COPT Defense Properties reported strong third quarter 2024 results, with diluted FFO per share, as adjusted for comparability, reaching $0.65. This figure exceeded the midpoint of the company's guidance range by $0.01, demonstrating robust operational performance. Diluted earnings per share (EPS) for the quarter was $0.32.
The company's Same Property Cash Net Operating Income (NOI) increased by 9.4% for the third quarter and 8.8% year-to-date, reflecting strong portfolio performance. Management raised the midpoint of its full-year 2024 FFO per share guidance by $0.01 to $2.57, implying a 6.2% year-over-year growth. The midpoint of Same Property Cash NOI guidance for the year was also increased by 50 basis points to 8.5%.
Operational metrics remained strong, with the Defense/IT Portfolio 95.0% occupied and 96.5% leased as of September 30, 2024. Total leasing volume for the quarter was 829,000 square feet, contributing to 2.5 million square feet year-to-date. Tenant retention reached 88% in the third quarter and 84% year-to-date, leading to a 250 basis point increase in the midpoint of the full-year retention guidance to 85%.
COPT Defense also announced two strategic acquisitions in late September 2024. The company acquired a 365-acre land parcel near Des Moines, Iowa, for $32 million, intended for data center shell development with an estimated 3.3 million square feet of capacity. This expansion targets the hyperscale data center market, which is the fifth largest in the U.S.
Additionally, COPT Defense acquired an 80,000 square foot Class A office building at 3900 Rogers Road in San Antonio, Texas, for $17 million. This building was vacant upon acquisition but was subsequently fully leased to the U.S. Government, with rent expected to commence in the second quarter of 2025. These acquisitions are expected to fuel future development and long-term accretion to FFO, AFFO, and NAV per share.
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