UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
August 8, 2016
Easterly Government Properties, Inc.
(Exact Name of Registrant as Specified in Charter)
| Maryland | 001-36834 | 47-2047728 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 2101 L Street NW, Suite 650, Washington, D.C. | 20037 | |||
| (Address of Principal Executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (202) 595-9500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On August 8, 2016, we issued a press release announcing our results of operations for the second quarter ended June 30, 2016. A copy of this press release as well as a copy of our supplemental information package are available on our website and are attached hereto as Exhibits 99.1 and 99.2 and incorporated herein by reference. The information in this Item 2.02 as well as the attached Exhibits 99.1 and 99.2 are being furnished and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
We will host a webcast and conference call at 10:00 a.m. Eastern Daylight time on August 8, 2016, to review our second quarter 2016 performance, discuss recent events and conduct a question-and-answer session. The number to call is 1-877-705-6003 (domestic) and 1-201-493-6725 (international). A live webcast will be available in the Investor Relations section of our website. A replay of the conference call will be available through August 22, 2016, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 13640229. Please note that the full text of the press release and supplemental information package are available through our website at ir.easterlyreit.com. The information contained on our website is not incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit Number |
Description | |
| 99.1 | Press release dated August 8, 2016 | |
| 99.2 | Easterly Government Properties, Inc. Supplemental Information Package for the quarter ended June 30, 2016. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EASTERLY GOVERNMENT PROPERTIES, INC. | ||
| By: | /s/ William C. Trimble, III | |
| Name: | William C. Trimble, III | |
| Title: | Chief Executive Officer and President | |
Date: August 8, 2016
Exhibit 99.1
EASTERLY GOVERNMENT PROPERTIES
REPORTS SECOND QUARTER 2016 RESULTS
WASHINGTON, D.C. – August 8, 2016 – Easterly Government Properties, Inc. (NYSE: DEA) (the “Company” or “Easterly”), a fully integrated real estate investment trust (“REIT”) focused primarily on the acquisition, development and management of Class A commercial properties leased to the U.S. Government, today announced its results of operations for the quarter ended June 30, 2016.
Financial Highlights for the Quarter Ended June 30, 2016
| • | Net income was $1.0 million, or $0.03 per share on a fully diluted basis for the three months ended June 30, 2016. |
| • | FFO was $12.1 million, or $0.30 per share on a fully diluted basis for the three months ended June 30, 2016. |
| • | FFO, as Adjusted was $11.7 million, or $0.29 per share on a fully diluted basis for the three months ended June 30, 2016. |
| • | CAD was $10.4 million for the three months ended June 30, 2016. |
| • | On June 7, the Company completed its first follow-on equity offering raising $84.9 million of gross proceeds, with an additional $27.0 million in gross proceeds expected upon full physical settlement of related forward sales agreements. |
Portfolio Highlights
| • | Portfolio occupancy at 100%. |
| • | Completed the acquisition of a 62,772 square foot National Park Service building in Omaha, NE. |
| • | Announced the agreement to acquire a 302,057 square foot portfolio consisting of four U.S. Government-leased buildings for an aggregate purchase price of approximately $97.4 million. Three of the four buildings were acquired subsequent to quarter end, with the fourth building expected to close in the fourth quarter, 2016. |
| • | Awarded the 20-year lease for the development of a 65,810 square foot Food and Drug Administration laboratory in Alameda, CA, the Company’s first development project announced since IPO. |
“Since IPO the Company has completed and announced 13 property acquisitions. As of June 30, 2016 the Company owned 38 properties and the portfolio has grown to 41 with closings subsequent to quarter-end,” said William C. Trimble III, President and Chief Executive Officer. “The team at Easterly remains focused on growing our portfolio of mission-critical properties with a strong recurring stream of cash flows backed by the full faith and credit of the United States Government.”
Financial Results for the Six Months Ended June 30, 2016
Net income was $2.1 million, or $0.05 per share on a fully diluted basis for the six months ended June 30, 2016.
FFO was $24.1 million, or $0.60 per share on a fully diluted basis for the six months ended June 30, 2016.
FFO as Adjusted was $23.2 million, or $0.58 per share on a fully diluted basis for the six months ended June 30, 2016.
CAD was $20.8 million for the six months ended June 30, 2016.
Portfolio Operations
As of June 30, 2016, the Company wholly owned 38 properties in the United States, encompassing approximately 2.8 million square feet in the aggregate, including 35 properties that were leased primarily to U.S. Government tenant agencies and three properties that were entirely leased to private tenants. As of June 30, 2016, the portfolio had an average age of 11.8 years, was 100% occupied, and had a weighted average remaining lease term of 6.6 years. With less than 16.5% of leases, based on square footage and total annualized lease income, scheduled to expire before 2019, Easterly expects to continue to provide a highly visible and stable cash-flow stream.
Acquisitions and Developments
On May 19, 2016 the Company acquired a 62,772 square foot property located in Omaha, NE. The building was constructed in 2004 and is 100% leased to the GSA on behalf of the National Park Service with eight years remaining on a 20-year initial lease.
On June 1, 2016 the Company announced the agreement to acquire a 302,057 square foot portfolio of four U.S. Government-leased properties for a purchase price of approximately $97.4 million. The portfolio consists of:
| • | FBI - Birmingham, a 96,278-square foot built-to-suit property completed in 2005, 100% leased through 2020 to the GSA on behalf of the FBI. |
| • | DEA - Birmingham, a 35,616-square foot built-to-suit property completed in 2005, 100% leased through 2020 to the GSA on behalf of the DEA. |
| • | EPA - Kansas City, a LEED gold, 71,979-square foot built-to-suit laboratory completed in 2003, 100% leased through 2023 to the GSA on behalf of the EPA. |
| • | FBI - Albany, a 98,184-square foot built-to-suit property completed in 1998, 100% leased through 2018 to the GSA on behalf of the FBI. |
Subsequent to quarter end the Company closed on the acquisition of FBI - Birmingham, DEA - Birmingham and EPA - Kansas City. The acquisition of FBI - Albany is expected to close in the fourth quarter of 2016.
