CDP

COPT DEFENSE PROPERTIES

NYSE · REAL ESTATE · REAL ESTATE INVESTMENT TRUSTS

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USD · close Oct 21

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MKT CAP $3.8BP/E 23.0DIV YIELD 3.78%FCF YIELD 8.48%REV TTM $784.2M +4.5%NET INCOME $171.8M +14.4%NET DEBT $2.6B52W 27.32 – 38.35SEC XBRL · TTM TO Invalid Date

How CDP rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

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Length

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New in FY2025

Our tenants include the USG and its defense contractors, who are primarily engaged in priority national security activities, and who generally require mission-critical and high security property enhancements.
Our property portfolio is predominantly comprised of office properties and single-tenant data center shells.
As of December 31, 2025, our Defense/IT Portfolio included: • 201 operating properties totaling 23.2 million square feet.
We owned 24 of these properties totaling 4.3 million square feet through unconsolidated real estate joint ventures; • fiveproperties under development that will total approximately 646,000 square feet upon completion; and • approximately 1,000 acres of land controlled that we believe could be developed into approximately 10.6 million square feet.
We also owned sixother 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 December 31, 2025.
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.
As of December 31, 2025, COPT Defense owned 97.5% of the outstanding CDPLP common units (“common units”) and there were no preferred units outstanding.
In addition, we have made available on our internet website under the heading “Investors” and sub-heading “Governance” the charters for our Board of Trustees’ Audit, Compensation, Investment and Nominating and Corporate Governance Committees, as well as our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Code of Ethics for Financial Officers.
Defense/IT Strategy : We focus on owning, operating and developing Defense/IT Portfolio properties, which as of December 31, 2025 accounted for 201 of our 207 properties, representing 90.3% of our annualized rental revenue (“ARR”), and we control developable land to accommodate future growth in this portfolio.
The properties in this portfolio are adjacent to, or contain, their demand drivers, whose activities pertain more to knowledge and technology missions of the USG (i.e., research and development and other highly-technical defense and security areas) rather than to force structure (i.e., troops) and weapon system mass production.
Demand drivers for our Defense/IT Portfolio include: • high-priority facilities and missions of USG organizations and agencies supporting defense and national security activities, such as intelligence, surveillance, reconnaissance, missile defense and space activities, cybersecurity and network activities, research and development and advanced weapons systems testing and engineering, in Maryland, Huntsville, Alabama, Northern Virginia, Washington, DC and San Antonio, Texas; and • data center shells developed in response to demand driven by advancements in cloud computing and Artificial Intelligence.
The hub of our data center portfolio is in Northern Virginia, one of the largest data center markets in the world due in large part to its central location along the United States’ Eastern Seaboard, robust fiber connectivity infrastructure and access to reliable and affordable utilities required to support operations.
Due to this business strategy, our Defense/IT Portfolio has certain distinguishing characteristics relative to typical commercial office properties, including: • proximity to demand drivers, which is generally preferred, and often required, for tenants to execute their missions; • demand that is driven by, and correlated with, national security spending for activities occurring in the properties’ respective demand drivers, which we believe may make tenants unable, or less likely, to relocate, and is less susceptible to the effects of overall economic conditions than typical office properties; • higher likelihood of significant tenant investments in properties for unique needs, such as Sensitive Compartmented Information Facility (“SCIF”), critical power supply, access control and operational redundancy, which we believe supports higher tenant retention; • ability of many of the properties leased to the USG to meet Anti-Terrorism Force Protection (“ATFP”) requirements; and • higher preponderance of tenants who require their employees to work in the properties for security purposes, which we believe makes them less susceptible to remote work trends.
