Easterly Government Properties Acquires 100,000 Leased Square Foot Internal Revenue Service Industrial Facility in Ogden, Utah

Rhea-AI Summary

Easterly Government Properties (NYSE: DEA) has acquired a 100,000 square foot facility in Ogden, Utah, fully leased to the GSA for IRS use. The mission-critical facility features Level 4 security requirements and houses tax submission processing and Digital Fraud Department operations. The property, situated on 13 acres, includes advanced security measures like 24/7 monitoring, bomb detection equipment, and chemical sniffing K9s. The lease expires in January 2029 with two five-year extension options through 2039. As one of only two IRS processing centers in the US, the facility accommodates up to 850 employees per shift and is expanding operations with the relocation of its Imaging Department from Cincinnati.

Positive

• 100% occupancy with high-credit US Government tenant (IRS)
• Long-term lease through 2029 with extension options until 2039
• Mission-critical facility as one of only two IRS processing centers in the US
• Facility expansion with relocation of Imaging Department from Cincinnati
• High operational capacity supporting up to 850 employees per shift

Negative

• None.

Insights

Real Estate Investment Analyst

This strategic acquisition of a 100,000 square foot IRS facility strengthens Easterly's position in mission-critical government properties. The facility's Level 4 security classification and role as one of only two IRS processing centers nationwide demonstrates exceptional tenant stickiness and lease renewal probability. The property's features, including the planned relocation of the Imaging Department and addition of new scanners, indicate potential for increased operational importance.

The lease structure through 2029 with two five-year extension options provides stable, predictable cash flows until potentially 2039. The facility's high occupancy levels (up to 850 employees per shift) and mission-critical status suggest strong tenant retention. This acquisition aligns with Easterly's strategy of focusing on essential government facilities and should contribute to predictable FFO growth.

Government Operations Specialist

The facility's designation as one of only two IRS processing centers nationwide makes it an irreplaceable asset in the IRS infrastructure. The relocation of the Imaging Department from Cincinnati indicates operational consolidation and increased strategic importance. The extensive security features, including bomb detection and K9 units, reflect the facility's critical role in tax processing and digital fraud prevention.

The three-shift operation pattern and high staffing levels demonstrate the facility's operational significance. The planned technology upgrades with new high-speed scanners suggest long-term commitment to the location. This facility's role in housing the Digital Fraud Department's origins adds to its institutional importance within the IRS network.

~ Mission critical industrial facility meets Level 4 security requirements with advanced bomb detection capabilities and chemical sniffing K9s ~

WASHINGTON--(BUSINESS WIRE)-- 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 and its adjacent partners, announced today that it has acquired a 100,000 leased square foot facility 100% leased to the General Services Administration (GSA) for the beneficial use of the Internal Revenue Service (IRS), located in Ogden, Utah (“IRS - Ogden”), a geographic hub for the agency.

The highly secure 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. Government security requirements due to the critical areas and systems within the property, 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.

“Today’s announcement reinforces our commitment to growing our long-term cash flows and generating durable returns for the foreseeable future,” said Darrell Crate, President and CEO of Easterly Government Properties. “With this acquisition, we remain focused on executing our robust pipeline and delivering shareholder value through accretive deals, while enabling high credit U.S. Government agencies to deliver greater cost efficiencies.”

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 4 new high-speed scanners.

With this acquisition, Easterly owns, directly or through the Company’s joint venture, 97 properties totaling 9.5 million leased square feet.

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 results. 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 February 27, 2024. 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/20241122423501/en/

Easterly Government Properties, Inc.

Lindsay S. Winterhalter

Senior Vice President, Investor Relations & Operations

202-596-3947

ir@easterlyreit.com

Source: Easterly Government Properties, Inc.

FAQ

What facility did Easterly Government Properties (DEA) acquire in Ogden, Utah?

Easterly Government Properties acquired a 100,000 square foot IRS industrial facility in Ogden, Utah, which serves as one of only two IRS processing centers in the United States.

What security features does the new DEA-acquired IRS facility in Ogden have?

The facility has Level 4 security requirements, including 24/7 security monitoring, bomb detection equipment, chemical sniffing K9s, gated access, guard stations, and a receipt control and deposit center.

How long is the lease term for the Ogden IRS facility acquired by DEA?

The lease expires in January 2029 and contains two five-year options that could extend the lease through January 2039.

What operations are being relocated to the DEA-owned Ogden IRS facility?

The IRS is actively relocating its Imaging Department from Cincinnati to the Ogden facility and adding 4 new high-speed scanners.