was contractually obligated as of June 30, 2026, and have $10.0 million in debt balloon payments maturing in 2026. During the remainder of 2026 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, with the balance funded using any excess available cash and cash equivalents and borrowings under our Revolving Development Facility and Revolving Credit Facility.
Current wording
During the remainder of 2026, we expect to spend $80 million to $90 million on costs for properties actively under development, most of which was contractually obligated as of September 30, 2026. During the remainder of 2026 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, with the balance funded using any excess available cash and cash equivalents and borrowings under our Revolving Development Facility and Revolving Credit Facility.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•general, administrative, leasing, and other expenses;