Welcome to the COP Defense Properties 4th Quarter and Full Year 2025 Results Conference Call. As a reminder, today's call is being recorded. At this time, I'd like to turn the call over to Venkat Kaminini, COP Defense's Vice President of Best Relations. Mr. Kaminini, please go ahead.

Thank you, Jonathan. Good afternoon, and welcome to COP Defense's conference call to discuss 4th Quarter and Full Year results. With me today are Steve Podorek, President and CEO, Britt Snyder, Executive Vice President and COO, and Anthony Mislav, Executive Vice President and CFO. 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.

Good afternoon, and thank you for joining us. 2025 was another great year for the company, as we outperformed virtually all of our operating and financial metrics. FFO per share was $2.72, which is six cents above the midpoint of our initial guidance and represents an increase of 5.8% over 2024's results and marks our seventh consecutive year of FFO per share growth. Same property, cash, NOI increased 4.1% year over year, driven by a 40 basis point increase and our average occupancy. We executed 557,000 square feet of vacancy leasing, which represented 47% of the space we had vacant at the beginning of the year. We also executed 477,000 square feet of investment leasing and a weighted average lease term of 13 years. We committed $278 million of capital to new investments, which consisted of five projects in four different markets, and these projects are 81% pre-lease. Importantly, four of the five projects represent expansions with existing tenants. In late December, we committed roughly $155 million to two built-in-suit projects in our Fort Meade VW corridor and San Antonio markets. First, we committed $66 million to a fully pre-lease development with ARLIS, which is the University of Maryland's Applied Research Laboratory for Intelligence and Security, to expand their footprint in our park. This 110,000 square foot project will expand our Discovery District campus, which currently totals 415,000 square feet and is 98.4% least. This new RLIS facility will serve as the Capital Quantum Benchmarking Hub to test and evaluate quantum computing prototypes for national security in a partnership between the state of Maryland and DARPA, the Defense Advanced Research Projects Agency. In 2024, the University of Maryland received a $500 million contract from the DOD to support ARLIS and their mission of addressing complex national security problems. Second, we committed $88 million to a 132,000 square foot fully pre-lease development project in San Antonio with an existing defense IT tenant. Our team did a tremendous job of adding incremental density to our already fully leased high-security 1.1 million square foot campus to create this additional development opportunity. In aggregate, along with those projects placed in service are required in 2025, we'll generate an incremental fifty two million dollars of cash NOI on a stabilized annual basis, which will be realized as projects are completed and placed in the service. The incremental LNOI will phase in between 2026 and 2029, which will be the first full year benefiting from the total amount. 48 million dollars of this is contractual and the balance is from leasing up the remaining availability at 8500 Advanced Gateway. Britt will discuss the very strong pipeline of activity we have for our G8500. For 2026, we're establishing the midpoint of FFO per share guidance at $2.75, which implies three cents or 1.1% growth over 2025's outstanding results. Our guidance absorbs a nine-cent increase in financing costs. Excluding this impact, 2026 FFO per share would have totaled $2.84, and 4.4% year-over-year growth. Anthony will provide details on the specific assumptions included in our guidance, but we're already off to a great start to the year with capital commitments and investment leasing. In January, we committed $146 million to yet another fully pre-lease development project at the National Business Park, once again with an existing Defense IT tenant. This is another high-security specialized facility that will total 236,000 square feet. And earlier this week, we executed a full building lease for MVP 400 with an existing tenant that is a top-ten U.S. defense contractor for 148,000 square feet and a lease term of nearly 11 years. Turning to the defense budget, three days ago, President Trump signed the FY2026 Defense Appropriations Act. This base budget is $841 billion, which is an $8 billion increase over the president's initial request. Adding the $113 billion in allocated DOD funding that was in the Big Beautiful Bill, this amounts to a defense budget of over $950 billion, which is the largest defense-based budget in our nation's history, and is a 15% year-over-year increase. The President's fiscal year 2027 budget request is expected to be submitted in the coming weeks, but he publicly announced the need for a $1.5 trillion defense budget. Regardless of where the final number ends up, his comments send a strong policy signal of the President's commitment to increase investment in defense, and we expect the overall size of the defense budget to continue to increase throughout the next three years. Importantly, the initial FY2026 Defense Appropriations Act enjoyed very strong bipartisan support, recognizing the increasingly complex global threat environment. A recent editorial published in the Wall Street Journal was titled, A Serious Defense Budget at last and it highlighted the new technologies that are proliferating in ways that threaten the US homeland which include hypersonic missiles space and cyber weapons drones and the weaponization of AI the editorials conclusions are perfectly aligned with the administration's peace through strength philosophy and recognizes that investment in defense is definitely less costly than a war. Given this backdrop, we continue to expect that the priority missions our portfolio supports will be well funded in the near and medium term to safeguard national security. And these missions include intelligence, surveillance and reconnaissance, cyber security, missile defense, space activities, among others. Space is the newest war fighting domain and achieving Uncontested dominance in this theater is of paramount importance to the country's defense. In support of this objective, we expect the $175 billion multi-year Golden Dome initiative and the relocation of Space Command's headquarters to Huntsville to drive growth and demand for both government and contractors at the Redstone Gateway for the foreseeable future. Before I turn the call over to Britt, let me reflect on our performance over the past few years. In 2019, we entered our era of growth as we had largely completed our strategic reallocation plan and our FFO per share for that year was $2.03. Seven years later, the midpoint of our 2026 guidance is $2.75, a 35% increase, and represents a compound annual growth rate of 4.4%. Between the initial midpoint of 2023 and 2026 guidance ranges, FFO per share is expected to grow at a compounded rate of 4.9%, which is over 20% higher than what we had projected back in 2022. And with that, I'll turn the call over to Brett for some details.

