Copt Defense Properties · NYSE:CDP
Copt Defense Properties — Q1 2021 Earnings Presentation
52 slides from Copt Defense Properties's earnings presentation, Apr 30, 2021
Slide 1: Corporate Office Properties Trust
Corporate Office Properties Trust FA COPT
Slide 2: Earnings Release & Supplemental Information - Table of Contents
CORPORATE OFFICE PROPERTIES TRUST Earnings Release & Supplemental Information - Unaudited For the Quarter Ended March 31, 2021 Overview: ‘Summary Description Equity Research Coverage. Selected Financial Summary Data Selected Portfolio Data Financial Statements: Consolidated Balance Sheets. Consolida
Slide 3: Summary Description
Corporate Office Properties Trust Summary Description The Company: Corporate Office Properties Trust (the “Company” or “COPT”) is a self-managed real estate investment trust (“REIT”). COPT is listed on the New York Stock Exchange under the symbol “OFC” and is an S&P MidCap 400 Company. We own, manag
Slide 4: Equity Research Coverage
Corporate Office Properties Trust Equity Research Coverage Firm Senior Analyst Phone Email Bank of America Securities Jamie Feldman 646-855-5808 james.feldman@bofa.com BTIG Tom Catherwood 212-738-6410 tcatherwood@btig.com Capital One Securities Chris Lucas 571-633-8151 christopher.lucas@capitalone.c
Slide 5: Selected Financial Summary Data
Corporate Office Properties Trust Selected Financial Summary Data (in thousands, except per share data) Page Three Months Ended SUMMARY OF RESULTS Refer. 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Net (loss) income 6 $ (6,079) $ 83,549 $ (31,342) $ 25,121 $ 25,550 NOI from real estate operations 13 $
Slide 6: Selected Portfolio Data
Corporate Office Properties Trust Selected Portfolio Data (1) 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Operating Office and Data Center Shell Properties # of Properties Total Portfolio 182 181 176 174 171 Consolidated Portfolio 165 164 161 159 156 Core Portfolio 180 179 174 172 169 Same Properties 1
Slide 7: Consolidated Balance Sheets
Corporate Office Properties Trust Consolidated Balance Sheets (in thousands) 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Assets Properties, net: Operating properties, net $ 3,106,698 $ 3,115,280 $ 2,999,892 $ 2,888,817 $ 2,813,949 Development and redevelopment in progress, including land (1) 187,290 17
Slide 8: Consolidated Statements of Operations
Corporate Office Properties Trust Consolidated Statements of Operations (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Revenues Lease revenue $ 144,624 $ 139,093 $ 133,875 $ 132,147 $ 131,012 Other property revenue 540 535 568 391 1,104 Construction contract and other ser
Slide 9: Funds from Operations
Corporate Office Properties Trust Funds from Operations (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Net (loss) income $ (6,079) $ 83,549 $ (31,342) $ 25,121 $ 25,550 Real estate-related depreciation and amortization 37,321 36,653 35,332 33,612 32,596 Impairment losses
Slide 10: Diluted Share and Unit Computations
Corporate Office Properties Trust Diluted Share and Unit Computations (in thousands, except per share data) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 EPS Denominator: Weighted average common shares - basic 111,888 111,817 111,811 111,800 111,724 Dilutive effect of share-based compe
Slide 11: Adjusted Funds from Operations
Corporate Office Properties Trust Adjusted Funds from Operations (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Diluted FFO available to common share and common unit holders, as adjusted for comparability $ 64,454 $ 64,188 $ 61,485 $ 57,817 $ 57,866 Straight line rent adj
Slide 12: EBITDAre and Adjusted EBITDA
Corporate Office Properties Trust EBITDAre and Adjusted EBITDA (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Net (loss) income $ (6,079) $ 83,549 $ (31,342) $ 25,121 $ 25,550 Interest expense 17,519 17,148 17,152 16,797 16,840 Income tax expense 32 258 16 30 49 Real esta
Slide 13: Office and Data Center Shell Properties by Segment
Corporate Office Properties Trust Office and Data Center Shell Properties by Segment (1) - 3/31/21 (square feet in thousands) # of Operational % % Properties Square Feet Occupied Leased Core Portfolio: (2) Defense/IT Locations: Fort Meade/Baltimore Washington (“BW”) Corridor: National Business Park
Slide 14: NOI from Real Estate Operations and Occupancy by Property Grouping
Corporate Office Properties Trust NOI from Real Estate Operations and Occupancy by Property Grouping - 3/31/21 (dollars and square feet in thousands) As of Period End NOI from Real Estate # of Office % of Total Operations and Data Annualized Annualized Center Shell Operational % Occupied Rental Rent
Slide 15: Consolidated Real Estate Revenues and NOI by Segment
