8-K
Easterly Government Properties, Inc. (DEA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 25, 2025
Easterly Government Properties, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Maryland | 001-36834 | 47-2047728 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br>Identification No.) |
| 2001 K Street NW, Suite 775 North, Washington, D.C. | 20006 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (202)
595-9500
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
| Securities registered pursuant to Section 12(b) of the Act: | ||
| --- | --- | --- |
| Title of each class | Trading<br><br>Symbol(s) | Name of each exchange on which registered |
| Common Stock | DEA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 25, 2025, we issued a press release announcing our results of operations for the fourth quarter ended December 31, 2024. A copy of this press release as well as a copy of our supplemental information package are available on our website and are attached hereto as Exhibits 99.1 and 99.2 and incorporated herein by reference. The information in this Item 2.02 as well as the attached Exhibits 99.1 and 99.2 are being furnished and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
We will host a webcast and conference call at 11:00 a.m. Eastern Time on February 25, 2025, to review our fourth quarter ended 2024 performance, discuss recent events and conduct a question-and-answer session. A live webcast will be available in the Investor Relations section of our website. Please note that the full text of the press release and supplemental information package are available through our website at ir.easterlyreit.com. The information contained on our website is not incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release dated February 25, 2025. |
| 99.2 | Easterly Government Properties, Inc. Supplemental Information Package for the quarter ended December 31, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document.) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EASTERLY GOVERNMENT<br><br>PROPERTIES, INC. | |
|---|---|
| By: | /s/ Allison E. Marino |
| Name: | Allison E. Marino |
| Title: | Executive Vice President, Chief Financial Officer and Chief Accounting Officer |
Date: February 25, 2025
EX-99.1
Exhibit 99.1
EASTERLY GOVERNMENT PROPERTIES
REPORTS FOURTH QUARTER 2024 RESULTS
WASHINGTON, D.C. – February 25, 2025 – Easterly Government Properties, Inc. (NYSE: DEA) (the “Company” or “Easterly”), a fully integrated real estate investment trust (“REIT”) focused primarily on the acquisition, development and management of Class A commercial properties leased to the U.S. Government and its adjacent partners, today announced its results of operations for the quarter and full year ended December 31, 2024.
Highlights for the Quarter Ended December 31, 2024:
- Net income of $5.7 million, or $0.05 per share on a fully diluted basis
- Core FFO of $32.6 million, or $0.29 per share on a fully diluted basis
- Acquired a 104,136 square foot facility 100% leased to Northrop Grumman Systems Corporation (NYSE: NOC, S&P: BBB+), a multinational aerospace and defense company, located in Aurora, Colorado (“Northrop Grumman - Aurora”)
- Acquired a 100,000 leased square foot, Level 4 secure facility fully occupied by the Internal Revenue Service (IRS) and located in Ogden, Utah (“IRS - Ogden”)
- Acquired a 97% leased, combined 295,253 square foot campus across three assets leased primarily to the Wake County Public School System (WCPSS) and located in Cary, North Carolina
- Issued an aggregate of 2,269,843 shares of the Company's common stock in settlement of previously entered into forward sales transactions through the Company's $300.0 million ATM Program launched in December 2019 (the “2019 ATM Program”). These shares were then physically settled in the same quarter at a weighted average price per share of $12.38, raising net proceeds to the Company of approximately $28.1 million
“We are pleased with the position of our portfolio,” said Darrell Crate, Easterly’s President & Chief Executive Officer. “Through the DOGE effort, the federal government has recognized the value and efficiency of leasing versus owning its real estate. We are specialists in delivering mission-critical facilities to key government agencies, and we remain committed to our ongoing public-private partnership.”
Highlights for the Year Ended December 31, 2024:
Net income of $20.6 million, or $0.19 per share on a fully diluted basis
Core FFO of $126.9 million, or $1.17 per share on a fully diluted basis
Received an investment grade issuer credit rating from Kroll Bond Rating Agency, LLC (“KBRA”) of BBB with Stable Outlook
Awarded a lease to develop a 50,777 square foot federal courthouse in Flagstaff, Arizona (“JUD - Flagstaff”)
Achieved a 4% decrease in total portfolio energy consumption year-over-year
Executed a new $400.0 million revolving credit facility (the “Revolver”) with an accordion feature that allows the Company to request additional lender commitments of up to $300.0 million with an initial maturity of June 2028
Exceeded initial full year guidance and achieved results at the upper end of raised guidance
Completed the acquisition of, either directly or through the Company's joint venture partnership (the “JV”), 10 properties for an aggregate pro rata contractual purchase price of approximately $230.0 million, comprised of $189.1 million of wholly owned acquisitions, and $40.9 million from a pro rata JV acquisition
Expanded the Company's investment strategy to acquire mission-critical facilities leased to private sector government contractors that help fulfill key government functions through the use of specialized real estate
Successfully renewed 144,172 leased square feet of the Company's portfolio for a weighted average lease term of 19.3 years
Maintained a quarterly cash dividend of $0.265 per share
Issued an aggregate of 5,491,217 shares of the Company's common stock in settlement of previously entered into forward sales transactions through the Company's 2019 ATM Program at a weighted average price per share of $12.95, raising net proceeds to the Company of approximately $71.1 million
Portfolio Operations
As of December 31, 2024, the Company or its JV owned 100 operating properties in the United States encompassing approximately 9.7 million leased square feet, including 92 operating properties that were leased primarily to U.S. Government tenant agencies, three operating properties that were entirely leased to private tenants, and four operating property leased primarily to tenant agencies of a high-credit U.S. state government. In addition, the Company wholly owned two properties in development that the Company expects will encompass approximately 0.2 million rentable square feet upon completion. The first re-development project, located in Atlanta, Georgia, is currently under construction and, once complete, a 20-year lease with the U.S. General Services Administration (GSA) is expected to commence for the beneficial use of the U.S. Food and Drug Administration (FDA). The second project, located in Flagstaff, Arizona, is currently in design and, once complete, a 20-year lease with the GSA is expected to commence for the beneficial use of the United States Judiciary. As of December 31, 2024, the portfolio had a weighted average age of 15.7 years, based upon the date properties were built or renovated-to-suit, and had a weighted average remaining lease term of 10.0 years.
Balance Sheet and Capital Markets Activity
As of December 31, 2024, the Company had total indebtedness of approximately $1.6 billion comprised of $274.6 million outstanding on its senior unsecured revolving credit facility, $100.0 million outstanding on its 2016 term loan facility, $174.5 million outstanding on its 2018 term loan facility, $900.0 million of senior unsecured notes, and $156.3 million of mortgage debt (excluding unamortized premiums and discounts and deferred financing fees). The Company's outstanding debt had a weighted average maturity of 4.5 years and a weighted average interest rate of 4.6%. Further, the Company's Net Debt to total enterprise value was 55.2% and its Adjusted Net Debt to annualized quarterly pro forma EBITDA ratio was 7.1x.
On January 11, 2024, the Company announced it had received an investment grade issuer credit rating from KBRA of BBB with Stable Outlook. This rating has since been reaffirmed.
On January 25, 2024, the Company announced it extended its $100.0 million unsecured term loan executed in 2016 (the “2016 Term Loan”) for the facility and extended the weighted average life of maturities at attractive spreads, underscoring the Company’s fortified balance sheet and strong capital partner relationships.
On June 4, 2024, the Company announced it has executed a new $400.0 million revolving credit facility. The Revolver includes an accordion feature that allows the Company to request additional lender commitments of
up to $300.0 million, for a total Revolver capacity of up to $700.0 million. The Revolver will initially mature four years from the closing date, in June 2028, with two six-month as-of-right extension options available to extend the maturity to June 2029, subject to certain conditions. Borrowings under the Revolver will bear interest at a rate of Adjusted SOFR plus a spread of 1.20% to 1.80%, depending on the Company’s leverage ratio. Given the Company's current leverage ratio, the initial spread to Adjusted SOFR is set at 1.35%.
In the year ended December 31, 2024, the Company issued an aggregate of 5,491,217 shares of the Company's common stock in settlement of forward sales transactions through the 2019 ATM Program at a weighted average price per share of $12.95, raising net proceeds to the Company of approximately $71.1 million. As of the date of this release, the Company has no unsettled forward sales transactions outstanding under the 2019 ATM Program.
Acquisitions and Development Lending Activity
On March 4, 2024, the Company announced it has been awarded a 20-year non-cancelable lease for a 50,777 rentable square foot Federal courthouse in Flagstaff, Arizona. JUD - Flagstaff is expected to be a state-of-the-art, three-story courthouse that is constructed according to Level III security requirements. The steel framed, natural stone clad facility is designed utilizing the Crime Prevention Through Environmental Design (CPTED) principles and incorporates a number of important safety features, including perimeter fencing, natural and constructed physical barriers, required setbacks, and building security. The courthouse provides for secured parking under the building for the judges and U.S. Marshals and features a sallyport to transport defendants via a separate pathway up to prisoner intake and the courtrooms on the second and third floors. Three independent paths of travel are constructed throughout the entire facility to ensure defendants, judges, and the public never interact with one another outside the two District and Magistrate courtrooms. Once the development is complete, a brand-new 20-year firm term lease will commence with the GSA for the benefit of the United States Judiciary.
On April 12, 2024, the Company acquired a 135,200 square foot facility primarily leased to the Office of the Chief Information Officer (OCIO) and Office of Human Capital of the U.S. Immigration and Customs Enforcement (ICE), located near Dallas, Texas (“ICE - Dallas”). ICE - Dallas is a 95% leased facility that has been renovated to suit ICE’s OCIO and Office of Human Capital. The OCIO is responsible for delivering innovative information technology (IT) and business solutions that enable ICE to protect and secure the nation. The asset will help facilitate the OCIO’s mission critical IT initiatives to modernize ICE’s IT systems and adapt and conform to modern IT management disciplines. Two additional triple net private tenants occupy the remaining leased space under leases that feature annual lease escalations. The weighted average initial lease term for all three tenancies is 16.2 years and still carried a weighted average remaining lease term of 13.3 years at the time of its original announcement.
On May 7, 2024, the Company acquired a 27,840 square foot facility 100% leased to Homeland Security Investigations (HSI), the principal investigation arm within the Department of Homeland Security (DHS), with a 15-year lease that does not expire until March 2036, and located in Orlando, Florida (“HSI - Orlando”). HSI helps shield the nation from global threats to ensure Americans are safe and secure. The agency maintains operations in 235 cities nationwide and maintains an international presence that spans over 90 offices in more than 50 countries. HSI - Orlando also houses the Central Florida Intelligence Exchange, which is an all crime and all hazards fusion center, supporting nine counties with on-site staffing from multiple federal, state, and local agencies.
On May 9, 2024, the Company acquired a 49,420 square foot facility 100% leased to ICE and located in Orlando, Florida (“ICE - Orlando”). ICE - Orlando is a 49,420 square foot facility 100% leased to the U.S. Immigration and Customs Enforcement (ICE). The Orlando-based property features a 20-year lease that does not expire until August 2040. As one of the country’s premier federal law enforcement agencies, ICE is dedicated to detecting and dismantling transnational criminal networks that target the American people and threaten our industries, organizations, and financial system. The critical operations housed in this facility cover a significant portion of Central Florida.
On August 6, 2024, the Company entered into a construction loan agreement to lend up to $52.1 million to a developer (the “Borrower”) in connection with the re-development of an approximately 68,669 square foot Drug Enforcement Administration (DEA) facility located in Bedford, Massachusetts (“DEA - Bedford”). The construction loan will accrue interest monthly at a fixed market rate of 9.00% per annum and will be re-paid through draws made on the construction loan. The construction loan shall be repaid in full on or before August 31, 2027, the maturity date. Upon completion of the development, at the Company’s election, the Company has the option through a Membership Interest Purchase Agreement to purchase all of the issued and outstanding membership interest from the Borrower through a special purpose entity which solely holds the developed property.
On August 29, 2024, the Company acquired the previously announced 193,100 leased square foot outpatient facility leased to the VA located in Jacksonville, Florida. VA - Jacksonville is the final property to be acquired in the previously announced portfolio of 10 properties 100% leased to the VA under predominately 20-year firm term leases. VA - Jacksonville supports veterans within the surrounding region through primary and specialty healthcare services including prosthetics, physical therapy, occupational therapy, traumatic brain injury treatment, and rehabilitation medicine. The facility also features a domiciliary which provides housing to veterans who are otherwise homeless, require substance abuse treatment, or need additional full-time care. Over 1.4 million veterans reside in the State of Florida, representing the third largest veteran population in the nation.
