Easterly Government Properties Acquires 99,246 SF Facility Adjacent to Wright-Patterson Air Force Base and Occupied by Northrop Grumman Systems Corporation

Rhea-AI Summary

Easterly Government Properties (NYSE: DEA) has acquired a 99,246 square foot facility in Beavercreek, Ohio, fully leased to Northrop Grumman Systems (NYSE: NOC). The build-to-suit property, occupied since 2012, features robust security enhancements and is strategically located adjacent to Wright-Patterson Air Force Base. This acquisition aligns with Easterly's focus on mission-critical real estate for government-adjacent companies.

The facility's proximity to the Air Force Research Laboratory's (AFRL) headquarters underscores its strategic importance. AFRL, founded in 1917, is the primary scientific research and development center for the Department of the Air Force, employing over 12,500 people across nine technology areas. With this addition, Easterly's portfolio now includes 95 properties totaling 9.3 million square feet.

Positive

• Acquisition of a 99,246 sq ft facility 100% leased to Northrop Grumman Systems
• Strategic location adjacent to Wright-Patterson Air Force Base
• Robust security enhancements in the facility
• Expands Easterly's portfolio to 95 properties totaling 9.3 million square feet
• Aligns with company's strategy of acquiring mission-critical real estate for government-adjacent tenants

Negative

• None.

Insights

Financial Analyst

Easterly Government Properties' acquisition of the 99,246 sq ft facility leased to Northrop Grumman is a strategic move that strengthens its portfolio of government-adjacent properties. The 100% net-leased asset with annual rent escalations provides a stable income stream, enhancing the company's financial stability. The property's location near Wright-Patterson Air Force Base and its high-security features make it a valuable long-term asset. This acquisition aligns with Easterly's focus on mission-critical real estate and could potentially lead to increased investor confidence. However, the financial terms of the deal were not disclosed, making it challenging to assess its immediate impact on Easterly's bottom line. Overall, this acquisition modestly reinforces Easterly's market position in the specialized government-adjacent real estate sector.

Real Estate Expert

The acquisition of this Northrop Grumman facility in Beavercreek, Ohio, is a savvy move by Easterly Government Properties. The property's strategic location adjacent to Gate 22B of Wright-Patterson Air Force Base significantly enhances its long-term value and potential for sustained occupancy. The build-to-suit nature of the facility, occupied since 2012, suggests a strong tenant-landlord relationship. The robust security enhancements, including secure design standards and access control systems, make this property highly specialized and difficult to replicate, potentially reducing competition and ensuring long-term tenancy. With this addition, Easterly's portfolio now comprises 95 properties totaling 9.3 million square feet, indicating steady growth. This acquisition reinforces Easterly's niche market position in government-adjacent properties, which could provide a competitive edge in attracting similar high-value tenants in the future.

Defense Industry Analyst

Easterly's acquisition of the Northrop Grumman facility in Dayton is a strategic play in the defense real estate sector. The property's proximity to the Air Force Research Laboratory (AFRL) headquarters is crucial, given AFRL's significant role in scientific research and development for the Department of the Air Force. This location could facilitate Northrop Grumman's collaboration with AFRL, potentially leading to increased contract opportunities. The facility's robust security features align with the confidential nature of defense work, making it a valuable asset for both Easterly and Northrop Grumman. However, investors should note that the defense industry can be subject to budget fluctuations and policy changes, which could impact long-term lease stability. Despite this, the specialized nature of the facility and Northrop Grumman's long-standing occupancy since 2012 suggest a lower risk profile for this particular asset.

~ 100% net leased asset with annual rent escalations ~

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 99,246 square foot facility 100% leased to Northrop Grumman Systems Corporation (NYSE: NOC, S&P: BBB+), a multinational aerospace and defense company and located in Beavercreek, Ohio, a suburb of Dayton (“Northrop Grumman - Dayton”).

The build-to-suit facility has been occupied by Northrop Grumman 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.

“This acquisition is an important milestone for Easterly as we execute on our robust pipeline of mission critical real estate for high credit government adjacent companies,” said Darrell Crate, Easterly’s Chief Executive Officer. “With this announcement, Easterly enhances its definable edge in owning and developing specialized facilities which support our corporate tenants’ missions alongside their U.S. Government partners.”

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.

With this acquisition, Easterly owns, directly or through the Company’s joint venture, 95 properties totaling 9.3 million 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/20240905167541/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 property did Easterly Government Properties (DEA) acquire in Beavercreek, Ohio?

Easterly Government Properties acquired a 99,246 square foot facility fully leased to Northrop Grumman Systems in Beavercreek, Ohio, adjacent to Wright-Patterson Air Force Base.

How long has Northrop Grumman occupied the facility acquired by Easterly Government Properties (DEA)?

Northrop Grumman has occupied the build-to-suit facility since 2012, which is approximately 11 years as of the acquisition announcement.

What is the strategic importance of the location of the facility acquired by Easterly Government Properties (DEA)?

The facility is strategically located adjacent to Gate 22B at Wright-Patterson Air Force Base, which is the main access point for the Air Force Research Laboratory's headquarters and the Air Force Institute of Technology.

How many properties does Easterly Government Properties (DEA) own after this acquisition?

After this acquisition, Easterly Government Properties owns, directly or through its joint venture, 95 properties totaling 9.3 million square feet.