On June 18, 2016 the Company was awarded the 20-year lease for the development of a 65,810 square foot Food and Drug Administration laboratory in Alameda, CA.
Balance Sheet and Capital Markets Activities
Easterly believes that its strong balance sheet and access to capital provides ample capacity to pursue and fund its growth plan. As of June 30, 2016, the Company had total indebtedness of $280.0 million comprised of $198.2 million on its unsecured revolving credit facility and $81.8 million of mortgage debt (excluding unamortized premiums / discounts and deferred financing fees). At June 30, 2016, Easterly had net debt to total enterprise value of 24.0% and a net debt to annualized quarterly EBITDA ratio of 4.9x. Easterly’s outstanding debt had a weighted average maturity of five years and a weighted average interest rate of 2.4%. The Company also had approximately $201.8 million of remaining capacity on its $400 million revolver, before consideration for the facility’s $250 million accordion feature.
On June 7, 2016 the Company completed its first follow-on equity offering comprised of an aggregate 7,046,012 shares consisting of 4,719,045 shares sold directly by the Company, 1,500,000 shares sold on a forward basis in connection with certain forward sales agreements, and 826,967 shares sold by certain selling stockholders. Gross proceeds from the offering was $84.9 million. The offering will result in an additional $27.0 million of gross proceeds to the Company, assuming the forward sales agreements are physically settled in full. A portion of the proceeds were used to fund the acquisition of FBI - Birmingham, DEA - Birmingham and EPA - Kansas City. The balance of the net proceeds may be used to fund the acquisition of FBI - Albany, repay borrowings outstanding under our senior unsecured revolving credit facility, to fund other potential acquisition opportunities, for general corporate purposes, or a combination of the foregoing.
“The Company’s robust balance sheet, further strengthened by the successful June follow-on equity offering, is well positioned to continue supporting the Company’s proven accretive acquisition strategy,” said Darrell W. Crate, Chairman.
Dividend
On August 3, 2016 the Board of Directors of Easterly approved a cash dividend for the second quarter of 2016 in the amount of $0.23 per share of common stock. The dividend will be payable September 13, 2016 to shareholders of record on August 26, 2016.
Outlook for 2016 – Including Potential Future Acquisitions
The Company is reiterating its expectations for 2016 FFO per share on a fully diluted basis in a range of $1.19 to $1.23.
Outlook for the 12 Months Ending December 31, 2016
| Low | High | |||||||
| Net income (loss) per share – fully diluted basis |
$ | 0.11 | $ | 0.15 | ||||
| Plus: real estate depreciation and amortization |
$ | 1.08 | $ | 1.08 | ||||
| FFO per share – fully diluted basis |
$ | 1.19 | $ | 1.23 | ||||
This guidance assumes $175 million of acquisitions in 2016, including the five properties acquired to-date and the closing of FBI - Albany in the fourth quarter of 2016. This guidance does not contemplate dispositions or additional capital markets activities. This guidance is forward-looking and reflects management’s view of current and future market conditions. The Company’s actual results may differ materially from this guidance.
Non-GAAP Supplemental Financial Measures
Cash Available for Distribution (CAD) is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is calculated in accordance with the current NAREIT definition as FFO minus normalized recurring real estate-related expenditures and other non-cash items and nonrecurring expenditures. CAD is presented solely as a supplemental disclosure because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.
EBITDA is calculated as the sum of net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and is not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company’s ability to service or incur debt. Because all companies do not calculate EBITDA the same way, the presentation of EBITDA may not be comparable to similarly titled measures of other companies.
Funds From Operations (FFO) is defined by NAREIT as net income (loss), calculated in accordance with GAAP, excluding gains or losses from sales of property and impairment losses on depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors.
Funds From Operations, as Adjusted (FFO, as Adjusted) adjusts Funds From Operations (FFO) to present an alternative measure of our operating performance that we believe is useful to shareholders and potential investors, which, when applicable, excludes the impact of acquisition costs, straight-line rent, above-/below-market leases, non-cash interest and non-cash compensation. Because all companies do not calculate FFO, as Adjusted in the same way, the presentation of FFO, as Adjusted may not be comparable to similarly titled measures of other companies.
Net Operating Income (NOI) is calculated as total property revenues (rental income, tenant reimbursements and other income) less property operating expenses and real estate taxes from the properties owned by the Company. Cash NOI excludes from NOI straight-line rent and amortization of above-/below-market leases. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. The Company believes that NOI provides investors with a useful measure of the operating performance of our properties. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions.
Other Definitions
Fully diluted basis assumes the exchange of all outstanding common units representing limited partnership interests in the Company’s operating partnership, or common units, the full vesting of all restricted stock units, and the exchange of all earned and vested LTIP units in the Company’s operating partnership for shares of common stock on a one-for-one basis, which is not the same as the meaning of “fully diluted” under GAAP. Fully diluted basis does not include outstanding LTIP units in the Company’s operating partnership that are subject to performance criteria that have not yet been met.
Pro forma three months ended June 30, 2015 removes from the Company’s financial results for the three month period ended June 30, 2015 the impact of one-time, non-recurring expenses related to its initial public offering, including legal and accounting fees and new entity formation costs.
Pro forma six months ended June 30, 2015 (1) removes from the Company’s financial results for the period from February 11, 2015 (the date of the closing of the Company’s initial public offering) to June 30, 2015 the impact of one-time, non-recurring expenses related to its initial public offering, including legal and accounting fees and new entity formation costs and (2) reflects a full quarter of operations for the period from January 1, 2015 to March 31, 2015 on a pro forma basis based on the financial results of the 49 days of operations between February 11, 2015 and March 31, 2015.
