Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-14023 | |
Entity Registrant Name | CORPORATE OFFICE PROPERTIES TRUST | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 23-2947217 | |
Entity Address, Address Line One | 6711 Columbia Gateway Drive | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Columbia | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 21046 | |
City Area Code | 443 | |
Local Phone Number | 285-5400 | |
Title of 12(b) Security | Common Shares of beneficial interest, $0.01 par value | |
Trading Symbol | OFC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 112,324,851 | |
Entity Central Index Key | 0000860546 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Properties, net: | ||
Operating properties, net | $ 3,227,797 | $ 3,115,280 |
Projects in development or held for future development | 379,325 | 447,269 |
Total properties, net | 3,607,122 | 3,562,549 |
Property - operating right-of-use assets | 38,854 | 40,570 |
Property - finance right-of-use assets | 40,077 | 40,425 |
Assets held for sale, net | 2,821 | 0 |
Cash and cash equivalents | 14,570 | 18,369 |
Investment in unconsolidated real estate joint ventures | 40,304 | 29,303 |
Accounts receivable, net | 33,110 | 41,637 |
Deferred rent receivable | 103,062 | 92,876 |
Intangible assets on real estate acquisitions, net | 15,788 | 19,344 |
Deferred leasing costs (net of accumulated amortization of $31,975 and $30,375, respectively) | 62,269 | 58,613 |
Prepaid expenses and other assets, net | 117,214 | 104,583 |
Total assets | 4,151,138 | 4,077,023 |
Liabilities: | ||
Debt, net | 2,159,732 | 2,086,918 |
Accounts payable and accrued expenses | 176,636 | 142,717 |
Rents received in advance and security deposits | 32,092 | 33,425 |
Dividends and distributions payable | 31,306 | 31,231 |
Deferred revenue associated with operating leases | 8,704 | 10,832 |
Property - operating lease liabilities | 29,630 | 30,746 |
Interest rate derivatives | 5,562 | 9,522 |
Other liabilities | 10,691 | 12,490 |
Total liabilities | 2,454,353 | 2,357,881 |
Commitments and contingencies (Note 18) | ||
Redeemable noncontrolling interests | 26,006 | 25,430 |
Corporate Office Properties Trust’s shareholders’ equity: | ||
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,325,411 at September 30, 2021 and 112,181,759 at December 31, 2020) | 1,123 | 1,122 |
Additional paid-in capital | 2,480,412 | 2,478,906 |
Cumulative distributions in excess of net income | (839,676) | (809,836) |
Accumulated other comprehensive loss | (5,347) | (9,157) |
Total Corporate Office Properties Trust’s shareholders’ equity | 1,636,512 | 1,661,035 |
Noncontrolling interests in subsidiaries: | ||
Common units in Corporate Office Properties, L.P. (“COPLP”) | 21,568 | 20,465 |
Other consolidated entities | 12,699 | 12,212 |
Noncontrolling interests in subsidiaries | 34,267 | 32,677 |
Total equity | 1,670,779 | 1,693,712 |
Total liabilities, redeemable noncontrolling interests and equity | 4,151,138 | 4,077,023 |
Investing Receivables | ||
Properties, net: | ||
Investing receivables (net of allowance for credit losses of $1,415 and $2,851, respectively) | $ 75,947 | $ 68,754 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accumulated amortization of deferred leasing costs | $ 31,975 | $ 30,375 |
Common Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares of beneficial interest, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common Shares of beneficial interest issued (in shares) | 112,325,411 | 112,181,759 |
Common Shares of beneficial interest, shares outstanding (in shares) | 112,325,411 | 112,181,759 |
Investing Receivables | ||
Investing receivable allowance for credit loss | $ 1,415 | $ 2,851 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Revenues | |||||
Lease revenue | $ 145,749 | $ 133,875 | $ 434,031 | $ 397,034 | |
Other property revenue | 841 | 568 | 2,146 | 2,063 | |
Construction contract and other service revenues | 28,046 | 20,323 | 64,592 | 46,240 | |
Total revenues | 174,636 | 154,766 | 500,769 | 445,337 | |
Operating expenses | |||||
Property operating expenses | 57,190 | 51,552 | 168,780 | 151,755 | |
Depreciation and amortization associated with real estate operations | 36,611 | 35,332 | 111,487 | 101,540 | |
Construction contract and other service expenses | 27,089 | 19,220 | 61,964 | 44,052 | |
Impairment losses | 0 | 1,530 | 0 | 1,530 | |
General, administrative and leasing expenses | 9,342 | 7,467 | 26,970 | 23,111 | |
Business development expenses and land carry costs | 1,093 | 1,094 | 3,559 | 3,474 | |
Total operating expenses | 131,325 | 116,195 | 372,760 | 325,462 | |
Interest expense | (15,720) | (17,152) | (49,181) | (50,789) | |
Interest and other income | 1,818 | 1,746 | 5,911 | 5,233 | |
Credit loss recoveries | 326 | 1,465 | 1,040 | 161 | |
Gain on sales of real estate | (32) | 0 | 39,711 | 5 | |
Loss on early extinguishment of debt | (1,159) | (3,237) | (59,553) | (3,237) | |
Loss on interest rate derivatives | 0 | (53,196) | 0 | (53,196) | |
Income (loss) before equity in income of unconsolidated entities and income taxes | 28,544 | (31,803) | 65,937 | 18,052 | |
Equity in income of unconsolidated entities | 297 | 477 | 779 | 1,372 | |
Income tax expense | (47) | (16) | (103) | (95) | |
Net income (loss) | 28,794 | (31,342) | 66,613 | 19,329 | |
Net (income) loss attributable to noncontrolling interests: | |||||
Common units in COPLP | (357) | 386 | (831) | (185) | |
Preferred units in COPLP | 0 | (77) | 0 | (231) | |
Other consolidated entities | (1,336) | (812) | (2,949) | (3,207) | |
Net income (loss) attributable to COPT common shareholders | $ 27,101 | $ (31,845) | $ 62,833 | $ 15,706 | |
Earnings per common share: | |||||
Net income (loss) attributable to COPT common shareholders - basic (in dollars per share) | [1] | $ 0.24 | $ (0.29) | $ 0.56 | $ 0.14 |
Net income (loss) attributable to COPT common shareholders - diluted (in dollars per share) | [1] | $ 0.24 | $ (0.29) | $ 0.56 | $ 0.14 |
[1] | Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 28,794 | $ (31,342) | $ 66,613 | $ 19,329 |
Other comprehensive income: | ||||
Unrealized (loss) income on interest rate derivatives | (118) | 1,428 | 426 | (39,592) |
Reclassification adjustments on interest rate derivatives recognized in interest expense | 1,226 | 1,342 | 3,604 | 2,408 |
Reclassification adjustments on interest rate derivatives recognized in loss on interest rate derivatives | 0 | 51,865 | 0 | 51,865 |
Total other comprehensive income | 1,108 | 54,635 | 4,030 | 14,681 |
Comprehensive income | 29,902 | 23,293 | 70,643 | 34,010 |
Comprehensive income attributable to noncontrolling interests | (1,733) | (1,173) | (4,000) | (3,408) |
Comprehensive income attributable to COPT | $ 28,169 | $ 22,120 | $ 66,643 | $ 30,602 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Cumulative Effect, Period Of Adoption, Adjustment | Cumulative Effect, Period Of Adoption, AdjustmentCumulative Distributions in Excess of Net Income | Cumulative Effect, Period of Adoption, Adjusted Balance | Cumulative Effect, Period of Adoption, Adjusted BalanceCommon Shares | Cumulative Effect, Period of Adoption, Adjusted BalanceAdditional Paid-in Capital | Cumulative Effect, Period of Adoption, Adjusted BalanceCumulative Distributions in Excess of Net Income | Cumulative Effect, Period of Adoption, Adjusted BalanceAccumulated Other Comprehensive Loss | Cumulative Effect, Period of Adoption, Adjusted BalanceNoncontrolling Interests |
Balance at Dec. 31, 2019 | $ 1,719,245 | $ 1,121 | $ 2,481,558 | $ (778,275) | $ (25,444) | $ 40,285 | $ (5,541) | $ (5,541) | $ 1,713,704 | $ 1,121 | $ 2,481,558 | $ (783,816) | $ (25,444) | $ 40,285 |
Increase (Decrease) in Shareholders' Equity | ||||||||||||||
Conversion of common units to common shares | 0 | 182 | (182) | |||||||||||
Share-based compensation issuance, net of redemptions | 4,730 | 1 | 3,394 | 1,335 | ||||||||||
Redemption of vested equity awards | (1,629) | (1,629) | ||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 527 | (527) | |||||||||||
Comprehensive income | 31,295 | 15,706 | 14,896 | 693 | ||||||||||
Dividends | (92,537) | (92,537) | ||||||||||||
Distributions to owners of common and preferred units in COPLP | (1,306) | (1,306) | ||||||||||||
Contributions from noncontrolling interests in other consolidated entities | 112 | 112 | ||||||||||||
Distributions to noncontrolling interests in other consolidated entities | (22) | (22) | ||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | (4,711) | (4,711) | ||||||||||||
Balance at Sep. 30, 2020 | 1,649,636 | 1,122 | 2,479,321 | (860,647) | (10,548) | 40,388 | ||||||||
Balance at Jun. 30, 2020 | 1,656,924 | 1,122 | 2,477,977 | (797,959) | (64,513) | 40,297 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||||
Share-based compensation issuance, net of redemptions | 1,784 | 0 | 1,223 | 561 | ||||||||||
Redemption of vested equity awards | (57) | (57) | ||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 552 | (552) | |||||||||||
Comprehensive income | 22,653 | (31,845) | 53,965 | 533 | ||||||||||
Dividends | (30,843) | (30,843) | ||||||||||||
Distributions to owners of common and preferred units in COPLP | (444) | (444) | ||||||||||||
Distributions to noncontrolling interests in other consolidated entities | (7) | (7) | ||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | (374) | (374) | ||||||||||||
Balance at Sep. 30, 2020 | 1,649,636 | 1,122 | 2,479,321 | (860,647) | (10,548) | 40,388 | ||||||||
Balance at Dec. 31, 2020 | 1,693,712 | 1,122 | 2,478,906 | (809,836) | (9,157) | 32,677 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||||
Conversion of common units to common shares | 0 | 121 | (121) | |||||||||||
Redemption of common units | (297) | (297) | ||||||||||||
Share-based compensation issuance, net of redemptions | 6,322 | 1 | 3,239 | 3,082 | ||||||||||
Redemption of vested equity awards | (2,422) | (2,422) | ||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 1,245 | (1,245) | |||||||||||
Comprehensive income | 68,357 | 62,833 | 3,810 | 1,714 | ||||||||||
Dividends | (92,673) | (92,673) | ||||||||||||
Distributions to owners of common and preferred units in COPLP | (1,196) | (1,196) | ||||||||||||
Distributions to noncontrolling interests in other consolidated entities | (23) | (23) | ||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | (677) | (677) | ||||||||||||
Other | (324) | (324) | ||||||||||||
Balance at Sep. 30, 2021 | 1,670,779 | 1,123 | 2,480,412 | (839,676) | (5,347) | 34,267 | ||||||||
Balance at Jun. 30, 2021 | 1,671,312 | 1,123 | 2,478,416 | (835,894) | (6,415) | 34,082 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||||
Redemption of common units | (56) | (56) | ||||||||||||
Share-based compensation issuance, net of redemptions | 2,162 | 1,064 | 1,098 | |||||||||||
Redemption of vested equity awards | (64) | (64) | ||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 1,051 | (1,051) | |||||||||||
Comprehensive income | 28,769 | 27,101 | 1,068 | 600 | ||||||||||
Dividends | (30,883) | (30,883) | ||||||||||||
Distributions to owners of common and preferred units in COPLP | (398) | (398) | ||||||||||||
Distributions to noncontrolling interests in other consolidated entities | (8) | (8) | ||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | (55) | (55) | ||||||||||||
Balance at Sep. 30, 2021 | $ 1,670,779 | $ 1,123 | $ 2,480,412 | $ (839,676) | $ (5,347) | $ 34,267 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Shares outstanding (in shares) | 112,325,411 | 112,175,688 | 112,325,411 | 112,175,688 |
Conversion of common units to common shares (in shares) | 8,054 | 12,009 | ||
Share-based compensation issuance, net of redemptions (in shares) | (10,659) | (7,504) | 135,598 | 94,974 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Revenues from real estate operations received | $ 427,448 | $ 394,094 |
Construction contract and other service revenues received | 68,780 | 53,911 |
Property operating expenses paid | (168,009) | (159,007) |
Construction contract and other service expenses paid | (50,275) | (45,686) |
General, administrative, leasing, business development and land carry costs paid | (22,367) | (24,408) |
Interest expense paid | (46,621) | (49,693) |
Lease incentives paid | (8,694) | (12,634) |
Other | (359) | 2,464 |
Net cash provided by operating activities | 199,903 | 159,041 |
Cash flows from investing activities | ||
Development and redevelopment of properties | (176,554) | (284,416) |
Tenant improvements on operating properties | (15,149) | (23,377) |
Other capital improvements on operating properties | (19,256) | (24,797) |
Proceeds from sale of properties | 114,050 | 0 |
Non-operating distributions from unconsolidated real estate joint venture | 872 | 2,287 |
Leasing costs paid | (14,929) | (12,455) |
Settlement of interest rate derivatives | 0 | (53,130) |
Other | (1,026) | (321) |
Net cash used in investing activities | (111,992) | (396,209) |
Proceeds from debt | ||
Revolving Credit Facility | 456,000 | 409,000 |
Unsecured senior notes | 987,210 | 395,264 |
Other debt proceeds | 4,630 | 199,088 |
Repayments of debt | ||
Revolving Credit Facility | (589,000) | (529,000) |
Unsecured senior notes | (600,000) | (122,948) |
Scheduled principal amortization | (2,911) | (3,077) |
Other debt repayments | (188,960) | 0 |
Deferred financing costs paid | (2,662) | (2,161) |
Payments in connection with early extinguishment of debt | (55,720) | (3,037) |
Common share dividends paid | (92,632) | (92,512) |
Distributions paid to redeemable noncontrolling interests | (1,687) | (13,515) |
Redemption of vested equity awards | (2,422) | (1,629) |
Other | (3,645) | (1,760) |
Net cash (used in) provided by financing activities | (91,799) | 233,713 |
Net decrease in cash and cash equivalents and restricted cash | (3,888) | (3,455) |
Cash and cash equivalents and restricted cash | ||
Beginning of period | 22,033 | 18,130 |
End of period | 18,145 | 14,675 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 66,613 | 19,329 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 113,676 | 102,864 |
Impairment losses | 0 | 1,530 |
Amortization of deferred financing costs and net debt discounts | 3,969 | 3,104 |
Increase in deferred rent receivable | (13,515) | (3,560) |
Gain on sales of real estate | (39,711) | (5) |
Share-based compensation | 5,960 | 4,753 |
Loss on early extinguishment of debt | 59,553 | 3,237 |
Loss on interest rate derivatives | 0 | 53,196 |
Other | (3,708) | (4,184) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 6,269 | (744) |
Increase in prepaid expenses and other assets, net | (13,120) | (13,164) |
Increase (decrease) in accounts payable, accrued expenses and other liabilities | 15,250 | (3,971) |
Decrease in rents received in advance and security deposits | (1,333) | (3,344) |
Net cash provided by operating activities | 199,903 | 159,041 |
Reconciliation of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents | 14,570 | 11,458 |
Restricted cash | 3,575 | 3,217 |
Cash and cash equivalents and restricted cash | 18,145 | 14,675 |
Supplemental schedule of non-cash investing and financing activities: | ||
Increase (decrease) in accrued capital improvements, leasing and other investing activity costs | 17,590 | (195) |
Recognition of operating right-of-use assets and related lease liabilities | 328 | 8,955 |
Investment in unconsolidated real estate joint venture retained in property disposition | 11,842 | 0 |
Increase (decrease) in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | 4,030 | (37,183) |
Dividends/distributions payable | 31,306 | 31,307 |
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | 121 | 182 |
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | (1,245) | (527) |
Increase in redeemable noncontrolling interests and decrease in equity to carry redeemable noncontrolling interests at fair value | $ 677 | $ 4,711 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Corporate Office Properties Trust (“COPT”) and subsidiaries (collectively, the “Company”, “we” or “us”) is a fully-integrated and self-managed real estate investment trust (“REIT”). We own, manage, lease, develop and selectively acquire office and data center properties. The majority of our portfolio is in locations that support the United States Government (“USG”) and its contractors, most of whom are engaged in national security, defense and information technology (“IT”) related activities servicing what we believe are growing, durable, priority missions (“Defense/IT Locations”). We also own a portfolio of office properties located in select urban/urban-like submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (“Regional Office”). As of September 30, 2021, our properties included the following: • 186 properties totaling 21.7 million square feet comprised of 16.9 million square feet in 160 office properties and 4.7 million square feet in 26 single-tenant data center shell properties (“data center shells”). We owned 19 of these data center shells through unconsolidated real estate joint ventures; • a wholesale data center with a capacity of 19.25 megawatts; • 13 properties under development (10 office properties and three data center shells), including three partially-operational properties, that we estimate will total approximately 1.8 million square feet upon completion; and • approximately 720 acres of land controlled for future development that we believe could be developed into approximately 8.9 million square feet and 43 acres of other land. We conduct almost all of our operations and own almost all of our assets through our operating partnership, Corporate Office Properties, L.P. (“COPLP”) and subsidiaries (collectively, the “Operating Partnership”), of which COPT is the sole general partner. COPLP owns real estate directly and through subsidiary partnerships and limited liability companies (“LLCs”). In addition to owning real estate, COPLP also owns subsidiaries that provide real estate services such as property management, development and construction services primarily for our properties but also for third parties. Some of these services are performed by a taxable REIT subsidiary (“TRS”). Equity interests in COPLP are in the form of common and preferred units. As of September 30, 2021, COPT owned 98.3% of the outstanding COPLP common units (“common units”) and there were no preferred units outstanding. Common units not owned by COPT carry certain redemption rights. The number of common units owned by COPT is equivalent to the number of outstanding common shares of beneficial interest (“common shares”) of COPT, and the entitlement of common units to quarterly distributions and payments in liquidation is substantially the same as that of COPT common shareholders. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of COPT, the Operating Partnership, their subsidiaries and other entities in which COPT has a majority voting interest and control. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if we are deemed to be the primary beneficiary of such entities. We eliminate all intercompany balances and transactions in consolidation. We use the equity method of accounting when we own an interest in an entity and can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity. When we own an equity investment in an entity and cannot exert significant influence over its operations, we measure the investment at fair value, with changes recognized through net income. For an investment without a readily determinable fair value, we measure the investment at cost, less any impairments, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer. These interim financial statements should be read together with the consolidated financial statements and notes thereto as Reclassifications We reclassified certain amounts from the prior period to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity. Recent Accounting Pronouncements |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements We have a non-qualified elective deferred compensation plan for Trustees and certain members of our management team that, prior to December 31, 2019, permitted participants to defer up to 100% of their compensation on a pre-tax basis and receive a tax-deferred return on such deferrals. Effective December 31, 2019, no new investments of deferred compensation were eligible for the plan. The assets held in the plan (comprised primarily of mutual funds and equity securities) and the corresponding liability to the participants are measured at fair value on a recurring basis on our consolidated balance sheets using quoted market prices, as are other marketable securities that we hold. The balance of the plan, which was fully funded and totaled $2.6 million as of September 30, 2021, is included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets along with an insignificant amount of other marketable securities. The offsetting liability associated with the plan is adjusted to fair value at the end of each accounting period based on the fair value of the plan assets and reported in “other liabilities” on our consolidated balance sheets. The assets of the plan are classified in Level 1 of the fair value hierarchy, while the offsetting liability is classified in Level 2 of the fair value hierarchy. The fair values of our interest rate derivatives are determined using widely accepted valuation techniques, including a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate market data and implied volatilities in such interest rates. While we determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our interest rate derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. However, as of September 30, 2021, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivatives and determined that these adjustments are not significant. As a result, we determined that our interest rate derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets (excluding investing receivables) and accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturities of these instruments. The fair values of our investing receivables, as disclosed in Note 7, were based on the discounted estimated future cash flows of the loans (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans with similar maturities and credit quality, and the estimated cash payments include scheduled principal and interest payments. For our disclosure of debt fair values in Note 9, we estimated the fair value of our unsecured senior notes based on quoted market rates for publicly-traded debt (categorized within Level 2 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments include scheduled principal and interest payments. Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. For additional fair value information, refer to Note 7 for investing receivables, Note 9 for debt and Note 10 for interest rate derivatives. The table below sets forth our financial assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2021 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Assets: Marketable securities in deferred compensation plan (1) Mutual funds $ 2,545 $ — $ — $ 2,545 Other 71 — — 71 Other marketable securities (1) 33 — — 33 Interest rate derivatives (1) — 70 — 70 Total assets $ 2,649 $ 70 $ — $ 2,719 Liabilities: Deferred compensation plan liability (2) $ — $ 2,616 $ — $ 2,616 Interest rate derivatives — 5,562 — 5,562 Total liabilities $ — $ 8,178 $ — $ 8,178 (1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet. (2) Included in the line entitled “other liabilities” on our consolidated balance sheet. |
Properties, Net
Properties, Net | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Properties, Net | Properties, Net Operating properties, net consisted of the following (in thousands): September 30, December 31, 2020 Land $ 539,899 $ 528,269 Buildings and improvements 3,890,678 3,711,264 Less: Accumulated depreciation (1,202,780) (1,124,253) Operating properties, net $ 3,227,797 $ 3,115,280 As of September 30, 2021, we had one property in our data center shells sub-segment previously removed from service that was classified as assets held for sale, net on our consolidated balance sheet, the sole component of which was properties, net. 2021 Dispositions On June 2, 2021, we sold a 90% interest in two data center shell properties in Northern Virginia based on an aggregate property value of $118.8 million and retained a 10% interest in the properties through B RE COPT DC JV III LLC, a newly-formed joint venture. Our partner in the joint venture acquired the 90% interest from us for $106.9 million. We account for our interest in the joint venture using the equity method of accounting as described further in Note 6. We recognized a gain on sale of $40.2 million in the nine months ended September 30, 2021. 2021 Development Activities |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases Lessor Arrangements We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue 2021 2020 2021 2020 Fixed $ 114,309 $ 106,743 $ 340,157 $ 314,845 Variable 31,440 27,132 93,874 82,189 $ 145,749 $ 133,875 $ 434,031 $ 397,034 Fixed contractual payments due under our property leases were as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Sales-type leases 2021 (1) $ 109,800 $ 221 2022 418,746 960 2023 370,652 960 2024 323,198 960 2025 241,090 960 Thereafter 1,020,675 4,516 Total contractual payments $ 2,484,161 8,577 Less: Amount representing interest (2,277) Net investment in sales-type leases $ 6,300 (1) Represents the three months ending December 31, 2021. Lessee Arrangements As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,854 $ 40,570 Finance leases - Property (1) Property - finance right-of-use assets 40,077 40,425 Total right-of-use assets $ 78,931 $ 80,995 (1) On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option. Property lease liabilities consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,630 $ 30,746 Finance leases - Property Other liabilities 14 28 Total lease liabilities $ 29,644 $ 30,774 The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021: Weighted average remaining lease term Operating leases 51 years Finance leases < 1 year Weighted average discount rate Operating leases 7.16 % Finance leases 3.62 % The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2021 2020 2021 2020 Operating lease cost Property leases - fixed Property operating expenses $ 1,013 $ 598 $ 2,999 $ 1,465 Property leases - variable Property operating expenses 11 107 31 116 Finance lease cost Amortization of property right-of-use assets Property operating expenses 5 9 23 27 $ 1,029 $ 714 $ 3,053 $ 1,608 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,399 $ 987 Financing cash flows for financing leases $ 14 $ 674 Payments on property leases were due as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Finance Total 2021 (1) $ 807 $ — $ 807 2022 3,297 14 3,311 2023 3,352 — 3,352 2024 3,403 — 3,403 2025 1,749 — 1,749 Thereafter 123,979 — 123,979 Total lease payments 136,587 14 136,601 Less: Amount representing interest (106,957) — (106,957) Lease liability $ 29,630 $ 14 $ 29,644 (1) Represents the three months ending December 31, 2021. |
Leases | Leases Lessor Arrangements We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue 2021 2020 2021 2020 Fixed $ 114,309 $ 106,743 $ 340,157 $ 314,845 Variable 31,440 27,132 93,874 82,189 $ 145,749 $ 133,875 $ 434,031 $ 397,034 Fixed contractual payments due under our property leases were as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Sales-type leases 2021 (1) $ 109,800 $ 221 2022 418,746 960 2023 370,652 960 2024 323,198 960 2025 241,090 960 Thereafter 1,020,675 4,516 Total contractual payments $ 2,484,161 8,577 Less: Amount representing interest (2,277) Net investment in sales-type leases $ 6,300 (1) Represents the three months ending December 31, 2021. Lessee Arrangements As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,854 $ 40,570 Finance leases - Property (1) Property - finance right-of-use assets 40,077 40,425 Total right-of-use assets $ 78,931 $ 80,995 (1) On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option. Property lease liabilities consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,630 $ 30,746 Finance leases - Property Other liabilities 14 28 Total lease liabilities $ 29,644 $ 30,774 The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021: Weighted average remaining lease term Operating leases 51 years Finance leases < 1 year Weighted average discount rate Operating leases 7.16 % Finance leases 3.62 % The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2021 2020 2021 2020 Operating lease cost Property leases - fixed Property operating expenses $ 1,013 $ 598 $ 2,999 $ 1,465 Property leases - variable Property operating expenses 11 107 31 116 Finance lease cost Amortization of property right-of-use assets Property operating expenses 5 9 23 27 $ 1,029 $ 714 $ 3,053 $ 1,608 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,399 $ 987 Financing cash flows for financing leases $ 14 $ 674 Payments on property leases were due as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Finance Total 2021 (1) $ 807 $ — $ 807 2022 3,297 14 3,311 2023 3,352 — 3,352 2024 3,403 — 3,403 2025 1,749 — 1,749 Thereafter 123,979 — 123,979 Total lease payments 136,587 14 136,601 Less: Amount representing interest (106,957) — (106,957) Lease liability $ 29,630 $ 14 $ 29,644 (1) Represents the three months ending December 31, 2021. |
Leases | Leases Lessor Arrangements We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue 2021 2020 2021 2020 Fixed $ 114,309 $ 106,743 $ 340,157 $ 314,845 Variable 31,440 27,132 93,874 82,189 $ 145,749 $ 133,875 $ 434,031 $ 397,034 Fixed contractual payments due under our property leases were as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Sales-type leases 2021 (1) $ 109,800 $ 221 2022 418,746 960 2023 370,652 960 2024 323,198 960 2025 241,090 960 Thereafter 1,020,675 4,516 Total contractual payments $ 2,484,161 8,577 Less: Amount representing interest (2,277) Net investment in sales-type leases $ 6,300 (1) Represents the three months ending December 31, 2021. Lessee Arrangements As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,854 $ 40,570 Finance leases - Property (1) Property - finance right-of-use assets 40,077 40,425 Total right-of-use assets $ 78,931 $ 80,995 (1) On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option. Property lease liabilities consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,630 $ 30,746 Finance leases - Property Other liabilities 14 28 Total lease liabilities $ 29,644 $ 30,774 The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021: Weighted average remaining lease term Operating leases 51 years Finance leases < 1 year Weighted average discount rate Operating leases 7.16 % Finance leases 3.62 % The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2021 2020 2021 2020 Operating lease cost Property leases - fixed Property operating expenses $ 1,013 $ 598 $ 2,999 $ 1,465 Property leases - variable Property operating expenses 11 107 31 116 Finance lease cost Amortization of property right-of-use assets Property operating expenses 5 9 23 27 $ 1,029 $ 714 $ 3,053 $ 1,608 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,399 $ 987 Financing cash flows for financing leases $ 14 $ 674 Payments on property leases were due as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Finance Total 2021 (1) $ 807 $ — $ 807 2022 3,297 14 3,311 2023 3,352 — 3,352 2024 3,403 — 3,403 2025 1,749 — 1,749 Thereafter 123,979 — 123,979 Total lease payments 136,587 14 136,601 Less: Amount representing interest (106,957) — (106,957) Lease liability $ 29,630 $ 14 $ 29,644 (1) Represents the three months ending December 31, 2021. |
Leases | Leases Lessor Arrangements We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue 2021 2020 2021 2020 Fixed $ 114,309 $ 106,743 $ 340,157 $ 314,845 Variable 31,440 27,132 93,874 82,189 $ 145,749 $ 133,875 $ 434,031 $ 397,034 Fixed contractual payments due under our property leases were as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Sales-type leases 2021 (1) $ 109,800 $ 221 2022 418,746 960 2023 370,652 960 2024 323,198 960 2025 241,090 960 Thereafter 1,020,675 4,516 Total contractual payments $ 2,484,161 8,577 Less: Amount representing interest (2,277) Net investment in sales-type leases $ 6,300 (1) Represents the three months ending December 31, 2021. Lessee Arrangements As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,854 $ 40,570 Finance leases - Property (1) Property - finance right-of-use assets 40,077 40,425 Total right-of-use assets $ 78,931 $ 80,995 (1) On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option. Property lease liabilities consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,630 $ 30,746 Finance leases - Property Other liabilities 14 28 Total lease liabilities $ 29,644 $ 30,774 The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021: Weighted average remaining lease term Operating leases 51 years Finance leases < 1 year Weighted average discount rate Operating leases 7.16 % Finance leases 3.62 % The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2021 2020 2021 2020 Operating lease cost Property leases - fixed Property operating expenses $ 1,013 $ 598 $ 2,999 $ 1,465 Property leases - variable Property operating expenses 11 107 31 116 Finance lease cost Amortization of property right-of-use assets Property operating expenses 5 9 23 27 $ 1,029 $ 714 $ 3,053 $ 1,608 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,399 $ 987 Financing cash flows for financing leases $ 14 $ 674 Payments on property leases were due as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Finance Total 2021 (1) $ 807 $ — $ 807 2022 3,297 14 3,311 2023 3,352 — 3,352 2024 3,403 — 3,403 2025 1,749 — 1,749 Thereafter 123,979 — 123,979 Total lease payments 136,587 14 136,601 Less: Amount representing interest (106,957) — (106,957) Lease liability $ 29,630 $ 14 $ 29,644 (1) Represents the three months ending December 31, 2021. |
Real Estate Joint Ventures
Real Estate Joint Ventures | 9 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Real Estate Joint Ventures | Real Estate Joint Ventures Consolidated Real Estate Joint Ventures The table below sets forth information pertaining to our investments in consolidated real estate joint ventures as of September 30, 2021 (dollars in thousands): September 30, 2021 (1) Date Acquired Nominal Ownership % Total Encumbered Assets Total Liabilities Entity Location LW Redstone Company, LLC (2) 3/23/2010 85% Huntsville, Alabama $ 453,496 $ 90,295 $ 99,173 Stevens Investors, LLC 8/11/2015 95% Washington, DC 164,189 — 859 M Square Associates, LLC 6/26/2007 50% College Park, Maryland 100,634 60,950 52,527 $ 718,319 $ 151,245 $ 152,559 (1) Excludes amounts eliminated in consolidation. (2) We fund all capital requirements. Our partner generally receives distributions of the firs t $1.2 million of annual operating cash flows and we receive the remainder. On August 11, 2021, we entered into a $112.0 million construction loan with Stevens Investors, LLC to enable it to early extinguish a third party construction loan. Our loan to the joint venture, which is eliminated in consolidation, carries an interest rate of LIBOR plus 2.35% and had a balance of $90.5 million as of September 30, 2021. The loan matures on August 11, 2024, and we have priority for repayment in full of borrowings and accrued interest on the loan over partner distributions of any future refinancing proceeds or other available cash flows. Unconsolidated Real Estate Joint Ventures The table below sets forth information pertaining to our investments in unconsolidated real estate joint ventures accounted for using the equity method of accounting (dollars in thousands): Date Acquired Nominal Ownership % Number of Properties Carrying Value of Investment (1) Entity September 30, 2021 December 31, 2020 B RE COPT DC JV II LLC (2) 10/30/2020 10% 8 $ 15,735 $ 15,988 BREIT COPT DC JV LLC 6/20/2019 10% 9 12,620 13,315 B RE COPT DC JV III LLC 6/2/2021 10% 2 11,949 — 19 $ 40,304 $ 29,303 (1) Included in the line entitled “investment in unconsolidated real estate joint ventures” on our consolidated balance sheets. (2) Our investment in B RE COPT DC JV II LLC was lower than our share of the joint venture’s equity by $7.3 million as of September 30, 2021 and $7.4 million as of December 31, 2020 due to a difference between our cost basis and our share of the joint venture’s underlying equity in its net assets. We recognize adjustments to our share of the joint venture’s earnings and losses resulting from this basis difference in the underlying assets of the joint venture. |
Investing Receivables
Investing Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Investing Receivables | Investing Receivables Investing receivables consisted of the following (in thousands): September 30, December 31, 2020 Notes receivable from the City of Huntsville $ 71,322 $ 65,564 Other investing loans receivable 6,040 6,041 Amortized cost basis 77,362 71,605 Allowance for credit losses (1,415) (2,851) Investing receivables, net $ 75,947 $ 68,754 The balances above include accrued interest receivable, net of allowance for credit losses, of $3.6 million as of September 30, 2021 and $4.8 million as of December 31, 2020. Our notes receivable from the City of Huntsville funded infrastructure costs in connection with our LW Redstone Company, LLC joint venture (see Note 6) and carry an interest rate of 9.95%. Our other investing loans receivable carry an interest rate of 8.0%. The fair value of these receivables was approximately $78 million as of September 30, 2021 and $73 million as of December 31, 2020. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets, Net | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expense and Other Assets [Abstract] | |
Prepaid Expenses and Other Assets, Net | Prepaid Expenses and Other Assets, Net Prepaid expenses and other assets, net consisted of the following (in thousands): September 30, December 31, 2020 Lease incentives, net $ 40,150 $ 35,642 Prepaid expenses 26,815 19,690 Construction contract costs in excess of billings, net 12,987 10,343 Furniture, fixtures and equipment, net 10,008 10,433 Net investment in sales-type leases 6,300 6,573 Non-real estate equity investments 5,545 5,509 Restricted cash 3,575 3,664 Marketable securities in deferred compensation plan 2,616 3,027 Deferred tax asset, net (1) 1,883 1,989 Deferred financing costs, net (2) 1,595 2,439 Other assets 5,740 5,274 Prepaid expenses and other assets, net $ 117,214 $ 104,583 (1) Includes a valuation allowance of $24,000 as of September 30, 2021 and $201,000 as of December 31, 2020. (2) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. |
Debt, Net
