Properties, Net

12 Months Ended

Dec. 31, 2025

Operating properties, net consisted of the following (in thousands):


	December 31,
	2025		2024
Land	$	519,256	$	495,707
Buildings and improvements	4,663,198		4,395,063
Less: Accumulated depreciation	(1,682,367)		(1,537,293)
Operating properties, net	$	3,500,087	$	3,353,477

2025 Acquisition

On October 30, 2025, we acquired 15050 Conference Center Drive, a 142,000 square foot operating office property in Chantilly, Virginia (included in the NoVA Defense/IT sub-segment of our Defense/IT Portfolio reportable segment) that was 100% leased, for a gross purchase price of $40.0 million, or $32.6 million net of a $7.4 million purchase price credit for an unpaid tenant improvement allowance.

The table below sets forth the allocation of the purchase price and transaction costs associated with the acquisition (in thousands):


Land, operating properties	$	10,943
Building and improvements	9,357
Intangible assets on real estate acquisition (1)	13,344
Total assets	$	33,644
Below-market leases	(767)
Total acquisition cost	$	32,877

(1)Represents in-place lease value with an amortization period of 9.8 years associated with the acquisition.

2024 Acquisitions

In 2024, we acquired the following operating office properties:

•6841 Benjamin Franklin Drive, a 202,000 square foot property in Columbia, Maryland (included in the Fort Meade/BW Corridor sub-segment of our Defense/IT Portfolio reportable segment) that was 56% leased, for a purchase price of $15.0 million on March 15, 2024; and

•3900 Rogers Road, an 80,000 square foot property in San Antonio, Texas (included in the Lackland Air Force Base sub-segment of our Defense/IT Portfolio reportable segment) that was vacant on the acquisition date and subsequently leased in full, for a purchase price of $17.0 million on September 26, 2024.

The table below sets forth the allocation of the aggregate purchase price and transaction costs associated with these acquisitions (in thousands):


Land, operating properties	$	8,361
Building and improvements	16,635
Intangible assets on real estate acquisitions	7,248


Total acquisition cost	$	32,244

Intangible assets recorded in connection with these acquisitions included the following (dollars in thousands):


			Weighted Average Amortization Period (in Years)
Tenant relationship value	$	3,752	12.4
In-place lease value	2,229		2.4
Above-market leases	1,267		2.4
	$	7,248	7.6

2023 Impairments

As part of our closing process for the three months ended September 30, 2023, we conducted our quarterly review of our portfolio of long-lived assets to be held and used for indicators of impairment. As a result of this process, we shortened the expected holding periods for six operating properties in our Other segment and a parcel of land located in Baltimore, Maryland, Northern Virginia and Washington, DC. We determined that the carrying amount of the properties would not likely be recovered from the undiscounted cash flows from the operations and sales of the properties over the shortened holding periods. Accordingly, we recognized impairment losses of $252.8 million on these properties in 2023.

2023 Dispositions

On January 10, 2023, we sold a 90% interest in three data center shell properties in Northern Virginia based on an aggregate property value of $211.3 million and retained a 10% interest in the properties through Redshift JV LLC (“Redshift”), a newly-formed joint venture. Our partner in the joint venture acquired the 90% interest from us for $190.2 million. We account for our interest in the joint venture using the equity method of accounting, as described further in Note 6. We recognized a gain on sale of $49.4 million.

COPT DEFENSE PROPERTIES 10-K