QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from | to |
Corporate Office Properties Trust | ||||
(State or other jurisdiction of | (IRS Employer | |||
incorporation or organization) | Identification No.) | |||
Corporate Office Properties, L.P. | ||||
(State or other jurisdiction of | (IRS Employer | |||
incorporation or organization) | Identification No.) |
, | , | , | |||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ☒ | Smaller reporting company | Emerging growth company |
• | combined reports better reflect how management, investors and the analyst community view the business as a single operating unit; |
• | combined reports enhance investors’ understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management; |
• | combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and |
• | combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review. |
• | consolidated financial statements; |
• | the following notes to the consolidated financial statements: |
• | Note 3, Fair Value Measurements of COPT and subsidiaries and COPLP and subsidiaries; |
• | Note 8, Prepaid Expenses and Other Assets, Net of COPT and subsidiaries and COPLP and subsidiaries; and |
• | Note 16, Earnings per Share of COPT and subsidiaries and Earnings per Unit of COPLP and subsidiaries; |
• | “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of COPT”; and |
• | “Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of COPLP.” |
PAGE | ||
June 30, 2020 | December 31, 2019 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | $ | |||||
Projects in development or held for future development | |||||||
Total properties, net | |||||||
Property - operating right-of-use assets | |||||||
Property - finance right-of-use assets | |||||||
Cash and cash equivalents | |||||||
Investment in unconsolidated real estate joint ventures | |||||||
Accounts receivable, net | |||||||
Deferred rent receivable | |||||||
Intangible assets on real estate acquisitions, net | |||||||
Deferred leasing costs (net of accumulated amortization of $34,878 and $33,782, respectively) | |||||||
Investing receivables (net of allowance for credit losses of $3,976 at June 30, 2020) | |||||||
Prepaid expenses and other assets, net | |||||||
Total assets | $ | $ | |||||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | $ | |||||
Accounts payable and accrued expenses | |||||||
Rents received in advance and security deposits | |||||||
Dividends and distributions payable | |||||||
Deferred revenue associated with operating leases | |||||||
Property - operating lease liabilities | |||||||
Interest rate derivatives | |||||||
Other liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 17) | |||||||
Redeemable noncontrolling interests | |||||||
Equity: | |||||||
Corporate Office Properties Trust’s shareholders’ equity: | |||||||
Common Shares of beneficial interest ($0.01 par value; 150,000,000 shares authorized; shares issued and outstanding of 112,183,192 at June 30, 2020 and 112,068,705 at December 31, 2019) | |||||||
Additional paid-in capital | |||||||
Cumulative distributions in excess of net income | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total Corporate Office Properties Trust’s shareholders’ equity | |||||||
Noncontrolling interests in subsidiaries: | |||||||
Common units in COPLP | |||||||
Preferred units in COPLP | |||||||
Other consolidated entities | |||||||
Noncontrolling interests in subsidiaries | |||||||
Total equity | |||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenues | |||||||||||||||
Lease revenue | $ | $ | $ | $ | |||||||||||
Other property revenue | |||||||||||||||
Construction contract and other service revenues | |||||||||||||||
Total revenues | |||||||||||||||
Operating expenses | |||||||||||||||
Property operating expenses | |||||||||||||||
Depreciation and amortization associated with real estate operations | |||||||||||||||
Construction contract and other service expenses | |||||||||||||||
General, administrative and leasing expenses | |||||||||||||||
Business development expenses and land carry costs | |||||||||||||||
Total operating expenses | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest and other income | |||||||||||||||
Credit loss expense | ( | ) | ( | ) | |||||||||||
Gain on sales of real estate | |||||||||||||||
Income before equity in income of unconsolidated entities and income taxes | |||||||||||||||
Equity in income of unconsolidated entities | |||||||||||||||
Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | |||||||||
Net income | |||||||||||||||
Net income attributable to noncontrolling interests: | |||||||||||||||
Common units in COPLP | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Preferred units in COPLP | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other consolidated entities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income attributable to COPT common shareholders | $ | $ | $ | $ | |||||||||||
Earnings per common share: (1) | |||||||||||||||
Net income attributable to COPT common shareholders - basic | $ | $ | $ | $ | |||||||||||
Net income attributable to COPT common shareholders - diluted | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive loss: | |||||||||||||||
Unrealized loss on interest rate derivatives | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Loss (gain) on interest rate derivatives recognized in interest expense | ( | ) | ( | ) | |||||||||||
Total other comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive income | |||||||||||||||
Comprehensive income attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive income attributable to COPT | $ | $ | $ | $ |
Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | |||||||||||||||||||
For the Three Months Ended June 30, 2019 | ||||||||||||||||||||||||
Balance at March 31, 2019 (111,939,790 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||
Redemption of common units | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Share-based compensation (10,097 shares issued, net of redemptions) | — | — | — | |||||||||||||||||||||
Redemption of vested equity awards | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | — | ( | ) | |||||||||||||||||||
Comprehensive income | — | — | ( | ) | ||||||||||||||||||||
Dividends | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2019 (111,949,887 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||
For the Three Months Ended June 30, 2020 | ||||||||||||||||||||||||
Balance at March 31, 2020 (112,169,463 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||
Share-based compensation (13,729 shares issued, net of redemptions) | — | — | — | |||||||||||||||||||||
Redemption of vested equity awards | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | — | — | ( | ) | |||||||||||||||||||
Comprehensive income | — | — | ( | ) | ||||||||||||||||||||
Dividends | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2020 (112,183,192 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
Common Shares | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | ||||||||||||||||||
For the Six Months Ended June 30, 2019 | |||||||||||||||||||||||
Balance at December 31, 2018 (110,241,868 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||
Conversion of common units to common shares (5,500 shares) | — | — | — | ( | ) | ||||||||||||||||||
Redemption of common units | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Common shares issued under forward equity sale agreements (1,614,087 shares) | — | — | — | ||||||||||||||||||||
Share-based compensation (88,432 shares issued, net of redemptions) | — | — | |||||||||||||||||||||
Redemption of vested equity awards | — | ( | ) | — | — | — | ( | ) | |||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | ( | ) | — | — | ||||||||||||||||||
Comprehensive income | — | — | ( | ) | |||||||||||||||||||
Dividends | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | — | — | — | — | |||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | ( | ) | — | — | — | ( | ) | |||||||||||||||
Balance at June 30, 2019 (111,949,887 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||
For the Six Months Ended June 30, 2020 | |||||||||||||||||||||||
Balance at December 31, 2019 (112,068,705 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||
Cumulative effect of accounting change for adoption of credit loss guidance | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Balance at December 31, 2019, as adjusted | ( | ) | ( | ) | |||||||||||||||||||
Conversion of common units to common shares (12,009 shares) | — | — | — | ( | ) | ||||||||||||||||||
Share-based compensation (102,478 shares issued, net of redemptions) | — | — | |||||||||||||||||||||
Redemption of vested equity awards | — | ( | ) | — | — | — | ( | ) | |||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | — | ( | ) | — | — | ||||||||||||||||||
Comprehensive income | — | — | ( | ) | |||||||||||||||||||
Dividends | — | — | ( | ) | — | — | ( | ) | |||||||||||||||
Distributions to owners of common and preferred units in COPLP | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | — | — | — | — | |||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | ( | ) | — | — | — | ( | ) | |||||||||||||||
Balance at June 30, 2020 (112,183,192 common shares outstanding) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
For the Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | $ | |||||
Construction contract and other service revenues received | |||||||
Property operating expenses paid | ( | ) | ( | ) | |||
Construction contract and other service expenses paid | ( | ) | ( | ) | |||
General, administrative, leasing, business development and land carry costs paid | ( | ) | ( | ) | |||
Interest expense paid | ( | ) | ( | ) | |||
Lease incentives paid | ( | ) | ( | ) | |||
Other | |||||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities | |||||||
Development and redevelopment of properties | ( | ) | ( | ) | |||
Tenant improvements on operating properties | ( | ) | ( | ) | |||
Other capital improvements on operating properties | ( | ) | ( | ) | |||
Proceeds from property dispositions | |||||||
Distribution from unconsolidated real estate joint venture following contribution of properties | |||||||
Sale of properties | |||||||
Investing receivables funded | ( | ) | |||||
Leasing costs paid | ( | ) | ( | ) | |||
Other | ( | ) | |||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | |||||||
Other debt proceeds | |||||||
Repayments of debt | |||||||
Revolving Credit Facility | ( | ) | ( | ) | |||
Scheduled principal amortization | ( | ) | ( | ) | |||
Deferred financing costs paid | ( | ) | |||||
Net proceeds from issuance of common shares | |||||||
Common share dividends paid | ( | ) | ( | ) | |||
Distributions paid to noncontrolling interests in COPLP | ( | ) | ( | ) | |||
Distributions paid to redeemable noncontrolling interests | ( | ) | ( | ) | |||
Redemption of vested equity awards | ( | ) | ( | ) | |||
Other | ( | ) | |||||
Net cash provided by (used in) financing activities | ( | ) | |||||
Net increase in cash and cash equivalents and restricted cash | |||||||
Cash and cash equivalents and restricted cash | |||||||
Beginning of period | |||||||
End of period | $ | $ |
For the Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | |||||||
Amortization of deferred financing costs and net debt discounts | |||||||
Increase in deferred rent receivable | ( | ) | ( | ) | |||
Gain on sales of real estate | ( | ) | ( | ) | |||
Share-based compensation | |||||||
Other | ( | ) | ( | ) | |||
Changes in operating assets and liabilities: | |||||||
Decrease (increase) in accounts receivable | ( | ) | |||||
Decrease (increase) in prepaid expenses and other assets, net | ( | ) | |||||
(Decrease) increase in accounts payable, accrued expenses and other liabilities | ( | ) | |||||
Decrease in rents received in advance and security deposits | ( | ) | ( | ) | |||
Net cash provided by operating activities | $ | $ | |||||
Reconciliation of cash and cash equivalents and restricted cash: | |||||||
Cash and cash equivalents at beginning of period | $ | $ | |||||
Restricted cash at beginning of period | |||||||
Cash and cash equivalents and restricted cash at beginning of period | $ | $ | |||||
Cash and cash equivalents at end of period | $ | $ | |||||
Restricted cash at end of period | |||||||
Cash and cash equivalents and restricted cash at end of period | $ | $ | |||||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Increase in accrued capital improvements, leasing and other investing activity costs | $ | $ | |||||
Finance right-of-use asset contributed by noncontrolling interest in joint venture | $ | $ | |||||
Operating right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | |||||
Non-cash changes from property dispositions: | |||||||
Contribution of properties to unconsolidated real estate joint venture | $ | $ | |||||
Investment in unconsolidated real estate joint venture retained in disposition | $ | $ | |||||
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | $ | ( | ) | $ | ( | ) | |
Dividends/distributions payable | $ | $ | |||||
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | $ | $ | |||||
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | $ | $ | |||||
Increase in redeemable noncontrolling interests and decrease in equity to carry redeemable noncontrolling interests at fair value | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Assets | |||||||
Properties, net: | |||||||
Operating properties, net | $ | $ | |||||
Projects in development or held for future development | |||||||
Total properties, net | |||||||
Property - operating right-of-use assets | |||||||
Property - finance right-of-use assets | |||||||
Cash and cash equivalents | |||||||
Investment in unconsolidated real estate joint ventures | |||||||
Accounts receivable, net | |||||||
Deferred rent receivable | |||||||
Intangible assets on real estate acquisitions, net | |||||||
Deferred leasing costs (net of accumulated amortization of $34,878 and $33,782, respectively) | |||||||
Investing receivables (net of allowance for credit losses of $3,976 at June 30, 2020) | |||||||
Prepaid expenses and other assets, net | |||||||
Total assets | $ | $ | |||||
Liabilities and equity | |||||||
Liabilities: | |||||||
Debt, net | $ | $ | |||||
Accounts payable and accrued expenses | |||||||
Rents received in advance and security deposits | |||||||
Distributions payable | |||||||
Deferred revenue associated with operating leases | |||||||
Property - operating lease liabilities | |||||||
Interest rate derivatives | |||||||
Other liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 17) | |||||||
Redeemable noncontrolling interests | |||||||
Equity: | |||||||
Corporate Office Properties, L.P.’s equity: | |||||||
Preferred units held by limited partner, 352,000 preferred units outstanding at June 30, 2020 and December 31, 2019 | |||||||
Common units, 112,183,192 and 112,068,705 held by the general partner and 1,628,421 and 1,482,425 held by limited partners at June 30, 2020 and December 31, 2019, respectively | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total Corporate Office Properties, L.P.’s equity | |||||||
Noncontrolling interests in subsidiaries | |||||||
Total equity | |||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenues | |||||||||||||||
Lease revenue | $ | $ | $ | $ | |||||||||||
Other property revenue | |||||||||||||||
Construction contract and other service revenues | |||||||||||||||
Total revenues | |||||||||||||||
Operating expenses | |||||||||||||||
Property operating expenses | |||||||||||||||
Depreciation and amortization associated with real estate operations | |||||||||||||||
Construction contract and other service expenses | |||||||||||||||
General, administrative and leasing expenses | |||||||||||||||
Business development expenses and land carry costs | |||||||||||||||
Total operating expenses | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest and other income | |||||||||||||||
Credit loss expense | ( | ) | ( | ) | |||||||||||
Gain on sales of real estate | |||||||||||||||
Income before equity in income of unconsolidated entities and income taxes | |||||||||||||||
Equity in income of unconsolidated entities | |||||||||||||||
Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | |||||||||
Net income | |||||||||||||||
Net income attributable to noncontrolling interests in consolidated entities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income attributable to COPLP | |||||||||||||||
Preferred unit distributions | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income attributable to COPLP common unitholders | $ | $ | $ | $ | |||||||||||
Earnings per common unit: (1) | |||||||||||||||
Net income attributable to COPLP common unitholders - basic | $ | $ | $ | $ | |||||||||||
Net income attributable to COPLP common unitholders - diluted | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive loss: | |||||||||||||||
Unrealized loss on interest rate derivatives | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Loss (gain) on interest rate derivatives recognized in interest expense | ( | ) | ( | ) | |||||||||||
Total other comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive income | |||||||||||||||
Comprehensive income attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive income attributable to COPLP | $ | $ | $ | $ |
Limited Partner Preferred Units | Common Units | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Subsidiaries | ||||||||||||||||||||||
Units | Amount | Units | Amount | Total Equity | |||||||||||||||||||||
For the Three Months Ended June 30, 2019 | |||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Redemption of common units | — | — | ( | ) | ( | ) | — | — | ( | ) | |||||||||||||||
Share-based compensation (units net of redemption) | — | — | — | — | |||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Comprehensive income | — | — | ( | ) | |||||||||||||||||||||
Distributions to owners of common and preferred units | — | ( | ) | — | ( | ) | — | — | ( | ) | |||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
For the Three Months Ended June 30, 2020 | |||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Share-based compensation (units net of redemption) | — | — | — | — | |||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Comprehensive loss | — | — | ( | ) | |||||||||||||||||||||
Distributions to owners of common and preferred units | — | ( | ) | — | ( | ) | — | — | ( | ) | |||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | ) | $ | $ |
Limited Partner Preferred Units | Common Units | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Subsidiaries | ||||||||||||||||||||||
Units | Amount | Units | Amount | Total Equity | |||||||||||||||||||||
For the Six Months Ended June 30, 2019 | |||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Redemption of common units | — | — | ( | ) | ( | ) | — | — | ( | ) | |||||||||||||||
Issuance of common units resulting from common shares issued under COPT forward equity sale agreements | — | — | — | — | |||||||||||||||||||||
Share-based compensation (units net of redemption) | — | — | — | — | |||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Comprehensive income | — | — | ( | ) | |||||||||||||||||||||
Distributions to owners of common and preferred units | — | ( | ) | — | ( | ) | — | — | ( | ) | |||||||||||||||
Contributions from noncontrolling interests in subsidiaries | — | — | — | — | — | ||||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
For the Six Months Ended June 30, 2020 | |||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||
Cumulative effect of accounting change for adoption of credit loss guidance | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at December 31, 2019, as adjusted | ( | ) | |||||||||||||||||||||||
Share-based compensation (units net of redemption) | — | — | — | — | |||||||||||||||||||||
Redemptions of vested equity awards | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Comprehensive income | — | — | ( | ) | ( | ) | |||||||||||||||||||
Distributions to owners of common and preferred units | — | ( | ) | — | ( | ) | — | — | ( | ) | |||||||||||||||
Contributions from noncontrolling interests in subsidiaries | — | — | — | — | — | ||||||||||||||||||||
Distributions to noncontrolling interests in subsidiaries | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | ) | $ | $ |
For the Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities | |||||||
Revenues from real estate operations received | $ | $ | |||||
Construction contract and other service revenues received | |||||||
Property operating expenses paid | ( | ) | ( | ) | |||
Construction contract and other service expenses paid | ( | ) | ( | ) | |||
General, administrative, leasing, business development and land carry costs paid | ( | ) | ( | ) | |||
Interest expense paid | ( | ) | ( | ) | |||
Lease incentives paid | ( | ) | ( | ) | |||
Other | |||||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities | |||||||
Development and redevelopment of properties | ( | ) | ( | ) | |||
Tenant improvements on operating properties | ( | ) | ( | ) | |||
Other capital improvements on operating properties | ( | ) | ( | ) | |||
Proceeds from property dispositions | |||||||
Distribution from unconsolidated real estate joint venture following contribution of properties | |||||||
Sale of properties | |||||||
Investing receivables funded | ( | ) | |||||
Leasing costs paid | ( | ) | ( | ) | |||
Other | ( | ) | |||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities | |||||||
Proceeds from debt | |||||||
Revolving Credit Facility | |||||||
Other debt proceeds | |||||||
Repayments of debt | |||||||
Revolving Credit Facility | ( | ) | ( | ) | |||
Scheduled principal amortization | ( | ) | ( | ) | |||
Deferred financing costs paid | ( | ) | |||||
Net proceeds from issuance of common units | |||||||
Common unit distributions paid | ( | ) | ( | ) | |||
Distributions paid to redeemable noncontrolling interests | ( | ) | ( | ) | |||
Redemption of vested equity awards | ( | ) | ( | ) | |||
Other | ( | ) | |||||
Net cash provided by (used in) financing activities | ( | ) | |||||
Net increase in cash and cash equivalents and restricted cash | |||||||
Cash and cash equivalents and restricted cash | |||||||
Beginning of period | |||||||
End of period | $ | $ |
For the Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and other amortization | |||||||
Amortization of deferred financing costs and net debt discounts | |||||||
Increase in deferred rent receivable | ( | ) | ( | ) | |||
Gain on sales of real estate | ( | ) | ( | ) | |||
Share-based compensation | |||||||
Other | ( | ) | ( | ) | |||
Changes in operating assets and liabilities: | |||||||
Decrease (increase) in accounts receivable | ( | ) | |||||
Decrease (increase) in prepaid expenses and other assets, net | ( | ) | |||||
(Decrease) increase in accounts payable, accrued expenses and other liabilities | ( | ) | |||||
Decrease in rents received in advance and security deposits | ( | ) | ( | ) | |||
Net cash provided by operating activities | $ | $ | |||||
Reconciliation of cash and cash equivalents and restricted cash: | |||||||
Cash and cash equivalents at beginning of period | $ | $ | |||||
Restricted cash at beginning of period | |||||||
Cash and cash equivalents and restricted cash at beginning of period | $ | $ | |||||
Cash and cash equivalents at end of period | $ | $ | |||||
Restricted cash at end of period | |||||||
Cash and cash equivalents and restricted cash at end of period | $ | $ | |||||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Increase in accrued capital improvements, leasing and other investing activity costs | $ | $ | |||||
Finance right-of-use asset contributed by noncontrolling interest in joint venture | $ | $ | |||||
Operating right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | |||||
Non-cash changes from property dispositions: | |||||||
Contribution of properties to unconsolidated real estate joint venture | $ | $ | |||||
Investment in unconsolidated real estate joint venture retained in disposition | $ | $ | |||||
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | $ | ( | ) | $ | ( | ) | |
Distributions payable | $ | $ | |||||
Increase in redeemable noncontrolling interests and decrease in equity to carry redeemable noncontrolling interests at fair value | $ | $ |
• |
• | a wholesale data center with a critical load of |
• |
• | approximately |
• | investing receivables, as disclosed in Note 7; |
• | tenant notes receivable; |
• | other assets comprised of non-lease revenue related accounts receivable (primarily from construction contract services) and contract assets from unbilled construction contract revenue; and |
• | off-balance sheet credit exposures. |
For the Six Months Ended June 30, 2020 | |||||||||||||||||||
Investing Receivables | Tenant Notes Receivable (1) | Other Assets (2) | Off-Balance Sheet Credit Exposures (3) | Total | |||||||||||||||
December 31, 2019 | $ | $ | $ | $ | $ | ||||||||||||||
Cumulative effect of change for adoption of credit loss guidance | |||||||||||||||||||
Credit loss expense | |||||||||||||||||||
June 30, 2020 | $ | $ | $ | $ | $ |
(1) | Included in the line entitled “accounts receivable, net” on our consolidated balance sheets. |
Origination Year | |||||||||||||||||||||||||||
2015 and Earlier | 2016 | 2017 | 2018 | 2019 | 2020 | Total | |||||||||||||||||||||
