Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 22, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
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, $0.01 par value | |
Trading Symbol | OFC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 112,423,310 | |
Entity Central Index Key | 0000860546 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Properties, net: | ||
Operating properties, net | $ 3,180,790 | $ 3,090,510 |
Projects in development or held for future development | 458,961 | 442,434 |
Total properties, net | 3,639,751 | 3,532,944 |
Property - operating right-of-use assets | 38,056 | 38,361 |
Assets held for sale, net | 0 | 192,699 |
Cash and cash equivalents | 20,735 | 13,262 |
Investment in unconsolidated real estate joint ventures | 39,017 | 39,889 |
Accounts receivable, net | 31,554 | 40,752 |
Deferred rent receivable | 121,015 | 108,926 |
Intangible assets on property acquisitions, net | 12,543 | 14,567 |
Lease incentives, net | 50,871 | 51,486 |
Deferred leasing costs (net of accumulated amortization of $32,379 and $31,768, respectively) | 68,004 | 65,850 |
Prepaid expenses and other assets, net | 78,762 | 81,490 |
Total assets | 4,185,193 | 4,262,452 |
Liabilities: | ||
Debt, net | 2,177,811 | 2,272,304 |
Accounts payable and accrued expenses | 177,180 | 186,202 |
Rents received in advance and security deposits | 27,745 | 32,262 |
Dividends and distributions payable | 31,400 | 31,299 |
Deferred revenue associated with operating leases | 8,416 | 9,341 |
Property - operating lease liabilities | 29,412 | 29,342 |
Other liabilities | 10,526 | 17,729 |
Total liabilities | 2,462,490 | 2,578,479 |
Commitments and contingencies (Note 18) | ||
Redeemable noncontrolling interests | 26,752 | 26,898 |
Shareholders’ equity: | ||
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,424,671 at June 30, 2022 and 112,327,533 at December 31, 2021) | 1,124 | 1,123 |
Additional paid-in capital | 2,481,139 | 2,481,539 |
Cumulative distributions in excess of net income | (827,076) | (856,863) |
Accumulated other comprehensive income (loss) | 1,806 | (3,059) |
Total shareholders’ equity | 1,656,993 | 1,622,740 |
Noncontrolling interests in subsidiaries: | ||
Common units in Corporate Office Properties, L.P. (“COPLP”) | 25,505 | 21,363 |
Other consolidated entities | 13,453 | 12,972 |
Noncontrolling interests in subsidiaries | 38,958 | 34,335 |
Total equity | 1,695,951 | 1,657,075 |
Total liabilities, redeemable noncontrolling interests and equity | 4,185,193 | 4,262,452 |
Investing Receivables | ||
Properties, net: | ||
Investing receivables (net of allowance for credit losses of $1,645 and $1,599, respectively) | $ 84,885 | $ 82,226 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accumulated amortization of deferred leasing costs | $ 32,379 | $ 31,768 |
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) | 112,424,671 | 112,327,533 |
Common Shares of beneficial interest, shares outstanding (in shares) | 112,424,671 | 112,327,533 |
Investing Receivables | ||
Investing receivable allowance for credit loss | $ 1,645 | $ 1,599 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Revenues | |||||
Lease revenue | $ 142,277 | $ 136,454 | $ 283,666 | $ 273,744 | |
Other property revenue | 969 | 765 | 1,860 | 1,305 | |
Construction contract and other service revenues | 42,557 | 19,988 | 95,757 | 36,546 | |
Total revenues | 185,803 | 157,207 | 381,283 | 311,595 | |
Operating expenses | |||||
Property operating expenses | 54,116 | 50,914 | 111,297 | 104,190 | |
Depreciation and amortization associated with real estate operations | 34,812 | 34,732 | 69,076 | 69,232 | |
Construction contract and other service expenses | 41,304 | 19,082 | 92,954 | 34,875 | |
General, administrative and leasing expenses | 8,355 | 9,222 | 16,899 | 17,628 | |
Business development expenses and land carry costs | 701 | 1,372 | 1,484 | 2,466 | |
Total operating expenses | 139,288 | 115,322 | 291,710 | 228,391 | |
Interest expense | (14,808) | (15,942) | (29,232) | (33,461) | |
Interest and other income | 1,818 | 2,228 | 3,711 | 4,093 | |
Credit loss (expense) recoveries | (225) | (193) | 91 | 714 | |
Gain on sales of real estate | (19) | 40,233 | (4) | 39,743 | |
Loss on early extinguishment of debt | 0 | (25,228) | (342) | (58,394) | |
Income from continuing operations before equity in income of unconsolidated entities and income taxes | 33,281 | 42,983 | 63,797 | 35,899 | |
Equity in income of unconsolidated entities | 318 | 260 | 1,206 | 482 | |
Income tax expense | (4) | (24) | (157) | (56) | |
Income from continuing operations | 33,595 | 43,219 | 64,846 | 36,325 | |
Discontinued operations | 0 | 679 | 29,573 | 1,494 | |
Net income | 33,595 | 43,898 | 94,419 | 37,819 | |
Net income attributable to noncontrolling interests: | |||||
Common units in COPLP | (496) | (559) | (1,352) | (474) | |
Other consolidated entities | (789) | (938) | (1,438) | (1,613) | |
Net income attributable to COPT common shareholders | $ 32,310 | $ 42,401 | $ 91,629 | $ 35,732 | |
Basic earnings per common share: | |||||
Income from continuing operations - basic (in dollars per share) | [1] | $ 0.29 | $ 0.37 | $ 0.55 | $ 0.30 |
Discontinued operations - basic (in dollars per share) | [1] | 0 | 0.01 | 0.26 | 0.02 |
Net income attributable to COPT common shareholders - basic (in dollars per share) | [1] | 0.29 | 0.38 | 0.81 | 0.32 |
Diluted earnings per common share: | |||||
Income from continuing operations - diluted (in dollars per share) | [1] | 0.29 | 0.37 | 0.55 | 0.30 |
Discontinued operations - diluted (in dollars per share) | [1] | 0 | 0.01 | 0.26 | 0.02 |
Net income attributable to COPT common shareholders - diluted (in dollars per share) | [1] | $ 0.29 | $ 0.38 | $ 0.81 | $ 0.32 |
[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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 33,595 | $ 43,898 | $ 94,419 | $ 37,819 |
Other comprehensive income: | ||||
Unrealized income (loss) on interest rate derivatives | 1,008 | (240) | 3,545 | 544 |
Reclassification adjustments on interest rate derivatives recognized in interest expense | 754 | 1,203 | 1,757 | 2,378 |
Total other comprehensive income | 1,762 | 963 | 5,302 | 2,922 |
Comprehensive income | 35,357 | 44,861 | 99,721 | 40,741 |
Comprehensive income attributable to noncontrolling interests | (1,405) | (1,484) | (3,227) | (2,267) |
Comprehensive income attributable to COPT | $ 33,952 | $ 43,377 | $ 96,494 | $ 38,474 |
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 Income (Loss) | Noncontrolling Interests |
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 | (241) | (241) | ||||
Share-based compensation issuance, net of redemptions | 4,160 | 1 | 2,175 | 1,984 | ||
Redemption of vested equity awards | (2,358) | (2,358) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 194 | (194) | |||
Comprehensive income | 39,588 | 35,732 | 2,742 | 1,114 | ||
Dividends | (61,790) | (61,790) | ||||
Distributions to owners of common units in COPLP | (798) | (798) | ||||
Distributions to noncontrolling interests in other consolidated entities | (15) | (15) | ||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | (622) | (622) | ||||
Other | (324) | (324) | ||||
Balance at Jun. 30, 2021 | 1,671,312 | 1,123 | 2,478,416 | (835,894) | (6,415) | 34,082 |
Balance at Mar. 31, 2021 | 1,656,792 | 1,123 | 2,476,807 | (847,407) | (7,391) | 33,660 |
Increase (Decrease) in Shareholders' Equity | ||||||
Redemption of common units | (241) | (241) | ||||
Share-based compensation issuance, net of redemptions | 2,145 | 0 | 1,078 | 1,067 | ||
Redemption of vested equity awards | (68) | (68) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 739 | (739) | |||
Comprehensive income | 44,120 | 42,401 | 976 | 743 | ||
Dividends | (30,888) | (30,888) | ||||
Distributions to owners of common units in COPLP | (400) | (400) | ||||
Distributions to noncontrolling interests in other consolidated entities | (8) | (8) | ||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | (140) | (140) | ||||
Balance at Jun. 30, 2021 | 1,671,312 | 1,123 | 2,478,416 | (835,894) | (6,415) | 34,082 |
Balance at Dec. 31, 2021 | 1,657,075 | 1,123 | 2,481,539 | (856,863) | (3,059) | 34,335 |
Increase (Decrease) in Shareholders' Equity | ||||||
Redemption of common units | (376) | (376) | ||||
Share-based compensation issuance, net of redemptions | 4,678 | 1 | 2,021 | 2,656 | ||
Redemption of vested equity awards | (1,120) | (1,120) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | (1,378) | 1,378 | |||
Comprehensive income | 98,415 | 91,629 | 4,865 | 1,921 | ||
Dividends | (61,842) | (61,842) | ||||
Distributions to owners of common units in COPLP | (941) | (941) | ||||
Distributions to noncontrolling interests in other consolidated entities | (15) | (15) | ||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | 77 | 77 | ||||
Balance at Jun. 30, 2022 | 1,695,951 | 1,124 | 2,481,139 | (827,076) | 1,806 | 38,958 |
Balance at Mar. 31, 2022 | 1,690,536 | 1,124 | 2,479,119 | (828,473) | 164 | 38,602 |
Increase (Decrease) in Shareholders' Equity | ||||||
Redemption of common units | (164) | (164) | ||||
Share-based compensation issuance, net of redemptions | 2,377 | 1,007 | 1,370 | |||
Redemption of vested equity awards | (61) | (61) | ||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 1,036 | (1,036) | |||
Comprehensive income | 34,618 | 32,310 | 1,642 | 666 | ||
Dividends | (30,913) | (30,913) | ||||
Distributions to owners of common units in COPLP | (472) | (472) | ||||
Distributions to noncontrolling interests in other consolidated entities | (8) | (8) | ||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | 38 | 38 | ||||
Balance at Jun. 30, 2022 | $ 1,695,951 | $ 1,124 | $ 2,481,139 | $ (827,076) | $ 1,806 | $ 38,958 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Shares outstanding (in shares) | 112,424,671 | 112,336,070 | 112,424,671 | 112,336,070 |
Conversion of common units to common shares (in shares) | 8,054 | |||
Share-based compensation issuance, net of redemptions (in shares) | 5,860 | 8,836 | 97,138 | 146,257 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities | ||
Revenues from real estate operations received | $ 285,858 | $ 280,708 |
Construction contract and other service revenues received | 90,663 | 38,419 |
Property operating expenses paid | (99,512) | (91,672) |
Construction contract and other service expenses paid | (88,833) | (34,445) |
General, administrative, leasing, business development and land carry costs paid | (17,782) | (15,399) |
Interest expense paid | (26,732) | (31,392) |
Lease incentives paid | (7,739) | (7,442) |
Other | 2,797 | (765) |
Net cash provided by operating activities | 138,720 | 138,012 |
Cash flows from investing activities | ||
Development and redevelopment of properties | (142,862) | (110,909) |
Tenant improvements on operating properties | (16,734) | (10,872) |
Other capital improvements on operating properties | (21,590) | (12,382) |
Proceeds from sale of properties | 220,780 | 114,394 |
Leasing costs paid | (4,121) | (11,408) |
Other | (565) | 576 |
Net cash provided by (used in) investing activities | 34,908 | (30,601) |
Proceeds from debt | ||
Revolving Credit Facility | 329,000 | 387,000 |
Unsecured senior notes | 0 | 589,818 |
Other debt proceeds | 0 | 4,459 |
Repayments of debt | ||
Revolving Credit Facility | (224,000) | (361,000) |
Unsecured senior notes | 0 | (600,000) |
Scheduled principal amortization | (1,618) | (1,922) |
Other debt repayments | (200,000) | 0 |
Payments in connection with early extinguishment of debt | (6) | (55,713) |
Common share dividends paid | (61,814) | (61,747) |
Other | (6,859) | (8,564) |
Net cash used in financing activities | (165,297) | (107,669) |
Net increase (decrease) in cash and cash equivalents and restricted cash | 8,331 | (258) |
Cash and cash equivalents and restricted cash | ||
Beginning of period | 17,316 | 22,033 |
End of period | 25,647 | 21,775 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 94,419 | 37,819 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 70,235 | 76,476 |
Amortization of deferred financing costs and net debt discounts | 2,351 | 2,666 |
Increase in deferred rent receivable | (11,603) | (9,421) |
Gain on sales of real estate | (28,560) | (39,743) |
Share-based compensation | 4,301 | 3,913 |
Loss on early extinguishment of debt | 342 | 58,394 |
Other | (2,549) | (2,462) |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 9,374 | 45 |
Decrease in lease incentives and prepaid expenses and other assets, net | 8,407 | 13,894 |
Decrease in accounts payable, accrued expenses and other liabilities | (3,480) | (1,037) |
Decrease in rents received in advance and security deposits | (4,517) | (2,532) |
Net cash provided by operating activities | 138,720 | 138,012 |
Reconciliation of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents | 20,735 | 17,182 |
Restricted cash | 4,912 | 4,593 |
Cash and cash equivalents and restricted cash | 25,647 | 21,775 |
Supplemental schedule of non-cash investing and financing activities: | ||
Decrease in accrued capital improvements, leasing and other investing activity costs | (6,222) | (15,887) |
Recognition of operating right-of-use assets and related lease liabilities | 683 | 328 |
Investment in unconsolidated real estate joint venture retained in property disposition | 0 | 11,842 |
Increase in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | 5,072 | 2,922 |
Dividends/distributions payable | 31,400 | 31,302 |
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | 0 | 121 |
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | 1,378 | (194) |
(Decrease) increase in redeemable noncontrolling interests and (increase) decrease in equity to carry redeemable noncontrolling interests at fair value | $ (77) | $ 622 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022, our properties included the following: • 188 properties totaling 22.1 million square feet comprised of 17.1 million square feet in 161 office properties and 5.0 million square feet in 27 single-tenant data center shells. We owned 19 of these data center shells through unconsolidated real estate joint ventures; • 12 properties under development (nine office properties and three data center shells), including one partially-operational property, and an expansion of one fully-operational property that we estimate will total approximately 1.9 million square feet upon completion; and • approximately 710 acres of land controlled for future development that we believe could be developed into approximately 8.4 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 June 30, 2022, COPT owned 98.0% 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 | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation These 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 of and for the year ended December 31, 2021 included in our 2021 Annual Report on Form 10-K. The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly state our financial position and results of operations. All adjustments are of a normal recurring nature. The consolidated financial statements have been prepared using the accounting policies described in our 2021 Annual Report on Form 10-K as updated for our adoption of recent accounting pronouncements discussed below. Reclassifications We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity, including amounts reclassified in conjunction with the transfer of a wholesale data center to discontinued operations in the fourth quarter of 2021. We provide disclosure regarding our discontinued operations in Note 4. Recent Accounting Pronouncements In 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
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
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 $1.9 million as of June 30, 2022, 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 June 30, 2022, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivatives and determined that these adjustments were 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 our senior notes (categorized within Level 1 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 June 30, 2022 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 $ 1,824 $ — $ — $ 1,824 Other 57 — — 57 Other marketable securities (1) 32 — — 32 Interest rate derivatives (1) — 2,468 — 2,468 Total assets $ 1,913 $ 2,468 $ — $ 4,381 Liabilities: Deferred compensation plan liability (2) $ — $ 1,881 $ — $ 1,881 (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 | 6 Months Ended |