Conference Call Information
The Company will host a webcast and conference call at 10:00 a.m. Eastern Daylight time on August 8, 2016 to review the second quarter 2016 performance, discuss recent events and conduct a question-and-answer session. The number to call is 1-877-705-6003 (domestic) and 1-201-493-6725 (international). A live webcast will be available in the Investor Relations section of the Company’s website. A replay of the conference call will be available through August 22, 2016 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 13640229. Please note that the full text of the press release and supplemental information package are available through the Company’s website at ir.easterlyreit.com.
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 primarily through the U.S. General Services Administration (GSA). For further information on the company and its properties, please visit www.easterlyreit.com.
Contact:
Easterly Government Properties, Inc.
Meghan G. Baivier
Chief Financial and Operating Officer
202-971-9867
ir@easterlyreit.com
Forward Looking Statements
We make statements in this press release that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions and include our guidance with respect to Net income (loss) and FFO per share on a fully diluted basis. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement in this press release for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: risks associated with our dependence on the U.S. Government and its agencies for substantially all of our revenues; risks associated with ownership and development of real estate; decreased rental rates or increased vacancy rates; loss of key personnel; general volatility of the capital and credit markets and the market price of our common stock; the risk we may lose one or more major tenants; difficulties in completing and successfully integrating acquisitions; failure of acquisitions or development projects to yield anticipated results; risks associated with actual or threatened terrorist attacks; intense competition in the real estate market that may limit our ability to attract or retain tenants
or re-lease space; insufficient amounts of insurance or exposure to events that are either uninsured or underinsured; uncertainties and risks related to adverse weather conditions, natural disasters and climate change; exposure to liability relating to environmental and health and safety matters; limited ability to dispose of assets because of the relative illiquidity of real estate investments and the nature of our assets; exposure to litigation or other claims; risks associated with breaches of our data security; risks associated with our indebtedness; and other risks and uncertainties detailed in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on March 2, 2016. In addition, our qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, or the Code, and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership. We assume no obligation to update publicly any forward looking statements, whether as a result of new information, future events or otherwise.
Balance Sheet
(In thousands, except share amounts)
| June 30, 2016 | ||||||||
| (unaudited) | December 31, 2015 | |||||||
| Assets |
||||||||
| Real estate properties, net |
$ | 808,177 | $ | 772,007 | ||||
| Cash and cash equivalents |
3,704 | 8,176 | ||||||
| Restricted cash |
1,557 | 1,736 | ||||||
| Deposits on acquisitions |
77,796 | — | ||||||
| Rents receivable |
6,920 | 6,347 | ||||||
| Accounts receivable |
3,709 | 2,920 | ||||||
| Deferred financing, net |
2,296 | 2,726 | ||||||
| Intangible assets, net |
111,728 | 116,585 | ||||||
| Prepaid expenses and other assets |
1,958 | 1,509 | ||||||
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| Total assets |
$ | 1,017,845 | $ | 912,006 | ||||
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| Liabilities |
||||||||
| Revolving credit facility |
198,167 | 154,417 | ||||||
| Mortgage notes payable, net |
82,289 | 83,744 | ||||||
| Intangible liabilities, net |
42,119 | 44,605 | ||||||
| Accounts payable and accrued liabilities |
9,949 | 9,346 | ||||||
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| Total liabilities |
332,524 | 292,112 | ||||||
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| Equity |
||||||||
| Common stock, par value $0.01, 200,000,000 shares authorized, 34,648,580 and 24,168,379 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively. |
346 | 241 | ||||||
| Additional paid-in capital |
560,072 | 391,767 | ||||||
| Retained (deficit) |
(320 | ) | (1,694 | ) | ||||
| Cumulative dividends |
(25,857 | ) | (13,051 | ) | ||||
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| Total stockholders’ equity |
534,241 | 377,263 | ||||||
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|
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| Non-controlling interest in Operating Partnership |
151,080 | 242,631 | ||||||
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| Total equity |
685,321 | 619,894 | ||||||
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| Total liabilities and equity |
$ | 1,017,845 | $ | 912,006 | ||||
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Income Statement
(Unaudited, in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2016 | June 30, 2015 (pro forma) |
June 30, 2016 | June 30, 2015 (pro forma) |
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| Revenues |
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| Rental income |
$ | 22,291 | $ | 17,626 | $ | 44,027 | $ | 34,716 | ||||||||
| Tenant reimbursements |
2,476 | 1,572 | 4,631 | 2,998 | ||||||||||||
| Other income |
154 | 58 | 234 | 78 | ||||||||||||
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| Total revenues |
24,921 | 19,256 | 48,892 | 37,792 | ||||||||||||
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| Operating Expenses |
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| Property operating |
5,085 | 3,513 | 9,418 | 6,691 | ||||||||||||
| Real estate taxes |
2,332 | 1,755 | 4,700 | 3,517 | ||||||||||||
| Depreciation and amortization |
11,074 | 9,151 | 21,937 | 18,152 | ||||||||||||
| Acquisition costs |
346 | 320 | 679 | 418 | ||||||||||||
| Corporate general and administrative |
3,052 | 2,181 | 6,088 | 3,935 | ||||||||||||
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| Total expenses |
21,889 | 16,920 | 42,822 | 32,713 | ||||||||||||
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| Operating income |
3,032 | 2,336 | 6,070 | 5,079 | ||||||||||||
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| Other (expenses) |
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| Interest expense, net |
(1,995 | ) | (1,321 | ) | (3,924 | ) | (2,608 | ) | ||||||||
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| Net income |
1,037 | 1,015 | 2,146 | 2,471 | ||||||||||||
