The following is a summary of the COPT Defense Properties (CDP) Q1 2024 Earnings Call Transcript:
Financial Performance:
COPT Defense Properties reported Q1 2024 FFO per share of $0.62, reflecting a same property cash NOI increase of 6.1% YoY.
The dividend payout ratio stood at 57%, and the company approved a 3.5% dividend increase in February, showing its second consecutive annual increase.
COPT increased its midpoint of 2024 FFO per share guidance by $0.03 to $2.54, implying a 5% YoY FFO growth.
Occupancy rates reached 93.6% for the entire portfolio and 95.6% for the defense IT portfolio.
The company raised its same property cash NOI guidance midpoint by 50 basis points to 6.5%.
Business Progress:
The company completed 721,000 square feet of total leasing, started two development projects, and acquired a 202,000 square foot building in Columbia Gateway.
COPT executed 160,000 square feet of vacancy leasing during Q1, which indicates progress towards achieving their full-year target of 400,000 square feet.
The acquisition of Franklin Center, a modern LEED-Gold certified office building in Columbia Gateway, is expected to be slightly accretive to the FFO per share in 2024.
The company reported an increase in demand from cyber tenants in the Columbia Gateway market, and more activity in their Navy support portfolio.
The active developments, pre-leased at 74%, provides a trajectory for their external NOI growth over the next few years.
The company has a pipeline of over 0.5 million square feet for development leasing, indicating potential for new build and leasing opportunities.
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