On September 4, 2024, the Company acquired Northrop Grumman - Dayton, a build-to-suit facility that has been occupied by Northrop Grumman Systems Corporation since 2012 and incorporates robust security enhancements, including secure design standards, access control systems, and security cameras, all of which aid in the confidentiality and integrity of the tenant’s operations. The property sits adjacent to Gate 22B at the Wright-Patterson Air Force Base, the main access point for the Air Force Research Laboratory’s (AFRL) headquarters and the Air Force Institute of Technology. Dating back to its founding in 1917, the AFRL is the primary scientific research and development center for the Department of the Air Force and plays an integral role in leading the discovery, development, and integration of warfighting technologies for the country’s air, space, and cyberspace force. With a workforce of more than 12,500 employees across nine technology areas and 40 other operations across the globe, AFRL provides a diverse portfolio of science and technology ranging from fundamental to advanced research and technology development.
On October 10, 2024, the Company acquired a 104,136 square foot facility 100% leased to Northrop Grumman Systems Corporation located in Aurora, Colorado. The facility, developed in 2002, was built-to-suit for TRW Inc., an aerospace and automotive corporation acquired by Northrop Grumman in that same year. Approximately 70% of the three-floor buildout is constructed under secure design standards as required by the U.S. Government related to the tenant’s contracts with Buckley Space Force Base (“Buckley SFB”). This secure space is certified and accredited as meeting Director of National Intelligence security standards for the processing, storage, and discussion of sensitive compartmented information. The property is located immediately west of Buckley SFB, which contributes an estimated $2.5 billion annually to the local economy and provides strategic and theater missile warning to the United States and its International Partners. The base supports 3,500 active-duty members from every service, 4,000 National Guard personnel and Reservists, four commonwealth international partners, 2,400 civilians, 2,500 contractors, 94,000 retirees and approximately 40,000 veterans and dependents.
On November 21 2024, the Company acquired a 100,000 leased square foot facility 100% leased to the GSA for the beneficial use of the IRS, located in Ogden, Utah, a geographic hub for the agency. The highly secure, Level 4 facility sits on 13 acres and houses mission-critical operations related to the IRS’ tax submission processing and Digital Fraud Department, which was first created within the location. Holding Level 4 U.S. IRS - Ogden maintains 24/7 security system monitoring, bomb detection equipment, chemical sniffing K9s, gated access, guard stations, a receipt control and deposit center, and numerous pieces of specialized equipment to facilitate the IRS’ core functions including administering the Internal Revenue Code and pursuing instances of erroneous or fraudulent tax filings. IRS - Ogden is used as the IRS’s internal mail processing center and features a lease that expires in January 2029 and contains two five-year options that extend the lease through January 2039. This facility is one of only two IRS processing centers within the U.S. and maintains three staffing shifts, with up to 850 employees per shift onsite daily during high volume periods. To build upon its on-site operations,
the IRS is actively relocating its Imaging Department from its Cincinnati location to the Ogden facility and adding four new high-speed scanners.
On November 27, 2024, the Company acquired a 97% leased, combined 295,253 square foot campus across three assets leased primarily to the Wake County Public School System. The three properties serve as multi-purpose facilities, functioning as both operational headquarters and public-facing service centers that are critical to the tenant’s mission. WCPSS first occupied these facilities in 2011 under a lease that does not expire until 2034.
The three properties in the WCPSS campus include:
- Wake County I - Cary: 75,401 square foot facility 100% leased to WCPSS through June 30, 2034 with annual rent escalations
- Wake County II - Cary: 98,340 square foot facility 100% leased to WCPSS through June 30, 2034 with annual rent escalations
- Wake County III - Cary: 121,512 square foot facility 63% leased to WCPSS through June 30, 2034 with annual rent escalations, 31% leased to Jacobs Engineering with annual rent escalations, and 6% currently available for future leasing as a value-add opportunity
Dividend
On February 19, 2025, the Board of Directors of Easterly approved a cash dividend for the fourth quarter of 2024 in the amount of $0.265 per common share. The dividend will be payable March 17, 2025 to shareholders of record on March 5, 2025.
Subsequent Events
On January 8, 2025, the Company amended the 2016 Term Loan. Easterly extended the maturity date of the 2016 Term Loan from January 30, 2025 to January 28, 2028. Further, the Company may exercise at its discretion two one-year extension options, subject to certain conditions, thus extending the maturity date as late as January 28, 2030. Easterly further secured increased borrowing capacity on the accordion feature from $150.0 million to $250.0 million. In connection with the 2016 Term Loan, the Company also entered into an interest rate swap to effectively fix SOFR at 3.8569% annually. By executing this swap, the Company provides greater certainty over its interest rate exposure. Borrowings under the 2016 Term Loan will continue to bear interest at a rate of SOFR, a credit spread adjustment of 0.10%, plus a spread of 1.20% to 1.70%, depending on the Company's leverage ratio. Given the Company's current leverage ratio, the 2016 Term Loan’s initial spread to SOFR is set at 1.35%.
Guidance
This guidance is forward-looking and reflects management’s view of current and future market conditions. The Company’s actual results may differ materially from this guidance.
Outlook for the 12 Months Ending December 31, 2025
The Company is raising the lower end of its guidance for full-year 2025 Core FFO per share on a fully diluted basis at a range of $1.18 - $1.21.
| Low | High | |||
|---|---|---|---|---|
| Net income (loss) per share – fully diluted basis | $ | 0.20 | 0.23 | |
| Plus: Company’s share of real estate depreciation and amortization | $ | 0.97 | 0.97 | |
| FFO per share – fully diluted basis | $ | 1.17 | 1.20 | |
| Plus: Company’s share of depreciation of non-real estate assets | $ | 0.01 | 0.01 | |
| Core FFO per share – fully diluted basis | $ | 1.18 | 1.21 |
This guidance assumes $100 million of wholly owned acquisitions and $25 - $75 million of gross development-related investment during 2025.
Non-GAAP Supplemental Financial Measures
This section contains definitions of certain non-GAAP financial measures and other terms that the Company uses in this press release and, where applicable, the reasons why management believes these non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations and the other purposes for which management uses the measures. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. A reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included in this press release following the consolidated financial statements. Additional detail can be found in the Company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q, as well as other documents filed with or furnished to the Securities and Exchange Commission from time to time. We present certain financial information and metrics “at Easterly’s Share,” which is calculated on an entity-by-entity basis. “At Easterly’s Share” information, which we also refer to as being “at share,” “pro rata,” or “our share” is not, and is not intended to be, a presentation in accordance with GAAP.
Cash Available for Distribution (CAD) is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is calculated in accordance with the current Nareit definition as FFO minus normalized recurring real estate-related expenditures and other non-cash items, nonrecurring expenditures and the unconsolidated real estate venture’s allocated share of these adjustments. CAD is presented solely as a supplemental disclosure because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.
Core Funds from Operations (Core FFO) adjusts FFO to present an alternative measure of the Company's operating performance, which, when applicable, excludes items which it believes are not representative of ongoing operating results, such as liability management related costs (including losses on extinguishment of debt and modification costs), catastrophic event charges, depreciation of non-real estate assets, provision for credit losses, and the unconsolidated real estate venture's allocated share of these adjustments. In future periods, the Company may also exclude other items from Core FFO that it believes may help investors compare
its results. The Company believes Core FFO more accurately reflects the ongoing operational and financial performance of the Company's core business.
EBITDA is calculated as the sum of net income (loss) before interest expense, taxes, depreciation and amortization, (gain) loss on the sale of operating properties, impairment loss, and the unconsolidated real estate venture’s allocated share of these adjustments. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP, is not indicative of operating income or cash provided by operating activities as determined under GAAP and may be presented on a pro forma basis. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA the same way, the presentation of EBITDA may not be comparable to similarly titled measures of other companies.
Funds From Operations (FFO) is defined, in accordance with the Nareit FFO White Paper - 2018 Restatement, as net income (loss), calculated in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. FFO includes the Company’s share of FFO generated by unconsolidated affiliates. FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors.
Net Debt and Adjusted Net Debt Net Debt represents the Company's consolidated debt and its share of unconsolidated debt adjusted to exclude its share of unamortized premiums and discounts and deferred financing fees, less its share of cash and cash equivalents and property acquisition closing escrow, net of deposit. By excluding these items, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. The Company believes this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding its financial condition. Adjusted Net Debt is Net Debt reduced by 1) for each project under construction or in design, the lesser of i) outstanding lump-sum reimbursement amounts and ii) the cost to date, 2) 40% times the amount by which the cost to date exceeds total lump-sum reimbursement amounts for each project under construction or in design and 3) outstanding lump-sum reimbursement amounts for projects previously completed. These adjustments are made to 1) remove the estimated portion of each project under construction, in design or previously completed that has been financed with debt which may be repaid with outstanding cost reimbursement payments from the US Government and 2) remove the estimated portion of each project under construction or in design, in excess of total lump-sum reimbursements, that has been financed with debt but has not yet produced earnings. See page 25 of the Company’s Q4 2024 Supplemental Information Package for further information. The Company’s method of calculating Net Debt and Adjusted Net Debt may be different from methods used by other REITs and may be presented on a pro forma basis. Accordingly, the Company's method may not be comparable to such other REITs.
Other Definitions
Fully diluted basis assumes the exchange of all outstanding common units representing limited partnership interests in the Company’s operating partnership, or common units, the full vesting of all shares of restricted
stock, and the exchange of all earned and vested LTIP units in the Company’s operating partnership for shares of common stock on a one-for-one basis, which is not the same as the meaning of “fully diluted” under GAAP.
Conference Call Information
The Company will host a webcast and conference call at 11:00 am Eastern time on February 25, 2025 to review the fourth quarter 2024 performance, discuss recent events and conduct a question-and-answer session. A live webcast will be available in the Investor Relations section of the Company’s website. Shortly after the webcast, a replay of the webcast will be available on the Investor Relations section of the Company's website for up to twelve months. Please note that the full text of the press release and supplemental information package are also available through the Company’s website at ir.easterlyreit.com.
About Easterly Government Properties, Inc.
Easterly Government Properties, Inc. (NYSE: DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA). For further information on the company and its properties, please visit www.easterlyreit.com.
Contact:
Easterly Government Properties, Inc.
Lindsay S. Winterhalter
Senior Vice President, Investor Relations & Operations
202-596-3947
ir@easterlyreit.com
Forward Looking Statements
We make statements in this press release that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions and include our guidance with respect to Net income (loss) and Core FFO per share on a fully diluted basis. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement in this press release for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: risks associated with our dependence on the U.S. Government and its agencies for substantially all of our revenues, including credit risk and risk that the U.S. Government reduces its spending on real estate or that it changes its preference away from leased properties; risks associated with ownership and development of real estate; the risk of decreased
rental rates or increased vacancy rates; the loss of key personnel; general volatility of the capital and credit markets and the market price of our common stock; the risk we may lose one or more major tenants; difficulties in completing and successfully integrating acquisitions; failure of acquisitions or development projects to occur at anticipated levels or yield anticipated results; risks associated with our joint venture activities; risks associated with actual or threatened terrorist attacks; intense competition in the real estate market that may limit our ability to attract or retain tenants or re-lease space; insufficient amounts of insurance or exposure to events that are either uninsured or underinsured; uncertainties and risks related to adverse weather conditions, natural disasters and climate change; exposure to liability relating to environmental and health and safety matters; limited ability to dispose of assets because of the relative illiquidity of real estate investments and the nature of our assets; exposure to litigation or other claims; risks associated with breaches of our data security; risks associated with our indebtedness, including failure to refinance current or future indebtedness on favorable terms, or at all, failure to meet the restrictive covenants and requirements in our existing and new debt agreements, fluctuations in interest rates and increased costs to refinance or issue new debt; risks associated with derivatives or hedging activity; risks associated with mortgage debt or unsecured financing or the unavailability thereof, which could make it difficult to finance or refinance properties and could subject us to foreclosure; adverse impacts from any future pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies and our financial condition and results of operations; and other risks and uncertainties detailed in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (SEC) on February 25, 2025, and under the heading “Risk Factors” in our other public filings. In addition, our anticipated qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, or the Code, and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership. We assume no obligation to update publicly any forward looking statements, whether as a result of new information, future events or otherwise.
Balance Sheet
(Unaudited, in thousands, except share amounts)
| December 31, 2023 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Real estate properties, net | 2,572,095 | $ | 2,319,143 | ||
| Cash and cash equivalents | 19,353 | 9,381 | |||
| Restricted cash | 8,451 | 12,558 | |||
| Tenant accounts receivable | 71,172 | 66,274 | |||
| Investment in unconsolidated real estate venture | 316,521 | 284,544 | |||
| Real estate loan receivable, net | 34,081 | - | |||
| Intangible assets, net | 161,425 | 148,453 | |||
| Interest rate swaps | 717 | 1,994 | |||
| Prepaid expenses and other assets | 39,256 | 37,405 | |||
| Total assets | 3,223,071 | $ | 2,879,752 | ||
| Liabilities | |||||
| Revolving credit facility | 274,550 | 79,000 | |||
| Term loan facilities, net | 274,009 | 299,108 | |||
| Notes payable, net | 894,676 | 696,532 | |||
| Mortgage notes payable, net | 155,586 | 220,195 | |||
| Intangible liabilities, net | 14,885 | 12,480 | |||
| Deferred revenue | 120,977 | 82,712 | |||
| Accounts payable, accrued expenses and other liabilities | 101,271 | 80,209 | |||
| Total liabilities | 1,835,954 | 1,470,236 | |||
| Equity | |||||
| Common stock, par value 0.01, 200,000,000 shares authorized, 107,970,559 and 100,973,247 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively | 1,080 | 1,010 | |||
| Additional paid-in capital | 1,873,545 | 1,783,338 | |||
| Retained earnings | 131,854 | 112,301 | |||
| Cumulative dividends | (686,044 | ) | (576,319 | ) | |
| Accumulated other comprehensive income | 683 | 1,871 | |||
| Total stockholders' equity | 1,321,118 | 1,322,201 | |||
| Non-controlling interest in Operating Partnership | 65,999 | 87,315 | |||
| Total equity | 1,387,117 | 1,409,516 | |||
| Total liabilities and equity | 3,223,071 | $ | 2,879,752 |
All values are in US Dollars.
