COPT(US:CDP)2023-11-02 16:00Occupancy and Leasing - The company finished the period with a portfolio occupancy rate of 94.1% and a leasing rate of 95.1%[113] - Tenant retention rate was 82.5%, driven by strong leasing demand in the Defense/IT Portfolio[113] - For the nine months ended September 30, 2023, the company leased 2.2 million square feet, including 1.4 million square feet of renewal leasing[117] - Average occupancy rate improved to 93.0% in Q3 2023 from 91.9% in Q3 2022, an increase of 1.1%[123] Financial Performance - Net loss for the three months ended September 30, 2023, was $221.2 million, compared to a net income of $32.3 million for the same period in 2022[121] - Total revenues for the three months ended September 30, 2023, were $168.6 million, a decrease of $13.9 million from $182.5 million in 2022[121] - NOI from real estate operations for the nine months ended September 30, 2023, was $285.4 million, compared to $268.5 million in 2022[119] - Same Property revenues for Q3 2023 increased to $144,290, up from $139,035 in Q3 2022, representing a variance of $5,255[123] - NOI from real estate operations for Q3 2023 was $96,494, compared to $91,096 in Q3 2022, reflecting an increase of $5,398[123] - Total revenues for the nine months ended September 30, 2023, were $505,253, down from $563,783 in the same period of 2022, a decrease of $58,530[130] - Property operating expenses for the nine months ended September 30, 2023, increased to $182,808 from $168,960 in 2022, an increase of $13,848[130] - NOI from real estate operations for the nine months ended September 30, 2023, was $285,421, compared to $268,494 in 2022, an increase of $16,927[131] - Funds from operations (FFO) for the three months ended September 30, 2023, was $70.0 million, an increase from $68.1 million in the prior year[149] - Basic FFO available to common share and common unit holders for the three months ended September 30, 2023, was $68.5 million, compared to $66.4 million in the same period last year[149] - Diluted FFO per share for the three months ended September 30, 2023, was $0.60, up from $0.58 in the prior year[149] Impairment and Losses - The company reported impairment losses of $252.8 million for the three months ended September 30, 2023[121] - Impairment losses recognized during Q3 2023 amounted to $252.8 million due to shortened expected holding periods for certain properties[126] Cash Flow and Financing - Net cash flow from operating activities increased by $22.5 million for the nine months ended September 30, 2023, compared to the same period in 2022[151] - Net cash flow used in investing activities increased by $19.4 million for the nine months ended September 30, 2023, primarily due to lower proceeds from property sales[152] - Net cash flow provided by financing activities for the nine months ended September 30, 2023, was $81.0 million, compared to a net cash flow used of $105.6 million in the prior year[153] - The company had net proceeds of debt borrowings totaling $182.2 million and paid dividends to common shareholders amounting to $95.1 million[157] - The company expects to spend approximately $60 million on development costs for the remainder of 2023, funded by cash flow from operations and excess cash[163] Debt and Financial Obligations - The company’s total debt obligations as of September 30, 2023, amounted to $2.2 billion, with a weighted average interest rate of 3.11%[168] - The fair value of the company's debt was $2.1 billion as of September 30, 2023, with a potential increase of approximately $78 million if interest rates had been 1% lower[169] - The company is compliant with all restrictive financial covenants as of September 30, 2023[166] - The company plans to continue developing and redeveloping properties beyond 2023, primarily funded through borrowings under the Revolving Credit Facility[164] Property Transactions - A 90% interest in three data center shell properties in Northern Virginia was sold for $190.2 million, resulting in a gain on sale of $49.4 million[113] - The company recognized a gain on sales of real estate due to the sale of a 90% interest in three data center shell properties[138] - Discontinued operations in the prior period included a gain of $28.6 million from the sale of a wholesale data center[139] Shareholder and Equity Information - The company has a program to offer and sell common shares with an aggregate gross sales price of up to $300 million[160] - The company has a Revolving Credit Facility with a maximum borrowing capacity of $600.0 million, with an available borrowing capacity of $525.0 million as of September 30, 2023[157][158] Operating Expenses - General, administrative, leasing, and other expenses increased due to higher compensation-related expenses in the current period[135] - NOI from service operations decreased to $456 in Q3 2023 from $1,258 in Q3 2022, a decline of $802[125] - Construction contract and other service revenues for the nine months ended September 30, 2023, decreased to $42,012 from $130,570 in 2022, a decline of $88,558[133] Interest Rate Sensitivity - Interest expense on variable-rate debt would have increased by $764,000 in the nine months ended September 30, 2023, if the applicable variable index rate was 1% higher[170]