Thank you, Steve. We finished the quarter with strong occupancy at 94% in the total portfolio and 95.5% in the defense IT portfolio. Year over year, occupancy increased 40 basis points in the total portfolio and 10 10 basis points in the defense IT portfolio. Our buildings remain highly leased with our total portfolio at 95.3% and our defense IT portfolio at 96.5%. The leased percentage for the total portfolio increased 20 basis points from the end of last year, driven by our incredibly strong vacancy leasing performance. And I want to give special recognition to our entire team who contributed to these outstanding results in terms of both vacancy and investment leasing. In fact, we executed 557,000 square feet of vacancy leasing during the year, which exceeded our initial target by 40% or over 150,000 square feet. In our defense IT portfolio, we executed 424,000 square feet, which alone exceeded our 400,000 square foot initial goal for our entire portfolio. The vacancy leasing achieved represented 47% of our available inventory at the beginning of the year for the total portfolio, and 58% within our defense IT portfolio. Half of this leasing was tied to either secure space, cyber activity, or a combination of In our defense IT portfolio, over half of our vacancy leasing and 90% of our investment leasing was executed with existing tenants. We enjoyed broad-based leasing activity across our markets, and notably, we executed roughly 110,000 square feet in our Navy support market, which represented 73% of our available inventory in that group at the beginning of the year. Many of you have asked about this market over the past few quarters, and we delivered. The leased rate in this portfolio increased nearly 200 basis points over the year, and the occupancy rate increased over 400 basis points. We also executed over 130,000 square feet in our other segment, which is the highest level in over a decade and represented 29% of our available inventory at the beginning of the year. This is important as this segment holds the largest amount of vacancy in the portfolio. Leasing achievement in the other segment included over 40,000 square feet at our property in Tyson's Corner and nearly 90,000 square feet in Baltimore. Year over year, the leased rate in our other segment increased nearly 300 basis points and the occupancy rate increased nearly 400 basis points. For 2026, we have again set a vacancy leasing target of 400,000 square feet, which represents one-third of total available inventory at the beginning of the year. Our leasing activity ratio is 74%, which equates to 870,000 square feet of prospects on 1.2 million square feet of availability, and 10% of this activity is in advanced negotiations. Turning to renewal leasing, we executed 2 million square feet for the year, with tenant retention of 78%, and cash rent spreads up 1.1%. In our defense IT portfolio, we executed 1.9 million square feet for the year, with tenant retention of 79%, and cash rent spreads up 2.7%. The government had an administrative delay in processing lease renewals that were expected in the fourth quarter, which included 700,000 square feet of secure, full building leases in San Antonio. This delay negatively impacted our tenant retention and cash rent spreads relative to our guidance. And to quantify the impact of these delayed renewals, tenant retention would have been 84% or over 600 basis points higher, and cash rent spreads on renewals would have been 2.4% or over 130 basis points. Our 2026 guidance assumes a midpoint for tenant retention of 80% and cash rent spreads up 2% at the midpoint. In 2026, we have 2.2 million square feet of government leases expiring, virtually all of which we expect to renew. Nearly 1 million square feet of this total is at our campus in San Antonio, which consists entirely of secure, full-building leases with the government that expire in the first quarter of 2026. This group of leases accounts for one-third of the expiring square feet in our defense IT portfolio this year and over 40% of the expiring annualized rental revenue. We expect 100% retention on this nearly 1 million square feet as lease economics have already been finalized. And again, we're just waiting for the government to finish processing the paperwork. We believe this process will be completed and this batch of leases will be renewed in the first quarter. Turning to our large lease retention on slide 20 of our flipbook, we provide an update on leases in excess of 50,000 square feet that expire between mid-2024 and year-end 2026. Overall, we now expect tenant retention of over 95% on the entire 4 million square feet of these large lease renewals, as we expect 100% retention on the remaining 12 leases totaling 1.9 million square feet, all of which are with the U.S. government and half of which are at our campus in San Antonio. Additionally, since we started providing this disclosure three and a half years ago, We have renewed over 4 million square feet of large leases with a retention rate of over 97%. Moving on to development, we commenced three developments over the past few months, and our active development pipeline totals nearly $450 million of capital commitment. The active pipeline totals 880,000 square feet and is 86% pre-leased. Five of our six development projects are 100% pre-leased now that we've executed the full building lease at MVP 400. The only development with space available is our 8500 Advanced Gateway project in Huntsville, which was just constructed as an inventory building in one of our highest occupied parks. We commenced construction on 8500 Advanced Gateway a year ago, and the roughly 400,000 square feet of prospects on the remaining 125,000 square feet of availability speaks to the strength of tenant demand at Redstone Gateway. The project is currently 20% pre-leased, as we signed a 32,000-square-foot lease in the fourth quarter with a defense IT tenant whose technology is central to the Golden Dome initiative. We are in advance negotiations on a 32,000-square-foot lease with another defense contractor, which is also supporting Golden Dome, and has been a tenant of ours for over 20 years. This lease will increase the pre-lease rate at 8,500 advance gateways 40%. We are already progressing planning and design for our next inventory building at Redstone Gateway, and once 8500 Advanced Gateway approaches 60% pre-lease, we expect to commence the next inventory development. And finally, at 8100 Rideout Road in Huntsville, which is an inventory development we delivered last year, we are in advanced negotiations with one of our top defense IT tenants to expand into the remaining 27,000 square feet of availability. Once executed, the only space available in our 2.4 million square foot Redstone Gateway operating portfolio will be a single 10,000 square foot suite, and we are in advanced negotiations with a defense contractor on that space. Our development leasing pipeline, which we define as opportunities we consider 50% likely to win or better within two years or less, currently stands at nearly 1 million square Recall, the pipeline stood at 1.3 million square feet at the end of last quarter. Since then, we achieved over 650,000 square feet of investment leasing, and we added another 300,000 square feet of high-probability prospects. Beyond that, we are tracking an additional 1 million square feet of potential development opportunities. This activity should allow us to maintain a solid development pipeline in the near and medium term. With that, I'll hand it over to Anthony. Thank you, Brett.