Income Statement
(Unaudited, in thousands, except share and per share amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||
| Revenues | ||||||||||||
| Rental income | $ | 74,136 | $ | 69,795 | $ | 289,601 | $ | 273,906 | ||||
| Tenant reimbursements | 2,050 | 1,629 | 6,544 | 8,908 | ||||||||
| Asset management income | 622 | 550 | 2,302 | 2,110 | ||||||||
| Other income | 1,442 | 646 | 3,605 | 2,303 | ||||||||
| Total revenues | 78,250 | 72,620 | 302,052 | 287,227 | ||||||||
| Expenses | ||||||||||||
| Property operating | 18,731 | 17,701 | 70,151 | 71,964 | ||||||||
| Real estate taxes | 6,852 | 7,560 | 30,924 | 30,461 | ||||||||
| Depreciation and amortization | 24,652 | 23,347 | 96,333 | 91,292 | ||||||||
| Acquisition costs | 451 | 435 | 1,878 | 1,661 | ||||||||
| Corporate general and administrative | 6,418 | 6,692 | 24,450 | 27,118 | ||||||||
| Provision for credit losses(1) | 49 | - | 1,527 | - | ||||||||
| Total expenses | 57,153 | 55,735 | 225,263 | 222,496 | ||||||||
| Other income (expense) | ||||||||||||
| Income from unconsolidated real estate venture | 1,684 | 1,332 | 6,051 | 5,498 | ||||||||
| Interest expense, net | (17,223 | ) | (13,430 | ) | (62,433 | ) | (49,169 | ) | ||||
| Gain on the sale of real estate | 171 | - | 171 | - | ||||||||
| Net income | 5,729 | 4,787 | 20,578 | 21,060 | ||||||||
| Non-controlling interest in Operating Partnership | (276 | ) | (351 | ) | (1,025 | ) | (2,256 | ) | ||||
| Net income available to Easterly Government | ||||||||||||
| Properties, Inc. | $ | 5,453 | $ | 4,436 | $ | 19,553 | $ | 18,804 | ||||
| Net income available to Easterly Government | ||||||||||||
| Properties, Inc. per share: | ||||||||||||
| Basic | $ | 0.05 | $ | 0.04 | $ | 0.18 | $ | 0.19 | ||||
| Diluted | $ | 0.05 | $ | 0.04 | $ | 0.18 | $ | 0.19 | ||||
| Weighted-average common shares outstanding: | ||||||||||||
| Basic | 105,744,868 | 98,982,693 | 103,443,951 | 94,264,166 | ||||||||
| Diluted | 106,110,415 | 99,334,449 | 103,758,546 | 94,556,055 | ||||||||
| Net income, per share - fully diluted basis | $ | 0.05 | $ | 0.04 | $ | 0.19 | $ | 0.20 | ||||
| Weighted average common shares outstanding - | ||||||||||||
| fully diluted basis | 111,136,991 | 107,424,269 | 108,910,534 | 105,621,563 |
(1) Provision for credit loss amounts previously classified within Corporate general and administrative have been reclassified to Provision for credit losses on our Consolidated Statements of Operations to conform with the current period presentation.
EBITDA
(Unaudited, in thousands)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||
| Net income | $ | 5,729 | $ | 4,787 | $ | 20,578 | $ | 21,060 | ||
| Depreciation and amortization | 24,652 | 23,347 | 96,333 | 91,292 | ||||||
| Interest expense | 17,223 | 13,430 | 62,433 | 49,169 | ||||||
| Tax expense | 102 | 302 | (356 | ) | 1,105 | |||||
| Gain on the sale of real estate | (171 | ) | - | (171 | ) | - | ||||
| Unconsolidated real estate venture allocated share of above adjustments | 2,335 | 2,087 | 8,489 | 7,929 | ||||||
| EBITDA | $ | 49,870 | $ | 43,953 | $ | 187,306 | $ | 170,555 | ||
| Pro forma adjustments(1) | 1,442 | |||||||||
| Pro forma EBITDA | $ | 51,312 |
(1) Pro forma assuming a full quarter of operations from the five operating properties acquired in the fourth quarter of 2024.
FFO and CAD
(Unaudited, in thousands, except share and per share amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||
| Net income | $ | 5,729 | $ | 4,787 | $ | 20,578 | $ | 21,060 | ||||
| Depreciation of real estate assets | 24,400 | 23,094 | 95,326 | 90,288 | ||||||||
| Gain on the sale of real estate | (171 | ) | - | (171 | ) | - | ||||||
| Unconsolidated real estate venture allocated share of above adjustments | 2,272 | 2,002 | 8,256 | 7,639 | ||||||||
| FFO | $ | 32,230 | $ | 29,883 | $ | 123,989 | $ | 118,987 | ||||
| Adjustments to FFO: | ||||||||||||
| Loss on extinguishment of debt | - | - | 260 | 14 | ||||||||
| Provision for credit losses | 49 | - | 1,527 | - | ||||||||
| Natural disaster event expense, net of recovery | 96 | (17 | ) | 95 | 69 | |||||||
| Depreciation of non-real estate assets | 252 | 252 | 1,007 | 1,003 | ||||||||
| Unconsolidated real estate venture allocated share of above adjustments | 16 | 16 | 66 | 66 | ||||||||
| Core FFO | $ | 32,643 | $ | 30,134 | $ | 126,944 | $ | 120,139 | ||||
| FFO, per share - fully diluted basis | $ | 0.29 | $ | 0.28 | $ | 1.14 | $ | 1.13 | ||||
| Core FFO, per share - fully diluted basis | $ | 0.29 | $ | 0.28 | $ | 1.17 | $ | 1.14 | ||||
| Core FFO | $ | 32,643 | $ | 30,134 | $ | 126,944 | $ | 120,139 | ||||
| Straight-line rent and other non-cash adjustments | 134 | (1,236 | ) | (2,989 | ) | (3,897 | ) | |||||
| Amortization of above-/below-market leases | (471 | ) | (678 | ) | (1,935 | ) | (2,730 | ) | ||||
| Amortization of deferred revenue | (1,762 | ) | (1,571 | ) | (6,887 | ) | (6,249 | ) | ||||
| Non-cash interest expense | 750 | 272 | 2,108 | 1,024 | ||||||||
| Non-cash compensation | 1,002 | 1,122 | 3,211 | 5,747 | ||||||||
| Natural disaster event expense, net of recovery | (96 | ) | 17 | (95 | ) | (69 | ) | |||||
| Principal amortization | (1,115 | ) | (1,090 | ) | (4,403 | ) | (4,316 | ) | ||||
| Maintenance capital expenditures | (5,536 | ) | (4,198 | ) | (13,745 | ) | (12,474 | ) | ||||
| Contractual tenant improvements | (362 | ) | (771 | ) | (1,222 | ) | (2,139 | ) | ||||
| Unconsolidated real estate venture allocated share of above adjustments | (102 | ) | (139 | ) | (109 | ) | (201 | ) | ||||
| Cash Available for Distribution (CAD) | $ | 25,085 | $ | 21,862 | $ | 100,878 | $ | 94,835 | ||||
| Weighted average common shares outstanding - fully diluted basis | 111,136,991 | 107,424,269 | 108,910,534 | 105,621,563 |
Net Debt and Adjusted Net Debt
(Unaudited, in thousands)
| December 31, 2024 | |||
|---|---|---|---|
| Total Debt(1) | $ | 1,605,348 | |
| Less: Cash and cash equivalents | (20,803 | ) | |
| Net Debt | $ | 1,584,545 | |
| Less: Adjustment for development projects(2) | (131,824 | ) | |
| Adjusted Net Debt | $ | 1,452,721 |
1 Excludes unamortized premiums / discounts and deferred financing fees.
2 See definition of Adjusted Net Debt on Page 7 of this release.
EX-99.2
Exhibit 99.2
| Disclaimers |
|---|
Forward-looking Statement
We make statements in this Supplemental Information Package that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement in this Supplemental Information Package for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: risks associated with our dependence on the U.S. Government and its agencies for substantially all of our revenues, including credit risk and risk that the U.S. Government reduces its spending on real estate or that it changes its preference away from leased properties; risks associated with ownership and development of real estate; the risk of decreased rental rates or increased vacancy rates; the loss of key personnel; general volatility of the capital and credit markets and the market price of our common stock; the risk we may lose one or more major tenants; difficulties in completing and successfully integrating acquisitions; failure of acquisitions or development projects to occur at anticipated levels or yield anticipated results; risks associated with our joint venture activities; risks associated with actual or threatened terrorist attacks; intense competition in the real estate market that may limit our ability to attract or retain tenants or re-lease space; insufficient amounts of insurance or exposure to events that are either uninsured or underinsured; uncertainties and risks related to adverse weather conditions, natural disasters and climate change; exposure to liability relating to environmental and health and safety matters; limited ability to dispose of assets because of the relative illiquidity of real estate investments and the nature of our assets; exposure to litigation or other claims; risks associated with breaches of our data security; risks associated with our indebtedness, including failure to refinance current or future indebtedness on favorable terms, or at all, failure to meet the restrictive covenants and requirements in our existing and new debt agreements, fluctuations in interest rates and increased costs to refinance or issue new debt; risks associated with derivatives or hedging activity; risks associated with mortgage debt or unsecured financing or the unavailability thereof, which could make it difficult to finance or refinance properties and could subject us to foreclosure; adverse impacts from any future pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies and the financial condition and results of operations of the Company; and other risks and uncertainties detailed in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission, or the SEC, on February 25, 2025 and included under the heading “Risk Factors” in our other public filings. In addition, our qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, or the Code, and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership. We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Ratings
Ratings are not recommendations to buy, sell or hold the Company’s securities.
The following discussion related to the consolidated financial statements of the Company should be read in conjunction with the financial statements for the quarter ended December 31, 2024 that will be released in our Form 10-K to be filed with the SEC on or about February 25, 2025.
| Supplemental Definitions |
|---|
This section contains definitions of certain non-GAAP financial measures and other terms that the Company uses in this Supplemental Information Package and, where applicable, the reasons why management believes these non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations and the other purposes for which management uses the measures. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. Additional detail can be found in the Company’s most recent quarterly report on Form 10-Q and the Company’s most recent annual report on Form 10-K, as well as other documents filed with or furnished to the SEC from time to time. We present certain financial information and metrics “at Easterly’s Share,” which is calculated on an entity-by-entity basis. “At Easterly’s Share” information, which we also refer to as being “at share,” “pro rata,” “our pro rata share” or “our share” is not, and is not intended to be, a presentation in accordance with GAAP.
Annualized lease income is defined as the annualized contractual base rent for the last month in a specified period, plus the annualized straight-line rent adjustments for the last month in such period and the annualized net expense reimbursements earned by us for the last month in such period.
Cash Available for Distribution (CAD) is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is calculated in accordance with the current Nareit definition as FFO minus normalized recurring real estate-related expenditures and other non-cash items, nonrecurring expenditures and the unconsolidated real estate venture’s allocated share of these adjustments. CAD is presented solely as a supplemental disclosure because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.
Cash fixed charge coverage ratio is calculated as EBITDA divided by the sum of principal amortization and interest expense, excluding amortization of premiums / discounts and deferred financing fees, for the most recent quarter.
Cash interest coverage ratio is calculated as EBITDA divided by interest expense, excluding amortization of premiums / discounts and deferred financing fees, for the most recent quarter.
Core Funds from Operations (Core FFO) adjusts FFO to present an alternative measure of the Company's operating performance, which, when applicable, excludes items which it believes are not representative of ongoing operating results, such as liability management related costs (including losses on extinguishment of debt and modification costs), catastrophic event charges, depreciation of non-real estate assets, provision for credit losses, and the unconsolidated real estate venture's allocated share of these adjustments. In future periods, the Company may also exclude other items from Core FFO that it believes may help investors compare its results. The Company believes Core FFO more accurately reflects the ongoing operational and financial performance of the Company's core business.
