Earnings release
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1 NEWS RELEASE IR Contacts: Venkat Kommineni, CFA Michelle Layne 443.285.5587 443.285.5452 venkat.kommineni@copt.com michelle.layne@copt.com COPT Defense Reports Third Quarter 2026 Results _______________________________________________________________ EPS of $0.41 FFO per Share, As Adjusted for Comparability, of $0.71 2.9% FFO per Share Growth Year-over-Year 2-cents above the Midpoint of Guidance Increased Midpoint of Guidance for 2026 FFO per Share, As Adjusted for Comparability, by 2-cents to $2.80 Implies 2.9% FFO per Share Growth for the Year Same Property Cash NOI Increased 3.2% and 5.3% Year-to-Date Increased Midpoint of 2026 Guidance by 25 basis points to 4.25% Occupancy and Leased Levels Total Portfolio 94.0% Occupied and 95.0% Leased Defense/IT Portfolio 95.2% Occupied and 96.2% Leased _______________________________________________________________ Leasing Activity Total Leasing in 3Q26 and YTD of 842,000 SF and 3.0 million SF Vacancy Leasing in 3Q26 and YTD of 222,000 SF and 453,000 SF Increased Annual Target to 625,000 SF from 475,000 SF Renewal Leasing in 3Q26 and YTD of 545,000 SF and 2.1 million SF Tenant Retention in 3Q26 and YTD of 70% and 80% Decreased Midpoint of 2026 Guidance by 2.5% to 80% due to Strategic Space Recaptures Investment Leasing in 3Q26 and YTD of 75,000 SF and 491,000 SF _______________________________________________________________ Investment Activity Committed $88 million of Capital to Two Inventory Developments in Huntsville, AL Increased 2026 Guidance Target by $40 million to $375 million _______________________________________________________________ COLUMBIA, MD (BUSINESS WIRE) October 29, 2026 - COPT Defense Properties (“COPT Defense” or the “Company”) (NYSE: CDP) announced results for the third quarter ended September 30, 2026.
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2 Management Comments Stephen E. Budorick, COPT Defense’s President & Chief Executive Officer, commented, “Our track record of outperformance continued in the third quarter, as FFO per share exceeded the midpoint of our guidance by $0.02. The portfolio continues to benefit from strong tenant demand for specialized space across all of our markets, driven by growth in programs supporting the defense of our nation. We increased the midpoint of guidance for 2026 FFO per share, as adjusted for comparability, by $0.02 to $2.80, which is $0.05 above our initial guidance, and absorbs $0.03 of incremental dilution from our Exchangeable Notes, resulting from our 20% share price increase over the first nine months of the year. We increased the midpoint of 2026 guidance for Same Property cash NOI growth by 25 basis points to 4.25%, capital commitment to new investments by $40 million to $375 million, and capital invested in development and acquisitions by $15 million to $240 million. We decreased the midpoint of tenant retention by 2.5%, to 80%, taking advantage of opportunities to re- lease space to high value tenants with a track record of strong growth. We raised our target for vacancy leasing by over 30% from 475,000 square feet to 625,000 square feet, which is over 50% higher than our initial target of 400,000 square feet. This increased leasing target is driven in part by our decision to proactively capture space to accommodate new higher growth tenancy in Columbia Gateway and in Huntsville, which impacts our retention guidance but de-risks future lease expirations. We expect the FY 2026 defense budget, along with the FY 2027 base budget request in which a 28% year -over-year increase is proposed, will provide a very supportive backdrop for demand in our portfolio to support priority missions, including intelligence, cybersecurity, and missile defense.” Financial Highlights 3rd Quarter Financial Results: • Diluted earnings per share (“EPS”) was $0.41 for the quarter ended September 30, 2026, compared to $0.37 for the quarter ended September 30, 2025. • Diluted funds from operations per share (“FFOPS”), as calculated in accordance w ith Nareit’s definition and as adjusted for comparability , was $0.71 for the quarter ended September 30, 2026, compared to $0.69 for the quarter ended September 30, 2025. Operating Performance Highlights Operating Portfolio Summary: • At September 30, 2026, the Company’s 25.3 million square foot total portfolio was 94.0% occupied and 95.0% leased, which includes the 23.3 million square foot Defense/IT Portfolio that was 95.2% occupied and 96.2% leased. Same Property Performance: • At September 30, 2026, the Company’s 24.6 million square foot Same Property portfolio was 93.9% occupied and 94.9% leased.
