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Here are 1-3 brief analogies to describe COPT Defense Properties (CDP):

• It's like the Lockheed Martin of real estate, providing essential facilities for national security and defense operations.
• It's like Crown Castle (CCI) for secure government and defense office buildings and data centers.

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• Office Property Leasing: Leasing of office properties, primarily to tenants supporting U.S. Government and defense/IT missions, and also Class-A offices in the Greater Washington, DC/Baltimore region.
• Data Center Property Leasing: Leasing of specialized data center shell properties and wholesale data center capacity to tenants.

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COPT Defense Properties (CDP) is a REIT that leases office and data center properties. Its major customers are its tenants, who fall into the following categories:

• The United States Government.
• United States Government contractors, predominantly those engaged in national security, defense, and information technology (IT) activities.
• Companies leasing Class-A office space in select urban/urban-like submarkets within the Greater Washington, DC/Baltimore region.

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Stephen E. Budorick, President & Chief Executive Officer

Stephen E. Budorick became President and Chief Executive Officer of COPT Defense Properties in May 2016, having previously served as Executive Vice President and Chief Operating Officer from September 2011. Prior to joining COPT Defense, he was Executive Vice President of asset management at Callahan Capital Partners, LLC, starting in 2006. His career also includes roles as Executive Vice President at Trizec Properties, Inc. (1997–2006) and Miglin Beitler Management Company (1991–1997), and in asset management at LaSalle Partners, Inc. (1988–1991). Mr. Budorick holds a B.S. in Industrial Engineering from the University of Illinois and an MBA in Finance from the University of Chicago.

Anthony Mifsud, Executive Vice President & Chief Financial Officer

Anthony Mifsud was appointed Executive Vice President and Chief Financial Officer of COPT Defense Properties, effective April 1, 2015, as part of a planned succession. He joined the Company in September 2007 and served as Senior Vice President, Finance and Treasurer from January 2011. Before COPT Defense, he was Senior Vice President and Treasurer for Municipal Mortgage & Equity, where he led the corporate finance group. He also spent fifteen years at The Rouse Company in various corporate finance functions, including five years as Vice President, Finance, and previously practiced as a CPA at KPMG Peat Marwick.

Britt A. Snider, Executive Vice President & Chief Operating Officer

Britt A. Snider joined COPT Defense Properties in December 2023 as Executive Vice President and Chief Operating Officer. In this role, he oversees the company's operations, including asset management, leasing, property management, government services, and commercial development. Before joining COPT Defense, Mr. Snider was a Principal at Redbrick LMD, a real estate investment and development company, and prior to that, he served as Senior Vice President at WS Development.

David L. Finch, General Counsel, Corporate Secretary

David L. Finch serves as the General Counsel and Corporate Secretary for COPT Defense Properties. He was appointed General Counsel by December 2010 and Corporate Secretary by October 2016.

Matthew T. Myers, Senior Vice President, Chief Accounting Officer & Controller

Matthew T. Myers is the Senior Vice President, Chief Accounting Officer & Controller for COPT Defense Properties, a role he has held, along with previously serving as Comptroller/Controller/Auditor as of February 2023.

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Key Risks to COPT Defense Properties (CDP)

1. Reliance on U.S. Government and Defense Spending & Tenant Concentration: COPT Defense Properties derives a significant majority of its rental revenue from properties supporting the U.S. Government and its contractors, with the U.S. Government itself being a major tenant. This specialization exposes the company to risks associated with fluctuations in defense spending, changes in government policy, and potential budgetary constraints or government shutdowns, which can delay leasing activities and renewals. Furthermore, a substantial portion of the company's revenue is concentrated among its top ten tenants, increasing exposure to credit risk if any of these major tenants face financial difficulties or choose not to renew leases.
2. Interest Rate Risk and Debt Refinancing: As a real estate investment trust (REIT), COPT Defense Properties is sensitive to changes in interest rates. Rising interest rates can increase the cost of servicing its existing debt, particularly as lower-rate debt matures and needs to be refinanced. The company has a significant debt load, and its reliance on external capital to fund investments poses a risk if capital markets become unfavorable, impacting its financial flexibility and profitability.
3. Leasing Challenges, Market Conditions, and Geographic Concentration: The company faces ongoing challenges in renewing leases and maintaining high occupancy rates across its portfolio, particularly concerning upcoming lease expirations. Broader adverse economic conditions, such as declining demand for office space, increased competition, or decreases in market rental rates, could negatively impact the value of its properties and financial performance. Additionally, COPT Defense Properties' concentration of properties in specific defense hubs and the Greater Washington, DC/Baltimore region heightens its sensitivity to regional economic and policy developments.