Debt, Net | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt, Net | Debt, Net Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of September 30, December 31, 2020 September 30, 2021 Stated Interest Rates Scheduled Maturity Mortgage and Other Secured Debt: Fixed rate mortgage debt (2) $ 137,310 $ 139,991 3.82% - 4.62% (3) 2023-2026 Variable rate secured debt 33,698 115,119 LIBOR + 1.45% to 1.55% (4) 2025-2026 Total mortgage and other secured debt 171,008 255,110 Revolving Credit Facility (5) 10,000 143,000 LIBOR + 0.775% to 1.45% (6) March 2023 (5) Term Loan Facility 299,274 398,447 LIBOR + 1.00% to 1.65% (7) December 2022 Unsecured Senior Notes 5.00%, $300,000 aggregate principal 298,235 297,915 5.00% (8) July 2025 2.25%, $400,000 aggregate principal 395,232 394,464 2.25% (9) March 2026 2.00%, $400,000 aggregate principal 396,394 — 2.00% (10) January 2029 2.75%, $600,000 aggregate principal 588,798 — 2.75% (10) April 2031 3.60%, $350,000 aggregate principal — 348,888 3.60% (11) N/A (11) 5.25%, $250,000 aggregate principal — 248,194 5.25% (12) N/A (12) Unsecured note payable 791 900 0% (13) May 2026 Total debt, net $ 2,159,732 $ 2,086,918 (1) The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $5.4 million as of September 30, 2021 and $5.9 million as of December 31, 2020. (2) Certain of the fixed rate mortgages carry interest rates that, upon assumption, were above or below market rates and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $108,000 as of September 30, 2021 and $155,000 as of December 31, 2020. (3) The weighted average interest rate on our fixed rate mortgage debt was 4.16% as of September 30, 2021. (4) The weighted average interest rate on our variable rate secured debt was 1.60% as of September 30, 2021. (5) The facility matures in March 2023, with the ability for us to further extend such maturity by two six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.075% of the total availability under the facility for each extension period. In connection with this facility, we also have the ability to borrow up to $500.0 million under new term loans from the facility’s lender group provided that there is no default under the facility and subject to the approval of the lenders. (6) The weighted average interest rate on the Revolving Credit Facility was 1.19% as of September 30, 2021. (7) The interest rate on this loan was 1.09% as of September 30, 2021. (8) The carrying value of these notes reflects an unamortized discount totaling $1.5 million as of September 30, 2021 and $1.8 million as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 5.15%. (9) The carrying value of these notes reflects an unamortized discount totaling $3.9 million as of September 30, 2021 and $4.5 million as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 2.48%. (10) Refer to paragraph below for further disclosure. (11) The carrying value of these notes reflects an unamortized discount totaling $781,000 as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%. Refer to paragraph below for further disclosure. (12) The carrying value of these notes reflects an unamortized discount totaling $1.6 million as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%. Refer to paragraph below for further disclosure. (13) This note carries an interest rate that, upon assumption, was below market rates and it therefore was recorded at its fair value based on applicable effective interest rates. The carrying value of this note reflects an unamortized discount totaling $120,000 as of September 30, 2021 and $161,000 as of December 31, 2020. All debt is owed by the Operating Partnership. While COPT is not directly obligated by any debt, it has guaranteed COPLP’s Revolving Credit Facility, Term Loan Facility and Unsecured Senior Notes. We issued the following unsecured senior notes in 2021: • $600.0 million of 2.75% Senior Notes due 2031 (the “2.75% Notes”) at an initial offering price of 98.95% of their face value on March 11, 2021, resulting in proceeds, after deducting underwriting discounts, but before other offering expenses, of $589.8 million. The notes mature on April 15, 2031. The carrying value of these notes reflects an unamortized discount totaling $9.7 million as of September 30, 2021. The effective interest rate under the notes, including amortization of discount and issuance costs, was 2.94%; and • $400.0 million of 2.00% Senior Notes due 2029 (the “2.00% Notes”) at an initial offering price of 99.97% of their face value on August 11, 2021, resulting in proceeds, after deducting underwriting discounts, but before other offering expenses, of $397.4 million. The notes mature on January 15, 2029. The carrying value of these notes reflects an unamortized discount totaling $2.6 million as of September 30, 2021. The effective interest rate under the notes, including amortization of discount and issuance costs, was 2.09%. We may redeem these notes, in whole at any time or in part from time to time, at our option, at a redemption price equal to the greater of (1) the aggregate principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to its present value, on a semi-annual basis at an adjusted treasury rate plus a spread (25 basis points for the 2.75% Notes and 20 basis points for the 2.00% Notes), plus accrued and unpaid interest thereon to the date of redemption. However, if this redemption occurs on or after January 15, 2031 for the 2.75% Notes or November 15, 2028 for the 2.00% Notes, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date. These notes are unconditionally guaranteed by COPT. With regard to our 3.60% Senior Notes due 2023 (the “3.60% Notes”) and 5.25% Senior Notes due 2024 (the “5.25% Notes”), we: • effective March 11, 2021, purchased pursuant to tender offers $184.4 million of 3.60% Notes for $196.7 million and $145.6 million of 5.25% Notes for $164.7 million, plus accrued interest; and • on April 12, 2021, redeemed the remaining $165.6 million of 3.60% Notes for $176.3 million and $104.4 million of 5.25% Notes for $117.7 million, plus accrued interest. In connection with these purchases and redemptions, we recognized a loss on early extinguishment of debt of $58.4 million in the nine months ended September 30, 2021. On August 11, 2021, we repaid $100.0 million of our term loan facility. Certain of our debt instruments require that we comply with a number of restrictive financial covenants. As of September 30, 2021, we were compliant with these financial covenants. We capitalized interest costs of $1.8 million in the three months ended September 30, 2021, $2.9 million in the three months ended September 30, 2020, $5.3 million in the nine months ended September 30, 2021 and $9.4 million in the nine months ended September 30, 2020. The following table sets forth information pertaining to the fair value of our debt (in thousands): September 30, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value Fixed-rate debt Unsecured Senior Notes $ 1,678,659 $ 1,723,267 $ 1,289,461 $ 1,334,342 Other fixed-rate debt 138,101 136,653 140,891 142,838 Variable-rate debt 342,972 343,577 656,566 654,102 $ 2,159,732 $ 2,203,497 $ 2,086,918 $ 2,131,282 |
Interest Rate Derivatives
Interest Rate Derivatives | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Derivatives | Interest Rate Derivatives The following table sets forth the key terms and fair values of our interest rate swap derivatives, each of which was designated as a cash flow hedge of interest rate risk (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date September 30, December 31, 2020 $ 100,000 1.901% One-Month LIBOR 9/1/2016 12/1/2022 $ (2,065) $ (3,394) $ 100,000 1.905% One-Month LIBOR 9/1/2016 12/1/2022 (2,070) (3,401) $ 50,000 1.908% One-Month LIBOR 9/1/2016 12/1/2022 (1,036) (1,704) $ 11,180 (1) 1.678% One-Month LIBOR 8/1/2019 8/1/2026 (391) (733) $ 23,000 (2) 0.573% One-Month LIBOR 4/1/2020 3/26/2025 70 (290) $ (5,492) $ (9,522) (1) The notional amount of this instrument is scheduled to amortize to $10.0 million. (2) The notional amount of this instrument is scheduled to amortize to $22.1 million. The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheets (in thousands): Fair Value at Derivatives Balance Sheet Location September 30, December 31, 2020 Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets, net $ 70 $ — Interest rate swaps designated as cash flow hedges Interest rate derivatives (liabilities) $ (5,562) $ (9,522) The tables below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): Amount of (Loss) Income Recognized in AOCL on Derivatives Amount of Loss Reclassified from AOCL into Interest Expense on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 2021 2020 2021 2020 Interest rate derivatives $ (118) $ 1,428 $ 426 $ (39,592) $ (1,226) $ (1,342) $ (3,604) $ (2,408) Amount of Loss Reclassified from AOCL into Loss on Interest Rate Derivatives on Statement of Operations Amount of Loss Recognized on Undesignated Swaps in Loss on Interest Rate Derivatives on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 2021 2020 2021 2020 Interest rate derivatives $ — $ (51,865) $ — $ (51,865) $ — $ (1,265) $ — $ (1,265) Based on the fair value of our derivatives as of September 30, 2021, we estimate that approximately $4.8 million of losses will be reclassified from AOCL as an increase to interest expense over the next 12 months. We have agreements with each of our interest rate derivative counterparties that contain provisions under which, if we default or are capable of being declared in default on defined levels of our indebtedness, we could also be declared in default on our derivative obligations. Failure to comply with the loan covenant provisions could result in our being declared in default on any derivative instrument obligations covered by the agreements. As of September 30, 2021, we were not in default with any of these provisions. As of September 30, 2021, the fair value of interest rate derivatives in a liability position related to these agreements was $5.6 million, excluding the effects of accrued interest and credit valuation adjustments. As of September 30, 2021, we had not posted any collateral related to these agreements. If we breach any of these provisions, we could be required to settle our obligations under the agreements at their termination value, which was $6.0 million as of September 30, 2021. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests Our partners in two real estate joint ventures, LW Redstone Company, LLC and Stevens Investors, LLC, have the right to require us to acquire their respective interests at fair value; accordingly, we classify the fair value of our partners’ interests as redeemable noncontrolling interests in the mezzanine section of our consolidated balance sheets. The table below sets forth the activity for these redeemable noncontrolling interests (in thousands): For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 25,430 $ 29,431 Distributions to noncontrolling interests (2,387) (13,335) Net income attributable to noncontrolling interests 2,286 2,715 Adjustment to arrive at fair value of interests 677 4,711 Ending balance $ 26,006 $ 23,522 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Equity | Equity Common Shares As of September 30, 2021, we had remaining capacity under our at-the-market stock offering program equal to an aggregate gross sales price of $300 million in common share sales. During the nine months ended September 30, 2021, certain COPLP limited partners converted 8,054 common units in COPLP for an equal number of common shares. We declared dividends per common share of $0.275 in the three months ended September 30, 2021 and 2020 and $0.825 in the nine months ended September 30, 2021 and 2020. See Note 16 for disclosure of COPT common share and COPLP common unit activity pertaining to our share-based compensation plans. |
Credit Losses, Financial Assets
Credit Losses, Financial Assets and Other Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Credit Loss [Abstract] | |
Credit Losses, Financial Assets and Other Instruments | Credit Losses, Financial Assets and Other Instruments The table below sets forth the activity for the allowance for credit losses (in thousands): For the Nine Months Ended September 30, 2021 Investing Receivables Tenant Notes Other Assets (2) Total December 31, 2020 $ 2,851 $ 1,203 $ 643 $ 4,697 Credit loss (recoveries) expense (1,436) (114) 510 (1,040) September 30, 2021 $ 1,415 $ 1,089 $ 1,153 $ 3,657 (1) Included in the line entitled “accounts receivable, net” on our consolidated balance sheets. (2) The balance as of September 30, 2021 and December 31, 2020 included $705,000 and $257,000, respectively, in the line entitled “accounts receivable, net” and $448,000 and $386,000, respectively, in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. The following table presents the amortized cost basis of our investing receivables, tenant notes receivable and sales-type lease receivables by credit risk classification, by origination year as of September 30, 2021 (in thousands): Origination Year 2016 and Earlier 2017 2018 2019 2020 2021 Total Investing receivables: Credit risk classification: Investment grade $ 68,773 $ 1,043 $ — $ — $ 1,057 $ 449 $ 71,322 Non-investment grade — — — 6,040 — — 6,040 Total $ 68,773 $ 1,043 $ — $ 6,040 $ 1,057 $ 449 $ 77,362 Tenant notes receivable: Credit risk classification: Investment grade $ — $ — $ 949 $ 69 $ 297 $ — $ 1,315 Non-investment grade 221 — 141 147 1,763 — 2,272 Total $ 221 $ — $ 1,090 $ 216 $ 2,060 $ — $ 3,587 Sales-type lease receivables: Credit risk classification: Investment grade $ — $ — $ — $ — $ 6,300 $ — $ 6,300 Our investment grade credit risk classification represents entities with investment grade credit ratings from ratings agencies (such as Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc. or Fitch Ratings Ltd.), meaning that they are considered to have at least an adequate capacity to meet their financial commitments, with credit risk ranging from minimal to moderate. Our non-investment grade credit risk classification represents entities with either no credit agency credit ratings or ratings deemed to be sub-investment grade; we believe that there is significantly more credit risk associated with this classification. The credit risk classifications of our investing receivables and tenant notes receivable were last updated in September 2021. An insignificant portion of the investing and tenant notes receivables set forth above was past due, which we define as being delinquent by more than three months from the due date. Notes receivable on nonaccrual status as of September 30, 2021 and December 31, 2020 were not significant. We did not recognize any interest income on notes receivable on nonaccrual status during the three or nine months ended September 30, 2021 and 2020. |
Information by Business Segment
Information by Business Segment | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Information by Business Segment | Information by Business SegmentWe have the following reportable segments: Defense/IT Locations; Regional Office; Wholesale Data Center; and Other. We also report on Defense/IT Locations sub-segments, which include the following: Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”); Northern Virginia Defense/IT Locations; Lackland Air Force Base (in San Antonio); locations serving the U.S. Navy (“Navy Support Locations”), which included properties proximate to the Washington Navy Yard, the Naval Air Station Patuxent River in Maryland and the Naval Surface Warfare Center Dahlgren Division in Virginia; Redstone Arsenal (in Huntsville); and data center shells (properties leased to tenants to be operated as data centers in which the tenants fund the costs for the power, fiber connectivity and data center infrastructure). We measure the performance of our segments through the measure we define as net operating income from real estate operations (“NOI from real estate operations”), which includes: real estate revenues and property operating expenses; and the net of revenues and property operating expenses of real estate operations owned through unconsolidated real estate joint ventures (“UJVs”) that is allocable to our ownership interest (“UJV NOI allocable to COPT”). Amounts reported for segment assets represent long-lived assets associated with consolidated operating properties (including the carrying value of properties, right-of-use assets, net of related lease liabilities, intangible assets, deferred leasing costs, deferred rents receivable and lease incentives) and the carrying value of investments in UJVs owning operating properties. Amounts reported as additions to long-lived assets represent additions to existing consolidated operating properties, excluding transfers from non-operating properties, which we report separately. The table below reports segment financial information for our reportable segments (in thousands): Defense/Information Technology Locations Fort Meade/BW Corridor Northern Virginia Defense/IT Lackland Air Force Base Navy Support Locations Redstone Arsenal Data Center Shells Total Defense/IT Locations Regional Office Operating Wholesale Other Total Three Months Ended September 30, 2021 Revenues from real estate operations $ 66,029 $ 15,291 $ 14,519 $ 8,558 $ 9,144 $ 6,913 $ 120,454 $ 16,810 $ 8,637 $ 689 $ 146,590 Property operating expenses (22,956) (5,980) (6,935) (3,454) (3,003) (657) (42,985) (8,395) (5,345) (465) (57,190) UJV NOI allocable to COPT — — — — — 1,060 1,060 — — — 1,060 NOI from real estate operations $ 43,073 $ 9,311 $ 7,584 $ 5,104 $ 6,141 $ 7,316 $ 78,529 $ 8,415 $ 3,292 $ 224 $ 90,460 Additions to long-lived assets $ 10,671 $ 1,614 $ — $ 897 $ 107 $ — $ 13,289 $ 5,319 $ 1,141 $ 69 $ 19,818 Transfers from non-operating properties $ 53,935 $ 87,986 $ 7,332 $ — $ 5,519 $ 421 $ 155,193 $ 381 $ — $ — $ 155,574 Three Months Ended September 30, 2020 Revenues from real estate operations $ 63,328 $ 14,699 $ 12,602 $ 8,006 $ 6,079 $ 7,995 $ 112,709 $ 14,913 $ 6,068 $ 753 $ 134,443 Property operating expenses (21,537) (5,245) (7,116) (3,044) (2,029) (861) (39,832) (7,782) (3,642) (296) (51,552) UJV NOI allocable to COPT — — — — — 1,752 1,752 — — — 1,752 NOI from real estate operations $ 41,791 $ 9,454 $ 5,486 $ 4,962 $ 4,050 $ 8,886 $ 74,629 $ 7,131 $ 2,426 $ 457 $ 84,643 Additions to long-lived assets $ 7,511 $ 2,219 $ — $ 1,650 $ 6,382 $ — $ 17,762 $ 5,303 $ 1,917 $ (3) $ 24,979 Transfers from non-operating properties $ (209) $ 58 $ 221 $ — $ 61,520 $ 65,269 $ 126,859 $ — $ — $ — $ 126,859 Nine Months Ended September 30, 2021 Revenues from real estate operations $ 197,315 $ 45,214 $ 40,762 $ 25,401 $ 26,172 $ 23,770 $ 358,634 $ 50,371 $ 24,902 $ 2,270 $ 436,177 Property operating expenses (69,341) (17,394) (21,315) (10,114) (8,525) (2,516) (129,205) (23,901) (14,395) (1,279) (168,780) UJV NOI allocable to COPT — — — — — 2,950 2,950 — — — 2,950 NOI from real estate operations $ 127,974 $ 27,820 $ 19,447 $ 15,287 $ 17,647 $ 24,204 $ 232,379 $ 26,470 $ 10,507 $ 991 $ 270,347 Additions to long-lived assets $ 29,063 $ 2,921 $ — $ 2,654 $ 3,418 $ — $ 38,056 $ 13,430 $ 1,490 $ 82 $ 53,058 Transfers from non-operating properties $ 55,075 $ 88,099 $ 56,601 $ — $ 19,724 $ 2,423 $ 221,922 $ 38,738 $ — $ — $ 260,660 Segment assets at September 30, 2021 $ 1,315,101 $ 470,077 $ 196,624 $ 172,381 $ 299,184 $ 353,340 $ 2,806,707 $ 538,080 $ 194,576 $ 3,508 $ 3,542,871 Nine Months Ended September 30, 2020 Revenues from real estate operations $ 190,464 $ 42,824 $ 37,935 $ 24,466 $ 15,402 $ 20,648 $ 331,739 $ 45,535 $ 19,695 $ 2,128 $ 399,097 Property operating expenses (63,618) (15,765) (21,696) (9,500) (5,488) (2,307) (118,374) (22,207) (10,338) (836) (151,755) UJV NOI allocable to COPT — — — — — 5,190 5,190 — — — 5,190 NOI from real estate operations $ 126,846 $ 27,059 $ 16,239 $ 14,966 $ 9,914 $ 23,531 $ 218,555 $ 23,328 $ 9,357 $ 1,292 $ 252,532 Additions to long-lived assets $ 22,144 $ 8,114 $ — $ 5,518 $ 6,698 $ — $ 42,474 $ 13,105 $ 10,699 $ 165 $ 66,443 Transfers from non-operating properties $ 4,304 $ 838 $ 381 $ — $ 91,827 $ 171,465 $ 268,815 $ — $ — $ — $ 268,815 Segment assets at September 30, 2020 $ 1,264,547 $ 392,226 $ 143,206 $ 180,337 $ 234,355 $ 446,530 $ 2,661,201 $ 387,290 $ 204,834 $ 3,643 $ 3,256,968 The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Segment revenues from real estate operations $ 146,590 $ 134,443 $ 436,177 $ 399,097 Construction contract and other service revenues 28,046 20,323 64,592 46,240 Total revenues $ 174,636 $ 154,766 $ 500,769 $ 445,337 The following table reconciles UJV NOI allocable to COPT to equity in income of unconsolidated entities as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 UJV NOI allocable to COPT $ 1,060 $ 1,752 $ 2,950 $ 5,190 Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense (763) (1,274) (2,167) (3,814) Add: Equity in loss of unconsolidated non-real estate entities — (1) (4) (4) Equity in income of unconsolidated entities $ 297 $ 477 $ 779 $ 1,372 As previously discussed, we provide real estate services such as property management, development and construction services primarily for our properties but also for third parties. The primary manner in which we evaluate the operating performance of our service activities is through a measure we define as net operating income