EBITDA is calculated as the sum of net income (loss) before interest expense, taxes, depreciation and amortization, (gain) loss on the sale of operating properties, impairment loss, and the unconsolidated real estate venture’s allocated share of these adjustments. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP, is not indicative of operating income or cash provided by operating activities as determined under GAAP and may be presented on a pro forma basis. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA the same way, the presentation of EBITDA may not be comparable to similarly titled measures of other companies.
Fully diluted basis assumes the exchange of all outstanding common units representing limited partnership interests in the Company’s operating partnership, or common units, the full vesting of all shares of restricted stock, and the exchange of all earned and vested LTIP units in the Company’s operating partnership for shares of common stock on a one-for-one basis, which is not the same as the meaning of “fully diluted” under GAAP.
| Supplemental Definitions |
|---|
Funds From Operations (FFO) is defined, in accordance with the Nareit FFO White Paper - 2018 Restatement, as net income (loss), calculated in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. FFO includes the Company’s share of FFO generated by unconsolidated affiliates. FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors.
Net Debt and Adjusted Net Debt Net Debt represents the Company's consolidated debt and its share of unconsolidated debt adjusted to exclude its share of unamortized premiums and discounts and deferred financing fees, less its share of cash and cash equivalents and property acquisition closing escrow, net of deposit. By excluding these items, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. The Company believes this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding its financial condition. Adjusted Net Debt is Net Debt reduced by 1) for each project under construction or in design, the lesser of i) outstanding lump-sum reimbursement amounts and ii) the cost to date, 2) 40% times the amount by which the cost to date exceeds total lump-sum reimbursement amounts for each project under construction or in design and 3) outstanding lump-sum reimbursement amounts for projects previously completed. These adjustments are made to 1) remove the estimated portion of each project under construction, in design or previously completed that has been financed with debt which may be repaid with outstanding cost reimbursement payments from the US Government and 2) remove the estimated portion of each project under construction or in design, in excess of total lump-sum reimbursements, that has been financed with debt but has not yet produced earnings. See page 25 for further information. The Company’s method of calculating Net Debt and Adjusted Net Debt may be different from methods used by other REITs and may be presented on a pro forma basis. Accordingly, the Company's method may not be comparable to such other REITs.
Net Operating Income (NOI) and Cash NOI NOI is calculated as net income adjusted to exclude depreciation and amortization, acquisition costs, corporate general and administrative costs, provision for credit losses, interest expense, gains or losses from sales of property, impairment loss, and the unconsolidated real estate venture’s allocated share of these adjustments. Cash NOI excludes from NOI straight-line rent, amortization of above-/below-market leases, amortization of deferred revenue (which results from landlord assets funded by tenants), and the unconsolidated real estate venture’s allocated share of these adjustments. NOI and Cash NOI presented by the Company may not be comparable to NOI and Cash NOI reported by other REITs that define NOI and Cash NOI differently. The Company believes that NOI and Cash NOI provide investors with useful measures of the operating performance of its properties. NOI and Cash NOI should not be considered an alternative to net income as an indication of the Company's performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.
| Table of Contents | |||
|---|---|---|---|
| Overview | |||
| --- | --- | ||
| Corporate Information and Analyst Coverage | 6 | ||
| Executive Summary | 7 | ||
| Corporate Financials | |||
| Balance Sheets | 8 | ||
| Income Statements | 9 | ||
| Net Operating Income | 10 | ||
| EBITDA | 11 | ||
| FFO and CAD | 12 | ||
| Unconsolidated Real Estate Venture | 13 | ||
| Debt | |||
| Debt Schedules | 15 | ||
| Debt Maturities | 17 | ||
| Properties | |||
| Leased Operating Property Overview | 18 | ||
| Tenants | 22 | ||
| Lease Expirations | 24 | ||
| Summary of Re/Development Projects | 25 | ||
| Corporate Information and Analyst Coverage | |||
| --- | |||
| Corporate Information | |||
| --- | --- | --- | --- |
| Corporate Headquarters | Stock Exchange Listing | Information Requests | Investor Relations |
| 2001 K Street NW | New York Stock Exchange | Please contact ir@easterlyreit.com | Lindsay Winterhalter |
| Suite 775 North | or 202-596-3947 to request an | Senior VP, Investor Relations & Operations | |
| Washington, DC 20006 | Ticker | Investor Relations package | |
| 202-595-9500 | DEA | ||
| Executive Team | Board of Directors | ||
| --- | --- | --- | --- |
| Darrell Crate, President & CEO | Mark Bauer, EVP Development | William Binnie, Chairman | Emil Henry Jr. |
| Michael Ibe, Vice-Chairman & EVP | Franklin Logan, GC | Darrell Crate | Michael Ibe |
| Allison Marino, CFO & CAO | Andrew Pulliam, EVP Acquisitions | Cynthia Fisher | Tara Innes |
| Stuart Burns, EVP Government Relations | Scott Freeman | ||
| Nick Nimerala, SVP Chief Asset Officer | |||
| Equity Research Coverage | |||
| --- | --- | --- | |
| Citigroup | Raymond James & Associates | RBC Capital Markets | |
| Michael A. Griffin | Jonathan Hughes | Michael Carroll | |
| 212-816-5871 | 727-567-2438 | 440-715-2649 | |
| Jefferies | Truist Securities | Compass Point Research & Trading, LLC | |
| Peter Abramowitz | Michael R. Lewis | Merrill Ross | |
| 212-336-7241 | 212-319-5659 | 202-534-1392 | |
| BMO Capital Markets | |||
| John P. Kim | |||
| 212-885-4115 |
Any opinions, estimates, forecasts or predictions regarding Easterly Government Properties, Inc.’s performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Easterly Government Properties, Inc. or its management. Easterly Government Properties, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such opinions, estimates, forecasts or predictions.
| Executive Summary<br><br>(In thousands, except share and per share amounts) | |||||||
|---|---|---|---|---|---|---|---|
| Outstanding Classes of Stock and Partnership Units - Fully Diluted Basis | At December 31, 2024 | Earnings | Three months ended December 31, 2023 | ||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Common shares | 107,891,988 | Net income available to Easterly Government Properties, Inc. | 5,453 | $ | 4,436 | ||
| Unvested restricted shares | 78,571 | Net income available to Easterly Government Properties, Inc. | |||||
| Common partnership and vested LTIP units | 5,393,886 | per share: | |||||
| Total - fully diluted basis | 113,364,445 | Basic | 0.05 | $ | 0.04 | ||
| Diluted | 0.05 | $ | 0.04 | ||||
| Market Capitalization | At December 31, 2024 | Net income | 5,729 | $ | 4,787 | ||
| Price of Common Shares | $ | 11.36 | Net income, per share - fully diluted basis | 0.05 | $ | 0.04 | |
| Total equity market capitalization - fully diluted basis | $ | 1,287,820 | Funds From Operations (FFO) | 32,230 | $ | 29,883 | |
| Net Debt | 1,584,545 | FFO, per share - fully diluted basis | 0.29 | $ | 0.28 | ||
| Total enterprise value | $ | 2,872,365 | |||||
| Core FFO | 32,643 | $ | 30,134 | ||||
| Core FFO, per share - fully diluted basis | 0.29 | $ | 0.28 | ||||
| Ratios | At December 31, 2024 | ||||||
| Net debt to total enterprise value | 55.2 | % | Cash Available for Distribution (CAD) | 25,085 | $ | 21,862 | |
| Net debt to annualized quarterly EBITDA | 7.9 | x | |||||
| Adjusted Net Debt to annualized quarterly pro forma EBITDA | 7.1 | x | Liquidity | ||||
| Cash interest coverage ratio | 3.0 | x | Cash and cash equivalents | $ | 20,803 | ||
| Cash fixed charge coverage ratio | 2.8 | x | Available under 400 million senior unsecured 2024 revolving credit facility(1) | $ | 125,325 |
All values are in US Dollars.
(1) 2024 revolving credit facility has an accordion feature that provides additional capacity, subject to syndication of the increase and the satisfaction of customary terms and conditions, of up to $300 million, for a total revolving credit facility size of not more than $700 million.
| Balance Sheets<br><br>(Unaudited, in thousands, except share amounts) | |||||
|---|---|---|---|---|---|
| December 31, 2023 | |||||
| --- | --- | --- | --- | --- | --- |
| Assets | |||||
| Real estate properties, net | 2,572,095 | $ | 2,319,143 | ||
| Cash and cash equivalents | 19,353 | 9,381 | |||
| Restricted cash | 8,451 | 12,558 | |||
| Tenant accounts receivable | 71,172 | 66,274 | |||
| Investment in unconsolidated real estate venture | 316,521 | 284,544 | |||
| Real estate loan receivable, net | 34,081 | - | |||
| Intangible assets, net | 161,425 | 148,453 | |||
| Interest rate swaps | 717 | 1,994 | |||
| Prepaid expenses and other assets | 39,256 | 37,405 | |||
| Total assets | 3,223,071 | $ | 2,879,752 | ||
| Liabilities | |||||
| Revolving credit facility | 274,550 | 79,000 | |||
| Term loan facilities, net | 274,009 | 299,108 | |||
| Notes payable, net | 894,676 | 696,532 | |||
| Mortgage notes payable, net | 155,586 | 220,195 | |||
| Intangible liabilities, net | 14,885 | 12,480 | |||
| Deferred revenue | 120,977 | 82,712 | |||
| Accounts payable, accrued expenses and other liabilities | 101,271 | 80,209 | |||
| Total liabilities | 1,835,954 | 1,470,236 | |||
| Equity | |||||
| Common stock, par value 0.01, 200,000,000 shares authorized, 107,970,559 and 100,973,247 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively | 1,080 | 1,010 | |||
| Additional paid-in capital | 1,873,545 | 1,783,338 | |||
| Retained earnings | 131,854 | 112,301 | |||
| Cumulative dividends | (686,044 | ) | (576,319 | ) | |
| Accumulated other comprehensive income | 683 | 1,871 | |||
| Total stockholders' equity | 1,321,118 | 1,322,201 | |||
| Non-controlling interest in Operating Partnership | 65,999 | 87,315 | |||
| Total equity | 1,387,117 | 1,409,516 | |||
| Total liabilities and equity | 3,223,071 | $ | 2,879,752 |
All values are in US Dollars.
| Income Statements<br><br>(Unaudited, in thousands, except share and per share amounts) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Twelve Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||
| Revenues | ||||||||||||
| Rental income | $ | 74,136 | $ | 69,795 | $ | 289,601 | $ | 273,906 | ||||
| Tenant reimbursements | 2,050 | 1,629 | 6,544 | 8,908 | ||||||||
| Asset management income | 622 | 550 | 2,302 | 2,110 | ||||||||
| Other income | 1,442 | 646 | 3,605 | 2,303 | ||||||||
| Total revenues | 78,250 | 72,620 | 302,052 | 287,227 | ||||||||
| Expenses | ||||||||||||
| Property operating | 18,731 | 17,701 | 70,151 | 71,964 | ||||||||
| Real estate taxes | 6,852 | 7,560 | 30,924 | 30,461 | ||||||||
| Depreciation and amortization | 24,652 | 23,347 | 96,333 | 91,292 | ||||||||
| Acquisition costs | 451 | 435 | 1,878 | 1,661 | ||||||||
| Corporate general and administrative | 6,418 | 6,692 | 24,450 | 27,118 | ||||||||
| Provision for credit losses(1) | 49 | - | 1,527 | - | ||||||||
| Total expenses | 57,153 | 55,735 | 225,263 | 222,496 | ||||||||
| Other income (expense) | ||||||||||||
| Income from unconsolidated real estate venture | 1,684 | 1,332 | 6,051 | 5,498 | ||||||||
| Interest expense, net | (17,223 | ) | (13,430 | ) | (62,433 | ) | (49,169 | ) | ||||
| Gain on the sale of real estate | 171 | - | 171 | - | ||||||||
| Net income | 5,729 | 4,787 | 20,578 | 21,060 | ||||||||
| Non-controlling interest in Operating Partnership | (276 | ) | (351 | ) | (1,025 | ) | (2,256 | ) | ||||
| Net income available to Easterly Government | ||||||||||||
| Properties, Inc. | $ | 5,453 | $ | 4,436 | $ | 19,553 | $ | 18,804 | ||||
| Net income available to Easterly Government | ||||||||||||
| Properties, Inc. per share: | ||||||||||||
| Basic | $ | 0.05 | $ | 0.04 | $ | 0.18 | $ | 0.19 | ||||
| Diluted | $ | 0.05 | $ | 0.04 | $ | 0.18 | $ | 0.19 | ||||
| Weighted-average common shares outstanding: | ||||||||||||
| Basic | 105,744,868 | 98,982,693 | 103,443,951 | 94,264,166 | ||||||||
| Diluted | 106,110,415 | 99,334,449 | 103,758,546 | 94,556,055 | ||||||||
| Net income, per share - fully diluted basis | $ | 0.05 | $ | 0.04 | $ | 0.19 | $ | 0.20 | ||||
| Weighted average common shares outstanding - | ||||||||||||
| fully diluted basis | 111,136,991 | 107,424,269 | 108,910,534 | 105,621,563 |
(1) Provision for credit loss amounts previously classified within Corporate general and administrative have been reclassified to Provision for credit losses on our Consolidated Statements of Operations to conform with the current period presentation.
