COPT Defense Properties has recently released its 10-K report, revealing that as of September 30, 2024, the company's Defense/IT Portfolio comprised 194 properties, including 24 owned through unconsolidated joint ventures, encompassing 22.2 million square feet and was 96.5% leased. The company's tenants include the USG and their defense contractors, primarily engaged in priority national security activities, requiring mission-critical and high security property enhancements.
In 2024, COPT Defense Properties achieved a year-end occupancy of 93.6% for its total portfolio and 95.6% for its Defense/IT Portfolio. The company completed strong leasing in its operating portfolio, with its highest tenant retention rate in over 20 years and vacant space leased during the year exceeding space vacated upon lease expirations. The Defense/IT Portfolio increased its Same Property pool’s average occupancy from 95.0% in 2023 to 95.8% in 2024, ending the year 96.4% occupied.
COPT Defense Properties' total portfolio also included eight office properties in its Other segment, which as of year-end represented 8.7% of its property square footage and 9.7% of its ARR. These properties had an average occupancy rate of 72.7% in 2024. The company's 2024 year-end occupancy rate decreased for its total portfolio due primarily to the vacant space that was acquired and placed in service in 2024 to feed demand in highly-leased business parks.
In 2024, COPT Defense Properties' diluted earnings per share increased from a loss of $(0.67) per share in 2023 to earnings of $1.23 per share in 2024, and its net income increased from a loss of $(74.3) million in 2023 to income of $143.9 million in 2024. The company's net operating income from real estate operations increased $34.9 million, or 9.1%, relative to 2023.
The company ended the year with no significant debt maturing until 2026, $525.0 million in available borrowing capacity under its Revolving Credit Facility, and the ability to fund the equity portion of its investing activities with cash flow from operations for the foreseeable future. The market has reacted to these announcements by moving the company's shares 0.1% to a price of $26.77. If you want to know more, read the company's complete 10-K report here.