We reported 2025 FFO per share of $2.72, which was two cents above the midpoint of our revised guidance and six cents above our initial guidance. The year benefited from earlier than expected leases commissments and success in flipping expected non-renewals to renewals, lower than anticipated net operating expenses, including non-recurring real estate tax refunds, the Stonegate acquisition in late October, additional interest and other income on investments, and lower net interest expense from the timing of development funding, which was partially offset by higher interest expense. During 2025, same property cash in OI increased 4.1%, which was well above the midpoint of our original guidance of 2.75%, and was driven by a 40 basis point positively impacted occupancy end of the year at 94.2%, which is right in line with the midpoint of updated guidance. The 10 basis points by a few previously discussed non-renewals in the We issued $400 million of five-year unsecured notes at a yield to maturity of 4.6%. The bonds priced at a credit spread of 95 basis points and are currently trading at spreads that are tighter than the offering will be used to repay our $400 million 2.25% bond, which impacts 2026 FFO per share based on the higher interest rate between the new bond and the maturing bond. Our decision in September to pre-fund this bond maturity was driven by our conservative and risk-averse nature, and the tight execution window that exists for any issuer only eliminated any execution risk, but also removed any underlying treasury rate risk. The time of our offering was 3.67%, and since our deal priced, the five-year has traded at or above that rate in 90%, expect another solid year of performance in 2026. So per share, a range of $2.71 to $2.79, cents, implying 1.1% growth at the midpoint. The $2.75 per share midpoint takes into account a 17-cent increase in NOI from rent increases and leases, along with increases in NOI from developments and one acquisition placed into service during 2025. This is partially offset by 9 cents from higher financing costs, 1.5 cents and 3 cents. Property cash NOI is projected to increase 2.5% at the midpoint. This guide during real estate tax, reduce the 2026 growth rate by to end the year between 93.5% and 94.5% and be relatively flat regarding uses of capital in 2026. We expect to spend $200 to $250 million on active and future projects and to commit $225 to $275 million of capital to new investments. We take a conservative approach to our AFFO payout ratio, which has averaged roughly 60% over the past two years and is forecasted to be under 65% in 2026. At this level, the portfolio continues to generate sufficient cash to fund the equity component of our anticipated investments on a leveraged neutral basis. Finally, I'd like to take a moment to discuss the impact of placing our development, NBP 400, into service this year and our overall approach to capitalized costs as it relates to development. We will place NBP 400 into service on April 1st, which marks one year from the completion of the core and shell of the building. At that point, as our longstanding policy compels us, we will stop capitalizing interest and operating costs associated with the project. This results in a 1.5-cent impact to 2026 FFO per share, which is absorbed in our guidance. Our policy is to capitalize interest and operating expenses, the largest component of which is real estate taxes associated with properties undergoing development or we continue to capitalize these costs until a property becomes operational, which we define as the earlier of 90% occupancy or one year from substantial completion of the core and shell. Historically, we capitalize only a small fraction of our overall interest expense with capitalized interest averaging roughly 5% of our gross interest over the past three forecasts. We will capitalize less than 8% of our delivery of NBP 400 will temporarily reduce total portfolio occupancy by 60 basis points beginning in the second quarter and FFO per share in the second and third quarters. Our guidance assumes the lease we just executed with a defense contractor will commence in the fourth quarter. We believe our policy regarding capitalized costs related to development and redevelopment projects is illustrative of our conservative approach to adhering to GAAP standards and avoids accumulating our key accomplishments and messages.