Jun. 30, 2022 | |
Real Estate [Abstract] | |
Properties, Net | Properties, Net Operating properties, net consisted of the following (in thousands): June 30, December 31, 2021 Land $ 584,878 $ 572,900 Buildings and improvements 3,809,623 3,670,133 Less: Accumulated depreciation (1,213,711) (1,152,523) Operating properties, net $ 3,180,790 $ 3,090,510 2022 Dispositions and Discontinued Operations On January 25, 2022, we sold 9651 Hornbaker Road in Manassas, Virginia, our sole wholesale data center investment, for $222.5 million, resulting in a gain on sale of $28.6 million. This property, a separate reportable segment, is reported herein as discontinued operations. The table below sets forth the components of the property’s assets classified as held for sale on our consolidated balance sheet as of December 31, 2021 (in thousands): Properties, net $ 191,857 Deferred rent receivable 462 Intangible assets on property acquisitions, net 73 Deferred leasing costs, net 307 Assets held for sale, net $ 192,699 The table below sets forth the property’s results of operations included in discontinued operations on our consolidated statements of operations and its operating and investing cash flows included on our consolidated statements of cash flows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Revenues from real estate operations $ — $ 7,204 $ 1,980 $ 14,538 Property operating expenses — (3,702) (971) (7,400) Depreciation and amortization associated with real estate operations — (2,823) — (5,644) Gain on sale of real estate — — 28,564 — Discontinued operations $ — $ 679 $ 29,573 $ 1,494 Cash flows from operating activities $ 5,497 $ 8,938 Cash flows from investing activities $ 220,549 $ (577) 2022 Development Activities |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Lease revenue (1) 2022 2021 2022 2021 Fixed $ 112,691 $ 107,823 $ 223,858 $ 214,758 Variable 29,586 28,631 59,808 58,986 $ 142,277 $ 136,454 $ 283,666 $ 273,744 (1) Excludes lease revenue from discontinued operations of which: $5.6 million was fixed and $1.6 million was variable for the three months ended June 30, 2021; and $1.5 million and $11.1 million was fixed and $527,000 and $3.4 million was variable for the six months ended June 30, 2022 and 2021, respectively. Fixed contractual payments due under our property leases were as follows (in thousands): As of June 30, 2022 Year Ending December 31, Operating leases Sales-type leases 2022 (1) $ 223,948 $ 480 2023 420,071 960 2024 372,126 960 2025 285,179 960 2026 221,782 960 Thereafter 1,055,808 3,556 Total contractual payments $ 2,578,914 7,876 Less: Amount representing interest (1,942) Net investment in sales-type leases $ 5,934 (1) Represents the six months ending December 31, 2022. Lessee Arrangements As of June 30, 2022, our balance sheet included $40.3 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 June 30, 2022 December 31, 2021 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,056 $ 38,361 Finance leases - Property Prepaid expenses and other assets, net 2,222 2,238 Total right-of-use assets $ 40,278 $ 40,599 Our property lease liabilities reported on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location June 30, 2022 December 31, 2021 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,412 $ 29,342 As of June 30, 2022, our operating leases had a weighted average remaining lease term of 52 years and a weighted average discount rate of 7.19%. The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended June 30, For the Six Months Ended June 30, Lease cost 2022 2021 2022 2021 Operating lease cost Property leases - fixed Property operating expenses $ 1,032 $ 1,013 $ 2,051 $ 1,986 Property leases - variable Property operating expenses 17 10 33 20 Finance lease cost Amortization of property right-of-use assets Property operating expenses 8 9 16 18 $ 1,057 $ 1,032 $ 2,100 $ 2,024 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Six Months Ended June 30, Supplemental cash flow information 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,676 $ 1,586 Financing cash flows for financing leases $ — $ 10 Payments on property operating leases were due as follows (in thousands): Year Ending December 31, June 30, 2022 2022 (1) $ 1,679 2023 3,399 2024 3,451 2025 1,797 2026 1,578 Thereafter 125,934 Total lease payments 137,838 Less: Amount representing interest (108,426) Lease liability $ 29,412 (1) Represents the six months ending December 31, 2022. |
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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Lease revenue (1) 2022 2021 2022 2021 Fixed $ 112,691 $ 107,823 $ 223,858 $ 214,758 Variable 29,586 28,631 59,808 58,986 $ 142,277 $ 136,454 $ 283,666 $ 273,744 (1) Excludes lease revenue from discontinued operations of which: $5.6 million was fixed and $1.6 million was variable for the three months ended June 30, 2021; and $1.5 million and $11.1 million was fixed and $527,000 and $3.4 million was variable for the six months ended June 30, 2022 and 2021, respectively. Fixed contractual payments due under our property leases were as follows (in thousands): As of June 30, 2022 Year Ending December 31, Operating leases Sales-type leases 2022 (1) $ 223,948 $ 480 2023 420,071 960 2024 372,126 960 2025 285,179 960 2026 221,782 960 Thereafter 1,055,808 3,556 Total contractual payments $ 2,578,914 7,876 Less: Amount representing interest (1,942) Net investment in sales-type leases $ 5,934 (1) Represents the six months ending December 31, 2022. Lessee Arrangements As of June 30, 2022, our balance sheet included $40.3 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 June 30, 2022 December 31, 2021 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,056 $ 38,361 Finance leases - Property Prepaid expenses and other assets, net 2,222 2,238 Total right-of-use assets $ 40,278 $ 40,599 Our property lease liabilities reported on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location June 30, 2022 December 31, 2021 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,412 $ 29,342 As of June 30, 2022, our operating leases had a weighted average remaining lease term of 52 years and a weighted average discount rate of 7.19%. The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended June 30, For the Six Months Ended June 30, Lease cost 2022 2021 2022 2021 Operating lease cost Property leases - fixed Property operating expenses $ 1,032 $ 1,013 $ 2,051 $ 1,986 Property leases - variable Property operating expenses 17 10 33 20 Finance lease cost Amortization of property right-of-use assets Property operating expenses 8 9 16 18 $ 1,057 $ 1,032 $ 2,100 $ 2,024 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Six Months Ended June 30, Supplemental cash flow information 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,676 $ 1,586 Financing cash flows for financing leases $ — $ 10 Payments on property operating leases were due as follows (in thousands): Year Ending December 31, June 30, 2022 2022 (1) $ 1,679 2023 3,399 2024 3,451 2025 1,797 2026 1,578 Thereafter 125,934 Total lease payments 137,838 Less: Amount representing interest (108,426) Lease liability $ 29,412 (1) Represents the six months ending December 31, 2022. |
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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Lease revenue (1) 2022 2021 2022 2021 Fixed $ 112,691 $ 107,823 $ 223,858 $ 214,758 Variable 29,586 28,631 59,808 58,986 $ 142,277 $ 136,454 $ 283,666 $ 273,744 (1) Excludes lease revenue from discontinued operations of which: $5.6 million was fixed and $1.6 million was variable for the three months ended June 30, 2021; and $1.5 million and $11.1 million was fixed and $527,000 and $3.4 million was variable for the six months ended June 30, 2022 and 2021, respectively. Fixed contractual payments due under our property leases were as follows (in thousands): As of June 30, 2022 Year Ending December 31, Operating leases Sales-type leases 2022 (1) $ 223,948 $ 480 2023 420,071 960 2024 372,126 960 2025 285,179 960 2026 221,782 960 Thereafter 1,055,808 3,556 Total contractual payments $ 2,578,914 7,876 Less: Amount representing interest (1,942) Net investment in sales-type leases $ 5,934 (1) Represents the six months ending December 31, 2022. Lessee Arrangements As of June 30, 2022, our balance sheet included $40.3 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 June 30, 2022 December 31, 2021 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,056 $ 38,361 Finance leases - Property Prepaid expenses and other assets, net 2,222 2,238 Total right-of-use assets $ 40,278 $ 40,599 Our property lease liabilities reported on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location June 30, 2022 December 31, 2021 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,412 $ 29,342 As of June 30, 2022, our operating leases had a weighted average remaining lease term of 52 years and a weighted average discount rate of 7.19%. The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended June 30, For the Six Months Ended June 30, Lease cost 2022 2021 2022 2021 Operating lease cost Property leases - fixed Property operating expenses $ 1,032 $ 1,013 $ 2,051 $ 1,986 Property leases - variable Property operating expenses 17 10 33 20 Finance lease cost Amortization of property right-of-use assets Property operating expenses 8 9 16 18 $ 1,057 $ 1,032 $ 2,100 $ 2,024 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Six Months Ended June 30, Supplemental cash flow information 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,676 $ 1,586 Financing cash flows for financing leases $ — $ 10 Payments on property operating leases were due as follows (in thousands): Year Ending December 31, June 30, 2022 2022 (1) $ 1,679 2023 3,399 2024 3,451 2025 1,797 2026 1,578 Thereafter 125,934 Total lease payments 137,838 Less: Amount representing interest (108,426) Lease liability $ 29,412 (1) Represents the six months ending December 31, 2022. |
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 leases. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Lease revenue (1) 2022 2021 2022 2021 Fixed $ 112,691 $ 107,823 $ 223,858 $ 214,758 Variable 29,586 28,631 59,808 58,986 $ 142,277 $ 136,454 $ 283,666 $ 273,744 (1) Excludes lease revenue from discontinued operations of which: $5.6 million was fixed and $1.6 million was variable for the three months ended June 30, 2021; and $1.5 million and $11.1 million was fixed and $527,000 and $3.4 million was variable for the six months ended June 30, 2022 and 2021, respectively. Fixed contractual payments due under our property leases were as follows (in thousands): As of June 30, 2022 Year Ending December 31, Operating leases Sales-type leases 2022 (1) $ 223,948 $ 480 2023 420,071 960 2024 372,126 960 2025 285,179 960 2026 221,782 960 Thereafter 1,055,808 3,556 Total contractual payments $ 2,578,914 7,876 Less: Amount representing interest (1,942) Net investment in sales-type leases $ 5,934 (1) Represents the six months ending December 31, 2022. Lessee Arrangements As of June 30, 2022, our balance sheet included $40.3 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 June 30, 2022 December 31, 2021 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,056 $ 38,361 Finance leases - Property Prepaid expenses and other assets, net 2,222 2,238 Total right-of-use assets $ 40,278 $ 40,599 Our property lease liabilities reported on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location June 30, 2022 December 31, 2021 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,412 $ 29,342 As of June 30, 2022, our operating leases had a weighted average remaining lease term of 52 years and a weighted average discount rate of 7.19%. The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended June 30, For the Six Months Ended June 30, Lease cost 2022 2021 2022 2021 Operating lease cost Property leases - fixed Property operating expenses $ 1,032 $ 1,013 $ 2,051 $ 1,986 Property leases - variable Property operating expenses 17 10 33 20 Finance lease cost Amortization of property right-of-use assets Property operating expenses 8 9 16 18 $ 1,057 $ 1,032 $ 2,100 $ 2,024 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Six Months Ended June 30, Supplemental cash flow information 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,676 $ 1,586 Financing cash flows for financing leases $ — $ 10 Payments on property operating leases were due as follows (in thousands): Year Ending December 31, June 30, 2022 2022 (1) $ 1,679 2023 3,399 2024 3,451 2025 1,797 2026 1,578 Thereafter 125,934 Total lease payments 137,838 Less: Amount representing interest (108,426) Lease liability $ 29,412 (1) Represents the six months ending December 31, 2022. |
Real Estate Joint Ventures
Real Estate Joint Ventures | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 (dollars in thousands): Nominal Ownership % June 30, 2022 (1) Date Acquired Total Encumbered Assets Total Liabilities Entity Location LW Redstone Company, LLC (2) 3/23/2010 85% Huntsville, Alabama $ 547,429 $ 88,065 $ 108,738 Stevens Investors, LLC (3) 8/11/2015 95% Washington, DC 167,443 — 904 M Square Associates, LLC 6/26/2007 50% College Park, Maryland 102,419 60,153 51,802 $ 817,291 $ 148,218 $ 161,444 (1) Excludes amounts eliminated in consolidation. (2) We fund all capital requirements. Our partner generally receives distributions of the first $1.2 million of annual operating cash flows and we receive the remainder. (3) As of June 30, 2022, we also had a $112.0 million construction loan to the joint venture, which is eliminated in consolidation, that carries an interest rate of LIBOR plus 2.35% and had a balance of $95.3 million; 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 June 30, 2022 December 31, 2021 B RE COPT DC JV II LLC (2) 10/30/2020 10% 8 $ 15,291 $ 15,579 BREIT COPT DC JV LLC 6/20/2019 10% 9 11,971 12,460 B RE COPT DC JV III LLC 6/2/2021 10% 2 11,755 11,850 19 $ 39,017 $ 39,889 (1) Included in the line entitled “investment in unconsolidated real estate joint ventures” on our consolidated balance sheets. |
Investing Receivables
Investing Receivables | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Investing Receivables | Investing Receivables Investing receivables consisted of the following (in thousands): June 30, December 31, 2021 Notes receivable from the City of Huntsville $ 81,497 $ 77,784 Other investing loans receivable 5,033 6,041 Amortized cost basis 86,530 83,825 Allowance for credit losses (1,645) (1,599) Investing receivables, net $ 84,885 $ 82,226 The balances above include accrued interest receivable, net of allowance for credit losses, of $2.3 million as of June 30, 2022 and $5.3 million as of December 31, 2021. 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 $88 million as of June 30, 2022 and $84 million as of December 31, 2021. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets, Net | 6 Months Ended |
Jun. 30, 2022 | |
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): June 30, December 31, 2021 Construction contract costs in excess of billings, net $ 29,223 $ 22,384 Furniture, fixtures and equipment, net 9,014 9,599 Deposits 7,154 3,910 Non-real estate equity investments 6,107 5,544 Prepaid expenses 6,066 20,058 Net investment in sales-type leases 5,934 6,194 Restricted cash 4,912 4,054 Interest rate derivatives 2,468 355 Property - finance right-of-use assets 2,222 2,238 Marketable securities in deferred compensation plan 1,881 2,556 Deferred tax asset, net (1) 1,685 1,841 Deferred financing costs, net (2) 746 1,314 Other assets 1,350 1,443 Prepaid expenses and other assets, net $ 78,762 $ 81,490 (1) Includes a valuation allowance of $24,000 as of June 30, 2022 and December 31, 2021. (2) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. |
Debt, Net