We believe that our cross-discipline teams collectively complement our Defense/IT strategy due to: • well-established relationships with the USG and its contractors, many of whom lease space in more than one of our properties, and in multiple geographic locations in some cases; • extensive experience in developing: • high quality office properties; • secured, specialized space, with the ability to satisfy the USG’s and defense contractor’s unique needs (including SCIF, ATFP and access control requirements); and • data center shells to customer specifications within very condensed timeframes to accommodate time-sensitive tenant demand; and • depth of knowledge, specialized skills and credentialed personnel in operating and developing highly-specialized properties with complex space and security-oriented needs.
Other Properties : In addition to our Defense/IT Portfolio, we also owned six office properties located in the Greater Washington, DC/Baltimore region as of December 31, 2025, representing 9.7% of our ARR.
We intend to sell these properties when we believe that market conditions and opportunities position us to be able to optimize our return on investment.
We aim to develop and operate our portfolio to create healthier work environments and reduce consumption of resources by: • developing new buildings designed to use resources with a high level of efficiency and low impact on human health and the environment during their life cycles through our participation in the U.S.
Green Building Council’s Leadership in Energy and Environmental Design (“LEED”) program, targeting new office properties to meet LEED certification standards or, when not possible, striving to otherwise incorporate LEED criteria into property designs; • adopting select property operations practices from the Environmental Protection Agency’s Green Building standards and LEED for Building Operations and Maintenance (“LEED O+M: Existing Buildings”) guidelines for much of our portfolio, including cleaning, recycling, integrated pest management, energy reduction and landscaping practices; • investing in building automation systems and high-efficiency heating, ventilation and air conditioning systems and implementing resource conservation practices to reduce energy consumption; and • investing in water-saving features.
In 2025, we continued our annual participation in the Global Real Estate Sustainability Benchmark survey, which is widely recognized for measuring the environmental, social and governance performance of real estate companies and funds, and earned an overall score of “Green Star” on the survey, representing the highest quadrant of achievement, for the 11th consecutive year.
External Growth Strategy: Allocating investment capital to new properties serves as the foundation for our external growth.
Our external growth strategy is concentrated on identifying future development opportunities, either on existing or acquired land, in support of our Defense/IT strategy.
We have significant land holdings adjacent to demand drivers that we believe can further support such growth while serving as a barrier against competitive supply.
While we typically prefer properties to be significantly leased prior to commencing development, we develop properties ahead of completed leasing in certain locations where we believe that consistent demand and high occupancy rates warrant building of inventory to accommodate anticipated USG and/or contractor demand.
To a lesser extent, we may also pursue growth in our Defense/IT Portfolio through acquisitions serving missions tied to demand drivers, seeking to execute such transactions at attractive yields and below replacement cost.