A year of outstanding achievements, delivering strong performance across all segments of the portfolio, melting in FFO per share growth of 5.8% year-over-year, and representing our third consecutive dividend increase, resulting in a 10.9% increase over the last three years. For 2026, we expect this will be our eighth consecutive year of FFO per share growth. We again set a target for vacancy leasing at 400,000 square feet, which is an aggressive goal, given the limited amount of unleashed space in our portfolio. We expect tenant retention will remains strong at 80% and we expect to commit $250 million of capital to new investments of which we've already committed $146 million. Our liquidity remains very strong and we expect to continue self-funding the equity component of our capital investments. We now anticipate compound annual FFO per share growth of nearly 5% between 2023 and 2026, and we're already off to a great start. We expect to deliver another strong year of results. Before I wrap up, I want to make a comment about the passing of my good friend and former colleague, Roger Washi. Sadly, Roger passed away suddenly on January 8th. Much of the foundation that we have built on over the past decade is a result of the leadership and foresight of Roger Weishe. Roger worked for the company for over three decades, serving in a wide range of leadership roles, culminating with being the company's third chief executive officer from 2011 and We have no need to idolize him beyond what he was, because that was more than enough. A loving husband and father, a man of great faith and integrity, a fierce and loyal friend, a man of great intelligence and kindness, and a colleague and leader who cared deeply for all those he encountered. Those of us who had the privilege to work with and alongside Roger are better off because of it. He is greatly missed. Operator, with that, please open up the call for questions.