Debt, Net | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt, Net | Debt, Net Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of June 30, December 31, 2021 June 30, 2022 Stated Interest Rates Scheduled Maturity Mortgage and Other Secured Debt: Fixed rate mortgage debt $ 85,708 $ 86,960 3.82% - 4.62% (2) 2023-2026 Variable rate secured debt 33,530 33,667 LIBOR + 1.45% to 1.55% (3) 2025-2026 Total mortgage and other secured debt 119,238 120,627 Revolving Credit Facility (4) 181,000 76,000 LIBOR + 0.775% to 1.45% (5) March 2023 (4) Term Loan Facility (6) 99,904 299,420 LIBOR + 1.00% to 1.65% (7) December 2022 Unsecured Senior Notes 2.25%, $400,000 aggregate principal 396,013 395,491 2.25% (8) March 2026 2.00%, $400,000 aggregate principal 396,749 396,512 2.00% (9) January 2029 2.75%, $600,000 aggregate principal 589,588 589,060 2.75% (10) April 2031 2.90%, $400,000 aggregate principal 394,643 394,441 2.90% (11) December 2033 Unsecured note payable 676 753 0% (12) May 2026 Total debt, net $ 2,177,811 $ 2,272,304 (1) The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $4.9 million as of June 30, 2022 and $5.8 million as of December 31, 2021. (2) The weighted average interest rate on our fixed rate mortgage debt was 4.07% as of June 30, 2022. (3) The weighted average interest rate on our variable rate secured debt was 2.58% as of June 30, 2022. (4) 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. (5) The weighted average interest rate on the Revolving Credit Facility was 2.38% as of June 30, 2022. (6) We repaid $200.0 million of this loan during the six months ended June 30, 2022. (7) The interest rate on this loan was 2.31% as of June 30, 2022. (8) The carrying value of these notes reflects an unamortized discount totaling $3.2 million as of June 30, 2022 and $3.6 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.48%. (9) The carrying value of these notes reflects an unamortized discount totaling $2.3 million as of June 30, 2022 and $2.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.09%. (10) The carrying value of these notes reflects an unamortized discount totaling $9.0 million as of June 30, 2022 and $9.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.94%. (11) The carrying value of these notes reflects an unamortized discount totaling $4.4 million as of June 30, 2022 and $4.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 3.01%. (12) 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 $85,000 as of June 30, 2022 and $108,000 as of December 31, 2021. 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. Certain of our debt instruments require that we comply with a number of restrictive financial covenants. As of June 30, 2022, we were compliant with these financial covenants. Our debt matures on the following schedule (in thousands): Year Ending December 31, June 30, 2022 2022 (1) $ 101,715 2023 199,953 2024 29,983 2025 23,717 2026 446,300 Thereafter 1,400,000 Total $ 2,201,668 (2) (1) Represents the six months ending December 31, 2022. (2) Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $23.9 million. We capitalized interest costs of $1.4 million in the three months ended June 30, 2022, $1.7 million in the three months ended June 30, 2021, $2.9 million in the six months ended June 30, 2022 and $3.5 million in the six months ended June 30, 2021. The following table sets forth information pertaining to the fair value of our debt (in thousands): June 30, 2022 December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Fixed-rate debt Unsecured Senior Notes $ 1,776,993 $ 1,739,316 $ 1,775,504 $ 1,809,950 Other fixed-rate debt 86,384 82,707 87,713 87,339 Variable-rate debt 314,434 313,220 409,087 409,639 $ 2,177,811 $ 2,135,243 $ 2,272,304 $ 2,306,928 |
Interest Rate Derivatives
Interest Rate Derivatives | 6 Months Ended |
Jun. 30, 2022 | |
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 (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date June 30, December 31, 2021 $ 100,000 1.901% One-Month LIBOR 9/1/2016 12/1/2022 $ 269 $ (1,361) $ 100,000 1.905% One-Month LIBOR 9/1/2016 12/1/2022 268 (1,365) $ 11,000 (1) 1.678% One-Month LIBOR 8/1/2019 8/1/2026 495 (234) $ 22,925 (2) 0.573% One-Month LIBOR 4/1/2020 3/26/2025 1,436 355 $ 50,000 (3) 1.908% One-Month LIBOR 9/1/2016 N/A — (684) $ 2,468 $ (3,289) (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. (3) We cash settled this swap and accrued interest thereon for $625,000 on January 28, 2022. Each of these swaps was designated as a cash flow hedge of interest rate risk except for the swap with a $50.0 million notional amount for which we discontinued hedge accounting in December 2021. 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 June 30, December 31, 2021 Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets, net $ 2,468 $ 355 Interest rate swaps designated as cash flow hedges Other liabilities $ — $ (2,960) Interest rate swap not designated Other liabilities $ — $ (684) The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): Amount of Income (Loss) Recognized in Amount of Loss Reclassified from AOCI into Interest Expense on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended June 30, For the Six Months Ended June 30, For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 2022 2021 2022 2021 Interest rate derivatives $ 1,008 $ (240) $ 3,545 $ 544 $ (754) $ (1,203) $ (1,757) $ (2,378) Based on the fair value of our derivatives as of June 30, 2022, we estimate that approximately $1.0 million of gains will be reclassified from accumulated other comprehensive income (“ AOCI”) as a decrease to interest expense over the next 12 months. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2022 | |
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 Six Months Ended June 30, 2022 2021 Beginning balance $ 26,898 $ 25,430 Distributions to noncontrolling interests (1,375) (1,165) Net income attributable to noncontrolling interests 1,306 1,153 Adjustment to arrive at fair value of interests (77) 622 Ending balance $ 26,752 $ 26,040 |
Equity
Equity | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Equity | Equity In May 2022, we entered into an at-the-market (“ATM”) stock offering program (the “2022 ATM Program”) that replaced a similar program established in 2018 (the “2018 ATM Program”) because we replaced the registration statement under which the 2018 ATM Program was registered with a new registration statement. Under the 2022 ATM Program, we may offer and sell common shares in at-the-market stock offerings having an aggregate gross sales price of up to $300 million and may also, at our discretion, sell common shares under forward equity sales agreements. As of June 30, 2022, we had not issued any shares under the 2022 ATM Program. We declared dividends per common share of $0.275 in the three months ended June 30, 2022 and 2021 and $0.550 in the six months ended June 30, 2022 and 2021. 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 | 6 Months Ended |
Jun. 30, 2022 | |
Credit Loss [Abstract] | |
Credit Losses, Financial Assets and Other Instruments | Credit Losses, Financial Assets and Other Instruments The table below sets forth the allowance for credit losses activity for the six months ended June 30, 2022 and 2021 (in thousands): Investing Receivables Tenant Notes Other Assets (2) Total December 31, 2021 $ 1,599 $ 1,057 $ 913 $ 3,569 Credit loss expense (recoveries) 46 (76) (61) (91) June 30, 2022 $ 1,645 $ 981 $ 852 $ 3,478 December 31, 2020 $ 2,851 $ 1,203 $ 643 $ 4,697 Credit loss (recoveries) expense (719) (77) 82 (714) June 30, 2021 $ 2,132 $ 1,126 $ 725 $ 3,983 (1) Included in the line entitled “accounts receivable, net” on our consolidated balance sheets. (2) The balance as of June 30, 2022 and December 31, 2021 included $742,000 and $218,000, respectively, in the line entitled “accounts receivable, net” and $110,000 and $695,000, respectively, in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. The balance as of June 30, 2021 and December 31, 2020 included $89,000 and $257,000, respectively, in the line entitled “accounts receivable, net” and $636,000 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 June 30, 2022 (in thousands): Origination Year 2017 and Earlier 2018 2019 2020 2021 Total Investing receivables: Credit risk classification: Investment grade $ 73,478 $ — $ — $ 1,757 $ 6,262 $ 81,497 Non-investment grade — — 5,033 — — 5,033 Total $ 73,478 $ — $ 5,033 $ 1,757 $ 6,262 $ 86,530 Tenant notes receivable: Credit risk classification: Investment grade $ — $ 855 $ 52 $ 234 $ — $ 1,141 Non-investment grade 180 115 108 1,646 — 2,049 Total $ 180 $ 970 $ 160 $ 1,880 $ — $ 3,190 Sales-type lease receivables: Credit risk classification: Investment grade $ — $ — $ — $ 5,934 $ — $ 5,934 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 June 2022. 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 June 30, 2022 and December 31, 2021 were not significant. We did not recognize any interest income on notes receivable on nonaccrual status during the three or six months ended June 30, 2022 and 2021. |
Information by Business Segment
Information by Business Segment | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Information by Business Segment | Information by Business SegmentWe have the following reportable segments: Defense/IT Locations; Regional Office; Wholesale Data Center (the only property in which we sold on January 25, 2022); 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 (“NoVA Defense/IT”); Lackland Air Force Base (in San Antonio); locations serving the U.S. Navy (“Navy Support”), 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). Our segment reporting included below reflects our retrospective reclassification of: certain activities to our Other reportable segment from our Wholesale Data Center reportable segment in the fourth quarter of 2021; and two properties to our NoVA Defense/IT sub-segment from our Regional Office segment in the first quarter of 2022.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/IT Locations Fort Meade/BW Corridor NoVA Defense/IT Lackland Air Force Base Navy Support Redstone Arsenal Data Center Shells Total Defense/IT Locations Regional Office Wholesale Other Total Three Months Ended June 30, 2022 Revenues from real estate operations $ 67,589 $ 18,103 $ 15,129 $ 8,085 $ 9,308 $ 9,140 $ 127,354 $ 14,121 $ — $ 1,771 $ 143,246 Property operating expenses (23,499) (6,157) (7,520) (3,330) (3,631) (1,189) (45,326) (7,628) 50 (1,212) (54,116) UJV NOI allocable to COPT — — — — — 1,080 1,080 — — — 1,080 NOI from real estate operations $ 44,090 $ 11,946 $ 7,609 $ 4,755 $ 5,677 $ 9,031 $ 83,108 $ 6,493 $ 50 $ 559 $ 90,210 Additions to long-lived assets $ 12,341 $ 2,541 $ — $ 650 $ 224 $ — $ 15,756 $ 3,561 $ 16 $ 65 $ 19,398 Transfers from non-operating properties $ 768 $ 918 $ 521 $ (78) $ 20,037 $ 5,673 $ 27,839 $ 30 $ — $ — $ 27,869 Three Months Ended June 30, 2021 Revenues from real estate operations $ 64,840 $ 15,626 $ 13,688 $ 8,445 $ 8,775 $ 8,070 $ 119,444 $ 15,970 $ 7,204 $ 1,805 $ 144,423 Property operating expenses (21,714) (5,917) (7,506) (3,227) (2,968) (777) (42,109) (7,463) (3,828) (1,216) (54,616) UJV NOI allocable to COPT — — — — — 973 973 — — — 973 NOI from real estate operations $ 43,126 $ 9,709 $ 6,182 $ 5,218 $ 5,807 $ 8,266 $ 78,308 $ 8,507 $ 3,376 $ 589 $ 90,780 Additions to long-lived assets $ 11,511 $ 1,172 $ — $ 1,205 $ 3,053 $ — $ 16,941 $ 3,939 $ 121 $ 9 $ 21,010 Transfers from non-operating properties $ 784 $ 25 $ 49,218 $ — $ 1,288 $ 1,017 $ 52,332 $ 38,000 $ — $ — $ 90,332 Six Months Ended June 30, 2022 Revenues from real estate operations $ 134,803 $ 36,679 $ 29,842 $ 16,254 $ 18,503 $ 16,645 $ 252,726 $ 29,203 $ 1,980 $ 3,597 $ 287,506 Property operating expenses (49,283) (13,026) (14,592) (6,801) (7,366) (2,199) (93,267) (15,558) (975) (2,468) (112,268) UJV NOI allocable to COPT — — — — — 2,160 2,160 — — — 2,160 NOI from real estate operations $ 85,520 $ 23,653 $ 15,250 $ 9,453 $ 11,137 $ 16,606 $ 161,619 $ 13,645 $ 1,005 $ 1,129 $ 177,398 Additions to long-lived assets $ 24,126 $ 4,730 $ — $ 1,390 $ 459 $ — $ 30,705 $ 7,894 $ (35) $ 66 $ 38,630 Transfers from non-operating properties $ 6,137 $ 1,237 $ 939 $ 6,298 $ 20,113 $ 86,876 $ 121,600 $ 301 $ — $ — $ 121,901 Segment assets at June 30, 2022 $ 1,331,828 $ 488,597 $ 196,723 $ 172,873 $ 316,008 $ 435,252 $ 2,941,281 $ 534,257 $ — $ 3,878 $ 3,479,416 Six Months Ended June 30, 2021 Revenues from real estate operations $ 131,286 $ 31,811 $ 26,243 $ 16,843 $ 17,028 $ 16,857 $ 240,068 $ 31,673 $ 14,538 $ 3,308 $ 289,587 Property operating expenses (46,385) (12,253) (14,380) (6,660) (5,522) (1,859) (87,059) (14,667) (7,651) (2,213) (111,590) UJV NOI allocable to COPT — — — — — 1,890 1,890 — — — 1,890 NOI from real estate operations $ 84,901 $ 19,558 $ 11,863 $ 10,183 $ 11,506 $ 16,888 $ 154,899 $ 17,006 $ 6,887 $ 1,095 $ 179,887 Additions to long-lived assets $ 18,392 $ 1,470 $ — $ 1,757 $ 3,311 $ — $ 24,930 $ 7,948 $ 349 $ 13 $ 33,240 Transfers from non-operating properties $ 1,140 $ 113 $ 49,269 $ — $ 14,205 $ 2,002 $ 66,729 $ 38,357 $ — $ — $ 105,086 Segment assets at June 30, 2021 $ 1,266,622 $ 403,442 $ 189,418 $ 174,633 $ 295,672 $ 353,797 $ 2,683,584 $ 520,126 $ 196,209 $ 3,639 $ 3,403,558 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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Segment revenues from real estate operations $ 143,246 $ 144,423 $ 287,506 $ 289,587 Construction contract and other service revenues 42,557 19,988 95,757 36,546 Less: Revenues from discontinued operations (Note 4) — (7,204) (1,980) (14,538) Total revenues $ 185,803 $ 157,207 $ 381,283 $ 311,595 The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Segment property operating expenses $ 54,116 $ 54,616 $ 112,268 $ 111,590 Less: Property operating expenses from discontinued operations (Note 4) — (3,702) (971) (7,400) Total property operating expenses $ 54,116 $ 50,914 $ 111,297 $ 104,190 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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 UJV NOI allocable to COPT $ 1,080 $ 973 $ 2,160 $ 1,890 Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense (760) (711) (1,518) (1,404) Add: Equity in (loss) income of unconsolidated non-real estate entities (2) (2) 564 (4) Equity in income of unconsolidated entities $ 318 $ 260 $ 1,206 $ 482 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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Construction contract and other service revenues $ 42,557 $ 19,988 $ 95,757 $ 36,546 Construction contract and other service expenses (41,304) (19,082) (92,954) (34,875) NOI from service operations $ 1,253 $ 906 $ 2,803 $ 1,671 The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to income (loss) from continuing operations as reported on our consolidated statements of operations (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 NOI from real estate operations $ 90,210 $ 90,780 $ 177,398 $ 179,887 NOI from service operations 1,253 906 2,803 1,671 Interest and other income 1,818 2,228 3,711 4,093 Credit loss (expense) recoveries (225) (193) 91 714 Gain on sales of real estate (19) 40,233 (4) 39,743 Equity in income of unconsolidated entities 318 260 1,206 482 Income tax expense (4) (24) (157) (56) Depreciation and other amortization associated with real estate operations (34,812) (34,732) (69,076) (69,232) General, administrative and leasing expenses (8,355) (9,222) (16,899) (17,628) Business development expenses and land carry costs (701) (1,372) (1,484) (2,466) Interest expense (14,808) (15,942) (29,232) (33,461) UJV NOI allocable to COPT included in equity in income of unconsolidated entities (1,080) (973) (2,160) (1,890) Revenues from real estate operations from discontinued operations (Note 4) — (7,204) (1,980) (14,538) Property operating expenses from discontinued operations (Note 4) — 3,702 971 7,400 Loss on early extinguishment of debt — (25,228) (342) (58,394) Income from continuing operations $ 33,595 $ 43,219 $ 64,846 $ 36,325 The following table reconciles our segment assets to our consolidated total assets (in thousands): June 30, June 30, Segment assets $ 3,479,416 $ 3,403,558 Operating properties lease liabilities included in segment assets 29,412 29,927 Non-operating property assets 469,380 441,048 Other assets 206,985 177,499 Total consolidated assets $ 4,185,193 $ 4,052,032 The accounting policies of the segments are the same as those used to prepare our consolidated financial statements, except that discontinued operations are not presented separately for segment purposes. In the segment reporting presented above, we did not allocate interest expense, depreciation and amortization, gain on sales of real estate, loss on early extinguishment of debt 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 | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Construction contract revenue: Guaranteed maximum price $ 36,503 $ 11,388 $ 84,426 $ 13,489 Firm fixed price 3,257 2,441 6,701 3,912 Cost-plus fee 2,255 5,847 3,561 18,333 Other 542 312 1,069 812 $ 42,557 $ 19,988 $ 95,757 $ 36,546 The table below reports construction contract and other service revenues by service type (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Construction contract revenue: Construction $ 41,829 $ 18,828 $ 94,398 $ 34,584 Design 186 848 290 1,150 Other 542 312 1,069 812 $ 42,557 $ 19,988 $ 95,757 $ 36,546 We recognized an insignificant amount of revenue in the three and six months ended June 30, 2022 and 2021 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 Six Months Ended June 30, 2022 2021 Beginning balance $ 7,193 $ 13,997 Ending balance $ 4,751 $ 10,003 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 on our consolidated balance sheets. The beginning and ending balances of our contract assets were as follows (in thousands): For the Six Months Ended June 30, 2022 2021 Beginning balance $ 22,384 $ 10,343 Ending balance $ 29,223 $ 9,766 Contract liabilities are included in other liabilities on our consolidated balance sheets. Changes in contract liabilities were as follows (in thousands): For the Six Months Ended June 30, 2022 2021 Beginning balance $ 2,499 $ 4,610 Ending balance $ 2,363 $ 2,320 Portion of beginning balance recognized in revenue during: Three months ended June 30 $ 164 $ 2,070 Six months ended June 30 $ 190 $ 2,617 Revenue allocated to the remaining performance obligations under existing contracts as of June 30, 2022 that will be recognized as revenue in future periods was $62.4 million, of which we expect to recognize approximately $44 million in the six months ending December 31, 2022 and the remainder in 2023. We have no deferred incremental costs incurred to obtain or fulfill our construction contracts or other service revenues as of June 30, 2022 and December 31, 2021. Credit loss expense on construction contracts receivable and unbilled construction revenue was insignificant for the three and six months ended June 30, 2022 and 2021. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Restricted Shares During the six months ended June 30, 2022, certain employees and non-employee members of our Board of Trustees (“Trustees”) were granted a total of 165,284 restricted common shares with an aggregate grant date fair value of $4.4 million (weighted average of $26.52 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 six months ended June 30, 2022, forfeiture restrictions lapsed on 141,185 previously issued common shares; these shares had a weighted average grant date fair value of $26.28 per share, and the aggregate intrinsic value of the shares on the vesting dates was $3.7 million. 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 six months ended June 30, 2022, we granted 101,966 TB-PIUs with an aggregate grant date fair value of $2.7 million (weighted average of $26.39 per TB-PIU) to senior management team members and certain non-employee Trustees. TB-PIUs granted to senior management team members 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. 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 six months ended June 30, 2022, forfeiture restrictions lapsed on 73,056 previously issued TB-PIUs; these TB-PIUs had a weighted average grant date fair value of $26.01 per unit, and the aggregate intrinsic value of the TB-PIUs on the vesting date was $1.9 million. PB-PIUs On January 1, 2022, we granted certain senior management team members 231,838 PB-PIUs with a three-year performance period concluding on the earlier of December 31, 2024 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 $3.8 million ($32.87 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 $27.97; expected volatility for common shares of 31.7%; and a risk-free interest rate of 0.98%. Based on COPT’s TSR relative to its peer group of companies, for the 2019 PB-PIUs issued to executives that vested on December 31, 2021, we issued 156,104 PIUs in settlement of the PB-PIUs on February 1, 2022. Deferred Share Awards During the six months ended June 30, 2022, a non-employee Trustee was granted 3,941 deferred share awards with an aggregate grant date fair value of $100,000 ($25.41 per share). Deferred share awards vest on the first anniversary of the grant date, provided that the Trustee remains in his or her position. We settle deferred share awards by issuing an equivalent number of common shares upon vesting of the awards or a later date elected by the Trustee (generally upon cessation of being a Trustee). |
Earnings Per Share ("EPS")
Earnings Per Share ("EPS") | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Income from continuing operations $ 33,595 $ 43,219 $ 64,846 $ 36,325 Income from continuing operations attributable to noncontrolling interests (1,285) (1,488) (2,369) (2,068) Income from continuing operations attributable to share-based compensation awards for basic EPS (92) (134) (204) (247) Numerator for basic EPS from continuing operations attributable to COPT common shareholders 32,218 41,597 62,273 34,010 Redeemable noncontrolling interests (30) (20) (69) 7 Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS 17 11 35 9 Numerator for diluted EPS from continuing operations attributable to COPT common shareholders 32,205 41,588 62,239 34,026 Discontinued operations — 679 29,573 1,494 Discontinued operations attributable to noncontrolling interests — (9) (421) (19) Income from discontinued operations attributable to share-based compensation awards for diluted EPS — (2) (90) 3 Numerator for diluted EPS on net income attributable to COPT common shareholders $ 32,205 $ 42,256 $ 91,301 $ 35,504 Denominator (all weighted averages): Denominator for basic EPS (common shares) 112,082 111,974 112,052 111,931 Dilutive effect of redeemable noncontrolling interests 126 133 129 125 Dilutive effect of share-based compensation awards 429 297 427 280 Denominator for diluted EPS (common shares) 112,637 112,404 112,608 112,336 Basic EPS: Income from continuing operations attributable to COPT common shareholders $ 0.29 $ 0.37 $ 0.55 $ 0.30 Discontinued operations attributable to COPT common shareholders — 0.01 0.26 0.02 Net income attributable to COPT common shareholders $ 0.29 $ 0.38 $ 0.81 $ 0.32 Diluted EPS: Income from continuing operations attributable to COPT common shareholders $ 0.29 $ 0.37 $ 0.55 $ 0.30 Discontinued operations attributable to COPT common shareholders — 0.01 0.26 0.02 Net income attributable to COPT common shareholders $ 0.29 $ 0.38 $ 0.81 $ 0.32 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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Conversion of common units 1,476 1,262 1,430 1,254 Conversion of redeemable noncontrolling interests 863 776 835 799 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 June 30, 2022 and 2021 of 404,000 and 420,000, respectively, and for the six months ended June 30, 2022 and 2021 of 401,000 and 419,000, respectively; • weighted average TB-PIUs for the three months ended June 30, 2022 and 2021 of 191,000 and 166,000, respectively, and for the six months ended June 30, 2022 and 2021 of 182,000 and 148,000, respectively; and • weighted average PB-PIUs for the three and six months ended June 30, 2021 of 228,000. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022, management believes that it is reasonably possible that we could recognize a loss of up to $3.8 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 June 30, 2022. 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 June 30, 2022, we do not expect any such future fundings will be required. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These 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 of and for the year ended December 31, 2021 included in our 2021 Annual Report on Form 10-K. The unaudited consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly state our financial position and results of operations. All adjustments are of a normal recurring nature. The consolidated financial statements have been prepared using the accounting policies described in our 2021 Annual Report on Form 10-K as updated for our adoption of recent accounting pronouncements discussed below. |
Reclassifications | Reclassifications We reclassified certain amounts from prior periods to conform to the current period presentation of our consolidated financial statements with no effect on previously reported net income or equity, including amounts reclassified in conjunction with the transfer of a wholesale data center to discontinued operations in the fourth quarter of 2021. We provide disclosure regarding our discontinued operations in Note 4. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In 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) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 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 $ 1,824 $ — $ — $ 1,824 Other 57 — — 57 Other marketable securities (1) 32 — — 32 Interest rate derivatives (1) — 2,468 — 2,468 Total assets $ 1,913 $ 2,468 $ — $ 4,381 Liabilities: Deferred compensation plan liability (2) $ — $ 1,881 $ — $ 1,881 (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) | 6 Months Ended |
Jun. 30, 2022 | |
Real Estate [Abstract] | |
Schedule of operating properties, net | Operating properties, net consisted of the following (in thousands): June 30, December 31, 2021 Land $ 584,878 $ 572,900 Buildings and improvements 3,809,623 3,670,133 Less: Accumulated depreciation (1,213,711) (1,152,523) Operating properties, net $ 3,180,790 $ 3,090,510 |
Disposal Groups, Including Discontinued Operations | The table below sets forth the components of the property’s assets classified as held for sale on our consolidated balance sheet as of December 31, 2021 (in thousands): Properties, net $ 191,857 Deferred rent receivable 462 Intangible assets on property acquisitions, net 73 Deferred leasing costs, net 307 Assets held for sale, net $ 192,699 The table below sets forth the property’s results of operations included in discontinued operations on our consolidated statements of operations and its operating and investing cash flows included on our consolidated statements of cash flows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) Revenues from real estate operations $ — $ 7,204 $ 1,980 $ 14,538 Property operating expenses — (3,702) (971) (7,400) Depreciation and amortization associated with real estate operations — (2,823) — (5,644) Gain on sale of real estate — — 28,564 — Discontinued operations $ — $ 679 $ 29,573 $ 1,494 Cash flows from operating activities $ 5,497 $ 8,938 Cash flows from investing activities $ 220,549 $ (577) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, For the Six Months Ended June 30, Lease revenue (1) 2022 2021 2022 2021 Fixed $ 112,691 $ 107,823 $ 223,858 $ 214,758 Variable 29,586 28,631 59,808 58,986 $ 142,277 $ 136,454 $ 283,666 $ 273,744 (1) Excludes lease revenue from discontinued operations of which: $5.6 million was fixed and $1.6 million was variable for the three months ended June 30, 2021; and $1.5 million and $11.1 million was fixed and $527,000 and $3.4 million was variable for the six months ended June 30, 2022 and 2021, respectively. |
Sales-type Leases Fixed Contractual Payments Due | Fixed contractual payments due under our property leases were as follows (in thousands): As of June 30, 2022 Year Ending December 31, Operating leases Sales-type leases 2022 (1) $ 223,948 $ 480 2023 420,071 960 2024 372,126 960 2025 285,179 960 2026 221,782 960 Thereafter 1,055,808 3,556 Total contractual payments $ 2,578,914 7,876 Less: Amount representing interest (1,942) Net investment in sales-type leases $ 5,934 (1) Represents the six months ending December 31, 2022. |
Operating Leases Fixed Contractual Payments Due | Fixed contractual payments due under our property leases were as follows (in thousands): As of June 30, 2022 Year Ending December 31, Operating leases Sales-type leases 2022 (1) $ 223,948 $ 480 2023 420,071 960 2024 372,126 960 2025 285,179 960 2026 221,782 960 Thereafter 1,055,808 3,556 Total contractual payments $ 2,578,914 7,876 Less: Amount representing interest (1,942) Net investment in sales-type leases $ 5,934 (1) Represents the six months ending December 31, 2022. |
Right-of-Use Assets and Lease Liabilities | Our property right-of-use assets consisted of the following (in thousands): Leases Balance Sheet Location June 30, 2022 December 31, 2021 Right-of-use assets Operating leases - Property Property - operating right-of-use assets $ 38,056 $ 38,361 Finance leases - Property Prepaid expenses and other assets, net 2,222 2,238 Total right-of-use assets $ 40,278 $ 40,599 Our property lease liabilities reported on our consolidated balance sheets consisted of the following (in thousands): Leases Balance Sheet Location June 30, 2022 December 31, 2021 Lease liabilities Operating leases - Property Property - operating lease liabilities $ 29,412 $ 29,342 |
Lease Costs | The table below presents our total property lease cost (in thousands): Statement of Operations Location For the Three Months Ended June 30, For the Six Months Ended June 30, Lease cost 2022 2021 2022 2021 Operating lease cost Property leases - fixed Property operating expenses $ 1,032 $ 1,013 $ 2,051 $ 1,986 Property leases - variable Property operating expenses 17 10 33 20 Finance lease cost Amortization of property right-of-use assets Property operating expenses 8 9 16 18 $ 1,057 $ 1,032 $ 2,100 $ 2,024 The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands): For the Six Months Ended June 30, Supplemental cash flow information 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 1,676 $ 1,586 Financing cash flows for financing leases $ — $ 10 |
Operating Lease, Liability, Maturity | Payments on property operating leases were due as follows (in thousands): Year Ending December 31, June 30, 2022 2022 (1) $ 1,679 2023 3,399 2024 3,451 2025 1,797 2026 1,578 Thereafter 125,934 Total lease payments 137,838 Less: Amount representing interest (108,426) Lease liability $ 29,412 (1) Represents the six months ending December 31, 2022. |
Real Estate Joint Ventures (Tab
Real Estate Joint Ventures (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 (dollars in thousands): Nominal Ownership % June 30, 2022 (1) Date Acquired Total Encumbered Assets Total Liabilities Entity Location LW Redstone Company, LLC (2) 3/23/2010 85% Huntsville, Alabama $ 547,429 $ 88,065 $ 108,738 Stevens Investors, LLC (3) 8/11/2015 95% Washington, DC 167,443 — 904 M Square Associates, LLC 6/26/2007 50% College Park, Maryland 102,419 60,153 51,802 $ 817,291 $ 148,218 $ 161,444 (1) Excludes amounts eliminated in consolidation. (2) We fund all capital requirements. Our partner generally receives distributions of the first $1.2 million of annual operating cash flows and we receive the remainder. (3) As of June 30, 2022, we also had a $112.0 million construction loan to the joint venture, which is eliminated in consolidation, that carries an interest rate of LIBOR plus 2.35% and had a balance of $95.3 million; 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. |
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 June 30, 2022 December 31, 2021 B RE COPT DC JV II LLC (2) 10/30/2020 10% 8 $ 15,291 $ 15,579 BREIT COPT DC JV LLC 6/20/2019 10% 9 11,971 12,460 B RE COPT DC JV III LLC 6/2/2021 10% 2 11,755 11,850 19 $ 39,017 $ 39,889 (1) Included in the line entitled “investment in unconsolidated real estate joint ventures” on our consolidated balance sheets. |
Investing Receivables (Tables)