Corporate Office Properties Trust Consolidated Real Estate Revenues and NOI by Segment (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Consolidated real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 66,446 $ 63,733 $ 63,328 $ 62,698 $ 64,438 NoVA Defense/I
Slide 16: Cash NOI by Segment
Corporate Office Properties Trust Cash NOI by Segment (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 39,666 $ 42,430 $ 41,365 $ 41,968 $ 42,170 NoVA Defense/IT 9,222 9,519 9,410 9,610 9,118 Lackland Air Force Base 5,
Slide 17: Same Properties Average Occupancy Rates by Segment
Corporate Office Properties Trust Same Properties (1) Average Occupancy Rates by Segment (square feet in thousands) # of Operational Three Months Ended Properties Square Feet 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Core Portfolio: Defense/IT Locations: Fort Meade/BW Corridor 87 8,195 90.3% 91.2% 90
Slide 18: Same Properties Real Estate Revenues and NOI by Segment
Corporate Office Properties Trust Same Properties Real Estate Revenues and NOI by Segment (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Same Properties real estate revenues Defense/IT Locations: Fort Meade/BW Corridor $ 65,278 $ 62,912 $ 62,694 $ 62,075 $ 63,798 NoVA Def
Slide 19: Same Properties Cash NOI by Segment
Corporate Office Properties Trust Same Properties Cash NOI by Segment (dollars in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Same Properties cash NOI Defense/IT Locations: Fort Meade/BW Corridor $ 39,192 $ 42,068 $ 40,991 $ 41,668 $ 42,241 NoVA Defense/IT 9,138 9,519 9,41
Slide 20: Leasing - Office and Data Center Shell Portfolio
Corporate Office Properties Trust Leasing - Office and Data Center Shell Portfolio (1) Quarter Ended 3/31/21 (square feet in thousands) Defense/IT Locations Ft Meade/ Total BW NoVA Navy Redstone Defense/IT Regional Corridor Defense/IT Support Arsenal Locations Office Total Renewed Space Leased Squar
Slide 21: Lease Expiration Analysis
Corporate Office Properties Trust Lease Expiration Analysis as of 3/31/21 (1) (dollars and square feet in thousands, except per square foot amounts) Office and Data Center Shells Annualized % of Core/Total Square Rental Annualized Annualized Rental Footage of Revenue of Rental Revenue of Leases Expi
Slide 22: Lease Expiration Analysis - Wholesale Data Center
Annualized % of Core/Total Square Rental Annualized Annualized Rental Footage of Revenue of Rental Revenue of Leases Expiring Revenue Expiring Leases per Segment of Lease and Year of Expiration (2) Expiring Leases (3) Expiring (3)(4) Occupied Sq. Foot (3) Core Portfolio 19,605 $ 545,300 99.5% $ 31.5
Slide 23: 2021 Core Portfolio Quarterly Lease Expiration Analysis
Corporate Office Properties Trust 2021 Core Portfolio Quarterly Lease Expiration Analysis as of 3/31/21 (1) (dollars and square feet in thousands, except per square foot amounts) Office and Data Center Shells Annualized % of Core Annualized Rental Square Rental Annualized Revenue of Footage of Reven
Slide 24: Top 20 Tenants
Corporate Office Properties Trust Top 20 Tenants as of 3/31/21 (1) (dollars and square feet in thousands) % Weighted Total of Total Occupied Square Average Annualized Annualized Feet in Office and Remaining Lease Term Rental Revenue Rental Data Center in Office and Data Tenant (2) Revenue (2) Shells
Slide 25: Summary of Development Projects
Corporate Office Properties Trust Summary of Development Projects as of 3/31/21 (1) (dollars and square feet in thousands) as of 3/31/21 (2) Actual or Anticipated Total Cost to Date Shell Anticipated Rentable % Leased as Anticipated Placed in Completion Operational Property and Segment Location Squa
Slide 26: Development and Redevelopment Placed in Service
Corporate Office Properties Trust Development and Redevelopment Placed in Service as of 3/31/21 (square feet in thousands) Square Feet Placed in Total Property Service 2021 Space Placed % Leased Rentable in Service % Property as of Square Leased as of Property and Location Segment 3/31/21 Feet 1st Q
Slide 27: Summary of Land Owned/Controlled
Corporate Office Properties Trust Summary of Land Owned/Controlled as of 3/31/21 (1) (in thousands) Estimated Developable Square Carrying Location Acres Feet Amount Land owned/controlled for future development Defense/IT Locations: Fort Meade/BW Corridor: National Business Park 175 1,999 Howard Coun
Slide 28: Capitalization Overview
Corporate Office Properties Trust Capitalization Overview (dollars, shares and units in thousands) Wtd. Avg. Maturity Effective Gross Debt (Years) Stated Rate Balance at (1)(2) Rate (3)(4) 3/31/21 Investment Grade Ratings & Outlook Latest Affirmation Debt Fitch BBB- Stable 3/3/21 Secured debt 2.8 3.