Thank you, Mr. Bedork. Ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, press star 11 again. Our first question comes from the line of Seth Berge from Citi. Your question, please.

Thanks for taking my question. I guess just starting off with the development pipeline, are you starting to see opportunities from Golden Dome and, you know, the new kind of defense appropriations kind of trickle into that pipeline visibility, or, you know, are projects kind of related to that still on the come?

I think the answer is both, Seth. But Britt talked about the big backlog of prospects we have for RG8500 in the 400,000-square-foot range. Many, if not most, of those pertain to Golden Dome. And I believe they represent, you know, kind of initial footprints, early moves to get into the action. And I think subsequent down the road, you'll see larger requirements as awards are made and the contractors ramp up to perform the actual creation of the Golden Dome.

I'll just add a couple things to that, too. I mean, they're really trying to move that process forward from a contracting standpoint. I mean, the Missile Defense Agency's SHIELD contract could afford DOD with quite a bit more flexibility to process orders more quickly, and then also they're looking to fast-track especially some of the space-based interceptor contractors through OTAs or other transactional authority. So we actually, we're seeing it not just through the tours, but also how they're setting up for these contracts to be awarded, so.

Great, and then just a second one on kind of the leasing assumptions around tenant retention, you know, 80% at the midpoint, I guess, kind of for the 20% that, you know, would not be retained, you know, given kind of the type of tenant that you have, where are those tenants going? Is there, like, a cited reason for move-out, or could that be conservative, just kind of given where your retention has been the past couple of years?

Well, when you look at our non-renewals from year to year, it's typically smaller tenants that are vulnerable to a relocation because they need a little less space or a little more space. Probably 70% of non-renewals are just getting smaller tenants into the right size space. Some of those are non-defense tenants and often it's our asset managers managing their inventory to accommodate the growth of larger defense tenants.

So there's always a little friction in there.

But I have to remind you, for a decade, we've delivered 80% retention. It's a pretty astounding number.

Thank you. And our next question comes from the line of Blaine Heck from Wells Fargo. Your question, please.

Great, thanks. Just following up on potential additional investments, specifically the roughly $100 million of additional investments earmarked for guidance in 2026, I guess, what do you think the mix between acquisitions and developments will be in that total? And can you talk about the profile and yields that you're targeting on acquisitions and outside the activity in Huntsville you described? Are there any additional near-term development projects that you're eyeing at the moment?

Well, we talked about our development pipeline having roughly a million square feet. A big chunk of that are smaller contractors for $8,500, but there are some build-tooth opportunities. Our yield targets haven't really changed for developments. We target, you know, eight and a half cash on cash yield at the commencement of the lease. regarding acquisitions, when they occur, we consider them opportunistic. We don't have any built into our guidance, if you will. And typically the yield on that acquisition has to exceed that which we can do on our development opportunities for us to make the move.

Got it. That's helpful, Keller. Sure. And then just switching gears, you guys have been pretty steadfast in your messaging around not needing equity as a source of funds to support your investment initiatives. But, you know, given that the stock performance has been very strong thus far this year, I'm wondering whether you'd be more open to issuance at these levels. I guess how equity would rank in your options for funding sources, and maybe alternatively, are there any assets that you would consider for dispositions if you were to add significant developments or acquisitions this year?

Well, many layers to that question. It's nice to be in a position where we could consider issuing equity, but it's kind of a last alternative. we have as we have made very clear the ability to handle our expected development investments with the cash we generate internally we actually have the building ability to flex up in a given year or two with a modest increase in our debt ratio which on a previous basis will only be temporary Regarding dispositions, there are a few assets that we've clearly indicated we'd like to sell. They're all in the other segment, not defense. Timing of those sales is not so much dependent on our development, our pace of development opportunities, but more market conditions in the markets where they exist, where we can get an efficient sale and preserve shareholder value.