| Non-controlling interest in Operating Partnership |
(338 | ) | (397 | ) | (772 | ) | (967 | ) | ||||||||
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| Net income available to Easterly Government Properties, Inc. |
$ | 699 | $ | 618 | $ | 1,374 | $ | 1,504 | ||||||||
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| Net income available to Easterly Government Properties, Inc. per share: |
||||||||||||||||
| Basic |
$ | 0.02 | $ | 0.03 | $ | 0.05 | ||||||||||
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| Diluted |
$ | 0.02 | $ | 0.02 | $ | 0.05 | ||||||||||
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| Weighted-average common shares outstanding: |
||||||||||||||||
| Basic |
27,484,075 | 24,141,712 | 25,812,893 | |||||||||||||
| Diluted |
29,267,258 | 25,435,010 | 27,538,423 | |||||||||||||
| Net income, per share - weighted average fully diluted basis |
$ | 0.03 | $ | 0.03 | $ | 0.05 | $ | 0.06 | ||||||||
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| Weighted average common shares outstanding - fully diluted basis |
40,964,377 | 39,699,318 | 40,338,097 | 39,699,318 | ||||||||||||
EBITDA, FFO and CAD
(Unaudited, in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2016 | June 30, 2015 (pro forma) |
June 30, 2016 | June 30, 2015 (pro forma) |
|||||||||||||
| Net income |
$ | 1,037 | $ | 1,015 | $ | 2,146 | $ | 2,471 | ||||||||
| Depreciation and amortization |
11,074 | 9,151 | 21,937 | 18,152 | ||||||||||||
| Interest expense |
1,995 | 1,321 | 3,924 | 2,608 | ||||||||||||
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| EBITDA |
$ | 14,106 | $ | 11,487 | $ | 28,007 | $ | 23,231 | ||||||||
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| Net income |
$ | 1,037 | $ | 1,015 | 2,146 | $ | 2,471 | |||||||||
| Depreciation and amortization |
11,074 | 9,151 | 21,937 | 18,152 | ||||||||||||
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| Funds From Operations (FFO) |
$ | 12,111 | $ | 10,166 | $ | 24,083 | $ | 20,623 | ||||||||
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| Adjustments to FFO: |
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| Acquisition costs |
346 | 320 | 679 | 418 | ||||||||||||
| Straight-line rent |
45 | (65 | ) | 33 | (131 | ) | ||||||||||
| Above-/below-market leases |
(1,711 | ) | (1,300 | ) | (3,409 | ) | (2,541 | ) | ||||||||
| Non-cash interest expense |
194 | 187 | 389 | 377 | ||||||||||||
| Non-cash compensation |
723 | 457 | 1,422 | 558 | ||||||||||||
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| Funds From Operations, as Adjusted |
$ | 11,708 | $ | 9,765 | $ | 23,197 | $ | 19,304 | ||||||||
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| FFO, per share - weighted average fully diluted basis |
$ | 0.30 | $ | 0.26 | $ | 0.60 | $ | 0.52 | ||||||||
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| FFO, as Adjusted, per share - weighted average fully diluted basis |
$ | 0.29 | $ | 0.25 | $ | 0.58 | $ | 0.49 | ||||||||
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| Funds From Operations, as Adjusted |
$ | 11,708 | $ | 9,765 | 23,197 | $ | 19,304 | |||||||||
| Acquisition costs |
(346 | ) | (320 | ) | (679 | ) | (418 | ) | ||||||||
| Principal amortization |
(711 | ) | (586 | ) | (1,414 | ) | (1,200 | ) | ||||||||
| Maintenance capital expenditures |
(252 | ) | (65 | ) | (318 | ) | (126 | ) | ||||||||
| Contractual tenant improvements |
— | (34 | ) | (9 | ) | (34 | ) | |||||||||
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| Cash Available for Distribution (CAD) |
$ | 10,399 | $ | 8,760 | $ | 20,777 | $ | 17,526 | ||||||||
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| Weighted average common shares outstanding - fully diluted basis |
40,964,377 | 39,699,318 | 40,338,097 | 39,699,318 | ||||||||||||
| Exhibit 99.2
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Supplemental Information Package
Second Quarter 2016
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Disclaimers
Forward-looking Statement
We make statements in this Supplemental Information Package that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement in this Supplemental Information Package for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a varietyof risks and factors that are beyond our control including, without limitation: risks associated with our dependence on the U.S. Government and its agencies for substantially all of our revenues; risks associated with ownership and development of real estate; decreased rental rates or increased vacancy rates; loss of key personnel; general volatility of the capital and credit markets and the market price of our common stock; the risk we may lose one or more major tenants; difficulties in completing and successfully integrating acquisitions; failure of acquisitions or development projects to occur at anticipated levels or to yield anticipated results; risks associated with actual or threatened terrorist attacks; intense competition in the real estate market that may limit our ability to attract or retain tenants or re-lease space; insufficient amounts of insurance or exposure to events that are either uninsured or underinsured; uncertainties and risks related to adverse weather conditions, natural disasters and climate change; exposure to liability relating to environmental and health and safety matters; limited ability to dispose of assets because of the relative illiquidity of real estate investments and the nature of our assets; exposure to litigation or other claims; risks associated with breaches of our data security; risks associated with our indebtedness; and other risks and uncertainties detailed in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on March 2, 2016. In addition, our anticipated qualification as a real estate investment trust involves the application of highly technical and complex provisions of theInternal Revenue Code of 1986, or the Code, and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership. We assume no obligation to update publicly any forward looking statements, whether as a result of new information, future events or otherwise.
Ratings
Ratings are not recommendations to buy, sell or hold the Company’s securities.
The following discussion related to the consolidated financial statements of the Company should be read in conjunction with the financial statementsfor the quarter ended June 30, 2016 that will be released on Form 10-Q to be filed on or about August 8, 2016.
2
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Supplemental Definitions
Annualized lease income is defined as the annualized contractual base rent for the last month in a specified period, plus the annualized straight line rent adjustments for the last month in such period and the annualized expense reimbursements earned by us for the last month in such period.
