President, Chief Executive Officer & Trustee, COPT DEFENSE PROPERTIES
COPT Defense Properties CEO talks about the company’s rebrand, strategy and competitive advantage
Stephen Budorick, President & CEO of COPT Defense Properties talks with Judy Khan Shaw about the company's rebrand, ...
About Stephen Budorick
Stephen Budorick, president and CEO of COPT Defense Properties, said at Nareit's REITweek: 2026 Investor Conference that the company's consistent operating performance, disciplined capital deployment, and favorable defense spending trends continue to support long-term growth. He noted that the company has maintained portfolio occupancy above 94% and a tenant retention rate near 80%, and has deployed about $270 million annually into new investments and development. Budorick stated that the U.S. is entering a period of accelerated investment in defense, citing a 20% increase in the FY 2026 budget and a 43% increase requested for FY 2027. He said this would mean expanded programs for contractors and the government, and that COPT is well positioned to serve them. Regarding Moody's upgrade of the company's investment-grade rating, Budorick said it acknowledged the strength of the company's operating performance over the past eight or nine years, but that fixed income investors had already recognized that strength in advance of the rating agencies.
Transcript (19 segments)
J
Judy Shaw0:09
I'm Judy Shaw for NYC Floor Talk joining me today is Stephen Budorick, he is president and CEO at COPT Defense Properties. Stephen, it's wonderful to have you here. Thanks for joining me today.
S
Stephen Budorick0:20
It's my pleasure. Thank you.
J
Judy Shaw0:20
Great day! So now Stephen, tell me what separates COPT Defense from a traditional office landlord?
S
Stephen Budorick0:28
So we are a specialized office REIT and what makes us different is our tenants, our properties, and our locations. We invest in assets that serve National Defense missions of the United States and their defense contractors. So our locations are different for an office company — we're proximate to defense installations in various parts of the country. Our assets are different because they're improved for anti-terrorism force protection and high security operations for missions. And our tenants are different because they're all defense contractors and they're the best credit tenants in the country. And then of course our biggest tenant is the United States government; they represent 37% of our revenue, 65 separate buildings, and 5.5 million square feet of office space.
J
Judy Shaw1:16
Okay, so now tell me, how did the portfolio perform during COVID?
S
Stephen Budorick1:19
We were the top performing office company in the country. First of all, because our tenants do National Defense missions, we operated every building every day and they were no less than half occupied. Within just a matter of months, defense missions were back full-time, working 100%, five days a week. And moreover, because our credit is so good in this industry, we collected 99.5% of our rents. And we had more experience operating in a COVID environment than any other landlord. So we did exceptionally well and we're rewarded for it.
J
Judy Shaw1:57
Okay, so now today's an exciting day. You are celebrating your rebrand to COPT Defense and it's also your 25th listing anniversary. And you're going to be ringing the closing bell. Talk to me about that.
S
Stephen Budorick2:11
So prior to today, our name was Corporate Office Property Trust. We started a little over 25 years ago with the idea that we would be a suburban office company. Along the way, we started serving US defense missions and we have deeply focused the company to be a specialist in serving national defense. So our name has tremendous brand value with our customers as COPT, but 'office properties' really isn't appropriate anymore because we invest in defense properties. So this better signifies the composition of our portfolio and our investment strategy.
J
Judy Shaw2:49
All right, and you're ringing the bell to celebrate that?
S
Stephen Budorick2:49
Yes, we are.
J
Judy Shaw2:49
So tell me about your strategy. What is your strategy?
S
Stephen Budorick2:55
So our strategy is very simple: we find important US defense missions; we invest in land that's proximate to them, most advantaged land positions; and then we're a developer — we're an avid developer — we construct buildings to meet the needs of the defense community, generally on a low-risk basis, pre-lease. We're a long-term holder of assets, so we operate them extremely efficiently. We have operated buildings for the US government for 30 years, and a third of our employees carry the highest security credentials available from the US government. So our strategy is find the right location, we've got a long history with our customers, and we build the buildings they need and we run them really well.
J
Judy Shaw3:39
And what would you say is your competitive advantage?
S
Stephen Budorick3:43
Location. 30-year track record with the US government, 30 years of constructing and operating anti-terrorism force-protection constructed and skilled buildings. Multiple relationships with the best contractors in the industry, and a tremendous history of operating excellence and execution.
J
Judy Shaw4:04
And we know that you're working with the government in defense, so tell me, who are your largest tenants?
S
Stephen Budorick4:09
The US government, that's it. And then it's a who's who of defense contractors: General Dynamics, SNC, RTX, L3Harris, CACI, Leidos, Lockheed Martin, Boeing, and many others.
J
Judy Shaw4:26
Wow, all right. We see Allen and Hamilton. Oh, don't want to forget them. No.
All right, well Stephen, it has been wonderful to talk with you. Congratulations on the rebrand. Thank you. Wonderful to talk with you. Thanks for joining me on Floor Talk.
S
Stephen Budorick4:36
And thank you for having us. It's a great honor. Appreciate it.