COPT Defense Properties

Welcome to the COP Defense Properties Fourth Quarter and Full Year 2025 Results Conference Call. As a reminder, today's call is being recorded at this time. I'd like to turn the call over to Venkat Kamaneni, COP Defense's Vice President of Investor Relations. Mr. Kamaneni, please go ahead.

Thank you, Jonathan. Good afternoon, and welcome to COP Defense's conference call to discuss fourth quarter and full year results. With me today are Steve Podorek, President and CEO, Britt Snyder, Executive Vice President and COO, and Anthony Mifsud, Executive Vice President and CFO. Reconciliations of GAAP and non-GAAP financial measures that management discusses are available on our website, in the results press release and presentation, and in our supplemental information package. As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties, which are discussed in our SEC filings. Actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update them.

Steve? Good afternoon, and thank you for joining us. 2025 was another great year for the company, as we outperformed on virtually all of our operating and financial metrics. FFO per share was $2.72, which is six cents above the midpoint of our initial guidance and represents an increase of 5.8% over 2024's results and marks our seventh consecutive year of FFO per share growth. Same property cash, NOI increased 4.1% year over year, driven by a 40 basis point increase in our average occupancy. We executed 557,000 square feet of vacancy leasing, which represented 47% of the space we had vacant at the beginning of the year. We also executed 477,000 square feet of investment leasing at a weighted average lease term of 13 years. We committed $278 million of capital to new investments, which consisted of five projects in four different markets, and these projects are 81% pre-lease. Importantly, four of the five projects represent expansions with existing tenants. In late December, we committed roughly $155 million to two build-and-suit projects in our Fort Meade BW corridor and San Antonio markets. First, we committed $66 million to a fully pre-lease development with ARLIS, which is the University of Maryland's Applied Research Laboratory for Intelligence and Security, to expand their footprint in our park. This 110,000 square foot project will expand our Discovery District campus, which currently totals 415,000 square feet and is 98.4% leased. This new ARLIS facility will serve as the capital quantum benchmarking hub to test and evaluate quantum computing prototypes for national security in a partnership between the state of Maryland and DARPA, the Defense Advanced Research Projects Agency. In 2024, the University of Maryland received a $500 million contract from the DoD to support ARLIS and their mission of addressing complex national security problems. Second, we committed $88 million to a 132,000 square foot fully pre-leased development project in San Antonio with an existing defense IT tenant. Our team did a tremendous job of adding incremental density to our already fully leased high security 1.1 million square foot campus. to create this additional development opportunity. In aggregate, our active developments, along with those projects placed in service or acquired in 2025, will generate an incremental $52 million of cash NOI on a stabilized annual basis, which will be realized as projects are completed and placed in the service. The incremental NOI will phase in between 2026 and 2029, which will be the first full year benefiting from the total amount. $48 million of this is contractual, and the balance is from leasing up the remaining availability at 8500 Advanced Gateway. Brent will discuss the very strong pipeline of activity we have for our G8500s. For 2026, we're establishing the midpoint of FFO per share guidance at $2.75, which implies 3 cents or 1.1% growth over 2025's outstanding results. Our guidance absorbs a 9 cent increase in financing costs. Excluding this impact, 2026 FFO per share would have totaled $2.84, and 4.4% year-over-year growth. Anthony will provide details on the specific assumptions included in our guidance, but we're already off to a great start to the year with capital commitments and investment leasing. In January, we committed $146 million to yet another fully pre-lease development project at the National Business Park, once again with an existing defense IT tenant. This is another high security specialized facility that will total 236,000 square feet. And earlier this week, we executed a full building lease for MVP 400 with an existing tenant that is a top 10 US defense contractor for 148,000 square feet and a lease term of nearly 11 years. Turning to the defense budget, three days ago, President Trump signed the FY2026 Defense Appropriations Act. This base budget is $841 billion, which is an $8 billion increase over the President's initial request. Adding the $113 billion in allocated DOD funding that was in the big, beautiful bill, This amounts to a defense budget of over $950 billion, which is the largest defense-based budget in our nation's history, and is a 15% year-over-year increase. The President's fiscal year 2027 budget request is expected to be submitted in the coming weeks, but he publicly announced the need for a $1.5 trillion defense budget. Regardless of where the final number ends up, His comments send a strong policy signal of the President's commitment to increase investment in defense, and we expect the overall size of the defense budget to continue to increase throughout the next three years. Importantly, the initial FY2026 Defense Appropriations Act enjoyed very strong bipartisan support, recognizing the increasingly complex global threat environment. A recent editorial published in Wall Street Journal was titled, A Serious Defense Budget at Last. And it highlighted the new technologies that are proliferating in ways that threaten the U.S. homeland, which include hypersonic missiles, space and cyber weapons, drones, and the weaponization of AI. The editorial's conclusions are perfectly aligned with the administration's peace through strength philosophy and recognizes that investment in defense is infinitely less costly than a war. Given this backdrop, we continue to expect that the priority missions our portfolio supports will be well-funded in the near and medium term to safeguard national security. And these missions include intelligence, surveillance, and reconnaissance, cybersecurity, missile defense, space activities, among others. Space is the newest warfighting domain, and achieving uncontested dominance in this theater is of paramount importance to the country's defense. In support of this objective, we expect a $175 billion multi-year Golden Dome initiative and the relocation of Space Command's headquarters to Huntsville to drive growth and demand for both government and contractors at the Red Zone Gateway for the foreseeable future. Before I turn the call over to Britt, let me reflect on our performance over the past few years. In 2019, we entered our era of growth as we had largely completed our strategic reallocation plan and our FFO per share for that year was $2.03. Seven years later, the midpoint of our 2026 guidance is $2.75, a 35% increase and represents compound annual growth rate of 4.4%. Between the initial midpoint of 2023 and 2026 guidance ranges, FFO per share is expected to grow at a compounded rate of 4.9%, which is over 20% higher than what we had projected back in 2022. And with that, I'll turn the call over to Brett for some details.