| Net Operating Income<br><br>(Unaudited, in thousands) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Twelve Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||
| Net income | $ | 5,729 | $ | 4,787 | $ | 20,578 | $ | 21,060 | ||||
| Depreciation and amortization | 24,652 | 23,347 | 96,333 | 91,292 | ||||||||
| Acquisition costs | 451 | 435 | 1,878 | 1,661 | ||||||||
| Corporate general and administrative | 6,418 | 6,692 | 24,450 | 27,118 | ||||||||
| Provision for credit losses | 49 | - | 1,527 | - | ||||||||
| Interest expense | 17,223 | 13,430 | 62,433 | 49,169 | ||||||||
| Gain on the sale of real estate | (171 | ) | - | (171 | ) | - | ||||||
| Unconsolidated real estate venture allocated share of above adjustments | 2,391 | 2,053 | 8,585 | 7,925 | ||||||||
| Net Operating Income | 56,742 | 50,744 | 215,613 | 198,225 | ||||||||
| Adjustments to Net Operating Income: | ||||||||||||
| Straight-line rent and other non-cash adjustments | 151 | (1,230 | ) | (2,936 | ) | (4,012 | ) | |||||
| Amortization of above-/below-market leases | (471 | ) | (678 | ) | (1,935 | ) | (2,730 | ) | ||||
| Amortization of deferred revenue | (1,762 | ) | (1,571 | ) | (6,887 | ) | (6,249 | ) | ||||
| Unconsolidated real estate venture allocated share of above adjustments | (1 | ) | (7 | ) | 43 | (125 | ) | |||||
| Cash Net Operating Income | $ | 54,659 | $ | 47,258 | $ | 203,898 | $ | 185,109 | ||||
| EBITDA<br><br>(Unaudited, in thousands) | ||||||||||||
| --- | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||
| Net income | $ | 5,729 | $ | 4,787 | $ | 20,578 | $ | 21,060 | ||||
| Depreciation and amortization | 24,652 | 23,347 | 96,333 | 91,292 | ||||||||
| Interest expense | 17,223 | 13,430 | 62,433 | 49,169 | ||||||||
| Tax expense | 102 | 302 | (356 | ) | 1,105 | |||||||
| Gain on the sale of real estate | (171 | ) | - | (171 | ) | - | ||||||
| Unconsolidated real estate venture allocated share of above adjustments | 2,335 | 2,087 | 8,489 | 7,929 | ||||||||
| EBITDA | $ | 49,870 | $ | 43,953 | $ | 187,306 | $ | 170,555 | ||||
| Pro forma adjustments(1) | 1,442 | |||||||||||
| Pro forma EBITDA | $ | 51,312 |
(1) Pro forma assuming a full quarter of operations from the five operating properties acquired in the fourth quarter of 2024.
| FFO and CAD<br><br>(Unaudited, in thousands, except share and per share amounts) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Twelve Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||
| Net income | $ | 5,729 | $ | 4,787 | $ | 20,578 | $ | 21,060 | ||||
| Depreciation of real estate assets | 24,400 | 23,094 | 95,326 | 90,288 | ||||||||
| Gain on the sale of real estate | (171 | ) | - | (171 | ) | - | ||||||
| Unconsolidated real estate venture allocated share of above adjustments | 2,272 | 2,002 | 8,256 | 7,639 | ||||||||
| FFO | $ | 32,230 | $ | 29,883 | $ | 123,989 | $ | 118,987 | ||||
| Adjustments to FFO: | ||||||||||||
| Loss on extinguishment of debt | - | - | 260 | 14 | ||||||||
| Provision for credit losses | 49 | - | 1,527 | - | ||||||||
| Natural disaster event expense, net of recovery | 96 | (17 | ) | 95 | 69 | |||||||
| Depreciation of non-real estate assets | 252 | 252 | 1,007 | 1,003 | ||||||||
| Unconsolidated real estate venture allocated share of above adjustments | 16 | 16 | 66 | 66 | ||||||||
| Core FFO | $ | 32,643 | $ | 30,134 | $ | 126,944 | $ | 120,139 | ||||
| FFO, per share - fully diluted basis | $ | 0.29 | $ | 0.28 | $ | 1.14 | $ | 1.13 | ||||
| Core FFO, per share - fully diluted basis | $ | 0.29 | $ | 0.28 | $ | 1.17 | $ | 1.14 | ||||
| Core FFO | $ | 32,643 | $ | 30,134 | $ | 126,944 | $ | 120,139 | ||||
| Straight-line rent and other non-cash adjustments | 134 | (1,236 | ) | (2,989 | ) | (3,897 | ) | |||||
| Amortization of above-/below-market leases | (471 | ) | (678 | ) | (1,935 | ) | (2,730 | ) | ||||
| Amortization of deferred revenue | (1,762 | ) | (1,571 | ) | (6,887 | ) | (6,249 | ) | ||||
| Non-cash interest expense | 750 | 272 | 2,108 | 1,024 | ||||||||
| Non-cash compensation | 1,002 | 1,122 | 3,211 | 5,747 | ||||||||
| Natural disaster event expense, net of recovery | (96 | ) | 17 | (95 | ) | (69 | ) | |||||
| Principal amortization | (1,115 | ) | (1,090 | ) | (4,403 | ) | (4,316 | ) | ||||
| Maintenance capital expenditures | (5,536 | ) | (4,198 | ) | (13,745 | ) | (12,474 | ) | ||||
| Contractual tenant improvements | (362 | ) | (771 | ) | (1,222 | ) | (2,139 | ) | ||||
| Unconsolidated real estate venture allocated share of above adjustments | (102 | ) | (139 | ) | (109 | ) | (201 | ) | ||||
| Cash Available for Distribution (CAD) | $ | 25,085 | $ | 21,862 | $ | 100,878 | $ | 94,835 | ||||
| Weighted average common shares outstanding - fully diluted basis | 111,136,991 | 107,424,269 | 108,910,534 | 105,621,563 |
Unconsolidated Real Estate Venture
(Unaudited, in thousands)
| Balance Sheet Information | Balance Sheet | Easterly's Share(2) | ||
|---|---|---|---|---|
| December 31, 2024 | December 31, 2024 | |||
| Real estate properties - net | $ | 501,938 | $ | 266,027 |
| Total assets | 607,746 | 322,114 | ||
| Total liabilities | 11,142 | 5,905 | ||
| Total preferred stockholders' equity | 102 | 63 | ||
| Total common stockholders' equity | 596,502 | 316,146 | ||
| Basis difference(1) | - | 375 | ||
| Total equity | $ | 596,604 | $ | 316,521 |
(1) This amount represents the aggregate difference between the Company’s historical cost basis and basis reflected at the joint venture level.
(2) The Company owns 53.0% of the properties through the unconsolidated joint venture.
| Unconsolidated Real Estate Venture (Cont.)<br><br>(Unaudited, in thousands) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement Information | Three Months Ended | Easterly's Share(1) | Twelve Months Ended | Easterly's Share(1) | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31, 2024 | December 31, 2024 | December 31, 2024 | December 31, 2024 | |||||||||
| Revenues | ||||||||||||
| Rental income | $ | 12,614 | $ | 6,685 | $ | 45,336 | $ | 24,028 | ||||
| Other income | 41 | 22 | 181 | 96 | ||||||||
| Total Revenues | 12,655 | 6,707 | 45,517 | 24,124 | ||||||||
| Operating expenses | ||||||||||||
| Property operating | 2,758 | 1,462 | 9,543 | 5,057 | ||||||||
| Real estate taxes | 1,604 | 850 | 6,069 | 3,216 | ||||||||
| Depreciation and amortization | 4,318 | 2,289 | 15,701 | 8,322 | ||||||||
| Acquisition costs | (7 | ) | (4 | ) | (7 | ) | (4 | ) | ||||
| Asset management fees | 623 | 330 | 2,302 | 1,221 | ||||||||
| Corporate general and administrative | 158 | 84 | 337 | 179 | ||||||||
| Total expenses | 9,454 | 5,011 | 33,945 | 17,991 | ||||||||
| Other expenses | ||||||||||||
| Interest expense - net | (41 | ) | (22 | ) | (164 | ) | (88 | ) | ||||
| Distributions to preferred shareholders | - | (4 | ) | - | (15 | ) | ||||||
| Net income | $ | 3,160 | $ | 1,670 | $ | 11,408 | $ | 6,030 | ||||
| Depreciation and amortization | 4,318 | 2,289 | 15,701 | 8,322 | ||||||||
| Interest expense - net | 41 | 22 | 164 | 88 | ||||||||
| Tax expense | 45 | 24 | 147 | 79 | ||||||||
| EBITDA | $ | 7,564 | $ | 4,005 | $ | 27,420 | $ | 14,519 | ||||
| Net income | $ | 3,160 | $ | 1,670 | $ | 11,408 | $ | 6,030 | ||||
| Depreciation of real estate assets | 4,286 | 2,272 | 15,577 | 8,256 | ||||||||
| FFO | $ | 7,446 | $ | 3,942 | $ | 26,985 | $ | 14,286 | ||||
| Adjustments to FFO: | ||||||||||||
| Depreciation of non-real estate assets | 32 | 16 | 125 | 66 | ||||||||
| Core FFO | $ | 7,478 | $ | 3,958 | $ | 27,110 | $ | 14,352 | ||||
| Adjustments to Core FFO: | ||||||||||||
| Straight-line rent and other non-cash adjustments | (2 | ) | (1 | ) | 80 | 43 | ||||||
| Non-cash interest expense | 41 | 22 | 164 | 87 | ||||||||
| Maintenance capital expenditures | (42 | ) | (22 | ) | (237 | ) | (125 | ) | ||||
| Contractual tenant improvements | (191 | ) | (101 | ) | (220 | ) | (116 | ) | ||||
| Cash Available for Distribution (CAD) | $ | 7,284 | $ | 3,856 | $ | 26,897 | $ | 14,241 |
(1) The Company owns 53.0% of the properties through the unconsolidated joint venture.
| Debt Schedules<br><br>(Unaudited, in thousands) | |||||
|---|---|---|---|---|---|
| Debt Instrument | Maturity Date | December 31, 2024<br>Interest Rate | December 31, 2024<br>Balance(1) | December 31, 2024<br>Percent of <br>Total Indebtedness | |
| --- | --- | --- | --- | --- | --- |
| Unsecured debt | |||||
| 2024 Revolving Credit facility | 3-Jun-2028(2) | S + 145 bps(3) | $ | 274,550 | 17.1% |
| 2016 Term Loan facility | 30-Jan-2025(4) | 5.31%(5) | 100,000 | 6.2% | |
| 2018 Term Loan facility | 23-Jul-26 | 5.23%(6) | 174,500 | 10.9% | |
| 2017 Series A Senior Notes | 25-May-27 | 4.05% | 95,000 | 5.9% | |
| 2017 Series B Senior Notes | 25-May-29 | 4.15% | 50,000 | 3.1% | |
| 2017 Series C Senior Notes | 25-May-32 | 4.30% | 30,000 | 1.9% | |
| 2019 Series A Senior Notes | 12-Sep-29 | 3.73% | 85,000 | 5.3% | |
| 2019 Series B Senior Notes | 12-Sep-31 | 3.83% | 100,000 | 6.2% | |
| 2019 Series C Senior Notes | 12-Sep-34 | 3.98% | 90,000 | 5.6% | |
| 2021 Series A Senior Notes | 14-Oct-28 | 2.62% | 50,000 | 3.1% | |
| 2021 Series B Senior Notes | 14-Oct-30 | 2.89% | 200,000 | 12.5% | |
| 2024 Series A Senior Notes | 28-May-33 | 6.56% | 150,000 | 9.3% | |
| 2024 Series B Senior Notes | 13-Aug-33 | 6.56% | 50,000 | 3.1% | |
| Total unsecured debt | 4.7 years | 4.71% | $ | 1,449,050 | 90.2% |
| (wtd-avg maturity) | (wtd-avg rate) | ||||
| Secured mortgage debt | |||||
| USFS II - Albuquerque | 14-Jul-26 | 4.46% | 9,624 | 0.6% | |
| ICE - Charleston | 15-Jan-27 | 4.21% | 10,491 | 0.7% | |
| VA - Loma Linda | 6-Jul-27 | 3.59% | 127,500 | 7.9% | |
| CBP - Savannah | 10-Jul-33 | 3.40% | 8,683 | 0.6% | |
| Total secured mortgage debt | 2.8 years | 3.67% | $ | 156,298 | 9.8% |
| (wtd-avg maturity) | (wtd-avg rate) |
(1) Excludes unamortized premiums / discounts and deferred financing fees.