Investing receivables: | |||||||||||||||||||||||||||
Credit risk classification: | |||||||||||||||||||||||||||
Investment grade | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Non-investment grade | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Tenant notes receivable: | |||||||||||||||||||||||||||
Credit risk classification: | |||||||||||||||||||||||||||
Investment grade | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Non-investment grade | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Assets: | ||||||||||||||||
Marketable securities in deferred compensation plan (1) | ||||||||||||||||
Mutual funds | $ | $ | $ | $ | ||||||||||||
Other | ||||||||||||||||
Mutual funds (1) | ||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||||
Deferred compensation plan liability (2) | $ | $ | $ | $ | ||||||||||||
Interest rate derivatives | ||||||||||||||||
Total liabilities | $ | $ | $ | $ |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs(Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Assets: | ||||||||||||||||
Mutual funds (1) | $ | $ | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||||
Interest rate derivatives | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Land | $ | $ | |||||
Buildings and improvements | |||||||
Less: Accumulated depreciation | ( | ) | ( | ) | |||
Operating properties, net | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
Lease revenue | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Fixed | $ | $ | $ | $ | ||||||||||||
Variable | ||||||||||||||||
$ | $ | $ | $ |
Year Ending December 31, | June 30, 2020 | December 31, 2019 | ||||||
2020 (1) | $ | $ | ||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
$ | $ |
• | $ |
• | $ |
• | $ |
• | $ |
• | $ |
• | $ |
Leases | Balance Sheet Location | June 30, 2020 | December 31, 2019 | |||||||
Right-of-use assets | ||||||||||
Operating leases - Property | Property - operating right-of-use assets | $ | $ | |||||||
Finance leases - Property | Property - finance right-of-use assets | |||||||||
Total right-of-use assets | $ | $ |
Leases | Balance Sheet Location | June 30, 2020 | December 31, 2019 | |||||||
Lease liabilities | ||||||||||
Operating leases - Property | Property - operating lease liabilities | $ | $ | |||||||
Finance leases - Property | Other liabilities | |||||||||
Total lease liabilities | $ | $ |
Weighted average remaining lease term | |||
Operating leases | |||
Finance leases | < 1 year | ||
Weighted average discount rate | |||
Operating leases | % | ||
Finance leases | % |
Statement of Operations Location | For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||
Lease cost | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
Operating lease cost | ||||||||||||||||||
Property leases | Property operating expenses | $ | $ | $ | $ | |||||||||||||
Finance lease cost | ||||||||||||||||||
Amortization of property right-of-use assets | Property operating expenses | |||||||||||||||||
$ | $ | $ | $ |
For the Six Months Ended June 30, | ||||||||
Supplemental cash flow information | 2020 | 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows for operating leases | $ | $ | ||||||
Financing cash flows for financing leases | $ | $ |
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||||||||||
Year Ending December 31, | Operating leases | Finance leases | Total | Operating leases | Finance leases | Total | ||||||||||||||||||
2020 (1) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
2021 | ||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||
2023 | ||||||||||||||||||||||||
2024 | ||||||||||||||||||||||||
Thereafter | ||||||||||||||||||||||||
Total lease payments | ||||||||||||||||||||||||
Less: Amount representing interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Lease liability | $ | $ | $ | $ | $ | $ |
June 30, 2020 (1) | ||||||||||||||||||
Date Acquired | Nominal Ownership % | Total Assets | Encumbered Assets | Total Liabilities | ||||||||||||||
Entity | Location | |||||||||||||||||
LW Redstone Company, LLC | 3/23/2010 | Huntsville, Alabama | $ | $ | $ | |||||||||||||
M Square Associates, LLC | 6/26/2007 | College Park, Maryland | ||||||||||||||||
Stevens Investors, LLC | 8/11/2015 | Washington, DC | ||||||||||||||||
$ | $ | $ |
(1) | Excludes amounts eliminated in consolidation. |
Date Acquired | Nominal Ownership % | Number of Properties | Carrying Value of Investment (1) | ||||||||||||
Entity | June 30, 2020 | December 31, 2019 | |||||||||||||
GI-COPT DC Partnership LLC | 7/21/2016 | $ | $ | ||||||||||||
BREIT COPT DC JV LLC | 6/20/2019 | ||||||||||||||
$ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Notes receivable from the City of Huntsville | $ | $ | |||||
Other investing loans receivable | |||||||
Amortized cost basis | |||||||
Allowance for credit losses | ( | ) | |||||
Investing receivables, net | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Lease incentives, net | $ | $ | |||||
Furniture, fixtures and equipment, net | |||||||
Non-real estate equity investments | |||||||
Prepaid expenses | |||||||
Construction contract costs in excess of billings, net | |||||||
Restricted cash | |||||||
Deferred financing costs, net (1) | |||||||
Deferred tax asset, net (2) | |||||||
Other assets | |||||||
Total for COPLP and subsidiaries | |||||||
Marketable securities in deferred compensation plan | |||||||
Total for COPT and subsidiaries | $ | $ |
Carrying Value (1) as of | ||||||||||||
June 30, 2020 | December 31, 2019 | June 30, 2020 | ||||||||||
Stated Interest Rates | Scheduled Maturity | |||||||||||
Mortgage and Other Secured Debt: | ||||||||||||
Fixed rate mortgage debt (2) | $ | $ | 3.82% - 4.62% (3) | 2023-2026 | ||||||||
Variable rate secured debt (4) | LIBOR + 1.45% to 2.35% (5) | 2020-2026 | ||||||||||
Total mortgage and other secured debt | ||||||||||||
Revolving Credit Facility (6) | LIBOR + 0.775% to 1.45% (7) | March 2023 (6) | ||||||||||
Term Loan Facility (8) | LIBOR + 1.00% to 1.65% (9) | 2022 | ||||||||||
Unsecured Senior Notes | ||||||||||||
3.60%, $350,000 aggregate principal | 3.60% (10) | May 2023 | ||||||||||
5.25%, $250,000 aggregate principal | 5.25% (11) | February 2024 | ||||||||||
3.70%, $300,000 aggregate principal | 3.70% (12) | June 2021 | ||||||||||
5.00%, $300,000 aggregate principal | 5.00% (13) | July 2025 | ||||||||||
Unsecured note payable | 0% (14) | May 2026 | ||||||||||
Total debt, net | $ | $ |
(1) | The carrying values of our debt other than the Revolving Credit Facility reflect net deferred financing costs of $ |
(2) | Certain of the fixed rate mortgages carry interest rates that, upon assumption, were above or below market rates and therefore were recorded at their fair value based on applicable effective interest rates. The carrying values of these loans reflect net unamortized premiums totaling $ |
(3) | The weighted average interest rate on our fixed rate mortgage debt was |
(4) | Includes a construction loan with $ |
(5) | The weighted average interest rate on our variable rate secured debt was |
(6) | The facility matures in March 2023, with the ability for us to further extend such maturity by |
(7) | The weighted average interest rate on the Revolving Credit Facility was |
(9) | The interest rate on this loan was |
(10) | The carrying value of these notes reflects an unamortized discount totaling $ |
(11) | The carrying value of these notes reflects an unamortized discount totaling $ |
(12) | The carrying value of these notes reflects an unamortized discount totaling $ |
(14) | 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 $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Fixed-rate debt | |||||||||||||||
Unsecured Senior Notes | $ | $ | $ | $ | |||||||||||
Other fixed-rate debt | |||||||||||||||
Variable-rate debt | |||||||||||||||
$ | $ | $ | $ |
Fair Value at | ||||||||||||||||||
Notional Amount | Fixed Rate | Floating Rate Index | Effective Date | Expiration Date | June 30, 2020 | December 31, 2019 | ||||||||||||
$ | (1) | One-Month LIBOR | 10/13/2015 | 10/1/2020 | $ | ( | ) | $ | ||||||||||
One-Month LIBOR | 9/1/2016 | 12/1/2022 | ( | ) | ( | ) | ||||||||||||
One-Month LIBOR | 9/1/2016 | 12/1/2022 | ( | ) | ( | ) | ||||||||||||
One-Month LIBOR | 9/1/2016 | 12/1/2022 | ( | ) | ( | ) | ||||||||||||
(2) | One-Month LIBOR | 8/1/2019 | 8/1/2026 | ( | ) | ( | ) | |||||||||||
One-Month LIBOR | 4/1/2020 | 12/31/2020 | ( | ) | ||||||||||||||
(3) | One-Month LIBOR | 4/1/2020 | 3/26/2025 | ( | ) | |||||||||||||
Three-Month LIBOR | 6/30/2020 | 6/30/2030 | ( | ) | ( | ) | ||||||||||||
Three-Month LIBOR | 6/30/2020 | 6/30/2030 | ( | ) | ( | ) | ||||||||||||
Three-Month LIBOR | 6/30/2020 | 6/30/2030 | ( | ) | ( | ) | ||||||||||||
$ | ( | ) | $ | ( | ) |
(1) | The notional amount of this instrument is scheduled to amortize to $ |
(2) | The notional amount of this instrument is scheduled to amortize to $ |
(3) | The notional amount of this instrument is scheduled to amortize to $ |
Fair Value at | ||||||||||
Derivatives | Balance Sheet Location | June 30, 2020 | December 31, 2019 | |||||||
Interest rate swaps designated as cash flow hedges | Prepaid expenses and other assets, net | $ | $ | |||||||
Interest rate swaps designated as cash flow hedges | Interest rate derivatives (liabilities) | $ | ( | ) | $ | ( | ) |
Amount of Loss Recognized in AOCL on Derivatives | Amount of (Loss) Gain Reclassified from AOCL into Interest Expense on Statement of Operations | |||||||||||||||||||||||||||||||
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, | |||||||||||||||||||||||||||||
Derivatives in Hedging Relationships | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||
Interest rate derivatives | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ |
For the Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Beginning balance | $ | $ | ||||||
Distributions to noncontrolling interests | ( | ) | ( | ) | ||||
Net income attributable to noncontrolling interests | ||||||||
Adjustment to arrive at fair value of interests | ||||||||
Ending balance | $ | $ |
Operating Property Segments | |||||||||||||||||||||||||||||||||||||||||||
Defense/Information Technology Locations | |||||||||||||||||||||||||||||||||||||||||||
Fort Meade/BW Corridor | Northern Virginia Defense/IT | Lackland Air Force Base | Navy Support Locations | Redstone Arsenal | Data Center Shells | Total Defense/IT Locations | Regional Office | Wholesale Data Center | Other | Total | |||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Property operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
UJV NOI allocable to COPT | |||||||||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Additions to long-lived assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Transfers from non-operating properties | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Property operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
UJV NOI allocable to COPT | |||||||||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Additions to long-lived assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Transfers from non-operating properties | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Property operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
UJV NOI allocable to COPT | |||||||||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Additions to long-lived assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Transfers from non-operating properties | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Segment assets at June 30, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Revenues from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Property operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
UJV NOI allocable to COPT | |||||||||||||||||||||||||||||||||||||||||||
NOI from real estate operations | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Additions to long-lived assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Transfers from non-operating properties | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Segment assets at June 30, 2019 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Segment revenues from real estate operations | $ | $ | $ | $ | |||||||||||
Construction contract and other service revenues | |||||||||||||||
Total revenues | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
UJV NOI allocable to COPT | $ | $ | $ | $ | |||||||||||
Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Add: Equity in loss of unconsolidated non-real estate entities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Equity in income of unconsolidated entities | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Construction contract and other service revenues | $ | $ | $ | $ | |||||||||||
Construction contract and other service expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
NOI from service operations | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
NOI from real estate operations | $ | $ | $ | $ | |||||||||||
NOI from service operations | |||||||||||||||
Interest and other income | |||||||||||||||
Credit loss expense | ( | ) | ( | ) | |||||||||||
Gain on sales of real estate | |||||||||||||||
Equity in income of unconsolidated entities | |||||||||||||||
Income tax (expense) benefit | ( | ) | ( | ) | ( | ) | |||||||||
Depreciation and other amortization associated with real estate operations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
General, administrative and leasing expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Business development expenses and land carry costs | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Less: UJV NOI allocable to COPT included in equity in income of unconsolidated entities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income | $ | $ | $ | $ |
June 30, 2020 | June 30, 2019 | ||||||
Segment assets | $ | $ | |||||
Operating properties lease liabilities included in segment assets | |||||||
Non-operating property assets | |||||||
Other assets | |||||||
Total COPT consolidated assets | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Construction contract revenue: | |||||||||||||||
Guaranteed maximum price | $ | $ | $ | $ | |||||||||||
Firm fixed price | |||||||||||||||
Cost-plus fee | |||||||||||||||
Other | |||||||||||||||
$ | $ | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Construction contract revenue: | |||||||||||||||
Construction | $ | $ | $ | $ | |||||||||||
Design | |||||||||||||||
Other | |||||||||||||||
$ | $ | $ | $ |
For the Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Beginning balance | $ | $ | |||||
Ending balance | $ | $ |
For the Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Beginning balance | $ | $ | |||||
Ending balance | $ | $ |
For the Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Beginning balance | $ | $ | |||||
Ending balance | $ | $ | |||||
Portion of beginning balance recognized in revenue during: | |||||||
Three months ended June 30 | $ | $ | |||||
Six months ended June 30 | $ | $ |
Percentile Rank | Earned Awards 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 |
• | 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 COPT’s forward equity sale agreements, redeemable noncontrolling interests and our share-based compensation using the treasury stock or if-converted 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. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Numerator: | |||||||||||||||
Net income attributable to COPT | $ | $ | $ | $ | |||||||||||
Income attributable to share-based compensation awards | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Numerator for basic EPS on net income attributable to COPT common shareholders | |||||||||||||||
Preferred unit distributions | |||||||||||||||
Redeemable noncontrolling interests | |||||||||||||||
Common units in the Operating Partnership | |||||||||||||||
Income attributable to share-based compensation awards | |||||||||||||||
Numerator for diluted EPS on net income attributable to COPT common shareholders | $ | $ | $ | $ | |||||||||||
Denominator (all weighted averages): | |||||||||||||||
Denominator for basic EPS (common shares) | |||||||||||||||
Dilutive convertible preferred units | |||||||||||||||
Dilutive effect of common units | |||||||||||||||
Dilutive effect of redeemable noncontrolling interests | |||||||||||||||
Dilutive effect of share-based compensation awards | |||||||||||||||
Denominator for diluted EPS (common shares) | |||||||||||||||
Basic EPS | $ | $ | $ | $ | |||||||||||
Diluted EPS | $ | $ | $ | $ |
Weighted Average Shares Excluded from Denominator | |||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Conversion of common units | |||||||||||
Conversion of redeemable noncontrolling interests | |||||||||||
Conversion of Series I preferred units |
• | weighted average shares related to COPT’s forward equity sale agreements for the six months ended June 30, 2019 of |
• | weighted average restricted shares and deferred share awards for the three months ended June 30, 2020 and 2019 of |
• | weighted average options for the three and six months ended June 30, 2019 of |
• | weighted average unvested TB-PIUs for the three months ended June 30, 2020 and 2019 of |
• | the denominator is increased to include: (1) the weighted average number of potential additional common units that would have been outstanding if securities that are convertible into our common units were converted; and (2) the effect of dilutive |
• | the numerator is adjusted to add back any changes in income or loss that would result from the assumed conversion into common units that we add to the denominator. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Numerator: | |||||||||||||||
Net income attributable to COPLP | $ | $ | $ | $ | |||||||||||
Preferred unit distributions | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income attributable to share-based compensation awards | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Numerator for basic EPU on net income attributable to COPLP common unitholders | |||||||||||||||
Redeemable noncontrolling interests | |||||||||||||||
Income attributable to share-based compensation awards | |||||||||||||||
Dilutive effective of preferred units | |||||||||||||||
Numerator for diluted EPU on net income attributable to COPLP common unitholders | $ | $ | $ | $ | |||||||||||
Denominator (all weighted averages): | |||||||||||||||
Denominator for basic EPU (common units) | |||||||||||||||
Dilutive convertible preferred units | |||||||||||||||
Dilutive effect of redeemable noncontrolling interests | |||||||||||||||
Dilutive effect of share-based compensation awards | |||||||||||||||
Denominator for diluted EPU (common units) | |||||||||||||||
Basic EPU | $ | $ | $ | $ | |||||||||||
Diluted EPU | $ | $ | $ | $ |
Weighted Average Shares Excluded from Denominator | |||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Conversion of redeemable noncontrolling interests | |||||||||||
Conversion of Series I preferred units |
• | weighted average shares related to COPT’s forward equity sale agreements for the six months ended June 30, 2019 of |
• | weighted average restricted units and deferred share awards for the three months ended June 30, 2020 and 2019 of |
• | weighted average options for the three and six months ended June 30, 2019 of |
• | weighted average unvested TB-PIUs for the three months ended June 30, 2020 and 2019 of |
• | disruption of our tenants’ operations, which could adversely affect their ability, or willingness, to sustain their businesses and/or fulfill their lease obligations; |
• | our ability to maintain occupancy in our properties and obtain new leases for unoccupied and new development space at favorable terms or at all; |
• | shortages in supply of products or services from our and our tenants’ vendors that are needed for us and our tenants to operate effectively, and which could lead to increased costs for such products and services; |
• | access to debt and equity capital on attractive terms or at all. Severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our or our tenants’ ability to access capital necessary to fund operations, refinance debt or fund planned investments on a timely basis, and may adversely affect the valuation of financial assets and liabilities; |
• | our and our tenants’ ability to continue or complete planned development, including the potential for delays in the supply of materials or labor necessary for development; and |
• | an increase in the pace of businesses implementing remote work arrangements over the long-term, which would adversely effect demand for office space. |
• | finished the period with our office and data center shell portfolio 93.4% occupied and 94.5% leased; |
• | placed into service 642,000 square feet in four newly-developed properties (including two data center shell properties and two office properties in our Redstone Arsenal sub-segment) and one redeveloped property that were 98.6% leased as of June 30, 2020; and |
• | amended an existing term loan facility to increase the loan amount by $150.0 million and reduce the LIBOR interest rate spread on the facility. We used the resulting loan proceeds to repay borrowings under our Revolving Credit Facility that funded development costs. |
• | how we expect to generate cash for short and long-term capital needs; and |
• | our commitments and contingencies. |
• | general economic and business conditions, which will, among other things, affect office property and data center demand and rents, tenant creditworthiness, interest rates, financing availability and property values; |
• | adverse changes in the real estate markets, including, among other things, increased competition with other companies; |
• | risks and uncertainties regarding the impact of the COVID-19 pandemic, and similar pandemics, along with restrictive measures instituted to prevent spread, on our business, the real estate industry and national, regional and local economic conditions; |
• | governmental actions and initiatives, including risks associated with the impact of a prolonged government shutdown or budgetary reductions or impasses, such as a reduction in rental revenues, non-renewal of leases and/or reduced or delayed demand for additional space by our strategic customers; |
• | our ability to borrow on favorable terms; |
• | risks of real estate acquisition and development activities, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that development or operating costs may be greater than anticipated; |
• | risks of investing through joint venture structures, including risks that our joint venture partners may not fulfill their financial obligations as investors or may take actions that are inconsistent with our objectives; |
• | changes in our plans for properties or views of market economic conditions or failure to obtain development rights, either of which could result in recognition of significant impairment losses; |
• | our ability to satisfy and operate effectively under Federal income tax rules relating to real estate investment trusts and partnerships; |
• | possible adverse changes in tax laws; |
• | the dilutive effects of issuing additional common shares; |
• | our ability to achieve projected results; |
• | security breaches relating to cyber attacks, cyber intrusions or other factors; and |
• | environmental requirements. |
• | for the operations of our properties; |
◦ | we consulted with medical experts in developing an approach to safely operate our properties during the pandemic; |
◦ | we used manufacturer recommended OEM heating and air conditioning filters to ensure appropriate outside air distribution; |
◦ | we proactively engaged our tenants to help them through unknowns as pandemic concerns heightened and restrictive measures were being instituted, and maintained that engagement to ensure communication regarding steps we were taking in our business operations, any changes in tenant operations (such as office closures or revised work schedules) and the existence of any actual or presumed COVID-19 cases in properties; |
◦ | our on-site property operations staff were required to use personal protective equipment, such as masks, gloves and hand sanitizer, and implement other procedural changes to enhance separation and minimize spread; |
◦ | we instituted enhanced cleaning measures, particularly for high touch areas and flat surfaces, and conducted special deep cleanings in properties potentially affected by actual or presumed COVID-19 cases; |
◦ | we provided signage promoting proper social distancing practices and hand sanitizer stations for property common area lobbies; and |
◦ | for properties not being used by tenants due to office closures or work from home arrangements, we locked down public (non-tenant) access to the properties for security purposes and instituted other measures aimed at managing costs; |
• | for our employees: |
◦ | our staff deemed to be essential, including our executives, select other members of our leadership team and most of our property management team, have continued to report to their normal work locations; and |
◦ | most of our other staff worked from home from mid-March until the end of May, when they began reporting to their normal work locations on a weekly rotational basis; and |
• | for our leasing activities: |
◦ | we continued active engagement for lease transactions already in progress; |