Investing Receivables (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Schedule of investing receivables | Investing receivables consisted of the following (in thousands): June 30, December 31, 2021 Notes receivable from the City of Huntsville $ 81,497 $ 77,784 Other investing loans receivable 5,033 6,041 Amortized cost basis 86,530 83,825 Allowance for credit losses (1,645) (1,599) Investing receivables, net $ 84,885 $ 82,226 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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): June 30, December 31, 2021 Construction contract costs in excess of billings, net $ 29,223 $ 22,384 Furniture, fixtures and equipment, net 9,014 9,599 Deposits 7,154 3,910 Non-real estate equity investments 6,107 5,544 Prepaid expenses 6,066 20,058 Net investment in sales-type leases 5,934 6,194 Restricted cash 4,912 4,054 Interest rate derivatives 2,468 355 Property - finance right-of-use assets 2,222 2,238 Marketable securities in deferred compensation plan 1,881 2,556 Deferred tax asset, net (1) 1,685 1,841 Deferred financing costs, net (2) 746 1,314 Other assets 1,350 1,443 Prepaid expenses and other assets, net $ 78,762 $ 81,490 (1) Includes a valuation allowance of $24,000 as of June 30, 2022 and December 31, 2021. (2) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. |
Debt, Net (Tables)
Debt, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Our debt consisted of the following (dollars in thousands): Carrying Value (1) as of June 30, December 31, 2021 June 30, 2022 Stated Interest Rates Scheduled Maturity Mortgage and Other Secured Debt: Fixed rate mortgage debt $ 85,708 $ 86,960 3.82% - 4.62% (2) 2023-2026 Variable rate secured debt 33,530 33,667 LIBOR + 1.45% to 1.55% (3) 2025-2026 Total mortgage and other secured debt 119,238 120,627 Revolving Credit Facility (4) 181,000 76,000 LIBOR + 0.775% to 1.45% (5) March 2023 (4) Term Loan Facility (6) 99,904 299,420 LIBOR + 1.00% to 1.65% (7) December 2022 Unsecured Senior Notes 2.25%, $400,000 aggregate principal 396,013 395,491 2.25% (8) March 2026 2.00%, $400,000 aggregate principal 396,749 396,512 2.00% (9) January 2029 2.75%, $600,000 aggregate principal 589,588 589,060 2.75% (10) April 2031 2.90%, $400,000 aggregate principal 394,643 394,441 2.90% (11) December 2033 Unsecured note payable 676 753 0% (12) May 2026 Total debt, net $ 2,177,811 $ 2,272,304 (1) The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $4.9 million as of June 30, 2022 and $5.8 million as of December 31, 2021. (2) The weighted average interest rate on our fixed rate mortgage debt was 4.07% as of June 30, 2022. (3) The weighted average interest rate on our variable rate secured debt was 2.58% as of June 30, 2022. (4) 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. (5) The weighted average interest rate on the Revolving Credit Facility was 2.38% as of June 30, 2022. (6) We repaid $200.0 million of this loan during the six months ended June 30, 2022. (7) The interest rate on this loan was 2.31% as of June 30, 2022. (8) The carrying value of these notes reflects an unamortized discount totaling $3.2 million as of June 30, 2022 and $3.6 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.48%. (9) The carrying value of these notes reflects an unamortized discount totaling $2.3 million as of June 30, 2022 and $2.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.09%. (10) The carrying value of these notes reflects an unamortized discount totaling $9.0 million as of June 30, 2022 and $9.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 2.94%. (11) The carrying value of these notes reflects an unamortized discount totaling $4.4 million as of June 30, 2022 and $4.5 million as of December 31, 2021. The effective interest rate under the notes, including amortization of the issuance costs, was 3.01%. (12) 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 $85,000 as of June 30, 2022 and $108,000 as of December 31, 2021. |
Schedule of Debt Maturities | Our debt matures on the following schedule (in thousands): Year Ending December 31, June 30, 2022 2022 (1) $ 101,715 2023 199,953 2024 29,983 2025 23,717 2026 446,300 Thereafter 1,400,000 Total $ 2,201,668 (2) (1) Represents the six months ending December 31, 2022. (2) Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $23.9 million. |
Schedule of the fair value of debt | The following table sets forth information pertaining to the fair value of our debt (in thousands): June 30, 2022 December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Fixed-rate debt Unsecured Senior Notes $ 1,776,993 $ 1,739,316 $ 1,775,504 $ 1,809,950 Other fixed-rate debt 86,384 82,707 87,713 87,339 Variable-rate debt 314,434 313,220 409,087 409,639 $ 2,177,811 $ 2,135,243 $ 2,272,304 $ 2,306,928 |
Interest Rate Derivatives (Tabl
Interest Rate Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 (dollars in thousands): Fair Value at Notional Amount Fixed Rate Floating Rate Index Effective Date Expiration Date June 30, December 31, 2021 $ 100,000 1.901% One-Month LIBOR 9/1/2016 12/1/2022 $ 269 $ (1,361) $ 100,000 1.905% One-Month LIBOR 9/1/2016 12/1/2022 268 (1,365) $ 11,000 (1) 1.678% One-Month LIBOR 8/1/2019 8/1/2026 495 (234) $ 22,925 (2) 0.573% One-Month LIBOR 4/1/2020 3/26/2025 1,436 355 $ 50,000 (3) 1.908% One-Month LIBOR 9/1/2016 N/A — (684) $ 2,468 $ (3,289) (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. (3) We cash settled this swap and accrued interest thereon for $625,000 on January 28, 2022. |
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 June 30, December 31, 2021 Interest rate swaps designated as cash flow hedges Prepaid expenses and other assets, net $ 2,468 $ 355 Interest rate swaps designated as cash flow hedges Other liabilities $ — $ (2,960) Interest rate swap not designated Other liabilities $ — $ (684) |
Schedule of effect of interest rate derivatives on consolidated statements of operations and comprehensive income | The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands): Amount of Income (Loss) Recognized in Amount of Loss Reclassified from AOCI into Interest Expense on Statement of Operations Derivatives in Hedging Relationships For the Three Months Ended June 30, For the Six Months Ended June 30, For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 2022 2021 2022 2021 Interest rate derivatives $ 1,008 $ (240) $ 3,545 $ 544 $ (754) $ (1,203) $ (1,757) $ (2,378) |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 Six Months Ended June 30, 2022 2021 Beginning balance $ 26,898 $ 25,430 Distributions to noncontrolling interests (1,375) (1,165) Net income attributable to noncontrolling interests 1,306 1,153 Adjustment to arrive at fair value of interests (77) 622 Ending balance $ 26,752 $ 26,040 |
Credit Losses, Financial Asse_2
Credit Losses, Financial Assets and Other Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Credit Loss [Abstract] | |
Credit Losses, Financial Assets and Other Instruments, Allowance for Credit Loss | The table below sets forth the allowance for credit losses activity for the six months ended June 30, 2022 and 2021 (in thousands): Investing Receivables Tenant Notes Other Assets (2) Total December 31, 2021 $ 1,599 $ 1,057 $ 913 $ 3,569 Credit loss expense (recoveries) 46 (76) (61) (91) June 30, 2022 $ 1,645 $ 981 $ 852 $ 3,478 December 31, 2020 $ 2,851 $ 1,203 $ 643 $ 4,697 Credit loss (recoveries) expense (719) (77) 82 (714) June 30, 2021 $ 2,132 $ 1,126 $ 725 $ 3,983 (1) Included in the line entitled “accounts receivable, net” on our consolidated balance sheets. (2) The balance as of June 30, 2022 and December 31, 2021 included $742,000 and $218,000, respectively, in the line entitled “accounts receivable, net” and $110,000 and $695,000, respectively, in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. The balance as of June 30, 2021 and December 31, 2020 included $89,000 and $257,000, respectively, in the line entitled “accounts receivable, net” and $636,000 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 June 30, 2022 (in thousands): Origination Year 2017 and Earlier 2018 2019 2020 2021 Total Investing receivables: Credit risk classification: Investment grade $ 73,478 $ — $ — $ 1,757 $ 6,262 $ 81,497 Non-investment grade — — 5,033 — — 5,033 Total $ 73,478 $ — $ 5,033 $ 1,757 $ 6,262 $ 86,530 Tenant notes receivable: Credit risk classification: Investment grade $ — $ 855 $ 52 $ 234 $ — $ 1,141 Non-investment grade 180 115 108 1,646 — 2,049 Total $ 180 $ 970 $ 160 $ 1,880 $ — $ 3,190 Sales-type lease receivables: Credit risk classification: Investment grade $ — $ — $ — $ 5,934 $ — $ 5,934 |
Information by Business Segme_2
Information by Business Segment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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/IT Locations Fort Meade/BW Corridor NoVA Defense/IT Lackland Air Force Base Navy Support Redstone Arsenal Data Center Shells Total Defense/IT Locations Regional Office Wholesale Other Total Three Months Ended June 30, 2022 Revenues from real estate operations $ 67,589 $ 18,103 $ 15,129 $ 8,085 $ 9,308 $ 9,140 $ 127,354 $ 14,121 $ — $ 1,771 $ 143,246 Property operating expenses (23,499) (6,157) (7,520) (3,330) (3,631) (1,189) (45,326) (7,628) 50 (1,212) (54,116) UJV NOI allocable to COPT — — — — — 1,080 1,080 — — — 1,080 NOI from real estate operations $ 44,090 $ 11,946 $ 7,609 $ 4,755 $ 5,677 $ 9,031 $ 83,108 $ 6,493 $ 50 $ 559 $ 90,210 Additions to long-lived assets $ 12,341 $ 2,541 $ — $ 650 $ 224 $ — $ 15,756 $ 3,561 $ 16 $ 65 $ 19,398 Transfers from non-operating properties $ 768 $ 918 $ 521 $ (78) $ 20,037 $ 5,673 $ 27,839 $ 30 $ — $ — $ 27,869 Three Months Ended June 30, 2021 Revenues from real estate operations $ 64,840 $ 15,626 $ 13,688 $ 8,445 $ 8,775 $ 8,070 $ 119,444 $ 15,970 $ 7,204 $ 1,805 $ 144,423 Property operating expenses (21,714) (5,917) (7,506) (3,227) (2,968) (777) (42,109) (7,463) (3,828) (1,216) (54,616) UJV NOI allocable to COPT — — — — — 973 973 — — — 973 NOI from real estate operations $ 43,126 $ 9,709 $ 6,182 $ 5,218 $ 5,807 $ 8,266 $ 78,308 $ 8,507 $ 3,376 $ 589 $ 90,780 Additions to long-lived assets $ 11,511 $ 1,172 $ — $ 1,205 $ 3,053 $ — $ 16,941 $ 3,939 $ 121 $ 9 $ 21,010 Transfers from non-operating properties $ 784 $ 25 $ 49,218 $ — $ 1,288 $ 1,017 $ 52,332 $ 38,000 $ — $ — $ 90,332 Six Months Ended June 30, 2022 Revenues from real estate operations $ 134,803 $ 36,679 $ 29,842 $ 16,254 $ 18,503 $ 16,645 $ 252,726 $ 29,203 $ 1,980 $ 3,597 $ 287,506 Property operating expenses (49,283) (13,026) (14,592) (6,801) (7,366) (2,199) (93,267) (15,558) (975) (2,468) (112,268) UJV NOI allocable to COPT — — — — — 2,160 2,160 — — — 2,160 NOI from real estate operations $ 85,520 $ 23,653 $ 15,250 $ 9,453 $ 11,137 $ 16,606 $ 161,619 $ 13,645 $ 1,005 $ 1,129 $ 177,398 Additions to long-lived assets $ 24,126 $ 4,730 $ — $ 1,390 $ 459 $ — $ 30,705 $ 7,894 $ (35) $ 66 $ 38,630 Transfers from non-operating properties $ 6,137 $ 1,237 $ 939 $ 6,298 $ 20,113 $ 86,876 $ 121,600 $ 301 $ — $ — $ 121,901 Segment assets at June 30, 2022 $ 1,331,828 $ 488,597 $ 196,723 $ 172,873 $ 316,008 $ 435,252 $ 2,941,281 $ 534,257 $ — $ 3,878 $ 3,479,416 Six Months Ended June 30, 2021 Revenues from real estate operations $ 131,286 $ 31,811 $ 26,243 $ 16,843 $ 17,028 $ 16,857 $ 240,068 $ 31,673 $ 14,538 $ 3,308 $ 289,587 Property operating expenses (46,385) (12,253) (14,380) (6,660) (5,522) (1,859) (87,059) (14,667) (7,651) (2,213) (111,590) UJV NOI allocable to COPT — — — — — 1,890 1,890 — — — 1,890 NOI from real estate operations $ 84,901 $ 19,558 $ 11,863 $ 10,183 $ 11,506 $ 16,888 $ 154,899 $ 17,006 $ 6,887 $ 1,095 $ 179,887 Additions to long-lived assets $ 18,392 $ 1,470 $ — $ 1,757 $ 3,311 $ — $ 24,930 $ 7,948 $ 349 $ 13 $ 33,240 Transfers from non-operating properties $ 1,140 $ 113 $ 49,269 $ — $ 14,205 $ 2,002 $ 66,729 $ 38,357 $ — $ — $ 105,086 Segment assets at June 30, 2021 $ 1,266,622 $ 403,442 $ 189,418 $ 174,633 $ 295,672 $ 353,797 $ 2,683,584 $ 520,126 $ 196,209 $ 3,639 $ 3,403,558 |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Segment revenues from real estate operations $ 143,246 $ 144,423 $ 287,506 $ 289,587 Construction contract and other service revenues 42,557 19,988 95,757 36,546 Less: Revenues from discontinued operations (Note 4) — (7,204) (1,980) (14,538) Total revenues $ 185,803 $ 157,207 $ 381,283 $ 311,595 |
Schedule of reconciliation of segment property operating expenses to property operating expenses | The following table reconciles our segment property operating expenses to property operating expenses as reported on our consolidated statements of operations (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Segment property operating expenses $ 54,116 $ 54,616 $ 112,268 $ 111,590 Less: Property operating expenses from discontinued operations (Note 4) — (3,702) (971) (7,400) Total property operating expenses $ 54,116 $ 50,914 $ 111,297 $ 104,190 |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 UJV NOI allocable to COPT $ 1,080 $ 973 $ 2,160 $ 1,890 Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense (760) (711) (1,518) (1,404) Add: Equity in (loss) income of unconsolidated non-real estate entities (2) (2) 564 (4) Equity in income of unconsolidated entities $ 318 $ 260 $ 1,206 $ 482 |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Construction contract and other service revenues $ 42,557 $ 19,988 $ 95,757 $ 36,546 Construction contract and other service expenses (41,304) (19,082) (92,954) (34,875) NOI from service operations $ 1,253 $ 906 $ 2,803 $ 1,671 |
Schedule of reconciliation of net operating income from real estate operations and service operations to income from continuing operations | The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to income (loss) from continuing operations as reported on our consolidated statements of operations (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 NOI from real estate operations $ 90,210 $ 90,780 $ 177,398 $ 179,887 NOI from service operations 1,253 906 2,803 1,671 Interest and other income 1,818 2,228 3,711 4,093 Credit loss (expense) recoveries (225) (193) 91 714 Gain on sales of real estate (19) 40,233 (4) 39,743 Equity in income of unconsolidated entities 318 260 1,206 482 Income tax expense (4) (24) (157) (56) Depreciation and other amortization associated with real estate operations (34,812) (34,732) (69,076) (69,232) General, administrative and leasing expenses (8,355) (9,222) (16,899) (17,628) Business development expenses and land carry costs (701) (1,372) (1,484) (2,466) Interest expense (14,808) (15,942) (29,232) (33,461) UJV NOI allocable to COPT included in equity in income of unconsolidated entities (1,080) (973) (2,160) (1,890) Revenues from real estate operations from discontinued operations (Note 4) — (7,204) (1,980) (14,538) Property operating expenses from discontinued operations (Note 4) — 3,702 971 7,400 Loss on early extinguishment of debt — (25,228) (342) (58,394) Income from continuing operations $ 33,595 $ 43,219 $ 64,846 $ 36,325 |
Schedule of reconciliation of segment assets to total assets | The following table reconciles our segment assets to our consolidated total assets (in thousands): June 30, June 30, Segment assets $ 3,479,416 $ 3,403,558 Operating properties lease liabilities included in segment assets 29,412 29,927 Non-operating property assets 469,380 441,048 Other assets 206,985 177,499 Total consolidated assets $ 4,185,193 $ 4,052,032 |
Construction Contract and Oth_2
Construction Contract and Other Service Revenues (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Construction contract revenue: Guaranteed maximum price $ 36,503 $ 11,388 $ 84,426 $ 13,489 Firm fixed price 3,257 2,441 6,701 3,912 Cost-plus fee 2,255 5,847 3,561 18,333 Other 542 312 1,069 812 $ 42,557 $ 19,988 $ 95,757 $ 36,546 The table below reports construction contract and other service revenues by service type (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Construction contract revenue: Construction $ 41,829 $ 18,828 $ 94,398 $ 34,584 Design 186 848 290 1,150 Other 542 312 1,069 812 $ 42,557 $ 19,988 $ 95,757 $ 36,546 |