Slide 29: Summary of Outstanding Debt
Corporate Office Properties Trust Summary of Outstanding Debt as of 3/31/21 (dollars in thousands) Balloon Payment Stated Amount Maturity Stated Amount Due Upon Maturity Unsecured Debt Rate Outstanding Date Secured Debt Rate Outstanding Maturity Date Revolving Credit Facility L + 1.10% $ — Mar-23 (1
Slide 30: Summary of Outstanding Debt (continued)
Corporate Office Properties Trust Summary of Outstanding Debt as of 3/31/21 (continued) 800,000 $ (Consolidated debt maturities in thousands) 600,000 400,000 200,000 0 2021 (1) 2022 2023 2024 2025 2026 2031 Unsecured Secured Variable/Fixed Rate Debt Debt Categories Other Unsecured Debt: 0.0% Secured
Slide 31: Debt Analysis
Corporate Office Properties Trust Debt Analysis (dollars and square feet in thousands) As of and for As of and for Three Months Ended 3/31/21 Three Months 2.25% and Ended Senior Note Covenants (1) Required 2.75% Notes Other Notes Line of Credit & Term Loan Covenants (1) Required 3/31/21 Total Debt /
Slide 32: Consolidated Real Estate Joint Ventures
Corporate Office Properties Trust Consolidated Real Estate Joint Ventures as of 3/31/21 (dollars and square feet in thousands) NOI for the COPT Three Months Nominal Operational Ended 3/31/21 Total Assets Venture Ownership Operating Properties Square Feet % Occupied % Leased (1) (2) Level Debt % Subu
Slide 33: Unconsolidated Real Estate Joint Ventures
Corporate Office Properties Trust Unconsolidated Real Estate Joint Ventures as of 3/31/21 (dollars and square feet in thousands) Joint venture information (1) BREIT-COPT B RE COPT COPT ownership % 10% 10% COPT’s investment $ 13,094 $ 15,840 # of Properties 9 8 Square Feet 1,471 1,278 % Occupied 100%
Slide 34: Supplementary Reconciliations of Non-GAAP Measures
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 NOI from real estate operations (1) Real estate revenues $ 145,164 $ 139,628 $ 134,443 $ 132,538 $ 132,116 Property operating expenses (56,9
Slide 35: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) Three Months Ended 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Total interest expense $ 17,519 $ 17,148 $ 17,152 $ 16,797 $ 16,840 Less: Amortization of deferred financing costs (793) (664) (
Slide 36: Supplementary Reconciliations of Non-GAAP Measures (continued)
Corporate Office Properties Trust Supplementary Reconciliations of Non-GAAP Measures (continued) (in thousands) 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Total assets $ 4,112,948 $ 4,077,023 $ 4,120,189 $ 4,011,325 $ 4,054,457 Accumulated depreciation 1,157,059 1,124,253 1,095,441 1,065,094 1,035,703
Slide 37: Definitions - Non-GAAP Measures
Corporate Office Properties Trust Definitions Non-GAAP Measures We believe that the measures defined below that are not determined in accordance with generally accepted accounting principles (“GAAP”) are helpful to investors in measuring our performance and comparing it to that of other real estate
Slide 38: Definitions - Cash NOI
Corporate Office Properties Trust Definitions Cash net operating income (“Cash NOI”) Defined as NOI from real estate operations adjusted to eliminate the effects of: straight-line rental adjustments, amortization of tenant incentives, amortization of intangibles and other assets included in FFO and
Slide 39: Definitions - Diluted FFO as Adjusted for Comparability
Corporate Office Properties Trust Definitions Diluted FFO available to common share and common unit holders, as adjusted for comparability (“Diluted FFO, as adjusted for comparability”) Defined as Diluted FFO or FFO adjusted to exclude: operating property acquisition costs; gain or loss on early ext
Slide 40: Definitions - Funds from Operations
Corporate Office Properties Trust Definitions Funds from operations (“FFO” or “FFO per Nareit”) Defined as net income computed using GAAP, excluding gains on sales and impairment losses of real estate and investments in unconsolidated real estate JVs (net of associated income tax) and real estate-re
Slide 41: Definitions - NOI from Real Estate Operations
