The following is a summary of the COPT Defense Properties (CDP) Q1 2024 Earnings Call Transcript:

Financial Performance:

• COPT Defense Properties reported Q1 2024 FFO per share of $0.62, reflecting a same property cash NOI increase of 6.1% YoY.

• The dividend payout ratio stood at 57%, and the company approved a 3.5% dividend increase in February, showing its second consecutive annual increase.

• COPT increased its midpoint of 2024 FFO per share guidance by $0.03 to $2.54, implying a 5% YoY FFO growth.

• Occupancy rates reached 93.6% for the entire portfolio and 95.6% for the defense IT portfolio.

• The company raised its same property cash NOI guidance midpoint by 50 basis points to 6.5%.

Business Progress:

• The company completed 721,000 square feet of total leasing, started two development projects, and acquired a 202,000 square foot building in Columbia Gateway.

• COPT executed 160,000 square feet of vacancy leasing during Q1, which indicates progress towards achieving their full-year target of 400,000 square feet.

• The acquisition of Franklin Center, a modern LEED-Gold certified office building in Columbia Gateway, is expected to be slightly accretive to the FFO per share in 2024.

• The company reported an increase in demand from cyber tenants in the Columbia Gateway market, and more activity in their Navy support portfolio.

• The active developments, pre-leased at 74%, provides a trajectory for their external NOI growth over the next few years.

• The company has a pipeline of over 0.5 million square feet for development leasing, indicating potential for new build and leasing opportunities.

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