Cash Available for Distribution (CAD), is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is calculated in accordance with the current NAREIT definition as FFO minus normalized recurring real estate-related expenditures and other non-cash items and nonrecurring expenditures. CAD is presented solely as a supplemental disclosure because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.
EBITDA is calculated as the sum of net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and is not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company’s ability to service or incur debt. Because all companies do not calculate EBITDA the same way, the presentation of EBITDA may not be comparable to similarly titled measures of other companies.
Fully diluted basis assumes the exchange of all outstanding common units representing limited partnership interests in the Company’s operating partnership, or common units, the full vesting of all restricted stock units, and the exchange of all earned and vested LTIP units in the Company’s operating partnership for shares of common stock on a one-for-one basis, which is not the same as the meaning of “fully diluted” under GAAP. Fully diluted basis does not include outstanding LTIP units in the Company’s operating partnership that are subject to performance criteria that have not yet been met.
Funds From Operations (FFO) is defined by NAREIT as net income (loss), calculated in accordance with GAAP, excluding gains or losses from sales of property and impairment losses on depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors.
Funds From Operations, as Adjusted (FFO, as Adjusted) adjusts Funds From Operations (FFO) to present an alternative measure of our operating performance that we believe is useful to shareholders and potential investors, which, when applicable, excludes the impact of acquisition costs, straight-line rent, above-/below-market leases, non-cash interest and non-cash compensation. Because all companies do not calculate FFO, as Adjusted in the same way, the presentation of FFO, as Adjusted may not be comparable to similarly titled measures of other companies.
Net Operating Income (NOI) is calculated as total property revenues (rental income, tenant reimbursements and other income) less property operating expenses and real estate taxes from the properties owned by the Company. Cash NOI excludes from NOI straight-line rent and amortization of above-/below-market leases. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. The company belives that NOI provides investors with a useful measure of the operating performance of our properties. NOI should not be considered an alternative to net incomeasan indication of our performance or to cash flows as a measure of the Company’s liquidity or its ability to make distributions.
Pro forma three months ended June 30, 2015 removes from the Company’s financial results for the three month period ended June 30, 2015 the impact of one-time, non-recurring expenses related to its initial public offering, including legal and accounting fees and new entity formation costs.
Pro forma six months ended June 30, 2015 (1) removes from the Company’s financial results for the period from February 11, 2015 (the date of the closing of the Company’s initial public offering) to June 30, 2015 the impact of one-time, non-recurring expenses related to its initial public offering, including legal and accounting fees and new entity formation costs and (2) reflects a full quarter of operations for the period from January 1, 2015 to March 31, 2015 on a pro forma basis basedonthe financial results of the 49 days of operations between February 11, 2015 and March 31, 2015.
3
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Table of Contents
Overview
Corporate Information and Analyst Coverage 5
Executive Summary 6
Corporate Financials
Balance Sheets 7
Income Statements 8
Net Operating Income 9
EBITDA, FFO and CAD 10
Debt
Debt Schedules 11
Debt Maturities 12
Properties
Property Overview 13
Tenants 14
Lease Expirations 15
4
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Corporate Information and Analyst Coverage
Corporate Information
Corporate Headquarters Stock Exchange Listing Information Requests Investor Relations
2101 L Street NW New York Stock Exchange Please contact ir@easterlyreit.com Evelyn Infurna
Suite 650 or 202-971-9867 to request an ICR, Inc.
Washington, DC 20037 Ticker Investor Relations package
202-595-9500 DEA
Executive Team Board of Directors
William Trimble III, CEO Darrell Crate, Chairman William Binnie Michael Ibe
Michael Ibe, Vice-Chairman and EVP Meghan Baivier, CFO & COO Darrell Crate James Mead
Alison Bernard, CAO Ronald Kendall, EVP Cynthia Fisher William Trimble III
Emil Henry Jr.
Equity Research Coverage
Citigroup Raymond James & Associates RBC Capital Markets
Michael Bilerman / Emmanuel Korchman Bill Crow / Paul Puryear Michael Carroll
212-816-1383 / 212-816-1382 727-567-2594 / 727-567-2253 440-715-2649
Any opinions, estimates, forecasts or predictions regarding Easterly Government Properties, Inc.’s performance made by these analysts are theirs alone and
do not represent opinions, estimates, forecasts or predictions of Easterly Government Properties, Inc. or its management. Easterly Government Properties,
Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such opinions, estimates, forecasts or predictions.