◦ | during periods of time in which we were unable to physically show space to prospective tenants (from mid-March until late May to mid-June), we showed space to new prospective tenants using a combination of virtual technology and pre-recorded video tours; and |
◦ | we implemented new advertising strategies to promote space availability. |
• | same property NOI from real estate operations decreased 0.2% for the three months ended June 30, 2020 relative to the comparable 2019 period and increased 1.2% for the six months ended June 30, 2020 relative to the comparable 2019 period. These changes included the effect of a $1.6 million increase in provisions for collectability losses, most of which |
• | other lease revenue collections were not significantly affected by the pandemic. However, we have agreed to deferred payment arrangements for $2.8 million in lease receivables to be repaid in most cases by 2021 with primarily Regional Office tenants and tenants serving as amenities to Defense/IT Location properties whose operations were significantly disrupted; |
• | office and data center shell portfolio was 93.4% occupied (compared to 92.9% at year end) and 94.5% leased (compared to 94.4% at year end) and our Same Properties portfolio was 92.3% occupied (compared to 91.8% at year end) and 93.5% leased (unchanged from year end). These percentages reflect decreases of 0.3% to 0.4% since March 31, 2020 attributable primarily to a tenant whose planned vacancy was known prior to the pandemic; |
• | operating expenses were not significantly affected by the pandemic. While there were some additional expenses resulting from additional cleaning related costs, personal protective equipment supplies and social distancing measures, those expenses were offset by expense savings from reduced property usage by tenants; and |
• | leadership team concluded that the economic disruption resulting from COVID-19 constituted a significant adverse change in the business climate that could affect the value of our Regional Office properties, which are dependent on commercial office tenants and could suffer increased vacancy as a result. Accordingly, we concluded that these circumstances constituted an indicator of impairment. We performed recovery analyses for each Regional Office property’s asset group and concluded that the carrying value of each asset group was recoverable from the respective estimated undiscounted future cash flows. As a result, no impairment loss was recognized. |
June 30, 2020 | December 31, 2019 | ||||||
Occupancy rates at period end | |||||||
Total | 93.4 | % | 92.9 | % | |||
Defense/IT Locations: | |||||||
Fort Meade/BW Corridor | 90.9 | % | 92.4 | % | |||
Northern Virginia Defense/IT | 87.0 | % | 82.4 | % | |||
Lackland Air Force Base | 100.0 | % | 100.0 | % | |||
Navy Support Locations | 93.9 | % | 92.5 | % | |||
Redstone Arsenal | 99.7 | % | 99.3 | % | |||
Data Center Shells | 100.0 | % | 100.0 | % | |||
Total Defense/IT Locations | 93.8 | % | 93.7 | % | |||
Regional Office | 92.0 | % | 88.1 | % | |||
Other | 68.4 | % | 73.0 | % | |||
Average contractual annual rental rate per square foot at period end (1) | $ | 31.15 | $ | 31.28 |
(1) | Includes estimated expense reimbursements. |
Rentable Square Feet | Occupied Square Feet | ||||
(in thousands) | |||||
December 31, 2019 | 19,173 | 17,816 | |||
Vacated upon lease expiration (1) | — | (264 | ) | ||
Occupancy for new leases (2) | — | 310 | |||
Developed or redeveloped | 642 | 620 | |||
Other changes | (34 | ) | (3 | ) | |
June 30, 2020 | 19,781 | 18,479 |
(1) | Includes lease terminations and space reductions occurring in connection with lease renewals. |
(2) | Excludes occupancy of vacant square feet acquired or developed. |
• | office and data center shell properties: |
• | stably owned and 100% operational throughout the current and prior year reporting periods. We define these as changes from “Same Properties”; |
• | developed or redeveloped and placed into service that were not 100% operational throughout the current and prior year reporting periods; and |
• | disposed; and |
• | our wholesale data center. |
For the Three Months Ended June 30, | |||||||||||
2020 | 2019 | Variance | |||||||||
(in thousands) | |||||||||||
Revenues | |||||||||||
Revenues from real estate operations | $ | 132,538 | $ | 132,771 | $ | (233 | ) | ||||
Construction contract and other service revenues | 12,236 | 42,299 | (30,063 | ) | |||||||
Total revenues | 144,774 | 175,070 | (30,296 | ) | |||||||
Operating expenses | |||||||||||
Property operating expenses | 50,204 | 47,886 | 2,318 | ||||||||
Depreciation and amortization associated with real estate operations | 33,612 | 34,802 | (1,190 | ) | |||||||
Construction contract and other service expenses | 11,711 | 41,002 | (29,291 | ) | |||||||
General, administrative and leasing expenses | 8,158 | 9,386 | (1,228 | ) | |||||||
Business development expenses and land carry costs | 1,262 | 870 | 392 | ||||||||
Total operating expenses | 104,947 | 133,946 | (28,999 | ) | |||||||
Interest expense | (16,797 | ) | (18,475 | ) | 1,678 | ||||||
Interest and other income | 2,282 | 1,849 | 433 | ||||||||
Credit loss expense | (615 | ) | — | (615 | ) | ||||||
Gain on sales of real estate | — | 84,469 | (84,469 | ) | |||||||
Equity in income of unconsolidated entities | 454 | 420 | 34 | ||||||||
Income tax (expense) benefit | (30 | ) | 176 | (206 | ) | ||||||
Net income | $ | 25,121 | $ | 109,563 | $ | (84,442 | ) |
For the Three Months Ended June 30, | |||||||||||
2020 | 2019 | Variance | |||||||||
(Dollars in thousands, except per square foot data) | |||||||||||
Revenues | |||||||||||
Same Properties revenues | |||||||||||
Lease revenue, excluding lease termination revenue and provision for collectability losses | $ | 119,808 | $ | 115,363 | $ | 4,445 | |||||
Lease termination revenue | 358 | 285 | 73 | ||||||||
Provision for collectability losses included in lease revenue | (1,592 | ) | (24 | ) | (1,568 | ) | |||||
Other property revenue | 337 | 1,303 | (966 | ) | |||||||
Same Properties total revenues | 118,911 | 116,927 | 1,984 | ||||||||
Developed and redeveloped properties placed in service | 7,189 | 1,929 | 5,260 | ||||||||
Wholesale data center | 6,455 | 8,560 | (2,105 | ) | |||||||
Dispositions | (17 | ) | 4,673 | (4,690 | ) | ||||||
Other | — | 682 | (682 | ) | |||||||
132,538 | 132,771 | (233 | ) | ||||||||
Property operating expenses | |||||||||||
Same Properties | (45,487 | ) | (43,338 | ) | (2,149 | ) | |||||
Developed and redeveloped properties placed in service | (1,255 | ) | (346 | ) | (909 | ) | |||||
Wholesale data center | (3,463 | ) | (3,618 | ) | 155 | ||||||
Dispositions | 4 | (562 | ) | 566 | |||||||
Other | (3 | ) | (22 | ) | 19 | ||||||
(50,204 | ) | (47,886 | ) | (2,318 | ) | ||||||
UJV NOI allocable to COPT | |||||||||||
Same Properties | 1,220 | 1,205 | 15 | ||||||||
Retained interests in UJV formed in 2019 | 505 | 46 | 459 | ||||||||
1,725 | 1,251 | 474 | |||||||||
NOI from real estate operations | |||||||||||
Same Properties | 74,644 | 74,794 | (150 | ) | |||||||
Developed and redeveloped properties placed in service | 5,934 | 1,583 | 4,351 | ||||||||
Wholesale data center | 2,992 | 4,942 | (1,950 | ) | |||||||
Dispositions, net of retained interests in UJV formed in 2019 | 492 | 4,157 | (3,665 | ) | |||||||
Other | (3 | ) | 660 | (663 | ) | ||||||
$ | 84,059 | $ | 86,136 | $ | (2,077 | ) | |||||
Same Properties NOI from real estate operations by segment | |||||||||||
Defense/IT Locations | $ | 65,995 | $ | 66,980 | $ | (985 | ) | ||||
Regional Office | 8,274 | 7,430 | 844 | ||||||||
Other | 375 | 384 | (9 | ) | |||||||
$ | 74,644 | $ | 74,794 | $ | (150 | ) | |||||
Same Properties rent statistics | |||||||||||
Average occupancy rate | 92.4 | % | 91.6 | % | 0.8 | % | |||||
Average straight-line rent per occupied square foot (1) | $ | 6.47 | $ | 6.55 | $ | (0.08 | ) |
(1) | Includes minimum base rents, net of abatements, and lease incentives on a straight-line basis for the periods set forth above. |
For the Three Months Ended June 30, | ||||||||||||
2020 | 2019 | Variance | ||||||||||
(in thousands) | ||||||||||||
Construction contract and other service revenues | $ | 12,236 | $ | 42,299 | $ | (30,063 | ) | |||||
Construction contract and other service expenses | (11,711 | ) | (41,002 | ) | 29,291 | |||||||
NOI from service operations | $ | 525 | $ | 1,297 | $ | (772 | ) |
For the Six Months Ended June 30, | |||||||||||
2020 | 2019 | Variance | |||||||||
(in thousands) | |||||||||||
Revenues | |||||||||||
Revenues from real estate operations | $ | 264,654 | $ | 264,761 | $ | (107 | ) | ||||
Construction contract and other service revenues | 25,917 | 59,249 | (33,332 | ) | |||||||
Total revenues | 290,571 | 324,010 | (33,439 | ) | |||||||
Operating expenses | |||||||||||
Property operating expenses | 100,203 | 97,331 | 2,872 | ||||||||
Depreciation and amortization associated with real estate operations | 66,208 | 69,598 | (3,390 | ) | |||||||
Construction contract and other service expenses | 24,832 | 57,328 | (32,496 | ) | |||||||
General, administrative and leasing expenses | 15,644 | 18,137 | (2,493 | ) | |||||||
Business development expenses and land carry costs | 2,380 | 1,983 | 397 | ||||||||
Total operating expenses | 209,267 | 244,377 | (35,110 | ) | |||||||
Interest expense | (33,637 | ) | (37,149 | ) | 3,512 | ||||||
Interest and other income | 3,487 | 4,135 | (648 | ) | |||||||
Credit loss expense | (1,304 | ) | — | (1,304 | ) | ||||||
Gain on sales of real estate | 5 | 84,469 | (84,464 | ) | |||||||
Equity in income of unconsolidated entities | 895 | 811 | 84 | ||||||||
Income tax expense | (79 | ) | (18 | ) | (61 | ) | |||||
Net income | $ | 50,671 | $ | 131,881 | $ | (81,210 | ) |
For the Six Months Ended June 30, | |||||||||||
2020 | 2019 | Variance | |||||||||
(Dollars in thousands, except per square foot data) | |||||||||||
Revenues | |||||||||||
Same Properties revenues | |||||||||||
Lease revenue, excluding lease termination revenue and provision for collectability losses | $ | 238,175 | $ | 231,822 | $ | 6,353 | |||||
Lease termination revenue | 443 | 806 | (363 | ) | |||||||
Provision for collectability losses included in lease revenue | (1,700 | ) | (93 | ) | (1,607 | ) | |||||
Other property revenue | 1,381 | 2,345 | (964 | ) | |||||||
Same Properties total revenues | 238,299 | 234,880 | 3,419 | ||||||||
Constructed and redeveloped properties placed in service | 12,741 | 2,831 | 9,910 | ||||||||
Wholesale data center | 13,627 | 16,431 | (2,804 | ) | |||||||
Dispositions | (17 | ) | 9,048 | (9,065 | ) | ||||||
Other | 4 | 1,571 | (1,567 | ) | |||||||
264,654 | 264,761 | (107 | ) | ||||||||
Property operating expenses | |||||||||||
Same Properties | (91,132 | ) | (89,503 | ) | (1,629 | ) | |||||
Constructed and redeveloped properties placed in service | (2,370 | ) | (660 | ) | (1,710 | ) | |||||
Wholesale data center | (6,696 | ) | (6,456 | ) | (240 | ) | |||||
Dispositions | 4 | (700 | ) | 704 | |||||||
Other | (9 | ) | (12 | ) | 3 | ||||||
(100,203 | ) | (97,331 | ) | (2,872 | ) | ||||||
UJV NOI allocable to COPT | |||||||||||
Same Properties | 2,427 | 2,424 | 3 | ||||||||
Retained interests in UJV formed in 2019 | 1,011 | 46 | 965 | ||||||||
3,438 | 2,470 | 968 | |||||||||
NOI from real estate operations | |||||||||||
Same Properties | 149,594 | 147,801 | 1,793 | ||||||||
Constructed and redeveloped properties placed in service | 10,371 | 2,171 | 8,200 | ||||||||
Wholesale data center | 6,931 | 9,975 | (3,044 | ) | |||||||
Dispositions, net of retained interests in UJV formed in 2019 | 998 | 8,394 | (7,396 | ) | |||||||
Other | (5 | ) | 1,559 | (1,564 | ) | ||||||
$ | 167,889 | $ | 169,900 | $ | (2,011 | ) | |||||
Same Properties NOI from real estate operations by segment | |||||||||||
Defense/IT Locations | $ | 132,561 | $ | 132,159 | $ | 402 | |||||
Regional Office | 16,197 | 14,847 | 1,350 | ||||||||
Other | 836 | 795 | 41 | ||||||||
$ | 149,594 | $ | 147,801 | $ | 1,793 | ||||||
Same Properties rent statistics | |||||||||||
Average occupancy rate | 92.3 | % | 91.6 | % | 0.7 | % | |||||
Average straight-line rent per occupied square foot (1) | $ | 13.02 | $ | 13.10 | $ | (0.08 | ) |
(1) | Includes minimum base rents, net of abatements, and lease incentives on a straight-line basis for the periods set forth above. |
For the Six Months Ended June 30, | ||||||||||||
2020 | 2019 | Variance | ||||||||||
(in thousands) | ||||||||||||
Construction contract and other service revenues | $ | 25,917 | $ | 59,249 | $ | (33,332 | ) | |||||
Construction contract and other service expenses | (24,832 | ) | (57,328 | ) | 32,496 | |||||||
NOI from service operations | $ | 1,085 | $ | 1,921 | $ | (836 | ) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(Dollars and shares in thousands, except per share data) | |||||||||||||||
Net income | $ | 25,121 | $ | 109,563 | $ | 50,671 | $ | 131,881 | |||||||
Real estate-related depreciation and amortization | 33,612 | 34,802 | 66,208 | 69,598 | |||||||||||
Depreciation and amortization on UJV allocable to COPT | 818 | 566 | 1,636 | 1,132 | |||||||||||
Gain on sales of real estate | — | (84,469 | ) | (5 | ) | (84,469 | ) | ||||||||
FFO | 59,551 | 60,462 | 118,510 | 118,142 | |||||||||||
Noncontrolling interests-preferred units in the Operating Partnership | (77 | ) | (165 | ) | (154 | ) | (330 | ) | |||||||
FFO allocable to other noncontrolling interests | (1,525 | ) | (1,188 | ) | (13,540 | ) | (2,159 | ) | |||||||
Basic FFO allocable to share-based compensation awards | (254 | ) | (229 | ) | (447 | ) | (414 | ) | |||||||
Basic FFO available to common share and common unit holders | 57,695 | 58,880 | 104,369 | 115,239 | |||||||||||
Dilutive preferred units in the Operating Partnership | 77 | — | 154 | — | |||||||||||
Redeemable noncontrolling interests | 37 | 33 | 69 | 942 | |||||||||||
Diluted FFO available to common share and common unit holders | 57,809 | 58,913 | 104,592 | 116,181 | |||||||||||
Executive transition costs | — | — | — | 4 | |||||||||||
Demolition costs on redevelopment and nonrecurring improvements | 9 | — | 52 | 44 | |||||||||||
Non-comparable professional and legal expenses | — | 311 | — | 311 | |||||||||||
FFO allocation to other noncontrolling interests resulting from capital event | — | — | 11,090 | — | |||||||||||
Diluted FFO comparability adjustments allocable to share-based compensation awards | (1 | ) | (2 | ) | (51 | ) | (2 | ) | |||||||
Diluted FFO available to common share and common unit holders, as adjusted for comparability | $ | 57,817 | $ | 59,222 | $ | 115,683 | $ | 116,538 | |||||||
Weighted average common shares | 111,800 | 111,557 | 111,762 | 110,759 | |||||||||||
Conversion of weighted average common units | 1,237 | 1,327 | 1,232 | 1,329 | |||||||||||
Weighted average common shares/units - Basic FFO per share | 113,037 | 112,884 | 112,994 | 112,088 | |||||||||||
Dilutive effect of share-based compensation awards | 321 | 310 | 280 | 289 | |||||||||||
Dilutive convertible preferred units | 176 | — | 176 | — | |||||||||||
Redeemable noncontrolling interests | 157 | 136 | 133 | 1,037 | |||||||||||
Weighted average common shares/units - Diluted FFO per share and as adjusted for comparability | 113,691 | 113,330 | 113,583 | 113,414 | |||||||||||
Diluted FFO per share | $ | 0.51 | $ | 0.52 | $ | 0.92 | $ | 1.02 | |||||||
Diluted FFO per share, as adjusted for comparability | $ | 0.51 | $ | 0.52 | $ | 1.02 | $ | 1.03 | |||||||
Denominator for diluted EPS | 112,121 | 113,105 | 112,042 | 112,507 | |||||||||||
Weighted average common units | 1,237 | 1,327 | 1,232 | — | |||||||||||
Redeemable noncontrolling interests | 157 | (926 | ) | 133 | 907 | ||||||||||
Dilutive convertible preferred units | 176 | (176 | ) | 176 | — | ||||||||||
Denominator for diluted FFO per share and as adjusted for comparability | 113,691 | 113,330 | 113,583 | 113,414 |
Development and redevelopment | $ | 197,037 | |
Tenant improvements on operating properties (1) | 17,153 | ||
Capital improvements on operating properties | 16,137 | ||
$ | 230,327 |
• | net proceeds from debt borrowings of $179.3 million; offset in part by |
• | dividends and/or distributions to equity holders of $62.5 million. |
• | dividends and/or distributions to equity holders of $62.2 million; and |
• | net debt repayments of $41.6 million; offset in part by |
• | net proceeds from the issuance of common shares (or units) of $46.4 million. |
For the Periods Ending December 31, | |||||||||||||||||||||||||||
2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | |||||||||||||||||||||
Contractual obligations (1) | |||||||||||||||||||||||||||
Debt (2) | |||||||||||||||||||||||||||
Balloon payments due upon maturity | $ | 12,133 | $ | 300,000 | $ | 464,406 | $ | 582,577 | $ | 277,649 | $ | 367,723 | $ | 2,004,488 | |||||||||||||
Scheduled principal payments (3) | 1,979 | 3,955 | 4,498 | 3,553 | 2,334 | 2,294 | 18,613 | ||||||||||||||||||||
Interest on debt (3)(4) | 33,498 | 60,193 | 54,656 | 36,980 | 18,631 | 9,848 | 213,806 | ||||||||||||||||||||
Development and redevelopment obligations (5)(6) | 174,511 | 28,897 | 2,354 | — | — | — | 205,762 | ||||||||||||||||||||
Third-party construction cost obligations (6)(7) | 5,998 | 5,261 | — | — | — | — | 11,259 | ||||||||||||||||||||
Tenant and other building improvements (3)(6) | 20,957 | 28,752 | 9,547 | — | — | — | 59,256 | ||||||||||||||||||||
Property finance leases (principal and interest) (3) | 660 | 14 | 14 | — | — | — | 688 | ||||||||||||||||||||
Property operating leases (3) | 636 | 1,328 | 1,352 | 1,358 | 1,363 | 113,780 | 119,817 | ||||||||||||||||||||
Total contractual cash obligations | $ | 250,372 | $ | 428,400 | $ | 536,827 | $ | 624,468 | $ | 299,977 | $ | 493,645 | $ | 2,633,689 |
(1) | The contractual obligations set forth in this table exclude contracts for property operations and certain other contracts entered into in the normal course of business. Also excluded are accruals and payables incurred and interest rate derivative liabilities, which are reflected in our reported liabilities (although debt and lease liabilities are included on the table). |
(2) | Represents scheduled principal amortization payments and maturities only and therefore excludes net debt discounts and deferred financing costs of $11.1 million. As of June 30, 2020, maturities included $300 million in 2021 that we expect to refinance; maturities also included $169.0 million in 2023 that may be extended to 2024, subject to certain conditions. |
(3) | We expect to pay these items using cash flow from operations. |
(4) | Represents interest costs for our outstanding debt as of June 30, 2020 for the terms of such debt. For variable rate debt, the amounts reflected above used June 30, 2020 interest rates on variable rate debt in computing interest costs for the terms of such debt. We expect to pay these items using cash flow from operations. |
(5) | Represents contractual obligations pertaining to new development and redevelopment activities. |
(6) | Due to the long-term nature of certain development and construction contracts and leases included in these lines, the amounts reported in the table represent our estimate of the timing for the related obligations being payable. |
(7) | Represents contractual obligations pertaining to projects for which we are acting as construction manager on behalf of unrelated parties who are our clients. We expect to be reimbursed in full for these costs by our clients. |
For the Periods Ending December 31, | |||||||||||||||||||||||||||
2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | |||||||||||||||||||||
Debt: | |||||||||||||||||||||||||||
Fixed rate debt (1) | $ | 1,878 | $ | 303,875 | $ | 4,033 | $ | 416,590 | $ | 279,443 | $ | 337,442 | $ | 1,343,261 | |||||||||||||
Weighted average interest rate | 3.96 | % | 3.70 | % | 3.98 | % | 3.70 | % | 5.16 | % | 4.87 | % | 4.30 | % | |||||||||||||
Variable rate debt (2) | $ | 12,234 | $ | 80 | $ | 464,871 | $ | 169,540 | $ | 540 | $ | 32,575 | $ | 679,840 | |||||||||||||
Weighted average interest rate (3) | 2.02 | % | 1.62 | % | 1.36 | % | 1.21 | % | 1.68 | % | 1.69 | % | 1.35 | % |
(1) | Represents principal maturities only and therefore excludes net discounts and deferred financing costs of $11.1 million. |
(2) | As of June 30, 2020, maturities included $169.0 million in 2023 that may be extended to 2024, subject to certain conditions. |
(3) | The amounts reflected above used interest rates as of June 30, 2020 for variable rate debt. |
• | disruption of our tenants’ operations, which could adversely affect their ability, or willingness, to sustain their businesses and/or fulfill their lease obligations; |
• | our ability to maintain occupancy in our properties and obtain new leases for unoccupied and new development space at favorable terms or at all; |
• | shortages in supply of products or services from our and our tenants’ vendors that are needed for us and our tenants to operate effectively, and which could lead to increased costs for such products and services; |
• | access to debt and equity capital on attractive terms or at all. Severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our or our tenants’ ability to access capital necessary to fund operations, refinance debt or fund planned investments on a timely basis, and may adversely affect the valuation of financial assets and liabilities; |
• | our and our tenants’ ability to continue or complete planned development, including the potential for delays in the supply of materials or labor necessary for development; and |
• | an increase in the pace of businesses implementing remote work arrangements over the long-term, which would adversely effect demand for office space. |
(a) | Not applicable |
EXHIBIT NO. | DESCRIPTION | |
101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document (filed herewith). | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document (filed herewith). | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith). | |
101.LAB | Inline XBRL Extension Labels Linkbase (filed herewith). | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith). | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith). | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
CORPORATE OFFICE PROPERTIES TRUST | CORPORATE OFFICE PROPERTIES, L.P. | ||
By: Corporate Office Properties Trust, | |||
its General Partner | |||
/s/ Stephen E. Budorick | /s/ Stephen E. Budorick | ||
Stephen E. Budorick | Stephen E. Budorick | ||
President and Chief Executive Officer | President and Chief Executive Officer | ||
/s/ Anthony Mifsud | /s/ Anthony Mifsud | ||
Anthony Mifsud | Anthony Mifsud | ||
Executive Vice President and Chief Financial Officer | Executive Vice President and Chief Financial Officer | ||
Dated: | July 31, 2020 | Dated: | July 31, 2020 |
Date: | July 31, 2020 | /s/ Stephen E. Budorick | |
Stephen E. Budorick | |||
President and Chief Executive Officer |
Date: | July 31, 2020 | /s/ Anthony Mifsud | |
Anthony Mifsud | |||
Chief Financial Officer |
Date: | July 31, 2020 | /s/ Stephen E. Budorick | |
Stephen E. Budorick | |||
President and Chief Executive Officer | |||
Date: | July 31, 2020 | /s/ Anthony Mifsud | |
Anthony Mifsud | |||
Chief Financial Officer |
/s/ Stephen E. Budorick | |
Stephen E. Budorick | |
President and Chief Executive Officer | |
Date: | July 31, 2020 |
/s/ Anthony Mifsud | |
Anthony Mifsud | |
Chief Financial Officer | |
Date: | July 31, 2020 |
/s/ Stephen E. Budorick | |
Stephen E. Budorick | |
President and Chief Executive Officer | |
Date: | July 31, 2020 |
/s/ Anthony Mifsud | |
Anthony Mifsud | |
Chief Financial Officer | |
Date: | July 31, 2020 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Net income | $ 25,121 | $ 109,563 | $ 50,671 | $ 131,881 |
Other comprehensive loss: | ||||
Unrealized loss on interest rate derivatives | (3,315) | (13,545) | (41,020) | (22,390) |
Loss (gain) on interest rate derivatives recognized in interest expense | 935 | (557) | 1,066 | (1,127) |
Total other comprehensive loss | (2,380) | (14,102) | (39,954) | (23,517) |
Comprehensive income | 22,741 | 95,461 | 10,717 | 108,364 |
Comprehensive income attributable to noncontrolling interests | (1,556) | (2,597) | (2,235) | (3,941) |
Comprehensive income attributable to COPT/COPLP | 21,185 | 92,864 | 8,482 | 104,423 |
Corporate Office Properties, L.P. | ||||
Net income | 25,121 | 109,563 | 50,671 | 131,881 |
Other comprehensive loss: | ||||
Unrealized loss on interest rate derivatives | (3,315) | (13,545) | (41,020) | (22,390) |
Loss (gain) on interest rate derivatives recognized in interest expense | 935 | (557) | 1,066 | (1,127) |
Total other comprehensive loss | (2,380) | (14,102) | (39,954) | (23,517) |
Comprehensive income | 22,741 | 95,461 | 10,717 | 108,364 |
Comprehensive income attributable to noncontrolling interests | (1,223) | (1,268) | (1,976) | (2,305) |
Comprehensive income attributable to COPT/COPLP | $ 21,518 | $ 94,193 | $ 8,741 | $ 106,059 |
Consolidated Statements of Equity - USD ($) $ in Thousands |
Total |
Forward Equity Sale Agreement |
Common Shares |
Common Shares
Forward Equity Sale Agreement
|
Additional Paid-in Capital |
Additional Paid-in Capital
Forward Equity Sale Agreement
|
Cumulative Distributions in Excess of Net Income |
Accumulated Other Comprehensive Loss |
Noncontrolling Interests |
Corporate Office Properties, L.P. |
Corporate Office Properties, L.P.
