COPT Defense Announces Tax Treatment of 2024 Distributions

Rhea-AI Summary

COPT Defense (NYSE: CDP) has announced the tax treatment of its 2024 common share distributions. The company declared four quarterly distributions of $0.2950 per share, totaling $1.1800 for the year. All distributions are classified as taxable ordinary dividends and qualify as Section 199A dividends.

As of September 30, 2024, COPT Defense's portfolio consists of 194 properties, including 24 owned through unconsolidated joint ventures, comprising 22.2 million square feet with a 96.5% lease rate. The company specializes in properties near or containing key U.S. Government defense installations, serving primarily USG and defense contractor tenants engaged in national security activities.

Positive

• 96.5% portfolio occupancy rate indicates strong tenant demand
• Substantial portfolio of 194 properties with 22.2 million square feet
• Stable quarterly dividend payments of $0.2950 per share
• Strategic focus on government and defense contractors provides stable tenant base

Negative

• None.

Insights

Tax and REIT Expert

COPT Defense's tax treatment disclosure reveals important insights for investors. The company distributed $1.18 per share through four equal quarterly payments of $0.295, demonstrating remarkable consistency in its dividend policy. The classification of 100% of distributions as ordinary dividends, fully qualifying for Section 199A treatment, is particularly advantageous for shareholders.

The Section 199A qualification means individual investors can potentially deduct up to 20% of their qualified REIT dividends from their taxable income, enhancing after-tax returns. This tax efficiency, combined with the absence of return of capital or capital gains distributions, indicates that COPT Defense's earnings fully support its dividend payments through operating income.

The company's robust business model is evident in its 96.5% portfolio occupancy rate across 194 defense-focused properties. With primary tenants being the U.S. Government and defense contractors engaged in national security activities, COPT Defense benefits from highly stable, government-backed rental income streams. This tenant quality and mission-critical nature of the properties provide strong support for the consistency and reliability of future dividend distributions.

COLUMBIA, Md.--(BUSINESS WIRE)-- COPT Defense Properties (NYSE: CDP) (“COPT Defense” or the “Company”) announced the 2024 tax treatment of its common share distributions as described below. Shareholders are encouraged to consult with their tax advisors as to their specific tax treatment of COPT Defense common share distributions.

Please note that the common share distributions with a record date of December 31, 2024, and payment date of January 15, 2025, are allocated to 2024 for income tax purposes.

The table below summarizes the income tax treatment of 2024 distributions:

Common Shares (CUSIP #22002T108)
Record Date	Payment Date	Total Distribution per Share		Total Distribution Allocable to 2024		2024 Taxable Ordinary Dividends		2024 Total Capital Gain Distribution		2024 Return of Capital		2024 Unrecaptured Section 1250 Gain		2024 Section 199A Dividend (1)
03/29/2024	04/17/2024	$	0.2950	$	0.2950	$	0.2950	$	-	$	-	$	-	$	0.2950
06/28/2024	07/17/2024	$	0.2950	$	0.2950	$	0.2950	$	-	$	-	$	-	$	0.2950
09/30/2024	10/17/2024	$	0.2950	$	0.2950	$	0.2950	$	-	$	-	$	-	$	0.2950
12/31/2024	01/15/2025	$	0.2950	$	0.2950	$	0.2950	$	-	$	-	$	-	$	0.2950
		$	1.1800	$	1.1800	$	1.1800	$	-	$	-	$	-	$	1.1800
		(1) Section 199A Dividend is a subset of, and is included in, the Taxable Ordinary Dividend Amount.

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, 2024, the Company’s Defense/IT Portfolio of 194 properties, including 24 owned through unconsolidated joint ventures, encompassed 22.2 million square feet and was 96.5% 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 differ 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, 2023.

Source: COPT Defense Properties

View source version on businesswire.com: https://www.businesswire.com/news/home/20250122337467/en/

IR Contacts:

Venkat Kommineni, CFA

443.285.5587

venkat.kommineni@copt.com



Michelle Layne

443.285.5452

michelle.layne@copt.com

Source: COPT Defense Properties

FAQ

What is COPT Defense's (CDP) total dividend distribution for 2024?

COPT Defense's total dividend distribution for 2024 is $1.1800 per share, paid in four quarterly installments of $0.2950 each.

How are COPT Defense's (CDP) 2024 dividends classified for tax purposes?

All of COPT Defense's 2024 distributions are classified as taxable ordinary dividends and qualify as Section 199A dividends.

What is the current occupancy rate of COPT Defense's (CDP) property portfolio?

As of September 30, 2024, COPT Defense's Defense/IT Portfolio was 96.5% leased.

How many properties does COPT Defense (CDP) own as of September 2024?

COPT Defense owns 194 properties, including 24 owned through unconsolidated joint ventures, totaling 22.2 million square feet.

When are COPT Defense's (CDP) 2024 quarterly dividend payment dates?

The dividend payment dates are April 17, July 17, October 17, 2024, and January 15, 2025 (for the Q4 2024 dividend).