COPT(US:CDP)2024-11-04 21:04Occupancy and Leasing - The portfolio was 93.1% occupied and 94.8% leased as of September 30, 2024[110] - Tenant retention rate was 84.3%, driven by strong leasing demand in the Defense/IT Portfolio[110] - Leased 2.5 million sq ft during the nine months ended September 30, 2024, including 2.1 million sq ft of renewals[120] - Average occupancy rate improved to 93.6%, up from 93.5% year-over-year[127] - Average occupancy rate improved to 93.5%, up from 93.0% year-over-year, indicating a 0.5% increase[137] Financial Performance - Net income for the three months ended September 30, 2024, was $37.4 million, a significant improvement from a loss of $221.2 million in the same period of 2023[121] - Total revenues increased to $189.2 million for the three months ended September 30, 2024, up from $168.6 million in 2023[125] - NOI from real estate operations was $105.5 million for the three months ended September 30, 2024, compared to $96.5 million in 2023[121] - Same Property total revenues increased to $161,981,000 for the three months ended September 30, 2024, up from $153,589,000, representing an increase of $8,392,000[127] - NOI from real estate operations reached $105,526,000, compared to $96,494,000 for the same period last year, reflecting an increase of $9,032,000[127] - Revenues from real estate operations for the nine months ended September 30, 2024, totaled $506,311,000, an increase of $43,070,000 from $463,241,000 in the prior year[135] - Total revenues for the nine months ended September 30, 2024, were $569,834,000, an increase of $64,581,000 from $505,253,000[135] - Same Property total revenues increased to $476,447,000 for the nine months ended September 30, 2024, compared to $455,584,000 for the same period in 2023, reflecting a variance of $20,863,000[137] - NOI from real estate operations reached $312,593,000, up from $285,421,000, representing an increase of $27,172,000[137] - Funds from operations (FFO) for the nine months ended September 30, 2024, increased to $224.6 million, up from $208.9 million in the prior year, representing a 7.9% increase[153] Property Acquisitions and Developments - Acquired three properties: 202,000 sq ft for $15.0 million, 80,000 sq ft for $17.0 million, and 365 acres for $32.0 million[110] - Developed properties placed in service generated revenues of $21,710,000, significantly higher than $1,596,000 in the previous year, a variance of $20,114,000[137] - Total property additions for the nine months ended September 30, 2024, amounted to $203.7 million, with $123.9 million allocated to development[155] - The company expects to spend between $55 million and $65 million on property development costs during the remainder of 2024[167] Operating Expenses - Total operating expenses decreased significantly to $134.7 million for the three months ended September 30, 2024, from $374.3 million in 2023[125] - Property operating expenses for the nine months ended September 30, 2024, were $199,037,000, an increase of $16,229,000 from $182,808,000[135] Debt and Interest - As of September 30, 2024, the total debt obligations amounted to $2.18 billion, with fixed-rate debt at $2.18 billion and variable-rate debt at $232.71 million[172][173] - The weighted average interest rate on fixed-rate debt is 2.96%, while the variable-rate debt has a weighted average interest rate of 6.56%[172] - Interest expense increased to $61,760,000, up from $50,759,000, primarily due to additional interest from the 5.25% Notes issued in September 2023[132] - The company’s interest expense for the nine months ended September 30, 2024, would remain unchanged if the applicable variable index rate was 1% higher[174] - Fixed-rate debt maturing in 2025 is $1.30 billion, while $436.14 million is due in 2026[172] - The company has $75 million of debt maturing in 2026 that may be extended to 2027, and $125 million that may be extended to 2028, subject to certain conditions[172] Cash Flow - Net cash flow from operating activities increased by $20.2 million for the nine months ended September 30, 2024, primarily due to growth in the operating portfolio[156] - Net cash flow used in investing activities increased by $127.3 million compared to the prior year, mainly due to proceeds from properties sold in the previous period[157] - As of September 30, 2024, the company had $34.5 million in cash and cash equivalents and a Revolving Credit Facility with a maximum borrowing capacity of $600 million[161][162] Financial Metrics - Basic FFO available to common share and common unit holders is a key metric for assessing operating performance, excluding gains on sales and impairment losses[142] - Diluted FFO per share provides context for evaluating FFO results, similar to how EPS is used for net income[149] - Diluted FFO per share for the three months ended September 30, 2024, was $0.65, compared to $0.60 in the same period last year[153] Impairment and Gains - Impairment losses recognized during the period amounted to $252.8 million due to the review of long-lived assets[131] - The company reported a gain on sales of real estate from the prior period due to the sale of a 90% interest in three data center shell properties[141]