Easterly Government Properties Acquires 104,136 SF Facility Adjacent to Buckley Space Force Base and Occupied by Northrop Grumman Systems Corporation

Rhea-AI Summary

Easterly Government Properties (NYSE: DEA) has acquired a 104,136 square foot facility in Aurora, Colorado, fully leased to Northrop Grumman Systems (NYSE: NOC). The property, built in 2002, is strategically located adjacent to Buckley Space Force Base. 70% of the three-floor buildout meets secure design standards required by the U.S. Government, with space certified for processing sensitive compartmented information.

This acquisition aligns with Easterly's focus on vital real estate for high-credit companies connected to the government. The facility supports Northrop Grumman's contracts with Buckley SFB, which contributes an estimated $2.5 billion annually to the local economy. With this addition, Easterly now owns 96 properties totaling 9.5 million square feet, either directly or through joint ventures.

Positive

• Acquisition of a 100% leased, triple net asset with annual rent escalations
• Strategic location adjacent to Buckley Space Force Base
• 70% of the facility meets secure government design standards
• Strengthens Easterly's portfolio of specialized facilities supporting government-related missions
• Expands total portfolio to 96 properties and 9.5 million square feet

Negative

• None.

Insights

Real Estate Investment Analyst

This acquisition by Easterly Government Properties (DEA) is strategically significant. The 104,136 sq ft facility, fully leased to Northrop Grumman, strengthens DEA's portfolio of mission-critical properties. The asset's proximity to Buckley Space Force Base and its secure design standards make it a valuable long-term holding. The triple-net lease structure with annual rent escalations provides stable, growing cash flows. This move aligns with DEA's focus on high-quality, government-related tenants, potentially enhancing its competitive position in the specialized real estate sector. For investors, this acquisition represents a low-risk addition to DEA's portfolio, likely contributing to steady income growth and potential value appreciation over time. The 100% occupancy and BBB+ rated tenant mitigate near-term risks, making this a solid addition to DEA's government-focused REIT strategy.

Defense Industry Analyst

Northrop Grumman's long-term lease of this strategically located facility underscores its commitment to supporting Space Force operations. The property's secure design standards, meeting Director of National Intelligence security requirements, highlight its importance in Northrop's government contract work. This facility's proximity to Buckley SFB, which contributes $2.5 billion annually to the local economy, positions Northrop Grumman to maintain and potentially expand its role in space and defense projects. For investors, this signals Northrop's sustained involvement in high-value government contracts, particularly in space and missile defense sectors. The investment in specialized infrastructure suggests a long-term commitment to these areas, which could drive future revenue growth and contract wins for Northrop Grumman in the evolving space defense market.

~ 100% leased, triple net 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 104,136 square foot facility 100% leased to Northrop Grumman Systems Corporation (NYSE: NOC, S&P: BBB+), a multinational aerospace and defense company, located in Aurora, Colorado (“Northrop Grumman - Aurora”).

The facility, developed in 2002, was built-to-suit for TRW Inc., an aerospace and automotive corporation acquired by Northrop Grumman in that same year. Approximately 70% of the three-floor buildout is constructed under secure design standards as required by the U.S. Government related to the tenant’s contracts with Buckley Space Force Base (“Buckley SFB”). This secure space is certified and accredited as meeting Director of National Intelligence security standards for the processing, storage, and discussion of sensitive compartmented information.

“This acquisition advances our efforts in building a robust portfolio of vital real estate for high-credit companies connected to the government, like Northrop Grumman," said Darrell Crate, Easterly’s Chief Executive Officer. "With this acquisition, we strengthen our competitive advantage in owning and developing specialized facilities that support the missions of our corporate tenants and their U.S. Government partners.”

The property is located immediately west of Buckley SFB, which contributes an estimated $2.5 billion annually to the local economy and provides strategic and theater missile warning to the United States and its International Partners. The base supports 3,500 active-duty members from every service, 4,000 National Guard personnel and Reservists, four commonwealth international partners, 2,400 civilians, 2,500 contractors, 94,000 retirees and approximately 40,000 veterans and dependents.

With this acquisition, Easterly owns, directly or through the Company’s joint venture, 96 properties totaling 9.5 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/20241015659710/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 Aurora, Colorado?

Easterly Government Properties acquired a 104,136 square foot facility in Aurora, Colorado, fully leased to Northrop Grumman Systems and located adjacent to Buckley Space Force Base.

How does the acquired facility support Northrop Grumman's government contracts?

70% of the facility's three-floor buildout meets secure design standards required by the U.S. Government for Northrop Grumman's contracts with Buckley Space Force Base, including space certified for processing sensitive compartmented information.

What is the strategic importance of this acquisition for Easterly Government Properties (DEA)?

This acquisition strengthens Easterly's portfolio of specialized facilities supporting government-related missions and advances their strategy of owning vital real estate for high-credit companies connected to the government.

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

With this acquisition, Easterly Government Properties now owns, directly or through joint ventures, 96 properties totaling 9.5 million square feet.