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3 • The Company’s Same Property cash NOI increased 3.2% in the quarter ended September 30, 2026 compared to the same period in 2025. Leasing: • Total Square Feet Leased: For the quarter ended September 30, 2026, the Company leased 842,000 square feet, including 545,000 square feet of renewals, 222,000 square feet of vacancy leasing, and 75,000 square feet of investment leasing. For the nine months ended September 30, 2026, the Company executed 3.0 million square feet of total leasing, including 2.1 million square feet of renewals, 453,000 square feet of vacancy leasing, and 491,000 square feet of investment leasing. • Tenant Retention Rates: During the quarter ended September 30, 2026, the Company renewed 69.9% of expiring square feet in its total portfolio. During the nine months ended September 30, 2026, the Company renewed 80.0% of expiring square feet in its total portfolio. • Rent Spreads and Average Escalations on Renewing Leases : For the quarter ended September 30, 2026, straight-line rents on renewals increased 20.3% and cash rents on renewed space increased 8.5%, while annual escalations on renewing leases averaged 2.2%. For the nine months ended September 30, 2026, straight -line rents on renewals increased 12.7% and cash rents on renewed space increased 4.3%, while annual escalations on renewing leases averaged 2.8%. • Lease Terms: In the quarter ended September 30, 2026, lease terms averaged 4.3 years on renewing leases, 7.2 years on vacancy leasing, and 11.6 years on investment leasing. For the nine months ended September 30, 2026, lease terms averaged 4.2 years on renewing leases, 7.0 years on vacancy leasing, and 12.9 years on investment leasing. Investment Activity Highlights • Development Pipeline: The Company’s development pipeline consists of eight properties totaling 1.1 million square feet that were 64% leased as of September 30, 2026. These projects represent a total estimated investment of $528 million, of which $185 million was spent as of September 30, 2026. Balance Sheet and Capital Transaction Highlights • For the quarter ended September 30, 2026, the Company’s adjusted EBITDA fixed charge coverage ratio was 4.4x. • At September 30, 2026, the Company’s net debt to in- place adjusted EBITDA ratio was 5.9x and its net debt adjusted for fully-leased investment properties to in-place adjusted EBITDA ratio was 5.6x. • At September 30, 2026, the Company’s weighted average effective interest rate on its consolidated debt portfolio was 3.8% with a weighted average maturity of 4 years (assuming exercise of available extension options), and 83% of the Company’s debt was subject to fixed interest rates.
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4 Associated Supplemental Presentation Prior to the call, the Company will post a slide presentation to accompany management’s prepared remarks for its third quarter 2026 conference call; the presentation can be viewed and downloaded from the ‘Financial Info – Financial Results’ section of COPT Defense’s Investors website: https://investors.copt.com/financial-information/financial-results 2026 Guidance Management is revising and increasing the midpoint of its full-year guidance and establishing fourth quarter guidance for diluted EPS, diluted FFOPS, per Nareit, and diluted FFOPS, as adjusted for comparability, as follows: Reconciliation of Diluted EPS to FFOPS, per Nareit, and As Adjusted for Comparability Quarter Ending December 31, 2026 Year Ending December 31, 2026 Low High Low High Diluted EPS $ 0.29 $ 0.31 $ 1.43 $ 1.45 Real estate-related depreciation and amortization 0.37 0.37 1.48 1.48 Gain on sales of real estate — — (0.14) (0.14) Diluted FFOPS, Nareit definition 0.66 0.68 2.77 2.79 Demolition costs on nonrecurring improvements 0.02 0.02 0.02 0.02 Diluted FFOPS, as adjusted for comparability $ 0.68 $ 0.70 $ 2.79 $ 2.81 The Company detailed its initial full year guidance, with supporting assumptions, in a separate press release issued February 5, 2026; that release can be found in the ‘News & Events – Press Releases’ section of COPT Defense’s Investors website: https://investors.copt.com/news-events/press-releases Conference Call Information Management will discuss third quarter 2026 results on its conference call tomorrow, details of which are listed below: Conference Call Date: Friday, October 30, 2026 Time: 12:00 p.m. Eastern Time Participants must register for the conference call at the link below to receive the dial -in number and personal pin. Registering only takes a few moments and provides direct access to the conference call without waiting for an operator. You may register at any time, including up to and after the call start time: https://register-conf.media-server.com/register/BI0a191ed3b81d41ebba9fb6ef7dec8896 The conference call will also be available via live webcast in the ‘News & Events – IR Calendar’ section of COPT Defense’s Investors website: https://investors.copt.com/news-events/ir-calendar Replay Information A replay of the conference call will be immediately available via webcast only on COPT Defense’s Investors website and will be maintained on the website for approximately 90 days after the conference call.