from service operations (“NOI from service operations”), which is based on the net of revenues and expenses from these activities. Construction contract and other service revenues and expenses consist primarily of subcontracted costs that are reimbursed to us by the customer along with a management fee. The operating margins from these activities are small relative to the revenue. We believe NOI from service operations is a useful measure in assessing both our level of activity and our profitability in conducting such operations. The table below sets forth the computation of our NOI from service operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Construction contract and other service revenues $ 28,046 $ 20,323 $ 64,592 $ 46,240 Construction contract and other service expenses (27,089) (19,220) (61,964) (44,052) NOI from service operations $ 957 $ 1,103 $ 2,628 $ 2,188 The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to net income as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 NOI from real estate operations $ 90,460 $ 84,643 $ 270,347 $ 252,532 NOI from service operations 957 1,103 2,628 2,188 Interest and other income 1,818 1,746 5,911 5,233 Credit loss recoveries 326 1,465 1,040 161 Gain on sales of real estate (32) — 39,711 5 Equity in income of unconsolidated entities 297 477 779 1,372 Income tax expense (47) (16) (103) (95) Depreciation and other amortization associated with real estate operations (36,611) (35,332) (111,487) (101,540) Impairment losses — (1,530) — (1,530) General, administrative and leasing expenses (9,342) (7,467) (26,970) (23,111) Business development expenses and land carry costs (1,093) (1,094) (3,559) (3,474) Interest expense (15,720) (17,152) (49,181) (50,789) UJV NOI allocable to COPT included in equity in income of unconsolidated entities (1,060) (1,752) (2,950) (5,190) Loss on early extinguishment of debt (1,159) (3,237) (59,553) (3,237) Loss on interest rate derivatives — (53,196) — (53,196) Net income (loss) $ 28,794 $ (31,342) $ 66,613 $ 19,329 The following table reconciles our segment assets to our consolidated total assets (in thousands): September 30, September 30, Segment assets $ 3,542,871 $ 3,256,968 Operating properties lease liabilities included in segment assets 29,644 26,054 Non-operating property assets 385,025 642,182 Other assets 193,598 194,985 Total consolidated assets $ 4,151,138 $ 4,120,189 The accounting policies of the segments are the same as those used to prepare our consolidated financial statements. In the segment reporting presented above, we did not allocate interest expense, depreciation and amortization, impairment losses, gain on sales of real estate, loss on early extinguishment of debt, loss on interest rate derivatives and equity in income of unconsolidated entities not included in NOI to our real estate segments since they are not included in the measure of segment profit reviewed by management. We also did not allocate general, administrative and leasing expenses, business development expenses and land carry costs, interest and other income, credit loss (expense) recoveries, income taxes and noncontrolling interests because these items represent general corporate or non-operating property items not attributable to segments. |
Construction Contract and Other
Construction Contract and Other Service Revenues | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Construction Contract and Other Service Revenues | Construction Contract and Other Service Revenues We disaggregate our construction contract and other service revenues by compensation arrangement and by service type as we believe it best depicts the nature, timing and uncertainty of our revenue. The table below reports construction contract and other service revenues by compensation arrangement (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Construction contract revenue: Guaranteed maximum price $ 15,846 $ 4,358 $ 29,335 $ 14,834 Cost-plus fee 4,742 13,249 23,075 20,121 Firm fixed price 7,042 1,365 10,954 9,421 Other 416 1,351 1,228 1,864 $ 28,046 $ 20,323 $ 64,592 $ 46,240 The table below reports construction contract and other service revenues by service type (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Construction contract revenue: Construction $ 26,893 $ 18,786 $ 61,477 $ 42,520 Design 737 186 1,887 1,856 Other 416 1,351 1,228 1,864 $ 28,046 $ 20,323 $ 64,592 $ 46,240 We recognized an insignificant amount of revenue in the three and nine months ended September 30, 2021 and 2020 from performance obligations satisfied (or partially satisfied) in previous periods. Accounts receivable related to our construction contract services is included in accounts receivable, net on our consolidated balance sheets. The beginning and ending balances of accounts receivable related to our construction contracts were as follows (in thousands): For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 13,997 $ 12,378 Ending balance $ 5,726 $ 11,183 Contract assets, which we refer to herein as construction contract costs in excess of billings, net, are included in prepaid expenses and other assets, net reported on our consolidated balance sheets. The beginning and ending balances of our contract assets were as follows (in thousands): For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 10,343 $ 17,223 Ending balance $ 12,987 $ 13,980 Contract liabilities are included in other liabilities reported on our consolidated balance sheets. Changes in contract liabilities were as follows (in thousands): For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 4,610 $ 1,184 Ending balance $ 3,818 $ 5,236 Portion of beginning balance recognized in revenue during: Three months ended September 30 $ 9 $ 19 Nine months ended September 30 $ 2,626 $ 757 Revenue allocated to the remaining performance obligations under existing contracts as of September 30, 2021 that will be recognized as revenue in future periods was $159.2 million, of which we expect to recognize approximately $29 million in the three months ending December 31, 2021 and most of the remainder in 2022. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Restricted Shares During the nine months ended September 30, 2021, certain employees and non-employee members of our Board of Trustees (“Trustees”) were granted a total of 165,770 restricted common shares with an aggregate grant date fair value of $4.4 million (weighted average of $26.25 per share). Restricted shares granted to employees vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employee remains employed by us. Restricted shares granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in his or her position. During the nine months ended September 30, 2021, forfeiture restrictions lapsed on 157,066 previously issued common shares; these shares had a weighted average grant date fair value of $25.88 per share, and the aggregate intrinsic value of the shares on the vesting dates was $4.1 million. Performance Share Awards (“PSUs”) We issued 93,824 common shares on February 3, 2021 to executives in settlement of PSUs granted in 2018, representing 200% of the target awards for those PSUs. Profit Interest Units in COPLP (“PIUs”) We granted two forms of PIUs: time-based PIUs (“TB-PIUs”); and performance-based PIUs (“PB-PIUs”). TB-PIUs are subject to forfeiture restrictions until the end of the requisite service period, at which time the TB-PIUs automatically convert into vested PIUs. PB-PIUs are subject to a market condition in that the number of earned awards are determined at the end of the performance period (as described further below) and then settled in vested PIUs. Vested PIUs carry substantially the same rights to redemption and distributions as non-PIU common units. TB-PIUs During the nine months ended September 30, 2021, we granted 93,983 TB-PIUs with an aggregate grant date fair value of $2.5 million (weighted average of $26.16 per TB-PIU) to senior management team members and certain non-employee Trustees. TB-PIUs granted to senior management team members generally vest in equal annual increments over a three-year period beginning on the first anniversary of the date of grant provided that the employee remains employed by us. TB-PIUs granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in his or her position. Prior to vesting, TB-PIUs carry substantially the same rights to distributions as non-PIU common units but carry no redemption rights. During the nine months ended September 30, 2021, forfeiture restrictions lapsed on 40,591 previously issued TB-PIUs; these TB-PIUs had a weighted average grant date fair value of $25.14 per unit, and the aggregate intrinsic value of the TB-PIUs on the vesting date was $1.1 million. PB-PIUs On January 1, 2021, we granted certain senior management team members 227,544 PB-PIUs with a three-year performance period concluding on the earlier of December 31, 2023 or the date of: (1) termination by us without cause, death or disability of the employee or constructive discharge of the employee (collectively, “qualified termination”); or (2) a sale event. The number of earned awards at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return (“TSR”) relative to a peer group of companies, as set forth in the following schedule: Percentile Rank Earned PB-PIUs Payout % 75th or greater 100% of PB-PIUs granted 50th (target) 50% of PB-PIUs granted 25th 25% of PB-PIUs granted Below 25th 0% of PB-PIUs granted If the percentile rank exceeds the 25th percentile and is between two of the percentile ranks set forth in the table above, then the percentage of the earned awards will be interpolated between the ranges set forth in the table above to reflect any performance between the listed percentiles. If COPT’s TSR during the measurement period is negative, the maximum number of earned awards will be limited to the target level payout percentage. During the performance period, PB-PIUs carry rights to distributions equal to 10% of the distribution rights of non-PIU common units but carry no redemption rights. At the end of the performance period, we will settle the award by issuing vested PIUs equal to: the number of earned awards; and the excess, if any, of (1) the aggregate distributions that would have been paid with respect to vested PIUs issued in settlement of the earned awards through the date of settlement had such vested PIUs been issued on the grant date over (2) the aggregate distributions made on the PB-PIUs during the performance period, divided by the price of our common shares on the settlement date. If a performance period ends due to a sale event or qualified termination, the number of earned awards is prorated based on the portion of the three-year performance period that has elapsed. If employment is terminated by the employee or by us for cause, all PB-PIUs are forfeited. These PB-PIU grants had an aggregate grant date fair value of $3.4 million ($30.03 per target-level award associated with the grants) which is being recognized over the performance period. The grant date fair value was computed using a Monte Carlo model that included the following assumptions: baseline common share value of $26.08; expected volatility for common shares of 34.7%; and a risk-free interest rate of 0.18%. Deferred Share Awards |
Earnings Per Share ("EPS")
Earnings Per Share ("EPS") | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (“EPS”) | Earnings Per Share (“EPS”) We present both basic and diluted EPS. We compute basic EPS by dividing net income available to common shareholders allocable to unrestricted common shares under the two-class method by the weighted average number of unrestricted common shares outstanding during the period. Our computation of diluted EPS is similar except that: • the denominator is increased to include: (1) the weighted average number of potential additional common shares that would have been outstanding if securities that are convertible into common shares were converted; and (2) the effect of dilutive potential common shares outstanding during the period attributable to redeemable noncontrolling interests and share-based compensation awards using the if-converted or treasury stock methods; and • the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common shares that we add to the denominator. Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) attributable to COPT $ 27,101 $ (31,845) $ 62,833 $ 15,706 Income attributable to share-based compensation awards (92) (145) (337) (365) Numerator for basic EPS on net income (loss) attributable to COPT common shareholders 27,009 (31,990) 62,496 15,341 Redeemable noncontrolling interests (89) — (82) — Income attributable to share-based compensation awards 13 — 17 6 Numerator for diluted EPS on net income (loss) attributable to COPT common shareholders $ 26,933 $ (31,990) $ 62,431 $ 15,347 Denominator (all weighted averages): Denominator for basic EPS (common shares) 111,985 111,811 111,949 111,778 Dilutive effect of redeemable noncontrolling interests 138 — 130 — Dilutive effect of share-based compensation awards 375 — 285 278 Denominator for diluted EPS (common shares) 112,498 111,811 112,364 112,056 Basic EPS $ 0.24 $ (0.29) $ 0.56 $ 0.14 Diluted EPS $ 0.24 $ (0.29) $ 0.56 $ 0.14 Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands): Weighted Average Shares Excluded from Denominator For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Conversion of common units 1,262 1,240 1,257 1,235 Conversion of redeemable noncontrolling interests 782 973 793 954 Conversion of Series I Preferred Units — 176 — 176 The following securities were also excluded from the computation of diluted EPS because their effect was antidilutive: • weighted average restricted shares and deferred share awards for the three months ended September 30, 2021 and 2020 of 410,000 and 429,000, respectively, and for the nine months ended September 30, 2021 and 2020 of 416,000 and 432,000, respectively; • weighted average unvested TB-PIUs for the three months ended September 30, 2021 and 2020 of 168,000 and 91,000, respectively, and for the nine months ended September 30, 2021 and 2020 of 155,000 and 85,000, respectively; and |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Claims In the normal course of business, we are subject to legal actions and other claims. We record losses for specific legal proceedings and claims when we determine that a loss is probable and the amount of loss can be reasonably estimated. As of September 30, 2021, management believes that it is reasonably possible that we could recognize a loss of up to $3.4 million for certain municipal tax claims; while we do not believe this loss would materially affect our financial position or liquidity, it could be material to our results of operations. Management believes that it is also reasonably possible that we could incur losses pursuant to other claims but do not believe such losses would materially affect our financial position, liquidity or results of operations. Our assessment of the potential outcomes of these matters involves significant judgment and is subject to change based on future developments. Environmental We are subject to various Federal, state and local environmental regulations related to our property ownership and operation. We have performed environmental assessments of our properties, the results of which have not revealed any environmental liability that we believe would have a materially adverse effect on our financial position, operations or liquidity. In connection with a lease and subsequent sale in 2008 and 2010 of three properties in Dayton, New Jersey, we agreed to provide certain environmental indemnifications limited to $19 million in the aggregate. We have insurance coverage in place to mitigate much of any potential future losses that may result from these indemnification agreements. Tax Incremental Financing Obligation Anne Arundel County, Maryland issued tax incremental financing bonds to third-party investors in order to finance public improvements needed in connection with our project known as the National Business Park. These bonds had a remaining principal balance of approximately $31 million as of September 30, 2021. The real estate taxes on increases in assessed values post-bond issuance of properties in development districts encompassing the National Business Park are transferred to a special fund pledged to the repayment of the bonds. While we are obligated to fund, through a special tax, any future shortfalls between debt service of the bonds and real estate taxes available to repay the bonds, as of September 30, 2021, we do not expect any such future fundings will be required. Effects of COVID-19 As of the date of this filing, spread of COVID-19 continues world- and nation-wide. Since the beginning of the year, the United States has significantly increased the proportion of the population that has received COVID-19 vaccines, and there is increased confidence that spread of COVID-19 can, to a large extent, be contained through vaccinations and wearing masks indoors in public. As a result, most restrictive measures previously instituted to control spread have been gradually lifted and an increased proportion of the population has resumed a return to normal activities. However, there continues to be significant uncertainty regarding the duration and extent of the pandemic due to factors such as the continuing spread of the virus, the pace of world- and nation-wide vaccination efforts, the emergence of new variants of the virus and the efficacy of vaccines against such variants. While the pandemic has impacted the operations of much of the commercial real estate industry, we believe that we have been less susceptible to such impact due to our portfolio’s significant concentration in Defense/IT Locations. As a result, we believe that we have not been significantly affected by the pandemic. COVID-19, along with measures instituted to prevent spread, may adversely affect us in many ways, including, but not limited to: • disruption of our tenants’ operations, which could adversely affect their ability, or willingness, to sustain their businesses and/or fulfill their lease obligations; • our ability to maintain occupancy in our properties and obtain new leases for unoccupied and new development space at favorable terms or at all; • shortages in supply of products or services from our and our tenants’ vendors that are needed for us and our tenants to operate effectively, and which could lead to increased costs for such products and services; • access to debt and equity capital on attractive terms or at all. Severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our or our tenants’ ability to access capital necessary to fund operations, refinance debt or fund planned investments on a timely basis, and may adversely affect the valuation of financial assets and liabilities; • our and our tenants’ ability to continue or complete planned development, including the potential for delays in the supply of materials or labor necessary for development; and • an increase in the pace of businesses implementing remote work arrangements over the long-term, which would adversely effect demand for office space. The extent of the effect on our operations, financial condition and cash flows will be dependent on future developments, including the duration and extent of the pandemic, the prevalence, strength and duration of restrictive measures and the resulting effects on our tenants, potential future tenants, the commercial real estate industry and the broader economy, all of which are uncertain and difficult to predict. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of COPT, the Operating Partnership, their subsidiaries and other entities in which COPT has a majority voting interest and control. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if we are deemed to be the primary beneficiary of such entities. We eliminate all intercompany balances and transactions in consolidation. We use the equity method of accounting when we own an interest in an entity and can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity. When we own an equity investment in an entity and cannot exert significant influence over its operations, we measure the investment at fair value, with changes recognized through net income. For an investment without a readily determinable fair value, we measure the investment at cost, less any impairments, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer. These interim financial statements should be read together with the consolidated financial statements and notes thereto as |
