Corporate Office Properties Trust (NYSE:OFC) Q2 2019 Earnings Conference Call - Final Transcript
Jul 30, 2019 • 12:00 pm ET
Welcome to the Corporate Office Properties Trust Second Quarter Earnings Conference Call. As a reminder, today's call is being recorded.
At this time, I will turn the call over to Stephanie Krewson Kelly, COPT's Vice President of Investor Relations. Ms. Krewson-Kelly, please go ahead.
Stephanie Krewson Kelly
Thank you, Crystal. Good afternoon and welcome to COPT's Second Quarter 2019 Conference Call. With me today are Steve Budorick, President and CEO; Paul Adkins, Executive Vice President and COO; and Anthony Mifsud, EVP and CFO. In addition to the supplemental package and press release related to our results, we posted slides on the Investors section of our website to accompany management's remarks.
On our website and in the results press release, you will find reconciliations of GAAP to non-GAAP financial measures management discusses. At the conclusion of management's remarks, we'll open the call for questions.
Statements made during this call may be forward-looking within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties and other factors. Please refer to yesterday's press release and our SEC filings for a detailed discussion of forward-looking statements.
I will now hand the call over to Steve.
Thank you and good afternoon. We had a very productive first seven months, during which we achieved three high priority strategic objectives. In development leasing, we signed 1.7 million square feet to date, a new record for a single year. We exceeded our prior record by over 0.5 million square feet and we still have five months remaining in the year. As a result, we have more than doubled our expectation for full year development leasing in 2019 from our initial guidance levels.
Second, in the quarter, we tied our all-time quarterly record for vacancy leasing, and we're on pace to meet or exceed our best annual volume for the year.
And third, we created a strategic joint venture arrangement with Blackstone to fund our 2019 development investment needs and most of the equity for our expected 2020 development spend. Importantly, the JV creates a valuable relationship we can rely on to generate future capital recycling, if necessary, in a highly cost-effective manner to assure funding of our expanding development opportunities.
The healthy defense spending environment underpins the robust demand for our Defense/IT locations, and our ability to convert this broad-based demand into strong leasing volumes bolsters the outlook for future FFO growth. Last week, Congress agreed on a two-year budget deal that, when appropriated, will continue to grow defense spending in fiscal '20 and '21. The House passed the agreement last week, and the Senate is expected to pass it this week.
The two-year bipartisan agreement raises the final two years of spending caps put in place by the Budget Control Act of 2011, removing the possibility of future sequestration cuts and reducing the likelihood of Continuing Resolutions. The very visible bipartisan support to restore and fund our national defense continues to instill confidence