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5 Definitions For definitions of certain terms used in this press release, please refer to the information furnished in the Company’s Supplemental Information Package furnished on a Form 8- K which can be found on its website ( www.copt.com). Reconciliations of non- GAAP measures to the most directly comparable GAAP measures are included in the attached tables. About COPT Defense COPT Defense, an S&P MidCap 400 Company, is a self-managed REIT focused on owning, operating, and developing properties in locations proximate to, or sometimes containing, key U.S. Government (“USG”) defense installations and missions (referred to as its Defense/IT Portfolio). The Company’s tenants include the USG and their defense contractors, who are primarily engaged in priority national security activities, and who generally require mission- critical and high security property enhancements. As of September 30, 2026, the Company’s Defense/IT Portfolio of 202 properties, including 24 owned through unconsolidated joint ventures, encompassed 23.3 million square feet and was 96.2% leased. Forward-Looking Information This press release may contain “forward-looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the Company’s current expectations, estimates and projections about future events and financial trends affecting the Company. Forward- looking statements can be identified by the use of words such as “may,” “will,” “should,” “could,” “believe,” “anticipate,” “expect,” “estimate,” “plan,” or other comparable terminology. Forward -looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate. Although the Company believes that the expectations, estimates, and projections reflected in such forward-looking statements are based on reasonable assumptions at the time made, the Company can give no assurance that these expectations, estimates, and projections will be achieved. Future events and actual results may di ffer materially from those discussed in the forward- looking statements and the Company undertakes no obligation to update or supplement any forward - looking statements. The areas of risk that may affect these expectations, estimates, and projections include, but are not limited to, those risks described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Source: COPT Defense Properties
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COPT Defense Properties Summary Financial Data (unaudited) (dollars and shares in thousands, except per share data) 6 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2026 2025 2026 2025 Revenues Lease revenue $ 193,482 $ 178,272 $ 575,259 $ 529,178 Other property revenue 1,853 2,038 5,298 6,186 Construction contract and other service revenues 13,424 8,485 26,231 31,202 Total revenues 208,759 188,795 606,788 566,566 Operating expenses Property operating expenses 77,217 70,356 231,238 209,311 Depreciation and amortization associated with real estate operations 42,966 40,631 127,940 119,563 Construction contract and other service expenses 12,763 7,952 24,338 29,530 General and administrative expenses 9,047 8,483 26,740 24,833 Leasing expenses 2,780 2,449 8,863 8,061 Business development expenses and land carry costs 729 1,098 2,866 3,203 Total operating expenses 145,502 130,969 421,985 394,501 Interest expense (24,439) (20,894) (72,879) (62,336) Interest and other income, net 2,984 2,591 9,912 5,382 Gain on sales of real estate 7,673 3,018 14,697 3,318 Income before equity in income of unconsolidated entities and income taxes 49,475 42,541 136,533 118,429 Equity in income of unconsolidated entities 415 1,815 2,213 2,541 Income tax expense (96) (612) (254) (832) Net income 49,794 43,744 138,492 120,138 Net income attributable to noncontrolling interests Common units in the Operating Partnership (“OP”) (1,069) (924) (2,919) (2,496) Other consolidated entities (984) (1,093) (2,839) (2,828) Net income attributable to common shareholders $ 47,741 $ 41,727 $ 132,734 $ 114,814 Earnings per share (“EPS”) computation Numerator for diluted EPS Net income attributable to common shareholders $ 47,741 $ 41,727 $ 132,734 $ 114,814 Amount allocable to share-based compensation awards (183) (133) (525) (340) Numerator for diluted EPS $ 47,558 $ 41,594 $ 132,209 $ 114,474 Denominator Weighted average common shares - basic 112,886 112,485 112,855 112,442 Dilutive effect of share-based compensation awards 945 702 971 749 Dilutive exchangeable debt 2,088 — 1,183 — Weighted average common shares - diluted 115,919 113,187 115,009 113,191 Diluted EPS $ 0.41 $ 0.37 $ 1.15 $ 1.01
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COPT Defense Properties Summary Financial Data (unaudited) (in thousands, except per share data) 7 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2026 2025 2026 2025 Net income $ 49,794 $ 43,744 $ 138,492 $ 120,138 Real estate-related depreciation and amortization 42,966 40,631 127,940 119,563 Gain on sales of real estate (7,673) (3,018) (14,697) (3,318) Depreciation and amortization on unconsolidated real estate JVs 718 733 2,186 2,206 Gain on sale of real estate on unconsolidated real estate JV — — (1,276) — Funds from operations (“FFO”) 85,805 82,090 252,645 238,589 FFO allocable to other noncontrolling interests (1,342) (1,502) (3,906) (4,042) Basic FFO allocable to share-based compensation awards (620) (548) (1,840) (1,628) Basic FFO available to common share and common unit holders (“Basic FFO”) 83,843 80,040 246,899 232,919 Diluted FFO adjustments allocable to share-based compensation awards 63 53 190 294 Diluted FFO available to common share and common unit holders (“Diluted FFO”) 83,906 80,093 247,089 233,213 Loss on early extinguishment of debt on unconsolidated real estate JVs — 28 — 28 Demolition costs on nonrecurring improvements 97 — 97 — Diluted FFO comparability adjustments allocable to share-based compensation awards (1) — (1) — Diluted FFO available to common share and common unit holders, as adjusted for comparability 84,002 80,121 247,185 233,241 Straight line rent adjustments and lease incentive amortization (828) 5,053 3,219 1,518 Amortization of intangibles and other assets included in net operating income (“NOI”) (5) 42 161 268 Sales-type lease adjustments 33 — 134 — Share-based compensation, net of amounts capitalized 3,450 2,961 10,012 8,739 Amortization of deferred financing costs 778 657 2,404 1,981 Amortization of net debt discounts and commissions, net of amounts capitalized 1,087 1,070 3,380 3,181 Replacement capital expenditures (22,997) (26,982) (67,319) (72,365) Other (136) 352 406 508 Diluted adjusted funds from operations available to common share and common unit holders (“Diluted AFFO”) $ 65,384 $ 63,274 $ 199,582 $ 177,071 Diluted FFO per share $ 0.71 $ 0.69 $ 2.11 $ 2.02 Diluted FFO per share, as adjusted for comparability $ 0.71 $ 0.69 $ 2.11 $ 2.02 Dividends/distributions per common share/unit $ 0.32 $ 0.305 $ 0.96 $ 0.915
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COPT Defense Properties Summary Financial Data (unaudited) (dollars and shares in thousands, except per share data) 8 September 30, 2026 December 31, 2025 Balance sheet data Properties, net of accumulated depreciation $ 3,861,398 $ 3,783,477 Total assets $ 4,573,242 $ 4,701,790 Debt per balance sheet $ 2,579,733 $ 2,767,834 Total liabilities $ 2,952,058 $ 3,114,115 Redeemable noncontrolling interest $ 25,031 $ 25,506 Total equity $ 1,596,153 $ 1,562,169 Debt to assets 56.4% 58.9% Net debt to adjusted book 39.9% 40.5% Defense/IT Portfolio data (as of period end) Number of operating properties 202 201 Total operational square feet (in thousands) 23,316 23,159 % Occupied 95.2% 95.5% % Leased 96.2% 96.5% For the Three Months Ended September 30, For the Nine Months Ended September 30, 2026 2025 