Capital Strategy: Our capital strategy is aimed at maintaining continuous access to capital in the most cost-effective manner, irrespective of market conditions, by: • maintaining an investment grade rating to enable us to use debt comprised primarily of unsecured, fixed-rate debt (including the effect of interest rate swaps) from public markets and banks; • using secured nonrecourse debt from institutional lenders and banks; • managing our debt by monitoring, among other things: (1) the relationship of certain measures of earnings to our debt level and to certain capital costs; (2) the timing of debt maturities to ensure that maturities in any one year do not exceed levels that we believe we can refinance; (3) our exposure to changes in interest rates; and (4) our total and secured debt levels relative to our overall capital structure; • monitoring capacity available under revolving credit facilities and equity offering programs to provide liquidity to fund investment activities and other capital needs; • raising equity through issuances of common shares and, to a lesser extent, issuances of common equity in CDPLP and preferred equity; • recycling proceeds from sales of interests in properties, including through joint venture structures for certain investments, to fund property investment activities and/or reduce overall debt; • paying dividends at a level that is at least sufficient for us to maintain our REIT status; and • continuously evaluating the ability of our capital resources to accommodate our plans for growth.
Industry Segments As of December 31, 2025, our operations included the following reportable segments: Defense/IT Portfolio and Other.
Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”); • Redstone Arsenal in Huntsville, Alabama; • Northern Virginia Defense/IT Locations (“NoVA Defense/IT”); • Lackland Air Force Base in San Antonio, Texas; • locations serving the U.S.
Properties in this sub-segment as of December 31, 2025 were proximate to the Washington Navy Yard in Washington, DC, the Naval Air Station Patuxent River in Maryland and the Naval Surface Warfare Center Dahlgren Division in Virginia; and • data center shells in Northern Virginia.
As of December 31, 2025: our Defense/IT Portfolio segment included 201 of our operating properties, representing 92.1% of our square feet in operations, and all of our properties under development were for this segment; and our Other segment included our remaining six operating properties, representing 7.9% of our square feet in operations.
Human Capital Our Workforce : As of December 31, 2025, our workforce was comprised of 430 employees based in Maryland where we are headquartered, Virginia, Washington, DC, Alabama and Texas.
Our workforce has varying expertise among both our onsite operations teams (representing 61% of our total workforce) and corporate positions (the remaining 39% of our total workforce).
During 2025, our workforce size did not change significantly, with 70 new hires and 67 departures, including 12 retirements, representing a turnover rate of approximately 15.6% total, or 12.8% without retirements.
To effectively compete for human capital, we monitor employment trends and enhance our programs to maintain our strong workforce posture.
We rely on our employees to drive our success, and we support them with a variety of programs to attract, align, and grow their capabilities, and enhance their workplace experience through our culture and total rewards program, which includes comprehensive compensation and benefits.
Our Culture : We seek to engage our employees by developing and reinforcing our culture by emphasizing our core values, illustrated by the actiiVe acronym, which stands for: Accountability, Commitment, Teamwork, Integrity, Innovation, Value Creation and Excellence.
Our culture supports our aim of attracting, retaining and developing our top talent throughout the employment cycle to enhance our present and future workforce, with a strong belief in equal opportunity, engagement and ethics.
We conduct job-tailored safety training on an ongoing basis.
We also foster strong ties and encourage employee engagement with our communities by contributing time, effort, financial support and expertise.
Our Total Rewards : Our total rewards program philosophy is driven by accountability, which results in a pay-for-performance structure.
Our total rewards program includes: base salary; an annual cash bonus program based on the achievement of corporate, business unit, and individual objectives; health and wellbeing benefits; common equity to new employees, with annual opportunities for additional equity; a retirement savings plan with a company match; financially-supported learning programs; and employee recognition programs.