Forward Equity Sale Agreement
|
Corporate Office Properties, L.P.
Common Shares
|
Corporate Office Properties, L.P.
Common Shares
Forward Equity Sale Agreement
|
Corporate Office Properties, L.P.
Accumulated Other Comprehensive Loss
|
Corporate Office Properties, L.P.
Noncontrolling Interests
|
Corporate Office Properties, L.P.
Limited Partner
|
Corporate Office Properties, L.P.
Limited Partner
Preferred Shares
|
Cumulative Effect, Period Of Adoption, Adjustment |
Cumulative Effect, Period Of Adoption, Adjustment
Cumulative Distributions in Excess of Net Income
|
Cumulative Effect, Period Of Adoption, Adjustment
Corporate Office Properties, L.P.
|
Cumulative Effect, Period Of Adoption, Adjustment
Corporate Office Properties, L.P.
Common Shares
|
Cumulative Effect, Period of Adoption, Adjusted Balance |
Cumulative Effect, Period of Adoption, Adjusted Balance
Common Shares
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Additional Paid-in Capital
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Cumulative Distributions in Excess of Net Income
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Accumulated Other Comprehensive Loss
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Noncontrolling Interests
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Corporate Office Properties, L.P.
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Corporate Office Properties, L.P.
Common Shares
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Corporate Office Properties, L.P.
Accumulated Other Comprehensive Loss
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Corporate Office Properties, L.P.
Noncontrolling Interests
|
Cumulative Effect, Period of Adoption, Adjusted Balance
Corporate Office Properties, L.P.
Limited Partner
Preferred Shares
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance, preferred units (in share/units) at Dec. 31, 2018 | 352,000 | |||||||||||||||||||||||||||||||
Balance at Dec. 31, 2018 | $ 1,627,048 | $ 1,102 | $ 2,431,355 | $ (846,808) | $ (238) | $ 41,637 | $ 1,627,048 | $ 1,604,655 | $ (121) | $ 13,714 | $ 8,800 | |||||||||||||||||||||
Balance (in units/ shares) at Dec. 31, 2018 | 110,241,868 | 111,574,754 | ||||||||||||||||||||||||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||||||||||||||||||||||
Conversion of common units to common shares | $ 0 | 80 | (80) | |||||||||||||||||||||||||||||
Redemption of common units (in units) | (44) | |||||||||||||||||||||||||||||||
Redemption of common units | (1) | (1) | (1) | $ (1) | ||||||||||||||||||||||||||||
Redemption of vested equity awards | $ (1,920) | (1,920) | (1,920) | $ (1,920) | ||||||||||||||||||||||||||||
Issuance of common units resulting from common shares issued under COPT forward equity sale agreements (in units) | 1,614,087 | 1,614,087 | ||||||||||||||||||||||||||||||
Common shares issued under sale agreements and programs | $ 46,454 | $ 16 | $ 46,438 | $ 46,454 | $ 46,454 | |||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions (in units) | 88,432 | 343,934 | ||||||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions | $ 3,635 | 1 | 3,049 | 585 | 3,635 | $ 3,635 | ||||||||||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | (834) | 834 | |||||||||||||||||||||||||||||
Comprehensive income | 106,820 | 127,650 | (23,227) | 2,397 | 106,820 | 129,246 | (23,517) | 761 | 330 | |||||||||||||||||||||||
Dividends/Distributions | (61,509) | (61,509) | (62,612) | (62,282) | $ (330) | |||||||||||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | (1,103) | (1,103) | ||||||||||||||||||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | 2,570 | 2,570 | 2,570 | 2,570 | ||||||||||||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities/subsidiaries | (8) | (8) | (8) | (8) | ||||||||||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | $ (2,875) | (2,875) | (2,875) | $ (2,875) | ||||||||||||||||||||||||||||
Balance, preferred units (in shares/units) at Jun. 30, 2019 | 352,000 | |||||||||||||||||||||||||||||||
Balance (in units/ shares) at Jun. 30, 2019 | 111,949,887 | 113,532,731 | ||||||||||||||||||||||||||||||
Balance at Jun. 30, 2019 | $ 1,719,111 | 1,119 | 2,475,293 | (780,667) | (23,465) | 46,831 | 1,719,111 | $ 1,716,912 | (23,638) | 17,037 | $ 8,800 | |||||||||||||||||||||
Balance, preferred units (in share/units) at Mar. 31, 2019 | 352,000 | |||||||||||||||||||||||||||||||
Balance at Mar. 31, 2019 | $ 1,656,178 | 1,119 | 2,475,497 | (856,703) | (9,538) | 45,803 | 1,656,178 | $ 1,640,272 | (9,536) | 16,642 | $ 8,800 | |||||||||||||||||||||
Balance (in units/ shares) at Mar. 31, 2019 | 111,939,790 | 113,515,814 | ||||||||||||||||||||||||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||||||||||||||||||||||
Redemption of common units (in units) | (44) | |||||||||||||||||||||||||||||||
Redemption of common units | $ (1) | (1) | (1) | $ (1) | ||||||||||||||||||||||||||||
Redemption of vested equity awards | $ (103) | (103) | (103) | $ (103) | ||||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions (in units) | 10,097 | 16,961 | ||||||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions | $ 1,833 | 1,487 | 346 | 1,833 | $ 1,833 | |||||||||||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 488 | (488) | |||||||||||||||||||||||||||||
Comprehensive income | 94,592 | 106,791 | (13,927) | 1,728 | 94,592 | 108,130 | (14,102) | 399 | 165 | |||||||||||||||||||||||
Dividends/Distributions | (30,755) | (30,755) | (31,308) | (31,143) | $ (165) | |||||||||||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | (553) | (553) | ||||||||||||||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities/subsidiaries | (4) | (4) | (4) | (4) | ||||||||||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | $ (2,076) | (2,076) | (2,076) | $ (2,076) | ||||||||||||||||||||||||||||
Balance, preferred units (in shares/units) at Jun. 30, 2019 | 352,000 | |||||||||||||||||||||||||||||||
Balance (in units/ shares) at Jun. 30, 2019 | 111,949,887 | 113,532,731 | ||||||||||||||||||||||||||||||
Balance at Jun. 30, 2019 | $ 1,719,111 | 1,119 | 2,475,293 | (780,667) | (23,465) | 46,831 | 1,719,111 | $ 1,716,912 | (23,638) | 17,037 | $ 8,800 | |||||||||||||||||||||
Balance, preferred units (in share/units) at Dec. 31, 2019 | 352,000 | 352,000 | 352,000 | |||||||||||||||||||||||||||||
Balance at Dec. 31, 2019 | $ 1,719,245 | 1,121 | 2,481,558 | (778,275) | (25,444) | 40,285 | 1,719,245 | $ 1,724,159 | (25,648) | 11,934 | $ 8,800 | $ (5,541) | $ (5,541) | $ (5,541) | $ (5,541) | $ 1,713,704 | $ 1,121 | $ 2,481,558 | $ (783,816) | $ (25,444) | $ 40,285 | $ 1,713,704 | $ 1,718,618 | $ (25,648) | $ 11,934 | $ 8,800 | ||||||
Balance (in units/ shares) at Dec. 31, 2019 | 112,068,705 | 113,551,130 | 1,482,425 | 113,551,130 | ||||||||||||||||||||||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||||||||||||||||||||||
Conversion of common units to common shares | $ 0 | 182 | (182) | |||||||||||||||||||||||||||||
Redemption of vested equity awards | $ (1,572) | (1,572) | (1,572) | $ (1,572) | ||||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions (in units) | 102,478 | 260,483 | ||||||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions | $ 2,946 | 1 | 2,171 | 774 | 2,946 | $ 2,946 | ||||||||||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | (25) | 25 | |||||||||||||||||||||||||||||
Comprehensive income | 8,642 | 47,551 | (39,069) | 160 | 8,642 | 48,122 | (39,535) | (99) | 154 | |||||||||||||||||||||||
Dividends/Distributions | (61,694) | (61,694) | (62,556) | (62,402) | $ (154) | |||||||||||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | (862) | (862) | ||||||||||||||||||||||||||||||
Contributions from noncontrolling interests in other consolidated entities | 112 | 112 | 112 | 112 | ||||||||||||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities/subsidiaries | (15) | (15) | (15) | (15) | ||||||||||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | $ (4,337) | (4,337) | (4,337) | $ (4,337) | ||||||||||||||||||||||||||||
Balance, preferred units (in shares/units) at Jun. 30, 2020 | 352,000 | 352,000 | ||||||||||||||||||||||||||||||
Balance (in units/ shares) at Jun. 30, 2020 | 112,183,192 | 113,811,613 | 1,628,421 | |||||||||||||||||||||||||||||
Balance at Jun. 30, 2020 | $ 1,656,924 | 1,122 | 2,477,977 | (797,959) | (64,513) | 40,297 | 1,656,924 | $ 1,701,375 | (65,183) | 11,932 | $ 8,800 | |||||||||||||||||||||
Balance, preferred units (in share/units) at Mar. 31, 2020 | 352,000 | |||||||||||||||||||||||||||||||
Balance at Mar. 31, 2020 | $ 1,665,186 | 1,122 | 2,476,677 | (790,600) | (62,201) | 40,188 | 1,665,186 | $ 1,707,395 | (62,843) | 11,834 | $ 8,800 | |||||||||||||||||||||
Balance (in units/ shares) at Mar. 31, 2020 | 112,169,463 | 113,789,912 | ||||||||||||||||||||||||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||||||||||||||||||||||
Redemption of vested equity awards | $ (80) | (80) | (80) | $ (80) | ||||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions (in units) | 13,729 | 21,701 | ||||||||||||||||||||||||||||||
Share-based compensation issuance, net of redemptions | $ 1,736 | 1,188 | 548 | 1,736 | $ 1,736 | |||||||||||||||||||||||||||
Adjustments to noncontrolling interests resulting from changes in ownership of COPLP | 0 | 428 | (428) | |||||||||||||||||||||||||||||
Comprehensive income | 21,624 | 23,497 | (2,312) | 439 | 21,624 | 23,781 | (2,340) | 106 | 77 | |||||||||||||||||||||||
Dividends/Distributions | (30,856) | (30,856) | (31,298) | (31,221) | $ (77) | |||||||||||||||||||||||||||
Distributions to owners of common and preferred units in COPLP | (442) | (442) | ||||||||||||||||||||||||||||||
Distributions to noncontrolling interests in other consolidated entities/subsidiaries | (8) | (8) | (8) | (8) | ||||||||||||||||||||||||||||
Adjustment to arrive at fair value of redeemable noncontrolling interests | $ (236) | (236) | (236) | $ (236) | ||||||||||||||||||||||||||||
Balance, preferred units (in shares/units) at Jun. 30, 2020 | 352,000 | 352,000 | ||||||||||||||||||||||||||||||
Balance (in units/ shares) at Jun. 30, 2020 | 112,183,192 | 113,811,613 | 1,628,421 | |||||||||||||||||||||||||||||
Balance at Jun. 30, 2020 | $ 1,656,924 | $ 1,122 | $ 2,477,977 | $ (797,959) | $ (64,513) | $ 40,297 | $ 1,656,924 | $ 1,701,375 | $ (65,183) | $ 11,932 | $ 8,800 |
Consolidated Statements of Equity (Parenthetical) - shares |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Balance (in units/ shares) | 112,183,192 | 111,949,887 | 112,183,192 | 111,949,887 | 112,169,463 | 112,068,705 | 111,939,790 | 110,241,868 |
Conversion of common units to common shares (in units/shares) | 12,009 | 5,500 | ||||||
Share-based compensation issuance, net of redemptions (in units/shares) | 13,729 | 10,097 | 102,478 | 88,432 | ||||
Forward Equity Sale Agreement | ||||||||
Common shares issued during the period (in units/shares) | 1,614,087 |
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2020 |
Jun. 30, 2019 |
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Cash flows from operating activities | ||
Revenues from real estate operations received | $ 265,833 | $ 257,832 |
Construction contract and other service revenues received | 42,149 | 21,449 |
Property operating expenses paid | (86,934) | (83,305) |
Construction contract and other service expenses paid | (32,107) | (31,157) |
General, administrative, leasing, business development and land carry costs paid | (16,969) | (16,541) |
Interest expense paid | (31,581) | (34,896) |
Lease incentives paid | (5,611) | (3,228) |
Other | 1,757 | 1,661 |
Net cash provided by operating activities | 136,537 | 111,815 |
Cash flows from investing activities | ||
Development and redevelopment of properties | (185,357) | (219,633) |
Tenant improvements on operating properties | (16,489) | (7,585) |
Other capital improvements on operating properties | (11,576) | (8,920) |
Proceeds from property dispositions | ||
Distribution from unconsolidated real estate joint venture following contribution of properties | 0 | 129,783 |
Sale of properties | 0 | 107,517 |
Investing receivables funded | 0 | (11,104) |
Leasing costs paid | (8,424) | (7,632) |
Other | (5,442) | 3,944 |
Net cash used in investing activities | (227,288) | (13,630) |
Proceeds from debt | ||
Revolving Credit Facility | 251,000 | 258,000 |
Other debt proceeds | 189,359 | 10,606 |
Repayments of debt | ||
Revolving Credit Facility | (259,000) | (308,000) |
Scheduled principal amortization | (2,044) | (2,193) |
Deferred financing costs paid | (1,261) | 0 |
Net proceeds from issuance of common shares | 0 | 46,415 |
Common share/unit dividends/distributions paid | (61,667) | (61,040) |
Distributions paid to noncontrolling interests in COPLP | (863) | (1,115) |
Distributions paid to redeemable noncontrolling interests | (12,662) | (687) |
Redemption of vested equity awards | (1,572) | (1,920) |
Other | (2,803) | 533 |
Net cash provided by (used in) financing activities | 98,487 | (59,401) |
Net increase in cash and cash equivalents and restricted cash | 7,736 | 38,784 |
Cash and cash equivalents and restricted cash | ||
Beginning of period | 18,130 | 11,950 |
End of period | 25,866 | 50,734 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 50,671 | 131,881 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 67,075 | 70,527 |
Amortization of deferred financing costs and net debt discounts | 1,993 | 1,801 |
Increase in deferred rent receivable | (1,070) | (2,419) |
Gain on sales of real estate | (5) | (84,469) |
Share-based compensation | 3,027 | 3,283 |
Other | (1,263) | (2,996) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 5,039 | (31,846) |
Decrease (increase) in prepaid expenses and other assets, net | 23,202 | (852) |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (8,971) | 29,507 |
Decrease in rents received in advance and security deposits | (3,161) | (2,602) |
Net cash provided by operating activities | 136,537 | 111,815 |
Reconciliation of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents and restricted cash | 25,866 | 50,734 |
Supplemental schedule of non-cash investing and financing activities: | ||
Increase in accrued capital improvements, leasing and other investing activity costs | 12,940 | 29,862 |
Finance right-of-use asset contributed by noncontrolling interest in joint venture | 0 | 2,570 |
Operating right-of-use assets obtained in exchange for operating lease liabilities | 3,381 | 255 |
Non-cash changes from property dispositions: | ||
Contribution of properties to unconsolidated real estate joint venture | 0 | 99,288 |
Investment in unconsolidated real estate joint venture retained in disposition | 0 | 26,500 |
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | (39,953) | (23,585) |
Decrease in noncontrolling interests and increase in shareholders’ equity in connection with the conversion of common units into common shares | 182 | 80 |
Adjustments to noncontrolling interests resulting from changes in COPLP ownership | 25 | 834 |
Increase in redeemable noncontrolling interests and decrease in equity to carry redeemable noncontrolling interests at fair value | 4,337 | 2,875 |
Corporate Office Properties, L.P. | ||
Cash flows from operating activities | ||
Revenues from real estate operations received | 265,833 | 257,832 |
Construction contract and other service revenues received | 42,149 | 21,449 |
Property operating expenses paid | (86,934) | (83,305) |
Construction contract and other service expenses paid | (32,107) | (31,157) |
General, administrative, leasing, business development and land carry costs paid | (16,969) | (16,541) |
Interest expense paid | (31,581) | (34,896) |
Lease incentives paid | (5,611) | (3,228) |
Other | 1,757 | 1,661 |
Net cash provided by operating activities | 136,537 | 111,815 |
Cash flows from investing activities | ||
Development and redevelopment of properties | (185,357) | (219,633) |
Tenant improvements on operating properties | (16,489) | (7,585) |
Other capital improvements on operating properties | (11,576) | (8,920) |
Proceeds from property dispositions | ||
Distribution from unconsolidated real estate joint venture following contribution of properties | 0 | 129,783 |
Sale of properties | 0 | 107,517 |
Investing receivables funded | 0 | (11,104) |
Leasing costs paid | (8,424) | (7,632) |
Other | (5,442) | 3,944 |
Net cash used in investing activities | (227,288) | (13,630) |
Proceeds from debt | ||
Revolving Credit Facility | 251,000 | 258,000 |
Other debt proceeds | 189,359 | 10,606 |
Repayments of debt | ||
Revolving Credit Facility | (259,000) | (308,000) |
Scheduled principal amortization | (2,044) | (2,193) |
Deferred financing costs paid | (1,261) | 0 |
Net proceeds from issuance of common shares | 0 | 46,415 |
Common share/unit dividends/distributions paid | (62,376) | (61,825) |
Distributions paid to redeemable noncontrolling interests | (12,662) | (687) |
Redemption of vested equity awards | (1,572) | (1,920) |
Other | (2,957) | 203 |
Net cash provided by (used in) financing activities | 98,487 | (59,401) |
Net increase in cash and cash equivalents and restricted cash | 7,736 | 38,784 |
Cash and cash equivalents and restricted cash | ||
Beginning of period | 18,130 | 11,950 |
End of period | 25,866 | 50,734 |
Reconciliation of net income to net cash provided by operating activities: | ||
Net income | 50,671 | 131,881 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 67,075 | 70,527 |
Amortization of deferred financing costs and net debt discounts | 1,993 | 1,801 |
Increase in deferred rent receivable | (1,070) | (2,419) |
Gain on sales of real estate | (5) | (84,469) |
Share-based compensation | 3,027 | 3,283 |
Other | (1,263) | (2,996) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 5,039 | (31,846) |
Decrease (increase) in prepaid expenses and other assets, net | 22,674 | (483) |
(Decrease) increase in accounts payable, accrued expenses and other liabilities | (8,443) | 29,138 |
Decrease in rents received in advance and security deposits | (3,161) | (2,602) |
Net cash provided by operating activities | 136,537 | 111,815 |
Reconciliation of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents and restricted cash | 18,130 | 50,734 |
Supplemental schedule of non-cash investing and financing activities: | ||
Increase in accrued capital improvements, leasing and other investing activity costs | 12,940 | 29,862 |
Finance right-of-use asset contributed by noncontrolling interest in joint venture | 0 | 2,570 |
Operating right-of-use assets obtained in exchange for operating lease liabilities | 3,381 | 255 |
Non-cash changes from property dispositions: | ||
Contribution of properties to unconsolidated real estate joint venture | 0 | 99,288 |
Investment in unconsolidated real estate joint venture retained in disposition | 0 | 26,500 |
Decrease in fair value of derivatives applied to accumulated other comprehensive loss and noncontrolling interests | (39,953) | (23,585) |
Increase in redeemable noncontrolling interests and decrease in equity to carry redeemable noncontrolling interests at fair value | $ 4,337 | $ 2,875 |
Organization |
6 Months Ended | ||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Organization | Organization Corporate Office Properties Trust (“COPT”) and subsidiaries (collectively, the “Company”) is a fully-integrated and self-managed real estate investment trust (“REIT”). Corporate Office Properties, L.P. (“COPLP”) and subsidiaries (collectively, the “Operating Partnership”) is the entity through which COPT, the sole general partner of COPLP, conducts almost all of its operations and owns almost all of its assets. Unless otherwise expressly stated or the context otherwise requires, “we”, “us” and “our” as used herein refer to each of the Company and the Operating Partnership. 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, 2020, our properties included the following:
