CORPORATE OFFICE PROPERTIES TRUST Results for 3Q 2020 October - PowerPoint PPT Presentation

CORPORATE OFFICE PROPERTIES TRUST Results for 3Q 2020 October 29, 2020 The Preferred Provider of Mission Critical Real Estate Solutions

Table of Contents Results for 3Q 2020…............................Page 3 Safe Harbor I. Unless otherwise noted, information in this presentation represents the Company’s consolidated portfolio as of or for the quarter ended September 30, 2020. Factors Supporting Growth……………Page 6 II. This presentation may contain “forward - looking” statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Minimal Impact from COVID- 19……...Page 17 III. 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. These statements may include, 2020 Guidance………....………..……...Page 25 IV. without limitation, statements regarding: our belief that we are well- positioned to maintain relative normal operations through the COVID-19 crisis; our expectations as to renewal leasing, rent relief requests, Appendices……………………………...Page 29 V. development leasing and development projects; our liquidity situation; and our dividend. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Company cannot predict with A. Definitions & Glossary accuracy and some of which the Company might not even anticipate. B. Reconciliations Although the Company believes that 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, 2019 and subsequent Quarterly Reports on Form 10-Q. 2

Results for 4Q & FY 2018 I. Results for 3Q 2020 I. 100 Secured Gateway, Huntsville, AL 3

3Q 2020 Recap Strong 3Q Results; Minimal Impact from COVID-19 Shutdowns Incurred Minimal Impact from Core Portfolio Solid Leasing COVID-19 94.0% occupied, › 1.1 million SF executed in 3Q › R ent relief granted totals <1.0% 94.6% leased › 2.7 million SF executed of ARR 1 through 9/30/20 › Extremely strong rent collections 2 : › 2Q20 – 99.7% (100% net) ▪ July – 99.6% (100% net) Ample Liquidity ▪ August – 99.6% (100% net) › $612 million of liquidity 3 to ▪ September – 99.5% (99.9% net) complete the remaining $241 1.6 million SF million of development › 3Q20 – 99.6% (100% net) Under Development commitments ▪ October – 98.8% (99.3% net) › Expect to raise an additional › 84% leased ~$165 million of equity proceeds through joint venture sales before year end Annualized rental revenue (“ARR”); rent collections data are updated through October 29, 2020. 1. 2. Net = total monthly billings adjusted to exclude rent relief granted to tenants. 3. See Slide 23 for detail. 4

3Q20 Results 3Q20 Guidance Actual $0.51 – $0.53 FFOPS* $0.54 Same-Property: ▪ Occupancy 92 – 93% 92.5% ▪ Cash NOI Growth (1%) – 0% (0.2%) 89.0% for 3Q 80 – 85% ** Tenant Retention 84.3% YTD -- ~$100 mm Development Spend Development Leasing Achieved: ▪ 1Q -- -- ▪ 2Q -- 276,000 SF ▪ 3Q -- 244,000 SF -- Total To-Date 520,000 SF * FFOPS = diluted funds from operations per share, as adjusted for comparability. ** Tenant retention guidance is for the full year. Management has increased this range from the original range of 70 – 75%. 5

Results for 4Q & FY 2018 I. Factors Supporting Growth II. 6708 Alexander Bell Drive, Columbia, MD 6

Healthy DoD Spending Levels » Bi-partisan agreement for FY20 & FY21 Budgets eliminated sequestration threat » Budget Control Act of 2011 sunsets after FY21 » HASC voted in favor of FY 2021 NDAA 295-to-125; SASC voted 86-to-14 » FY 2015 –FY 2020, DoD’s Base Budget has grown at a compound annual rate of 5% » As expected, Congress passed a continuing resolution through December 11, 2020; expected to appropriate the FY 2021 budget after the election DoD’s Discretionary Budget Authority (“Base Budget”)* Current dollars, in billions. Sources: Historical data through FY 2016 are pulled from Tables 1-9 and 2-1 of the National Defense Budget Estimates ("Green Books") for FY 2017 or earlier; data for FY 2017 through FY 2019 are pulled from Tables 1-2 and 2-1 of the FY 2020 Green Book; Capital Alpha Partners; COPT’s IR Department. † DoD base budget (051) numbers exclude funding for overseas contingency operations ("OCO"), Atomic Energy Defense Activiti es (053), Other Defense-Related Activities (054), and mandatory spending. * FY 2017 includes $8.25 billion of "OCO for base budget purposes." Source: CRS report on the final authorizations. ** FY 2018 includes $5.8 billion of supplemental authorizations for Missile Defense. 7 ‡ Estimated, using the 2020 DoD Appropriations Act and the 2020 Military Construction, Veterans Affairs, and Related Agenci es Appropriations Act.