2026 2025 GAAP Payout ratio Net income 74.5% 80.5% 80.4% 87.9% Debt ratios Net income to interest expense ratio 2.0x 2.1x 1.9x 1.9x Debt to net income ratio 13.0x 14.0x N/A N/A Non-GAAP Payout ratios Diluted FFO 43.9% 43.7% 44.8% 45.0% Diluted FFO, as adjusted for comparability 43.9% 43.7% 44.7% 45.0% Diluted AFFO 56.4% 55.3% 55.4% 59.3% Debt ratios Adjusted EBITDA fixed charge coverage ratio 4.4x 4.8x 4.3x 4.8x Net debt to in-place adjusted EBITDA ratio 5.9x 6.1x N/A N/A Net debt adjusted for fully-leased investment properties to in-place adjusted EBITDA ratio 5.6x 5.8x N/A N/A Reconciliation of denominators for per share measures Denominator for diluted EPS 115,919 113,187 115,009 113,191 Weighted average common units 2,237 2,182 2,177 2,136 Denominator for diluted FFO per share and as adjusted for comparability 118,156 115,369 117,186 115,327
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COPT Defense Properties Summary Financial Data (unaudited) (in thousands) 9 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2026 2025 2026 2025 Numerators for payout ratios Dividends on unrestricted common and deferred shares $ 36,143 $ 34,332 $ 108,417 $ 102,974 Distributions on unrestricted common units 715 658 2,143 1,985 Dividends and distributions on restricted shares and units 239 209 753 663 Total dividends and distributions for GAAP payout ratio 37,097 35,199 111,313 105,622 Dividends and distributions on antidilutive shares and units (230) (202) (723) (592) Dividends and distributions for non-GAAP payout ratios $ 36,867 $ 34,997 $ 110,590 $ 105,030 Reconciliation of net income to earnings before interest, income taxes, depreciation and amortization for real estate (“EBITDAre”), adjusted EBITDA, and in-place adjusted EBITDA Net income $ 49,794 $ 43,744 $ 138,492 $ 120,138 Interest expense 24,439 20,894 72,879 62,336 Income tax expense 96 612 254 832 Real estate-related depreciation and amortization 42,966 40,631 127,940 119,563 Other depreciation and amortization 482 428 1,364 1,438 Gain on sales of real estate (7,673) (3,018) (14,697) (3,318) Adjustments from unconsolidated real estate JVs 1,797 1,758 4,105 4,791 EBITDAre 111,901 105,049 330,337 305,780 Credit loss (recoveries) expense (1,096) (324) (2,443) 1,378 Business development expenses 488 731 1,940 2,065 Demolition costs on nonrecurring improvements 97 — 97 — Executive transition costs — — — 78 Loss on early extinguishment of debt on unconsolidated real estate JVs — 28 — 28 Net gain on other investments — (1,713) (29) (1,713) Adjusted EBITDA 111,390 103,771 $ 329,902 $ 307,616 Pro forma NOI adjustment for property changes within period 1,150 21 Change in collectability of deferred rental revenue 32 — In-place adjusted EBITDA $ 112,572 $ 103,792 Reconciliations of tenant improvements and incentives, building improvements, and leasing costs for operating properties to replacement capital expenditures Tenant improvements and incentives $ 19,173 $ 24,769 $ 54,977 $ 53,820 Building improvements 3,882 3,662 7,916 11,175 Leasing costs 4,946 2,240 7,913 10,630 Net exclusions from tenant improvements and incentives (4,445) (3,390) (2,354) (93) Excluded building improvements (559) (299) (1,133) (2,203) Excluded leasing costs — — — (964) Replacement capital expenditures $ 22,997 $ 26,982 $ 67,319 $ 72,365
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COPT Defense Properties Summary Financial Data (unaudited) (in thousands) 10 For the Three Months Ended September 30, For the Nine Months Ended September 30, 2026 2025 2026 2025 Reconciliation of interest expense to the denominator for fixed charge coverage-Adjusted EBITDA Interest expense $ 24,439 $ 20,894 $ 72,879 $ 62,336 Less: Amortization of deferred financing costs (778) (657) (2,404) (1,981) Less: Amortization of net debt discounts and commissions, net of amounts capitalized (1,087) (1,070) (3,380) (3,181) COPT Defense’s share of interest expense of unconsolidated real estate JVs, excluding amortization of deferred financing costs and net debt premium and gain or loss on interest rate derivatives 971 898 2,875 2,409 Scheduled principal amortization 20 458 677 1,376 Capitalized interest, excluding amortization of deferred financing costs 2,031 1,292 5,284 3,345 Denominator for fixed charge coverage-Adjusted EBITDA $ 25,596 $ 21,815 $ 75,931 $ 64,304 Reconciliation of net income to NOI from real estate operations, same property NOI from real estate operations, and same property cash NOI from real estate operations Net income $ 49,794 $ 43,744 $ 138,492 $ 120,138 Construction contract and other service revenues (13,424) (8,485) (26,231) (31,202) Depreciation and other amortization associated with real estate operations 42,966 40,631 127,940 119,563 Construction contract and other service expenses 12,763 7,952 24,338 29,530 General and administrative expenses 9,047 8,483 26,740 24,833 Leasing expenses 2,780 2,449 8,863 8,061 Business development expenses and land carry costs 729 1,098 2,866 3,203 Interest expense 24,439 20,894 72,879 62,336 Interest and other income, net (2,984) (2,591) (9,912) (5,382) Gain on sales of real estate (7,673) (3,018) (14,697) (3,318) Equity in income of unconsolidated entities (415) (1,815) (2,213) (2,541) Unconsolidated real estate JVs NOI allocable to COPT Defense included in equity in income of unconsolidated entities 2,212 1,864 6,318 5,623 Income tax expense 96 612 254 832 NOI from real estate operations 120,330 111,818 355,637 331,676 Non-Same Property NOI from real estate operations (6,050) (541) (16,009) (1,446) Same Property NOI from real estate operations 114,280 111,277 339,628 330,230 Straight line rent adjustments and lease incentive amortization 1,108 2,185 8,329 (908) Amortization of acquired above- and below-market rents 15 41 220 170 Lease termination fees, net (1,901) (1,191) (3,921) (2,753) Tenant funded landlord assets and lease incentives (3,054) (5,239) (14,900) (13,875) Cash NOI adjustments in unconsolidated real estate JVs (421) (209) (1,063) (689) Sales-type lease adjustments 243 — 482 — Same Property Cash NOI from real estate operations $ 110,270 $ 106,864 $ 328,775 $ 312,175
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COPT Defense Properties Summary Financial Data (unaudited) (in thousands) 11 September 30, 2026 December 31, 2025 Reconciliation of total assets to adjusted book Total assets $ 4,573,242 $ 4,701,790 Accumulated depreciation 1,798,284 1,682,367 Accumulated amortization of intangibles on property acquisitions and deferred leasing costs 226,159 228,656 COPT Defense’s share of liabilities of unconsolidated real estate JVs 82,849 82,039 COPT Defense’s share of accumulated depreciation and amortization of unconsolidated real estate JVs 17,265 16,000 Less: Property - operating lease liabilities (41,178) (45,012) Less: Property - finance lease liabilities (1,090) (363) Less: Cash and cash equivalents (24,262) (274,986) Less: COPT Defense’s share of cash of unconsolidated real estate JVs (1,332) (1,898) Adjusted book $ 6,629,937 $ 6,388,593 September 30, 2026 December 31, 2025 September 30, 2025 Reconciliation of debt to net debt and net debt adjusted for fully-leased investment properties Debt per balance sheet $ 2,579,733 $ 2,767,834 $ 2,443,518 Net discounts and commissions and deferred financing costs 19,267 23,466 19,123 COPT Defense’s share of unconsolidated JV gross secured debt 75,250 75,250 75,250 Gross debt 2,674,250 2,866,550 2,537,891 Less: Cash and cash equivalents (24,262) (274,986) (23,687) Less: COPT Defense’s share of cash of unconsolidated real estate JVs (1,332) (1,898) (2,080) Net debt 2,648,656 2,589,666 2,512,124 Costs incurred on fully-leased development properties (112,988) (8,226) (83,794) Net debt adjusted for fully-leased investment properties $ 2,535,668 $ 2,581,440 $ 2,428,330