Easterly Government Properties, Inc. (NYSE: DEA) (the “Company” or
“Easterly”), a fully integrated real estate investment trust focused
primarily on the acquisition, development and management of Class A
commercial properties leased to the U.S. Government, announced today
that it has agreed to acquire from affiliates of an independent third
party a 1,479,762-square foot portfolio of 14 properties, 94% leased to
the U.S. Federal Government and 99% leased overall, for a purchase price
of approximately $430.0 million. Based on lease count and property count
respectively, 88% of the U.S. Government leases are still under their
original lease contract and 79% of the properties are build-to-suit or
renovation-to-suit construction, designed for the specific needs and
requirements of the occupying U.S. Government tenant agency.
Based on the Company’s underwriting, the Company believes the aggregate
purchase price of the 14 properties under contract represents a weighted
average underwritten capitalization rate of approximately 6.5%.
“We believe the acquisition of this 14-property portfolio is a wonderful
opportunity for the Company,” said William C. Trimble III, Easterly’s
Chief Executive Officer. “This acquisition is expected to grow our
portfolio by approximately 39% on a rentable square foot basis, while
still maintaining the same high-quality standard of assets Easterly is
Subject to the completion of customary closing conditions, the Company
expects to close the acquisition of these properties on a rolling basis
between July and December of 2018. When combined with the previously
announced pending acquisition of VA – San Jose and completed acquisition
of VA – Golden, for purchase prices totaling $84.9 million, the Company
has achieved total completed or pending acquisitions of $514.9 million
since the start of 2018.
The 14-property portfolio is comprised of the following 14 properties,
arranged from largest to smallest by square foot:
Various GSA – Buffalo, NY
Various GSA – Buffalo, a multi-tenanted Class A office building
completed in 2004, is primarily occupied by two federal agencies: the
Department of Veterans Affairs (VA) and the Internal Revenue Service
(IRS). It also houses one of the National Labor Relations Board’s 26
regional offices. The weighted average lease expiration year for the
267,766-square foot building is 2021. The U.S. Government leases 94% of
the 100% leased building.
Various GSA – Chicago, IL
Various GSA – Chicago, a multi-tenanted office building fully renovated
in 1999, is strategically located next to Chicago O’Hare International
Airport and serves as the Federal Aviation Administration’s (FAA) Great
Lakes Regional Office, which oversees operations in eight states. The
U.S. Department of Agriculture (USDA) also maintains a presence within
the facility. The weighted average lease expiration year for the
239,331-square foot building is 2020 and is 96% leased.
Various GSA – Portland, OR
Various GSA – Portland, a Class A trophy multi-tenanted asset, was built
in 2002 and is strategically located within Portland’s Central City Plan
District along the MAX light rail system. The facility is occupied by
tenants such as the USDA, U.S. Army Corp of Engineers (ACOE), Federal
Bureau of Investigation (FBI) and the Bureau of Alcohol, Tobacco,
Firearms and Explosives (ATF). The 225,057-square foot facility is 100%
leased with a weighted average lease expiration year of 2022.
TREAS – Parkersburg, WV
TREAS – Parkersburg, a 182,500-square foot build-to-suit property, was
built in multiple phases in 2004 and 2006 and is 100% leased to the
General Services Administration (GSA) for the beneficial use of the
Bureau of Fiscal Service (BFS) through 2021. This mission critical
agency within the U.S. Department of Treasury has been located in
Parkersburg since 1957 and currently occupies three buildings in the
SSA – Charleston, WV
SSA – Charleston, a 110,000-square foot single tenant facility fully
renovated in 2000, is occupied by the Office of Hearings Operations
(OHO), a part of the Social Security Administration (SSA). The
Charleston hearing office services three SSA field offices in Ohio and
nine SSA field offices in West Virginia. The space includes courtrooms,
administrative offices and public service areas. The facility is 100%
leased through 2019.
FBI – Pittsburgh, PA
FBI – Pittsburgh serves as one of 56 FBI field offices located
throughout the country. The 100,054-square foot facility was
built-to-suit for the FBI in 2001 and is 100% leased until 2027. This
facility oversees operations for nine surrounding resident agencies
located throughout Pennsylvania and the entirety of West Virginia.
FDA – College Park, MD
FDA – College Park houses a laboratory for the Food and Drug
Administration’s (FDA) Center for Food Safety and Applied Nutrition
(CFSAN), one of the FDA’s seven product-oriented centers. The
80,677-square foot office and laboratory was built-to-suit in 2004 and
is 100% leased to the GSA for the beneficial use of the FDA until 2029.