Mandate to Restore & Fund U.S. Military » A 2018 Pentagon Study reported that the DoD funding deficit created by the Budget Control Act of 2011 and the multi-year failure to provide timely appropriations had eroded U.S. Military power “to a dangerous degree,” and provided the imperative to correct it Prior Spending Deficit in Base Budget (050) Source: National Defense Strategy Commission’s Providing for the Common Defense (2018): https://www.usip.org/publications/2018/11/providing-common-defense 8

Growth from Development Leasing Robust Development Leasing Pipeline bodes well for future development leasing & NOI growth Development Leasing » After record year in 2019, demand for new facilities remains strong 2,000,000 » Major lease executions to-date include three 1,500,000 defense contractor build-to- suits and a large U.S. 1,000,000 Government lease at Redstone Gateway 500,000 » Our Development Leasing Pipeline of 2.4 million SF * supports future growth and 0 our goal of executing 1 million SF of development Actual SF Forecasted Initial Goal leasing in 2020 * As of October 29, 2020. Note: COPT’s Development Leasing Pipeline formerly was called its Shadow Development Pipeline. 9

Highly Leased Developments Drive NOI Growth » Between 2013 – 3Q20, Square Feet of Development Placed Into Service* we placed 7.8 million SF 2,000,000 into service that, on 100% 1,800,000 average, were 96% leased 1,600,000 80% » This includes 1.2 million SF 973,000 SF 1,400,000 PIS annually, placed in service during 2020 96% leased that were 99% leased 1,200,000 60% » During 4Q20, we expect 1,000,000 to place another 540,000 SF in service 800,000 40% that are 100% leased, 600,000 contributing to FFO growth into 2021/2022 400,000 20% 200,000 - 0% 2013 2014 2015 2016 2017 2018 2019 2020 E SF PIS Forecasted % Leased * As of September 30, 2020. 10

Vacancy Leasing Tempered by Shutdowns » Strong Vacancy Leasing of 143,000 SF in 1Q20 was 13% higher than 1Q19 results » 2Q & 3Q20 Vacancy Leasing volumes totaling 131,000 SF were light due to pandemic shutdowns affecting tenant decisions and brokerage firms » Leasing Activity Ratio † is rebuilding; expect solid volume in 4Q20 and momentum going into 2021 Vacancy Leasing in COPT’s Operating Portfolio* 350 100% 2016 2018 2019 2020 2017 95% 300 90% Core Portfolio % Leased and Occupied Square Feet of Vacancy Leased (000s) 250 85% 80% 200 75% 150 70% 65% 100 60% 50 55% 0 50% Defense/IT Regional Office* % Leased % Occ † Leasing Activity Ratio = total vacant SF divided by total prospects * Percent occupied & leased statistics are for COPT’s core portfolio. 11

Strong Tenant Retention Tenant co- investment creates “stickiness” and supports COPT’s sector-leading tenant retention rates and low renewal CapX » Expect renewal rate of 80 – 85% in 2020 to set 20-year record * » Proven track record of strong tenant retention COPT’s Renewal Rates Since 2000 rates, averaging: 100% » 73% between 2010−2019 90% » 78% between 2016−2019 80% 70% » In April, increased 2020 tenant retention 60% guidance to 75 – 80% 50% and again in July, to new 40% range of 80 – 85% 30% » FFO & AFFO benefits of 20% high renewal rates more 10% than offset impact of cash rent roll downs 0% Source: Company Supplemental Information Reports * 20-year record renewal rate of 80% was established in 2017. 12