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, 2020, COPT owned 98.6% of the outstanding COPLP common units (“common units”); the remaining common units and all of the outstanding COPLP preferred units (“preferred units”) were owned by third parties. 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. In the case of any series of preferred units held by COPT, there would be a series of preferred shares of beneficial interest (“preferred shares”) in COPT that is equivalent in number and carries substantially the same terms as such series of COPLP preferred units. COPT’s common shares are publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “OFC”. Because COPLP is managed by COPT, and COPT conducts substantially all of its operations through COPLP, we refer to COPT’s executive officers as COPLP’s executive officers; similarly, although COPLP does not have a board of trustees, we refer to COPT’s Board of Trustees as COPLP’s Board of Trustees.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The COPT 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. The COPLP consolidated financial statements include the accounts of COPLP, its subsidiaries and other entities in which COPLP 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, 2019 included in our 2019 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 2019 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. Recent Accounting Pronouncements Effective January 1, 2020, we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) that changes how entities measure credit losses for most financial assets and certain other instruments not measured at fair value through net income. The guidance replaces the current incurred loss model with an expected loss approach, resulting in a more timely recognition of such losses. The guidance applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables (excluding those arising from operating leases), loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures (e.g. loan commitments and guarantees). Under this guidance, we recognize an estimate of our expected credit losses on these asset types as an allowance, as the guidance requires that financial assets be measured on an amortized cost basis and be presented at the net amount expected to be collected. We adopted this guidance effective January 1, 2020 using the modified retrospective transition method under which we recognized a $5.5 million allowance for credit losses by means of a cumulative-effect adjustment to cumulative distributions in excess of net income of the Company (or common units of the Operating Partnership), and did not adjust prior comparative reporting periods. Our consolidated statements of operations reflect adjustments for changes in our expected credit losses occurring subsequent to adoption of this guidance. Effective January 1, 2020, we adopted guidance issued by the FASB that modifies disclosure requirements for fair value measurements. The resulting changes in disclosure did not have a material impact on our consolidated financial statements. Effective January 1, 2020, we adopted guidance issued by the FASB that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. FASB guidance did not previously address the accounting for such implementation costs. Our adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2020, the FASB 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 adopted over time as reference rate reform activities occur. During the six months ended June 30, 2020, we elected to apply the 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 these 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. In April 2020, the FASB issued a Staff Q&A document that addressed the accounting for lease accounting guidance for lease concessions resulting from the COVID-19 pandemic. Under existing lease guidance, we would normally have to determine, on a lease-by-lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated as a lease modification) or if such a concession was implemented pursuant to enforceable rights and obligations within the existing lease agreement (and, therefore, not treated as a lease modification). The Staff Q&A document enabled us to bypass the lease-by-lease analysis for lease concessions resulting from the COVID-19 pandemic, and instead elect to either apply the lease modification accounting framework or not, with such elections applied consistently to leases with similar characteristics and similar circumstances. Entities may make the elections for any lessor-provided concessions related to the effects of the COVID-19 pandemic (such as deferrals of lease payments or reduced future lease payments) as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We chose to apply the elections available under the Staff Q&A to restructurings of lease payment terms granted by us to tenants, the effect of which did not have a material impact on our consolidated financial statements. Credit Losses, Financial Assets and Other Instruments As discussed above, effective January 1, 2020, we adopted guidance issued by the FASB that changed how we measure credit losses for most financial assets and certain other instruments not measured at fair value through net income from an incurred loss model to an expected loss approach. Our items within the scope of this guidance included the following:
Under this guidance, we recognize an estimate of our expected credit losses on these items as an allowance, as the guidance requires that financial assets be measured on an amortized cost basis and be presented at the net amount expected to be collected (or as a separate liability in the case of off-balance sheet credit exposures). The allowance represents the portion of the amortized cost basis that we do not expect to collect (or loss we expect to incur in the case of off-balance sheet credit exposures) due to credit over the contractual life based on available information relevant to assessing the collectability of cash flows, which includes consideration of past events, current conditions and reasonable and supportable forecasts of future economic conditions (including consideration of asset- or borrower-specific factors). The guidance requires the allowance for expected credit losses to reflect the risk of loss, even when that risk is remote. An allowance for credit losses is measured and recorded upon the initial recognition of a financial asset (or off-balance sheet credit exposure), regardless of whether it is originated or purchased. Quarterly, the expected losses are re-estimated, considering any cash receipts and changes in risks or assumptions, with resulting adjustments recognized in the line entitled “credit loss expense” on our consolidated statements of operations. We estimate expected credit losses for in-scope items using historical loss rate information developed for varying classifications of credit risk and contractual lives. Due to our limited quantity of items within the scope of this guidance and the unique risk characteristics of such items, we individually assign each in-scope item a credit risk classification. The credit risk classifications assigned by us are determined based on credit ratings assigned by ratings agencies (as available) or are internally-developed based on available financial information, historical payment experience, credit documentation, other publicly available information and current economic trends. In addition, for certain items in which the risk of credit loss is affected by the economic performance of a real estate development project, we develop probability weighted scenario analyses for varying levels of performance in estimating our credit loss allowance (applicable to our notes receivable from the City of Huntsville disclosed in Note 7 and a tax incremental financing obligation disclosed in Note 17). The table below sets forth the activity for the allowance for credit losses (in thousands):
(2) The balance as of June 30, 2020 included $104,000 in the line entitled “accounts receivable, net” and $65,000 in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. (3) Included in the line entitled “other liabilities” on our consolidated balance sheets. The following table presents the amortized cost basis of our investing receivables and tenants notes receivable by credit risk classification, by origination year as of June 30, 2020 (in thousands):
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 2020. 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. When we believe that collection of interest income on an investing or tenant note receivable is not probable, we place the receivable on nonaccrual status, meaning interest income is recognized when payments are received rather than on an accrual basis. Notes receivable on nonaccrual status as of June 30, 2020 and December 31, 2019 were not significant. We did not recognize any interest income during the three and six months ended June 30, 2020 on notes receivable on nonaccrual status. We write off receivables when we believe the facts and circumstances indicate that continued pursuit of collection is no longer warranted. When cash is received in connection with receivables for which we have previously recognized credit losses, we recognize reductions in our credit loss expense.
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements COPT has 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. The Company froze additional entry into the plan effective December 31, 2019. 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 COPT’s consolidated balance sheets using quoted market prices, as are other marketable securities that we hold. The balance of the plan, which was fully funded and totaled $2.5 million as of June 30, 2020, is included in the line entitled “prepaid expenses and other assets, net” on COPT’s 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 COPT’s 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, 2020, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivatives and determined that these adjustments are not significant. As a result, we determined that our interest rate derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets (excluding investing receivables) and accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturities of these instruments. The fair values of our investing receivables, as disclosed in Note 7, were based on the discounted estimated future cash flows of the loans (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans with similar maturities and credit quality, and the estimated cash payments include scheduled principal and interest payments. For our disclosure of debt fair values in Note 9, we estimated the fair value of our unsecured senior notes based on quoted market rates for publicly-traded debt (categorized within Level 2 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments include scheduled principal and interest payments. Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement at such fair value amounts may not be possible and may not be a prudent management decision. For additional fair value information, please refer to Note 7 for investing receivables, Note 9 for debt and Note 10 for interest rate derivatives. COPT and Subsidiaries The table below sets forth financial assets and liabilities of COPT and subsidiaries that are accounted for at fair value on a recurring basis as of June 30, 2020 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):
(1) Included in the line entitled “prepaid expenses and other assets, net” on COPT’s consolidated balance sheet. (2) Included in the line entitled “other liabilities” on COPT’s consolidated balance sheet. COPLP and Subsidiaries The table below sets forth financial assets and liabilities of COPLP and subsidiaries that are accounted for at fair value on a recurring basis as of June 30, 2020 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):
(1) Included in the line entitled “prepaid expenses and other assets, net” on COPLP’s consolidated balance sheet.
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Properties, Net |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Properties, Net | Properties, Net Operating properties, net consisted of the following (in thousands):
2020 Development Activities During the six months ended June 30, 2020, we placed into service 621,000 square feet in four newly-developed properties and 21,000 square feet in a redeveloped property. As of June 30, 2020, we had 11 properties under development, including one partially-operational property, and expansions of three fully-operational properties that we estimate will total 1.9 million square feet upon completion.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Lessor Arrangements We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. As of June 30, 2020, these leases, which may encompass all, or a portion of, a property, had remaining terms spanning from one month to 15 years and averaging approximately five years. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our allocation of lease revenue recognized between fixed and variable lease revenue (in thousands):
Fixed contractual payments due under our property leases were as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020. Lessee arrangements As of June 30, 2020, our balance sheet included $71.5 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating or developing. The land leases have long durations with remaining terms ranging from 29 (excluding extension options) to 96 years, and included:
Our property right-of-use assets consisted of the following (in thousands):
Property lease liabilities consisted of the following (in thousands):
The table below sets forth the weighted average terms and discount rates of our property leases as of June 30, 2020:
The table below presents our total property lease cost (in thousands):
The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
Payments on property leases were due as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020.
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Leases | Leases Lessor Arrangements We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. As of June 30, 2020, these leases, which may encompass all, or a portion of, a property, had remaining terms spanning from one month to 15 years and averaging approximately five years. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our allocation of lease revenue recognized between fixed and variable lease revenue (in thousands):
Fixed contractual payments due under our property leases were as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020. Lessee arrangements As of June 30, 2020, our balance sheet included $71.5 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating or developing. The land leases have long durations with remaining terms ranging from 29 (excluding extension options) to 96 years, and included:
Our property right-of-use assets consisted of the following (in thousands):
Property lease liabilities consisted of the following (in thousands):
The table below sets forth the weighted average terms and discount rates of our property leases as of June 30, 2020:
The table below presents our total property lease cost (in thousands):
The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
Payments on property leases were due as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020.
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Leases | Leases Lessor Arrangements We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. As of June 30, 2020, these leases, which may encompass all, or a portion of, a property, had remaining terms spanning from one month to 15 years and averaging approximately five years. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our allocation of lease revenue recognized between fixed and variable lease revenue (in thousands):
Fixed contractual payments due under our property leases were as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020. Lessee arrangements As of June 30, 2020, our balance sheet included $71.5 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating or developing. The land leases have long durations with remaining terms ranging from 29 (excluding extension options) to 96 years, and included:
Our property right-of-use assets consisted of the following (in thousands):
Property lease liabilities consisted of the following (in thousands):
The table below sets forth the weighted average terms and discount rates of our property leases as of June 30, 2020:
The table below presents our total property lease cost (in thousands):
The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
Payments on property leases were due as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020.
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Real Estate Joint Ventures |
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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, 2020 (dollars in thousands):
In March 2020, the LW Redstone Company, LLC joint venture agreement was amended to change the distribution terms to allow the venture to distribute financing proceeds to satisfy our partner’s cumulative preferred return and to provide our partner a priority preferred return on its invested capital. 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):
(1) Included in the line entitled “investment in unconsolidated real estate joint ventures” on our consolidated balance sheets. |
Investing Receivables |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investing Receivables | Investing Receivables Investing receivables consisted of the following (in thousands):
The balances above include accrued interest receivable, net of allowance for credit losses, of $1.9 million as of June 30, 2020 and $4.7 million as of December 31, 2019. 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 $77 million as of June 30, 2020 and $74 million as of December 31, 2019.
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Prepaid Expenses and Other Assets, Net |
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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):
(1) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. (2) Includes a valuation allowance of $533,000 as of June 30, 2020 and $480,000 as of December 31, 2019.
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Debt, Net |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt, Net | Debt, Net Our debt consisted of the following (dollars in thousands):
(8) On March 6, 2020, we amended this loan facility to increase the loan amount by $150.0 million and change the interest terms.
(13) The carrying value of these notes reflects an unamortized discount totaling $1.9 million as of June 30, 2020 and $2.1 million as of December 31, 2019. The effective interest rate under the notes, including amortization of the issuance costs, was 5.15%.
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 Facilities and Unsecured Senior Notes. Certain of our debt instruments require that we comply with a number of restrictive financial covenants. As of June 30, 2020, we were compliant with these financial covenants. We capitalized interest costs of $3.2 million in the three months ended June 30, 2020, $2.4 million in the three months ended June 30, 2019, $6.5 million in the six months ended June 30, 2020 and $4.4 million in the six months ended June 30, 2019. The following table sets forth information pertaining to the fair value of our debt (in thousands):
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Interest Rate Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Derivatives | Interest Rate Derivatives The following table sets forth the key terms and fair values of our interest rate swap derivatives, each of which was designated as a cash flow hedge of interest rate risk (dollars in thousands):
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):
The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands):
Based on the fair value of our derivatives as of June 30, 2020, we estimate that approximately $8.1 million of losses will be reclassified from accumulated other comprehensive loss (“AOCL”) as an increase to interest expense over the next 12 months. We have agreements with each of our interest rate derivative counterparties that contain provisions under which, if we default or are capable of being declared in default on defined levels of our indebtedness, we could also be declared in default on our derivative obligations. Failure to comply with the loan covenant provisions could result in our being declared in default on any derivative instrument obligations covered by the agreements. As of June 30, 2020, we were not in default with any of these provisions. As of June 30, 2020, the fair value of interest rate derivatives in a liability position related to these agreements was $65.8 million, excluding the effects of accrued interest and credit valuation adjustments. As of June 30, 2020, we had not posted any collateral related to these agreements. If we breach any of these provisions, we could be required to settle our obligations under the agreements at their termination value, which was $66.2 million as of June 30, 2020. |
Redeemable Noncontrolling Interests |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Equity |
6 Months Ended |
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Jun. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity Common Shares/Units As of June 30, 2020, COPT had remaining capacity under its at-the-market stock offering program equal to an aggregate gross sales price of $300 million in common share sales. During the six months ended June 30, 2020, certain COPLP limited partners converted 12,009 common units in COPLP for an equal number of common shares in COPT. We declared dividends per COPT common share and distributions per COPLP common unit of $0.275 in the three months ended June 30, 2020 and 2019 and $0.550 in the six months ended June 30, 2020 and 2019. See Note 15 for disclosure of COPT common share and COPLP common unit activity pertaining to our share-based compensation plans.
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Information by Business Segment |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information by Business Segment | Information by Business Segment We have the following reportable segments: Defense/IT Locations; Regional Office; Wholesale Data Center; and Other. We also report on Defense/IT Locations sub-segments, which include the following: Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”); Northern Virginia Defense/IT Locations; Lackland Air Force Base (in San Antonio); locations serving the U.S. Navy (“Navy Support Locations”), which included properties proximate to the Washington Navy Yard, the Naval Air Station Patuxent River in Maryland and the Naval Surface Warfare Center Dahlgren Division in Virginia; Redstone Arsenal (in Huntsville); and data center shells (properties leased to tenants to be operated as data centers in which the tenants generally fund the costs for the power, fiber connectivity and data center infrastructure). We measure the performance of our segments through the measure we define as net operating income from real estate operations (“NOI from real estate operations”), which includes: real estate revenues and property operating expenses; and the net of revenues and property operating expenses of real estate operations owned through unconsolidated real estate joint ventures (“UJVs”) that is allocable to COPT’s 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):
The following table reconciles our segment revenues to total revenues as reported on our consolidated statements of operations (in thousands):
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):
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):
The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to net income as reported on our consolidated statements of operations (in thousands):
The following table reconciles our segment assets to the consolidated total assets of COPT and subsidiaries (in thousands):
The accounting policies of the segments are the same as those used to prepare our consolidated financial statements. In the segment reporting presented above, we did not allocate interest expense, depreciation and amortization, gain on sales of real estate 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, income taxes and noncontrolling interests because these items represent general corporate or non-operating property items not attributable to segments.
