Easterly Government Properties Acquires Three Building Campus Leased to AAA Rated Wake County in Cary, North Carolina

Rhea-AI Summary

Easterly Government Properties (NYSE: DEA) has acquired a 295,253 square foot campus in Cary, North Carolina, leased primarily to the Wake County Public School System (WCPSS). The campus, consisting of three facilities, is 97% leased with leases extending until 2034. The properties serve as operational headquarters and public service centers, important to WCPSS's mission. The acquisition highlights Easterly's strategy to enhance earnings growth through accretive capital deployment, increasing cash flows from AAA-rated tenants. The three buildings include:

• Wake County I: 75,401 sq ft, 100% leased to WCPSS.
• Wake County II: 98,340 sq ft, 100% leased to WCPSS.
• Wake County III: 121,512 sq ft, 63% leased to WCPSS, 31% leased to Jacobs Engineering, and 6% available for leasing.

With this acquisition, Easterly's portfolio now totals 100 properties with 9.8 million leased square feet.

Positive

• Acquired a 295,253 sq ft campus, 97% leased.
• Leases extend until 2034, ensuring long-term revenue.
• Increased cash flows from AAA-rated tenants.
• Portfolio now includes 100 properties totaling 9.8 million sq ft.

Negative

• 6% of Wake County III remains vacant, posing a leasing challenge.

Insights

Real Estate Investment Analyst

This strategic acquisition significantly strengthens DEA's portfolio with a 295,253 square foot campus backed by AAA-rated government tenancy. The deal offers multiple value drivers:

• Long-term stable cash flows secured through 2034 with built-in annual rent escalations
• High-quality tenant mix with Wake County Public School System as anchor tenant
• Value-add opportunity through 6% vacant space
• Geographic diversification in the growing Cary, NC market

The transaction aligns with DEA's core strategy of acquiring Class A properties with government and adjacent tenants. The 97% occupancy rate and AAA-rated primary tenant enhance portfolio quality while maintaining a strong weighted average lease term. The additional Jacobs Engineering lease adds further stability and diversification to the tenant mix.

Financial Analyst

This acquisition represents an accretive growth opportunity for DEA's earnings and cash flow profile. Key financial aspects include:

• Annual rent escalators provide built-in revenue growth
• AAA-rated tenant creditworthiness minimizes default risk
• Multi-tenant structure with 94% occupancy reduces concentration risk
• Long-term leases through 2034 provide visibility on future cash flows

The 6% vacant space presents upside potential through lease-up opportunities in the Cary market. This transaction brings DEA's portfolio to 100 properties totaling 9.8 million square feet, demonstrating continued execution of their growth strategy while maintaining strong tenant credit quality.

~ Easterly acquires a 295,253 square foot campus located in Cary, North Carolina ~

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 97% leased, combined 295,253 square foot campus across three assets leased primarily to the Wake County Public School System (WCPSS).

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.

“Easterly's accelerated acquisition activity underscores our ability to pursue accretive capital deployment opportunities and deliver earnings growth to shareholders,” said Darrell Crate, President & CEO of Easterly Government Properties. “With this acquisition, we continue to increase our cash flows derived from a AAA rated government tenancy and maintain our portfolio's weighted average remaining lease term.”

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

With this acquisition, Easterly owns, directly or through the Company’s joint venture, 100 properties totaling 9.8 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/20241203979509/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 did Easterly Government Properties acquire?

Easterly acquired a 295,253 square foot campus in Cary, North Carolina.

Who are the tenants of the newly acquired campus by Easterly?

The primary tenant is the Wake County Public School System (WCPSS), with Jacobs Engineering leasing part of one building.

What is the lease duration for the acquired properties?

The leases extend until June 30, 2034.

How does this acquisition impact Easterly's portfolio?

Easterly's portfolio now includes 100 properties totaling 9.8 million leased square feet.

What percentage of the new campus is leased?

The campus is 97% leased.