(2) 2024 revolving credit facility has two six-month as-of-right extension options, subject to certain conditions and the payment of an extension fee.
(3) The 2024 revolving credit facility is subject to one interest rate swap with an effective date of June 23, 2023 and a notional value of $100.0 million, of which $25.5 million is associated with our 2024 revolving credit facility, to effectively fix the interest rate on the $25.5 million at 5.46% annually. The spread over the secured overnight financing rate ("SOFR") is based on our consolidated leverage ratio, as defined in our 2024 revolving credit facility agreement. Additionally, at December 31, 2024, $249.1 million of amounts outstanding under our 2024 revolving credit facility had a floating rate of 4.31% under USD SOFR with a five day lookback.
(4) On January 8, 2025, we entered into the ninth amendment to our senior unsecured term loan agreement, dated as of September 29, 2016, to extend the maturity date of our 2016 term loan facility from January 30, 2025 to January 28, 2028.
(5) Calculated based on one interest rate swap with a total notional value of $100.0 million, which effectively fixes the interest rate at 5.31% annually based on the Company’s current consolidated leverage ratio. The interest rate swap matures on December 23, 2027, which is not coterminous with the maturity date of the 2016 term loan facility.
(6) Calculated based on two interest rate swaps with an aggregate notional value of $200.0 million, of which $174.5 million is associated with our 2018 term loan facility, to effectively fix the interest rate on the $174.5 million at 5.23% annually based on the Company’s current consolidated leverage ratio. The two interest rate swaps mature on June 29, 2025 and March 23, 2025, neither of which is coterminous with the maturity date of the 2018 term loan facility.
| Debt Schedules (Cont.)<br><br>(Unaudited, in thousands) | |||||||
|---|---|---|---|---|---|---|---|
| Debt Statistics | December 31, 2024 | December 31, 2024 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Variable rate debt - unhedged | $ | 249,050 | % Variable rate debt - unhedged | 15.5 | % | ||
| Fixed rate debt | 1,356,298 | % Fixed rate debt(3) | 84.5 | % | |||
| Total Debt(1) | $ | 1,605,348 | |||||
| Less: cash and cash equivalents | (20,803 | ) | Weighted average maturity | 4.5 years | |||
| Net Debt | $ | 1,584,545 | Weighted average interest rate | 4.6 | % | ||
| Less: Adjustment for development(2) | (131,824 | ) | |||||
| Adjusted Net Debt | $ | 1,452,721 |
(1) Excludes unamortized premiums / discounts and deferred financing fees.
(2) See definition of Adjusted Net Debt on Page 4.
(3) Includes the Company's secured mortgage debt, 2016 and 2018 term loan facilities and $25.5 million associated with our 2024 revolving credit facility which are effectively swapped to fixed interest rates. Note the associated swaps are not coterminous with maturity dates of the respective term loan facilities. See Page 15 for further detail.
| Debt Maturities<br><br>(Unaudited, in thousands) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Secured Debt | Unsecured Debt | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Year | Scheduled<br>Amortization | Scheduled<br>Maturities | Scheduled<br>Maturities | Total | Percentage of <br>Debt Maturing | Weighted Average<br>Interest Rate of<br>Scheduled Maturities | ||||||||
| 2025 | 4,599 | - | 100,000 | 104,599 | 6.5 | % | 5.31 | % | ||||||
| 2026 | 3,686 | 6,368 | 174,500 | 184,554 | 11.5 | % | 5.19 | % | ||||||
| 2027 | 1,093 | 134,640 | 95,000 | 230,733 | 14.4 | % | 3.81 | % | ||||||
| 2028 | 983 | - | 324,550 | 325,533 | 20.3 | % | 5.25 | % | ||||||
| 2029 | 1,016 | - | 135,000 | 136,016 | 8.5 | % | 3.89 | % | ||||||
| 2030 | 1,049 | - | 200,000 | 201,049 | 12.5 | % | 2.89 | % | ||||||
| 2031 | 1,081 | - | 100,000 | 101,081 | 6.3 | % | 3.83 | % | ||||||
| 2032 | 1,116 | - | 30,000 | 31,116 | 1.9 | % | 4.30 | % | ||||||
| 2033 | 667 | - | 200,000 | 200,667 | 12.5 | % | 6.43 | % | ||||||
| 2034 | - | - | 90,000 | 90,000 | 5.6 | % | 3.98 | % | ||||||
| Total | $ | 15,290 | $ | 141,008 | $ | 1,449,050 | $ | 1,605,348 | 100.0 | % |
| Leased Operating Property Overview<br><br>(As of December 31, 2024, unaudited) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property Name | Location | Property Type | Tenant<br>Lease<br>Expiration<br>Year | Year Built /<br>Renovated | Leased<br>Square<br>Feet | Annualized<br>Lease<br>Income | Percentage <br>of Total<br>Annualized<br>Lease<br>Income | Annualized<br>Lease<br>Income per<br>Leased<br>Square Foot | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Wholly Owned U.S. Government Leased Properties | |||||||||||||
| VA - Loma Linda | Loma Linda, CA | Outpatient Clinic | 2036 | 2016 | 327,614 | $ | 16,850,124 | 4.9 | % | $ | 51.43 | ||
| USCIS - Kansas City | Lee's Summit, MO | Office | 2025 - 2042(1) | 1969 / 1999 | 403,178 | 10,007,859 | 2.9 | % | 24.82 | ||||
| JSC - Suffolk | Suffolk, VA | Specialized Facility | 2028(2) | 1993 / 2004 | 403,737 | 8,503,831 | 2.5 | % | 21.06 | ||||
| Various GSA - Chicago | Des Plaines, IL | Office | 2026 | 1971 / 1999 | 188,768 | 7,789,151 | 2.2 | % | 41.26 | ||||
| IRS - Fresno | Fresno, CA | Office | 2033 | 2003 | 180,481 | 6,972,352 | 2.0 | % | 38.63 | ||||
| Various GSA - Portland | Portland, OR | Office | 2025 - 2039(3) | 2002 | 205,478 | 6,927,716 | 2.0 | % | 33.72 | ||||
| Various GSA - Buffalo | Buffalo, NY | Office | 2025 - 2039 | 2004 | 273,678 | 6,893,503 | 2.0 | % | 25.19 | ||||
| FBI - Salt Lake | Salt Lake City, UT | Specialized Facility | 2032 | 2012 | 169,542 | 6,789,358 | 2.0 | % | 40.05 | ||||
| VA - San Jose | San Jose, CA | Outpatient Clinic | 2038 | 2018 | 90,085 | 5,819,576 | 1.7 | % | 64.60 | ||||
| EPA - Lenexa | Lenexa, KS | Office | 2027(2) | 2007 / 2012 | 169,585 | 5,796,626 | 1.7 | % | 34.18 | ||||
| FBI - Tampa | Tampa, FL | Specialized Facility | 2040 | 2005 | 138,000 | 5,314,469 | 1.5 | % | 38.51 | ||||
| FBI - San Antonio | San Antonio, TX | Specialized Facility | 2025 | 2007 | 148,584 | 5,206,053 | 1.5 | % | 35.04 | ||||
| FDA - Alameda | Alameda, CA | Laboratory | 2039 | 2019 | 69,624 | 4,966,674 | 1.4 | % | 71.34 | ||||
| FBI / DEA - El Paso | El Paso, TX | Specialized Facility | 2028 | 1998 - 2005 | 203,683 | 4,727,462 | 1.4 | % | 23.21 | ||||
| PTO - Arlington | Arlington, VA | Specialized Facility | 2035 | 2009 | 190,546 | 4,683,980 | 1.4 | % | 24.58 | ||||
| FEMA - Tracy | Tracy, CA | Warehouse | 2038 | 2018 | 210,373 | 4,652,852 | 1.3 | % | 22.12 | ||||
| TREAS - Parkersburg | Parkersburg, WV | Office | 2041 | 2004 / 2006 | 182,500 | 4,399,697 | 1.3 | % | 24.11 | ||||
| FDA - Lenexa | Lenexa, KS | Laboratory | 2040 | 2020 | 59,690 | 4,333,387 | 1.3 | % | 72.60 | ||||
| ICE - Dallas | Irvine, TX | Specialized Facility | 2032 / 2040(4) | 2000 / 2020 | 129,046 | 4,090,572 | 1.2 | % | 31.70 | ||||
| FBI - Pittsburgh | Pittsburgh, PA | Specialized Facility | 2027 | 2001 | 100,054 | 4,079,780 | 1.2 | % | 40.78 | ||||
| VA - South Bend | Mishawaka, IN | Outpatient Clinic | 2032 | 2017 | 86,363 | 4,026,610 | 1.2 | % | 46.62 | ||||
| FBI - New Orleans | New Orleans, LA | Specialized Facility | 2029(5) | 1999 / 2006 | 137,679 | 3,968,050 | 1.1 | % | 28.82 | ||||
| FBI - Omaha | Omaha, NE | Specialized Facility | 2044 | 2009 | 112,196 | 3,959,898 | 1.1 | % | 35.29 | ||||
| USCIS - Lincoln | Lincoln, NE | Office | 2025 | 2005 | 137,671 | 3,904,639 | 1.1 | % | 28.36 | ||||
| VA - Mobile | Mobile, AL | Outpatient Clinic | 2033 | 2018 | 79,212 | 3,798,371 | 1.1 | % | 47.95 | ||||
| FBI - Birmingham | Birmingham, AL | Specialized Facility | 2042 | 2005 | 96,278 | 3,692,036 | 1.1 | % | 38.35 | ||||
| FBI - Knoxville | Knoxville, TN | Specialized Facility | 2025 | 2010 | 99,130 | 3,629,035 | 1.0 | % | 36.61 | ||||
| FBI - Albany | Albany, NY | Specialized Facility | 2036 | 1998 | 69,476 | 3,591,446 | 1.0 | % | 51.69 | ||||
| EPA - Kansas City | Kansas City, KS | Laboratory | 2043 | 2003 | 55,833 | 3,589,765 | 1.0 | % | 64.29 | ||||
| USFS II - Albuquerque | Albuquerque, NM | Office | 2026(2) | 2011 | 98,720 | 3,553,436 | 1.0 | % | 36.00 | ||||
| DOT - Lakewood | Lakewood, CO | Office | 2039 | 2004 | 116,046 | 3,416,355 | 1.0 | % | 29.44 | ||||
| ICE - Charleston | North Charleston, SC | Specialized Facility | 2027 | 1994 / 2012 | 65,124 | 3,373,468 | 1.0 | % | 51.80 | ||||
| VA - Chico | Chico, CA | Outpatient Clinic | 2034 | 2019 | 51,647 | 3,341,875 | 1.0 | % | 64.71 | ||||
| FBI - Richmond | Richmond, VA | Specialized Facility | 2041 | 2001 | 96,607 | 3,334,875 | 1.0 | % | 34.52 | ||||
| JUD - Del Rio | Del Rio, TX | Federal Courthouse | 2041 | 1992 / 2004 | 89,880 | 3,291,972 | 1.0 | % | 36.63 | ||||
| FBI - Mobile | Mobile, AL | Specialized Facility | 2029(2) | 2001 | 76,112 | 3,262,209 | 0.9 | % | 42.86 | ||||
| FBI - Little Rock | Little Rock, AR | Specialized Facility | 2041 | 2001 | 102,377 | 3,237,405 | 0.9 | % | 31.62 | ||||
| Leased Operating Property Overview (Cont.)<br><br>(As of December 31, 2024, unaudited) | |||||||||||||
| --- | |||||||||||||
| Property Name | Location | Property Type | Tenant<br>Lease<br>Expiration<br>Year | Year Built /<br>Renovated | Leased<br>Square<br>Feet | Annualized<br>Lease<br>Income | Percentage <br>of Total<br>Annualized<br>Lease<br>Income | Annualized<br>Lease<br>Income per<br>Leased<br>Square Foot | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Wholly Owned U.S. Government Leased Properties (Cont.) | |||||||||||||
| DEA - Sterling | Sterling, VA | Laboratory | 2038 | 2001 | 57,692 | 3,222,788 | 0.9 | % | 55.86 | ||||
| DEA - Vista | Vista, CA | Laboratory | 2035 | 2002 | 52,293 | 3,147,780 | 0.9 | % | 60.20 | ||||
| USCIS - Tustin | Tustin, CA | Office | 2034 | 1979 / 2019 | 66,818 | 3,142,255 | 0.9 | % | 47.03 | ||||