Reclassifications | Reclassifications We reclassified certain amounts from the prior period to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity. |
Recent Accounting Pronouncements | Recent Accounting PronouncementsIn March 2020, the Financial Accounting Standards Board issued guidance containing practical expedients for reference rate reform related activities pertaining to debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. In 2020, we elected to apply an expedient to treat any changes in loans resulting from reference rate reform as debt modifications (as opposed to extinguishments) and hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of the hedge accounting expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of this guidance and may apply other elections as applicable as additional changes in the market occur. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities measured on recurring basis | The table below sets forth our financial assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2021 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands): Description Quoted Prices in Significant Other Significant Total Assets: Marketable securities in deferred compensation plan (1) Mutual funds $ 2,545 $ — $ — $ 2,545 Other 71 — — 71 Other marketable securities (1) 33 — — 33 Interest rate derivatives (1) — 70 — 70 Total assets $ 2,649 $ 70 $ — $ 2,719 Liabilities: Deferred compensation plan liability (2) $ — $ 2,616 $ — $ 2,616 Interest rate derivatives — 5,562 — 5,562 Total liabilities $ — $ 8,178 $ — $ 8,178 (1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet. (2) Included in the line entitled “other liabilities” on our consolidated balance sheet. |
Properties, Net (Tables)
Properties, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Schedule of operating properties, net | Operating properties, net consisted of the following (in thousands): September 30, December 31, 2020 Land $ 539,899 $ 528,269 Buildings and improvements 3,890,678 3,711,264 Less: Accumulated depreciation (1,202,780) (1,124,253) Operating properties, net $ 3,227,797 $ 3,115,280 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Operating Lease Revenue Recognized | The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease revenue 2021 2020 2021 2020 Fixed $ 114,309 $ 106,743 $ 340,157 $ 314,845 Variable 31,440 27,132 93,874 82,189 $ 145,749 $ 133,875 $ 434,031 $ 397,034 |
Sales-type Leases Fixed Contractual Payments Due | Fixed contractual payments due under our property leases were as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Sales-type leases 2021 (1) $ 109,800 $ 221 2022 418,746 960 2023 370,652 960 2024 323,198 960 2025 241,090 960 Thereafter 1,020,675 4,516 Total contractual payments $ 2,484,161 8,577 Less: Amount representing interest (2,277) Net investment in sales-type leases $ 6,300 (1) Represents the three months ending December 31, 2021. |
Operating Leases Fixed Contractual Payments Due | Fixed contractual payments due under our property leases were as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Sales-type leases 2021 (1) $ 109,800 $ 221 2022 418,746 960 2023 370,652 960 2024 323,198 960 2025 241,090 960 Thereafter 1,020,675 4,516 Total contractual payments $ 2,484,161 8,577 Less: Amount representing interest (2,277) Net investment in sales-type leases $ 6,300 (1) Represents the three months ending December 31, 2021. |
Right-of-Use Assets and Lease Liabilities | Our property right-of-use assets consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,854 $ 40,570 Finance leases - Property (1) Property - finance right-of-use assets 40,077 40,425 Total right-of-use assets $ 78,931 $ 80,995 (1) On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option. Property lease liabilities consisted of the following (in thousands): Leases Balance Sheet Location September 30, 2021 December 31, 2020 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,630 $ 30,746 Finance leases - Property Other liabilities 14 28 Total lease liabilities $ 29,644 $ 30,774 |
Lease Costs | The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021: Weighted average remaining lease term Operating leases 51 years Finance leases < 1 year Weighted average discount rate Operating leases 7.16 % Finance leases 3.62 % The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30, Lease cost 2021 2020 2021 2020 Operating lease cost Property leases - fixed Property operating expenses $ 1,013 $ 598 $ 2,999 $ 1,465 Property leases - variable Property operating expenses 11 107 31 116 Finance lease cost Amortization of property right-of-use assets Property operating expenses 5 9 23 27 $ 1,029 $ 714 $ 3,053 $ 1,608 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Nine Months Ended September 30, Supplemental cash flow information 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,399 $ 987 Financing cash flows for financing leases $ 14 $ 674 |
Finance Lease, Liability, Maturity | Payments on property leases were due as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Finance Total 2021 (1) $ 807 $ — $ 807 2022 3,297 14 3,311 2023 3,352 — 3,352 2024 3,403 — 3,403 2025 1,749 — 1,749 Thereafter 123,979 — 123,979 Total lease payments 136,587 14 136,601 Less: Amount representing interest (106,957) — (106,957) Lease liability $ 29,630 $ 14 $ 29,644 (1) Represents the three months ending December 31, 2021. |
Operating Lease, Liability, Maturity | Payments on property leases were due as follows (in thousands): As of September 30, 2021 Year Ending December 31, Operating leases Finance Total 2021 (1) $ 807 $ — $ 807 2022 3,297 14 3,311 2023 3,352 — 3,352 2024 3,403 — 3,403 2025 1,749 — 1,749 Thereafter 123,979 — 123,979 Total lease payments 136,587 14 136,601 Less: Amount representing interest (106,957) — (106,957) Lease liability $ 29,630 $ 14 $ 29,644 (1) Represents the three months ending December 31, 2021. |
Real Estate Joint Ventures (Tab
Real Estate Joint Ventures (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of information related to investments in consolidated real estate joint ventures | The table below sets forth information pertaining to our investments in consolidated real estate joint ventures as of September 30, 2021 (dollars in thousands): September 30, 2021 (1) Date Acquired Nominal Ownership % Total Encumbered Assets Total Liabilities Entity Location LW Redstone Company, LLC (2) 3/23/2010 85% Huntsville, Alabama $ 453,496 $ 90,295 $ 99,173 Stevens Investors, LLC 8/11/2015 95% Washington, DC 164,189 — 859 M Square Associates, LLC 6/26/2007 50% College Park, Maryland 100,634 60,950 52,527 $ 718,319 $ 151,245 $ 152,559 (1) Excludes amounts eliminated in consolidation. (2) We fund all capital requirements. Our partner generally receives distributions of the firs t $1.2 million of annual operating cash flows and we receive the remainder. |
Schedule of information related to investments in unconsolidated real estate joint ventures | The table below sets forth information pertaining to our investments in unconsolidated real estate joint ventures accounted for using the equity method of accounting (dollars in thousands): Date Acquired Nominal Ownership % Number of Properties Carrying Value of Investment (1) Entity September 30, 2021 December 31, 2020 B RE COPT DC JV II LLC (2) 10/30/2020 10% 8 $ 15,735 $ 15,988 BREIT COPT DC JV LLC 6/20/2019 10% 9 12,620 13,315 B RE COPT DC JV III LLC 6/2/2021 10% 2 11,949 — 19 $ 40,304 $ 29,303 (1) Included in the line entitled “investment in unconsolidated real estate joint ventures” on our consolidated balance sheets. |
Investing Receivables (Tables)
Investing Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of investing receivables | Investing receivables consisted of the following (in thousands): September 30, December 31, 2020 Notes receivable from the City of Huntsville $ 71,322 $ 65,564 Other investing loans receivable 6,040 6,041 Amortized cost basis 77,362 71,605 Allowance for credit losses (1,415) (2,851) Investing receivables, net $ 75,947 $ 68,754 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets, net consisted of the following (in thousands): September 30, December 31, 2020 Lease incentives, net $ 40,150 $ 35,642 Prepaid expenses 26,815 19,690 Construction contract costs in excess of billings, net 12,987 10,343 Furniture, fixtures and equipment, net 10,008 10,433 Net investment in sales-type leases 6,300 6,573 Non-real estate equity investments 5,545 5,509 Restricted cash 3,575 3,664 Marketable securities in deferred compensation plan 2,616 3,027 Deferred tax asset, net (1) 1,883 1,989 Deferred financing costs, net (2) 1,595 2,439 Other assets 5,740 5,274 Prepaid expenses and other assets, net $ 117,214 $ 104,583 (1) Includes a valuation allowance of $24,000 as of September 30, 2021 and $201,000 as of December 31, 2020. (2) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. |
Debt, Net (Tables)
Debt, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of September 30, December 31, 2020 September 30, 2021 Stated Interest Rates Scheduled Maturity Mortgage and Other Secured Debt: Fixed rate mortgage debt (2) $ 137,310 $ 139,991 3.82% - 4.62% (3) 2023-2026 Variable rate secured debt 33,698 115,119 LIBOR + 1.45% to 1.55% (4) 2025-2026 Total mortgage and other secured debt 171,008 255,110 Revolving Credit Facility (5) 10,000 143,000 LIBOR + 0.775% to 1.45% (6) March 2023 (5) Term Loan Facility 299,274 398,447 LIBOR + 1.00% to 1.65% (7) December 2022 Unsecured Senior Notes 5.00%, $300,000 aggregate principal 298,235 297,915 5.00% (8) July 2025 2.25%, $400,000 aggregate principal 395,232 394,464 2.25% (9) March 2026 2.00%, $400,000 aggregate principal 396,394 — 2.00% (10) January 2029 2.75%, $600,000 aggregate principal 588,798 — 2.75% (10) April 2031 3.60%, $350,000 aggregate principal — 348,888 3.60% (11) N/A (11) 5.25%, $250,000 aggregate principal — 248,194 5.25% (12) N/A (12) Unsecured note payable 791 900 0% (13) May 2026 Total debt, net $ 2,159,732 $ 2,086,918 (1) The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $5.4 million as of September 30, 2021 and $5.9 million as of December 31, 2020. (2) Certain of the fixed rate mortgages carry interest rates that, upon assumption, were above or below market rates and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $108,000 as of September 30, 2021 and $155,000 as of December 31, 2020. (3) The weighted average interest rate on our fixed rate mortgage debt was 4.16% as of September 30, 2021. (4) The weighted average interest rate on our variable rate secured debt was 1.60% as of September 30, 2021. (5) The facility matures in March 2023, with the ability for us to further extend such maturity by two six-month periods at our option, provided that there is no default under the facility and we pay an extension fee of 0.075% of the total availability under the facility for each extension period. In connection with this facility, we also have the ability to borrow up to $500.0 million under new term loans from the facility’s lender group provided that there is no default under the facility and subject to the approval of the lenders. (6) The weighted average interest rate on the Revolving Credit Facility was 1.19% as of September 30, 2021. (7) The interest rate on this loan was 1.09% as of September 30, 2021. (8) The carrying value of these notes reflects an unamortized discount totaling $1.5 million as of September 30, 2021 and $1.8 million as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 5.15%. (9) The carrying value of these notes reflects an unamortized discount totaling $3.9 million as of September 30, 2021 and $4.5 million as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 2.48%. (10) Refer to paragraph below for further disclosure. (11) The carrying value of these notes reflects an unamortized discount totaling $781,000 as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 3.70%. Refer to paragraph below for further disclosure. (12) The carrying value of these notes reflects an unamortized discount totaling $1.6 million as of December 31, 2020. The effective interest rate under the notes, including amortization of the issuance costs, was 5.49%. Refer to paragraph below for further disclosure. (13) This note carries an interest rate that, upon assumption, was below market rates and it therefore was recorded at its fair value based on applicable effective interest rates. The carrying value of this note reflects an unamortized discount totaling $120,000 as of September 30, 2021 and $161,000 as of December 31, 2020. |
Schedule of the fair value of debt | The following table sets forth information pertaining to the fair value of our debt (in thousands): September 30, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value Fixed-rate debt Unsecured Senior Notes $ 1,678,659 $ 1,723,267 $ 1,289,461 $ 1,334,342 Other fixed-rate debt 138,101 136,653 140,891 142,838 Variable-rate debt 342,972 343,577 656,566 654,102 $ 2,159,732 $ 2,203,497 $ 2,086,918 $ 2,131,282 |
Interest Rate Derivatives (Tabl
Interest Rate Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of key terms and fair values of interest rate swap derivatives | The following table sets forth the key terms and fair values of our interest rate swap derivatives, each of which was designated as a cash flow hedge of interest rate risk (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date September 30, December 31, 2020 $ 100,000 1.901% One-Month LIBOR 9/1/2016 12/1/2022 $ (2,065) $ (3,394) $ 100,000 1.905% One-Month LIBOR 9/1/2016 12/1/2022 (2,070) (3,401) $ 50,000 1.908% One-Month LIBOR 9/1/2016 12/1/2022 (1,036) (1,704) $ 11,180 (1) 1.678% One-Month LIBOR 8/1/2019 8/1/2026 (391) (733) $ 23,000 (2) 0.573% One-Month LIBOR 4/1/2020 3/26/2025 70 (290) $ (5,492) $ (9,522) (1) The notional amount of this instrument is scheduled to amortize to $10.0 million. (2) The notional amount of this instrument is scheduled to amortize to $22.1 million. |
Schedule of fair value and balance sheet classification of interest rate derivatives | The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheets (in thousands): Fair Value at Derivatives Balance Sheet Location September 30, December 31, 2020 Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets, net $ 70 $ — Interest rate swaps designated as cash flow hedges Interest rate derivatives (liabilities) $ (5,562) $ (9,522) |
Schedule of effect of interest rate derivatives on consolidated statements of operations and comprehensive income | The tables below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): Amount of (Loss) Income Recognized in AOCL on Derivatives Amount of Loss Reclassified from AOCL into Interest Expense on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 2021 2020 2021 2020 Interest rate derivatives $ (118) $ 1,428 $ 426 $ (39,592) $ (1,226) $ (1,342) $ (3,604) $ (2,408) Amount of Loss Reclassified from AOCL into Loss on Interest Rate Derivatives on Statement of Operations Amount of Loss Recognized on Undesignated Swaps in Loss on Interest Rate Derivatives on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 2021 2020 2021 2020 Interest rate derivatives $ — $ (51,865) $ — $ (51,865) $ — $ (1,265) $ — $ (1,265) |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Schedule of activity for redeemable noncontrolling interest | The table below sets forth the activity for these redeemable noncontrolling interests (in thousands): For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 25,430 $ 29,431 Distributions to noncontrolling interests (2,387) (13,335) Net income attributable to noncontrolling interests 2,286 2,715 Adjustment to arrive at fair value of interests 677 4,711 Ending balance $ 26,006 $ 23,522 |
Credit Losses, Financial Asse_2
Credit Losses, Financial Assets and Other Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Credit Loss [Abstract] | |
Credit Losses, Financial Assets and Other Instruments, Allowance for Credit Loss | The table below sets forth the activity for the allowance for credit losses (in thousands): For the Nine Months Ended September 30, 2021 Investing Receivables Tenant Notes Other Assets (2) Total December 31, 2020 $ 2,851 $ 1,203 $ 643 $ 4,697 Credit loss (recoveries) expense (1,436) (114) 510 (1,040) September 30, 2021 $ 1,415 $ 1,089 $ 1,153 $ 3,657 (1) Included in the line entitled “accounts receivable, net” on our consolidated balance sheets. (2) The balance as of September 30, 2021 and December 31, 2020 included $705,000 and $257,000, respectively, in the line entitled “accounts receivable, net” and $448,000 and $386,000, respectively, in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. |
Financing Receivable Credit Quality Indicator | The following table presents the amortized cost basis of our investing receivables, tenant notes receivable and sales-type lease receivables by credit risk classification, by origination year as of September 30, 2021 (in thousands): Origination Year 2016 and Earlier 2017 2018 2019 2020 2021 Total Investing receivables: Credit risk classification: Investment grade $ 68,773 $ 1,043 $ — $ — $ 1,057 $ 449 $ 71,322 Non-investment grade — — — 6,040 — — 6,040 Total $ 68,773 $ 1,043 $ — $ 6,040 $ 1,057 $ 449 $ 77,362 Tenant notes receivable: Credit risk classification: Investment grade $ — $ — $ 949 $ 69 $ 297 $ — $ 1,315 Non-investment grade 221 — 141 147 1,763 — 2,272 Total $ 221 $ — $ 1,090 $ 216 $ 2,060 $ — $ 3,587 Sales-type lease receivables: Credit risk classification: Investment grade $ — $ — $ — $ — $ 6,300 $ — $ 6,300 |
Information by Business Segme_2
Information by Business Segment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment financial information for real estate operations | The table below reports segment financial information for our reportable segments (in thousands): Defense/Information Technology Locations Fort Meade/BW Corridor Northern Virginia Defense/IT Lackland Air Force Base Navy Support Locations Redstone Arsenal Data Center Shells Total Defense/IT Locations Regional Office Operating Wholesale Other Total Three Months Ended September 30, 2021 Revenues from real estate operations $ 66,029 $ 15,291 $ 14,519 $ 8,558 $ 9,144 $ 6,913 $ 120,454 $ 16,810 $ 8,637 $ 689 $ 146,590 Property operating expenses (22,956) (5,980) (6,935) (3,454) (3,003) (657) (42,985) (8,395) (5,345) (465) (57,190) UJV NOI allocable to COPT — — — — — 1,060 1,060 — — — 1,060 NOI from real estate operations $ 43,073 $ 9,311 $ 7,584 $ 5,104 $ 6,141 $ 7,316 $ 78,529 $ 8,415 $ 3,292 $ 224 $ 90,460 Additions to long-lived assets $ 10,671 $ 1,614 $ — $ 897 $ 107 $ — $ 13,289 $ 5,319 $ 1,141 $ 69 $ 19,818 Transfers from non-operating properties $ 53,935 $ 87,986 $ 7,332 $ — $ 5,519 $ 421 $ 155,193 $ 381 $ — $ — $ 155,574 Three Months Ended September 30, 2020 Revenues from real estate operations $ 63,328 $ 14,699 $ 12,602 $ 8,006 $ 6,079 $ 7,995 $ 112,709 $ 14,913 $ 6,068 $ 753 $ 134,443 Property operating expenses (21,537) (5,245) (7,116) (3,044) (2,029) (861) (39,832) (7,782) (3,642) (296) (51,552) UJV NOI allocable to COPT — — — — — 1,752 1,752 — — — 1,752 NOI from real estate operations $ 41,791 $ 9,454 $ 5,486 $ 4,962 $ 4,050 $ 8,886 $ 74,629 $ 7,131 $ 2,426 $ 457 $ 84,643 Additions to long-lived assets $ 7,511 $ 2,219 $ — $ 1,650 $ 6,382 $ — $ 17,762 $ 5,303 $ 1,917 $ (3) $ 24,979 Transfers from non-operating properties $ (209) $ 58 $ 221 $ — $ 61,520 $ 65,269 $ 126,859 $ — $ — $ — $ 126,859 Nine Months Ended September 30, 2021 Revenues from real estate operations $ 197,315 $ 45,214 $ 40,762 $ 25,401 $ 26,172 $ 23,770 $ 358,634 $ 50,371 $ 24,902 $ 2,270 $ 436,177 Property operating expenses (69,341) (17,394) (21,315) (10,114) (8,525) (2,516) (129,205) (23,901) (14,395) (1,279) (168,780) UJV NOI allocable to COPT — — — — — 2,950 2,950 — — — 2,950 NOI from real estate operations $ 127,974 $ 27,820 $ 19,447 $ 15,287 $ 17,647 $ 24,204 $ 232,379 $ 26,470 $ 10,507 $ 991 $ 270,347 Additions to long-lived assets $ 29,063 $ 2,921 $ — $ 2,654 $ 3,418 $ — $ 38,056 $ 13,430 $ 1,490 $ 82 $ 53,058 Transfers from non-operating properties $ 55,075 $ 88,099 $ 56,601 $ — $ 19,724 $ 2,423 $ 221,922 $ 38,738 $ — $ — $ 260,660 Segment assets at September 30, 2021 $ 1,315,101 $ 470,077 $ 196,624 $ 172,381 $ 299,184 $ 353,340 $ 2,806,707 $ 538,080 $ 194,576 $ 3,508 $ 3,542,871 Nine Months Ended September 30, 2020 Revenues from real estate operations $ 190,464 $ 42,824 $ 37,935 $ 24,466 $ 15,402 $ 20,648 $ 331,739 $ 45,535 $ 19,695 $ 2,128 $ 399,097 Property operating expenses (63,618) (15,765) (21,696) (9,500) (5,488) (2,307) (118,374) (22,207) (10,338) (836) (151,755) UJV NOI allocable to COPT — — — — — 5,190 5,190 — — — 5,190 NOI from real estate operations $ 126,846 $ 27,059 $ 16,239 $ 14,966 $ 9,914 $ 23,531 $ 218,555 $ 23,328 $ 9,357 $ 1,292 $ 252,532 Additions to long-lived assets $ 22,144 $ 8,114 $ — $ 5,518 $ 6,698 $ — $ 42,474 $ 13,105 $ 10,699 $ 165 $ 66,443 Transfers from non-operating properties $ 4,304 $ 838 $ 381 $ — $ 91,827 $ 171,465 $ 268,815 $ — $ — $ — $ 268,815 Segment assets at September 30, 2020 $ 1,264,547 $ 392,226 $ 143,206 $ 180,337 $ 234,355 $ 446,530 $ 2,661,201 $ 387,290 $ 204,834 $ 3,643 $ 3,256,968 |
