COPT Defense Properties (CDP) 2023 Q2 法說會逐字稿

Welcome to the Corporate Office Properties Trust Quarter (sic) [Second Quarter] 2023 Results Conference Call. (Operator Instructions) As a reminder, today's call is being recorded.

歡迎參加 Corporate Office Properties Trust 2023 年第二季業績電話會議。 （操作員指示）提醒一下，今天的通話正在錄音中。

At this time, I'd like to turn the call over to Venkat Kommineni, COPT's Vice President of Investor Relations. Mr. Kommineni, please go ahead.

現在，我想把電話轉給 COPT 投資人關係副總裁 Venkat Kommineni。 Kommineni 先生，請繼續。

Thank you, Joanne. Good afternoon, and welcome to COPT's conference call to discuss second quarter results. With me today are Steve Budorick, President and CEO; and Anthony Mifsud, Executive Vice President and CFO.

謝謝喬安妮。下午好，歡迎參加 COPT 的第二季業績電話會議。今天與我一起出席的有總裁兼首席執行官史蒂夫·布多里克 (Steve Budorick) 和執行副總裁兼首席財務官安東尼·米夫蘇德 (Anthony Mifsud)。

Reconciliations of GAAP and non-GAAP financial measures that management discusses are available on our website in the results, press release and presentation and in our supplemental information package. As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties, which are discussed in our SEC filings. Actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update them. Steve?

管理層討論的 GAAP 和非 GAAP 財務指標的對帳表可在我們網站的業績報告、新聞稿、簡報以及補充資訊包中找到。提醒一下，今天電話會議上做出的前瞻性陳述可能受到風險和不確定性的影響，這些風險和不確定性已在我們提交給美國證券交易委員會的文件中進行了討論。實際事件和結果可能與這些前瞻性陳述有重大差異，本公司不承擔更新這些陳述的義務。史蒂夫？

Good afternoon, and thank you for joining us. Our investment strategy and differentiated portfolio continue to generate strong operating results and support our positive outlook for our business for the coming years. The $100 billion increase to the Department of Defense budget that had been appropriated since March 2022. And the roughly $25 billion increase that is expected to occur later this year, has and will continue to drive strong demand throughout our Defense/IT portfolio. Our capital allocation decisions have deeply concentrated our assets in locations adjacent to or in some instances, containing high priority missions.

下午好，感謝您的參與。我們的投資策略和差異化投資組合持續創造強勁的營運業績，並支撐我們對未來幾年業務的樂觀展望。自2022年3月以來，國防部預算已增加1,000億美元，預計今年稍後還將增加約250億美元，這已經並將繼續推動我們整個國防/IT投資組合的強勁需求。我們的資本配置決策已將資產高度集中在毗鄰或在某些情況下包含高優先任務的地點。

Defense contractors benefit greatly by locating offices proximate to these high priority missions. These missions require secure office environments and the mission work cannot be performed from home. The secure environments for these missions are difficult to get approval to construct, expensive to create and requiring significant tenant co-investment and are not transportable. These are the major factors that drive our industry-leading retention rates.

國防承包商將辦公室設在這些高優先任務附近，受益匪淺。這些任務需要安全的辦公環境，而任務工作無法在家中進行。這些任務所需的安全環境難以獲得建設批准，建造成本高昂，需要租戶共同投資，且不便於運輸。這些因素是我們維持業界領先留存率的主要因素。

Accordingly, our competitive advantages of the best locations adjacent to these high-priority defense missions. A unique portfolio with significant security improvements, readily developable land sites to support mission growth, a 30-year track record of performance excellence and our franchise of relationships and security credentials continues to provide strong results, including resilient cash flows and FFO growth.

因此，我們擁有毗鄰這些高優先級國防任務區位優勢，從而形成了競爭優勢。我們獨特的投資組合擁有顯著的安全改進、易於開發的地塊以支持任務發展、30年的卓越業績記錄以及我們豐富的客戶關係和安全資質，這些優勢將繼續帶來強勁的業績，包括穩健的現金流和營運現金流（FFO）增長。

We reported second quarter FFO per share as adjusted for comparability of $0.60, $0.02 higher than the midpoint of our guidance. Our core portfolio is 95% leased, which represents a 130 basis point increase year-over-year. Our Defense/IT segment is 96.8% leased which is the highest level since we began disclosing the segment in 2015 and represents a 190 basis point year-over-year increase. Same property cash NOI increased 5.8% over the second quarter of last year and increased 7% during the first half of the year. We executed 88,000 square feet of vacancy leasing with a weighted average lease term of nearly 7 years, which brought our total for the 6 months ended to 187,000 square feet.

我們報告的第二季每股營運現金流量（FFO）經可比性調整後為0.60美元，比我們預期的中點高出0.02美元。我們的核心投資組合已出租95%，年增130個基點。我們的國防/IT部門已出租96.8%，這是自2015年我們開始揭露該部門以來的最高水平，年增190個基點。同業現金淨營業利潤（NOI）較去年第二季成長5.8%，上半年成長7%。我們執行了8.8萬平方英尺的空置租賃，加權平均租賃期近7年，這使我們截至上半年的總租賃面積達到18.7萬平方英尺。

Adding the first few weeks of July, we've executed 218,000 square feet of vacancy leasing year-to-date, which puts us right on track to achieve our full year target of 400,000 square feet. Recall, our expected vacancy leasing volumes in 2023 are lower than 2022 due to the diminished inventory available for lease in our defense locations.