| VA - Orange | Orange, CT | Outpatient Clinic | 2034 | 2019 | 56,330 | 2,998,139 | 0.9 | % | 53.22 | ||||
| VA - Indianapolis | Brownsburg, IN | Outpatient Clinic | 2041 | 2021 | 80,000 | 2,980,495 | 0.9 | % | 37.26 | ||||
| ICE - Albuquerque | Albuquerque, NM | Specialized Facility | 2027 | 2011 | 71,100 | 2,841,105 | 0.8 | % | 39.96 | ||||
| JUD - El Centro | El Centro, CA | Federal Courthouse | 2034 | 2004 | 43,345 | 2,814,240 | 0.8 | % | 64.93 | ||||
| SSA - Charleston | Charleston, WV | Office | 2029 | 1959 / 2000 | 110,000 | 2,805,454 | 0.8 | % | 25.50 | ||||
| DEA - Dallas Lab | Dallas, TX | Laboratory | 2038 | 2001 | 49,723 | 2,798,999 | 0.8 | % | 56.29 | ||||
| DEA - Pleasanton | Pleasanton, CA | Laboratory | 2035 | 2015 | 42,480 | 2,779,748 | 0.8 | % | 65.44 | ||||
| DEA - Upper Marlboro | Upper Marlboro, MD | Laboratory | 2037 | 2002 | 50,978 | 2,761,612 | 0.8 | % | 54.17 | ||||
| NARA - Broomfield | Broomfield, CO | Warehouse | 2032 | 2012 | 161,730 | 2,690,321 | 0.8 | % | 16.63 | ||||
| TREAS - Birmingham | Birmingham, AL | Office | 2029 | 2014 | 83,676 | 2,627,473 | 0.8 | % | 31.40 | ||||
| DHS - Atlanta | Atlanta, GA | Specialized Facility | 2031 - 2038(6) | 2008 / 2023 | 91,185 | 2,579,815 | 0.7 | % | 28.29 | ||||
| USAO - Louisville | Louisville, KY | Specialized Facility | 2031 | 2011 | 60,000 | 2,540,094 | 0.7 | % | 42.33 | ||||
| JUD - Charleston | Charleston, SC | Federal Courthouse | 2040 | 1999 | 52,339 | 2,518,931 | 0.7 | % | 48.13 | ||||
| JUD - Jackson | Jackson, TN | Federal Courthouse | 2043 | 1998 | 75,043 | 2,403,192 | 0.7 | % | 32.02 | ||||
| IRS - Ogden | Ogden, UT | Warehouse | 2029(7) | 1996 | 100,000 | 2,352,291 | 0.7 | % | 23.52 | ||||
| CBP - Savannah | Savannah, GA | Laboratory | 2033 | 2013 | 35,000 | 2,289,518 | 0.7 | % | 65.41 | ||||
| DEA - Dallas | Dallas, TX | Specialized Facility | 2041 | 2001 | 71,827 | 2,272,075 | 0.7 | % | 31.63 | ||||
| Various GSA - Cleveland | Brooklyn Heights, OH | Office | 2028 - 2040(7) | 1981 / 2021 | 61,384 | 2,245,513 | 0.6 | % | 36.58 | ||||
| NWS - Kansas City | Kansas City, MO | Specialized Facility | 2033(2) | 1998 / 2020 | 94,378 | 2,155,680 | 0.6 | % | 22.84 | ||||
| DEA - Santa Ana | Santa Ana, CA | Specialized Facility | 2029 | 2004 | 39,905 | 2,019,910 | 0.6 | % | 50.62 | ||||
| NPS - Omaha | Omaha, NE | Specialized Facility | 2029 | 2004 | 62,772 | 1,891,182 | 0.5 | % | 30.13 | ||||
| DEA - North Highlands | Sacramento, CA | Specialized Facility | 2033 | 2002 | 37,975 | 1,885,075 | 0.5 | % | 49.64 | ||||
| GSA - Clarksburg | Clarksburg, WV | Office | 2039(2) | 1999 | 70,495 | 1,880,219 | 0.5 | % | 26.67 | ||||
| VA - Golden | Golden, CO | Warehouse | 2026 | 1996 / 2011 | 56,753 | 1,782,038 | 0.5 | % | 31.40 | ||||
| JUD - Newport News | Newport News, VA | Federal Courthouse | 2033 | 2008 | 35,005 | 1,676,464 | 0.5 | % | 47.89 | ||||
| ICE - Orlando | Orlando, FL | Specialized Facility | 2040 | 1996 / 2010 | 49,420 | 1,668,211 | 0.5 | % | 33.76 | ||||
| USCG - Martinsburg | Martinsburg, WV | Specialized Facility | 2027 | 2007 | 59,547 | 1,624,577 | 0.5 | % | 27.28 | ||||
| JUD - Aberdeen | Aberdeen, MS | Federal Courthouse | 2025 | 2005 | 46,979 | 1,577,074 | 0.5 | % | 33.57 | ||||
| VA - Charleston | North Charleston, SC | Warehouse | 2040 | 2020 | 97,718 | 1,504,645 | 0.4 | % | 15.40 | ||||
| DEA - Albany | Albany, NY | Specialized Facility | 2042 | 2004 | 31,976 | 1,407,704 | 0.4 | % | 44.02 | ||||
| USAO - Springfield | Springfield, IL | Specialized Facility | 2038 | 2002 | 43,600 | 1,391,454 | 0.4 | % | 31.91 | ||||
| JUD - Council Bluffs | Council Bluffs, IA | Federal Courthouse | 2041(7) | 2021 | 28,900 | 1,367,675 | 0.4 | % | 47.32 | ||||
| DEA - Riverside | Riverside, CA | Specialized Facility | 2032 | 1997 | 34,354 | 1,321,949 | 0.4 | % | 38.48 | ||||
| DEA - Birmingham | Birmingham, AL | Specialized Facility | 2038 | 2005 | 35,616 | 1,256,899 | 0.4 | % | 35.29 | ||||
| Leased Operating Property Overview (Cont.)<br><br>(As of December 31, 2024, unaudited) | |||||||||||||
| --- | |||||||||||||
| Property Name | Location | Property Type | Tenant<br>Lease<br>Expiration<br>Year | Year Built /<br>Renovated | Leased<br>Square<br>Feet | Annualized<br>Lease<br>Income | Percentage <br>of Total<br>Annualized<br>Lease<br>Income | Annualized<br>Lease<br>Income per<br>Leased<br>Square Foot | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Wholly Owned U.S. Government Leased Properties (Cont.) | |||||||||||||
| HSI - Orlando | Orlando, FL | Specialized Facility | 2036 | 2006 | 27,840 | 1,075,437 | 0.3 | % | 38.63 | ||||
| SSA - Dallas | Dallas, TX | Specialized Facility | 2035 | 2005 | 27,200 | 1,069,445 | 0.3 | % | 39.32 | ||||
| JUD - South Bend | South Bend, IN | Federal Courthouse | 2027 | 1996 / 2011 | 30,119 | 802,002 | 0.2 | % | 26.63 | ||||
| ICE - Louisville | Louisville, KY | Specialized Facility | 2036 | 2011 | 17,420 | 657,841 | 0.2 | % | 37.76 | ||||
| DEA - San Diego | San Diego, CA | Warehouse | 2032 | 1999 | 16,100 | 561,172 | 0.2 | % | 34.86 | ||||
| DEA - Bakersfield | Bakersfield, CA | Specialized Facility | 2038 | 2000 | 9,800 | 493,373 | 0.1 | % | 50.34 | ||||
| SSA - San Diego | San Diego, CA | Specialized Facility | 2032 | 2003 | 10,059 | 452,386 | 0.1 | % | 44.97 | ||||
| ICE - Otay | San Diego, CA | Office | 2027 | 2001 | 7,434 | 261,222 | 0.1 | % | 35.14 | ||||
| Subtotal | 7,858,905 | $ | 278,371,939 | 80.4 | % | $ | 35.42 | ||||||
| Wholly Owned State and Local Government Leased Property | |||||||||||||
| Wake County III - Cary | Cary, NC | Office | 2027 / 2034(8) | 1997 | 113,722 | 3,555,902 | 1.0 | % | 31.27 | ||||
| CA - Anaheim | Anaheim, CA | Office | 2033 / 2034 | 1991 / 2020 | 95,273 | 3,364,379 | 1.0 | % | 35.31 | ||||
| Wake County II - Cary | Cary, NC | Office | 2034(9) | 1994 | 98,340 | 2,953,908 | 0.9 | % | 30.04 | ||||
| Wake County I - Cary | Cary, NC | Office | 2034(9) | 1991 | 75,401 | 2,254,676 | 0.7 | % | 29.90 | ||||
| Subtotal | 382,736 | $ | 12,128,865 | 3.6 | % | $ | 31.69 | ||||||
| Wholly Owned Privately Leased Property | |||||||||||||
| Northrop Grumman - Dayton | Beavercreek, OH | Specialized Facility | 2029(7) | 2012 | 99,246 | 2,579,090 | 0.7 | % | 25.99 | ||||
| Northrop Grumman - Aurora | Aurora, CO | Specialized Facility | 2032(7) | 2002 | 104,136 | 2,368,386 | 0.7 | % | 22.74 | ||||
| 501 East Hunter Street - Lummus Corporation | Lubbock, TX | Warehouse | 2028(7) | 2013 | 70,078 | 412,024 | 0.1 | % | 5.88 | ||||
| Subtotal | 273,460 | $ | 5,359,500 | 1.5 | % | $ | 19.60 | ||||||
| Wholly Owned Properties Total / Weighted Average | 8,515,101 | $ | 295,860,304 | 85.5 | % | $ | 34.75 | ||||||
| Leased Operating Property Overview (Cont.)<br><br>(As of December 31, 2024, unaudited) | |||||||||||||
| --- | |||||||||||||
| Property Name | Location | Property Type | Tenant<br>Lease<br>Expiration<br>Year | Year Built /<br>Renovated | Leased<br>Square<br>Feet | Annualized<br>Lease<br>Income | Percentage <br>of Total<br>Annualized<br>Lease<br>Income | Annualized<br>Lease<br>Income per<br>Leased<br>Square Foot | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| U.S Government Leased to Unconsolidated Real Estate Venture | |||||||||||||
| VA - Phoenix(10) | Phoenix, AZ | Outpatient Clinic | 2042 | 2022 | 257,294 | 10,781,681 | 3.1 | % | 41.90 | ||||
| VA - San Antonio(10) | San Antonio, TX | Outpatient Clinic | 2041 | 2021 | 226,148 | 9,308,441 | 2.7 | % | 41.16 | ||||
| VA - Jacksonville(10) | Jacksonville, FL | Outpatient Clinic | 2043 | 2023 | 193,100 | 7,372,700 | 2.1 | % | 38.18 | ||||
| VA - Chattanooga(10) | Chattanooga, TN | Outpatient Clinic | 2035 | 2020 | 94,566 | 4,385,607 | 1.3 | % | 46.38 | ||||
| VA - Lubbock(10)(11) | Lubbock, TX | Outpatient Clinic | 2040 | 2020 | 120,916 | 4,251,052 | 1.2 | % | 35.16 | ||||
| VA - Marietta(10) | Marietta, GA | Outpatient Clinic | 2041 | 2021 | 76,882 | 3,958,402 | 1.1 | % | 51.49 | ||||
| VA - Birmingham(10) | Irondale, AL | Outpatient Clinic | 2041 | 2021 | 77,128 | 3,192,361 | 0.9 | % | 41.39 | ||||
| VA - Corpus Christi(10) | Corpus Christi, TX | Outpatient Clinic | 2042 | 2022 | 69,276 | 2,947,359 | 0.9 | % | 42.55 | ||||
| VA - Columbus(10) | Columbus, GA | Outpatient Clinic | 2042 | 2022 | 67,793 | 2,917,896 | 0.8 | % | 43.04 | ||||
| VA - Lenexa(10) | Lenexa, KS | Outpatient Clinic | 2041 | 2021 | 31,062 | 1,349,757 | 0.4 | % | 43.45 | ||||
| Subtotal | 1,214,165 | $ | 50,465,256 | 14.5 | % | $ | 41.56 | ||||||
| Total / Weighted Average | 9,729,266 | $ | 346,325,560 | 100.0 | % | $ | 35.60 | ||||||
| Total / Weighted Average at Easterly's Share | 9,158,607 | $ | 322,606,890 | $ | 35.22 |
(1) 316,318 square feet leased to U.S. Citizenship and Immigration Services ("USCIS") will expire on February 19, 2042 and contains two five-year renewal options. 75,451 square feet leased to three private tenants will expire between 2025-2028 and each contains renewal options.
(2) Lease contains one five-year renewal option.
(3) 37,811 square feet leased to the U.S. Army Corps of Engineers ("ACOE") will expire on February 19, 2025 and contains two five-year renewal options. 21,646 square feet leased to the Federal Bureau of Investigation ("FBI") will expire on December 31, 2029 and contains one five-year renewal options. 11,061 square feet leased to five private tenants will expire between 2026-2030 and each contains renewal options. 4,846 square feet leased to the Department of Energy ("DOE") will expire on April 14, 2033 and contains one ten-year renewal option.
(4) 80,523 square feet leased to the U.S. Immigration and Customs Enforcement ("ICE") will expire on September 14, 2040. 29,074 square feet leased to a private tenant will expire on September 30, 2032 and contains one five-year renewal option. 19,449 square feet leased to a private tenant will expire on January 31, 2032 and contains one five-year renewal option.