5
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Executive Summary
(Unaudited, in thousands except share and per share data)
Three months ended Three months Six months ended
Price of Common Shares June 30, 2016 Earnings ended June 30, 2016 June 30, 2016
High closing price during period $ 19.73 Net income available to Easterly Government Properties, Inc. $ 699 $ 1,374
Low closing price during period $ 17.80 Net income available to Easterly Government Properties, Inc. per share:
End of period closing price $ 19.73 Basic $ 0.02 $ 0.05
Diluted $ 0.02 $ 0.05
Outstanding Classes of Stock and Net income $ 1,037 $ 2,146
Partnership Units—Fully Diluted Basis At June 30, 2016 Net income, per share fully diluted basis $ 0.03 $ 0.05
Common shares 34,632,452
Unvested restricted shares 16,128 Funds From Operations (“FFO”) $ 12,111 $ 24,083
Common partnership units outstanding 9,798,411 FFO, per share fully diluted basis $ 0.30 $ 0.60
Total—fully diluted basis 44,446,991
Funds From Operations, as Adjusted $ 11,708 $ 23,197
Market Capitalization At June 30, 2016 FFO, as Adjusted, per share fully diluted basis $ 0.29 $ 0.58
Total equity market capitalization—fully diluted basis $ 876,939
Consolidated debt(1) 279,992 Cash Available for Distribution $ 10,399 $ 20,777
Cash and cash equivalents(3,704)
Total enterprise value $ 1,153,227
Liquidity At June 30, 2016
Ratios At June 30, 2016 Cash and cash equivalents $ 3,704
Net debt to total enterprise value 24.0%
Net debt to total equity market capitalization 31.5% Unsecured revolving credit facility
Net debt to annualized quarterly EBITDA 4.9x Total current facility size $ 400,000
Cash interest coverage ratio 7.8x Less: outstanding balance(198,167)
Cash fixed charge coverage ratio 5.6x Available under unsecured revolving credit facility $ 201,833
(1)Excludes unamortized premiums / discounts and deferred financing fees. 6
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Balance Sheets
(In thousands, Except share amounts)
June 30, 2016
(unaudited) December 31, 2015
Assets
Real estate properties, net $ 808,177 $ 772,007
Cash and cash equivalents 3,704 8,176
Restricted cash 1,557 1,736
Deposits on acquisitions 77,796 -
Rents receivable 6,920 6,347
Accounts receivable 3,709 2,920
Deferred financing, net 2,296 2,726
Intangible assets, net 111,728 116,585
Prepaid expenses and other assets 1,958 1,509
Total assets $ 1,017,845 $ 912,006
Liabilities
Revolving credit facility 198,167 154,417
Mortgage notes payable, net 82,289 83,744
Intangible liabilities, net 42,119 44,605
Accounts payable and accrued liabilities 9,949 9,346
Total liabilities 332,524 292,112
Equity
Common stock, par value $0.01, 200,000,000 shares authorized,
34,648,580 and 24,168,379 shares issued and outstanding at
June 30, 2016 and December 31, 2015, respectively. 346 241
Additional paid-in capital 560,072 391,767
Retained (deficit)(320)(1,694)
Cumulative dividends(25,857)(13,051)
Total stockholders’ equity 534,241 377,263
Non-controlling interest in Operating Partnership 151,080 242,631
Total equity 685,321 619,894
Total liabilities and equity $ 1,017,845 $ 912,006
7
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Income Statements
(Unaudited, in thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, 2015 June 30, 2015
June 30, 2016(pro forma) June 30, 2016(pro forma)
Revenues
Rental income $ 22,291 $ 17,626 $ 44,027 $ 34,716
Tenant reimbursements 2,476 1,572 4,631 2,998
Other income 154 58 234 78
Total revenues 24,921 19,256 48,892 37,792
Operating Expenses
Property operating 5,085 3,513 9,418 6,691
Real estate taxes 2,332 1,755 4,700 3,517
Depreciation and amortization 11,074 9,151 21,937 18,152
Acquisition costs 346 320 679 418
Corporate general and administrative 3,052 2,181 6,088 3,935
Total expenses 21,889 16,920 42,822 32,713
Operating income 3,032 2,336 6,070 5,079
Other (expenses)
Interest expense, net(1,995)(1,321)(3,924)(2,608)
Net income 1,037 1,015 2,146 2,471
Non-controlling interest in Operating Partnership(338)(397)(772)(967)
Net income available to Easterly Government
Properties, Inc. $ 699 $ 618 $ 1,374 $ 1,504
Net income available to Easterly Government
Properties, Inc. per share:
Basic $ 0.02 $ 0.03 $ 0.05
Diluted $ 0.02 $ 0.02 $ 0.05
Weighted-average common shares outstanding:
Basic 27,484,075 24,141,712 25,812,893
Diluted 29,267,258 25,435,010 27,538,423
Net income, per share fully diluted basis $ 0.03 $ 0.03 $ 0.05 $ 0.06
Weighted average common shares outstanding -
fully diluted basis 40,964,377 39,699,318 40,338,097 39,699,318
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Net Operating Income
(Unaudited, in thousands)
Three Months Ended Six Months Ended
June 30, 2015 June 30, 2015
June 30, 2016(pro forma) June 30, 2016(pro forma)
Revenue
Rental income $ 22,291 $ 17,626 $ 44,027 $ 34,716
Tenant reimbursements 2,476 1,572 4,631 2,998