Schedule of reconciliation of segment revenues to total revenues | The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Segment revenues from real estate operations $ 146,590 $ 134,443 $ 436,177 $ 399,097 Construction contract and other service revenues 28,046 20,323 64,592 46,240 Total revenues $ 174,636 $ 154,766 $ 500,769 $ 445,337 |
Reconciliation of UJV NOI allocable to COPT to equity in income of unconsolidated entities | The following table reconciles UJV NOI allocable to COPT to equity in income of unconsolidated entities as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 UJV NOI allocable to COPT $ 1,060 $ 1,752 $ 2,950 $ 5,190 Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense (763) (1,274) (2,167) (3,814) Add: Equity in loss of unconsolidated non-real estate entities — (1) (4) (4) Equity in income of unconsolidated entities $ 297 $ 477 $ 779 $ 1,372 |
Schedule of computation of net operating income from service operations | The table below sets forth the computation of our NOI from service operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Construction contract and other service revenues $ 28,046 $ 20,323 $ 64,592 $ 46,240 Construction contract and other service expenses (27,089) (19,220) (61,964) (44,052) NOI from service operations $ 957 $ 1,103 $ 2,628 $ 2,188 |
Schedule of reconciliation of net operating income from real estate operations and service operations to net income | The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to net income as reported on our consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 NOI from real estate operations $ 90,460 $ 84,643 $ 270,347 $ 252,532 NOI from service operations 957 1,103 2,628 2,188 Interest and other income 1,818 1,746 5,911 5,233 Credit loss recoveries 326 1,465 1,040 161 Gain on sales of real estate (32) — 39,711 5 Equity in income of unconsolidated entities 297 477 779 1,372 Income tax expense (47) (16) (103) (95) Depreciation and other amortization associated with real estate operations (36,611) (35,332) (111,487) (101,540) Impairment losses — (1,530) — (1,530) General, administrative and leasing expenses (9,342) (7,467) (26,970) (23,111) Business development expenses and land carry costs (1,093) (1,094) (3,559) (3,474) Interest expense (15,720) (17,152) (49,181) (50,789) UJV NOI allocable to COPT included in equity in income of unconsolidated entities (1,060) (1,752) (2,950) (5,190) Loss on early extinguishment of debt (1,159) (3,237) (59,553) (3,237) Loss on interest rate derivatives — (53,196) — (53,196) Net income (loss) $ 28,794 $ (31,342) $ 66,613 $ 19,329 |
Schedule of reconciliation of segment assets to total assets | The following table reconciles our segment assets to our consolidated total assets (in thousands): September 30, September 30, Segment assets $ 3,542,871 $ 3,256,968 Operating properties lease liabilities included in segment assets 29,644 26,054 Non-operating property assets 385,025 642,182 Other assets 193,598 194,985 Total consolidated assets $ 4,151,138 $ 4,120,189 |
Construction Contract and Oth_2
Construction Contract and Other Service Revenues (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The table below reports construction contract and other service revenues by compensation arrangement (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Construction contract revenue: Guaranteed maximum price $ 15,846 $ 4,358 $ 29,335 $ 14,834 Cost-plus fee 4,742 13,249 23,075 20,121 Firm fixed price 7,042 1,365 10,954 9,421 Other 416 1,351 1,228 1,864 $ 28,046 $ 20,323 $ 64,592 $ 46,240 The table below reports construction contract and other service revenues by service type (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Construction contract revenue: Construction $ 26,893 $ 18,786 $ 61,477 $ 42,520 Design 737 186 1,887 1,856 Other 416 1,351 1,228 1,864 $ 28,046 $ 20,323 $ 64,592 $ 46,240 |
Contract with Customer, Contract Asset, Contract Liability and Receivable | The beginning and ending balances of accounts receivable related to our construction contracts were as follows (in thousands): For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 13,997 $ 12,378 Ending balance $ 5,726 $ 11,183 For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 10,343 $ 17,223 Ending balance $ 12,987 $ 13,980 For the Nine Months Ended September 30, 2021 2020 Beginning balance $ 4,610 $ 1,184 Ending balance $ 3,818 $ 5,236 Portion of beginning balance recognized in revenue during: Three months ended September 30 $ 9 $ 19 Nine months ended September 30 $ 2,626 $ 757 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of payouts for defined performance under PB-PIUs | The number of earned awards at the end of the performance period will be determined based on the percentile rank of COPT’s total shareholder return (“TSR”) relative to a peer group of companies, as set forth in the following schedule: Percentile Rank Earned PB-PIUs Payout % 75th or greater 100% of PB-PIUs granted 50th (target) 50% of PB-PIUs granted 25th 25% of PB-PIUs granted Below 25th 0% of PB-PIUs granted |
Earnings Per Share ("EPS") (Tab
Earnings Per Share ("EPS") (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Summary of calculation of numerator and denominator in basic and diluted earnings per share | Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net income (loss) attributable to COPT $ 27,101 $ (31,845) $ 62,833 $ 15,706 Income attributable to share-based compensation awards (92) (145) (337) (365) Numerator for basic EPS on net income (loss) attributable to COPT common shareholders 27,009 (31,990) 62,496 15,341 Redeemable noncontrolling interests (89) — (82) — Income attributable to share-based compensation awards 13 — 17 6 Numerator for diluted EPS on net income (loss) attributable to COPT common shareholders $ 26,933 $ (31,990) $ 62,431 $ 15,347 Denominator (all weighted averages): Denominator for basic EPS (common shares) 111,985 111,811 111,949 111,778 Dilutive effect of redeemable noncontrolling interests 138 — 130 — Dilutive effect of share-based compensation awards 375 — 285 278 Denominator for diluted EPS (common shares) 112,498 111,811 112,364 112,056 Basic EPS $ 0.24 $ (0.29) $ 0.56 $ 0.14 Diluted EPS $ 0.24 $ (0.29) $ 0.56 $ 0.14 |
Schedule of securities excluded from computation of diluted earnings per share | Our diluted EPS computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPS for the respective periods (in thousands): Weighted Average Shares Excluded from Denominator For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Conversion of common units 1,262 1,240 1,257 1,235 Conversion of redeemable noncontrolling interests 782 973 793 954 Conversion of Series I Preferred Units — 176 — 176 |
Organization - Narrative 1 (Det
Organization - Narrative 1 (Details) - Sep. 30, 2021 ft² in Millions | property | ft² | MW | a |
Unconsolidated Real Estate Joint Ventures | ||||
Investments in real estate | ||||
Number of real estate properties | 19 | |||
Operating Properties | ||||
Investments in real estate | ||||
Number of real estate properties | 186 | |||
Area of real estate property (in sqft or acres) | ft² | 21.7 | |||
Operating Properties | Office Properties | ||||
Investments in real estate | ||||
Number of real estate properties | 160 | |||
Area of real estate property (in sqft or acres) | ft² | 16.9 | |||
Operating Properties | Single-tenant data centers | ||||
Investments in real estate | ||||
Number of real estate properties | 26 | |||
Area of real estate property (in sqft or acres) | ft² | 4.7 | |||
Operating Properties | Single-tenant data centers | Unconsolidated Real Estate Joint Ventures | ||||
Investments in real estate | ||||
Number of real estate properties | 19 | |||
Operating wholesale data center | ||||
Investments in real estate | ||||
Capacity (in megawatts) | MW | 19.25 | |||
Properties under development | ||||
Investments in real estate | ||||
Number of real estate properties | 13 | |||
Area of real estate property (in sqft or acres) | ft² | 1.8 | |||
Properties under development | Office Properties | ||||
Investments in real estate | ||||
Number of real estate properties | 10 | |||
Properties under development | Single-tenant data centers | ||||
Investments in real estate | ||||
Number of real estate properties | 3 | |||
Properties under development, partially-operational | ||||
Investments in real estate | ||||
Number of real estate properties | 3 | |||
Land controlled for future development | ||||
Investments in real estate | ||||
Area of real estate property (in sqft or acres) | 8.9 | 720 | ||
Other Land | ||||
Investments in real estate | ||||
Area of real estate property (in sqft or acres) | a | 43 |
Organization - Narrative 2 (Det
Organization - Narrative 2 (Details) - Corporate Office Properties, L.P. | 9 Months Ended |
Sep. 30, 2021shares | |
Preferred Units | |
Forms of ownership in Operating Partnership and ownership percentage by the entity | |
Limited partners' capital account, units outstanding (in units) | 0 |
COPT | Common Units | |
Forms of ownership in Operating Partnership and ownership percentage by the entity | |
Percentage ownership in operating partnership | 98.30% |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Sep. 30, 2021 | Dec. 31, 2020 | |
Assets and liabilities measured at fair value on a recurring basis | |||
Marketable securities in deferred compensation plan | $ 2,616 | $ 3,027 | |
Fair value measurement on a recurring basis | Deferred compensation plan | Trustees and Management | |||
Assets and liabilities measured at fair value on a recurring basis | |||
Maximum percentage of participants' compensation which is deferrable | 100.00% | ||
Marketable securities in deferred compensation plan | $ 2,600 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities, Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Marketable securities in deferred compensation plan | $ 2,616 | $ 3,027 |
Fair value measurement on a recurring basis | ||
Assets: | ||
Other marketable securities | 33 | |
Interest rate derivatives | 70 | |
Total assets | 2,719 | |
Liabilities: | ||
Deferred compensation plan liability | 2,616 | |
Interest rate derivatives | 5,562 | |
Total liabilities | 8,178 | |
Fair value measurement on a recurring basis | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 2,545 | |
Fair value measurement on a recurring basis | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 71 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Other marketable securities | 33 | |
Interest rate derivatives | 0 | |
Total assets | 2,649 | |
Liabilities: | ||
Deferred compensation plan liability | 0 | |
Interest rate derivatives | 0 | |
Total liabilities | 0 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 2,545 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 71 | |
Fair value measurement on a recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Other marketable securities | 0 | |
Interest rate derivatives | 70 | |
Total assets | 70 | |
Liabilities: | ||
Deferred compensation plan liability | 2,616 | |
Interest rate derivatives | 5,562 | |
Total liabilities | 8,178 | |
Fair value measurement on a recurring basis | Significant Other Observable Inputs (Level 2) | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 0 | |
Fair value measurement on a recurring basis | Significant Other Observable Inputs (Level 2) | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 0 | |
Fair value measurement on a recurring basis | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Other marketable securities | 0 | |
Interest rate derivatives | 0 | |
Total assets | 0 | |
Liabilities: | ||
Deferred compensation plan liability | 0 | |
Interest rate derivatives | 0 | |
Total liabilities | 0 | |
Fair value measurement on a recurring basis | Significant Unobservable Inputs (Level 3) | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 0 | |
Fair value measurement on a recurring basis | Significant Unobservable Inputs (Level 3) | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | $ 0 |
Properties, Net - Operating pro
Properties, Net - Operating properties, net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating properties, net | ||
Operating properties, net | $ 3,227,797 | $ 3,115,280 |
Operating Properties, net | ||
Operating properties, net | ||
Less: accumulated depreciation | (1,202,780) | (1,124,253) |
Operating properties, net | 3,227,797 | 3,115,280 |
Operating Properties, net | Land | ||
Operating properties, net | ||
Gross | 539,899 | 528,269 |
Operating Properties, net | Buildings and improvements | ||
Operating properties, net | ||
Gross | $ 3,890,678 | $ 3,711,264 |
Properties, Net - Narrative (De
Properties, Net - Narrative (Details) ft² in Thousands, $ in Millions | Jun. 02, 2021USD ($)property | Sep. 30, 2021USD ($)ft²propertyProperty |
B RE COPT DC JV III LLC | ||
Real Estate [Line Items] | ||
Nominal Ownership % | 10.00% | 10.00% |
Number of real estate properties | 2 | |
Disposed of by sale | Data Center Shells in Northern Virginia | ||
Real Estate [Line Items] | ||
Ownership percentage sold | 90.00% | |
Number of real estate properties sold | 2 | |
Transaction value | $ | $ 118.8 | |
Proceeds from sale | $ | $ 106.9 | |
Gain on sale of ownership interest | $ | $ 40.2 | |
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Data Center Shells | ||
Real Estate [Line Items] | ||
Real estate properties held for sale | Property | 1 | |
Newly developed properties placed in service | ||
Real Estate [Line Items] | ||
Area of real estate property (in sqft or acres) | ft² | 709 | |
Number of real estate properties | 6 | |
Properties under development | ||
Real Estate [Line Items] | ||
Area of real estate property (in sqft or acres) | ft² | 1,800 | |
Number of real estate properties | 13 | |
Properties under development, partially-operational | ||
Real Estate [Line Items] | ||
Number of real estate properties | 3 |
Leases - Lease Revenue (Details
Leases - Lease Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Fixed | $ 114,309 | $ 106,743 | $ 340,157 | $ 314,845 |
Variable | 31,440 | 27,132 | 93,874 | 82,189 |
Lease revenue | $ 145,749 | $ 133,875 | $ 434,031 | $ 397,034 |
Leases - Payments to be Receive
Leases - Payments to be Received (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Operating leases | |
2021 | $ 109,800 |
2022 | 418,746 |
2023 | 370,652 |
2024 | 323,198 |
2025 | 241,090 |
Thereafter | 1,020,675 |
Total contractual payments | 2,484,161 |
Sales-type leases | |
2021 | 221 |
2022 | 960 |
2023 | 960 |
2024 | 960 |
2025 | 960 |
Thereafter | 4,516 |
Total contractual payments | 8,577 |
Less: Amount representing interest | (2,277) |
Net investment in sales-type leases | $ 6,300 |
Leases - Lessee Arrangements (D
Leases - Lessee Arrangements (Details) $ in Millions | Sep. 30, 2021USD ($) |
Leases [Abstract] | |
Lessee right-of-use asset | $ 78.9 |
Leases - Right-of-Use Assets an
Leases - Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating leases - Property | $ 38,854 | $ 40,570 |
Finance leases - Property | 40,077 | 40,425 |
Total right-of-use assets | 78,931 | 80,995 |
Property - operating lease liabilities | 29,630 | 30,746 |
Finance leases - Property | 14 | 28 |
Total lease liabilities | $ 29,644 | $ 30,774 |
Finance Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Oct. 22, 2021USD ($) |
Land | Subsequent Event | |
Lessee, Lease, Description [Line Items] | |
Carrying value of finance lease right of use asset acquired under bargain purchase option | $ 37.8 |
Leases - Weighted Average Terms
Leases - Weighted Average Terms and Discount Rates (Details) | Sep. 30, 2021 |
Leases [Abstract] | |
Operating leases, Weighted average remaining lease term | 51 years |
Finance leases, Weighted average remaining lease term (less than) | 1 year |
Operating lease, Weighted average discount rate | 7.16% |
Finance lease, Weighted average discount rate | 3.62% |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||||
Lease costs | $ 1,029 | $ 714 | $ 3,053 | $ 1,608 |
Property Operating Expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Property leases - fixed | 1,013 | 598 | 2,999 | 1,465 |
Property leases - variable | 11 | 107 | 31 | 116 |
Finance lease cost - Amortization of property right-of-use assets | $ 5 | $ 9 | $ 23 | $ 27 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 2,399 | $ 987 |
Financing cash flows for financing leases | $ 14 | $ 674 |
Leases - Lease Liabilities (Det
Leases - Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating leases | ||
2021 | $ 807 | |
2022 | 3,297 | |
2023 | 3,352 | |
2024 | 3,403 | |
2025 | 1,749 | |
Thereafter | 123,979 | |
Total lease payments | 136,587 | |
Less: Amount representing interest | (106,957) | |
Lease liability | 29,630 | $ 30,746 |
Finance leases | ||
2021 | 0 | |
2022 | 14 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total lease payments | 14 | |
Less: Amount representing interest | 0 | |
Lease liability | 14 | 28 |
Total | ||
2021 | 807 | |
2022 | 3,311 | |
2023 | 3,352 | |
2024 | 3,403 | |
2025 | 1,749 | |
Thereafter | 123,979 | |
Total lease payments | 136,601 | |
Less: Amount representing interest | (106,957) | |
Total lease liabilities | $ 29,644 | $ 30,774 |
Real Estate Joint Ventures - In
Real Estate Joint Ventures - Investments in Consolidated Real Estate Joint Ventures (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | |
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 4,151,138 | $ 4,077,023 | $ 4,120,189 |
Total Liabilities | 2,454,353 | $ 2,357,881 | |
LW Redstone Company LLC | |||
Investments in consolidated real estate joint ventures | |||
Preferred distributions of annual operating cash flows to partner | 1,200 | ||
Variable Interest Entity, Primary Beneficiary | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | 718,319 | ||
Encumbered Assets | 151,245 | ||
Total Liabilities | $ 152,559 | ||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 85.00% | ||
Total Assets | $ 453,496 | ||
Encumbered Assets | 90,295 | ||
Total Liabilities | $ 99,173 | ||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 95.00% | ||
Total Assets | $ 164,189 | ||
Encumbered Assets | 0 | ||
Total Liabilities | $ 859 | ||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 50.00% | ||
Total Assets | $ 100,634 | ||
Encumbered Assets | 60,950 | ||
Total Liabilities | $ 52,527 |
Real Estate Joint Ventures - Na
Real Estate Joint Ventures - Narrative (Details) $ in Millions | Aug. 11, 2021USD ($) | Sep. 30, 2021USD ($) | Jun. 02, 2021property |
