Annual report [Section 13 and 15(d), not S-K Item 405]

Debt, Net

v3.25.4
Debt, Net
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Debt, Net Debt, Net
 
Debt Summary

Our debt consisted of the following (dollars in thousands):
 
Carrying Value (1) as of December 31,
 December 31, 2025
  2025 2024 Stated Interest Rates Scheduled Maturity
Mortgage and Other Secured Debt        
Fixed-rate mortgage debt $ 36,064  $ 37,130 
3.82%
 June 2026
Variable-rate secured debt 10,125  32,471 
SOFR + 0.10%
+ 1.45% (2)
 August 2026
Revolving Development Facility (3) 96,000  — 
SOFR
+ 1.25% to 1.90% (4)
 October 2029 (3)
Total mortgage and other secured debt 142,189  69,601     
Revolving Credit Facility (3) 54,000  75,000 
SOFR
+ 0.725% to 1.400% (5)
 October 2029 (3)
Term loan facility (3) 49,911  124,633 
SOFR
+ 0.850% to 1.700% (6)
 January 2027 (3)
Unsecured Senior Notes (3)
2.25%, $400,000 aggregate principal
 399,812  398,699 
2.25% (7)
 March 2026
5.25%, $345,000 aggregate principal
 339,470  337,588 
5.25% (8)
 September 2028
2.00%, $400,000 aggregate principal
 398,459  397,961 
2.00% (9)
 January 2029
4.50%, $400,000 aggregate principal
 394,326  — 
4.50% (10)
 October 2030
2.75%, $600,000 aggregate principal
 593,476  592,330 
2.75% (11)
 April 2031
2.90%, $400,000 aggregate principal
 396,130  395,692 
2.90% (12)
 December 2033
Unsecured note payable 61  251 
0% (13)
 May 2026
Total debt, net $ 2,767,834  $ 2,391,755     
(1)The carrying values of our debt other than the Revolving Development Facility and Revolving Credit Facility reflect net deferred financing costs of $4.1 million as of December 31, 2025 and $4.0 million as of December 31, 2024.
(2)Including the effect of an interest rate swap that hedges the risk of interest rate changes, the weighted average interest rate on our variable-rate secured debt as of December 31, 2025 was 3.1%; excluding the effect of this swap, the weighted average interest rate on this debt as of December 31, 2025 was 5.2%.
(3)Refer to the paragraphs below for further disclosure.
(4)The weighted average interest rate on the Revolving Development Facility was 5.1% as of December 31, 2025, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9).
(5)The weighted average interest rate on the Revolving Credit Facility was 4.6% as of December 31, 2025, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9).
(6)The interest rate on this loan was 4.9% as of December 31, 2025, excluding the effect of interest rate swaps that hedge the risk of interest rate changes (see Note 9).
(7)The carrying value of these notes reflects unamortized discounts and commissions totaling $153,000 as of December 31, 2025 and $1.1 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 2.5%.
(8)As discussed below, these notes have an exchange settlement feature under which the notes may, under certain circumstances, be exchangeable at the option of the holders. The carrying value of these notes reflects unamortized commissions totaling $4.9 million as of December 31, 2025 and $6.6 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 5.8%.
(9)The carrying value of these notes reflects unamortized discounts and commissions totaling $1.1 million as of December 31, 2025 and $1.5 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 2.1%.
(10)The carrying value of these notes reflects unamortized discounts and commissions totaling $4.3 million as of December 31, 2025. The effective interest rate under the notes, including amortization of such costs, was 4.8%.
(11)The carrying value of these notes reflects unamortized discounts and commissions totaling $5.7 million as of December 31, 2025 and $6.7 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 2.9%.
(12)The carrying value of these notes reflects unamortized discounts and commissions totaling $3.2 million as of December 31, 2025 and $3.5 million as of December 31, 2024. The effective interest rate under the notes, including amortization of such costs, was 3.0%.
(13)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 $1,000 as of December 31, 2025 and $10,000 as of December 31, 2024.
All debt is owed by the Operating Partnership. While COPT Defense is not directly obligated by any debt, it has guaranteed CDPLP’s Revolving Development Facility, Revolving Credit Facility, term loan facility and Unsecured Senior Notes. As of December 31, 2025, all of our mortgage and other secured debt was for consolidated real estate joint ventures (see Note 6), except for our Revolving Development Facility.
Certain of our debt instruments require that we comply with a number of restrictive financial covenants, including corporate leverage ratio, unencumbered leverage ratio, minimum fixed charge coverage ratio, minimum unencumbered interest coverage ratio, minimum debt service and maximum secured indebtedness ratio. In addition, the terms of some of CDPLP’s debt may limit its ability to make certain types of payments and distributions to COPT Defense in the event of default or when such payments or distributions may prompt failure of debt covenants, excluding distributions required to maintain COPT Defense’s qualification as a REIT.  As of December 31, 2025, we were compliant with these financial covenants.