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 Six Months Ended June 30, 2022 2021 Beginning balance $ 7,193 $ 13,997 Ending balance $ 4,751 $ 10,003 For the Six Months Ended June 30, 2022 2021 Beginning balance $ 22,384 $ 10,343 Ending balance $ 29,223 $ 9,766 For the Six Months Ended June 30, 2022 2021 Beginning balance $ 2,499 $ 4,610 Ending balance $ 2,363 $ 2,320 Portion of beginning balance recognized in revenue during: Three months ended June 30 $ 164 $ 2,070 Six months ended June 30 $ 190 $ 2,617 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Income from continuing operations $ 33,595 $ 43,219 $ 64,846 $ 36,325 Income from continuing operations attributable to noncontrolling interests (1,285) (1,488) (2,369) (2,068) Income from continuing operations attributable to share-based compensation awards for basic EPS (92) (134) (204) (247) Numerator for basic EPS from continuing operations attributable to COPT common shareholders 32,218 41,597 62,273 34,010 Redeemable noncontrolling interests (30) (20) (69) 7 Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS 17 11 35 9 Numerator for diluted EPS from continuing operations attributable to COPT common shareholders 32,205 41,588 62,239 34,026 Discontinued operations — 679 29,573 1,494 Discontinued operations attributable to noncontrolling interests — (9) (421) (19) Income from discontinued operations attributable to share-based compensation awards for diluted EPS — (2) (90) 3 Numerator for diluted EPS on net income attributable to COPT common shareholders $ 32,205 $ 42,256 $ 91,301 $ 35,504 Denominator (all weighted averages): Denominator for basic EPS (common shares) 112,082 111,974 112,052 111,931 Dilutive effect of redeemable noncontrolling interests 126 133 129 125 Dilutive effect of share-based compensation awards 429 297 427 280 Denominator for diluted EPS (common shares) 112,637 112,404 112,608 112,336 Basic EPS: Income from continuing operations attributable to COPT common shareholders $ 0.29 $ 0.37 $ 0.55 $ 0.30 Discontinued operations attributable to COPT common shareholders — 0.01 0.26 0.02 Net income attributable to COPT common shareholders $ 0.29 $ 0.38 $ 0.81 $ 0.32 Diluted EPS: Income from continuing operations attributable to COPT common shareholders $ 0.29 $ 0.37 $ 0.55 $ 0.30 Discontinued operations attributable to COPT common shareholders — 0.01 0.26 0.02 Net income attributable to COPT common shareholders $ 0.29 $ 0.38 $ 0.81 $ 0.32 |
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 June 30, For the Six Months Ended June 30, 2022 2021 2022 2021 Conversion of common units 1,476 1,262 1,430 1,254 Conversion of redeemable noncontrolling interests 863 776 835 799 |
Organization - Narrative 1 (Det
Organization - Narrative 1 (Details) - Jun. 30, 2022 ft² in Millions | property | ft² | 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 | 188 | ||
Area of real estate property (in sqft or acres) | ft² | 22.1 | ||
Operating Properties | Office Properties | |||
Investments in real estate | |||
Number of real estate properties | 161 | ||
Area of real estate property (in sqft or acres) | ft² | 17.1 | ||
Operating Properties | Single-tenant data centers | |||
Investments in real estate | |||
Number of real estate properties | 27 | ||
Area of real estate property (in sqft or acres) | ft² | 5 | ||
Operating Properties | Single-tenant data centers | Unconsolidated Real Estate Joint Ventures | |||
Investments in real estate | |||
Number of real estate properties | 19 | ||
Properties under development | |||
Investments in real estate | |||
Number of real estate properties | 12 | ||
Area of real estate property (in sqft or acres) | ft² | 1.9 | ||
Properties under development | Office Properties | |||
Investments in real estate | |||
Number of real estate properties | 9 | ||
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 | 1 | ||
Properties under development, expansions of fully operational properties | |||
Investments in real estate | |||
Number of real estate properties | 1 | ||
Land controlled for future development | |||
Investments in real estate | |||
Area of real estate property (in sqft or acres) | 8.4 | 710 | |
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. | 6 Months Ended |
Jun. 30, 2022 shares | |
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% |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2022 | Dec. 31, 2021 | |
Assets and liabilities measured at fair value on a recurring basis | |||
Marketable securities in deferred compensation plan | $ 1,881 | $ 2,556 | |
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% | ||
Marketable securities in deferred compensation plan | $ 1,900 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities, Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Marketable securities in deferred compensation plan | $ 1,881 | $ 2,556 |
Fair value measurement on a recurring basis | ||
Assets: | ||
Other marketable securities | 32 | |
Interest rate derivatives | 2,468 | |
Total assets | 4,381 | |
Liabilities: | ||
Deferred compensation plan liability | 1,881 | |
Fair value measurement on a recurring basis | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 1,824 | |
Fair value measurement on a recurring basis | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 57 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Other marketable securities | 32 | |
Interest rate derivatives | 0 | |
Total assets | 1,913 | |
Liabilities: | ||
Deferred compensation plan liability | 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 | 1,824 | |
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 | 57 | |
Fair value measurement on a recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Other marketable securities | 0 | |
Interest rate derivatives | 2,468 | |
Total assets | 2,468 | |
Liabilities: | ||
Deferred compensation plan liability | 1,881 | |
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 | |
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 prop
Properties, Net (Operating properties, net) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Construction Activities | ||
Operating properties, net | $ 3,180,790 | $ 3,090,510 |
Operating Properties | ||
Construction Activities | ||
Less: accumulated depreciation | (1,213,711) | (1,152,523) |
Operating properties, net | 3,180,790 | 3,090,510 |
Operating Properties | Land | ||
Construction Activities | ||
Gross | 584,878 | 572,900 |
Operating Properties | Buildings and improvements | ||
Construction Activities | ||
Gross | $ 3,809,623 | $ 3,670,133 |
Properties, Net (Narrative) (De
Properties, Net (Narrative) (Details) ft² in Thousands, $ in Millions | Jan. 25, 2022 USD ($) | Jun. 30, 2022 ft² property |
Newly developed properties placed in service | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Square footage of real estate properties (in square feet) | ft² | 363 | |
Number of real estate properties | 3 | |
Properties under development | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Square footage of real estate properties (in square feet) | ft² | 1,900 | |
Number of real estate properties | 12 | |
Properties under development, partially-operational | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of real estate properties | 1 | |
Properties under development, expansions of fully operational properties | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of real estate properties | 1 | |
9651 Hornbaker Road | Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Transaction value | $ | $ 222.5 | |
Discontinued operation, gain on disposal | $ | $ 28.6 |
Properties, Net (Schedule of As
Properties, Net (Schedule of Assets Held for Sale) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale, net | $ 0 | $ 192,699 |
Discontinued Operations, Disposed of by Sale | Wholesale Data Center | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Properties, net | 191,857 | |
Deferred rent receivable | 462 | |
Intangible assets on property acquisitions, net | 73 | |
Deferred leasing costs, net | 307 | |
Assets held for sale, net | $ 192,699 |
Properties, Net (Components of
Properties, Net (Components of Discontinued Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues from real estate operations | $ 0 | $ 7,204 | $ 1,980 | $ 14,538 |
Property operating expenses | 0 | (3,702) | (971) | (7,400) |
Discontinued operations | 0 | 679 | 29,573 | 1,494 |
Discontinued Operations, Disposed of by Sale | Wholesale Data Center | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues from real estate operations | 0 | 7,204 | 1,980 | 14,538 |
Property operating expenses | 0 | (3,702) | (971) | (7,400) |
Depreciation and amortization associated with real estate operations | 0 | (2,823) | 0 | (5,644) |
Gain on sale of real estate | 0 | 0 | 28,564 | 0 |
Discontinued operations | $ 0 | $ 679 | 29,573 | 1,494 |
Cash flows from operating activities | 5,497 | 8,938 | ||
Cash flows from investing activities | $ 220,549 | $ (577) |
Leases - Lease Revenue (Details
Leases - Lease Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Lessor, Lease, Description [Line Items] | ||||
Lease revenue | $ 142,277 | $ 136,454 | $ 283,666 | $ 273,744 |
Continuing Operations | ||||
Lessor, Lease, Description [Line Items] | ||||
Fixed | 112,691 | 107,823 | 223,858 | 214,758 |
Variable | 29,586 | 28,631 | 59,808 | 58,986 |
Lease revenue | $ 142,277 | 136,454 | 283,666 | 273,744 |
Discontinued Operations | ||||
Lessor, Lease, Description [Line Items] | ||||
Fixed | 5,600 | 1,500 | 11,100 | |
Variable | $ 1,600 | $ 527 | $ 3,400 |
Leases - Payments to be Receive
Leases - Payments to be Received (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Operating leases | |
2022 | $ 223,948 |
2023 | 420,071 |
2024 | 372,126 |
2025 | 285,179 |
2026 | 221,782 |
Thereafter | 1,055,808 |
Total contractual payments | 2,578,914 |
Sales-type leases | |
2022 | 480 |
2023 | 960 |
2024 | 960 |
2025 | 960 |
2026 | 960 |
Thereafter | 3,556 |
Total contractual payments | 7,876 |
Less: Amount representing interest | (1,942) |
Net investment in sales-type leases | $ 5,934 |
Leases - Lessee Arrangements (D
Leases - Lessee Arrangements (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Leases [Abstract] | |
Carrying value of lessee right-of-use asset | $ 40.3 |
Leases - Right-of-Use Assets an
Leases - Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating leases - Property | $ 38,056 | $ 38,361 |
Finance leases - Property | 2,222 | 2,238 |
Total right-of-use assets | 40,278 | 40,599 |
Property - operating lease liabilities | $ 29,412 | $ 29,342 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other assets, net | Prepaid expenses and other assets, net |
Leases - Narrative (Details)
Leases - Narrative (Details) | Jun. 30, 2022 |
Leases [Abstract] | |
Operating leases, Weighted average remaining lease term | 52 years |
Operating lease, Weighted average discount rate | 7.19% |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Lease costs | $ 1,057 | $ 1,032 | $ 2,100 | $ 2,024 |
Property Operating Expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Property leases - fixed | 1,032 | 1,013 | 2,051 | 1,986 |
Property leases - variable | 17 | 10 | 33 | 20 |
Finance lease cost - Amortization of property right-of-use assets | $ 8 | $ 9 | $ 16 | $ 18 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 1,676 | $ 1,586 |
Financing cash flows for financing leases | $ 0 | $ 10 |
Leases - Lease Liabilities (Det
Leases - Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | ||
2022 | $ 1,679 | |
2023 | 3,399 | |
2024 | 3,451 | |
2025 | 1,797 | |
2026 | 1,578 | |
Thereafter | 125,934 | |
Total lease payments | 137,838 | |
Less: Amount representing interest | (108,426) | |
Lease liability | $ 29,412 | $ 29,342 |
Real Estate Joint Ventures - In
Real Estate Joint Ventures - Investments in Consolidated Real Estate Joint Ventures (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | |
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 4,185,193 | $ 4,262,452 | $ 4,052,032 |
Total Liabilities | 2,462,490 | $ 2,578,479 | |
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 | 817,291 | ||
Total Liabilities | 161,444 | ||
Variable Interest Entity, Primary Beneficiary | Asset Pledged as Collateral | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 148,218 | ||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 85% | ||
Total Assets | $ 547,429 | ||
Total Liabilities | 108,738 | ||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company LLC | Asset Pledged as Collateral | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 88,065 | ||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 95% | ||
Total Assets | $ 167,443 | ||
Total Liabilities | 904 | ||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | Asset Pledged as Collateral | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 0 | ||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 50% | ||
Total Assets | $ 102,419 | ||
Total Liabilities | 51,802 | ||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | Asset Pledged as Collateral | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 60,153 |
Real Estate Joint Ventures - Na
Real Estate Joint Ventures - Narrative (Details) - Stevens Investors, LLC - Construction Loan $ in Millions | Jun. 30, 2022 USD ($) |
Real Estate [Line Items] | |
Related party transaction, amount of transaction | $ 112 |
Loans and leases receivable, related parties | $ 95.3 |
London Interbank Offered Rate (LIBOR) | |
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 | Jun. 30, 2022 USD ($) property | Dec. 31, 2021 USD ($) |
Unconsolidated Real Estate Joint Ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of real estate properties | property | 19 | |
Carrying value of Investments | $ 39,017 | $ 39,889 |
B RE COPT DC JV II LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Nominal Ownership % | 10% | |
Number of real estate properties | property | 8 | |
Carrying value of Investments | $ 15,291 | 15,579 |
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 | $ 7,100 | 7,200 |
BREIT COPT DC JV LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Nominal Ownership % | 10% | |
Number of real estate properties | property | 9 | |
Carrying value of Investments | $ 11,971 | 12,460 |
B RE COPT DC JV III LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Nominal Ownership % | 10% | |
Number of real estate properties | property | 2 | |
Carrying value of Investments | $ 11,755 | $ 11,850 |
Investing Receivables - Investi
Investing Receivables - Investing Receivables (Details) - Investing Receivables - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amortized cost basis | $ 86,530 | $ 83,825 | ||
Allowance for credit losses | (1,645) | (1,599) | $ (2,132) | $ (2,851) |
Investing receivables, net | 84,885 | 82,226 | ||
Notes receivable from the City of Huntsville | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amortized cost basis | 81,497 | 77,784 | ||
Other investing loans receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Amortized cost basis | $ 5,033 | $ 6,041 |
Investing Receivables - Narrati
Investing Receivables - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, fair value disclosure | $ 88 | $ 84 |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued interest receivable, net of allowance for credit losses | $ 2.3 | $ 5.3 |
Investing Receivables | Other investing loans receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate | 8% | |
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 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Prepaid Expense and Other Assets [Abstract] | ||||
Construction contract costs in excess of billings, net | $ 29,223 | $ 22,384 | ||
Furniture, fixtures and equipment, net | 9,014 | 9,599 | ||
Deposits | 7,154 | 3,910 | ||
Non-real estate equity investments | 6,107 | 5,544 | ||
Prepaid expenses | 6,066 | 20,058 | ||
Net investment in sales-type leases | 5,934 | 6,194 | ||
Restricted cash | 4,912 | 4,054 | $ 4,593 | $ 3,664 |
Interest rate derivatives | 2,468 | 355 | ||
Property - finance right-of-use assets | 2,222 | 2,238 | ||
Marketable securities in deferred compensation plan | 1,881 | 2,556 | ||
Deferred tax asset, net | 1,685 | 1,841 | ||
Deferred financing costs, net | 746 | 1,314 | ||
Other assets | 1,350 | 1,443 | ||
Prepaid expenses and other assets, net | 78,762 | 81,490 | ||
Deferred tax assets, valuation allowance | $ 24 | $ 24 |
Debt, Net - Schedule of Debt (D
Debt, Net - Schedule of Debt (Details) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 USD ($) extension | Jun. 30, 2022 USD ($) extension | Dec. 31, 2021 USD ($) | |
Debt | |||
Carrying Value | $ 2,177,811,000 | $ 2,177,811,000 | $ 2,272,304,000 |
Mortgage and other secured debt | |||
Debt | |||
Carrying Value | 119,238,000 | 119,238,000 | 120,627,000 |
Loans payable | |||
Debt | |||
Net deferred financing costs | $ 4,900,000 | $ 4,900,000 | 5,800,000 |
Line of Credit | Revolving Credit Facility | |||
Debt | |||
