COPT Defense Properties Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Properties, net (Tables)

Properties, net (Tables)

12 Months Ended

Dec. 31, 2016

Operating properties, net consisted of the following (in thousands):



	December 31,
	2016			2015
Land	$	433,311		$	463,305
Buildings and improvements	2,944,905			3,157,587
Less: Accumulated depreciation	(706,385		)	(700,363		)
Operating properties, net	$	2,671,831		$	2,920,529

Schedule of projects in development or held for future development

Projects we had in development or held for future development consisted of the following (in thousands):



	December 31,
	2016		2015
Land	$	195,521	$	207,774
Development in progress, excluding land	206,010		221,445
Projects in development or held for future development	$	401,531	$	429,219

Components of assets held for sale

The table below sets forth the components of assets held for sale (in thousands):



	December 31,
	2016		2015
Properties, net	$	85,402	$	90,188
Deferred rent receivable	4,241		2,891
Intangible assets on real estate acquisitions, net	338		1,591
Deferred leasing costs, net	3,636		1,391
Lease incentives, net	1,037		721
Assets held for sale, net	$	94,654	$	96,782

Schedule of allocation of acquisition costs

The table below sets forth the allocation of the aggregate purchase price of these properties to the value of the acquired assets and liabilities (in thousands):



Land, operating properties	$	55,076
Building and improvements	139,540
Intangible assets on real estate acquisitions	75,729
Total assets	270,345
Below-market leases	(6,808		)
Total acquisition cost	$	263,537

Schedule of intangible assets recorded in connection with acquisition

Intangible assets recorded in connection with these acquisitions included the following (dollars in thousands):



			Weighted Average Amortization Period (in Years)
Tenant relationship value	$	31,183	12
In-place lease value	35,139		7
Above-market leases	6,720		4
Below-market cost arrangements	2,687		40
	$	75,729	10

Pro Forma information

The pro forma financial information was prepared for comparative purposes only and is not necessarily indicative of what would have occurred had these acquisitions been made at that time or of results which may occur in the future (in thousands, except per shares amounts).



	For the Year Ended December 31,
	2015		2014
	(Unaudited)
Pro forma total revenues	$	641,982	$	623,013
Pro forma net income attributable to COPT common shareholders	$	167,079	$	20,796
Pro forma EPS:
Basic	$	1.77	$	0.23
Diluted	$	1.77	$	0.23

Schedule of operating property dispositions

In 2016, we completed dispositions of the following operating properties (dollars in thousands):



Project Name	City, State	Segment	Date of Disposition	Number of Buildings	Total Rentable Square Feet	Transaction Value		Gain on Disposition
Arborcrest Corporate Campus (1)	Philadelphia, PA	Regional Office	8/4/2016	4	654,000	$	142,800	$	4,742
8003 Corporate Drive	White Marsh, MD	Regional Office	8/17/2016	1	18,000	2,400		—
1341 & 1343 Ashton Road	Hanover, MD	Fort Meade/BW Corridor	9/9/2016	2	25,000	2,900		848
8007, 8013, 8015, 8019 and 8023-8027 Corporate Drive (1)	White Marsh, MD	Regional Office	9/21/2016	5	130,000	14,513		1,906
1302, 1304 and 1306 Concourse Drive	Linthicum, MD	Fort Meade/BW Corridor	9/29/2016	3	299,000	48,100		8,375
2900 Towerview Road	Herndon, VA	Northern Virginia Defense/IT	10/19/2016	1	151,000	12,100		—
4940 Campbell Boulevard	White Marsh, MD	Regional Office	11/17/2016	1	50,000	5,200		—
1560 A and B Cable Ranch Road	San Antonio, TX	Other	11/30/2016	2	120,000	10,300		—
1331 Ashton Road	Hanover, MD	Fort Meade/BW Corridor	12/19/2016	1	29,000	2,625		—
900 Elkridge Landing Road	Linthicum, MD	Fort Meade/BW Corridor	12/22/2016	1	101,000	7,800		—
				21	1,577,000	$	248,738	$	15,871

(1) This disposition also included land.

In 2014, we completed dispositions of the following operating properties (dollars in thousands):



Project Name	City, State	Segment	Date of Sale	Number of Buildings	Total Rentable Square Feet	Transaction Value		Gain on Disposition
4969 and 4979 Mercantile Road	White Marsh, MD	Regional Office	7/14/2014	2	97,000	$	5,960	$	2,124
9930 and 9940 Franklin Square	White Marsh, MD	Regional Office	7/30/2014	2	72,000	10,475		2,303
5020, 5022, 5024 and 5026 Campbell Boulevard	White Marsh, MD	Regional Office	8/4/2014	4	134,000	12,400		666
				8	303,000	$	28,835	$	5,093

In 2015, we completed dispositions of the following operating properties (dollars in thousands):



Project Name	City, State	Segment	Date of Disposition	Number of Buildings	Total Rentable Square Feet	Transaction Value (1)		Gain on Disposition
1550 Westbranch Drive	McLean, VA	Regional Office	7/27/2015	1	160,000	$	27,800	$	—
15000 and 15010 Conference Center Drive	Chantilly, VA	Northern Virginia Defense/IT	8/28/2015	2	665,000	167,335		—
13200 Woodland Park Road	Herndon, VA	Regional Office	10/27/2015	1	397,000	84,000		42,515
9900, 9910 and 9920 Franklin Square Drive	White Marsh, MD	Regional Office	11/9/2015	3	135,000	24,150		6,468
9690 Deereco Road and 375 W. Padonia Road	Timonium, MD	Regional Office	12/17/2015	2	240,000	44,500		15,050
				9	1,597,000	$	347,785	$	64,033


(1)	Each of these properties were sold except for 15000 and 15010 Conference Center Drive, the disposition of which was completed in connection with a debt extinguishment, as discussed further below.