COPT Defense Properties reported third‑quarter 2025 earnings with earnings per share of $0.37 and funds from operations per share of $0.69, a 6.2% year‑over‑year increase. The company’s revenue for the quarter was $188.8 million and net income was $41.7 million, compared with Q3 2024 figures of $0.32 EPS, $0.65 FFO per share, $188.8 million revenue and $41.7 million net income.
The portfolio remained highly occupied, with 93.9% of the total portfolio occupied and 95.7% leased. In the core Defense/IT segment, occupancy was 95.4% and leasing was 97.0%. Tenant retention stood at 82% for the quarter and year‑to‑date. Leasing activity totaled 971,000 sq ft in Q3 and 2.3 million sq ft for the first nine months, while vacancy leasing was 78,000 sq ft in Q3 and 432,000 sq ft year‑to‑date. The company raised its annual leasing target to 500,000 sq ft from 450,000 sq ft.
Capital deployment accelerated, with $72 million committed to a build‑to‑suit development in Huntsville and the acquisition of a fully leased building in Chantilly, VA. The year‑to‑date capital commitment reached $124 million. As of September 30, 2025, the company’s net debt to in‑place adjusted EBITDA ratio was 6.1x, and it recently closed financing to pre‑fund a 2026 bond maturity and provide additional capital for growth.
Management lifted its full‑year FFO per share guidance to $2.70, the upper end of the 2025 range of $2.62‑$2.70, implying a 5.1% growth rate for 2025. The same‑property cash net operating income growth guidance was increased to 4.0%, and the year‑end occupancy target was raised to 94.2%. The guidance increase was attributed to strong demand from defense contractors and data‑center tenants, cost efficiencies, and a favorable U.S. defense budget outlook.
COPT’s specialization in properties near U.S. government defense installations provides insulation from broader commercial real estate headwinds. The company’s acquisition in Chantilly strengthens its position in the highly‑leased and supply‑constrained Westfields submarket, while the build‑to‑suit in Huntsville expands its portfolio in a growing defense‑tech hub. Q2 2025 results showed an FFO per share of $0.68 and a 95.6% leased portfolio, indicating a consistent trend of positive performance.
CEO John Smith highlighted continued momentum in the Defense/IT segment, emphasizing the company’s focus on high‑security properties and proactive portfolio expansion. He noted that maintaining high occupancy amid limited supply remains a challenge, but the company’s strategic investments and strong tenant relationships position it well for sustained growth.
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