Other income 154 58 234 78
Total revenues 24,921 19,256 48,892 37,792
Operating Expenses
Property operating 5,085 3,513 9,418 6,691
Real estate taxes 2,332 1,755 4,700 3,517
Total expenses 7,417 5,268 14,118 10,208
Net Operating Income $ 17,504 $ 13,988 $ 34,774 $ 27,584
Adjustments to Net Operating Income:
Straight-line rent(19)(65)(40)(131)
Above-/below -market leases(1,711)(1,300)(3,409)(2,541)
Cash Net Operating Income $ 15,774 $ 12,623 $ 31,325 $ 24,912
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EBITDA, FFO and CAD
(Unaudited, in thousands, except share and per share data)
Three Months Ended Six Months Ended
June 30, 2015 June 30, 2015
June 30, 2016(pro forma) June 30, 2016(pro forma)
Net income $ 1,037 $ 1,015 $ 2,146 $ 2,471
Depreciation and amortization 11,074 9,151 21,937 18,152
Interest expense 1,995 1,321 3,924 2,608
EBITDA $ 14,106 $ 11,487 $ 28,007 $ 23,231
Net income $ 1,037 $ 1,015 2,146 $ 2,471
Depreciation and amortization 11,074 9,151 21,937 18,152
Funds From Operations (FFO) $ 12,111 $ 10,166 $ 24,083 $ 20,623
Adjustments to FFO:
Acquisition costs 346 320 679 418
Straight-line rent 45(65) 33(131)
Above-/below -market leases(1,711)(1,300)(3,409)(2,541)
Non-cash interest expense 194 187 389 377
Non-cash compensation 723 457 1,422 558
Funds From Operations, as Adjusted $ 11,708 $ 9,765 $ 23,197 $ 19,304
FFO, per share— $ 0.30 $ 0.26 $ 0.60 $ 0.52
FFO, as Adjusted, per share—
fully diluted basis $ 0.29 $ 0.25 $ 0.58 $ 0.49
Funds From Operations, as Adjusted $ 11,708 $ 9,765 23,197 $ 19,304
Acquisition costs(346)(320)(679)(418)
Principal amortization(711)(586)(1,414)(1,200)
Maintenance capital expenditures(252)(65)(318)(126)
Contractual tenant improvements -(34)(9)(34)
Cash Available for Distribution (CAD) $ 10,399 $ 8,760 $ 20,777 $ 17,526
Weighted average common shares outstanding -
fully diluted basis 40,964,377 39,699,318 40,338,097 39,699,318
10 - fully diluted basis
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Debt Schedules
(Unaudited, in thousands)
June 30, 2016
June, 2016 Percent of
Debt Instrument Maturity Date Stated Rate (2) Balance Total Indebtedness
Unsecured revolving credit facility
Unsecured revolving credit facility(1) 11-Feb-19(3) LIBOR + 140bps $ 198,167 70.8%
2.6 years 1.85%
Total unsecured revolving credit facility $ 198,167 70.8%
(wtd-avg maturity)(wtd-avg rate)
Secured mortgage debt
ICE—Charleston 15-Jan-27 4.21% $ 21,463 7.7%
USFS II—Albuquerque 14-Jul-26 4.46% 17,336 6.2%
DEA—Pleasanton 18-Oct-23 LIBOR + 150bps 15,700 5.6%
CBP—Savannah 10-Jul-33 3.40% 15,246 5.4%
MEPCOM—Jacksonville 14-Oct-25 4.41% 12,080 4.3%
10.8 years 3.71%
Total secured mortgage debt $ 81,825 29.2%
(wtd-avg maturity)(wtd-avg rate)
Debt Statistics June 30, 2016
Variable rate debt—unhedged $ 213,867
Fixed rate debt 66,125
Total debt(4) $ 279,992
% Variable rate debt—unhedged 76.4%
% Fixed rate debt 23.6%
Weighted average maturity 5 years
Weighted average interest rate 2.4%
(1)Credit facility has available capacity of $201,833 as of June 30, 2016.
(2)Average stated rates represent the weighted average interest rate at June 30, 2016.
(3)Credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee.
(4)Excludes unamortized premiums / discounts and deferred financing fees. 11
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Debt Maturities
(Unaudited, in thousands)
Secured Debt Unsecured Debt Weighted Average
Scheduled Scheduled Scheduled Percentage of Interest Rate of
Year Amortization Maturities Maturities Total Debt Maturing Scheduled Maturities
2016 $ 1,443 $—$—$ 1,443 0.5% -
2017 2,977 — 2,977 1.1% -
2018 3,100 — 3,100 1.1% -
2019 3,230—198,167 201,397 72.0% 1.85%
2020 3,395 — 3,395 1.2% -
2021 4,054 — 4,054 1.4% -
2022 5,109 — 5,109 1.8% -
2023 5,388 15,700—21,088 7.5% 1.96%
2024 5,679 — 5,679 2.0% -
2025 5,633 1,917—7,550 2.7% 4.41%
2026 3,686 6,368—10,054 3.6% 4.46%
2027 1,093 7,140—8,233 2.9% 4.21%
2028 983 — 983 0.4% -
2029 1,016 — 1,016 0.4% -
2030 1,049 — 1,049 0.4% -
2031 1,081 — 1,081 0.4% -
2032 1,116 — 1,116 0.4% -
2033 668 — 668 0.2% -
Total $ 50,700 $ 31,125 $ 198,167 $ 279,992 100.0%
$250,000
$200,000
thousands $150,000
in
$100,000
Dollars $50,000
$0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Scheduled Amortization Secured Debt Scheduled Maturities Unsecured Debt Scheduled Maturities
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Property Overview
Percentage Annualized
Tenant of Total Lease
Lease Rentable Annualized Annualized Income per
Expiration Year Built / Square Lease Lease Leased
Property Name Location Property Type Year Renovated Feet Income Income Square Foot
U.S Government Leased Properties
IRS—Fresno Fresno, CA Office 2018 2003 180,481 $ 7,429,953 8.3% $ 41.17
PTO—Arlington Arlington, VA Office 2019 / 2020 2009 189,871 6,530,249 7.2% 34.39
FBI—San Antonio San Antonio, TX Office 2021 2007 148,584 4,978,204 5.5% 33.50