So I guess just add another way, I guess you don't feel like your hesitation to issue equity has held you back at all from taking on more projects. Is that correct?

Not at all. Great. Thank you, guys. If God forbid we get so much that we have to issue equity, well, that'll be a happy day for our investors and we'll let everyone know well in advance, but we don't expect that to happen.

Great. Thanks, Steve.

And our next question comes from the line of Anthony Poulin from J.P. Morgan. Your question, please.

Yeah, thanks. So first one, just on the starts that you anticipate for 2026, it sounds like maybe the follow-up for 8,500 in Huntsville. Are there any others in the plan?

Well, we have our eye on a few, but you know we're not going to tell you where they're at. We're working several other opportunities. And, yes, you're right, we expect to start an inventory pretty quickly after 8,500 gets committed.

And so I guess if we're kind of looking out even beyond 26, like your investment spending has been pretty consistent in the last couple of years in your guidance for 26. But if we look at, like, what's left to spend on the developments in place right now, it sounds like you'll still have a couple hundred million to spend after 2026. And then if you start some things this year, that'll kind of add to that. So, I guess, should we expect development spending or investment spending to maybe ramp a bit in the next couple years?

From a spending standpoint, yes, because if you look at the development chart in our supplement, you'll notice that the two buildings that we committed to, one in late December and one in early January, have placed in service dates that are in 2027 and late 2028. Significant spending for those isn't going to occur in 2026, so it will occur in 2027 and 2028. So there will be incremental funding for the commitments that we've made this year, as well as the commitments we expect to make in 2026 and beyond.

And then I guess my follow-up then on all of that, because it seems like, you know, business is going well, and a few years ago you had laid out your 4% kind of earnings keg or as an intermediate or maybe even longer-term growth rate. Do you think that still stands?

Is there a chance that could bump a bit higher, given all the conditions surrounding it? the business or maybe how to think about that well you know this year's transition here because of the impact of the refinancing costs i think later in the year we'll probably try to give you a little more of a view of what our future looks like but we're very confident we're going to continue to produce solid growth as we have and uh that's my message thank you next question

comes to the line of Manus Epica from EpiCore ISI. Your question, please.

Thanks for taking the question. Out of demand that you're seeing in your markets, how much is driven by existing tenants versus new tenants? And have you witnessed any, like, meaningful uptake in immigration from maybe, like, tech defense tenants into your markets from other regions in the U.S.?

Yeah, I would say it's about 50-50 existing in new biz. and then we are seeing some groups come in from other locations.

Gotcha. Appreciate the commentary about maybe getting another outlook later this year, so we're definitely looking forward to that one. But just maybe in your view, obviously with now the demand picture looking really good and you're certainly, like, being able to capitalize on that, like how do you expect your, like, tenant mix maybe to change if we compare today's portfolio maybe to one potentially in, like, five years from now? Like, where do you think, like, maybe the mix is shifting in your portfolio?

The mix of tenants? Or are you talking about concentration?

Specifically tenants, like government versus tech defense versus traditional contractors. Like, where do you think there is maybe outside growth?

Who do you think is going to take bigger shares going forward? uh boy that's a hard one to answer you know um i think it'll be you know roughly comparable to what it is two parts defense contractor for every one part government and we'll see that growth in a variety of markets gotcha perfect thank you i appreciate it and our next question comes from the line of rich anderson from kinship rich gerald your question please yeah rich anderson

here i i caught off there uh steve first well said on roger you know one of the best that i can recall ever working with soft-spoken unassuming but probably a big part as you mentioned the architect of where you guys are today so uh so his legacy lives um just uh now getting into the questions um in terms of huntsville and you know kind of where it is in terms of the size of the portfolio two and a half million square feet or thereabouts mbp is 4.3 million square feet and growing from there um it when i think about all the forces at work moving to huntsville whether it's you know missile command space command golden dome do you feel like you could get to a point where you just kind of run out of opportunity to meet some of these demand forces coming at the area, or do you see opportunities to expand to be able to build more in the area? I'm curious what your sort of five-year outlook is on Huntsville in terms of how big it can become within the portfolio.