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Construction Contract and Other Service Revenues |
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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):
The table below reports construction contract and other service revenues by service type (in thousands):
We recognized an increase (decrease) in revenue of $74,000 and $(14,000) in the three months ended June 30, 2020 and 2019, respectively, and $74,000 and $18,000 in the six months ended June 30, 2020 and 2019, respectively, 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):
The increase in the accounts receivable balance reported above for the six months ended June 30, 2019 was due primarily to significant amounts billed near the end of the period. Contract assets, which we refer to herein as construction contract costs in excess of billings, net are included in prepaid expenses and other assets, net reported on our consolidated balance sheets. The beginning and ending balances of our contract assets were as follows (in thousands):
Contract liabilities are included in other liabilities reported on our consolidated balance sheets. Changes in contract liabilities were as follows (in thousands):
Revenue allocated to the remaining performance obligations under existing contracts as of June 30, 2020 that will be recognized as revenue in future periods was $70.5 million, approximately $20 million of which we expect to recognize during the remainder of 2020. |
Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Restricted Shares During the six months ended June 30, 2020, certain employees and non-employee members of our Board of Trustees (“Trustees”) were granted a total of 152,793 restricted common shares with an aggregate grant date fair value of $3.9 million (weighted average of $25.20 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, 2020, forfeiture restrictions lapsed on 159,083 previously issued common shares; these shares had a weighted average grant date fair value of $28.16 per share, and the aggregate intrinsic value of the shares on the vesting dates was $4.0 million. Deferred Share Awards During the six months ended June 30, 2020, certain non-employee Trustees were granted a total of 7,972 deferred share awards with an aggregate grant date fair value of $187,000 ($23.44 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). Performance Share Awards (“PSUs”) We issued 23,181 common shares on January 13, 2020 to executives in settlement of PSUs granted in 2017, representing 53% of the target awards for those PSUs. Profit Interest Units (“PIUs”) For 2020, we offered our executives and Trustees the opportunity to select PIUs as a form of long-term compensation in lieu of, or in combination with, other forms of share-based compensation awards (restricted shares, deferred share awards and PSUs). Our executives and certain of our Trustees selected PIUs as their form of share-based compensation for their 2020 grants. 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, 2020, our executives and certain non-employee Trustees were granted a total of 75,053 TB-PIUs with an aggregate grant date fair value of $1.9 million (weighted average of $25.14 per TB-PIU). TB-PIUs granted to executives vest in equal one-third increments over a three-year period beginning on the first anniversary of the date of grant. 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, 2020, 20,622 TB-PIUs awarded to our former Executive Vice President and Chief Operating Officer were forfeited upon his resignation. During the six months ended June 30, 2020, forfeiture restrictions lapsed on 25,182 previously issued TB-PIUs; these TB-PIUs had a grant date fair value of $26.30 per unit, and the aggregate intrinsic value of the TB-PIUs on the vesting date was $640,000. PB-PIUs On January 1, 2020, we granted our executives 176,758 PB-PIUs with a three-year performance period concluding on the earlier of December 31, 2022 or the date of: (1) termination by us without cause, death or disability of the executive or constructive discharge of the executive (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:
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 in settlement of the award plan and paying cash equal to the excess, if any, of: 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 the aggregate distributions made on the PB-PIUs during the performance period. 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 $2.9 million ($16.36 per PB-PIU) 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 $29.38; expected volatility for common shares of 18.0%; and a risk-free interest rate of 1.65%. |
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”) | Earnings Per Share (“EPS”) and Earnings Per Unit (“EPU”) COPT and Subsidiaries 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:
Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data):
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):
The following securities were also excluded from the computation of diluted EPS because their effect was antidilutive:
COPLP and Subsidiaries EPU We present both basic and diluted EPU. We compute basic EPU by dividing net income available to common unitholders allocable to unrestricted common units under the two-class method by the weighted average number of unrestricted common units outstanding during the period. Our computation of diluted EPU is similar except that:
potential common units outstanding during the period attributable to COPT’s forward equity sale agreements, redeemable noncontrolling interests and our share-based compensation using the treasury stock or if-converted methods; and
Summaries of the numerator and denominator for purposes of basic and diluted EPU calculations are set forth below (in thousands, except per unit data):
Our diluted EPU computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPU for the respective periods (in thousands):
The following securities were also excluded from the computation of diluted EPU because their effect was antidilutive:
• weighted average unvested TB-PIUs for the three months ended June 30, 2020 and 2019 of 90,000 and 59,000, respectively, and for the six months ended June 30, 2020 and 2019 of 82,000 and 39,000, respectively.
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Commitments and Contingencies |
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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, 2020, management believes that it is reasonably possible that we could recognize a loss of up to $3.2 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 such 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 $34 million as of June 30, 2020. 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, 2020, we do not expect any such future fundings will be significant. Effects of COVID-19 Since first being declared a pandemic by the World Health Organization in early March 2020, the coronavirus, or COVID-19, has spread worldwide. In an effort to control its spread, governments and other authorities have imposed restrictive measures affecting freedom of movement and business operations, such as shelter-in-place orders and business closures. Strong measures were in place in much of the United States beginning in March, bringing many businesses to a halt while forcing others to change the way in which they conduct their operations, with much of the workforce working from their homes to the extent they were able. States and local governments began easing these measures in late April, as regional COVID-19 case volumes appeared to be decreasing. The pace of the easing of these measures varied regionally, with some state and local governments lifting restrictive measures entirely, and many businesses were able to gradually begin resuming a return to normal operations. As of the date of this filing, case volumes were increasing in much of the country, with certain authorities re-instituting restrictive measures and others contemplating doing so. As a result, there continues to be significant uncertainty regarding the duration of this pandemic and, once it subsides, the potential for it to reoccur on a significant scale in the future. The outbreak has significantly disrupted economic markets worldwide, as well as in the United States at a national, regional and local level, and created significant volatility in financial markets. These conditions could continue or further deteriorate as businesses feel the prolonged effects of stalled or reduced operations and uncertainty regarding the pandemic continues. COVID-19, and similar pandemics, along with measures instituted to prevent spread, may adversely affect us in many ways, including, but not limited to:
The extent of the effect on our operations, financial condition and cash flows will be dependent on future developments, including the duration of the pandemic and any future resurgence thereof, the prevalence, strength and duration of restrictive measures and the resulting effects on our tenants, potential future tenants, the commercial real estate industry and the broader economy, all of which are uncertain and difficult to predict.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||
Basis of Presentation | Basis of Presentation The COPT 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. The COPLP consolidated financial statements include the accounts of COPLP, its subsidiaries and other entities in which COPLP 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, 2019 included in our 2019 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 2019 Annual Report on Form 10-K as updated for our adoption of recent accounting pronouncements discussed below.
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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.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Effective January 1, 2020, we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) that changes how entities measure credit losses for most financial assets and certain other instruments not measured at fair value through net income. The guidance replaces the current incurred loss model with an expected loss approach, resulting in a more timely recognition of such losses. The guidance applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables (excluding those arising from operating leases), loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures (e.g. loan commitments and guarantees). Under this guidance, we recognize an estimate of our expected credit losses on these asset types as an allowance, as the guidance requires that financial assets be measured on an amortized cost basis and be presented at the net amount expected to be collected. We adopted this guidance effective January 1, 2020 using the modified retrospective transition method under which we recognized a $5.5 million allowance for credit losses by means of a cumulative-effect adjustment to cumulative distributions in excess of net income of the Company (or common units of the Operating Partnership), and did not adjust prior comparative reporting periods. Our consolidated statements of operations reflect adjustments for changes in our expected credit losses occurring subsequent to adoption of this guidance. Effective January 1, 2020, we adopted guidance issued by the FASB that modifies disclosure requirements for fair value measurements. The resulting changes in disclosure did not have a material impact on our consolidated financial statements. Effective January 1, 2020, we adopted guidance issued by the FASB that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. FASB guidance did not previously address the accounting for such implementation costs. Our adoption of this guidance did not have a material impact on our consolidated financial statements. In March 2020, the FASB 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 adopted over time as reference rate reform activities occur. During the six months ended June 30, 2020, we elected to apply the 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 these 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. In April 2020, the FASB issued a Staff Q&A document that addressed the accounting for lease accounting guidance for lease concessions resulting from the COVID-19 pandemic. Under existing lease guidance, we would normally have to determine, on a lease-by-lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated as a lease modification) or if such a concession was implemented pursuant to enforceable rights and obligations within the existing lease agreement (and, therefore, not treated as a lease modification). The Staff Q&A document enabled us to bypass the lease-by-lease analysis for lease concessions resulting from the COVID-19 pandemic, and instead elect to either apply the lease modification accounting framework or not, with such elections applied consistently to leases with similar characteristics and similar circumstances. Entities may make the elections for any lessor-provided concessions related to the effects of the COVID-19 pandemic (such as deferrals of lease payments or reduced future lease payments) as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We chose to apply the elections available under the Staff Q&A to restructurings of lease payment terms granted by us to tenants, the effect of which did not have a material impact on our consolidated financial statements.
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Credit Losses, Financial Assets and Other Instruments | Credit Losses, Financial Assets and Other Instruments As discussed above, effective January 1, 2020, we adopted guidance issued by the FASB that changed how we measure credit losses for most financial assets and certain other instruments not measured at fair value through net income from an incurred loss model to an expected loss approach. Our items within the scope of this guidance included the following:
Under this guidance, we recognize an estimate of our expected credit losses on these items as an allowance, as the guidance requires that financial assets be measured on an amortized cost basis and be presented at the net amount expected to be collected (or as a separate liability in the case of off-balance sheet credit exposures). The allowance represents the portion of the amortized cost basis that we do not expect to collect (or loss we expect to incur in the case of off-balance sheet credit exposures) due to credit over the contractual life based on available information relevant to assessing the collectability of cash flows, which includes consideration of past events, current conditions and reasonable and supportable forecasts of future economic conditions (including consideration of asset- or borrower-specific factors). The guidance requires the allowance for expected credit losses to reflect the risk of loss, even when that risk is remote. An allowance for credit losses is measured and recorded upon the initial recognition of a financial asset (or off-balance sheet credit exposure), regardless of whether it is originated or purchased. Quarterly, the expected losses are re-estimated, considering any cash receipts and changes in risks or assumptions, with resulting adjustments recognized in the line entitled “credit loss expense” on our consolidated statements of operations. We estimate expected credit losses for in-scope items using historical loss rate information developed for varying classifications of credit risk and contractual lives. Due to our limited quantity of items within the scope of this guidance and the unique risk characteristics of such items, we individually assign each in-scope item a credit risk classification. The credit risk classifications assigned by us are determined based on credit ratings assigned by ratings agencies (as available) or are internally-developed based on available financial information, historical payment experience, credit documentation, other publicly available information and current economic trends. In addition, for certain items in which the risk of credit loss is affected by the economic performance of a real estate development project, we develop probability weighted scenario analyses for varying levels of performance in estimating our credit loss allowance (applicable to our notes receivable from the City of Huntsville disclosed in Note 7 and a tax incremental financing obligation disclosed in Note 17). We write off receivables when we believe the facts and circumstances indicate that continued pursuit of collection is no longer warranted. When cash is received in connection with receivables for which we have previously recognized credit losses, we recognize reductions in our credit loss expense. When we believe that collection of interest income on an investing or tenant note receivable is not probable, we place the receivable on nonaccrual status, meaning interest income is recognized when payments are received rather than on an accrual basis.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Losses, Financial Assets and Other Instruments, Allowance for Credit Loss | The table below sets forth the activity for the allowance for credit losses (in thousands):
(2) The balance as of June 30, 2020 included $104,000 in the line entitled “accounts receivable, net” and $65,000 in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets. (3) Included in the line entitled “other liabilities” on our consolidated balance sheets. |
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Accounts Receivable, Noncurrent, Credit Quality Indicator | The following table presents the amortized cost basis of our investing receivables and tenants notes receivable by credit risk classification, by origination year as of June 30, 2020 (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value assets and liabilities measured on recurring basis | The table below sets forth financial assets and liabilities of COPT and subsidiaries that are accounted for at fair value on a recurring basis as of June 30, 2020 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):
(1) Included in the line entitled “prepaid expenses and other assets, net” on COPT’s consolidated balance sheet. (2) Included in the line entitled “other liabilities” on COPT’s consolidated balance sheet. The table below sets forth financial assets and liabilities of COPLP and subsidiaries that are accounted for at fair value on a recurring basis as of June 30, 2020 and the hierarchy level of inputs used in measuring their respective fair values under applicable accounting standards (in thousands):
(1) Included in the line entitled “prepaid expenses and other assets, net” on COPLP’s consolidated balance sheet.
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Properties, Net (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of operating properties, net | Operating properties, net consisted of the following (in thousands):
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Leases (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Revenue Recognized | The table below sets forth our allocation of lease revenue recognized between fixed and variable lease revenue (in thousands):
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Fixed Contractual Payments Due | Fixed contractual payments due under our property leases were as follows (in thousands):
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Right-of-Use Assets and Lease Liabilities | Our property right-of-use assets consisted of the following (in thousands):
Property lease liabilities consisted of the following (in thousands):
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Lease Costs | The table below sets forth the weighted average terms and discount rates of our property leases as of June 30, 2020:
The table below presents our total property lease cost (in thousands):
The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
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Finance Lease, Liability, Maturity | Payments on property leases were due as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020.
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Lessee, Operating Lease, Liability, Maturity | Payments on property leases were due as follows (in thousands):
(1) As of June 30, 2020, represents the six months ending December 31, 2020.
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Real Estate Joint Ventures (Tables) |
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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, 2020 (dollars in thousands):
(1) Excludes amounts eliminated in consolidation.
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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):
(1) Included in the line entitled “investment in unconsolidated real estate joint ventures” on our consolidated balance sheets. |
Investing Receivables (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investing receivables | Investing receivables consisted of the following (in thousands):
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Prepaid Expenses and Other Assets, Net (Tables) |
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Schedule of prepaid expenses and other assets | Prepaid expenses and other assets, net consisted of the following (in thousands):
(1) Represents deferred costs, net of accumulated amortization, attributable to our Revolving Credit Facility and interest rate derivatives. (2) Includes a valuation allowance of $533,000 as of June 30, 2020 and $480,000 as of December 31, 2019. |
Debt, Net (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | Our debt consisted of the following (dollars in thousands):
(8) On March 6, 2020, we amended this loan facility to increase the loan amount by $150.0 million and change the interest terms.
(13) The carrying value of these notes reflects an unamortized discount totaling $1.9 million as of June 30, 2020 and $2.1 million as of December 31, 2019. The effective interest rate under the notes, including amortization of the issuance costs, was 5.15%.
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Schedule of the fair value of debt | The following table sets forth information pertaining to the fair value of our debt (in thousands):
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Interest Rate Derivatives (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of key terms and fair values of interest rate swap derivatives | The following table sets forth the key terms and fair values of our interest rate swap derivatives, each of which was designated as a cash flow hedge of interest rate risk (dollars in thousands):
(3) The notional amount of this instrument is scheduled to amortize to $22.1 million.
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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):
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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):
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Redeemable Noncontrolling Interests (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activity for redeemable noncontrolling interest | The table below sets forth the activity for these redeemable noncontrolling interests (in thousands):
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Information by Business Segment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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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):
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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):
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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):
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Schedule of reconciliation of net operating income from real estate operations and service operations to net income | The following table reconciles our NOI from real estate operations for reportable segments and NOI from service operations to net income as reported on our consolidated statements of operations (in thousands):
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Schedule of reconciliation of segment assets to total assets | The following table reconciles our segment assets to the consolidated total assets of COPT and subsidiaries (in thousands):
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Construction Contract and Other Service Revenues (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The table below reports construction contract and other service revenues by compensation arrangement (in thousands):
The table below reports construction contract and other service revenues by service type (in thousands):
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Contract with Customer, Asset and Liability | The beginning and ending balances of our contract assets were as follows (in thousands):
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Share-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||
Schedule of payouts for defined performance under performance-based awards of share-based compensation | 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:
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Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Tables) |
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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 EPU calculations are set forth below (in thousands, except per unit data):
Summaries of the numerator and denominator for purposes of basic and diluted EPS calculations are set forth below (in thousands, except per share data):
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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):
Our diluted EPU computations do not include the effects of the following securities since the conversions of such securities would increase diluted EPU for the respective periods (in thousands):