Our debt matures on the following schedule (in thousands):
Year Ending December 31, December 31, 2025
2026 $ 446,300 
2027 50,000 
2028 345,000 
2029 550,000 
2030 400,000 
Thereafter 1,000,000 
Total $ 2,791,300  (1)
(1)Represents scheduled principal amortization and maturities only and therefore excludes net discounts and deferred financing costs of $23.5 million.

We capitalized interest costs of $5.2 million in 2025, $2.9 million in 2024 and $4.5 million in 2023.

The following table sets forth information pertaining to the fair value of our debt (in thousands):
  December 31, 2025 December 31, 2024
  Carrying
Amount		 Estimated
Fair Value		 Carrying
Amount		 Estimated
Fair Value
Fixed-rate debt        
Unsecured Senior Notes $ 2,521,673  $ 2,438,332  $ 2,122,270  $ 1,946,905 
Other fixed-rate debt 36,125  35,649  37,381  35,841 
Variable-rate debt 210,036  211,505  232,104  232,768 
  $ 2,767,834  $ 2,685,486  $ 2,391,755  $ 2,215,514 

Revolving Development Facility

On October 16, 2025, we entered into a credit agreement for a secured revolving line of credit that we expect to use to fund property development activities (the “Revolving Development Facility”). The agreement provides for an initial aggregate commitment by the lender of $200.0 million. The facility matures on October 16, 2029, with the ability to extend such maturity by a 12-month period at our option, provided that there is no default under the facility and we pay an extension fee of 0.250% of the total amount available under the facility. The interest rate on the facility is based on the Secured Overnight Financing Rate (“SOFR”) plus 1.250% to 1.900%, as determined by the credit ratings assigned to CDPLP by S&P Global Ratings, Moody’s Investors Service, Inc. or Fitch Ratings, Inc. (collectively, the “Ratings Agencies”) or otherwise specified under the agreement. The facility also carries a quarterly fee that is based on the lenders’ commitment multiplied by a per annum rate of 0.125% to 0.300%, as determined by the credit ratings assigned to CDPLP by the Ratings Agencies or otherwise specified under the agreement. As of December 31, 2025, the maximum borrowing capacity under our Revolving Development Facility totaled $200.0 million, of which $104.0 million was available.

In 2025, weighted average borrowings totaled $123.4 million and the weighted average interest rate was 5.3% under our Revolving Development Facility.

Revolving Credit Facility and Term Loan Facility

On October 6, 2025, we entered into an amendment to an existing credit agreement with a group of lenders for an unsecured revolving credit facility (the “Revolving Credit Facility”), and which also provided for a $125.0 million term loan facility. The resulting amended credit agreement (the “Amended Credit Agreement”) includes the following provisions:

•for the Revolving Credit Facility:
•an aggregate commitment by the lenders of $800.0 million (increased from $600.0 million);
•an interest rate based on SOFR plus 0.725% to 1.400%, as determined by the credit ratings assigned to CDPLP by the Ratings Agencies or otherwise specified under the Amended Credit Agreement, with no SOFR transition charge;
•a quarterly fee based on the lenders’ commitment under the facility multiplied by a per annum rate of 0.125% to 0.300%, as determined by the credit ratings assigned to CDPLP by the Ratings Agencies or otherwise specified under the Amended Credit Agreement; and
•an extension of the maturity date from October 26, 2026 to October 5, 2029, with the ability for us to extend such maturity by two six-month periods at our option, provided that there is no default under the Amended Credit Agreement and we pay an extension fee of 0.0625% of the total availability under the facility for each extension period; and
•for the term loan facility:
•an interest rate based on SOFR plus 0.850% to 1.700%, as determined by the credit ratings assigned to CDPLP by the Ratings Agencies or otherwise specified under the Amended Credit Agreement, with no SOFR transition charge; and
•maintained the facility’s maturity date and extension option terms. The facility matures on January 30, 2027, with the ability for us to extend such maturity by a 12-month period at our option, provided that there is no default under the Amended Credit Agreement and we pay an extension fee of 0.125% of the outstanding term loans under the agreement for each extension period.