and 41 more.

Gone since FY2024

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 December 31, 2024, our Defense/IT Portfolio included: > 195 operating properties totaling 22.4 million square feet comprised of 16.5 million square feet in 164 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; > four properties under development (two office properties and two data center shells) that will total approximately 606,000 square feet upon completion; and > approximately 1,020 acres of land controlled that we believe could be developed into approximately 11.0 million square feet.
We also owned eight other operating properties totaling 2.1 million square feet and approximately 50 acres of other developable land in the Greater Washington, DC/Baltimore region as of December 31, 2024.
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.
As of December 31, 2024, COPT Defense owned 97.5% of the outstanding CDPLP common units (“common units”) and there were no preferred units outstanding.
In addition, we have made available on our Internet website under the heading “Corporate Governance” the charters for our Board of Trustees’ Audit, Compensation, Investment and Nominating and Corporate Governance Committees, as well as our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Code of Ethics for Financial Officers.
Defense/IT Strategy : We focus on owning, operating and developing Defense/IT Portfolio properties, which as of December 31, 2024 accounted for 195 of our 203 properties, representing 90.3% of our annualized rental revenue (“ARR”), and we control developable land to accommodate future growth in this portfolio.
The properties in this portfolio are adjacent to, or contain, their demand drivers, whose activities pertain more to knowledge and technology (i.e., research and development and other highly-technical defense and security areas) rather than to force structure (i.e., troops) and weapon system mass production.
Demand drivers for our Defense/IT Portfolio include: > high-priority facilities and missions of USG organizations and agencies supporting defense and national security activities, such as intelligence, surveillance, reconnaissance, missile defense, cybersecurity, space exploration, research and development and advanced weapons systems testing and engineering, in Maryland, Northern Virginia, Washington, DC, Huntsville, Alabama and San Antonio, Texas; and > data center shells developed in response to demand driven by advancements in cloud computing and Artificial Intelligence.
Our data center shells in operations or under development as of December 31, 2024 were located in Northern Virginia, one of the largest data center markets in the world due in large part to its central location along the United States’ Eastern Seaboard, robust fiber connectivity infrastructure and access to reliable and affordable utilities required to support operations.
Due to this business strategy, our Defense/IT Portfolio has certain distinguishing characteristics relative to typical commercial office properties, including: > proximity to demand drivers, which is generally preferred, and often required, for tenants to execute their missions; > demand that is driven by, and correlated with, national security spending for activities occurring in the properties’ respective demand drivers, which we believe supports higher tenant retention and less susceptibility to the effects of overall economic conditions than typical office properties; > higher likelihood of significant tenant investments in properties for unique needs, such as Sensitive Compartmented Information Facility (“SCIF”), critical power supply, access control and operational redundancy, which we believe may make tenants unable, or less likely, to relocate; > ability of many of the properties leased to the USG to meet Anti-Terrorism Force Protection (“ATFP”) requirements; and > higher preponderance of tenants who require their employees to work in the properties for security purposes, which we believe makes them less susceptible to remote work trends.
We believe that our cross-discipline teams collectively complement our Defense/IT strategy due to: > well-established relationships with the USG and its contractors, many of whom lease space in more than one of our properties, and in multiple geographic locations in some cases; > extensive experience in developing: > high quality office properties; > secured, specialized space, with the ability to satisfy the USG’s unique needs (including SCIF, ATFP and access control requirements); and > data center shells to customer specifications within very condensed timeframes to accommodate time-sensitive tenant demand; and > depth of knowledge, specialized skills and credentialed personnel in operating and developing highly-specialized properties with complex space and security-oriented needs.
Other Office Properties : In addition to our Defense/IT Portfolio, we also owned eight other office properties located in the Greater Washington, DC/Baltimore region as of December 31, 2024, representing 9.7% of our ARR.
We intend to sell our other office properties when we believe that market conditions and opportunities position us to be able to optimize our return on investment.
We aim to develop and operate our portfolio to create healthier work environments and reduce consumption of resources by: (1) developing new buildings designed to use resources with a high level of efficiency and low impact on human health and the environment during their life cycles through our participation in the U.S.
Green Building Council’s Leadership in Energy and Environmental Design (“LEED”) program, targeting new office properties to meet LEED certification standards or, when not possible, striving to otherwise incorporate LEED criteria into property designs; (2) adopting select property operations practices from the Environmental Protection Agency’s Green Building standards and LEED for Building Operations and Maintenance (“LEED O+M: Existing Buildings”) guidelines for much of our portfolio, including cleaning, recycling, integrated pest management, energy reduction and landscaping practices; (3) investing in building automation systems and high-efficiency heating, ventilation and air conditioning systems and implementing resource conservation practices to reduce energy consumption; and (4) investing in water-saving features.
