COPT Defense Properties

Welcome to the COP Defense Properties First Quarter 2026 Results Conference Call. As a reminder, today's call is being recorded. At this time, I will turn the call over to Venkat Komaneni, COP Defense's Vice President of Investor Relations. Mr. Komaneni, please go ahead.

Thank you, Dee. Good afternoon, and welcome to COP Defense's conference call to discuss first quarter results. With me today are Steve Bedorek, President and CEO, Britt Snyder, Executive Vice President and COO, and Anthony Misfud, 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. We're off to a solid start in 2026, and all aspects of the business are on track to achieve our objectives for the year. Based on our strong results in 2025 and our outlook for 2026, in February, we recommended and our Board approved an increase in our annual dividend of $0.06 per share, or 4.9%, marking our fourth consecutive year of dividend increases. Since 2022, our dividend has increased 16.4% and our FFO per share has increased 15.3%, demonstrating our attractive total return investment profile all while maintaining the conservative AFFO payout ratio below 65% and continuing to have the capacity to self-fund the equity required for external investments. For the first quarter, FFO per share was 69 cents, which is one cent above the midpoint of guidance and represents a 6.2% year-over-year increase. Same property cash NOI increased by 0.4% year over year, driven in part by a 70 basis point increase in our average occupancy. We executed 1.2 million square feet of renewal leasing and achieved a 91% retention rate. This included the full renewal of our nearly million square foot campus leased to the US government near Lackland Air Force Base in San Antonio. These renewals address the significant portion of our maturity risk in 2026, reducing our expiring annualized rental revenue from 21% at the beginning of the year to 11%. We executed 92,000 square feet of vacancy leasing, and we are right on track to meet our full-year target of 400,000 square feet. We executed 384,000 square feet of investment leasing, which consists of two previously announced full building leases at the National Business Park. Year-to-date, we've committed nearly $250 million of capital to new investments consisting of 620 Guardian Way, which fully leased build suit project at the National Business Park, and two new investments totaling nearly $100 million. Based on these strong results, we're elevating four guidance metrics, and Anthony will provide additional details in his section. Regarding these two new investments, first, we committed $55 million to a 150,000 square foot development project at Redstone Gateway. which sits inside the fence within our secure parcel on Redstone Arsenal. This investment creates anti-terrorism force protected inventory, or ATFP, for the United States government in advance of expected requirements. We're currently seeing demand for multiple government missions, experiencing growth related to missile defense and space activities, which in aggregate exceeds the capacity of the building. Second, we committed roughly $43 million to the acquisition of 17 acres of land in a ground lease in the Westfield Submarket in Chantilly, Virginia. The ground lease has very attractive long-term economics, which are supported by two highly strategic 100% leased office buildings known as Mission Ridge. These buildings are occupied by the FBI's Technology Division, including their cyber group, and two leading defense contractors who are among our top 20 defense IT tenants. This transaction provides us with essentially perpetual control of a strategic land parcel in one of our priority sub-markets in which we currently have a dominant market share and, importantly, the senior position in the capital structure, which should lead to an opportunity to acquire the leasehold interests in attractive terms, sometime in the future. Recall last quarter we acquired Stonegate One in this same Westfield submarket, which was a $40 million purchase of a 140,000 square foot building that is fully leased to a top 20 U.S. defense contractor. As shown on slide 15 of our flipbook, Stonegate and Mission Ridge are located within a half mile of each other in the same rich ecosystem of defense contractors supporting the adjacent U.S. government demand drivers. In March, we were very pleased to receive the news that Moody's upgraded our investment grade rating by one level to BAA2 with a stable outlook. Over the past five years, we've issued $1.8 billion of unsecured debt in four separate offerings. We achieved stellar pricing in each of those transactions with a weight average credit spread of 120 basis points and a maturity of nearly nine years. Clearly, our fixed income investors recognize the inherent strength of our strategy and our portfolio, and we're pleased to receive that recognition from Moody's as well. We are one of only three office REITs with a BAA2 rating, which we believe acknowledges our proven performance over the last six years, which encompassed the global COVID pandemic, significant increase in both inflation and interest rates, along with factors that led to the highest US office national vacancy rate in over 40 years. Turning to the defense budget, earlier this month, President Trump submitted the FY2027 budget, which the administration describes as a historic paradigm shift for investment in our national security infrastructure. The top line figure for defense budget request is a record $1.5 trillion, which is nearly a 45% increase year over year, and it's comprised of a base budget of $1.1 trillion and anticipated reconciliation funding of $350 billion. Our business is really driven off the proposed base budget of $1.1 trillion, which has been described as the new baseline by the Chairman of the House Armed Services Committee, Mike Rogers. The FY2027 proposed budget represents a nearly 30% increase over last year and nearly 50% increase over the last five years. The defense-based budget request includes a $16 billion increase for intelligence, or 14%, which is the largest year-over-year increase in over 20 years. A $4 billion increase for DoD cyber funding, or 25%, which is the largest increase in the history of DoD cyber funding. An additional $18 billion for Golden Dome, which brings appropriations and requests to date for this program to roughly $40 billion, of the $185 billion total. $21 billion was appropriated for Golden Dome in FY2026, but only a small portion of this amount has actually been awarded to date, which bodes well for emerging demand through the end of the year. And there's still more than $160 billion yet to be appropriated. This current and anticipated funding should provide a long runway of tenant demand that will develop and support the Golden Dome Initiative in the coming years as there is typically 12 to 18 month lag time between appropriations and lease executions. The FY2027 defense budget is a continuation of a 12 year trend of growth in defense spending and represents one of the few areas of public policy that garner strong bipartisan support. The country's significant investment in the priority missions which our locations support should result in a favorable demand backdrop for our portfolio over the near and medium term and provide additional opportunities for external growth. With that, I'll turn the call over to Brett.