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Organization (Details) - Jun. 30, 2020 ft² in Millions |
ft² |
property |
MW |
a |
---|---|---|---|---|
Unconsolidated Real Estate Joint Ventures | ||||
Investments in real estate | ||||
Number of real estate properties | 15 | |||
Operating Properties | ||||
Investments in real estate | ||||
Number of real estate properties | 174 | |||
Area of real estate property (in sqft or acres) | ft² | 19.8 | |||
Operating Properties | Office Properties | ||||
Investments in real estate | ||||
Number of real estate properties | 150 | |||
Area of real estate property (in sqft or acres) | ft² | 15.6 | |||
Operating Properties | Single-tenant data centers | ||||
Investments in real estate | ||||
Number of real estate properties | 24 | |||
Area of real estate property (in sqft or acres) | ft² | 4.2 | |||
Operating Properties | Single-tenant data centers | Unconsolidated Real Estate Joint Ventures | ||||
Investments in real estate | ||||
Number of real estate properties | 15 | |||
Operating wholesale data center | ||||
Investments in real estate | ||||
Critical load (in megawatts) | MW | 19.25 | |||
Properties under development | ||||
Investments in real estate | ||||
Number of real estate properties | 11 | |||
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 | 2 | |||
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 | 3 | |||
Land controlled for future development | ||||
Investments in real estate | ||||
Area of real estate property (in sqft or acres) | 11.5 | 900 | ||
Other Land | ||||
Investments in real estate | ||||
Area of real estate property (in sqft or acres) | a | 43 |
Organization (Details 2) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
COPT | Corporate Office Properties, L.P. | Common Units | |
Forms of ownership in Operating Partnership and ownership percentage by the entity | |
Percentage ownership in operating partnership | 98.60% |
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Allowance for credit loss impact | $ 5,541 |
Cumulative Effect, Period Of Adoption, Adjustment | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Allowance for credit loss impact | $ 5,500 |
Summary of Significant Accounting Policies - Allowance for Credit Loss Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Off-Balance Sheet, Credit Loss, Exposure, Credit Loss Expense (Reversal) Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2019 | $ 0 | |||
Cumulative effect of change for adoption of credit loss guidance | 1,340 | |||
Credit loss expense | 316 | |||
June 30, 2020 | $ 1,656 | 1,656 | ||
Credit Losses, Financial Assets and Other Instruments [Roll Forward] | ||||
December 31, 2019 | 97 | |||
Cumulative effect of change for adoption of credit loss guidance | 5,541 | |||
Credit loss expense | 615 | $ 0 | 1,304 | $ 0 |
June 30, 2020 | 6,942 | 6,942 | ||
Investing Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2019 | 0 | |||
Cumulative effect of change for adoption of credit loss guidance | 3,732 | |||
Credit loss expense | 244 | |||
June 30, 2020 | 3,976 | 3,976 | ||
Tenant Notes Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2019 | 97 | |||
Cumulative effect of change for adoption of credit loss guidance | 325 | |||
Credit loss expense | 719 | |||
June 30, 2020 | 1,141 | 1,141 | ||
Other Assets | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
December 31, 2019 | 0 | |||
Cumulative effect of change for adoption of credit loss guidance | 144 | |||
Credit loss expense | 25 | |||
June 30, 2020 | 169 | 169 | ||
Accounts receivable, allowance for credit loss | 169 | 169 | ||
Accounts Receivable, Net | Other Assets | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
June 30, 2020 | 104 | 104 | ||
Accounts receivable, allowance for credit loss | 104 | 104 | ||
Prepaid Expenses and Other Assets, Net | Other Assets | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
June 30, 2020 | 65 | 65 | ||
Accounts receivable, allowance for credit loss | $ 65 | $ 65 |
Summary of Significant Accounting Policies - Credit Risk Classification (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Investing Receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2015 and Earlier | $ 64,349 | |
2016 | 0 | |
2017 | 887 | |
2018 | 0 | |
2019 | 11,073 | |
2020 | 0 | |
Total | 76,309 | $ 73,523 |
Investing Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2015 and Earlier | 61,329 | |
2016 | 0 | |
2017 | 887 | |
2018 | 0 | |
2019 | 0 | |
2020 | 0 | |
Total | 62,216 | |
Investing Receivables | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2015 and Earlier | 3,020 | |
2016 | 0 | |
2017 | 0 | |
2018 | 0 | |
2019 | 11,073 | |
2020 | 0 | |
Total | 14,093 | |
Tenant Notes Receivables | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2015 and Earlier | 97 | |
2016 | 270 | |
2017 | 0 | |
2018 | 1,247 | |
2019 | 2,162 | |
2020 | 1,600 | |
Total | 5,376 | |
Tenant Notes Receivables | Investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2015 and Earlier | 0 | |
2016 | 68 | |
2017 | 0 | |
2018 | 1,069 | |
2019 | 95 | |
2020 | 0 | |
Total | 1,232 | |
Tenant Notes Receivables | Non-investment grade | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2015 and Earlier | 97 | |
2016 | 202 | |
2017 | 0 | |
2018 | 178 | |
2019 | 2,067 | |
2020 | 1,600 | |
Total | $ 4,144 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities in deferred compensation plan | $ 2,532 | $ 3,060 |
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 (as a percent) | 100.00% | |
Marketable securities in deferred compensation plan | $ 2,500 |
Fair Value Measurements (Details 2) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets: | ||
Marketable securities in deferred compensation plan | $ 2,532 | $ 3,060 |
Fair value measurement on a recurring basis | ||
Assets: | ||
Total assets | 2,539 | |
Liabilities: | ||
Deferred compensation plan liability | 2,532 | |
Interest rate derivatives | 65,612 | |
Total liabilities | 68,144 | |
Fair value measurement on a recurring basis | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 2,512 | |
Mutual funds | 7 | |
Fair value measurement on a recurring basis | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 20 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total assets | 2,539 | |
Liabilities: | ||
Deferred compensation plan liability | 0 | |
Interest rate derivatives | 0 | |
Total liabilities | 0 | |
Fair value measurement on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 2,512 | |
Mutual funds | 7 | |
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 | 20 | |
Fair value measurement on a recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 0 | |
Liabilities: | ||
Deferred compensation plan liability | 2,532 | |
Interest rate derivatives | 65,612 | |
Total liabilities | 68,144 | |
Fair value measurement on a recurring basis | Significant Other Observable Inputs (Level 2) | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 0 | |
Mutual funds | 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: | ||
Total assets | 0 | |
Liabilities: | ||
Deferred compensation plan liability | 0 | |
Interest rate derivatives | 0 | |
Total liabilities | 0 | |
Fair value measurement on a recurring basis | Significant Unobservable Inputs (Level 3) | Mutual funds | ||
Assets: | ||
Marketable securities in deferred compensation plan | 0 | |
Mutual funds | 0 | |
Fair value measurement on a recurring basis | Significant Unobservable Inputs (Level 3) | Other | ||
Assets: | ||
Marketable securities in deferred compensation plan | 0 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | ||
Liabilities: | ||
Interest rate derivatives | 65,612 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Mutual funds | ||
Assets: | ||
Mutual funds | 7 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Liabilities: | ||
Interest rate derivatives | 0 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual funds | ||
Assets: | ||
Mutual funds | 7 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Significant Other Observable Inputs (Level 2) | ||
Liabilities: | ||
Interest rate derivatives | 65,612 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Significant Other Observable Inputs (Level 2) | Mutual funds | ||
Assets: | ||
Mutual funds | 0 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Significant Unobservable Inputs (Level 3) | ||
Liabilities: | ||
Interest rate derivatives | 0 | |
Fair value measurement on a recurring basis | Corporate Office Properties, L.P. | Significant Unobservable Inputs (Level 3) | Mutual funds | ||
Assets: | ||
Mutual funds | $ 0 |
Properties, Net - Operating properties, net (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating properties, net | ||
Operating properties, net | $ 2,888,817 | $ 2,772,647 |
Operating Properties, net | ||
Operating properties, net | ||
Less: accumulated depreciation | (1,065,094) | (1,007,120) |
Operating properties, net | 2,888,817 | 2,772,647 |
Operating Properties, net | Land | ||
Operating properties, net | ||
Gross | 502,609 | 472,976 |
Operating Properties, net | Buildings and improvements | ||
Operating properties, net | ||
Gross | $ 3,451,302 | $ 3,306,791 |
Properties, Net - 2020 Development Activities (Details) ft² in Thousands |
Jun. 30, 2020
ft²
property
|
---|---|
Newly developed properties placed in service | |
Real Estate [Line Items] | |
Area of real estate property (in sqft or acres) | ft² | 621 |
Number of real estate properties | 4 |
Redeveloped properties placed in service | |
Real Estate [Line Items] | |
Area of real estate property (in sqft or acres) | ft² | 21 |
Properties under development | |
Real Estate [Line Items] | |
Area of real estate property (in sqft or acres) | ft² | 1,900 |
Number of real estate properties | 11 |
Properties under development, partially-operational | |
Real Estate [Line Items] | |
Number of real estate properties | 1 |
Properties under development, expansions of fully-operational properties | |
Real Estate [Line Items] | |
Number of real estate properties | 3 |
Leases (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Lessor, Lease, Description [Line Items] | |
Average term of contract | 5 years |
Minimum | |
Lessor, Lease, Description [Line Items] | |
Term of contract | 1 month |
Maximum | |
Lessor, Lease, Description [Line Items] | |
Term of contract | 15 years |
Leases (Details 1) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||||
Fixed | $ 103,993 | $ 104,193 | $ 208,102 | $ 208,837 | |
Variable | 28,154 | 27,222 | 55,057 | 53,481 | |
Lease revenue | 132,147 | $ 131,415 | 263,159 | $ 262,318 | |
Lease Payments to be Received | |||||
Remainder of fiscal year | 203,627 | 203,627 | |||
Year one | 372,518 | 372,518 | $ 388,310 | ||
Year two | 335,187 | 335,187 | 336,482 | ||
Year three | 281,094 | 281,094 | 299,356 | ||
Year four | 231,731 | 231,731 | 245,661 | ||
Year five | 195,246 | ||||
Thereafter | 634,608 | 634,608 | |||
Thereafter | 474,741 | ||||
Total | $ 2,058,765 | $ 2,058,765 | $ 1,939,796 |
Leases (Details 2) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
Lease
| |
Lessee, Lease, Description [Line Items] | |
Lessee right-of-use asset | $ 71.5 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining term of contract | 29 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining term of contract | 96 years |
Washington, DC | |
Lessee, Lease, Description [Line Items] | |
Lessee right-of-use asset | $ 10.2 |
Remaining term of contract | 80 years |
Number of contracts | Lease | 2 |
Baltimore, Maryland | |
Lessee, Lease, Description [Line Items] | |
Lessee right-of-use asset | $ 6.4 |
Remaining term of contract | 29 years |
Renewal term | 49 years |
Stevens Investors, LLC | Washington, DC | |
Lessee, Lease, Description [Line Items] | |
Lessee right-of-use asset | $ 37.8 |
Remaining term of contract | 96 years |
M Square Associates, LLC | College Park, Maryland | |
Lessee, Lease, Description [Line Items] | |
Lessee right-of-use asset | $ 6.6 |
Number of contracts | Lease | 4 |
M Square Associates, LLC | College Park, Maryland | Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining term of contract | 63 years |
M Square Associates, LLC | College Park, Maryland | Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining term of contract | 74 years |
LW Redstone Company, LLC | Huntsville, Alabama | |
Lessee, Lease, Description [Line Items] | |
Lessee right-of-use asset | $ 8.1 |
Renewal term | 25 years |
Number of contracts | Lease | 11 |
LW Redstone Company, LLC | Huntsville, Alabama | Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining term of contract | 43 years |
LW Redstone Company, LLC | Huntsville, Alabama | Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining term of contract | 50 years |
Fort Meade/BW Corridor | |
Lessee, Lease, Description [Line Items] | |
Lessee right-of-use asset | $ 2.3 |
Remaining term of contract | 48 years |
Number of contracts | Lease | 2 |
Leases (Details 3) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating leases - Property | $ 31,009 | $ 27,864 |
Finance leases - Property | 40,441 | 40,458 |
Total right-of-use assets | 71,450 | 68,322 |
Property - operating lease liabilities | 20,796 | 17,317 |
Finance leases - Property | 688 | 702 |
Total lease liabilities | $ 21,484 | $ 18,019 |
Leases (Details 4) |
Jun. 30, 2020 |
---|---|
Leases [Abstract] | |
Operating leases, Weighted average remaining lease term | 65 years |
Finance leases, Weighted average remaining lease term (less than) | 1 year |
Operating lease, Weighted average discount rate | 7.22% |
Finance lease, Weighted average discount rate | 3.62% |
Leases (Details 5) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Lessee, Lease, Description [Line Items] | ||||
Lease costs | $ 454 | $ 425 | $ 894 | $ 838 |
Property Operating Expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | 445 | 413 | 876 | 826 |
Finance lease right-of use amortization | $ 9 | $ 12 | $ 18 | $ 12 |
Leases (Details 6) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 541 | $ 550 |
Financing cash flows for financing leases | $ 14 | $ 4 |
Leases (Details 7) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating leases | ||
Remainder of fiscal year | $ 636 | |
Year one | 1,328 | $ 1,092 |
Year two | 1,352 | 1,138 |
Year three | 1,358 | 1,162 |
Year four | 1,363 | 1,167 |
Year five | 1,173 | |
Thereafter | 113,780 | |
Thereafter | 100,609 | |
Total lease payments | 119,817 | 106,341 |
Less: Amount representing interest | (99,021) | (89,024) |
Lease liability | 20,796 | 17,317 |
Finance leases | ||
Remainder of fiscal year | 660 | |
Year one | 14 | 674 |
Year two | 14 | 14 |
Year three | 0 | 14 |
Year four | 0 | 0 |
Year five | 0 | |
Thereafter | 0 | |
Thereafter | 0 | |
Total lease payments | 688 | 702 |
Less: Amount representing interest | 0 | 0 |
Lease liability | 688 | 702 |
Total | ||
Remainder of fiscal year | 1,296 | |
Year one | 1,342 | 1,766 |
Year two | 1,366 | 1,152 |
Year three | 1,358 | 1,176 |
Year four | 1,363 | 1,167 |
Year five | 1,173 | |
Thereafter | 113,780 | |
Thereafter | 100,609 | |
Total lease payments | 120,505 | 107,043 |
Less: Amount representing interest | (99,021) | (89,024) |
Total lease liabilities | $ 21,484 | $ 18,019 |
Real Estate Joint Ventures (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
|
Investments in consolidated real estate joint ventures | |||
Total Assets | $ 4,011,325 | $ 3,854,453 | $ 3,803,469 |
Total Liabilities | 2,331,253 | $ 2,105,777 | |
Variable Interest Entity, Primary Beneficiary | |||
Investments in consolidated real estate joint ventures | |||
Total Assets | 569,938 | ||
Encumbered Assets | 315,339 | ||
Total Liabilities | $ 233,358 | ||
Variable Interest Entity, Primary Beneficiary | LW Redstone Company, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 85.00% | ||
Total Assets | $ 335,040 | ||
Encumbered Assets | 111,380 | ||
Total Liabilities | $ 107,223 | ||
Variable Interest Entity, Primary Beneficiary | M Square Associates, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 50.00% | ||
Total Assets | $ 92,946 | ||
Encumbered Assets | 62,725 | ||
Total Liabilities | $ 56,153 | ||
Variable Interest Entity, Primary Beneficiary | Stevens Investors, LLC | |||
Investments in consolidated real estate joint ventures | |||
Nominal Ownership % | 95.00% | ||
Total Assets | $ 141,952 | ||
Encumbered Assets | 141,234 | ||
Total Liabilities | $ 69,982 |
Real Estate Joint Ventures (Details 2) $ in Thousands |
1 Months Ended | ||
---|---|---|---|
May 31, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
property
|
Dec. 31, 2019
USD ($)
|
|
Unconsolidated Real Estate Joint Ventures | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of Properties | property | 15 | ||
Carrying value of Investments | $ 50,457 | $ 51,949 | |
GI-COPT DC Partnership LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 50.00% | ||
Number of Properties | property | 6 | ||
Carrying value of Investments | $ 36,720 | 37,816 | |
Maximum cost reimbursement for development | $ 6,000 | ||
Variable Interest Entity, Not Primary Beneficiary | BREIT COPT DC JV LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Nominal Ownership % | 10.00% | ||
Number of Properties | property | 9 | ||
Carrying value of Investments | $ 13,737 | $ 14,133 |
Investing Receivables (Details) - Investing Receivables - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investing receivables | $ 76,309 | $ 73,523 |
Allowance for credit losses | (3,976) | 0 |
Investing receivables, net | 72,333 | 73,523 |
Notes receivable from the City of Huntsville | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investing receivables | 62,216 | 59,427 |
Other investing loans receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Investing receivables | $ 14,093 | $ 14,096 |
Investing Receivables - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other investing loans receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate | 8.00% | |
LW Redstone Company, LLC | Notes receivable from the City of Huntsville | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest rate | 9.95% | |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, fair value disclosure | $ 77.0 | $ 74.0 |
Investing Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accrued interest receivable, net of allowance for credit losses | $ 1.9 | $ 4.7 |
Prepaid Expenses and Other Assets, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Property, Plant and Equipment [Line Items] | ||||
Restricted cash | $ 4,270 | $ 3,397 | $ 4,452 | $ 3,884 |
Marketable securities in deferred compensation plan | 2,532 | 3,060 | ||
Total | 78,059 | 96,076 | ||
Taxable REIT Subsidiary | ||||
Property, Plant and Equipment [Line Items] | ||||
Deferred tax assets, valuation allowance | (533) | (480) | ||
Corporate Office Properties, L.P. | ||||
Property, Plant and Equipment [Line Items] | ||||
Lease incentives, net | 29,092 | 28,433 | ||
Furniture, fixtures and equipment, net | 9,015 | 7,823 | ||
Non-real estate equity investments | 6,726 | 6,705 | ||
Prepaid expenses | 6,600 | 18,835 | ||
Construction contract costs in excess of billings, net | 5,508 | 17,223 | ||
Restricted cash | 4,270 | 3,397 | $ 4,452 | $ 3,884 |
Deferred financing costs, net | 3,069 | 3,633 | ||
Deferred tax asset, net | 2,249 | 2,328 | ||
Other assets | 8,998 | 4,639 | ||
Total | $ 75,527 | $ 93,016 |
Debt, Net (Details) |
6 Months Ended | ||
---|---|---|---|
Mar. 06, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
extension
|
Dec. 31, 2019
USD ($)
|
|
Debt | |||
Carrying Value | $ 2,012,019,000 | $ 1,831,139,000 | |
Mortgage and other secured debt | |||
Debt | |||
Carrying Value | $ 250,121,000 | 211,485,000 | |
Line of Credit | Revolving Credit Facility | |||
Debt | |||
Number of extensions | extension | 2 | ||
Extension option period (in years) | 6 months | ||
Line of credit facility, extension fee percentage | 0.075% | ||
Loans payable | |||
Debt | |||
Deferred financing costs, net | $ 6,000,000.0 | 5,800,000 | |
Fixed rate mortgage debt | Mortgage and other secured debt | |||
Debt | |||
Carrying Value | 141,729,000 | 143,430,000 | |
Unamortized premium included in carrying value | $ 186,000 | 217,000 | |
Weighted average interest rate (as a percent) | 4.16% | ||
Fixed rate mortgage debt | Mortgage and other secured debt | Minimum | |||
Debt | |||
Interest rate (as a percent) | 3.82% | ||
Fixed rate mortgage debt | Mortgage and other secured debt | Maximum | |||
Debt | |||
Interest rate (as a percent) | 4.62% | ||
Variable-rate secured debt | Mortgage and other secured debt | |||
Debt | |||
Carrying Value | $ 108,392,000 | 68,055,000 | |
Weighted average interest rate (as a percent) | 2.22% | ||
Variable-rate secured debt | Mortgage and other secured debt | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 1.45% | ||
Variable-rate secured debt | Mortgage and other secured debt | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 2.35% | ||
Construction Loan | Mortgage and other secured debt | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Remaining borrowing capacity | $ 47,600,000 | ||
Revolving Credit Facility | |||
Debt | |||
Carrying Value | $ 169,000,000 | 177,000,000 | |
Weighted average interest rate (as a percent) | 1.20% | ||
Aggregate additional borrowing capacity available | $ 500,000,000.0 | ||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 0.775% | ||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 1.45% | ||
Term Loan Facility | |||
Debt | |||
Carrying Value | $ 398,058,000 | 248,706,000 | |
Interest rate (as a percent) | 1.17% | ||
Loan increase | $ 150,000,000.0 | ||
Term Loan Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 1.00% | ||
Term Loan Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate, spread (as a percent) | 1.65% | ||
3.60%, $350,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 348,658,000 | 348,431,000 | |
Debt instrument, face amount | $ 350,000,000 | ||
Interest rate (as a percent) | 3.60% | ||
Unamortized discount included in carrying value | $ 939,000 | 1,100,000 | |
Effective interest rate on debt (as a percent) | 3.70% | ||
5.25%, $250,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 247,920,000 | 247,652,000 | |
Debt instrument, face amount | $ 250,000,000 | ||
Interest rate (as a percent) | 5.25% | ||
Unamortized discount included in carrying value | $ 1,900,000 | 2,100,000 | |
Effective interest rate on debt (as a percent) | 5.49% | ||
3.70%, $300,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 299,585,000 | 299,324,000 | |
Debt instrument, face amount | $ 300,000,000 | ||
Interest rate (as a percent) | 3.70% | ||
Unamortized discount included in carrying value | $ 324,000 | 534,000 | |
Effective interest rate on debt (as a percent) | 3.85% | ||
5.00%, $300,000 aggregate principal | Unsecured senior notes | |||
Debt | |||
Carrying Value | $ 297,707,000 | 297,503,000 | |
Debt instrument, face amount | $ 300,000,000 | ||
Interest rate (as a percent) | 5.00% | ||
Unamortized discount included in carrying value | $ 1,900,000 | 2,100,000 | |
Effective interest rate on debt (as a percent) | 5.15% | ||
Unsecured note payable | |||
Debt | |||
Carrying Value | $ 970,000 | 1,038,000 | |
Interest rate (as a percent) | 0.00% | ||
Unamortized discount included in carrying value | $ 191,000 | $ 223,000 |
Debt, Net (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Debt Disclosure [Abstract] | ||||
Interest costs capitalized | $ 3.2 | $ 2.4 | $ 6.5 | $ 4.4 |
Debt, Net (Details 2) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Carrying Amount | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 2,012,019 | $ 1,831,139 |
Carrying Amount | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 1,193,870 | 1,192,910 |
Carrying Amount | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 142,699 | 144,468 |
Carrying Amount | Variable-rate secured debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 675,450 | 493,761 |
Estimated Fair Value | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 2,036,313 | 1,873,310 |
Estimated Fair Value | Unsecured senior notes | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 1,224,800 | 1,227,441 |
Estimated Fair Value | Other fixed-rate debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | 145,473 | 149,907 |
Estimated Fair Value | Variable-rate secured debt | ||
Carrying amount and estimated fair value of debt | ||
Long-term debt | $ 666,040 | $ 495,962 |
Interest Rate Derivatives (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Amount of Loss Recognized in AOCL on Derivatives | $ (3,315) | $ (13,545) | $ (41,020) | $ (22,390) | |
Amount of (Loss) Gain Reclassified from AOCL into Interest Expense on Statement of Operations | (935) | 557 | (1,066) | 1,127 | |
Interest rate swaps | Interest Expense | |||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Amount of (Loss) Gain Reclassified from AOCL into Interest Expense on Statement of Operations | (935) | $ 557 | (1,066) | $ 1,127 | |
Interest rate swaps | Prepaid expenses and other assets, net | |||||
Fair value of interest rate derivatives and balance sheet classification | |||||
Interest rate swaps designated as cash flow hedges | 0 | 0 | $ 23 | ||
Interest rate swaps | Interest rate derivatives (liabilities) | |||||
Fair value of interest rate derivatives and balance sheet classification | |||||
Interest rate swaps designated as cash flow hedges | (65,612) | (65,612) | (25,682) | ||
Designated | |||||
Fair values of interest rate swap derivatives | |||||
Fair value of interest rate swaps | (65,612) | (65,612) | (25,659) | ||
Designated | Interest rate swaps | |||||
Effect of interest rate derivatives on consolidated statements of operations and comprehensive income | |||||
Approximate amount to be reclassified from AOCL to interest expense over the next 12 months | 8,100 | 8,100 | |||