加上7月前幾週的數據，我們今年迄今已完成21.8萬平方英尺的空置租賃，這讓我們有望實現40萬平方英尺的全年目標。值得一提的是，由於國防辦公室的可租賃庫存減少，我們2023年的預期空置租賃量低於2022年。

The National Business Park is now 99.3% leased, which represents a 550 basis point increase since the end of last June, with only 31,000 square feet of unleased space in the 4.1 million square foot park, and the largest vacant space is only 7,800 square feet.

國家商業園區目前的出租率為 99.3%，自去年 6 月底以來增加了 550 個基點，在 410 萬平方英尺的園區中，只有 31,000 平方英尺的未出租空間，最大的空置空間僅為 7,800 平方英尺。

In our Defense/IT portfolio, we have 670,000 square feet of inventory available which is the lowest level since 2017, despite the fact that the portfolio has increased by nearly 6 million square feet during that period.

在我們的國防/IT投資組合中，我們擁有 670,000 平方英尺的可用庫存，這是自 2017 年以來的最低水平，儘管在此期間投資組合增加了近 600 萬平方英尺。

Our overall portfolio leasing activity ratio remains strong at 75% with a pipeline of 915,000 square feet of vacancy prospects. Total leasing volume of 891,000 square feet in the quarter included 803,000 square feet of renewals. Our overall retention rate for the quarter was 89% with our Defense/IT locations at 93%. And year-to-date, our overall retention rate is 83%. Cash rent spreads were up 1.3% for the quarter, while GAAP rent spreads were up 7.4%, driven by annual rent increases of 2.6% with a weighted average lease term of 5 years.

我們整體投資組合的租賃活動率維持強勁，達到75%，潛在空置面積達91.5萬平方英尺。本季總租賃面積為89.1萬平方英尺，其中續租面積為80.3萬平方英尺。本季我們的整體留存率為89%，其中國防/IT領域為93%。年初至今，我們的整體留存率為83%。本季現金租金利差上漲1.3%，而GAAP租金利差上漲7.4%，這得益於年租金上漲2.6%，加權平均租賃期限為5年。

Year-to-date, rent spreads are up 1.1% on a cash basis and 6.9% on a GAAP basis with a weighted average lease term of 4.5 years. Measuring the starting cash rent of the tenant's expiring lease to the starting cash rent of the renewal lease. The annual compound growth rate achieved on these leases was 3.4% for both the quarter and year-to-date.

年初至今，現金租金利差上漲1.1%，公認會計準則租金利差上漲6.9%，加權平均租期為4.5年。衡量標準是租戶即將到期租約的起始現金租金與續約租約的起始現金租金之比。本季和年初至今，這些租約的年複合成長率均為3.4%。

On Page 22 of our flip book, we expanded our large lease disclosure to include our view of renewals through 2025, and we continue to expect portfolio retention to be extremely strong.

在我們的翻書第 22 頁，我們擴大了大型租賃揭露範圍，包括了我們對 2025 年續約的看法，並且我們繼續預期投資組合保留率將非常高。

Looking forward over the next 10 quarters, we have 7.1 million square feet of leases expiring, which includes 3.9 million square feet of large leases defined as leases over 50,000 square feet. We expect a retention rate of roughly 95% on these large leases.

展望未來10個季度，我們將有710萬平方英尺的租約到期，其中包括390萬平方英尺的大型租約（定義為面積超過5萬平方英尺的租約）。我們預計這些大型租約的留存率約為95%。

For the balance of 2023, we expect to renew 100% of the large leases that are included in this total. Our 1.5 million square feet of active developments are 92% leased, with a total estimated cost of $480 million and consisting of 9 projects located in Maryland, Northern Virginia and Huntsville, Alabama. We expect to place 800,000 square feet of developments into service over the remainder of 2023 that we expect to be 99% leased when delivered. During the first 6 months of the year, we executed 495,000 square feet of development leases, including 3 full building build-to-suits and 30,000 square feet of development lease-up.

2023年餘下時間，我們預計將續約所有包含在此總額中的大型租約。我們150萬平方英尺的在建開發案已出租92%，總投資預計為4.8億美元，涵蓋位於馬裡蘭州、北維吉尼亞州和阿拉巴馬州亨茨維爾的9個項目。我們預計在2023年餘下時間將有80萬平方英尺的開發案投入使用，預計交貨時出租率將達到99%。今年上半年，我們簽訂了49.5萬平方英尺的開發租賃協議，其中包括3棟整棟建築的客製化建造項目和3萬平方英尺的開發租賃項目。

Our development pipeline, which we find as opportunities we consider 50% likely to win or better within 2 years or less, currently stands at 1 million square feet up from 700,000 square feet last quarter. Beyond that, we're tracking another 1.2 million square feet of potential future opportunities, which should allow us to maintain a solid development pipeline in the near and medium term. With the National Business Park essentially full, we are in the planning stage for our next contractor and government buildings, and have commenced predevelopment and pre-leasing activities.