The facility is part of the University of Maryland’s Research Park and
is located two blocks from CFSAN headquarters in the Harvey W. Wiley
Building, forming a campus which links university researchers, students
and staff with federal laboratories and private sector companies.
GSA – Clarksburg, WV
GSA – Clarksburg serves as a multi-tenanted federal center for various
federal tenants within the market area, including the FBI, DEA, SSA,
Offices of the U.S. Attorneys, and Small Business Association (SBA).
This 100% leased 63,760-square foot build-to-suit facility was
constructed in 1999 and serves the five tenant agencies through a single
GSA lease, which expires in 2019.
Courthouse – Charleston, SC
Courthouse – Charleston, an historic townhouse with a modern annex that,
together with two adjacent federally-owned buildings, constitutes the
federal judicial complex in Charleston. The original building dates to
1795 and was fully renovated in 1999 when the annex was constructed. The
building, known as the Josiah House, contains three district judge
courtrooms and four judges’ chambers. It is physically connected on the
second floor to the J. Waties Waring Judicial Center. This 60,500-square
foot federal courthouse is 100% leased through 2019.
DEA – Sterling, VA
DEA – Sterling serves as a special testing and research laboratory to
assist the DEA in performing mission critical forensic analyses. The
49,692-square foot facility was built-to-suit in 2001 and includes
evidence rooms, computer labs, cryptography and various other
specialized laboratories. The facility is 100% leased through 2020.
ICE – Pittsburgh, PA
ICE – Pittsburgh, a state-of-the-art, build-to-suit facility constructed
in 2004, is occupied by the U.S. Immigration and Customs Enforcement
(ICE), which works to promote homeland security and public safety with
respect to border control, customs, trade and immigration for the
surrounding Pittsburgh region. The Class A facility houses the Homeland
Security Investigations (HSI) division, dedicated to combating criminal
organizations illegally exploiting America’s travel, trade, financial
and immigration systems. This 33,425-square foot facility is located
adjacent to the FBI – Pittsburgh field office, is 76% leased and has a
weighted average lease expiration year of 2019.
VA – Baton Rouge, LA
VA – Baton Rouge, constructed in 2004, serves as a VA outpatient
facility for Baton Rouge and the surrounding veteran population. This
facility is one of two VA medical treatment facilities in Baton Rouge.
Situated close to the largest private medical center in Louisiana, VA –
Baton Rouge is 30,000-square feet in size and currently 100% leased to
the VA through 2019.
SSA – Dallas, TX
SSA – Dallas is a 27,200-square foot build-to-suit facility 100% leased
to the GSA for the beneficial use of the SSA through 2020. Built in
2005, this facility integrates state-of-the-art systems to serve as a
local field office with superb access from one of Dallas’s busiest
DEA – Bakersfield, CA
DEA – Bakersfield is a build-to-suit facility that houses the
Bakersfield Resident Office for the DEA’s San Francisco Division. This
9,800-square foot facility houses two holding cells, provides for secure
and enclosed first floor parking and offers second story office space
with secured rooms for weapons and drug storage. The facility was
constructed in 2000 and is 100% leased through 2021.
Year Built /
Total – 14 Properties
Weighted average by leased square foot
“Accretive growth and consistency of mission are key to this portfolio
acquisition,” said Meghan G. Baivier, Easterly’s Chief Financial and
Chief Operating Officer. “We are expecting to scale the Company through
an approximately 4% accretive deal to our run-rate FFO per share on a
fully diluted basis. To be able to do this while remaining true to our
bullseye acquisition strategy is a compelling opportunity for the
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.
This press release contains forward-looking statements within the
meaning of federal securities laws and regulations. These
forward-looking statements are identified by their use of terms and
phrases such as “believe,” “expect,” “intend,” “project,” “anticipate,”
“position,” and other similar terms and phrases, including references to
assumptions and forecasts of future operating and financial results
(such as Cash Net Operating Income (NOI) and Funds from Operation (FFO)
per share on a fully diluted basis). Forward-looking statements are not
guarantees of future performance and involve known and unknown risks,
uncertainties and other factors which may cause the actual results to
differ materially from those anticipated at the time the forward-looking
statements are made. These risks include, but are not limited to those
risks and uncertainties associated with our business described from time
to time in our filings with the Securities and Exchange Commission,
including our Annual Report on Form 10-K filed on March 1, 2018.
Although we believe the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, we can give no
assurance that the expectations will be attained or that any deviation
will not be material. All information in this release is as of the date
of this release, and we undertake no obligation to update any
forward-looking statement to conform the statement to actual results or
changes in our expectations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180618005952/en/