Fair value of derivative liability | 65,800 | 65,800 | |||
Settlement amount of derivative obligation at termination value | 66,200 | 66,200 | |||
Designated | Interest rate swap, effective October 13, 2015 | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 12,234 | $ 12,234 | |||
Fixed Rate | 1.39% | 1.39% | |||
Fair value of interest rate swaps | $ (38) | $ (38) | 23 | ||
Notional amount of interest rate derivatives after scheduled amortization | 12,100 | 12,100 | |||
Designated | Interest rate swap, effective September 1, 2016, swap one | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 100,000 | $ 100,000 | |||
Fixed Rate | 1.901% | 1.901% | |||
Fair value of interest rate swaps | $ (4,326) | $ (4,326) | (1,028) | ||
Designated | Interest rate swap, effective September 1, 2016, swap two | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 100,000 | $ 100,000 | |||
Fixed Rate | 1.905% | 1.905% | |||
Fair value of interest rate swaps | $ (4,336) | $ (4,336) | (1,037) | ||
Designated | Interest rate swap, effective September 1, 2016, swap three | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 50,000 | $ 50,000 | |||
Fixed Rate | 1.908% | 1.908% | |||
Fair value of interest rate swaps | $ (2,171) | $ (2,171) | (524) | ||
Designated | Interest rate swap, effective August 1, 2019 | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 11,200 | $ 11,200 | |||
Fixed Rate | 1.678% | 1.678% | |||
Fair value of interest rate swaps | $ (858) | $ (858) | (20) | ||
Notional amount of interest rate derivatives after scheduled amortization | 10,000 | 10,000 | |||
Designated | Interest rate swap, effective April 1, 2020, swap one | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 150,000 | $ 150,000 | |||
Fixed Rate | 0.498% | 0.498% | |||
Fair value of interest rate swaps | $ (248) | $ (248) | 0 | ||
Designated | Interest rate swap, effective April 1, 2020, swap two | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 23,000 | $ 23,000 | |||
Fixed Rate | 0.573% | 0.573% | |||
Fair value of interest rate swaps | $ (378) | $ (378) | 0 | ||
Notional amount of interest rate derivatives after scheduled amortization | 22,100 | 22,100 | |||
Designated | Interest rate swap, effective June 30, 2020, swap one | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 75,000 | $ 75,000 | |||
Fixed Rate | 3.176% | 3.176% | |||
Fair value of interest rate swaps | $ (18,779) | $ (18,779) | (8,640) | ||
Designated | Interest rate swap, effective June 30, 2020, swap two | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 75,000 | $ 75,000 | |||
Fixed Rate | 3.192% | 3.192% | |||
Fair value of interest rate swaps | $ (18,897) | $ (18,897) | (8,749) | ||
Designated | Interest rate swap, effective June 30, 2020, swap three | |||||
Fair values of interest rate swap derivatives | |||||
Notional Amount | $ 75,000 | $ 75,000 | |||
Fixed Rate | 2.744% | 2.744% | |||
Fair value of interest rate swaps | $ (15,581) | $ (15,581) | $ (5,684) |
Redeemable Noncontrolling Interests (Details) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020
USD ($)
joint_venture
|
Jun. 30, 2019
USD ($)
|
|
Noncontrolling Interest [Abstract] | ||
Number of joint ventures with redeemable noncontrolling interests | joint_venture | 2 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 29,431 | $ 26,260 |
Distributions to noncontrolling interests | (12,695) | (876) |
Net income attributable to noncontrolling interests | 2,075 | 1,544 |
Adjustment to arrive at fair value of interests | 4,337 | 2,875 |
Ending balance | $ 23,148 | $ 29,803 |
Equity (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Class of Stock [Line Items] | |||||
Conversion of common units to common shares (in units/shares) | 12,009 | 5,500 | |||
Dividends declared per share (in usd per share) | $ 0.275 | $ 0.275 | $ 0.550 | $ 0.550 | |
Common Shares | 2018 Common Stock Issued to Public Under At-the-Market Program | |||||
Class of Stock [Line Items] | |||||
At the market, offering program established, aggregate value | $ 300 | ||||
Corporate Office Properties, L.P. | |||||
Class of Stock [Line Items] | |||||
Dividends declared per share (in usd per share) | $ 0.275 | $ 0.275 | $ 0.550 | $ 0.550 |
Information by Business Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Segment financial information for real estate operations | |||||
Revenues from real estate operations | $ 144,774 | $ 175,070 | $ 290,571 | $ 324,010 | |
Property operating expenses | (50,204) | (47,886) | (100,203) | (97,331) | |
UJV NOI allocable to COPT | 1,725 | 1,251 | 3,438 | 2,470 | |
Segment assets | 4,011,325 | 3,803,469 | 4,011,325 | 3,803,469 | $ 3,854,453 |
Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 132,538 | 132,771 | 264,654 | 264,761 | |
Property operating expenses | (50,204) | (47,886) | (100,203) | (97,331) | |
UJV NOI allocable to COPT | 1,725 | 1,251 | 3,438 | 2,470 | |
NOI from real estate operations | 84,059 | 86,136 | 167,889 | 169,900 | |
Additions to long-lived assets | 24,870 | 15,665 | 41,464 | 30,519 | |
Transfers from non-operating properties | 83,779 | 101,611 | 141,956 | 141,086 | |
Defense/Information Technology Locations | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 110,244 | 108,452 | 219,030 | 216,975 | |
Property operating expenses | (39,551) | (36,330) | (78,542) | (75,212) | |
UJV NOI allocable to COPT | 1,725 | 1,251 | 3,438 | 2,470 | |
NOI from real estate operations | 72,418 | 73,373 | 143,926 | 144,233 | |
Additions to long-lived assets | 12,418 | 10,666 | 24,712 | 21,365 | |
Transfers from non-operating properties | 83,779 | 101,611 | 141,956 | 141,086 | |
Defense/Information Technology Locations | Fort Meade/BW Corridor | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 62,698 | 61,659 | 127,136 | 124,342 | |
Property operating expenses | (20,859) | (19,344) | (42,081) | (41,679) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 41,839 | 42,315 | 85,055 | 82,663 | |
Additions to long-lived assets | 6,958 | 7,499 | 14,633 | 11,434 | |
Transfers from non-operating properties | 3,975 | 1,338 | 4,513 | 6,378 | |
Defense/Information Technology Locations | Northern Virginia Defense/IT | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 14,447 | 13,912 | 28,125 | 28,743 | |
Property operating expenses | (5,335) | (4,694) | (10,520) | (9,986) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 9,112 | 9,218 | 17,605 | 18,757 | |
Additions to long-lived assets | 3,204 | 1,703 | 5,895 | 3,150 | |
Transfers from non-operating properties | 524 | 20 | 780 | 4,529 | |
Defense/Information Technology Locations | Lackland Air Force Base | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 13,257 | 12,104 | 25,333 | 23,665 | |
Property operating expenses | (7,785) | (6,648) | (14,580) | (12,607) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 5,472 | 5,456 | 10,753 | 11,058 | |
Additions to long-lived assets | 0 | 0 | 0 | 0 | |
Transfers from non-operating properties | 145 | 1,833 | 160 | 8,336 | |
Defense/Information Technology Locations | Navy Support Locations | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 8,119 | 8,185 | 16,460 | 16,340 | |
Property operating expenses | (3,171) | (3,286) | (6,456) | (6,690) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 4,948 | 4,899 | 10,004 | 9,650 | |
Additions to long-lived assets | 2,110 | 928 | 3,868 | 5,945 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Defense/Information Technology Locations | Redstone Arsenal | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 4,647 | 3,968 | 9,323 | 7,907 | |
Property operating expenses | (1,612) | (1,599) | (3,459) | (3,138) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 3,035 | 2,369 | 5,864 | 4,769 | |
Additions to long-lived assets | 146 | 536 | 316 | 836 | |
Transfers from non-operating properties | 29,171 | 5,576 | 30,307 | 9,211 | |
Defense/Information Technology Locations | Data Center Shells | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 7,076 | 8,624 | 12,653 | 15,978 | |
Property operating expenses | (789) | (759) | (1,446) | (1,112) | |
UJV NOI allocable to COPT | 1,725 | 1,251 | 3,438 | 2,470 | |
NOI from real estate operations | 8,012 | 9,116 | 14,645 | 17,336 | |
Additions to long-lived assets | 0 | 0 | 0 | 0 | |
Transfers from non-operating properties | 49,964 | 92,844 | 106,196 | 112,632 | |
Regional Office | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 15,162 | 15,018 | 30,622 | 29,851 | |
Property operating expenses | (6,888) | (7,590) | (14,425) | (15,006) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 8,274 | 7,428 | 16,197 | 14,845 | |
Additions to long-lived assets | 4,445 | 4,870 | 7,802 | 8,859 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Operating wholesale data center | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 6,455 | 8,560 | 13,627 | 16,431 | |
Property operating expenses | (3,463) | (3,618) | (6,696) | (6,456) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 2,992 | 4,942 | 6,931 | 9,975 | |
Additions to long-lived assets | 7,904 | 95 | 8,782 | 251 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Other | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Revenues from real estate operations | 677 | 741 | 1,375 | 1,504 | |
Property operating expenses | (302) | (348) | (540) | (657) | |
UJV NOI allocable to COPT | 0 | 0 | 0 | 0 | |
NOI from real estate operations | 375 | 393 | 835 | 847 | |
Additions to long-lived assets | 103 | 34 | 168 | 44 | |
Transfers from non-operating properties | 0 | 0 | 0 | 0 | |
Segment assets | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,140,539 | 3,036,140 | 3,140,539 | 3,036,140 | |
Segment assets | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 3,140,539 | 3,036,140 | 3,140,539 | 3,036,140 | |
Segment assets | Defense/Information Technology Locations | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 2,542,060 | 2,429,467 | 2,542,060 | 2,429,467 | |
Segment assets | Defense/Information Technology Locations | Fort Meade/BW Corridor | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 1,271,790 | 1,274,336 | 1,271,790 | 1,274,336 | |
Segment assets | Defense/Information Technology Locations | Northern Virginia Defense/IT | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 394,363 | 398,586 | 394,363 | 398,586 | |
Segment assets | Defense/Information Technology Locations | Lackland Air Force Base | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 144,253 | 146,475 | 144,253 | 146,475 | |
Segment assets | Defense/Information Technology Locations | Navy Support Locations | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 181,744 | 187,172 | 181,744 | 187,172 | |
Segment assets | Defense/Information Technology Locations | Redstone Arsenal | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 167,161 | 115,222 | 167,161 | 115,222 | |
Segment assets | Defense/Information Technology Locations | Data Center Shells | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 382,749 | 307,676 | 382,749 | 307,676 | |
Segment assets | Regional Office | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 389,058 | 393,110 | 389,058 | 393,110 | |
Segment assets | Operating wholesale data center | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | 205,711 | 209,787 | 205,711 | 209,787 | |
Segment assets | Other | Real estate operations | |||||
Segment financial information for real estate operations | |||||
Segment assets | $ 3,710 | $ 3,776 | $ 3,710 | $ 3,776 |
Information by Business Segment (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Reconciliation of segment revenues to total revenues | ||||
Construction contract and other service revenues | $ 12,236 | $ 42,299 | $ 25,917 | $ 59,249 |
Total revenues | 144,774 | 175,070 | 290,571 | 324,010 |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated Entities | ||||
UJV NOI allocable to COPT | 1,725 | 1,251 | 3,438 | 2,470 |
Less: Income from UJV allocable to COPT attributable to depreciation and amortization expense and interest expense | (1,270) | (830) | (2,540) | (1,657) |
Add: Equity in loss of unconsolidated non-real estate entities | (1) | (1) | (3) | (2) |
Equity in income of unconsolidated entities | 454 | 420 | 895 | 811 |
Computation of net operating income from service operations | ||||
Construction contract and other service revenues | 12,236 | 42,299 | 25,917 | 59,249 |
Construction contract and other service expenses | (11,711) | (41,002) | (24,832) | (57,328) |
Real estate operations | ||||
Reconciliation of segment revenues to total revenues | ||||
Total revenues | 132,538 | 132,771 | 264,654 | 264,761 |
Reconciliation of UJV NOI allocable to COPT to Equity Income in Unconsolidated Entities | ||||
UJV NOI allocable to COPT | 1,725 | 1,251 | 3,438 | 2,470 |
Service operations | ||||
Computation of net operating income from service operations | ||||
NOI from service operations | $ 525 | $ 1,297 | $ 1,085 | $ 1,921 |
Information by Business Segment (Details 3) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment financial information for real estate operations | ||||
Interest and other income | $ 2,282 | $ 1,849 | $ 3,487 | $ 4,135 |
Credit loss expense | (615) | 0 | (1,304) | 0 |
Gain on sales of real estate | 0 | 84,469 | 5 | 84,469 |
Equity in income of unconsolidated entities | 454 | 420 | 895 | 811 |
Income tax (expense) benefit | (30) | 176 | (79) | (18) |
Depreciation and other amortization associated with real estate operations | (33,612) | (34,802) | (66,208) | (69,598) |
General, administrative and leasing expenses | (8,158) | (9,386) | (15,644) | (18,137) |
Business development expenses and land carry costs | (1,262) | (870) | (2,380) | (1,983) |
Interest expense | (16,797) | (18,475) | (33,637) | (37,149) |
Less: UJV NOI allocable to COPT included in equity in income of unconsolidated entities | (1,725) | (1,251) | (3,438) | (2,470) |
Net income | 25,121 | 109,563 | 50,671 | 131,881 |
Real estate operations | ||||
Segment financial information for real estate operations | ||||
NOI from real estate operations | 84,059 | 86,136 | 167,889 | 169,900 |
Less: UJV NOI allocable to COPT included in equity in income of unconsolidated entities | (1,725) | (1,251) | (3,438) | (2,470) |
Service operations | ||||
Segment financial information for real estate operations | ||||
NOI from service operations | $ 525 | $ 1,297 | $ 1,085 | $ 1,921 |
Information by Business Segment (Details 4) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
---|---|---|---|
Reconciliation of segment assets to total assets | |||
Total COPT consolidated assets | $ 4,011,325 | $ 3,854,453 | $ 3,803,469 |
Operating properties lease liabilities included in segment assets | 20,796 | $ 17,317 | |
Segment assets | |||
Reconciliation of segment assets to total assets | |||
Total COPT consolidated assets | 3,140,539 | 3,036,140 | |
Operating properties lease liabilities included in segment assets | 19,073 | 16,502 | |
Other assets | |||
Reconciliation of segment assets to total assets | |||
Total COPT consolidated assets | 679,207 | 523,801 | |
Non-operating property assets | |||
Reconciliation of segment assets to total assets | |||
Total COPT consolidated assets | $ 172,506 | $ 227,026 |
Construction Contract and Other Service Revenues (Details 1) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 12,236 | $ 42,299 | $ 25,917 | $ 59,249 |
Construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 10,851 | 42,010 | 23,734 | 58,499 |
Design | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 1,128 | 86 | 1,670 | 338 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 257 | 203 | 513 | 412 |
Guaranteed Maximum Price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 5,432 | 25,792 | 10,476 | 38,148 |
Firm fixed price | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 2,984 | 1,335 | 8,056 | 3,660 |
Cost-plus fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | 3,563 | 14,969 | 6,872 | 17,029 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Construction contract and other service revenues | $ 257 | $ 203 | $ 513 | $ 412 |
Construction Contract and Other Service Revenues - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligations | $ 70,500,000 | $ 70,500,000 | ||
Remaining performance obligation expected to be recognized during the remainder of year | 20,000,000 | 20,000,000 | ||
Construction Contract Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Performance obligations satisfied or already satisfied | 74,000 | $ (14,000) | 74,000 | $ 18,000 |
Deferred incremental costs incurred | $ 0 | $ 0 | $ 0 | $ 0 |
Construction Contract and Other Service Revenues (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Change in Accounts Receivable | ||||
Beginning balance | $ 35,444 | |||
Ending balance | $ 30,404 | 30,404 | ||
Construction Contract Revenue | ||||
Change in Accounts Receivable | ||||
Beginning balance | 12,378 | $ 6,701 | ||
Ending balance | 8,898 | $ 34,837 | 8,898 | 34,837 |
Change in Contract with Customer, Asset | ||||
Beginning balance | 17,223 | 3,189 | ||
Ending balance | 5,508 | 12,629 | 5,508 | 12,629 |
Change in Contract with Customer, Liability | ||||
Beginning balance | 1,184 | 568 | ||
Ending balance | 2,435 | 156 | 2,435 | 156 |
Portion of beginning balance recognized in revenue during the period ended June 30 | $ 92 | $ 6 | $ 738 | $ 445 |
Share-Based Compensation (Details) $ / shares in Units, $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jan. 13, 2020
shares
|
Jan. 01, 2020
USD ($)
Percentile_Rank
$ / shares
shares
|
Jun. 30, 2020
USD ($)
form
$ / shares
shares
|
|
Restricted shares | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | 152,793 | ||
Aggregate grant date fair value | $ | $ 3,900 | ||
Aggregate grant date fair value (in dollars per share) | $ / shares | $ 25.20 | ||
Shares vested (in shares) | 159,083 | ||
Weighted average fair value of shares vested (in dollars per share) | $ / shares | $ 28.16 | ||
Aggregate intrinsic value of awards upon vesting | $ | $ 4,000 | ||
Deferred Share Awards | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | 7,972 | ||
Aggregate grant date fair value | $ | $ 187 | ||
Aggregate grant date fair value (in dollars per share) | $ / shares | $ 23.44 | ||
PIUs | |||
Share-Based Compensation | |||
Number of forms of executive compensation | form | 2 | ||
Time-based PIU's | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | 75,053 | ||
Aggregate grant date fair value | $ | $ 1,900 | ||
Aggregate grant date fair value (in dollars per share) | $ / shares | $ 25.14 | ||
Shares vested (in shares) | 25,182 | ||
Weighted average fair value of shares vested (in dollars per share) | $ / shares | $ 26.30 | ||
Aggregate intrinsic value of awards upon vesting | $ | $ 640 | ||
Shares canceled (in shares) | 20,622 | ||
Performance-based PIU's | |||
Share-Based Compensation | |||
Stock awards granted (in shares or units) | 176,758 | ||
Aggregate grant date fair value | $ | $ 2,900 | ||
Aggregate grant date fair value (in dollars per share) | $ / shares | $ 16.36 | ||
Award vesting period | 3 years | ||
Shares canceled (in shares) | 73,184 | ||
Potential earned PSUs payout for defined levels of performance under awards | |||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 75th or greater percentile rank | 100.00% | ||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 50th percentile rank | 50.00% | ||
Earned PB-PIUs payout (as a percent of PB-PIUs granted) on 25th percentile rank | 25.00% | ||
Earned PB-PIUs granted on percentile rank below 25th (as a percent) | 0.00% | ||
The number of percentile ranks to fall between to earn interpolated PB-PIUs between such percentile ranks, conditioned on the percentile rank exceeding 25% | Percentile_Rank | 2 | ||
Assumptions used to value stock awards | |||
Percent of award distribution rights | 10.00% | ||
Award performance period | 3 years | ||
Baseline value per common share (in dollars per share) | $ / shares | $ 29.38 | ||
Expected volatility of common shares (as a percent) | 18.00% | ||
Risk-free interest rate (as a percent) | 1.65% | ||
2017 PSU Grants | Performance share units | |||
Share-Based Compensation | |||
Shares issued (in shares) | 23,181 | ||
Percentage of target | 53.00% | ||
Executives | Time-based PIU's | |||
Share-Based Compensation | |||
Award vesting period | 3 years | ||
Vesting increments of awards granted | 33.33% |
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Numerator: | ||||||||
Net income attributable to COPT/COPLP | $ 23,497 | $ 106,791 | $ 47,551 | $ 127,650 | ||||
Income attributable to share-based compensation awards | (115) | (364) | (220) | (413) | ||||
Numerator for basic EPS/EPU on net income attributable to COPT/COPLP common shareholders/unitholders | 23,382 | 106,427 | 47,331 | 127,237 | ||||
Preferred unit distributions | 0 | 165 | 0 | 0 | ||||
Redeemable noncontrolling interests | 0 | 902 | 0 | 66 | ||||
Common units in the Operating Partnership | 0 | 0 | 0 | 1,515 | ||||
Income attributable to share-based compensation awards | 6 | 18 | 14 | 22 | ||||
Numerator for diluted EPS/EPU on net income attributable to COPT/COPLP common shareholders/unitholders | $ 23,388 | $ 107,512 | $ 47,345 | $ 128,840 | ||||
Denominator (all weighted averages): | ||||||||
Denominator for basic EPS/EPU (common shares/units) | 111,800 | 111,557 | 111,762 | 110,759 | ||||
Dilutive convertible preferred units | 0 | 176 | 0 | 0 | ||||
Dilutive effect of common units | 0 | 0 | 0 | 1,329 | ||||
Dilutive effect of redeemable noncontrolling interests | 0 | 1,062 | 0 | 130 | ||||
Dilutive effect of share-based compensation awards (in shares/units) | 321 | 310 | 280 | 289 | ||||
Denominator for diluted EPS/EPU (common shares/units) | 112,121 | 113,105 | 112,042 | 112,507 | ||||
Basic EPS: | ||||||||
Basic EPS/EPU (in dollars per share/unit) | [1] | $ 0.21 | $ 0.95 | $ 0.42 | $ 1.15 | |||
Diluted EPS: | ||||||||
Diluted EPS/EPU (in dollars per share/unit) | [1] | $ 0.21 | $ 0.95 | $ 0.42 | $ 1.15 | |||
Corporate Office Properties, L.P. | ||||||||
Numerator: | ||||||||
Net income attributable to COPT/COPLP | $ 23,858 | $ 108,295 | $ 48,276 | $ 129,576 | ||||
Preferred share/unit dividends/distributions | (77) | (165) | (154) | (330) | ||||
Income attributable to share-based compensation awards | (133) | (438) | (254) | (494) | ||||
Numerator for basic EPS/EPU on net income attributable to COPT/COPLP common shareholders/unitholders | 23,648 | 107,692 | 47,868 | 128,752 | ||||
Preferred unit distributions | 0 | 165 | 0 | 0 | ||||
Redeemable noncontrolling interests | 0 | 902 | 0 | 66 | ||||
Income attributable to share-based compensation awards | 0 | 18 | 0 | 22 | ||||
Numerator for diluted EPS/EPU on net income attributable to COPT/COPLP common shareholders/unitholders | $ 23,648 | $ 108,777 | $ 47,868 | $ 128,840 | ||||
Denominator (all weighted averages): | ||||||||
Denominator for basic EPS/EPU (common shares/units) | 113,037 | 112,884 | 112,994 | 112,088 | ||||
Dilutive convertible preferred units | 0 | 176 | 0 | 0 | ||||
Dilutive effect of redeemable noncontrolling interests | 0 | 1,062 | 0 | 130 | ||||
Dilutive effect of share-based compensation awards (in shares/units) | 321 | 310 | 280 | 289 | ||||
Denominator for diluted EPS/EPU (common shares/units) | 113,358 | 114,432 | 113,274 | 112,507 | ||||
Basic EPS: | ||||||||
Basic EPS/EPU (in dollars per share/unit) | [2] | $ 0.21 | $ 0.95 | $ 0.42 | $ 1.15 | |||
Diluted EPS: | ||||||||
Diluted EPS/EPU (in dollars per share/unit) | [2] | $ 0.21 | $ 0.95 | $ 0.42 | $ 1.15 | |||
|
Earnings Per Share ("EPS") and Earnings Per Unit ("EPU") (Details 2) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Conversion of common units | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1,237 | 1,327 | 1,232 | 0 |
Conversion of redeemable noncontrolling interests | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 878 | 0 | 944 | 907 |
Conversion of Series I preferred units | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 176 | 0 | 176 | 176 |
Weighted average shares related to forward equity sale agreements | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 758 | |||
Weighted average restricted shares/units and deferred shares | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 429 | 425 | 434 | 444 |
Weighted average options | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 17 | 23 | ||
Weighted average unvested TB-PIUs | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 90 | 59 | 82 | 39 |
Corporate Office Properties, L.P. | Conversion of redeemable noncontrolling interests | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 878 | 0 | 944 | 907 |
Corporate Office Properties, L.P. | Conversion of Series I preferred units | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 176 | 0 | 176 | 176 |
Corporate Office Properties, L.P. | Weighted average shares related to forward equity sale agreements | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 758 | |||
Corporate Office Properties, L.P. | Weighted average restricted shares/units and deferred shares | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 429 | 425 | 434 | 444 |
Corporate Office Properties, L.P. | Weighted average options | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 17 | 23 | ||
Corporate Office Properties, L.P. | Weighted average unvested TB-PIUs | ||||
Antidilutive securities | ||||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 90 | 59 | 82 | 39 |
Commitments and Contingencies (Details) $ in Millions |
Jun. 30, 2020
USD ($)
property
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Estimate of possible loss | $ 3.2 |
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 | $ 19.0 |
Tax Incremental Financing Bond | Anne Arundel County, Maryland | Specialty Tax Guarantee | |
Environmental Indemnity Agreement | |
Purchase obligations | $ 34.0 |
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