COPT(US:CDP)2024-08-01 18:50Occupancy and Leasing - The portfolio was 93.6% occupied and 94.9% leased as of June 30, 2024[116] - Tenant retention rate was 82.9%, driven by strong leasing demand in the Defense/IT Portfolio[116] - Leased 1.7 million square feet during the six months ended June 30, 2024, including 1.4 million square feet of renewals[122] - The occupancy rate for the Defense/IT Portfolio was 95.5% as of June 30, 2024, down from 96.2% at the end of 2023[120] - Average occupancy rate improved to 93.4%, an increase of 0.7% from 92.7%[139] Financial Performance - Net income for the three months ended June 30, 2024, was $36.4 million, compared to $31.6 million for the same period in 2023[131] - Total revenues increased to $187.3 million for the three months ended June 30, 2024, up from $169.2 million in 2023[131] - NOI from real estate operations was $105.4 million for the three months ended June 30, 2024, compared to $95.0 million in 2023[125] - Total revenues for the six months ended June 30, 2024, reached $380,609, an increase of $43,912 from $336,697 in 2023[138] - NOI from real estate operations for the six months was $207,067, up 18,140 from $188,927 in the previous year[139] - Net income for the six months ended June 30, 2024, was $70,078, a decrease of $41,962 from $112,040 in 2023[138] Revenue and Expenses - Annualized rental revenue per occupied square foot increased to $34.74 as of June 30, 2024, from $34.14 at the end of 2023[120] - Same Property revenues increased to $314,466, up 12,471 from $301,995 in the previous year[139] - Lease revenue, excluding lease termination revenue, rose to $310,051, an increase of 11,663 from $298,388[139] - Interest expense increased to $20.6 million for the three months ended June 30, 2024, from $16.5 million in 2023[131] - Interest expense increased to $(41,384), up $(8,423) from $(32,961) in the previous year[138] Development and Acquisitions - Acquired a 202,000 square foot office property in Columbia, Maryland for $15.0 million, which was 56% leased[116] - Developed properties placed in service contributed $14,124, a significant increase of 13,536 compared to $588 in the prior year[139] - Total property additions for the six months ended June 30, 2024, amounted to $100,462,000, including $60,502,000 for development[157] - Expected property development costs for the remainder of 2024 are projected to be between $110 million and $130 million, with funding sourced from cash flow from operations and borrowings under the Revolving Credit Facility[166] Cash Flow and Financing - Net cash flow from operating activities increased by $23.9 million for the six months ended June 30, 2024, primarily due to increased cash flow from real estate operations[158] - Net cash flow used in investing activities rose by $115.8 million for the six months ended June 30, 2024, largely due to proceeds from properties sold in the prior period[158] - Net cash flow used in financing activities for the six months ended June 30, 2023, was $124.7 million, including $57.4 million in net repayments of debt and $63.0 million in dividends to common shareholders[159] - As of June 30, 2024, the company had $100.4 million in cash and cash equivalents, primarily due to pre-funding future development investments from the issuance of 5.25% Notes[162] - The company has a Revolving Credit Facility with a maximum borrowing capacity of $600.0 million, with $525.0 million available as of June 30, 2024[163] Debt and Interest Rates - The fair value of the company's debt was $2.2 billion as of June 30, 2024, with a potential increase of approximately $77 million if interest rates had been 1% lower[172] - The weighted average interest rate for fixed-rate debt is 2.96%, while the weighted average interest rate for variable-rate debt is 6.68%[171] - Interest expense increased due to higher compensation-related expenses and the issuance of 5.25% Notes in September 2023[143] Future Plans and Compliance - The company aims to maintain an investment grade rating to facilitate access to unsecured, primarily fixed-rate debt from public markets and banks[164] - Material cash requirements include approximately $55 million for tenant and capital improvements and leasing costs for operating properties during the remainder of 2024[165] - The company is compliant with all restrictive financial covenants as of June 30, 2024[168] - The company plans to continue actively developing properties and may opportunistically acquire operating properties beyond 2024, primarily funded by cash flow from operations and borrowings[167]