Well, I can't wait to be on a call to tell you how we're going to manage that growth, And it's going to happen. It's just going to take a year or two, Rich. But do recall, we're built at 2.4 million square feet right now. We've got a little bit under development. Our overall capacity on the land we control without structured parking is 5.5 million square feet. So we have 3 million square feet of development runway on the enhanced use land that we do currently control. We believe there is a significant opportunity at the point where we have consumed that development that we can continue to expand our enhanced use lease presence on the base because there's ample land available. The existence of our contractor and government campus is a well-appreciated catalyst to the missions on the base. And, you know, in essence, we work in partnership with the U.S. Army overall commands to support their missions. So I don't think we're ever going to run out of runway there. There might be some processes we have to go through, but we've got a long runway in Huntsville.

In terms of the organic growth of the company, you guys have been successful moving upon whatever your guidance was to start the year. I think in the last two years you've seen it steadily sort of improve from one quarter to the next. Maybe the calculus is a little bit different this year. I'm not sure, but would you say that you've left some opportunity on the table from a pure organic point of view? And what has to happen for Same Store to sort of get a little boost up as the year progresses? And maybe you've left some conservatism on the table as well.

Well, you know, Same Store is a battle of inches. It's, you know, it's square feet renewed, weeks of earlier or later commencements, pennies of rents. You know, it's hard to say we're leaving anything on the table. Last year, our team executed extraordinarily well at getting the best outcome of probably 150 different transactions. And meanwhile, our operating teams have to keep the expenses in line and contest taxes. It's hand-to-hand combat and same-store growth. And I think we've put out a good, solid forecast. And we'd like to beat it, but I don't think we've sugar-coated it.

As for me, the $950 billion defense budget with the OBBB, I'm curious if you could sort of frame when that will start to matter to the bottom line in terms of leasing and, you know, actual opportunities for the company. I mean, it's great, obviously, as a setup for the long term. But is that like a two- or three-year type of process before you actually see it in your FFO line?

Yeah, we've traditionally conveyed that from an appropriation, our demand impact is 12 and sometimes 18 months down the road. And particularly with some of the big funding things that are occurring right now. because they're the funding is going to new programs new programs have to be conceptualized then put into you know contract competitions defense contractors have to compete for the contract get an award survive a protest finally get you know an adjudicated result and then they can leave space so So, you know, 12 to 18 months, it's really a very strong signal that our demand is going to remain very healthy, if not improved, over the next, you know, two years.

Rich, I would just ask, if you look at what I was referring to earlier, Golden Dome and even Golden Fleet, they're working on ways to Golden Dome for us.

That was the genesis of my question. Like, you know, it's somewhat political that all this is happening, although it is bipartisan. I get it in terms of the spending bills. But I just wondered if there was a climate of today maybe.

Well, I think what Rick can do is you're going to see a mix of both. But, you know, one thing quicker than we have traditionally seen, but it's hard to tell you it will be. Okay.

Thanks very much.

Thank you. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. Our next question comes from the line of Dylan Brzezinski from Green Street. Your question, please.

Thanks for taking the question. I know the Iowa data center development plan has sort of been pushed back a little bit, but just sort of wondering if there are any other sort of markets that you're looking to sort of go out and gobble up some land parcels for future development opportunities on the data center side. uh that currently we're constantly evaluating opportunities uh but there's nothing that we're seriously considering and then i guess just one last one on sort of the office disposition plans you know i think the theme that we've heard over the last several months is that debt capital markets are improving bidding tents are getting more full just sort of curious on your thoughts on sort of bringing 2,100 L to market, because I know that's sort of largely stabilized now?

Well, the D.C. market has not yet indicated pricing for assets that excites us. And so I don't expect that to happen for 12 months, but we have that building extremely well positioned. It's a fantastic development with great tenants. and when we see capitalization rates uh approach the level that makes sense for our shareholders we can move on it that's helpful thanks bud this does conclude the question and answer session of today's program i'd like to hand the program back to mr babadirk for any further remarks thank you all for joining our call today we are in our offices so please feel free to coordinate through VANCAD if you'd like to talk to us further. Have a great day.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.