COPT Defense Properties (CDP) | Investment Case

1. Company Snapshot

1.a. Company Description

COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties.The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (IT) related activities servicing what the Company believes are growing, durable, priority missions (Defense/IT Locations).The Company also owns a portfolio of office properties located in select urban submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (Regional Office Properties).

As of June 30, 2023, the Company derived 90% of its core portfolio annualized rental revenue from Defense/IT Locations and 10% from its Regional Office Properties.As of the same date and including 24 properties owned through unconsolidated joint ventures, COPT's core portfolio of 192 properties encompassed 22.9 million square feet and was 95% leased.

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1.b. Last Insights on CDP

COPT Defense Properties' recent performance was driven by strong Q2 2025 earnings, with FFO per share beating estimates at $0.68, up from $0.64 a year ago. The company's Defense/IT investment strategy yielded impressive results, with FFO per share exceeding guidance midpoint. A Zacks rating upgrade to Buy reflects growing optimism about its earnings prospects. With a high tenant occupancy rate and active development pipeline, the REIT is poised for future growth. Its solid balance sheet and investment-grade credit ratings mitigate potential risks.

1.c. Company Highlights

Last Price	32.41
Change Percentage	1.12%
Open	31.78
Previous Close	32.05
Market Cap ( Millions)	3669
Volume	1339985
Year High	32.82
Year Low	23.92
M A 50	30.69
M A 200	29.16

FCF Yield	7.64%
Dividend Yield	3.76%
ROE	10.14%
Debt / Equity	185.72%
Net Debt / EBIDTA	620.64%
Price To Book	2.41
Price Earnings Ratio	23.99
Price To FCF	13.09
Price To sales	4.8
EV / EBITDA	15.18

2. COPT Defense Posts Strong 2025 Results, Guides for Continued Growth

COPT Defense reported a strong financial performance in 2025, with FFO per share growing 5.8% year-over-year to $2.72, exceeding initial guidance by $0.06. The company's same-property cash NOI increased 4.1% year-over-year, driven by a 40 basis point increase in average occupancy. Actual EPS came out at $0.7, beating estimates of $0.68. The strong performance was driven by the company's continued focus on leasing and development, with 557,000 square feet of vacancy leasing and 477,000 square feet of investment leasing executed during the year.

Publication Date: Feb -16

                                    📋 Highlights
                                    FFO Per Share Growth::
                                                Increased 5.8% year-over-year to $2.72, exceeding initial guidance by $0.06.
Same-Property Cash NOI Growth::
                                                Rose 4.1% YoY, driven by a 40 basis point occupancy increase to 94% total portfolio occupancy.
Leasing Activity::
                                                Executed 557,000 sq ft of vacancy leasing and 477,000 sq ft of investment leasing with 13-year weighted average lease terms.
Development Pipeline::
                                                $450M in capital commitments for 880,000 sq ft, with 81% of projects pre-leased and 5 of 6 developments 100% pre-leased.
2026 Guidance::
                                                FFO per share projected at $2.71–$2.79 (1.1% midpoint growth), 2.5% same-property NOI growth, and 93.5–94.5% occupancy target.

                                

Operational Highlights

The company's operational performance was also strong, with a total portfolio occupancy rate of 94% and a Defense/IT portfolio occupancy rate of 95.5%. The development pipeline totals nearly $450 million of capital commitment and 880,000 square feet, with 5 of the 6 development projects 100% pre-leased. As noted by Britt Snider, the company executed 557,000 square feet of vacancy leasing, exceeding initial targets by 40% or over 150,000 square feet.

Guidance and Outlook

The company guided for FFO per share in 2026 at a range of $2.71 to $2.79, implying 1.1% growth at the midpoint. Same-property cash NOI is projected to increase 2.5% at the midpoint, with same-property occupancy expected to end the year between 93.5% and 94.5%. Analysts estimate next year's revenue growth at 4.0%, indicating a continued strong performance.