We have participated in the annual Global Real Estate Sustainability Benchmark survey, which is widely recognized for measuring the environmental, social and governance (“ESG”) performance of real estate companies and funds, and earned an overall score of “Green Star” on the survey in each of the last 10 years, representing the highest quadrant of achievement.
Property Investment Strategy: We expand our portfolio of operating properties primarily through property development in support of our Defense/IT strategy, and we have significant land holdings adjacent to, or containing, demand drivers that we believe can further support that growth while serving as a barrier against competitive supply.
While we typically prefer properties to be significantly leased prior to commencing development, we develop properties ahead of completed leasing in certain locations where we believe that consistent demand and high occupancy rates warrant building of inventory to accommodate future anticipated USG and contractor demand.
To a lesser extent, we may also pursue growth through acquisitions, seeking to execute such transactions at attractive yields and below replacement cost.
Capital Strategy: Our capital strategy is aimed at maintaining continuous access to capital irrespective of market conditions in the most cost-effective manner by: > maintaining an investment grade rating to enable us to use debt comprised primarily of unsecured, fixed-rate debt (including the effect of interest rate swaps) from public markets and banks; > using secured nonrecourse debt from institutional lenders and banks; > managing our debt by monitoring, among other things: (1) the relationship of certain measures of earnings to our debt level and to certain capital costs; (2) the timing of debt maturities to ensure that maturities in any one year do not exceed levels that we believe we can refinance; (3) our exposure to changes in interest rates; and (4) our total and secured debt levels relative to our overall capital structure; > monitoring capacity available under revolving credit facilities and equity offering programs to provide liquidity to fund investment activities and other capital needs; > raising equity through issuances of common shares and, to a lesser extent, issuances of common equity in CDPLP and preferred equity; > recycling proceeds from sales of interests in properties, including through joint venture structures for certain investments, to fund property investment activities and/or reduce overall debt; > paying dividends at a level that is at least sufficient for us to maintain our REIT status; and > continuously evaluating the ability of our capital resources to accommodate our plans for growth.
Industry Segments As of December 31, 2024, our operations included the following reportable segments: Defense/IT Portfolio and Other.
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.
Properties in this sub-segment as of December 31, 2024 were proximate to the Washington Navy Yard in Washington, DC, 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 in Northern Virginia.
As of December 31, 2024: our Defense/IT Portfolio segment included 195 of our operating properties, representing 91.3% of our square feet in operations, and all of our properties under development were for this segment; and our Other segment included our remaining eight operating properties, representing 8.7% of our square feet in operations.
Human Capital Our Workforce : As of December 31, 2024, our workforce was comprised of 427 employees based in Maryland, where we are headquartered, Virginia, Washington, DC, Alabama and Texas.
Our workforce has varying expertise, and includes: > Building Technicians (175 employees), o f which approximately 35% were of minority race.
Building technicians are skilled trades professionals who perform mechanical and operating systems maintenance and otherwise service our properties; and > Office Staff (252 employees), of which approximately 56% were female and approximately 30% of minority race, including: > Operations Management (83 employees): Property managers and support staff who service our tenant customer needs. > Asset Management and Leasing (11 employees): Customer-facing leaders who drive the financial performance of our assets. > Development and Construction (31 employees): Project managers and support staff who drive our development pipeline and interior design. > Finance and Accounting (70 employees): Professionals who manage our financial activities. > Company Support Functions (46 employees): Includes Human Resources, Investor Relations, Legal, Marketing, Information Technology, Facility Security and Corporate Administrative Support. > Senior Leadership (11 employees): Our business line and Company leaders, including our Named Executive Officers, who interface with our Board of Trustees and shareholders and manage our business strategy, functional activities, risk and overall success.
We operate in markets in which we compete for human capital.
We rely on our employees to drive our success and we support them with a variety of programs to enhance their workplace engagement and job fulfillment.
Culture and Workforce Engagement : We develop and reinforce our culture by emphasizing our core values, illustrated by the actiiVe acronym that stands for: Accountability, Commitment, Teamwork, Integrity, Innovation, Value Creation and Excellence.
These values are intended to serve as a compass to our workforce to inform behavior and fuel our success.
We believe in equal opportunity, engagement and ethics.
All employees must adhere to our Code of Business Conduct and Ethics.
We survey our workforce annually to measure employee engagement and identify opportunities for further improvement, which we believe has helped us to achieve annual “great workplace” honors for over a decade.
Compensation Program : Our compensation philosophy is driven by accountability, which results in a pay-for-performance structure.
Our compensation program includes: base salary; an annual cash bonus program based on the achievement of individual, business unit and company objectives; health and wellbeing benefits; a retirement savings plan with a company match; financially-supported learning programs; and employee recognition programs.
We also grant common equity to all new full-time employees and provide our senior management team and high performers with the ability to earn additional grants to align their interests with those of our shareholders and to incent retention.
Wellbeing and Safety : We view wellbeing as including four facets: Life, Mind, Body and Giving.

and 56 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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