Easterly Government Properties Announces Close of 49,420 SF Facility in Orlando, Florida to Expand Mission-Critical Portfolio

Rhea-AI Summary

Easterly Government Properties (NYSE: DEA) has closed on a 49,420 square foot facility in Orlando, Florida, fully leased to the U.S. Immigration and Customs Enforcement (ICE) for 20 years, with the lease expiring in August 2040.

This acquisition is part of Easterly's strategy to expand its portfolio of mission-critical properties leased to the U.S. Government. The facility will support ICE's operations against narcotics smuggling, human trafficking, child exploitation, gang violence, money laundering, and other criminal activities in Central Florida.

This purchase brings Easterly's portfolio to 93 properties, totaling 9.1 million square feet. CEO Darrell Crate highlighted this acquisition as a step towards delivering stable and attractive returns for shareholders while supporting national security and public safety.

Positive

• Acquisition of 49,420 SF facility leased to ICE.
• 20-year lease agreement with U.S. Government till August 2040.
• Facility supports mission-critical operations to combat crime in Central Florida.
• Expansion brings Easterly's portfolio to 93 properties.
• Total portfolio now encompasses 9.1 million square feet.
• Strategic acquisition aligned with external growth trajectory.
• Potential for stable and attractive returns for shareholders.

Negative

• Long-term lease obligations could limit flexibility.
• Dependence on government leases poses potential risk.
• Concentration in specific regions may expose to localized economic downturns.
• Potentially high maintenance and operational costs for specialized facilities.

Insights

Financial Analyst

Easterly Government Properties' acquisition of the 49,420 square foot facility leased to ICE is a significant step in its growth strategy. The 20-year lease term provides long-term revenue stability for the company, minimizing vacancy risk. Investors should note that lease longevity, particularly with a tenant like the U.S. Government, translates to a reliable income stream. Additionally, this move is aligned with Easterly's strategy of focusing on Class A commercial properties leased to government entities, which are generally considered lower-risk investments. This provides a steady yield, which can be attractive in volatile market conditions. The long-term lease also locks in rental income without being subjected to market rental fluctuations over the period.

Market Research Analyst

From a market research perspective, the Orlando facility's focus on critical operations like immigration enforcement and criminal investigation adds strategic value to Easterly's portfolio. This acquisition highlights the increasing demand for secure and strategic locations by government agencies, which could potentially drive up future lease rates in similar properties. Furthermore, the acquisition positions Easterly well within the high-demand Florida market, known for its economic growth and population increase. This could mean enhanced market valuation for the property and possibly higher appreciation rates compared to properties in less dynamic regions.

~ Close of federally leased facility with a 20-year term accelerates Easterly growth trajectory ~

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 the closing of the previously announced 49,420 square foot facility 100% leased to the U.S. Immigration and Customs Enforcement (ICE) and located in Orlando, Florida (“ICE - Orlando”).

ICE - Orlando features a 20-year lease that does not expire until August 2040. The asset helps facilitate the agency’s mission to enforce immigration laws and conduct criminal investigations to preserve national security and public safety. These mission-critical operations executed within the facility will directly combat illicit activity including narcotics smuggling, human trafficking, child exploitation, gang violence, money laundering, and other crimes in the Central Florida region.

“This strategic acquisition underscores our commitment to advancing the unwavering, mission-critical U.S. Government operations that fortify the safety of the country,” said Darrell Crate, Easterly’s Chief Executive Officer. “The closing of this asset further solidifies our external growth trajectory and track record in delivering stable, attractive returns for our shareholders.”

With this acquisition, Easterly owns, directly or through the Company’s joint venture, 93 properties totaling 9.1 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/20240515639552/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 is the significance of Easterly Government Properties' acquisition in Orlando?

The acquisition expands Easterly's portfolio with a 49,420 SF facility leased to ICE for 20 years, supporting critical law enforcement operations in Central Florida.

What is the duration of the lease for the new Easterly property in Orlando?

The lease for the Orlando facility is for 20 years, expiring in August 2040.

How does the new acquisition affect Easterly Government Properties' portfolio?

The acquisition increases Easterly's portfolio to 93 properties, totaling 9.1 million square feet, enhancing its growth trajectory.

What operations will the ICE facility in Orlando support?

The facility will support ICE's missions against narcotics smuggling, human trafficking, child exploitation, gang violence, money laundering, and other crimes.

How does this acquisition impact Easterly's investors?

This strategic acquisition is expected to deliver stable and attractive returns for shareholders while supporting vital national security operations.