(5) Lease contains one ten-year renewal option.
(6) 29,737 square feet leased to the U.S. Customs and Border Protection ("CBP") will expire on April 30, 2038. 17,373 square feet leased to a private tenant will expire on December 31, 2031 and contains two five-year renewal options. 44,075 square feet leased to the Transportation Security Administration ("TSA") will expire on December 14, 2038 and contains one five-year renewal option.
(7) Lease contains two five-year renewal options.
(8) 75,864 square feet leased to Wake County Public School System will expire on June 30, 2034 and contains two eight-year renewal options. 37,858 square feet leased to a private tenant will expire on December 31, 2027 and contains one five-year renewal option.
(9) Lease contains two eight-year renewal options.
(10) The Company owns 53.0% of the property through an unconsolidated joint venture.
(11) Asset is subject to a ground lease where the unconsolidated joint venture is the lessee.
| Tenants<br><br>(As of December 31, 2024, unaudited) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Tenant | Leased<br>Square Feet | Percentage<br>of Leased<br>Square Feet | Annualized<br>Lease Income | Percentage<br>of Total<br>Annualized<br>Lease<br>Income | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| U.S. Government | |||||||||||
| Department of Veteran Affairs ("VA") | 14.1 | 2,251,131 | 23.2 | % | $ | 96,083,994 | 27.8 | % | |||
| Federal Bureau of Investigation ("FBI") | 9.0 | 1,498,607 | 15.5 | % | 53,767,038 | 15.5 | % | ||||
| Drug Enforcement Administration ("DEA") | 10.7 | 607,290 | 6.2 | % | 27,941,589 | 8.1 | % | ||||
| Judiciary of the U.S. ("JUD") | 12.3 | 401,610 | 4.1 | % | 16,451,550 | 4.8 | % | ||||
| U.S. Citizenship and Immigration Services ("USCIS") | 11.8 | 520,807 | 5.4 | % | 15,012,669 | 4.3 | % | ||||
| Immigration and Customs Enforcement ("ICE") | 8.8 | 313,837 | 3.2 | % | 12,186,554 | 3.5 | % | ||||
| Internal Revenue Service ("IRS") | 7.2 | 333,334 | 3.4 | % | 10,626,239 | 3.1 | % | ||||
| Environmental Protection Agency ("EPA") | 6.7 | 225,418 | 2.3 | % | 9,386,391 | 2.7 | % | ||||
| Food and Drug Administration ("FDA") | 15.2 | 129,314 | 1.3 | % | 9,300,061 | 2.7 | % | ||||
| U.S. Joint Staff Command ("JSC") | 3.4 | 403,737 | 4.1 | % | 8,503,831 | 2.5 | % | ||||
| Federal Aviation Administration ("FAA") | 1.8 | 188,768 | 1.9 | % | 7,789,151 | 2.2 | % | ||||
| Bureau of the Fiscal Service ("BFS") | 12.7 | 266,176 | 2.7 | % | 7,027,170 | 2.0 | % | ||||
| Social Security Administration ("SSA") | 8.0 | 192,185 | 2.0 | % | 5,525,502 | 1.6 | % | ||||
| Patent and Trademark Office ("PTO") | 10.0 | 190,546 | 2.0 | % | 4,683,980 | 1.4 | % | ||||
| Federal Emergency Management Agency ("FEMA") | 13.8 | 210,373 | 2.2 | % | 4,652,852 | 1.3 | % | ||||
| U.S. Attorney Office ("USAO") | 9.9 | 110,776 | 1.1 | % | 4,122,947 | 1.2 | % | ||||
| Department of Transportation ("DOT") | 13.7 | 123,480 | 1.3 | % | 3,677,577 | 1.1 | % | ||||
| U.S. Forest Service ("USFS") | 1.5 | 98,720 | 1.0 | % | 3,553,436 | 1.0 | % | ||||
| Customs and Border Protection ("CBP") | 10.7 | 64,737 | 0.7 | % | 3,226,943 | 0.9 | % | ||||
| National Archives and Records Administration ("NARA") | 7.4 | 161,730 | 1.7 | % | 2,690,321 | 0.8 | % | ||||
| National Weather Service ("NWS") | 9.0 | 94,378 | 1.0 | % | 2,155,680 | 0.6 | % | ||||
| U.S. Department of Agriculture ("A") | 3.1 | 60,257 | 0.6 | % | 1,909,389 | 0.6 | % | ||||
| National Park Service ("NPS") | 4.5 | 62,772 | 0.6 | % | 1,891,182 | 0.5 | % | ||||
| General Services Administration - Other | 0.7 | 55,807 | 0.6 | % | 1,714,806 | 0.5 | % | ||||
| U.S. Coast Guard ("USCG") | 3.0 | 59,547 | 0.6 | % | 1,624,577 | 0.5 | % | ||||
| National Oceanic and Atmospheric Administration ("NOAA") | 6.7 | 33,403 | 0.3 | % | 1,426,062 | 0.4 | % | ||||
| Transportation Security Administration ("TSA") | 9.0 | 44,075 | 0.5 | % | 1,161,242 | 0.3 | % | ||||
| U.S. Army Corps of Engineers ("ACOE") | 0.1 | 39,320 | 0.4 | % | 1,147,120 | 0.3 | % | ||||
| Small Business Administration ("SBA") | 14.6 | 44,969 | 0.5 | % | 1,114,230 | 0.3 | % |
All values are in US Dollars.
| Tenants (Cont.)<br><br>(As of December 31, 2024, unaudited) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Tenant | Weighted<br>Average<br>Remaining<br>Lease Term(1) | Leased<br>Square Feet | Percentage<br>of Leased<br>Square Feet | Annualized<br>Lease Income | Percentage<br>of Total<br>Annualized<br>Lease<br>Income | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| U.S. Government | ||||||||||||
| Homeland Security Investigations ("HSI") | 11.2 | 27,840 | 0.3 | % | 1,075,437 | 0.3 | % | |||||
| Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") | 8.2 | 23,775 | 0.2 | % | 734,101 | 0.2 | % | |||||
| Federal Energy Regulatory Commission ("FERC") | 14.6 | 6,214 | 0.1 | % | 248,307 | 0.1 | % | |||||
| Department of Energy ("DOE") | 8.3 | 4,846 | 0.0 | % | 187,782 | 0.1 | % | |||||
| U.S. Probation Office ("USPO") | 14.1 | 6,621 | 0.1 | % | 176,606 | 0.1 | % | |||||
| U.S. Marshals Service ("USMS") | 2.1 | 1,054 | 0.0 | % | 50,583 | 0.0 | % | |||||
| Department of Labor ("DOL") | 14.1 | 574 | 0.0 | % | 15,316 | 0.0 | % | |||||
| Subtotal | 10.3 | 8,858,028 | 91.1 | % | $ | 322,842,215 | 93.3 | % | ||||
| State and Local Government | ||||||||||||
| Wake County Public School System | 9.5 | 249,605 | 2.6 | % | 7,605,214 | 2.2 | % | |||||
| State of California Employee Development Department | 9.1 | 65,133 | 0.7 | % | 2,296,631 | 0.7 | % | |||||
| State of California Department of Industrial Relations | 8.8 | 30,140 | 0.3 | % | 1,067,748 | 0.3 | % | |||||
| New York State Court of Claims | 1.7 | 14,274 | 0.1 | % | 391,875 | 0.1 | % | |||||
| Subtotal | 9.1 | 359,152 | 3.7 | % | $ | 11,361,468 | 3.3 | % | ||||
| Private Tenants | ||||||||||||
| Northrup Grumman Systems Corporation | 5.9 | 203,382 | 2.1 | % | 4,947,476 | 1.4 | % | |||||
| Other Private Tenants | 4.2 | 58,869 | 0.6 | % | 1,673,709 | 0.5 | % | |||||
| Jacobs Engineering Group, Inc. | 3.0 | 37,858 | 0.4 | % | 1,159,272 | 0.3 | % | |||||
| St. Luke's Health System | 2.0 | 32,043 | 0.3 | % | 924,624 | 0.3 | % | |||||
| HUB International Midwest Limited | 7.8 | 29,074 | 0.3 | % | 841,506 | 0.2 | % | |||||
| CVS Health | 0.4 | 39,690 | 0.4 | % | 776,210 | 0.2 | % | |||||
| Providence Health & Services | 0.7 | 21,643 | 0.2 | % | 747,258 | 0.2 | % | |||||
| Pate Rehabilitation Endeavors, LLC | 7.1 | 19,449 | 0.2 | % | 639,798 | 0.2 | % | |||||
| Lummus Corporation | 3.6 | 70,078 | 0.7 | % | 412,024 | 0.1 | % | |||||
| Subtotal | 4.4 | 512,086 | 5.2 | % | $ | 12,121,877 | 3.4 | % | ||||
| Total / Weighted Average | 10.0 | 9,729,266 | 100.0 | % | $ | 346,325,560 | 100.0 | % |
(1) Weighted based on leased square feet.
| Lease Expirations<br><br>(As of December 31, 2024, unaudited) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year of Lease Expiration (1) | Number of <br>Leases <br>Expiring | Leased Square<br>Footage<br>Expiring | Percentage of<br>Total Leased Square<br>Footage<br>Expiring | Annualized <br>Lease Income<br>Expiring | Percentage of<br>Total Annualized<br>Lease Income<br>Expiring | Annualized<br>Lease Income<br>per Leased<br>Square Foot Expiring | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 12 | 592,906 | 6.1 | % | 18,868,413 | 5.4 | % | 31.82 | |||||
| 2026 | 6 | 394,832 | 4.1 | % | 14,600,404 | 4.2 | % | 36.98 | |||||
| 2027 | 10 | 544,368 | 5.6 | % | 20,068,900 | 5.8 | % | 36.87 | |||||
| 2028 | 11 | 802,397 | 8.2 | % | 17,652,883 | 5.1 | % | 22.00 | |||||
| 2029 | 9 | 731,036 | 7.5 | % | 22,205,212 | 6.4 | % | 30.37 | |||||
| 2030 | 1 | 1,536 | 0.0 | % | 59,478 | 0.0 | % | 38.72 | |||||
| 2031 | 3 | 117,875 | 1.2 | % | 4,549,908 | 1.3 | % | 38.60 | |||||
| 2032 | 10 | 683,660 | 7.0 | % | 20,993,082 | 6.1 | % | 30.71 | |||||
| 2033 | 10 | 566,197 | 5.8 | % | 22,077,072 | 6.4 | % | 38.99 | |||||
| 2034 | 10 | 507,793 | 5.2 | % | 21,315,514 | 6.2 | % | 41.98 | |||||
| Thereafter | 53 | 4,786,666 | 49.3 | % | 183,934,694 | 53.1 | % | 38.43 | |||||
| Total / Weighted Average | 135 | 9,729,266 | 100.0 | % | $ | 346,325,560 | 100.0 | % | $ | 35.60 |
(1) The year of lease expiration is pursuant to current contract terms. Some tenants have the right to vacate their space during a specified period, or "soft term," before the stated terms of their leases expire. As of December 31, 2024, eight tenants occupying approximately 5.8% of our leased square feet and contributing approximately 5.2% of our annualized lease income are currently operating under lease provisions that allow them to exercise their right to terminate their lease before the stated term of their respective lease expires.
| Summary of Re/Development Projects<br><br>(As of December 31, 2024, unaudited, in thousands, except square feet) | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Projects Under Construction(1) | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Property Name | Location | Property Type | Total Leased Square Feet | Lease Term | Anticipated Total Cost | Cost to Date | Anticipated Lump-Sum Reimbursement(2) | Anticipated Completion Date | Anticipated Lease Commencement | |||||||
| FDA - Atlanta | Atlanta, GA | Laboratory | 162,000 | 20-Year | $ | 237,196 | $ | 184,100 | $ | 150,680 | 4Q 2025 | 4Q 2025 | ||||
| Total | 162,000 | $ | 237,196 | $ | 184,100 | $ | 150,680 | |||||||||
| Projects in Design(3) | ||||||||||||||||
| Property Name | Location | Property Type | Total Estimated Leased Square Feet | Lease Term | Anticipated Completion Date | Anticipated Lease Commencement | ||||||||||
| JUD - Flagstaff | Flagstaff, AZ | Courthouse | 50,777 | 20-Year | 3Q 2026 | 3Q 2026 | ||||||||||
| Projects Previously Completed with Outstanding Lump-Sum Reimbursements(2) | ||||||||||||||||
| Property Name | Location | Property Type | Total Leased Square Feet | Lease Term | Outstanding Lump-Sum Reimbursement(2) | Completion Date | Lease Commencement | |||||||||
| N/A | - | - | - | - | $ | - | - | - |
(1) Includes properties under construction for which design is complete.
(2) Includes reimbursement of lump-sum tenant improvement costs and development fees.
(3) Includes projects in the design phase for which project scope is not fully determined.