Valuation

Using the current valuation metrics, the stock trades at a P/E Ratio of 23.34, P/B Ratio of 2.35, and EV/EBITDA of 9.48. The Dividend Yield is 3.87%, indicating a relatively attractive yield for investors. With a ROIC of 68.87% and ROE of 10.14%, the company is generating strong returns on its investments.

Long-term Prospects

3. NewsRoom

COPT Defense Properties (CDP) Presents at Citi's Miami Global Property CEO Conference 2026 Transcript

Mar -03

Source: seekingalpha.com

Channing Capital Management LLC Boosts Stock Holdings in COPT Defense Properties $CDP

Feb -22

Source: defenseworld.net

COPT Defense Increases Quarterly Dividend by 4.9%

Feb -19

Source: businesswire.com

Pyxus International Achieves CDP Leadership Status

Feb -18

Source: prnewswire.com

COPT Defense Properties (NYSE:CDP) Given Average Rating of “Moderate Buy” by Analysts

Feb -14

Source: defenseworld.net

Italy's CDP urges Euronext to pick new CEO for Milan bourse, sources say

Feb -10

Source: reuters.com

36 U.S. REITs Expected To Raise Dividends In Q1 2026

Feb -10

Source: seekingalpha.com

From Silicon To Steel: The Value Trade Returns

Feb -08

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.33%)

6. Segments

Fort Meade/Baltimore Washington Corridor

Expected Growth: 4.5%

The 4.5% growth in the Fort Meade/Baltimore Washington Corridor is driven by the presence of COPT Defense Properties, a leading owner and operator of specialized office properties. Key drivers include the corridor's proximity to major defense installations, a highly educated workforce, and a strong demand for defense-related services, as well as the growing importance of cybersecurity and intelligence operations in the region.

Northern Virginia Defense/Information Technology

Expected Growth: 4.8%

Strong demand for defense and IT services in Northern Virginia, driven by proximity to the Pentagon and federal agencies, fuels growth. COPT's properties are strategically located near major defense contractors, supporting the segment's 4.8% growth. Additionally, the region's highly skilled workforce and investments in cybersecurity and data analytics further boost demand for defense and IT services.

Other

Expected Growth: 3.2%

COPT Defense Properties' 3.2% growth is driven by increasing demand for secure facilities, expansion of defense spending, and a growing need for data centers and cloud infrastructure. Additionally, the company's strategic acquisitions and development of properties in high-growth markets contribute to its growth momentum.

Lackland Air Force Base

Expected Growth: 4.2%

The 4.2% growth at Lackland Air Force Base is driven by increasing demand for defense infrastructure, strategic location, and COPT's expertise in managing defense properties. Additionally, the base's role in training and education, as well as its proximity to San Antonio's growing economy, contribute to the growth. Furthermore, the US government's continued investment in national defense and the base's importance in supporting military operations also support the growth.

Construction Contract and Other Service

Expected Growth: 4.0%

COPT Defense Properties' 4.0% growth in Construction Contract and Other Service is driven by increasing demand for secure facilities, expansion of government contracts, and rising investments in defense infrastructure. Additionally, the company's strategic partnerships and backlog of projects contribute to its growth momentum.

Redstone Arsenal

Expected Growth: 4.6%

Redstone Arsenal's 4.6% growth is driven by increasing demand for defense technology and cybersecurity, proximity to key government agencies, and COPT's strategic property management. The arsenal's role in missile defense and space exploration also fuels growth, as does the presence of major defense contractors like Boeing and Lockheed Martin.

Navy Support

Expected Growth: 4.1%

Navy Support from COPT Defense Properties' 4.1% growth driven by increasing demand for secure facilities, government investments in defense infrastructure, and strategic partnerships with the US Navy. Additionally, COPT's focus on mission-critical properties and its expertise in supporting defense operations contribute to its growth momentum.

Data Center Shells

Expected Growth: 4.9%

COPT Defense Properties' Data Center Shells growth is driven by increasing demand for secure and reliable data storage from government agencies and defense contractors, fueled by rising cybersecurity threats and growing adoption of cloud computing. Additionally, the company's strategic locations near major military bases and its expertise in meeting stringent security requirements contribute to its growth.

