COPT Defense Properties Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Properties, Net

Properties, Net

6 Months Ended

Jun. 30, 2022

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


	June 30, 2022		December 31, 2021
Land	$	584,878	$	572,900
Buildings and improvements	3,809,623		3,670,133
Less: Accumulated depreciation	(1,213,711)		(1,152,523)
Operating properties, net	$	3,180,790	$	3,090,510

2022 Dispositions and Discontinued Operations

On January 25, 2022, we sold 9651 Hornbaker Road in Manassas, Virginia, our sole wholesale data center investment, for $222.5 million, resulting in a gain on sale of $28.6 million. This property, a separate reportable segment, is reported herein as discontinued operations. The table below sets forth the components of the property’s assets classified as held for sale on our consolidated balance sheet as of December 31, 2021 (in thousands):



Properties, net	$	191,857
Deferred rent receivable	462
Intangible assets on property acquisitions, net	73
Deferred leasing costs, net	307

Assets held for sale, net	$	192,699

The table below sets forth the property’s results of operations included in discontinued operations on our consolidated statements of operations and its operating and investing cash flows included on our consolidated statements of cash flows (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Revenues from real estate operations	$	—	$	7,204	$	1,980	$	14,538
Property operating expenses	—		(3,702)		(971)		(7,400)
Depreciation and amortization associated with real estate operations	—		(2,823)		—		(5,644)

Gain on sale of real estate	—		—		28,564		—
Discontinued operations	$	—	$	679	$	29,573	$	1,494

Cash flows from operating activities					$	5,497	$	8,938
Cash flows from investing activities					$	220,549	$	(577)

2022 Development Activities

During the six months ended June 30, 2022, we placed into service 363,000 square feet in three newly-developed properties. As of June 30, 2022, we had 12 properties under development, including one partially-operational property, and an expansion of one fully-operational property that we estimate will total 1.9 million square feet upon completion.