Number of extensions | extension | 2 | 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 | $ 85,708,000 | $ 85,708,000 | 86,960,000 |
Weighted average interest rate (as a percent) | 4.07% | 4.07% | |
Fixed rate mortgage debt | Mortgage and other secured debt | Minimum | |||
Debt | |||
Interest rate | 3.82% | 3.82% | |
Fixed rate mortgage debt | Mortgage and other secured debt | Maximum | |||
Debt | |||
Interest rate | 4.62% | 4.62% | |
Variable-rate secured debt | Mortgage and other secured debt | |||
Debt | |||
Carrying Value | $ 33,530,000 | $ 33,530,000 | 33,667,000 |
Variable-rate secured debt | Mortgage and other secured debt | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Weighted average interest rate (as a percent) | 2.58% | 2.58% | |
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 | $ 181,000,000 | $ 181,000,000 | 76,000,000 |
Aggregate additional borrowing capacity available | $ 500,000,000 | $ 500,000,000 | |
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Weighted average interest rate (as a percent) | 2.38% | 2.38% | |
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 | $ 99,904,000 | $ 99,904,000 | 299,420,000 |
Repayments of long-term debt | $ 200,000,000 | ||
Term Loan Facility | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Interest rate | 2.31% | 2.31% | |
Term Loan Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread | 1% | ||
Term Loan Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread | 1.65% | ||
2.25%, $400,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Interest rate | 2.25% | 2.25% | |
Debt instrument, face amount | $ 400,000,000 | $ 400,000,000 | |
Carrying Value | 396,013,000 | 396,013,000 | 395,491,000 |
Unamortized discount included in carrying value | $ 3,200,000 | $ 3,200,000 | 3,600,000 |
Effective interest rate on debt | 2.48% | 2.48% | |
2.00%, $400,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Interest rate | 2% | 2% | |
Debt instrument, face amount | $ 400,000,000 | $ 400,000,000 | |
Carrying Value | 396,749,000 | 396,749,000 | 396,512,000 |
Unamortized discount included in carrying value | $ 2,300,000 | $ 2,300,000 | 2,500,000 |
Effective interest rate on debt | 2.09% | 2.09% | |
2.75%, $600,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Interest rate | 2.75% | 2.75% | |
Debt instrument, face amount | $ 600,000,000 | $ 600,000,000 | |
Carrying Value | 589,588,000 | 589,588,000 | 589,060,000 |
Unamortized discount included in carrying value | $ 9,000,000 | $ 9,000,000 | 9,500,000 |
Effective interest rate on debt | 2.94% | 2.94% | |
2.90%, $400,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Interest rate | 2.90% | 2.90% | |
Debt instrument, face amount | $ 400,000,000 | $ 400,000,000 | |
Carrying Value | 394,643,000 | 394,643,000 | 394,441,000 |
Unamortized discount included in carrying value | $ 4,400,000 | $ 4,400,000 | 4,500,000 |
Effective interest rate on debt | 3.01% | 3.01% | |
Unsecured note payable | |||
Debt | |||
Interest rate | 0% | 0% | |
Carrying Value | $ 676,000 | $ 676,000 | 753,000 |
Unamortized discount included in carrying value | $ 85,000 | $ 85,000 | $ 108,000 |
Debt, Net (Debt Maturities) (De
Debt, Net (Debt Maturities) (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Schedule on basis of which debt matures | |
2022 | $ 101,715 |
2023 | 199,953 |
2024 | 29,983 |
2025 | 23,717 |
2026 | 446,300 |
Thereafter | 1,400,000 |
Total | 2,201,668 |
Net discounts and deferred financing costs | $ 23,900 |
Debt, Net (Narrative) (Details)
Debt, Net (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Disclosure [Abstract] | ||||
Interest costs capitalized | $ 1.4 | $ 1.7 | $ 2.9 | $ 3.5 |
Debt, Net - Fair Value of Debt
Debt, Net - Fair Value of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Carrying Amount | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 2,177,811 | $ 2,272,304 |
Carrying Amount | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 1,776,993 | 1,775,504 |
Carrying Amount | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 86,384 | 87,713 |
Carrying Amount | Variable-rate secured debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 314,434 | 409,087 |
Estimated Fair Value | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 2,135,243 | 2,306,928 |
Estimated Fair Value | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 1,739,316 | 1,809,950 |
Estimated Fair Value | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 82,707 | 87,339 |
Estimated Fair Value | Variable-rate secured debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 313,220 | $ 409,639 |
Interest Rate Derivatives - Key
Interest Rate Derivatives - Key Terms and Fair Value of Interest Rate Derivative (Details) - USD ($) $ in Thousands | Jan. 28, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Fair values of interest rate swap derivatives | |||
Fair value of interest rate swaps | $ 2,468 | $ (3,289) | |
Designated | Interest rate swap, effective September 1, 2016, swap one | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed Rate | 1.901% | ||
Fair value of interest rate swaps | $ 269 | (1,361) | |
Designated | Interest rate swap, effective September 1, 2016, swap two | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 100,000 | ||
Fixed Rate | 1.905% | ||
Fair value of interest rate swaps | $ 268 | (1,365) | |
Designated | Interest rate swap, effective August 1, 2019 | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 11,000 | ||
Fixed Rate | 1.678% | ||
Fair value of interest rate swaps | $ 495 | (234) | |
Notional amount of interest rate derivatives after scheduled amortization | 10,000 | ||
Designated | Interest rate swap, effective April 1, 2020 | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 22,925 | ||
Fixed Rate | 0.573% | ||
Fair value of interest rate swaps | $ 1,436 | 355 | |
Notional amount of interest rate derivatives after scheduled amortization | 22,100 | ||
Designated | Interest rate swap, effective September 1, 2016, swap three | |||
Fair values of interest rate swap derivatives | |||
Payments for hedge, investing activities | $ 625 | ||
Not Designated as Hedging Instrument | Interest rate swap, effective September 1, 2016, swap three | |||
Fair values of interest rate swap derivatives | |||
Notional Amount | $ 50,000 | ||
Fixed Rate | 1.908% | ||
Fair value of interest rate swaps | $ 0 | $ (684) |
Interest Rate Derivatives - Nar
Interest Rate Derivatives - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Interest rate swap, effective September 1, 2016, swap three | Not Designated as Hedging Instrument | ||
Fair values of interest rate swap derivatives | ||
Notional amount of forecasted transaction not probable of occurring | $ 50 | |
Interest rate swaps | Designated | ||
Fair values of interest rate swap derivatives | ||
Approximate amount to be reclassified from AOCL to interest expense over the next 12 months | $ 1 |
Interest Rate Derivatives - Fai
Interest Rate Derivatives - Fair Value and Classification of Interest Rate Derivatives (Details) - Interest rate swaps - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Prepaid expenses and other assets, net | ||
Fair value of interest rate derivatives and balance sheet classification | ||
Interest rate swaps designated as cash flow hedges | $ 2,468 | $ 355 |
Other liabilities | ||
Fair value of interest rate derivatives and balance sheet classification | ||
Interest rate swaps designated as cash flow hedges | 0 | (2,960) |
Interest rate swap not designated | $ 0 | $ (684) |
Interest Rate Derivatives - Eff
Interest Rate Derivatives - Effect of Interest Rate Derivatives on Statement of Operations and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | ||||
Amount of Income (Loss) Recognized in AOCI on Derivatives | $ 1,008 | $ (240) | $ 3,545 | $ 544 |
Amount of Loss Reclassified from AOCI into Interest Expense on Statement of Operations | (754) | (1,203) | (1,757) | (2,378) |
Interest rate swaps | ||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | ||||
Amount of Income (Loss) Recognized in AOCI on Derivatives | 1,008 | (240) | 3,545 | 544 |
Interest Expense | Interest rate swaps | ||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | ||||
Amount of Loss Reclassified from AOCI into Interest Expense on Statement of Operations | $ (754) | $ (1,203) | $ (1,757) | $ (2,378) |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 USD ($) joint_venture | Jun. 30, 2021 USD ($) | |
Noncontrolling Interest [Abstract] | ||
Number of joint ventures with redeemable noncontrolling interests | joint_venture | 2 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 26,898 | $ 25,430 |
Distributions to noncontrolling interests | (1,375) | (1,165) |
Net income attributable to noncontrolling interests | 1,306 | 1,153 |
Adjustment to arrive at fair value of interests | (77) | 622 |
Ending balance | $ 26,752 | $ 26,040 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | May 31, 2022 | |
Equity [Abstract] | |||||
At the market, offering program established, aggregate value | $ 300 | ||||
Dividends declared per share (in usd per share) | $ 0.275 | $ 0.275 | $ 0.550 | $ 0.550 |
Credit Losses, Financial Asse_3
Credit Losses, Financial Assets and Other Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Credit Losses, Financial Assets and Other Instruments [Roll Forward] | ||||
Beginning balance | $ 3,569 | $ 4,697 | ||
Credit loss expense (recoveries) | $ 225 | $ 193 | (91) | (714) |
Ending balance | 3,478 | 3,983 | 3,478 | 3,983 |
Other Assets | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 913 | 643 | ||
Credit loss expense (recoveries) | (61) | 82 | ||
Ending balance | 852 | 725 | 852 | 725 |
Accounts receivable, allowance for credit loss | 852 | 725 | 852 | 725 |
Other Assets | Accounts Receivable, Net | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 218 | 257 | ||
Ending balance | 742 | 89 | 742 | 89 |
Accounts receivable, allowance for credit loss | 742 | 89 | 742 | 89 |
Other Assets | Prepaid expenses and other assets, net | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 695 | 386 | ||
Ending balance | 110 | 636 | 110 | 636 |
Accounts receivable, allowance for credit loss | 110 | 636 | 110 | 636 |
Investing Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 1,599 | 2,851 | ||
Credit loss expense (recoveries) | 46 | (719) | ||
Ending balance | 1,645 | 2,132 | 1,645 | 2,132 |
Tenant Notes Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 1,057 | 1,203 | ||
Credit loss expense (recoveries) | (76) | (77) | ||
Ending balance | $ 981 | $ 1,126 | $ 981 | $ 1,126 |
Credit Losses, Financial Asse_4
Credit Losses, Financial Assets and Other Instruments (Credit Risk Classification) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investing Receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2017 and Earlier | $ 73,478 | |
2018 | 0 | |
2019 | 5,033 | |
2020 | 1,757 | |
2021 | 6,262 | |
Total | 86,530 | $ 83,825 |
Investing Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2017 and Earlier | 73,478 | |
2018 | 0 | |
2019 | 0 | |
2020 | 1,757 | |
2021 | 6,262 | |
Total | 81,497 | |
Investing Receivables | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2017 and Earlier | 0 | |
2018 | 0 | |
2019 | 5,033 | |
2020 | 0 | |
2021 | 0 | |
Total | 5,033 | |
Tenant Notes Receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2017 and Earlier | 180 | |
2018 | 970 | |
2019 | 160 | |
2020 | 1,880 | |
2021 | 0 | |
Total | 3,190 | |
Tenant Notes Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2017 and Earlier | 0 | |
2018 | 855 | |
2019 | 52 | |
2020 | 234 | |
2021 | 0 | |
Total | 1,141 | |
Tenant Notes Receivables | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2017 and Earlier | 180 | |
2018 | 115 | |
2019 | 108 | |
2020 | 1,646 | |
2021 | 0 | |
Total | 2,049 | |
Sales-Type Lease Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2017 and Earlier | 0 | |
2018 | 0 | |
2019 | 0 | |
2020 | 5,934 | |
2021 | 0 | |
Total | $ 5,934 |
Information by Business Segme_3
Information by Business Segment - Narrative (Details) | Mar. 31, 2022 property |
Segment Reporting [Abstract] | |
Number of properties changing reportable segments | 2 |
Information by Business Segme_4
Information by Business Segment - Segment Financial Information for Our Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Segment financial information for real estate operations | |||||
Revenues from real estate operations | $ 185,803 | $ 157,207 | $ 381,283 | $ 311,595 | |
UJV NOI allocable to COPT | 1,080 | 973 | 2,160 | 1,890 | |
Segment assets | 4,185,193 | 4,052,032 | 4,185,193 | 4,052,032 | $ 4,262,452 |
Segment assets | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,479,416 | 3,403,558 | 3,479,416 | 3,403,558 | |
Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 143,246 | 144,423 | 287,506 | 289,587 | |
Property operating expenses | (54,116) | (54,616) | (112,268) | (111,590) | |
UJV NOI allocable to COPT | 1,080 | 973 | 2,160 | 1,890 | |
NOI from real estate operations | 90,210 | 90,780 | 177,398 | 179,887 | |
Additions to long-lived assets | 19,398 | 21,010 | 38,630 | 33,240 | |
Transfers from non-operating properties | 27,869 | 90,332 | 121,901 | 105,086 | |
Real estate operations | Defense/IT Locations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 127,354 | 119,444 | 252,726 | 240,068 | |
Property operating expenses | (45,326) | (42,109) | (93,267) | (87,059) | |
UJV NOI allocable to COPT | 1,080 | 973 | 2,160 | 1,890 | |
NOI from real estate operations | 83,108 | 78,308 | 161,619 | 154,899 | |
Additions to long-lived assets | 15,756 | 16,941 | 30,705 | 24,930 | |
Transfers from non-operating properties | 27,839 | 52,332 | 121,600 | 66,729 | |
Real estate operations | Defense/IT Locations | Fort Meade/BW Corridor | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 67,589 | 64,840 | 134,803 | 131,286 | |
Property operating expenses | (23,499) | (21,714) | (49,283) | (46,385) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 44,090 | 43,126 | 85,520 | 84,901 | |
Additions to long-lived assets | 12,341 | 11,511 | 24,126 | 18,392 | |
Transfers from non-operating properties | 768 | 784 | 6,137 | 1,140 | |
Real estate operations | Defense/IT Locations | NoVA Defense/IT | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 18,103 | 15,626 | 36,679 | 31,811 | |
Property operating expenses | (6,157) | (5,917) | (13,026) | (12,253) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 11,946 | 9,709 | 23,653 | 19,558 | |
Additions to long-lived assets | 2,541 | 1,172 | 4,730 | 1,470 | |
Transfers from non-operating properties | 918 | 25 | 1,237 | 113 | |
Real estate operations | Defense/IT Locations | Lackland Air Force Base | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 15,129 | 13,688 | 29,842 | 26,243 | |
Property operating expenses | (7,520) | (7,506) | (14,592) | (14,380) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 7,609 | 6,182 | 15,250 | 11,863 | |
Additions to long-lived assets | 0 | 0 | 0 | 0 | |
Transfers from non-operating properties | 521 | 49,218 | 939 | 49,269 | |
Real estate operations | Defense/IT Locations | Navy Support | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 8,085 | 8,445 | 16,254 | 16,843 | |
Property operating expenses | (3,330) | (3,227) | (6,801) | (6,660) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 4,755 | 5,218 | 9,453 | 10,183 | |
Additions to long-lived assets | 650 | 1,205 | 1,390 | 1,757 | |
Transfers from non-operating properties | (78) | 0 | 6,298 | 0 | |
Real estate operations | Defense/IT Locations | Redstone Arsenal | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 9,308 | 8,775 | 18,503 | 17,028 | |
Property operating expenses | (3,631) | (2,968) | (7,366) | (5,522) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 5,677 | 5,807 | 11,137 | 11,506 | |
Additions to long-lived assets | 224 | 3,053 | 459 | 3,311 | |
Transfers from non-operating properties | 20,037 | 1,288 | 20,113 | 14,205 | |
Real estate operations | Defense/IT Locations | Data Center Shells | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 9,140 | 8,070 | 16,645 | 16,857 | |
Property operating expenses | (1,189) | (777) | (2,199) | (1,859) | |
UJV NOI allocable to COPT | 1,080 | 973 | 2,160 | 1,890 | |
NOI from real estate operations | 9,031 | 8,266 | 16,606 | 16,888 | |
Additions to long-lived assets | 0 | 0 | 0 | 0 | |
Transfers from non-operating properties | 5,673 | 1,017 | 86,876 | 2,002 | |