7. Detailed Products

Defense/Intelligence Properties

COPT Defense Properties specializes in acquiring, developing, and managing properties that support the U.S. government's defense and intelligence operations.

Data Center Properties

COPT Defense Properties offers data center properties that meet the unique requirements of defense and intelligence agencies, including high-security standards and redundant infrastructure.

Office and Administrative Properties

COPT Defense Properties provides office and administrative properties that cater to the specific needs of defense and intelligence agencies, including secure facilities and advanced IT infrastructure.

Research and Development Properties

COPT Defense Properties offers research and development properties that support the innovative work of defense and intelligence agencies, including specialized laboratories and testing facilities.

Training and Simulation Properties

COPT Defense Properties provides training and simulation properties that enable defense and intelligence agencies to train personnel and test systems in realistic and immersive environments.

8. COPT Defense Properties's Porter Forces

Forces Ranking

Threat Of Substitutes

COPT Defense Properties has a low threat of substitutes due to the unique nature of its defense properties, making it difficult for substitutes to enter the market.

Bargaining Power Of Customers

COPT Defense Properties has a medium bargaining power of customers due to the presence of a few large customers, but the company's diversified customer base mitigates this risk.

Bargaining Power Of Suppliers

COPT Defense Properties has a low bargaining power of suppliers due to its strong relationships with suppliers and the availability of alternative suppliers.

Threat Of New Entrants

COPT Defense Properties has a high threat of new entrants due to the attractiveness of the defense properties market, which may attract new competitors.

Intensity Of Rivalry

COPT Defense Properties operates in a moderately competitive market, with a few established players, but the company's strong brand and customer relationships help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	62.67%
Debt Cost	3.95%
Equity Weight	37.33%
Equity Cost	8.62%
WACC	5.69%
Leverage	167.89%

11. Quality Control: COPT Defense Properties passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

COPT Defense

A-Score: 6.3/10

Value: 4.5

Growth: 4.7

Quality: 5.7

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

Kilroy Realty

A-Score: 6.3/10

Value: 5.5

Growth: 3.9

Quality: 5.8

Yield: 8.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

Highwoods Properties

A-Score: 6.2/10

Value: 6.0

Growth: 3.1

Quality: 5.5

Yield: 10.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

Boston Properties

A-Score: 5.4/10

Value: 5.7

Growth: 3.2

Quality: 4.1

Yield: 8.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

Douglas Emmett

A-Score: 4.9/10

Value: 4.7

Growth: 4.6

Quality: 3.3

Yield: 9.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

SL Green Realty

A-Score: 3.9/10

Value: 2.5

Growth: 0.9

Quality: 3.8

Yield: 9.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.11%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.69%

COPT Defense Properties - US22002T1088

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CDP

1.c. Company Highlights

Average Quality

Medium Volatility

Average Growth

Revenues Beats

Earnings Miss

Lower Quality

Lower Growth

Stable Momentum

Earnings Beats

Fairly Valued

Less Volatile

Strong Momentum

Revenues Miss

Better Quality

Average Yield

2. COPT Defense Posts Strong 2025 Results, Guides for Continued Growth

Operational Highlights

Guidance and Outlook

Valuation

Long-term Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.33%)

6. Segments

Fort Meade/Baltimore Washington Corridor

Expected Growth: 4.5%

Northern Virginia Defense/Information Technology

Expected Growth: 4.8%

Other

Expected Growth: 3.2%

Lackland Air Force Base

Expected Growth: 4.2%

Construction Contract and Other Service

Expected Growth: 4.0%

Redstone Arsenal

Expected Growth: 4.6%

Navy Support

Expected Growth: 4.1%

Data Center Shells

Expected Growth: 4.9%

7. Detailed Products

Defense/Intelligence Properties

Data Center Properties

Office and Administrative Properties

Research and Development Properties

Training and Simulation Properties

8. COPT Defense Properties's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: COPT Defense Properties passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

12.e Scoring ^Insights

12.f DCF ^BETA