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Share-Based Compensation | 3 Months Ended
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Mar. 31, 2026
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation Restricted Shares The table below presents restricted shares activity under our share-based compensation plan for the three months ended March 31, 2026:
|  | Number of Shares |  | Weighted Average Grant Date Fair Value
Unvested as of December 31, 2025 |  | 434,754 |  |  | $ | 26.56 |
Granted |  | 221,189 |  |  | $ | 31.78 |
Forfeited |  | (5,757) |  |  | $ | 26.72 |
Vested |  | (137,165) |  |  | $ | 25.95 |
Unvested as of March 31, 2026 |  | 513,021 |  |  | $ | 28.97 |
Restricted shares granted to employees generally vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employee remains employed by us. Restricted shares granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in the position. The aggregate intrinsic value of restricted shares that vested was $4.4 million for the three months ended March 31, 2026. Profit Interest Units in CDPLP (“PIUs”) We granted two forms of PIUs: time-based PIUs (“TB-PIUs”); and performance-based PIUs (“PB-PIUs”). TB-PIUs are subject to forfeiture restrictions until the end of the requisite service period, at which time the TB-PIUs automatically convert into vested PIUs. PB-PIUs are subject to a market condition in that the number of earned awards are determined at the end of the performance period (as described further below) and then settled in vested PIUs. Vested PIUs automatically convert into common units in CDPLP if, or when, a book-up event (as defined under federal income tax regulations) has occurred and carry substantially the same rights to distributions as common units. TB-PIUs The table below presents TB-PIUs activity under our share-based compensation plan for the three months ended March 31, 2026:
|  | Number of TB-PIUs |  | Weighted Average Grant Date Fair Value
Unvested as of December 31, 2025 |  | 235,903 |  |  | $ | 26.08 |
Granted |  | 74,215 |  |  | $ | 31.78 |
Vested |  | (96,694) |  |  | $ | 25.72 |
Unvested as of March 31, 2026 |  | 213,424 |  |  | $ | 28.23 |
TB-PIUs granted to senior management team members vest based on increments and over periods of time set forth under the terms of the respective awards provided that the employee remains employed by us. TB-PIUs granted to non-employee Trustees vest on the first anniversary of the grant date, provided that the Trustee remains in the position. Prior to vesting, TB-PIUs carry substantially the same rights to distributions as common units but carry no redemption rights. The aggregate intrinsic value of TB-PIUs that vested was $3.1 million for the three months ended March 31, 2026. Performance-Based Awards On January 1, 2026, we granted certain senior management team members performance-based equity, in the form of either PB-PIUs or performance share units (“PSUs”) as based on the election of the grant recipients. The grant recipients elected to receive, in aggregate, 324,870 PB-PIUs (equal to 200% of the target award) and 4,496 PSUs (equal to 200% of the target award). The performance-based equity awards have a three-year performance period concluding on the earlier of December 31, 2028 or the date of: (1) termination by us without cause, death, or disability of the employee, or constructive discharge of the employee (collectively, “qualified termination”); or (2) a sale event. The number of earned awards following the end of the performance period will be determined based on the percentile rank of COPT Defense’s total shareholder return (“TSR”) relative to a peer group of companies, as presented in the following schedule:
Percentile Rank |  | Earned Award Payout %
75th or greater |  | 200% of target award
50th (target) |  | 100% of target award
25th |  | 50% of target award
Below 25th |  | 0% of target award
If the percentile rank exceeds the 25th percentile and is between two of the percentile ranks set forth in the table above, then the percentage of the earned awards will be interpolated between the ranges set forth in the table above to reflect any performance between the listed percentiles. If COPT Defense’s TSR is negative when its TSR’s percentile rank exceeds the 50th percentile, then the earned award payout percentage used to arrive at the earned awards would be reduced by 25 percentage points, but in no event to a payout percentage of less than 100% of the target award; however, the resulting reduction in earned awards would subsequently be deemed earned awards if COPT Defense’s TSR becomes positive on any date in the calendar year following the end of the performance period. In addition, regardless of COPT Defense’s TSR relative to the peer group, no less than 100% of the target award will be earned if COPT Defense’s TSR is at least 10% and no less than 50% of the target award will be earned if COPT Defense’s TSR is at least 6%, with linear interpolation if COPT Defense’s TSR is between 6% and 10%. During the performance period, PB-PIUs carry rights to distributions equal to 10% of the distribution rights of common units, while PSUs do not carry such rights. Performance-based awards do not carry redemption or voting rights. Following the end of the performance period, we will settle the awards as follows: •for PB-PIUs, issuing vested PIUs equal to: the number of earned awards; and the excess, if any, of (1) the aggregate distributions that would have been paid with respect to vested PIUs issued in settlement of the earned awards through the date of settlement had such vested PIUs been issued on the grant date over (2) the aggregate distributions made on the PB-PIUs through the date of settlement, divided by the price of our common shares over a defined period of time; and •for PSUs, issuing fully-vested COPT Defense shares equal to: the number of earned awards; and the aggregate dividends that would have been paid with respect to the common shares issued in settlement of the earned awards through the date of settlement had such shares been issued on the grant date, divided by the price of our common shares over a defined period of time. If a performance period ends due to a sale event or qualified termination, the number of earned awards is prorated based on the portion of the three-year performance period that has elapsed. If employment is terminated by the employee or by us for cause, all unvested performance-based awards are forfeited. The performance-based awards granted on January 1, 2026 had an aggregate grant date fair value of $6.4 million ($39.10 per target-level award) in the form of PB-PIUs and $89,000 ($39.52 per target-level award) in the form of PSUs, which are being recognized over the performance period. The grant date fair values were computed using Monte Carlo models that included the following assumptions: baseline common share value of $27.80; expected volatility for common shares of 23.4%; and a risk-free interest rate of 3.7%. For PB-PIUs granted to executives on January 1, 2023 that vested on December 31, 2025, COPT Defense’s TSR ranking relative to the peer group companies equated to an earned award payout of 200% of the target award, which resulted in our issuance of 250,070 vested PIUs in settlement of the PB-PIUs on February 5, 2026.

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