As of December 31, 2025, the maximum borrowing capacity under our Revolving Credit Facility totaled $800.0 million, of which $746.0 million was available.

Weighted average borrowings under our Revolving Credit Facility totaled $100.9 million in 2025 and $78.3 million in 2024. The weighted average interest rate on our Revolving Credit Facility was 5.4% in 2025 and 6.3% in 2024, excluding the effect of interest rate swaps that hedge the risk of interest rate changes.

We repaid $75.0 million of our term loan facility in the fourth quarter of 2025.

Unsecured Senior Notes

During 2023 and 2025, we issued the following unsecured senior notes:

•$345.0 million of 5.25% Exchangeable Senior Notes due 2028 (the “5.25% Notes”) on September 12, 2023 in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, resulting in proceeds, after deducting the initial purchasers’ commissions, but before other offering expenses, of $336.4 million. The notes mature on September 15, 2028; and
•$400.0 million of 4.50% Senior Notes due 2030 (the “4.50% Notes”) at an initial offering price of 99.46% of their face value on October 2, 2025. The proceeds from this issuance, after deducting underwriting discounts and commissions, but before other offering expenses, were $395.5 million. The notes mature on October 15, 2030.

With regard to the 5.25% Notes:

•prior to the close of business on the business day immediately preceding June 15, 2028, the notes will be exchangeable at the option of the noteholders only in the event of certain circumstances and during certain periods defined under the terms of the notes. On or after June 15, 2028, the notes will be exchangeable at the option of the holders at any time prior to the close of business on the business day immediately preceding the maturity date. Upon exchange, the principal amount of notes is payable in cash. The remainder of the exchange obligation, if any, as determined based on the exchange price per common share at the time of settlement, is payable in cash, common shares or a combination thereof at our election. The exchange rate of the notes initially equaled 33.3739 of our common shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $29.96 per common share) and is subject to adjustment upon the occurrence of some events, but will not be adjusted for any accrued and unpaid interest. As of December 31, 2025, the exchange rate of the notes equaled 33.5201 of our common shares per $1,000 principal amount of notes (equivalent to an exchange price of approximately $29.83 per common share);
•we may redeem the notes at our option, in whole or in part, on any business day on or after September 21, 2026, and prior to the 51st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common shares has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date; and
•the table below sets forth interest expense recognized on the notes (in thousands):
For the Years Ended December 31,
2025 2024
Interest expense at stated interest rate $ 18,113  $ 18,113 
Interest expense associated with amortization of debt discount and issuance costs 1,653  1,560 
Total $ 19,766  $ 19,673 

We may redeem our 2.25% Senior Notes due 2026 (the “2.25% Notes”), 2.00% Senior Notes due 2029 (the “2.00% Notes”), 4.50% Notes, 2.75% Senior Notes due 2031 (the “2.75% Notes”) and 2.90% Senior Notes due 2033 (the “2.90% Notes”) in whole at any time or in part from time to time, at our option, at a redemption price equal to the greater of (1) the aggregate principal amount of the notes being redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted, on a semi-annual basis at an adjusted treasury rate plus a spread (35 basis points for the 2.25% Notes, 20 basis points for the 2.00% Notes,15 basis points for the 4.50% Notes, 25 basis points for the 2.75% Notes and 25 basis points for the 2.90% Notes), plus, in each case, accrued and unpaid interest thereon to the date of redemption. However, in each case, if this redemption occurs on or after a defined date (February 15, 2026 for the 2.25% Notes, November 15, 2028 for the 2.00% Notes, September 15, 2030 for the 4.50% Notes, January 15, 2031 for the 2.75% Notes and September 1, 2033 for the 2.90% Notes), the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.

Our unsecured senior notes are unconditionally guaranteed by COPT Defense.