COPT Defense Properties (CDP, Financial) has significantly enhanced its leasing activity at Redstone Gateway, securing two major leases totaling 55,000 square feet this year. In the first quarter of 2025, CDP finalized a lease agreement with the U.S. Department of Defense for 40,800 square feet at 8100 Rideout Road, raising the occupancy rate of the property to 79%. Only 27,000 square feet remain available at this 128,000 square foot location.
Further strengthening its portfolio, CDP entered into a lease with a Defense Contractor in April 2025 for 13,700 square feet at 9700 Advanced Gateway, resulting in the property being fully pre-leased. Across its Huntsville portfolio, which spans a total of 2.5 million square feet, CDP now boasts an impressive 98.5% leasing rate, leaving just 37,000 square feet available.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for COPT Defense Properties (CDP, Financial) is $33.14 with a high estimate of $38.00 and a low estimate of $29.00. The average target implies an upside of 24.18% from the current price of $26.69. More detailed estimate data can be found on the COPT Defense Properties (CDP) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, COPT Defense Properties's (CDP, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for COPT Defense Properties (CDP, Financial) in one year is $26.15, suggesting a downside of 2.02% from the current price of $26.69. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the COPT Defense Properties (CDP) Summary page.
CDP Key Business Developments
Release Date: February 07, 2025
- FFO Per Share: $2.56 for 2024, a 6.2% increase over 2023; guidance for 2025 at $2.66 midpoint, implying 3.5% growth.
- Same-Property Cash NOI: Increased 9.1% year over year in 2024; normalized increase of 3.4% excluding non-recurring items.
- Tenant Retention Rate: 86% in 2024, highest in over 20 years.
- Occupancy Levels: 93.6% overall portfolio; 95.6% in Defense IT portfolio.
- Vacancy Leasing: 500,000 square feet executed in 2024, exceeding target by 25%.
- Development Pipeline: 600,000 square feet active or not-yet-stabilized developments, 75% preleased.
- Capital Commitments: $212 million committed to new investments in 2024.
- Debt Profile: 100% of debt at fixed rates as of year-end 2024.
- 2025 Guidance: Same-property cash NOI projected to increase 2.75% at midpoint; tenant retention expected at 75%-85% range.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- COPT Defense Properties (CDP, Financial) achieved a record tenant retention rate of 86% in 2024, the highest in over 20 years.
- The company reported a 9.1% increase in same-property cash NOI, marking the highest growth ever recorded.
- CDP executed 0.5 million square feet of vacancy leasing, representing 45% of the space vacant at the beginning of the year.
- The company committed $212 million to new investments, including its first building acquisitions since 2015.
- CDP's FFO per share as adjusted for comparability was $2.56, exceeding the midpoint of initial guidance by $0.06.
Negative Points
- Occupancy levels slightly decreased by 60 basis points year over year due to strategic accumulation of inventory.
- The company anticipates a $0.015 increase in financing costs in 2025.
- There is potential uncertainty regarding defense budget appropriations due to political dynamics in Congress.
- Some nonrenewals and contractions are expected to impact occupancy in the first quarter of 2025.
- The company faces challenges in the investment sales market due to high interest rates and distressed asset conditions.