Stevens Investors, LLC | Construction Loan | |||
Real Estate [Line Items] | |||
Related party transaction, amount of transaction | $ 112 | ||
Loans and leases receivable, related parties | $ 90.5 | ||
B RE COPT DC JV III LLC | |||
Real Estate [Line Items] | |||
Nominal Ownership % | 10.00% | 10.00% | |
Disposed of by sale | Data Center Shells in Northern Virginia | |||
Real Estate [Line Items] | |||
Ownership percentage sold | 90.00% | ||
Number of real estate properties sold | property | 2 | ||
London Interbank Offered Rate (LIBOR) | Stevens Investors, LLC | Construction Loan | |||
Real Estate [Line Items] | |||
Related party transaction, rate | 2.35% |
Real Estate Joint Ventures - _2
Real Estate Joint Ventures - Investments in Unconsolidated Real Estate Joint Ventures (Details) $ in Thousands | Sep. 30, 2021USD ($)property | Jun. 02, 2021 | Dec. 31, 2020USD ($) |
Unconsolidated Real Estate Joint Ventures | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of real estate properties | property | 19 | ||
Carrying value of Investments | $ 40,304 | $ 29,303 | |
B RE COPT DC JV II LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10.00% | ||
Number of real estate properties | property | 8 | ||
Carrying value of Investments | $ 15,735 | 15,988 | |
Difference between the joint venture's cost basis and the entity's share of B RE COPT’s underlying equity in the net assets acquired from GI-COPT | $ 7,300 | 7,400 | |
BREIT COPT DC JV LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10.00% | ||
Number of real estate properties | property | 9 | ||
Carrying value of Investments | $ 12,620 | 13,315 | |
B RE COPT DC JV III LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10.00% | 10.00% | |
Number of real estate properties | property | 2 | ||
Carrying value of Investments | $ 11,949 | $ 0 |
Investing Receivables - Investi
Investing Receivables - Investing Receivables (Details) - Investing Receivables - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amortized cost basis | $ 77,362 | $ 71,605 |
Allowance for credit losses | (1,415) | (2,851) |
Investing receivables, net | 75,947 | 68,754 |
Notes receivable from the City of Huntsville | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amortized cost basis | 71,322 | 65,564 |
Other investing loans receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Amortized cost basis | $ 6,040 | $ 6,041 |
Investing Receivables - Narrati
Investing Receivables - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, fair value disclosure | $ 78 | $ 73 |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued interest receivable, net of allowance for credit losses | $ 3.6 | $ 4.8 |
Investing Receivables | Other investing loans receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate | 8.00% | |
Investing Receivables | LW Redstone Company LLC | Notes receivable from the City of Huntsville | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate | 9.95% |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||||
Lease incentives, net | $ 40,150 | $ 35,642 | ||
Prepaid expenses | 26,815 | 19,690 | ||
Construction contract costs in excess of billings, net | 12,987 | 10,343 | ||
Furniture, fixtures and equipment, net | 10,008 | 10,433 | ||
Net investment in sales-type leases | 6,300 | 6,573 | ||
Non-real estate equity investments | 5,545 | 5,509 | ||
Restricted cash | 3,575 | 3,664 | $ 3,217 | $ 3,397 |
Marketable securities in deferred compensation plan | 2,616 | 3,027 | ||
Deferred tax asset, net | 1,883 | 1,989 | ||
Deferred financing costs, net | 1,595 | 2,439 | ||
Other assets | 5,740 | 5,274 | ||
Total | 117,214 | 104,583 | ||
Taxable REIT Subsidiary | ||||
Property, Plant and Equipment [Line Items] | ||||
Deferred tax assets, valuation allowance | $ 24 | $ 201 |
Debt, Net - Schedule of Debt (D
Debt, Net - Schedule of Debt (Details) | 9 Months Ended | |||
Sep. 30, 2021USD ($)extension | Aug. 11, 2021USD ($) | Mar. 11, 2021USD ($) | Dec. 31, 2020USD ($) | |
Debt | ||||
Carrying Value | $ 2,159,732,000 | $ 2,086,918,000 | ||
Mortgage and other secured debt | ||||
Debt | ||||
Carrying Value | 171,008,000 | 255,110,000 | ||
Loans payable | ||||
Debt | ||||
Debt issuance costs | $ 5,400,000 | 5,900,000 | ||
Line of Credit | Revolving Credit Facility | ||||
Debt | ||||
Number of extensions | extension | 2 | |||
Extension option period (in years) | 6 months | |||
Line of credit facility, extension fee percentage | 0.075% | |||
Fixed rate mortgage debt | Mortgage and other secured debt | ||||
Debt | ||||
Carrying Value | $ 137,310,000 | 139,991,000 | ||
Unamortized premium included in carrying value | $ 108,000 | 155,000 | ||
Weighted average interest rate (as a percent) | 4.16% | |||
Fixed rate mortgage debt | Mortgage and other secured debt | Minimum | ||||
Debt | ||||
Interest rate | 3.82% | |||
Fixed rate mortgage debt | Mortgage and other secured debt | Maximum | ||||
Debt | ||||
Interest rate | 4.62% | |||
Variable-rate secured debt | Mortgage and other secured debt | ||||
Debt | ||||
Carrying Value | $ 33,698,000 | 115,119,000 | ||
Variable-rate secured debt | Mortgage and other secured debt | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Weighted average interest rate (as a percent) | 1.60% | |||
Variable-rate secured debt | Mortgage and other secured debt | Minimum | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Variable rate, spread | 1.45% | |||
Variable-rate secured debt | Mortgage and other secured debt | Maximum | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Variable rate, spread | 1.55% | |||
Revolving Credit Facility | ||||
Debt | ||||
Carrying Value | $ 10,000,000 | 143,000,000 | ||
Aggregate additional borrowing capacity available | $ 500,000,000 | |||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Weighted average interest rate (as a percent) | 1.19% | |||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Variable rate, spread | 0.775% | |||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Variable rate, spread | 1.45% | |||
Term Loan Facility | ||||
Debt | ||||
Carrying Value | $ 299,274,000 | 398,447,000 | ||
Term Loan Facility | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Interest rate | 1.09% | |||
Term Loan Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Variable rate, spread | 1.00% | |||
Term Loan Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||
Debt | ||||
Variable rate, spread | 1.65% | |||
5.00%, $300,000 aggregate principal | Unsecured senior notes | ||||
Debt | ||||
Interest rate | 5.00% | |||
Debt instrument, face amount | $ 300,000,000 | |||
Carrying Value | 298,235,000 | 297,915,000 | ||
Unamortized discount included in carrying value | $ 1,500,000 | 1,800,000 | ||
Effective interest rate on debt | 5.15% | |||
2.25%, $400,000 aggregate principal | Unsecured senior notes | ||||
Debt | ||||
Interest rate | 2.25% | |||
Debt instrument, face amount | $ 400,000,000 | |||
Carrying Value | 395,232,000 | 394,464,000 | ||
Unamortized discount included in carrying value | $ 3,900,000 | 4,500,000 | ||
Effective interest rate on debt | 2.48% | |||
2.00%, $400,000 aggregate principal | Unsecured senior notes | ||||
Debt | ||||
Interest rate | 2.00% | |||
Debt instrument, face amount | $ 400,000,000 | $ 400,000,000 | ||
Carrying Value | 396,394,000 | 0 | ||
Unamortized discount included in carrying value | $ 2,600,000 | |||
Effective interest rate on debt | 2.09% | |||
2.75%, $600,000 aggregate principal | Unsecured senior notes | ||||
Debt | ||||
Interest rate | 2.75% | |||
Debt instrument, face amount | $ 600,000,000 | $ 600,000,000 | ||
Carrying Value | 588,798,000 | 0 | ||
Unamortized discount included in carrying value | $ 9,700,000 | |||
Effective interest rate on debt | 2.94% | |||
3.60%, $350,000 aggregate principal | Unsecured senior notes | ||||
Debt | ||||
Interest rate | 3.60% | |||
Debt instrument, face amount | $ 350,000,000 | |||
Carrying Value | $ 0 | 348,888,000 | ||
Unamortized discount included in carrying value | $ 781,000 | |||
Effective interest rate on debt | 3.70% | |||
5.25%, $250,000 aggregate principal | Unsecured senior notes | ||||
Debt | ||||
Interest rate | 5.25% | |||
Debt instrument, face amount | $ 250,000,000 | |||
Carrying Value | $ 0 | $ 248,194,000 | ||
Unamortized discount included in carrying value | $ 1,600,000 | |||
Effective interest rate on debt | 5.49% | |||
Unsecured note payable | ||||
Debt | ||||
Interest rate | 0.00% | |||
Carrying Value | $ 791,000 | $ 900,000 | ||
Unamortized discount included in carrying value | $ 120,000 | $ 161,000 |
Debt, Net (Narrative) (Details)
Debt, Net (Narrative) (Details) - USD ($) | Aug. 11, 2021 | Mar. 11, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 12, 2021 | Dec. 31, 2020 |
Debt | ||||||||
Loss on early extinguishment of debt | $ 1,159,000 | $ 3,237,000 | $ 59,553,000 | $ 3,237,000 | ||||
Interest costs capitalized | 1,800,000 | $ 2,900,000 | 5,300,000 | $ 9,400,000 | ||||
2.75% Notes | Unsecured senior notes | ||||||||
Debt | ||||||||
Debt instrument, face amount | $ 600,000,000 | 600,000,000 | 600,000,000 | |||||
Initial offering price | 98.95% | |||||||
Proceeds from issuance of debt | $ 589,800,000 | |||||||
Redemption price on or after three months prior to maturity date | 100.00% | |||||||
Unamortized discount included in carrying value | $ 9,700,000 | $ 9,700,000 | ||||||
Effective interest rate on debt | 2.94% | 2.94% | ||||||
2.75% Notes | Unsecured senior notes | Adjusted Treasury | ||||||||
Debt | ||||||||
Basis point used in determining redemption price prior to maturity | 0.25% | |||||||
2.00% Notes | Unsecured senior notes | ||||||||
Debt | ||||||||
Debt instrument, face amount | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | |||||
Initial offering price | 99.97% | |||||||
Proceeds from issuance of debt | $ 397,400,000 | |||||||
Redemption price on or after three months prior to maturity date | 100.00% | |||||||
Unamortized discount included in carrying value | $ 2,600,000 | $ 2,600,000 | ||||||
Effective interest rate on debt | 2.09% | 2.09% | ||||||
2.00% Notes | Unsecured senior notes | Adjusted Treasury | ||||||||
Debt | ||||||||
Basis point used in determining redemption price prior to maturity | 0.20% | |||||||
3.60% Senior Notes and 5.25% Senior Notes | Unsecured senior notes | ||||||||
Debt | ||||||||
Loss on early extinguishment of debt | $ 58,400,000 | |||||||
3.60% Senior Notes | Unsecured senior notes | ||||||||
Debt | ||||||||
Debt instrument, face amount | $ 350,000,000 | 350,000,000 | ||||||
Unamortized discount included in carrying value | $ 781,000 | |||||||
Effective interest rate on debt | 3.70% | |||||||
Repurchased face amount | $ 184,400,000 | $ 165,600,000 | ||||||
Repurchase face amount including accrued interest | 196,700,000 | 176,300,000 | ||||||
5.250% Senior Notes | Unsecured senior notes | ||||||||
Debt | ||||||||
Debt instrument, face amount | $ 250,000,000 | $ 250,000,000 | ||||||
Unamortized discount included in carrying value | $ 1,600,000 | |||||||
Effective interest rate on debt | 5.49% | |||||||
Repurchased face amount | 145,600,000 | 104,400,000 | ||||||
Repurchase face amount including accrued interest | $ 164,700,000 | $ 117,700,000 | ||||||
Term Loan Facility | ||||||||
Debt | ||||||||
Repayments of long-term debt | $ 100,000,000 |
Debt, Net - Fair Value of Debt
Debt, Net - Fair Value of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Carrying Amount | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 2,159,732 | $ 2,086,918 |
Carrying Amount | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 1,678,659 | 1,289,461 |
Carrying Amount | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 138,101 | 140,891 |
Carrying Amount | Variable-rate secured debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 342,972 | 656,566 |
Estimated Fair Value | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 2,203,497 | 2,131,282 |
Estimated Fair Value | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 1,723,267 | 1,334,342 |
Estimated Fair Value | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 136,653 | 142,838 |
Estimated Fair Value | Variable-rate secured debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 343,577 | $ 654,102 |
Interest Rate Derivatives (Deta
Interest Rate Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Amount of (Loss) Income Recognized in AOCL on Derivatives | $ (118) | $ 1,428 | $ 426 | $ (39,592) | |
Amount of Loss Reclassified from AOCL into Interest Expense on Statement of Operations | (1,226) | (1,342) | (3,604) | (2,408) | |
Loss on interest rate derivatives | 0 | (53,196) | 0 | (53,196) | |
Interest rate swaps | Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | |||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Loss on interest rate derivatives | 0 | (51,865) | 0 | (51,865) | |
Interest rate swaps | Interest Expense | |||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Amount of Loss Reclassified from AOCL into Interest Expense on Statement of Operations | (1,226) | (1,342) | (3,604) | (2,408) | |
Interest rate swaps | Prepaid expenses and other assets, net | |||||
Fair value of interest rate derivatives and balance sheet classification | |||||
Interest rate swaps designated as cash flow hedges | 70 | 70 | $ 0 | ||
Interest rate swaps | Interest rate derivatives (liabilities) | |||||
Fair value of interest rate derivatives and balance sheet classification | |||||
Interest rate swaps designated as cash flow hedges | (5,562) | (5,562) | (9,522) | ||
Undesignated Swaps | |||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Loss on interest rate derivatives | 0 | $ (1,265) | 0 | $ (1,265) | |
Designated | |||||
Fair values of interest rate swap derivatives | |||||
Fair value of interest rate swaps | (5,492) | (5,492) | (9,522) | ||
Designated | Interest rate swaps | |||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Approximate amount to be reclassified from AOCL to interest expense over the next 12 months | 4,800 | 4,800 | |||
Fair value of derivative liability | 5,600 | 5,600 | |||
Settlement amount of derivative obligation at termination value | 6,000 | 6,000 | |||
Designated | Interest rate swap, effective September 1, 2016, swap one | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 100,000 | $ 100,000 | |||
Fixed Rate | 1.901% | 1.901% | |||
Fair value of interest rate swaps | $ (2,065) | $ (2,065) | (3,394) | ||
Designated | Interest rate swap, effective September 1, 2016, swap two | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 100,000 | $ 100,000 | |||
Fixed Rate | 1.905% | 1.905% | |||
Fair value of interest rate swaps | $ (2,070) | $ (2,070) | (3,401) | ||
Designated | Interest rate swap, effective September 1, 2016, swap three | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 50,000 | $ 50,000 | |||
Fixed Rate | 1.908% | 1.908% | |||
Fair value of interest rate swaps | $ (1,036) | $ (1,036) | (1,704) | ||
Designated | Interest rate swap, effective August 1, 2019 | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 11,180 | $ 11,180 | |||
Fixed Rate | 1.678% | 1.678% | |||
Fair value of interest rate swaps | $ (391) | $ (391) | (733) | ||
Notional amount of interest rate derivatives after scheduled amortization | 10,000 | 10,000 | |||
Designated | Interest rate swap, effective April 1, 2020, swap two | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 23,000 | $ 23,000 | |||
Fixed Rate | 0.573% | 0.573% | |||
Fair value of interest rate swaps | $ 70 | $ 70 | $ (290) | ||
Notional amount of interest rate derivatives after scheduled amortization | $ 22,100 | $ 22,100 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)joint_venture | Sep. 30, 2020USD ($) | |
Noncontrolling Interest [Abstract] | ||
Number of joint ventures with redeemable noncontrolling interests | joint_venture | 2 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 25,430 | $ 29,431 |
Distributions to noncontrolling interests | (2,387) | (13,335) |
Net income attributable to noncontrolling interests | 2,286 | 2,715 |
Adjustment to arrive at fair value of interests | 677 | 4,711 |
Ending balance | $ 26,006 | $ 23,522 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Class of Stock [Line Items] | ||||
Conversion of common units to common shares (in shares) | 8,054 | 12,009 | ||
Dividends declared per share (in usd per share) | $ 0.275 | $ 0.275 | $ 0.825 | $ 0.825 |
Common Shares | ||||
Class of Stock [Line Items] | ||||
At the market, offering program established, aggregate value | $ 300 | $ 300 | ||
Conversion of common units to common shares (in shares) | 8,054 |
Credit Losses, Financial Asse_3
Credit Losses, Financial Assets and Other Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Credit Losses, Financial Assets and Other Instruments [Roll Forward] | ||||
December 31, 2020 | $ 4,697 | |||
Credit loss (recoveries) expense | $ (326) | $ (1,465) | (1,040) | $ (161) |
September 30, 2021 | 3,657 | 3,657 | ||
Other Assets | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2020 | 643 | |||
Credit loss (recoveries) expense | 510 | |||
September 30, 2021 | 1,153 | 1,153 | ||
Accounts receivable, allowance for credit loss | 1,153 | 1,153 | ||
Other Assets | Accounts Receivable, Net | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2020 | 257 | |||
September 30, 2021 | 705 | 705 | ||
Accounts receivable, allowance for credit loss | 705 | 705 | ||
Other Assets | Prepaid expenses and other assets, net | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2020 | 386 | |||
September 30, 2021 | 448 | 448 | ||
Accounts receivable, allowance for credit loss | 448 | 448 | ||
Investing Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2020 | 2,851 | |||
Credit loss (recoveries) expense | (1,436) | |||
September 30, 2021 | 1,415 | 1,415 | ||
Tenant Notes Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2020 | 1,203 | |||
Credit loss (recoveries) expense | (114) | |||
September 30, 2021 | $ 1,089 | $ 1,089 |
Credit Losses, Financial Asse_4
Credit Losses, Financial Assets and Other Instruments (Credit Risk Classification) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Investing Receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2016 and Earlier | $ 68,773 | |
2017 | 1,043 | |
2018 | 0 | |
2019 | 6,040 | |
2020 | 1,057 | |
2021 | 449 | |
Total | 77,362 | $ 71,605 |
Investing Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2016 and Earlier | 68,773 | |
2017 | 1,043 | |
2018 | 0 | |
2019 | 0 | |
2020 | 1,057 | |
2021 | 449 | |
Total | 71,322 | |
Investing Receivables | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2016 and Earlier | 0 | |
2017 | 0 | |
2018 | 0 | |
2019 | 6,040 | |
2020 | 0 | |
2021 | 0 | |
Total | 6,040 | |
Tenant Notes Receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2016 and Earlier | 221 | |
2017 | 0 | |
2018 | 1,090 | |
2019 | 216 | |
2020 | 2,060 | |
2021 | 0 | |
Total | 3,587 | |
Tenant Notes Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2016 and Earlier | 0 | |
2017 | 0 | |
2018 | 949 | |
2019 | 69 | |
2020 | 297 | |
2021 | 0 | |
Total | 1,315 | |
Tenant Notes Receivables | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2016 and Earlier | 221 | |
2017 | 0 | |
2018 | 141 | |
2019 | 147 | |
2020 | 1,763 | |
2021 | 0 | |
Total | 2,272 | |
Sales-Type Lease Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2016 and Earlier | 0 | |
2017 | 0 | |
2018 | 0 | |
2019 | 0 | |
2020 | 6,300 | |
2021 | 0 | |
Total | $ 6,300 |
Information by Business Segme_3
Information by Business Segment - Segment Financial Information for Our Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment financial information for real estate operations | |||||
Revenues from real estate operations | $ 174,636 | $ 154,766 | $ 500,769 | $ 445,337 | |
Property operating expenses | (57,190) | (51,552) | (168,780) | (151,755) | |
UJV NOI allocable to COPT | 1,060 | 1,752 | 2,950 | 5,190 | |
Segment assets | 4,151,138 | 4,120,189 | 4,151,138 | 4,120,189 | $ 4,077,023 |
Segment assets | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,542,871 | 3,256,968 | 3,542,871 | 3,256,968 | |
Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 146,590 | 134,443 | 436,177 | 399,097 | |
Property operating expenses | (57,190) | (51,552) | (168,780) | (151,755) | |
UJV NOI allocable to COPT | 1,060 | 1,752 | 2,950 | 5,190 | |
NOI from real estate operations | 90,460 | 84,643 | 270,347 | 252,532 | |
Additions to long-lived assets | 19,818 | 24,979 | 53,058 | 66,443 | |
Transfers from non-operating properties | 155,574 | 126,859 | 260,660 | 268,815 | |
Real estate operations | Defense/Information Technology Locations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 120,454 | 112,709 | 358,634 | 331,739 | |
Property operating expenses | (42,985) | (39,832) | (129,205) | (118,374) | |
UJV NOI allocable to COPT | 1,060 | 1,752 | 2,950 | 5,190 | |
NOI from real estate operations | 78,529 | 74,629 | 232,379 | 218,555 | |
Additions to long-lived assets | 13,289 | 17,762 | 38,056 | 42,474 | |
Transfers from non-operating properties | 155,193 | 126,859 | 221,922 | 268,815 | |
Real estate operations | Defense/Information Technology Locations | Fort Meade/BW Corridor | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 66,029 | 63,328 | 197,315 | 190,464 | |
Property operating expenses | (22,956) | (21,537) | (69,341) | (63,618) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 43,073 | 41,791 | 127,974 | 126,846 | |
Additions to long-lived assets | 10,671 | 7,511 | 29,063 | 22,144 | |
Transfers from non-operating properties | 53,935 | (209) | 55,075 | 4,304 | |
Real estate operations | Defense/Information Technology Locations | Northern Virginia Defense/IT | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 15,291 | 14,699 | 45,214 | 42,824 | |
Property operating expenses | (5,980) | (5,245) | (17,394) | (15,765) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 9,311 | 9,454 | 27,820 | 27,059 | |
Additions to long-lived assets | 1,614 | 2,219 | 2,921 | 8,114 | |
Transfers from non-operating properties | 87,986 | 58 | 88,099 | 838 | |
Real estate operations | Defense/Information Technology Locations | Lackland Air Force Base | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 14,519 | 12,602 | 40,762 | 37,935 | |
Property operating expenses | (6,935) | (7,116) | (21,315) | (21,696) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 7,584 | 5,486 | 19,447 | 16,239 | |
Additions to long-lived assets | 0 | 0 | 0 | 0 | |
Transfers from non-operating properties | 7,332 | 221 | 56,601 | 381 | |
Real estate operations | Defense/Information Technology Locations | Navy Support Locations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 8,558 | 8,006 | 25,401 | 24,466 | |
Property operating expenses | (3,454) | (3,044) | (10,114) | (9,500) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 5,104 | 4,962 | 15,287 | 14,966 | |
Additions to long-lived assets | 897 | 1,650 | 2,654 | 5,518 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Real estate operations | Defense/Information Technology Locations | Redstone Arsenal | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 9,144 | 6,079 | 26,172 | 15,402 | |
Property operating expenses | (3,003) | (2,029) | (8,525) | (5,488) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 6,141 | 4,050 | 17,647 | 9,914 | |
Additions to long-lived assets | 107 | 6,382 | 3,418 | 6,698 | |
Transfers from non-operating properties | 5,519 | 61,520 | 19,724 | 91,827 | |
Real estate operations | Defense/Information Technology Locations | Data Center Shells | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 6,913 | 7,995 | 23,770 | 20,648 | |
Property operating expenses | (657) | (861) | (2,516) | (2,307) | |
UJV NOI allocable to COPT | 1,060 | 1,752 | 2,950 | 5,190 | |
NOI from real estate operations | 7,316 | 8,886 | 24,204 | 23,531 | |
Additions to long-lived assets | 0 | 0 | 0 | 0 | |
Transfers from non-operating properties | 421 | 65,269 | 2,423 | 171,465 | |
Real estate operations | Regional Office | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 16,810 | 14,913 | 50,371 | 45,535 | |
Property operating expenses | (8,395) | (7,782) | (23,901) | (22,207) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 8,415 | 7,131 | 26,470 | 23,328 | |
Additions to long-lived assets | 5,319 | 5,303 | 13,430 | 13,105 | |
Transfers from non-operating properties | 381 | 0 | 38,738 | 0 | |
Real estate operations | Operating wholesale data center | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 8,637 | 6,068 | 24,902 | 19,695 | |
Property operating expenses | (5,345) | (3,642) | (14,395) | (10,338) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 3,292 | 2,426 | 10,507 | 9,357 | |
Additions to long-lived assets | 1,141 | 1,917 | 1,490 | 10,699 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Real estate operations | Other | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 689 | 753 | 2,270 | 2,128 | |
Property operating expenses | (465) | (296) | (1,279) | (836) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 224 | 457 | 991 | 1,292 | |
Additions to long-lived assets | 69 | (3) | 82 | 165 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Real estate operations | Segment assets | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,542,871 | 3,256,968 | 3,542,871 | 3,256,968 | |
Real estate operations | Segment assets | Defense/Information Technology Locations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 2,806,707 | 2,661,201 | 2,806,707 | 2,661,201 | |
Real estate operations | Segment assets | Defense/Information Technology Locations | Fort Meade/BW Corridor | |||||
Segment financial information for real estate operations | |||||
Segment assets | 1,315,101 | 1,264,547 | 1,315,101 | 1,264,547 | |
Real estate operations | Segment assets | Defense/Information Technology Locations | Northern Virginia Defense/IT | |||||
Segment financial information for real estate operations | |||||
Segment assets | 470,077 | 392,226 | 470,077 | 392,226 | |
Real estate operations | Segment assets | Defense/Information Technology Locations | Lackland Air Force Base | |||||
Segment financial information for real estate operations | |||||
Segment assets | 196,624 | 143,206 | 196,624 | 143,206 | |
Real estate operations | Segment assets | Defense/Information Technology Locations | Navy Support Locations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 172,381 | 180,337 | 172,381 | 180,337 | |
Real estate operations | Segment assets | Defense/Information Technology Locations | Redstone Arsenal | |||||
Segment financial information for real estate operations | |||||
Segment assets | 299,184 | 234,355 | 299,184 | 234,355 | |
Real estate operations | Segment assets | Defense/Information Technology Locations | Data Center Shells | |||||
Segment financial information for real estate operations | |||||
Segment assets | 353,340 | 446,530 | 353,340 | 446,530 | |
Real estate operations | Segment assets | Regional Office | |||||
Segment financial information for real estate operations | |||||
Segment assets | 538,080 | 387,290 | 538,080 | 387,290 | |
Real estate operations | Segment assets | Operating wholesale data center | |||||
Segment financial information for real estate operations | |||||
Segment assets | 194,576 | 204,834 | 194,576 | 204,834 | |
Real estate operations | Segment assets | Other | |||||
Segment financial information for real estate operations | |||||
Segment assets | $ 3,508 | $ 3,643 | $ 3,508 | $ 3,643 |
Information by Business Segme_4
Information by Business Segment - Reconciliation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reconciliation of segment revenues to total revenues | ||||
Total revenues | $ 174,636 | $ 154,766 | $ 500,769 | $ 445,337 |
Construction contract and other service revenues | 28,046 | 20,323 | 64,592 | 46,240 |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated entities [Abstract] | ||||
UJV NOI allocable to COPT | 1,060 | 1,752 | 2,950 | 5,190 |
Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense | (763) | (1,274) | (2,167) | (3,814) |
Add: Equity in loss of unconsolidated non-real estate entities | 0 | (1) | (4) | (4) |
Equity in income of unconsolidated entities | 297 | 477 | 779 | 1,372 |
Computation of net operating income from service operations | ||||
Construction contract and other service revenues | 28,046 | 20,323 | 64,592 | 46,240 |
Construction contract and other service expenses | (27,089) | (19,220) | (61,964) | (44,052) |
Real estate operations | ||||
Reconciliation of segment revenues to total revenues | ||||
Total revenues | 146,590 | 134,443 | 436,177 | 399,097 |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated entities [Abstract] | ||||
UJV NOI allocable to COPT | 1,060 | 1,752 | 2,950 | 5,190 |
Service operations | ||||
Computation of net operating income from service operations | ||||
NOI from service operations | $ 957 | $ 1,103 | $ 2,628 | $ 2,188 |
Information by Business Segme_5
Information by Business Segment - Reconciliation of NOI from Real Estate Operations and NOI from Service Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment financial information for real estate operations | ||||
Interest and other income | $ 1,818 | $ 1,746 | $ 5,911 | $ 5,233 |
Credit loss recoveries | 326 | 1,465 | 1,040 | 161 |
Gain on sales of real estate | (32) | 0 | 39,711 | 5 |
Equity in income of unconsolidated entities | 297 | 477 | 779 | 1,372 |
Income tax expense | (47) | (16) | (103) | (95) |
Depreciation and other amortization associated with real estate operations | (36,611) | (35,332) | (111,487) | (101,540) |
Impairment losses | 0 | (1,530) | 0 | (1,530) |
General, administrative and leasing expenses | (9,342) | (7,467) | (26,970) | (23,111) |
Business development expenses and land carry costs | (1,093) | (1,094) | (3,559) | (3,474) |
Interest expense | (15,720) | (17,152) | (49,181) | (50,789) |
UJV NOI allocable to COPT included in equity in income of unconsolidated entities | (1,060) | (1,752) | (2,950) | (5,190) |
Loss on early extinguishment of debt | (1,159) | (3,237) | (59,553) | (3,237) |
Loss on interest rate derivatives | 0 | (53,196) | 0 | (53,196) |
Net income (loss) | 28,794 | (31,342) | 66,613 | 19,329 |
Real estate operations | ||||
Segment financial information for real estate operations | ||||
NOI from real estate operations | 90,460 | 84,643 | 270,347 | 252,532 |
UJV NOI allocable to COPT included in equity in income of unconsolidated entities | (1,060) | (1,752) | (2,950) | (5,190) |
Service operations | ||||
Segment financial information for real estate operations | ||||
NOI from service operations | $ 957 | $ 1,103 | $ 2,628 | $ 2,188 |
Information by Business Segme_6
Information by Business Segment - Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Reconciliation of segment assets to total assets | |||
Total consolidated assets | $ 4,151,138 | $ 4,077,023 | $ 4,120,189 |
Operating properties lease liabilities included in segment assets | 29,630 | $ 30,746 | |
Segment assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | 3,542,871 | 3,256,968 | |
Operating properties lease liabilities included in segment assets | 29,644 | 26,054 | |
Non-operating property assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | 385,025 | 642,182 | |
Other assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | $ 193,598 | $ 194,985 |
Construction Contract and Oth_3
Construction Contract and Other Service Revenues - Construction Contracts and Other Service Revenues by Compensation Arrangement and Service Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 28,046 | $ 20,323 | $ 64,592 | $ 46,240 |
Construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 26,893 | 18,786 | 61,477 | 42,520 |
Design | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 737 | 186 | 1,887 | 1,856 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 416 | 1,351 | 1,228 | 1,864 |
Guaranteed maximum price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 15,846 | 4,358 | 29,335 | 14,834 |
Cost-plus fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 4,742 | 13,249 | 23,075 | 20,121 |
Firm fixed price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 7,042 | 1,365 | 10,954 | 9,421 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 416 | $ 1,351 | $ 1,228 | $ 1,864 |
Construction Contract and Oth_4
Construction Contract and Other Service Revenues - Rollforwards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Change in Accounts Receivable | ||||
Beginning balance | $ 41,637 | |||
Ending balance | $ 33,110 | 33,110 | ||
Change in Contract with Customer, Asset | ||||
Beginning balance | 10,343 | |||
Ending balance | 12,987 | 12,987 | ||
Construction Contract Revenue | ||||
Change in Accounts Receivable | ||||
Beginning balance | 13,997 | $ 12,378 | ||
Ending balance | 5,726 | $ 11,183 | 5,726 | 11,183 |
Change in Contract with Customer, Asset | ||||
Beginning balance | 10,343 | 17,223 | ||
Ending balance | 12,987 | 13,980 | 12,987 | 13,980 |
Change in Contract with Customer, Liability | ||||
Beginning balance | 4,610 | 1,184 | ||
Ending balance | 3,818 | 5,236 | 3,818 | 5,236 |
Portion of beginning balance recognized in revenue during the period | $ 9 | $ 19 | $ 2,626 | $ 757 |
Construction Contract and Oth_5
Construction Contract and Other Service Revenues - Performance Obligation Narrative (Details) - Construction Contract Revenue $ in Millions | Sep. 30, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 159.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 29 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Construction Contract and Oth_6
Construction Contract and Other Service Revenues - Narrative (Details) - Construction Contract Revenue - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost, net | $ 0 | $ 0 | $ 0 |
Contract with customer, receivable, credit loss expense | $ 412,000 | $ 463,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ / shares in Units, $ in Thousands | Feb. 03, 2021shares | Jan. 01, 2021USD ($)Percentile_Rank$ / sharesshares | Sep. 30, 2021USD ($)form$ / sharesshares |
Restricted shares | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 165,770 | ||
Aggregate grant date fair value | $ | $ 4,400 | ||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 26.25 | ||
Shares vested (in shares) | shares | 157,066 | ||
Weighted average fair value of shares vested (in dollars per share) | $ / shares | $ 25.88 | ||
Aggregate intrinsic value of awards upon vesting | $ | $ 4,100 | ||
PIUs | |||
Share-Based Compensation | |||
Number of forms of profit interest units | form | 2 | ||
Performance-based PIU's | |||
Share-Based Compensation | |||
Aggregate grant date fair value | $ | $ 3,400 | ||
Potential earned PSUs payout for defined levels of performance under awards | |||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 75th or greater percentile rank | 100.00% | ||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 50th percentile rank | 50.00% | ||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 25th percentile rank | 25.00% | ||
Earned PB-PIUs granted on percentile rank below 25th (as a percent) | 0.00% | ||
The number of percentile ranks to fall between to earn interpolated PB-PIUs between such percentile ranks, conditioned on the percentile rank exceeding 25% | Percentile_Rank | 2 | ||
Percent of award distribution rights | 10.00% | ||
Award performance period | 3 years | ||
Assumptions used to value stock awards | |||
Baseline value per common share (in dollars per share) | $ / shares | $ 26.08 | ||
Expected volatility of common shares (as a percent) | 34.70% | ||
Risk-free interest rate (as a percent) | 0.18% | ||
Performance-based PIU's | Target Level | |||
Share-Based Compensation | |||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 30.03 | ||
Deferred Share Awards | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 3,416 | ||
Aggregate grant date fair value | $ | $ 93 | ||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 27.12 | ||
Executives | 2018 PSU Grants | Performance share units | |||
Share-Based Compensation | |||
Shares issued (in shares) | shares | 93,824 | ||
Percentage of target | 200.00% | ||
Senior Management Team Members and Certain Non-Employee Trustees | Time-based PIU's | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 93,983 | ||
Aggregate grant date fair value | $ | $ 2,500 | ||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 26.16 | ||
Shares vested (in shares) | shares | 40,591 | ||
Weighted average fair value of shares vested (in dollars per share) | $ / shares | $ 25.14 | ||
Aggregate intrinsic value of awards upon vesting | $ | $ 1,100 | ||
Senior Management Team Members | Time-based PIU's | |||
Share-Based Compensation | |||
Award vesting period | 3 years | ||
Senior Management Team Members | Performance-based PIU's | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 227,544 | ||
Award vesting period | 3 years | ||
Certain Non-Employee Trustees | Restricted shares | |||
Share-Based Compensation | |||
Award vesting period | 1 year | ||
Certain Non-Employee Trustees | Time-based PIU's | |||
Share-Based Compensation | |||
Award vesting period | 1 year | ||
Certain Non-Employee Trustees | Deferred Share Awards | |||
Share-Based Compensation | |||
Award vesting period | 1 year |
Earnings Per Share ("EPS") (Det
Earnings Per Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Numerator: | |||||
Net income (loss) attributable to COPT | $ 27,101 | $ (31,845) | $ 62,833 | $ 15,706 | |
Income attributable to share-based compensation awards | (92) | (145) | (337) | (365) | |
Numerator for basic EPS on net income (loss) attributable to COPT common shareholders | 27,009 | (31,990) | 62,496 | 15,341 | |
Redeemable noncontrolling interests | (89) | 0 | (82) | 0 | |
Income attributable to share-based compensation awards | 13 | 0 | 17 | 6 | |
Numerator for diluted EPS on net income (loss) attributable to COPT common shareholders | $ 26,933 | $ (31,990) | $ 62,431 | $ 15,347 | |
Denominator (all weighted averages): | |||||
Denominator for basic EPS (common shares) | 111,985 | 111,811 | 111,949 | 111,778 | |
Dilutive effect of redeemable noncontrolling interests | 138 | 0 | 130 | 0 | |
Dilutive effect of share-based compensation awards (in shares) | 375 | 0 | 285 | 278 | |
Denominator for diluted EPS (common shares) | 112,498 | 111,811 | 112,364 | 112,056 | |
Basic EPS: | |||||
Basic EPS (in dollars per share) | [1] | $ 0.24 | $ (0.29) | $ 0.56 | $ 0.14 |
Diluted EPS: | |||||
Diluted EPS (in dollars per share) | [1] | $ 0.24 | $ (0.29) | $ 0.56 | $ 0.14 |
[1] | Basic and diluted earnings per common share are calculated based on amounts attributable to common shareholders of Corporate Office Properties Trust. |
Earnings Per Share ("EPS") (D_2
Earnings Per Share ("EPS") (Details 2) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Conversion of common units | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1,262 | 1,240 | 1,257 | 1,235 |
Conversion of redeemable noncontrolling interests | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 782 | 973 | 793 | 954 |
Conversion of Series I preferred units | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 0 | 176 | 0 | 176 |
Weighted average restricted shares and deferred shares | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 410 | 429 | 416 | 432 |
Weighted average unvested TB-PIUs | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 168 | 91 | 155 | 85 |
Weighted average unvested PB-PIUs | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 228 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2021USD ($)property |
Commitments and Contingencies | |
Estimate of possible loss | $ 3.4 |
Environmental Indemnity Agreement | |
Number of lease properties which were provided environmental indemnifications | property | 3 |
Maximum environmental indemnification to the tenant against consequential damages after acquisition of property | $ 19 |
Anne Arundel County, Maryland | Tax Incremental Financing Bond | |
Environmental Indemnity Agreement | |
Maximum exposure | $ 31 |
Uncategorized Items - ofc-20210
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |