COPT Defense Properties (COPT Defense) (NYSE: CDP) is an equity REIT whose 21.3 million square foot portfolio of office and data center properties was 97% leased on September 30, 2023. Classified by Nareit as an “office REIT,” COPT Defense’s specialized capability to provide real estate solutions to the U.S. Government and its defense contractors, most of whom are engaged in national security, defense, and information technology (IT) related activities (collectively referred to as the “Defense/IT Portfolio”) is unique in the REIT industry and makes COPT Defense more of a specialty REIT.
- Healthy defense spending environment in the United States continues to drive strong demand for COPT Defense’s locations. The Defense/IT Portfolio, which accounts for ~90% of annualized rental revenue, is 97% leased, which is the highest level since the segment was disclosed in 2015. Through the third quarter of 2023, the company completed 2.2 million square feet of total leasing, with a tenant retention rate of 82.5%, which is ahead of the 5-year average of 76%, and well ahead of other office REITs. Because demand for COPT Defense locations is not correlated to the macroeconomic environment or general office fundamentals, COPT Defense is on track to achieve its development leasing objective of 700,000 square feet in 2023.
- COPT Defense owns and controls over 650 acres of land in its Defense/IT Properties, which limits competing supply and can accommodate over 8 million square feet of future mission growth.
- On September 30, 2023, 1.0 million square feet of specialized office and data centers were under construction, all of which are at Defense/IT locations; 90% of that space is pre-leased and will support growth in the coming quarters.
- An investment grade-rated balance sheet supports future growth through development and ensures dividend safety. COPT Defense’s market capitalization is $5.2 billion, composed of $2.8 billion in equity capitalization and $2.4 billion in total debt. The debt portfolio is primarily composed of long-term unsecured senior notes with attractive interest rates, and maturities that occur in 2026, 2029, 2031 and 2033. The company has no refinancing exposure until 2026.
Federal Realty (NYSE:FRT) owns, operates and redevelops high-quality retail-based properties located primarily in major coastal markets from Washington, D.C., to Boston, as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty’s mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland, and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty’s 102 properties include approximately 3,200 tenants, in 26 million square feet, and approximately 3,100 residential units.
Southern Company (NYSE: SO) is an energy company providing electric and gas service to nine million customers across the United States through its subsidiaries. The company is focused on making, moving and selling reliable, low-cost energy solutions from traditional and renewable power sources, as well as providing superior customer service. Recognizing the rapid evolution of the energy sector, including new technologies, customer preferences, and environmental, social, and governance initiatives, Southern Company is working to advance its solar, wind, and nuclear holdings, develop microgrids and significantly reduce its system’s greenhouse gas emissions.
- Over 9 million customers across seven subsidiaries.
- 300 consecutive quarterly dividends equal to or greater than those in the previous quarter (for 75 years)
- Developing microgrids and deploying energy storage systems throughout the U.S.
- Subsidiary Southern Power provides wholesale solar, wind, fuel cell and natural gas generation in 14 states
- Subsidiary PowerSecure is the nation’s leading distributed energy innovation company
National Retail Properties (NYSE: NNN), a real estate investment trust, invests primarily in high-quality retail properties subject to long-term leases. As of March 31, 2023, the company owned 3,449 properties in 49 states with a gross leasable area of approximately 35.3 million square feet and with a weighted average remaining lease term of 10.3 years.
Founded in 1992, LTC Properties, Inc. (NYSE: LTC) is a self-administered real estate investment trust (REIT) investing in seniors housing and health care properties. LTC’s portfolio encompasses Skilled Nursing Facilities, Assisted Living Communities, Independent Living Communities, Memory Care Communities and combinations thereof. The company’s main objective is to build and grow a diversified portfolio that creates and sustains shareholder value while providing stockholders current distribution income. To meet this objective, the company seeks properties operated by regional operators, ideally offering upside and portfolio diversification.
Essential Utilities Inc. (NYSE: WTRG) is one of the largest publicly traded water, wastewater service, and natural gas providers in the U.S., serving approximately five and a half million people across 10 states under the Aqua and Peoples brands. The company recognizes the importance water and natural gas play in everyday life and is proud to deliver safe, reliable services that contribute to a better quality of life in the communities it serves.
In keeping with our commitment to stakeholders, we will:
- Continue to recognize the importance of our quarterly dividend to shareholders. We have a history of delivering consecutive quarterly cash dividends for 77 years and increased the dividend 32 times in the last 31 years
- Invest approximately $1 billion in 2023 to replace and expand water and wastewater utility infrastructure and to replace and upgrade natural gas utility infrastructure, leading to significant reductions in methane emissions that occurs in aged gas pipes
- Continue to publish our award-winning Environmental, Social and Governance (ESG) report highlighting the company’s commitment to environmental stewardship, sustainable business practices, employee safety, diversity and inclusion, customer experience, and community engagement