Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How do you expect demand to evolve in your markets around the three defense priorities you mentioned, and are there plans to get ahead of that demand with additional developments or acquisitions? A: Stephen Budorick, CEO, explained that the three prioritiesspace activities, missile defense, and naval capabilities expansionare expected to impact Huntsville significantly. There is a strong consideration to relocate Space Command to Huntsville, which could lead to development in their portfolio. Missile defense will likely affect Huntsville as well, with potential expansions in the anti-missile defense system. Naval capabilities expansion could benefit their portfolio in Washington, D.C., and Southern Maryland.
Q: Could there be an indirect impact on COPT Defense Properties if there's increased focus on contractor customers due to changes in GSA leases? A: Stephen Budorick, CEO, noted that most service companies believe they are part of the solution DOGE is looking for, aiming to bring efficiencies to the DoD. The industry sees this as an opportunity to move beyond less efficient procurement methods and traditions.
Q: Can you provide an update on your data center land in Iowa and the status of applications for power? A: Stephen Budorick, CEO, stated that they are working through their power request and have a path to 1 gigawatt. However, the timing is less clear as the power company has other requests queued up. They are working with the customer on a global term sheet and specific discussions regarding power.
Q: Given the different factions in Congress, do you foresee any potential issues with defense budget appropriations being stalled or delayed, and could that impact your business? A: Stephen Budorick, CEO, acknowledged that anything can happen with DOD spending, but there has been bipartisan support to increase funding. Britt Snider, COO, added that direct conversations with customers show no slowdown, potentially the opposite, with expansion among military customers and contractors.
Q: Are you noticing any pricing differences or greater landlord pricing power with private sector tenants due to demand? A: Britt Snider, COO, mentioned that they continue to push where possible, focusing on reducing concessions and maintaining tenant retention, which provides a cost benefit over cash rent spread. They will push rates where it makes sense but won't risk losing tenants.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.