Real estate operations | Regional Office | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 14,121 | 15,970 | 29,203 | 31,673 | |
Property operating expenses | (7,628) | (7,463) | (15,558) | (14,667) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 6,493 | 8,507 | 13,645 | 17,006 | |
Additions to long-lived assets | 3,561 | 3,939 | 7,894 | 7,948 | |
Transfers from non-operating properties | 30 | 38,000 | 301 | 38,357 | |
Real estate operations | Wholesale Data Center | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 0 | 7,204 | 1,980 | 14,538 | |
Property operating expenses | 50 | (3,828) | (975) | (7,651) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 50 | 3,376 | 1,005 | 6,887 | |
Additions to long-lived assets | 16 | 121 | (35) | 349 | |
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 | 1,771 | 1,805 | 3,597 | 3,308 | |
Property operating expenses | (1,212) | (1,216) | (2,468) | (2,213) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 559 | 589 | 1,129 | 1,095 | |
Additions to long-lived assets | 65 | 9 | 66 | 13 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Real estate operations | Segment assets | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,479,416 | 3,403,558 | 3,479,416 | 3,403,558 | |
Real estate operations | Segment assets | Defense/IT Locations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 2,941,281 | 2,683,584 | 2,941,281 | 2,683,584 | |
Real estate operations | Segment assets | Defense/IT Locations | Fort Meade/BW Corridor | |||||
Segment financial information for real estate operations | |||||
Segment assets | 1,331,828 | 1,266,622 | 1,331,828 | 1,266,622 | |
Real estate operations | Segment assets | Defense/IT Locations | NoVA Defense/IT | |||||
Segment financial information for real estate operations | |||||
Segment assets | 488,597 | 403,442 | 488,597 | 403,442 | |
Real estate operations | Segment assets | Defense/IT Locations | Lackland Air Force Base | |||||
Segment financial information for real estate operations | |||||
Segment assets | 196,723 | 189,418 | 196,723 | 189,418 | |
Real estate operations | Segment assets | Defense/IT Locations | Navy Support | |||||
Segment financial information for real estate operations | |||||
Segment assets | 172,873 | 174,633 | 172,873 | 174,633 | |
Real estate operations | Segment assets | Defense/IT Locations | Redstone Arsenal | |||||
Segment financial information for real estate operations | |||||
Segment assets | 316,008 | 295,672 | 316,008 | 295,672 | |
Real estate operations | Segment assets | Defense/IT Locations | Data Center Shells | |||||
Segment financial information for real estate operations | |||||
Segment assets | 435,252 | 353,797 | 435,252 | 353,797 | |
Real estate operations | Segment assets | Regional Office | |||||
Segment financial information for real estate operations | |||||
Segment assets | 534,257 | 520,126 | 534,257 | 520,126 | |
Real estate operations | Segment assets | Wholesale Data Center | |||||
Segment financial information for real estate operations | |||||
Segment assets | 0 | 196,209 | 0 | 196,209 | |
Real estate operations | Segment assets | Other | |||||
Segment financial information for real estate operations | |||||
Segment assets | $ 3,878 | $ 3,639 | $ 3,878 | $ 3,639 |
Information by Business Segme_5
Information by Business Segment - Reconciliation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Reconciliation of segment revenues to total revenues | ||||
Construction contract and other service revenues | $ 42,557 | $ 19,988 | $ 95,757 | $ 36,546 |
Revenues from real estate operations from discontinued operations (Note 4) | 0 | (7,204) | (1,980) | (14,538) |
Total revenues | 185,803 | 157,207 | 381,283 | 311,595 |
Operating Expenses [Abstract] | ||||
Less: Property operating expenses from discontinued operations (Note 4) | 0 | (3,702) | (971) | (7,400) |
Total property operating expenses | 54,116 | 50,914 | 111,297 | 104,190 |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated entities [Abstract] | ||||
UJV NOI allocable to COPT | 1,080 | 973 | 2,160 | 1,890 |
Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense | (760) | (711) | (1,518) | (1,404) |
Add: Equity in (loss) income of unconsolidated non-real estate entities | (2) | (2) | 564 | (4) |
Equity in income of unconsolidated entities | 318 | 260 | 1,206 | 482 |
Computation of net operating income from service operations | ||||
Construction contract and other service revenues | 42,557 | 19,988 | 95,757 | 36,546 |
Construction contract and other service expenses | (41,304) | (19,082) | (92,954) | (34,875) |
Real estate operations | ||||
Reconciliation of segment revenues to total revenues | ||||
Total revenues | 143,246 | 144,423 | 287,506 | 289,587 |
Operating Expenses [Abstract] | ||||
Property operating expenses | 54,116 | 54,616 | 112,268 | 111,590 |
Less: Property operating expenses from discontinued operations (Note 4) | 0 | (3,702) | (971) | (7,400) |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated entities [Abstract] | ||||
UJV NOI allocable to COPT | 1,080 | 973 | 2,160 | 1,890 |
Service operations | ||||
Computation of net operating income from service operations | ||||
NOI from service operations | $ 1,253 | $ 906 | $ 2,803 | $ 1,671 |
Information by Business Segme_6
Information by Business Segment - Reconciliation of NOI from Real Estate Operations and NOI from Service Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment financial information for real estate operations | ||||
Interest and other income | $ 1,818 | $ 2,228 | $ 3,711 | $ 4,093 |
Credit loss (expense) recoveries | (225) | (193) | 91 | 714 |
Gain on sales of real estate | (19) | 40,233 | (4) | 39,743 |
Equity in income of unconsolidated entities | 318 | 260 | 1,206 | 482 |
Income tax expense | (4) | (24) | (157) | (56) |
Depreciation and other amortization associated with real estate operations | (34,812) | (34,732) | (69,076) | (69,232) |
General, administrative and leasing expenses | (8,355) | (9,222) | (16,899) | (17,628) |
Business development expenses and land carry costs | (701) | (1,372) | (1,484) | (2,466) |
Interest expense | (14,808) | (15,942) | (29,232) | (33,461) |
UJV NOI allocable to COPT included in equity in income of unconsolidated entities | (1,080) | (973) | (2,160) | (1,890) |
Revenues from real estate operations from discontinued operations (Note 4) | 0 | (7,204) | (1,980) | (14,538) |
Property operating expenses from discontinued operations (Note 4) | 0 | 3,702 | 971 | 7,400 |
Loss on early extinguishment of debt | 0 | (25,228) | (342) | (58,394) |
Income from continuing operations | 33,595 | 43,219 | 64,846 | 36,325 |
Real estate operations | ||||
Segment financial information for real estate operations | ||||
NOI from real estate operations | 90,210 | 90,780 | 177,398 | 179,887 |
UJV NOI allocable to COPT included in equity in income of unconsolidated entities | (1,080) | (973) | (2,160) | (1,890) |
Property operating expenses from discontinued operations (Note 4) | 0 | 3,702 | 971 | 7,400 |
Service operations | ||||
Segment financial information for real estate operations | ||||
NOI from service operations | $ 1,253 | $ 906 | $ 2,803 | $ 1,671 |
Information by Business Segme_7
Information by Business Segment - Reconciliation of Segment Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Reconciliation of segment assets to total assets | |||
Total consolidated assets | $ 4,185,193 | $ 4,262,452 | $ 4,052,032 |
Operating properties lease liabilities included in segment assets | 29,412 | $ 29,342 | |
Segment assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | 3,479,416 | 3,403,558 | |
Operating properties lease liabilities included in segment assets | 29,412 | 29,927 | |
Non-operating property assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | 469,380 | 441,048 | |
Other assets | |||
Reconciliation of segment assets to total assets | |||
Total consolidated assets | $ 206,985 | $ 177,499 |
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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 42,557 | $ 19,988 | $ 95,757 | $ 36,546 |
Construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 41,829 | 18,828 | 94,398 | 34,584 |
Design | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 186 | 848 | 290 | 1,150 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 542 | 312 | 1,069 | 812 |
Guaranteed maximum price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 36,503 | 11,388 | 84,426 | 13,489 |
Firm fixed price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 3,257 | 2,441 | 6,701 | 3,912 |
Cost-plus fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 2,255 | 5,847 | 3,561 | 18,333 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 542 | $ 312 | $ 1,069 | $ 812 |
Construction Contract and Oth_4
Construction Contract and Other Service Revenues - Rollforwards (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Change in Accounts Receivable | ||||
Beginning balance | $ 40,752 | |||
Ending balance | $ 31,554 | 31,554 | ||
Change in Contract with Customer, Asset | ||||
Beginning balance | 22,384 | |||
Ending balance | 29,223 | 29,223 | ||
Construction Contract Revenue | ||||
Change in Accounts Receivable | ||||
Beginning balance | 7,193 | $ 13,997 | ||
Ending balance | 4,751 | $ 10,003 | 4,751 | 10,003 |
Change in Contract with Customer, Asset | ||||
Beginning balance | 22,384 | 10,343 | ||
Ending balance | 29,223 | 9,766 | 29,223 | 9,766 |
Change in Contract with Customer, Liability | ||||
Beginning balance | 2,499 | 4,610 | ||
Ending balance | 2,363 | 2,320 | 2,363 | 2,320 |
Portion of beginning balance recognized in revenue during the period | $ 164 | $ 2,070 | $ 190 | $ 2,617 |
Construction Contract and Oth_5
Construction Contract and Other Service Revenues - Performance Obligation Narrative (Details) - Construction Contract Revenue $ in Millions | Jun. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 62.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 44 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Construction Contract and Oth_6
Construction Contract and Other Service Revenues - Narrative (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Construction Contract Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Deferred incremental costs | $ 0 | $ 0 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Feb. 01, 2022 shares | Jan. 01, 2022 USD ($) Percentile_Rank $ / shares shares | Jun. 30, 2022 USD ($) form $ / shares shares | |
Restricted shares | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 165,284 | ||
Aggregate grant date fair value | $ | $ 4,400 | ||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 26.52 | ||
Shares vested (in shares) | shares | 141,185 | ||
Weighted average fair value of shares vested (in dollars per share) | $ / shares | $ 26.28 | ||
Aggregate intrinsic value of awards upon vesting | $ | $ 3,700 | ||
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 | $ | $ 3,800 | ||
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% | ||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 50th percentile rank | 50% | ||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 25th percentile rank | 25% | ||
Earned PB-PIUs granted on percentile rank below 25th (as a percent) | 0% | ||
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% | ||
Award performance period | 3 years | ||
Assumptions used to value stock awards | |||
Baseline value per common share (in dollars per share) | $ / shares | $ 27.97 | ||
Expected volatility of common shares (as a percent) | 31.70% | ||
Risk-free interest rate (as a percent) | 0.98% | ||
Performance-based PIU's | Target Level | |||
Share-Based Compensation | |||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 32.87 | ||
Deferred Share Awards | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 3,941 | ||
Aggregate grant date fair value | $ | $ 100 | ||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 25.41 | ||
Senior Management Team Members And Certain Non Employee Trustees | Time-based PIU's | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 101,966 | ||
Aggregate grant date fair value | $ | $ 2,700 | ||
Aggregate weighted average grant date fair value (in dollars per share) | $ / shares | $ 26.39 | ||
Shares vested (in shares) | shares | 73,056 | ||
Weighted average fair value of shares vested (in dollars per share) | $ / shares | $ 26.01 | ||
Aggregate intrinsic value of awards upon vesting | $ | $ 1,900 | ||
Senior Management Team Members | Performance-based PIU's | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | shares | 231,838 | ||
Award vesting period | 3 years | ||
Executives | Performance-based PIU's | 2019 PB PIU | |||
Assumptions used to value stock awards | |||
Units issued for awards vested in period (in units) | shares | 156,104 |
Earnings Per Share ("EPS") (Bas
Earnings Per Share ("EPS") (Basic and Diluted Calculation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Numerator: | |||||
Income from continuing operations | $ 33,595 | $ 43,219 | $ 64,846 | $ 36,325 | |
Income from continuing operations attributable to noncontrolling interests | (1,285) | (1,488) | (2,369) | (2,068) | |
Income from continuing operations attributable to share-based compensation awards for basic EPS | (92) | (134) | (204) | (247) | |
Numerator for basic EPS from continuing operations attributable to COPT common shareholders | 32,218 | 41,597 | 62,273 | 34,010 | |
Redeemable noncontrolling interests | (30) | (20) | (69) | 7 | |
Adjustment to income from continuing operations attributable to share-based compensation awards for diluted EPS | 17 | 11 | 35 | 9 | |
Numerator for diluted EPS from continuing operations attributable to COPT common shareholders | 32,205 | 41,588 | 62,239 | 34,026 | |
Discontinued operations | 0 | 679 | 29,573 | 1,494 | |
Discontinued operations attributable to noncontrolling interests | 0 | (9) | (421) | (19) | |
Income from discontinued operations attributable to share-based compensation awards for diluted EPS | 0 | (2) | (90) | 3 | |
Numerator for diluted EPS on net income attributable to COPT common shareholders | $ 32,205 | $ 42,256 | $ 91,301 | $ 35,504 | |
Denominator (all weighted averages): | |||||
Denominator for basic EPS (common shares) | 112,082 | 111,974 | 112,052 | 111,931 | |
Dilutive effect of redeemable noncontrolling interests (in shares) | 126 | 133 | 129 | 125 | |
Dilutive effect of share-based compensation awards (in shares) | 429 | 297 | 427 | 280 | |
Denominator for diluted EPS (common shares) | 112,637 | 112,404 | 112,608 | 112,336 | |
Basic EPS: | |||||
Income from continuing operations attributable to COPT common shareholders - basic (in dollars per share) | [1] | $ 0.29 | $ 0.37 | $ 0.55 | $ 0.30 |
Discontinued operations attributable to COPT common shareholders - basic (in dollars per share) | [1] | 0 | 0.01 | 0.26 | 0.02 |
Net income attributable to COPT common shareholders - basic (in dollars per share) | [1] | 0.29 | 0.38 | 0.81 | 0.32 |
Diluted EPS: | |||||
Income from continuing operations attributable to COPT common shareholders - diluted (in dollars per share) | [1] | 0.29 | 0.37 | 0.55 | 0.30 |
Discontinued operations attributable to COPT common shareholders - diluted (in dollars per share) | 0 | 0.01 | 0.26 | 0.02 | |
Net income attributable to COPT common shareholders - diluted (in dollars per share) | [1] | $ 0.29 | $ 0.38 | $ 0.81 | $ 0.32 |
[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") (Det
Earnings Per Share ("EPS") (Details 2) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Conversion of common units | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1,476 | 1,262 | 1,430 | 1,254 |
Conversion of redeemable noncontrolling interests | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 863 | 776 | 835 | 799 |
Weighted average restricted shares and deferred shares | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 404 | 420 | 401 | 419 |
Weighted average TB-PIUs | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 191 | 166 | 182 | 148 |
Weighted average PB-PIUs | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 228 | 228 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2022 USD ($) property |
Commitments and Contingencies | |
Estimate of possible loss | $ 3.8 |
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 |