我們認為，在兩年或更短時間內，有50%或更高機率中標的開發項目，目前已達100萬平方英尺，較上一季的70萬平方英尺有所增長。此外，我們也正在追蹤另外120萬平方英尺的潛在未來開發機會，這將使我們能夠在近期和中期內保持穩健的開發進度。由於國家商務園區已基本滿員，我們正處於下一批承包商和政府大樓的規劃階段，並已啟動前期開發和預租活動。

We remain confident in achieving our 700,000 square foot development leasing goal for the year. The success we've achieved during the first 6 months of the year has compelled us to increase the projected midpoint for FFO per share, and we remain confident we can achieve our FFO per share growth expectations through 2026.

我們仍有信心實現今年70萬平方英尺的開發租賃目標。今年上半年的成功促使我們提高了每股FFO的預期中位數，並且我們仍然有信心在2026年實現每股FFO的成長預期。

And with that, I'll hand the call over to Anthony.

說完這些，我會把電話交給安東尼。

Thank you, Steve. We reported second quarter FFO per share as adjusted for comparability of $0.60, which is $0.02 higher than the midpoint of our guidance. The quarter's outperformance was primarily driven by lower-than-expected net operating expenses, a portion of which was the timing of certain repairs and maintenance projects that we now expect to be completed in the second half of the year and slightly lower interest expense.

謝謝，史蒂夫。我們報告的第二季每股營運現金流量（FFO）經可比性調整後為0.60美元，比我們預期的中位數高出0.02美元。本季的優異表現主要得益於低於預期的淨營運費用，部分原因是我們預計某些維修和保養項目將在下半年完成，以及利息支出略有下降。

We have generated very strong increases in same-property cash NOI with the results that have exceeded our initial expectations. Driven by the year-to-date outperformance that is not timing-related, we are increasing the midpoint of our same-property cash NOI guidance by 100 basis points to a revised range of 4.5% to 5.5%. This represents a 200 basis point increase in the midpoint for same-property cash NOI growth from our initial guidance target.

我們的同物業現金淨營業利潤 (NOI) 實現了強勁增長，業績超出了我們最初的預期。受年初至今非時間因素帶來的優異表現的推動，我們將同物業現金淨營業利潤 (NOI) 指引中點上調 100 個基點，至 4.5% 至 5.5% 的修訂區間。這意味著同物業現金淨營業利潤 (NOI) 成長中點比我們最初的指引目標上調了 200 個基點。

Same property occupancy ended the quarter at 92.8%, which is up 70 basis points sequentially from last quarter and up 170 basis points year-over-year, and we expect occupancy to continue to increase throughout the remainder of the year as executed leases commence, including 70,000 square feet by Lockheed Martin at 1200 Redstone Gateway in the third quarter, after taking occupancy of 52,000 square feet in the second quarter and 70,000 square feet in our Fort Meade/BW Corridor subsegment during the third quarter.

本季末，同類物業的入住率為 92.8%，比上一季增長 70 個基點，比去年同期增長 170 個基點，我們預計，隨著已簽訂的租約開始實施，入住率將在今年剩餘時間內繼續上升，其中包括洛克希德馬丁公司在第三季度於 1200 Redstone Gateway 簽訂的 700 平方英尺平方英尺的租約，並在第三季度簽訂了 Fort Meade/BW Corridor 子區域的 70,000 平方英尺的租約。

Our core portfolio is 95% leased with our Defense/IT locations finishing the quarter at 96.8% leased. Our 3 largest concentrated defense locations, which consist of the National Business Park, Redstone Gateway in Huntsville, and Lackland Air Force Base in San Antonio are 98.8% leased in aggregate and account for roughly 45% of our core annualized rental revenue. Adding our fully leased data center shell portfolio 50% of our core annualized rental revenues are generated from assets that are 99.3% leased. The strength of these properties occupancy, operations and cash flows are emblematic of our Defense/IT portfolio.

我們的核心投資組合的租賃率為95%，其中國防/IT設施的租賃率為96.8%。我們最大的三個國防設施集中地，包括國家商業園區、亨茨維爾的紅石門戶和聖安東尼奧的拉克蘭空軍基地，總租賃率為98.8%，約占我們核心年化租金收入的45%。加上我們已完全租賃的資料中心空殼投資組合，我們50%的核心年化租金收入來自租賃率為99.3%的資產。這些物業的入住率、營運情況和現金流強勁，是我們國防/IT投資組合的象徵。

Year-to-date, we have renewed 997,000 square feet with cash rent spreads up 1.1%. Based on our performance year-to-date and lease negotiations underway, we are increasing the midpoint of our cash rent spread guidance by 50 basis points to a revised range of flat to up 1%.

年初至今，我們已續約99.7萬平方英尺，現金租金利差上漲1.1%。根據年初至今的業績以及正在進行的租賃談判，我們將現金租金利差指引的中點上調50個基點，調整至持平至上漲1%的區間。

Our balance sheet is well positioned to navigate the current volatility in the capital markets environment. We have no significant debt maturities until March 2026. Our unencumbered portfolio now represents 96% of total NOI from real estate operations. Additionally, at the end of the quarter, we had over 70% of the capacity on our line of credit available.

我們的資產負債表已做好充分準備，能夠應對當前資本市場環境的波動。截至2026年3月，我們沒有任何重大債務到期。我們未支配的投資組合目前佔房地產業務淨營業收入總額的96%。此外，截至本季末，我們的信貸額度已超過70%的可用額度。

Our variable rate debt exposure was just under 5% at quarter end. Although we expect our floating rate debt to increase slightly over the remainder of the year as we fund development on our line of credit, our projections continue to have it below 10% at year-end.

截至本季末，我們的浮動利率債務部位略低於5%。儘管我們預計，隨著我們利用信貸額度為開發項目提供資金，浮動利率債務在今年剩餘時間內將略有增加，但我們預計年底的浮動利率債務敞口仍將低於10%。

Turning to 2023 guidance. Given our outperformance for the first 6 months of the year, we are increasing the midpoint of our FFO per share guidance by $0.02 from $2.38 to $2.40.

展望2023年的業績指引。鑑於我們今年前六個月的優異表現，我們將每股FFO指引中位數上調0.02美元，從2.38美元上調至2.40美元。

This revised midpoint represents a 2% increase in FFO per share over 2022's results. For the third quarter, we are establishing a guidance range for FFO as adjusted for comparability of $0.59 to $0.61 per share. The resulting guidance for the fourth quarter implies FFO per share between $0.60 and $0.62. With that, I'll hand the call back to Steve.

修正後的中點數值代表每股營運現金流量 (FFO) 較 2022 年業績成長 2%。對於第三季度，我們設定了可比性調整後的 FFO 指導區間，為每股 0.59 美元至 0.61 美元。由此得出的第四季度指引值意味著每股 FFO 將在 0.60 美元至 0.62 美元之間。至此，我將把電話轉回給史蒂夫。

Thank you. Summarizing our key messages. We delivered another strong quarter with FFO per share $0.02 above the midpoint of our guidance. Our Defense/IT segment is 96.8% leased, the highest rate since we started reporting the segment in 2015. We raised the midpoint of full year same property cash NOI guidance by 100 basis points driven by a great first half. We're on track to achieve our full year goals for vacancy and development leasing. Our 1.5 million square feet of active developments, which are 92% leased, provide a strong trajectory for NOI growth over the next few years. Our liquidity is very strong, and we continue to expect to self-fund the equity component of our expected development investment going forward.

謝謝。總結一下我們的關鍵訊息。我們本季業績強勁，每股營運現金流（FFO）比我們預期中位數高出0.02美元。我們的國防/IT部門的租賃率為96.8%，這是自2015年開始報告該部門以來的最高水準。由於上半年業績出色，我們將全年同物業現金淨營運收入（NOI）預期中位數上調了100個基點。我們預計將實現全年空置率和開發租賃目標。我們150萬平方英尺的活躍開發項目，租賃率為92%，為未來幾年的淨營運收入（NOI）成長提供了強勁的軌跡。我們的流動性非常強勁，我們預計未來將繼續自籌資金用於預期開發投資的股權部分。

We raised the midpoint full year FFO per share guidance by $0.02 and now expect to deliver FFO per share growth of 2% in 2023, 1% higher than our initial expectations. And we continue to expect compound annual FFO per share growth of roughly 4% between 2023 and 2026 from the midpoint of our original 2023 guidance.

我們將全年每股營運現金流 (FFO) 中位數指引上調了 0.02 美元，目前預計 2023 年每股營運現金流 (FFO) 將成長 2%，比我們最初的預期高出 1%。我們繼續預計，2023 年至 2026 年期間，每股營運現金流量 (FFO) 的年複合成長率將達到約 4%，高於我們最初 2023 年指引的中位數。

Before wrapping up the call, I wanted to share some interesting current perspectives. Agencies within the U.S. government have become increasingly vocal about the cyber espionage threats to our country. On last quarter's call, we shared the threat assessment published by the Director of the National Intelligence or DNI, regarding China. More recently, the office of the DNI advised Congress that Russia is focused on improving its ability to attack our infrastructure networks and China is likely capable of attacks that could disrupt our infrastructure. This quarter, The Five Eyes, which are the intelligence operations of the United States, United Kingdom, Canada, Australia and New Zealand just issued a warning that a Chinese state sponsor entity has targeted networks across critical U.S. infrastructure sectors.

在結束電話會議之前，我想分享一些當前有趣的觀點。美國政府各機構對我國面臨的網路間諜威脅日益關注。在上個季度的電話會議上，我們分享了國家情報總監（DNI）發布的關於中國的威脅評估。最近，DNI辦公室向國會通報，俄羅斯正致力於提升其攻擊我國基礎設施網路的能力，而中國很可能有能力發動足以破壞我國基礎設施的攻擊。本季度，「五眼聯盟」（由美國、英國、加拿大、澳洲和紐西蘭組成的情報機構）剛剛發出警告，稱一個中國國家支持實體已將目標鎖定在美國關鍵基礎設施領域的網路。

And last week, reports emerged that China-based hackers infiltrated e-mail accounts at the State Department and the Department of Commerce. The Center for Strategic and International Studies or CISC maintains a log of significant cyber events that have occurred since 2006, defined as state actions espionage and cyber attacks, where losses exceeded $1 million.

上週，有報道稱，中國駭客入侵了美國國務院和商務部的電子郵件帳號。戰略與國際研究中心（CISC）保存著自2006年以來發生的重大網路事件日誌，這些事件被定義為國家行動、間諜活動和網路攻擊，損失超過100萬美元。

Since 2010, when the U.S. Cyber Command was established, the number of annual significant cyber incidents, CISC has reported globally, has escalated at a compound annual rate of 16% and has averaged 11 significant cyber attacks per month over the past 36 months.

自2010年美國網路司令部成立以來，CISC報告的全球年度重大網路事件數量以16%的年複合率成長，過去36個月平均每月發生11起重大網路攻擊。

Our government's reaction to these threats has resulted in increased cyber-related investments, which has led to increased demand for our portfolio and our record level of leased inventory. Our portfolio is well positioned to continue to benefit from this investment given our advantaged locations and expertise in providing secure space. Year-to-date, over 50% of our executed vacancy leasing supports cyber activities, primarily in the Fort Meade/BW Corridor.

政府應對這些威脅的措施已導致網路相關投資增加，進而導致對我們投資組合的需求增加，租賃庫存也創下歷史新高。憑藉我們優越的地理位置和在提供安全空間方面的專業知識，我們的投資組合有望繼續受益於這項投資。年初至今，我們已執行的空置租賃中超過50%用於支持網路活動，主要集中在米德堡/波特蘭西部走廊地區。

Over the past 3 years, we've completed 730,000 square feet of cyber leasing in both our development and operating portfolios. Today, we have 465,000 square feet of demand seeking new and expansion space requiring SCIF or secure facilities, primarily to support cyber mission growth.

過去三年，我們在開發和營運專案組合中完成了73萬平方英尺（約730,000平方米）的網路空間租賃。目前，我們仍有46.5萬平方英尺（約465,000平方公尺）的空間需求，需要SCIF或安全設施來尋求新的和擴建的空間，主要用於支援網路任務的成長。

The National Business Park is 99.3% leased, the highest level in the past 15 years, and we're preparing new development options, primarily to support cyber mission growth for both the U.S. government and defense contractors.

國家商業園區的租賃率為 99.3%，是過去 15 年來的最高水平，我們正在準備新的開發方案，主要是為了支援美國政府和國防承包商的網路任務成長。

These facilities will require security enhancements and they'll address the asymmetric cyber threat that will persist indefinitely, thus, deepening the durability of our unique property portfolio and the resulting cash flows. We're extremely proud to have played an important role in providing valuable leases to our cyber tenants, and we look forward to the inherent expansion opportunities that will emerge from the critical defense needs of our country. So operator, with that, please open up the call for questions.

這些設施需要加強安全保障，並將應對將長期存在的非對稱網路威脅，從而增強我們獨特資產組合的持久性及其產生的現金流。我們非常自豪能夠在為網路租戶提供寶貴租賃方面發揮重要作用，並期待著國家關鍵的國防需求所帶來的內在擴展機會。接線員，好了，請開始提問。

(Operator Instructions) And I show our first question comes from the line of Blaine Heck from Wells Fargo.

（操作員指示）我表明我們的第一個問題來自富國銀行的布萊恩·赫克。

Maybe just a high-level question to start out. The government accountability office just did a study on federal buildings that -- concluded that the utilization at those buildings was very low. Obviously, the study covered a much different set of assets than what OFC owns. But can you just talk about your portfolio and how you'd characterize the utilization amongst your U.S. government tenants?

也許先問一個比較高深的問題。政府問責局剛剛對聯邦建築進行了一項研究，結論是這些建築的使用率非常低。顯然，這項研究涵蓋的資產種類與OFC擁有的資產種類大不相同。您能否談談您的投資組合，以及您如何描述美國政府租戶的使用率？

Sure. So first, let me talk to that study, which we read that primarily deals with the GSA -- the large GSA leases within the beltway. And indeed, they are very lightly used. Some estimates are 20% or less. And they've allowed a lot of work from home, and that employee base has gotten pretty comfortable with that arrangement. I've also learned that there are 15 separate labor unions that represent the various U.S. government employee bases and the kind of return-to-work efforts are going to take a long time because of the fractional representation of those employees.

當然。首先，我想談談那項研究，我們讀到的這項研究主要涉及的是GSA——環城公路內的大型GSA租賃公司。事實上，它們的使用率非常低。有人估計只有20%或更低。他們允許許多員工在家辦公，而這些員工群體已經相當適應這種安排。我還了解到，有15個獨立的工會代表美國政府僱員的不同群體，由於這些員工的代表性分散，復工工作將需要很長時間。

But turning to our portfolio, our government customer assets are not included in that report. Our government customers predominantly are in the defense or intelligence community. And because of the security requirements of their mission work, they are required to work in the office. So really going all the way back to October of 2020, the attendance in our government leased buildings has been normal or full, and it just doesn't pertain to our portfolio.

但談到我們的投資組合，我們的政府客戶資產並未包含在這份報告中。我們的政府客戶主要來自國防或情報部門。由於其任務工作的安全要求，他們必須在辦公室辦公。因此，實際上，從2020年10月開始，我們政府租賃辦公大樓的出席率一直正常或滿員，這與我們的投資組合無關。

Great. Steve. And then switching gears a little bit to the data centers. Power issues have become an impediment that we talked about consistently in the Northern Virginia data center business. Do you see those power issues subsiding at any point? And if not, I guess, would you consider developing data centers in any other market if your customer was willing to kind of plant a flag elsewhere?

太好了，史蒂夫。接下來稍微談談資料中心。電力問題一直是我們在北維吉尼亞資料中心業務中經常討論的問題。您認為這些電力問題會有所緩解嗎？如果沒有，我想，如果您的客戶願意在其他市場設立資料中心，您會考慮在那裡開發嗎？

So let me deal with the power, and I'm not exactly an expert, what's happening there. But the 2 power companies in Northern Virginia are working to increase the overall power capacity. And our understanding is it's going to deliver in roughly 1/3 in '24, '25 and '26. So I think we're more than 12 months away from seeing new power supply that can be pushed through the local distribution network. With regard to our appetite to follow our customer to a new market, we absolutely would do that provided the market was a substantial data center market with long-term confidence in assurance of a high demand level.

所以讓我來談談電力問題，我並非專家，也不知道那裡的情況。但北維吉尼亞州的兩家電力公司正在努力提高整體電力容量。我們的理解是，2024、2025 和 2026 年的發電量將達到約三分之一。所以我認為我們距離能夠透過本地配電網輸送電力的新電源還有一年多的時間。至於我們跟隨客戶開拓新市場的意願，只要這個市場規模龐大，並且長期有信心保持高需求水平，我們絕對會這麼做。

And I show our next question comes from the line of Michael Griffin from Citi.

下一個問題來自花旗銀行的麥可‧格里芬 (Michael Griffin)。

Maybe just touching again on the leasing front. I appreciate the disclosure around the large lease renewals through 2025. And you talked about 95% of these, about $4 million expected to be renewed. But for the remainder of that $7 million that expire, what should we expect in terms of retention rates? And any color you can give around that would be helpful.

也許我只是想再談一下租賃方面的問題。我很感謝您揭露截至2025年的大規模續約合約。您提到其中95%，大約400萬美元的合約預計將續約。但對於剩餘的700萬美元到期合同，我們應該預期其留存率是多少？您能否提供一些細節，這將很有幫助。

Sure. So we're not going to put out a statistical number, but it's extremely strong, Griff. We expect very little nonrenewal in our portfolio. So I would say if you just handicapped the rest of it at, call it, roughly 80%, we'd be at or maybe better than that.

當然。所以我們不會公佈具體的統計數據，但格里夫，我們的業績確實非常強勁。我們預期投資組合中幾乎不會出現不續約的情況。所以，我想說，如果你把剩下的部分設定為，比如說，大約80%，我們的業績應該會達到甚至超過這個數字。

Great. And then I know a topic that's been coming in for the past with Redstone is the potential moving of space demand from Colorado there. I'm curious if you can give any update on timing or anything around that matter.

太好了。我知道過去紅石計畫一直在討論的一個主題是，太空需求可能會從科羅拉多州轉移到那裡。您能否提供一些關於時間安排或其他相關事宜的最新資訊？

Well, I wish I had one, but I don't. For those people that are less familiar, Space Command was through a process, identified Redstone Gateway as the best location to stand up this new combatant command. There's been a lot of politics in the Senate level in the house where other states have protested the decision. They've gone through a reassessment twice in all 3 cases. Redstone Gateway has been the prevailing selection. It seems to be in a politically charged environment where the final decisions not been made and we continue to await the outcome as a lot of people in Redstone Gateway.

嗯，我希望有，但我沒有。對於那些不太了解的人來說，太空司令部經過一系列程序，確定紅石門戶是建立這個新作戰司令部的最佳地點。參議院和眾議院層級都存在著許多政治因素，其他州也對此決定表示抗議。在這三次方案中，他們都進行了兩次重新評估。紅石門戶一直是最終的選擇。目前看來，這是一個充滿政治色彩的氛圍，最終決定尚未做出，我們和紅石門戶的許多人一樣，仍在等待結果。

And I show our next question comes from the line of Camille Bonnel from Bank of America.

下一個問題來自美國銀行的 Camille Bonnel。

Anthony, could you please share the latest thoughts on how the company is thinking about its payout ratio? As we head towards the second half of the year, it looks like AFFO will be improving, implying your payout ratio will trend towards low 60%. So what's the sweet spot for you? And does the company have a target for the medium term?

安東尼，您能否分享一下公司對派息率的最新看法？隨著下半年的臨近，AFFO 似乎會有所改善，這意味著您的派息率將趨向 60% 以下。那麼，您認為最佳的派息率是多少？公司有中期目標嗎？

Our target for our payout ratio of AFFO has always been in the 70% range. Our projection for this year is that for the full year, we'll be more in the mid-60s of our total payout ratio based off of our remaining improvement -- our results for the year and the remaining improvements that we expect to make to our properties. So our ratio has always sort of been in that sort of 65% to 70% range.

我們AFFO的派息率目標一直在70%左右。我們今年的預測是，基於我們剩餘的改進——我們今年的業績以及我們預計對旗下物業進行的剩餘改進——我們的全年總派息率將在65%左右。所以我們的比率一直在65%到70%之間。

Okay. Great. And on the operating expense side, it looked like it outperformed in the quarter, but operating margins went down slightly. Was that more onetime in nature?

好的。太好了。就營運費用而言，本季的表現似乎超出預期，但營運利潤率略有下降。這是否是一次性的？

It was. I think there's -- operating expenses were favorable for the quarter. Some of that related to some R&M projects that were -- the completion of which were pushed into the third and fourth quarter of this year. But there was really no -- sort of noise around our margins.

是的。我認為本季的營運費用表現不錯。部分原因是一些研發和維護項目，這些項目的完工被推遲到了今年第三季和第四季。但我們的利潤率確實沒有受到任何影響。

Okay. So you expect to see that improving from here?

好的。那麼您預計接下來情況會有所改善嗎？

Yes.

是的。

And our next question comes from the line of Tom Catherwood from BTIG.

我們的下一個問題來自 BTIG 的 Tom Catherwood。

Steve, maybe going over to the vacancy leasing pipeline. Could you provide some more color around that? And specifically thinking are there certain regions of yours that are stronger than others? And what's really driving some of these tenant requirements? Is it expirations, expansions? Is it winning new contracts? Are there some kind of general themes that you can pull out of the demand that you're seeing?

史蒂夫，也許可以談談空置租賃業務。能否更詳細地介紹一下？具體來說，您認為哪些地區的業務比其他地區更強勁？這些租戶需求的真正驅動力是什麼？是合約到期、擴張還是贏得新合約？從您所看到的需求中，您能總結出一些普遍的趨勢嗎？

Sure. So I would say probably the 2 strongest areas in the development pipeline -- well, it's more than 2. But collectively, the BW/Fort Meade Corridor is extremely strong. And I spoke a little bit to the amount of tenant demand for new or expanded SCIF capacity in the BW market. And that is heavily aligned with or associated with new contracts and expanded opportunities in that cyber-related activity that I closed my comments with. The other area is Northern Virginia and again, most of that demand includes a need for expansion of SCIF because of expansion opportunity -- or new contract and expansion opportunities in the Route 28 corridor.

當然。所以我認為開發案中最強的兩個區域可能是——嗯，不只兩個。但總的來說，BW/米德堡走廊的實力非常強勁。我稍微談到了BW市場對新建或擴建SCIF容量的租戶需求量。這與我在評論結束時提到的網路相關活動的新合約和擴展機會密切相關。另一個區域是北維吉尼亞州，同樣，大部分需求包括由於擴建機會而對SCIF擴建的需求——或者28號公路走廊的新合約和擴建機會。

So when you're talking about the increased SCIF, is that -- is the cost for that base building? Is the cost for that covered in TIs? Are the tenants putting in -- when you look at those leases is on a net effective basis, is that more beneficial to you? Or just over the long term, does it make the tenant stickier?

那麼，您說的SCIF增加是指－基礎建築的成本嗎？這部分成本包含在TI（交易稅）嗎？租戶的投入－當您以淨有效租金為基礎來看待這些租約時，這對您來說更有利嗎？還是長期來看，這會讓租戶的黏性更強？

So on the going in lease, we give a market level of tenant improvement. So some better or worse than a non-SCIF tenant but the tenant itself has to invest the incremental capital to complete the SCIF. And with the escalation in costs that have occurred, you'll have to budget at least $150 a foot, if not $200 a square foot to complete the SCIF component of that suite. So that heavy co-investment and the fact that SCIFs are not portable. You can't pick them up and move them to a new building is a major factor in our record or industry-leading retention rates. So it does accrue to our benefit over the long term.

因此，在租賃合約中，我們會根據市場水準提供租戶改善方案。有些租戶的改善方案比非SCIF租戶更好或更差，但租戶本身必須投入增量資本才能完成SCIF。隨著成本的不斷上漲，您必須預算至少每平方英尺150美元，甚至每平方英尺200美元才能完成該套房的SCIF部分。因此，巨額的共同投資以及SCIF不可移動的特性——您無法將它們搬走並遷移到新建築——是我們保持創紀錄或行業領先留存率的主要因素。因此，從長遠來看，這確實會為我們帶來收益。

Got it. And then just with all the talk around increased demand, expansion of tenants, expansion of government budgets, what are you seeing in terms of new entrants in your specific area, providing real estate solutions to these tenants? And are you seeing any uptick in competitive supply?

明白了。那麼，剛才大家討論的是需求成長、租戶擴張、政府預算增加，您認為您所在地區有哪些新進者，為這些租戶提供房地產解決方案？您是否看到競爭性供應上升？

We really haven't, Tom. We tend to dominate the market in and around Fort Meade. I will say with the extremely high level of inventory leased at the NBP, we're kind of guiding some of that demand into Columbia Gateway. And we've got a rapidly escalating kind of inventory of SCIF or SCIF demand in the park, which is really good for that portfolio long term.

湯姆，我們確實沒有。我們傾向於在米德堡及其周邊地區佔據主導地位。我想說的是，由於NBP的租賃庫存量極高，我們正在將部分需求引導到哥倫比亞門戶。而且，園區內SCIF的庫存或SCIF需求正在快速成長，這對我們的投資組合的長期發展非常有利。

In Northern Virginia, it's always Route 28 corridors being more competitive for us because there are multiple landlords. But there are certainly no new entrants, no new development and the inventory in and around the demand drivers is largely well leased and stable. And of course, if you jump to Alabama, we have the best location period and the incremental demand tends to come to us.

在北維吉尼亞州，28號公路沿線對我們來說總是更具競爭力，因為那裡有多家房東。但那裡肯定沒有新進入者，也沒有新的開發項目，而且需求驅動因素及其周邊的庫存基本上都租得不錯，而且很穩定。當然，如果你去阿拉巴馬州，我們擁有最佳的地理位置，而且增量需求往往會湧向我們。

(Operator Instructions) And I show our next question comes from the line of Jay Poskitt from Evercore ISI.

（操作員指示）我想說的是，下一個問題來自 Evercore ISI 的 Jay Poskitt。

I'm just curious what you have baked into guidance in the back half of the year from a macroeconomic perspective. I know you mentioned that interest expense came in a bit better than you expected. So just curious your thoughts for the macro environment and also the rate environment in the back half of the year.

我只是好奇，從宏觀經濟角度來看，您在下半年的業績指引中融入了哪些內容。我知道您提到利息支出比預期好一些。所以，我很好奇您對下半年宏觀環境和利率環境的看法。

So from a rate environment built into our forecast for the balance of the year is the current SOFR curve that came -- that is sort of the most immediate one after the impact of any changes from the most recent Fed increase earlier this week. So it has the current projections for where the market is. I'd say a 25 basis point change in that curve for the remaining 6 months of the year is only about a $200,000 increase in interest expense for the 6 months ended just because such a large portion of our debt is fixed at this point, fixed or swapped.

因此，從我們今年剩餘時間的預測中納入的利率環境來看，當前的SOFR曲線——這可以說是本週早些時候聯準會升息後任何變化影響的最直接體現。因此，它反映了對當前市場狀況的預測。我認為，今年剩餘6個月中該曲線25個基點的變化，只會導致截至6個月的利息支出增加約20萬美元，因為我們目前的大部分債務是固定的，無論是固定的還是互換的。

That's helpful. And then just was wondering if there's any update on the regional office leasing activity?

這很有幫助。然後我想知道區域辦公室租賃活動有什麼最新進展嗎？

Well, so our leasing activity ratio for the regional -- the 5 regional office assets is about 68%. But I will say it's largely preliminary opportunities except for a lease that we're competing for in Downtown D.C. for 2100 L. So there's sharp contrast between the timing and the sense of urgency and the demand in our defense business, which is over 90% of our revenue and that 10%, which is regional office, it's pretty lethargic and I would not look for meaningful progress in the leasing environment through the end of the year with the exception of the 1 lease we're competing for at 2100 L.

嗯，我們區域性辦公大樓——5個區域性辦公大樓——的租賃活動率約為68%。不過，我想說，除了我們正在競爭的位於華盛頓特區市中心的2100平方英尺的租約外，其他大部分都是初步機會。因此，時機、緊迫感和我們國防業務的需求形成了鮮明對比。國防業務占我們收入的90%以上，而那10%（即區域性辦公大樓）的業務則相當低迷。我認為，除了我們正在競爭的位於2100平方英尺的租約外，到今年年底，租賃環境不會有任何有意義的進展。

Thank you. I'm showing no further questions in the queue at this time. I'll now turn the call back to Mr. Budorick for closing remarks.

謝謝。目前隊列中沒有其他問題了。現在我將把電話轉回給布多里克先生，請他做最後發言。

Well, thank you all for joining us today. We are in our office, so please coordinate through Venkat, if you would like a follow-up call. And thanks again for joining us.

好的，感謝大家今天加入我們。我們在辦公室，如果您需要後續電話，請透過 Venkat 進行協調。再次感謝您的參與。

Thank you for your participation today in the Corporate Office Properties Trust Second Quarter 2023 Results Conference Call. This concludes the presentation. You may now disconnect. Good day.

感謝您今天參加Corporate Office Properties Trust 2023年第二季業績電話會議。演示到此結束。您可以斷開連線了。祝您早日康復。