Corporate Office Properties Trust Definitions Net operating income from real estate operations (“NOI”) NOI, which is our segment performance measure, includes: consolidated real estate revenues; consolidated property operating expenses; and the net of revenues and property operating expenses of real
Slide 42: Definitions - Same Properties NOI and Other Definitions
Corporate Office Properties Trust Definitions Same Properties NOI and Same Properties cash NOI Defined as NOI, or Cash NOI, from real estate operations of Same Properties. We believe that these are important supplemental measures of operating performance of Same Properties for the same reasons discu
Slide 43: COPT Reports First Quarter 2021 Results; Raises Midpoint of Full Year Guidance
6711 Columbia Gateway Drive, Suite 300 Columbia, Maryland 21046 Telephone 443-285-5400 Facsimile 443-285-7650 www.copt.com NYSE: OFC NEWS RELEASE FOR IMMEDIATE RELEASE IR Contacts: Stephanie Krewson-Kelly Michelle Layne 443-285-5453 443-285-5452 stephanie.kelly@copt.com michelle.layne@copt.com COPT
Slide 44: CEO Comments on Leasing and Guidance
with our internal forecast, and we are off to a blistering start in the second quarter, completing over 660,000 square feet of new and renewal leasing, and achieving an 88% renewal rate. Based on leasing achieved in April and the transactions in negotiation, we are increasing our full-year tenant re
Slide 45: Investment Activity and Balance Sheet Highlights
• Lease Terms: In the first quarter of 2021, lease terms averaged 3.1 years on renewing leases, 5.5 years on development leasing, and 8.5 years on new leasing of vacant space. Investment Activity Highlights • Development Pipeline: At March 31, 2021, the Company’s development pipeline consisted of 10
Slide 46: Conference Call Information
Conference Call Information Management will discuss first quarter 2021 results on its conference call tomorrow at 12:00 p.m. Eastern Time, details of which are listed below: Conference Call Date: Friday, April 30, 2021 Time: 12:00 p.m. Eastern Time Telephone Number: (within the U.S.) 855-463-9057 Te
Slide 47: Forward-Looking Information
Forward-Looking Information This press release may contain “forward-looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company’s current expectations, estimates and projections about future events
Slide 48: Summary Financial Data (unaudited)
Corporate Office Properties Trust Summary Financial Data (unaudited) (dollars and shares in thousands, except per share data) For the Three Months Ended March 31, 2021 2020 Revenues Revenues from real estate operations $ 145,164 $ 132,116 Construction contract and other service revenues 16,558 13,68
Slide 49: Summary Financial Data (unaudited) - FFO
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands, except per share data) For the Three Months Ended March 31, 2021 2020 Net (loss) income $ (6,079) $ 25,550 Real estate-related depreciation and amortization 37,321 32,596 Gain on sales of real estate 490 (5) Deprecia
Slide 50: Summary Financial Data (unaudited) - Balance Sheet and Core Portfolio
Corporate Office Properties Trust Summary Financial Data (unaudited) (Dollars and shares in thousands, except per share data) March 31, December 31, 2021 2020 Balance Sheet Data Properties, net of accumulated depreciation $ 3,579,254 $ 3,562,549 Total assets 4,112,948 4,077,023 Debt, per balance she
Slide 51: Summary Financial Data (unaudited) - Reconciliations
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended March 31, 2021 2020 Reconciliation of common share dividends to dividends and distributions for payout ratios Common share dividends - unrestricted shares and deferred shares $ 30,805 $ 30,
Slide 52: Summary Financial Data (unaudited) - Capital Expenditure Reconciliation
Corporate Office Properties Trust Summary Financial Data (unaudited) (in thousands) For the Three Months Ended March 31, 2021 2020 Reconciliations of tenant improvements and incentives, building improvements and leasing costs for operating properties to replacement capital expenditures Tenant improv
COPT Defense Properties — Q1 2021 Earnings Presentation on 6ix