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The following are clear emerging threats for COPT Defense Properties:

• Increased Adoption of Remote and Hybrid Work Models: A significant shift towards remote and hybrid work arrangements among businesses and government agencies could reduce the overall demand for traditional office space. While COPT's portfolio is heavily concentrated in Defense/IT Locations with specialized requirements that may necessitate some in-office presence, a broader trend of companies optimizing their physical footprint could challenge future occupancy rates and rental growth for both its Defense/IT and Regional Office Properties.

• Accelerated Migration to Cloud Computing Services: The ongoing trend of organizations, including government contractors, moving their IT infrastructure from dedicated or co-located data centers to public, private, or hybrid cloud environments poses a threat to the demand for traditional data center shell and wholesale data center properties that COPT owns. As more services and data reside in the cloud, the need for the physical data center space that COPT provides could diminish over time, despite the specialized security needs of its customer base.

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• Increased U.S. Defense and IT Spending: A significant driver of revenue growth for COPT is the sustained and increasing U.S. defense budget. The company is strategically positioned with properties supporting priority Department of Defense (DOD) missions, federal agencies, and defense contractors. For instance, the FY 2026 Defense Budget, including additional allocations, is projected at $954 billion, creating a favorable environment for demand for COPT's specialized facilities. This increase in defense spending is anticipated to spur demand for specialized spaces like Secure Compartmented Information Facilities (SCIFs) and secure data centers.
• Strategic Development and Acquisitions in Defense/IT Locations: COPT focuses on disciplined expansion through new developments and selective acquisitions within established Defense/IT corridors such as Fort Meade/MD, Northern Virginia, Huntsville/AL, and San Antonio/TX. These new developments are often pre-leased (e.g., 70-100% pre-leasing ahead of groundbreaking for projects through 2025–2027), which minimizes lease-up risk and underpins net annualized billing revenue expansion upon delivery. The company plans substantial new investments in 2026, committing $225-$275 million to new projects.
• High Tenant Retention and Contractual Rent Escalators: The company consistently demonstrates strong tenant retention rates, particularly within its Defense/IT portfolio, which is projected to be between 75-85% for 2026 with a midpoint of 80%. This high retention rate ensures a stable revenue base. Additionally, COPT benefits from contractual rent escalators, typically around 2-3%, embedded in its long-term leases (often 7-12 years). These escalators contribute to consistent low-single-digit same-property cash net operating income (NOI) growth.
• Expanding Secure Compute and Data Center Offerings: COPT is expanding its powered-shell and high-specification infrastructure in locations adjacent to defense hubs, near fiber routes and peering points. This expansion aims to serve the growing needs of government cloud, AI model training/inference, and cyber missions, capitalizing on the robust demand for data center capacity.

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Capital Allocation Decisions (2021-2026)

Capital Expenditures

• COPT Defense Properties has established capital spending guidance for 2026 at $200 million to $250 million for active and future projects, alongside $225 million to $275 million in new investment commitments.
• In 2025, the company committed $278 million to new investments across five projects in four markets, with an 81% pre-leased rate. An additional $146 million capital commitment was made in January 2026 for a fully pre-leased development at National Business Park.
• The primary focus of these capital expenditures is on build-to-suit projects and pre-leased developments within its Defense/IT portfolio to support tenant growth. The company has a self-funding capability of $275 million to $300 million annually for such developments.