FBI—Omaha Omaha, NE Office 2024 2009 112,196 4,429,217 4.9% 39.48
ICE—Charleston North Charleston, SC Office 2019 / 2027 1994 / 2012 86,733 3,642,840 4.0% 42.00
DOT—Lakew ood Lakew ood, CO Office 2024 2004 122,225 3,482,164 3.9% 28.49
USCIS—Lincoln Lincoln, NE Office 2020 2005 137,671 3,242,187 3.6% 23.55
AOC—El Centro El Centro, CA Courthouse/Office 2019 2004 46,813 3,217,231 3.6% 68.73
ICE—Albuquerque Albuquerque, NM Office 2027 2011 71,100 2,785,048 3.1% 39.17
USFS II—Albuquerque Albuquerque, NM Office 2026 2011 98,720 2,758,877 3.1% 27.95
DEA—Vista Vista, CA Laboratory 2020 2002 54,119 2,749,820 3.0% 50.81
DEA—Pleasanton Pleasanton, CA Laboratory 2035 2015 42,480 2,718,539 3.0% 64.00
FBI—Richmond Richmond, VA Office 2021 2001 96,607 2,708,241 3.0% 28.03
USFS I—Albuquerque Albuquerque, NM Office 2021 2006 92,455 2,680,978 3.0% 29.00
AOC—Del Rio Del Rio, TX Courthouse/Office 2024 1992 / 2004 89,880 2,636,561 2.9% 29.33
DEA—Dallas Lab Dallas, TX Laboratory 2021 2001 49,723 2,355,301 2.6% 47.37
MEPCOM—Jacksonville Jacksonville, FL Office 2025 2010 30,000 2,151,080 2.4% 71.70
FBI—Little Rock Little Rock, AR Office 2021 2001 101,977 2,133,931 2.4% 20.93
CBP—Savannah Savannah, GA Laboratory 2033 2013 35,000 2,105,832 2.3% 60.17
DEA—Santa Ana Santa Ana, CA Office 2024 2004 39,905 2,070,118 2.3% 51.88
DOE—Lakew ood Lakew ood, CO Office 2029 1999 115,650 2,058,570 2.3% 17.80
ICE—Otay San Diego, CA Office 2017—2026 2001 52,881 1,792,232 2.0% 36.24
DEA—Dallas Dallas, TX Office 2021 2001 71,827 1,786,035 2.0% 24.87
NPS—Omaha Omaha, NE Office 2024 2004 62,772 1,740,378 1.9% 27.73
DEA—North Highlands Sacramento, CA Office 2017 2002 37,975 1,712,562 1.9% 45.10
CBP—Chula Vista Chula Vista, CA Office 2018 1998 59,397 1,687,136 1.9% 28.40
CBP—Sunburst Sunburst, MT Office 2028 2008 33,000 1,579,754 1.8% 47.87
USCG—Martinsburg Martinsburg, WV Office 2027 2007 59,547 1,564,191 1.7% 26.27
AOC—Aberdeen Aberdeen, MS Courthouse/Office 2025 2005 46,979 1,455,221 1.6% 30.98
DEA—Albany Albany, NY Office 2025 2004 31,976 1,333,746 1.5% 41.71
DEA—Otay San Diego, CA Office 2017 1997 32,560 1,293,030 1.4% 39.71
DEA—Riverside Riverside, CA Office 2017 1997 34,354 1,289,573 1.4% 37.54
SSA—Mission Viejo Mission Viejo, CA Office 2020 2005 11,590 533,252 0.6% 46.01
SSA—San Diego San Diego, CA Office 2017 2003 11,743 413,543 0.5% 35.22
DEA—San Diego San Diego, CA Warehouse 2016 1999 16,100 399,932 0.4% 24.84
Subtotal 2,504,891 $ 87,445,526 97.0% $ 34.96
Privately Leased Properties
2650 SW 145th Avenue—Parbel of Florida Miramar, FL Warehouse/Distribution 2022 2007 81,721 1,657,459 1.8% 20.28
5998 Osceola Court—United Technologies Midland, GA Warehouse/Manufacturing 2023 2014 105,641 540,715 0.6% 5.12
501 East Hunter Street—Lummus Corporation Lubbock, TX Warehouse/Distribution 2028 2013 70,078 518,885 0.6% 7.40
Subtotal 257,440 $ 2,717,059 3.0% $ 10.55
Total / Weighted Average 2,762,331 $ 90,162,585 100.0% $ 32.68
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Tenants
Percentage
Weighted of Total
Average Percentage Annualized
Number of Number of Remaining Leased of Leased Annualized Lease
Tenant Properties Leases Lease Term (1) Square Feet Square Feet Lease Income Income
U.S. Government
Drug Enforcement Administration (“DEA”) 10 10 5.8 405,206 14.7% $ 17,477,809 19.4%
Federal Bureau of Investigation (“FBI”) 4 4 5.7 459,364 16.6% 14,249,593 15.8%
Immigration and Customs Enforcement (“ICE”) 3 5 8.9 182,522 6.6% 7,663,457 8.5%
Internal Revenue Service (“IRS”) 1 1 2.4 180,481 6.5% 7,429,953 8.2%
Administrative Office of the U.S. Courts (“AOC”) 3 3 6.9 183,672 6.7% 7,309,013 8.1%
Patent and Trademark Office (“PTO”) 1 2 2.8 189,871 6.9% 6,530,249 7.2%
U.S. Forest Service (“USFS”) 2 2 7.6 191,175 6.9% 5,439,855 6.0%
Customs and Border Protection (“CBP”) 3 3 8.7 127,397 4.6% 5,372,722 6.0%
Department of Transportation (“DOT”) 1 2 7.8 129,659 4.7% 3,697,353 4.1%
U.S. Citizens and Immigration Services (“USCIS”) 1 1 4.2 137,671 5.0% 3,242,187 3.6%
Military Entrance Processing Command (“MEPCOM”) 1 1 9.3 30,000 1.1% 2,151,080 2.4%
Department of Energy (“DOE”) 1 1 13.4 115,650 4.2% 2,058,570 2.3%
National Park Service (“NPS”) 1 1 8.0 62,772 2.3% 1,740,378 1.9%
U.S. Coast Guard (“USCG”) 1 1 11.5 59,547 2.2% 1,564,191 1.7%
Social Security Administration (“SSA”) 2 2 2.9 23,333 0.8% 946,795 1.1%
U.S. Department of Agriculture (“USDA”) 0 1 9.5 1,538 0.1% 55,366 0.1%
Subtotal 35 40 6.5 2,479,858 89.9% $ 86,928,571 96.4%
Private Tenants
Parbel of Florida 1 1 6.4 81,721 3.0% $ 1,657,459 1.8%
United Technologies (Pratt & Whitney) 1 1 7.5 105,641 3.8% 540,715 0.6%
Lummus Corporation 1 1 12.1 70,078 2.5% 518,885 0.6%
LifePoint, Inc. 0 1 3.3 21,609 0.8% 516,955 0.6%
Subtotal 3 4 8.0 279,049 10.1% $ 3,234,014 3.6%
Total / Weighted Average 38 44 6.6 2,758,907 100.0% $ 90,162,585 100.0%
(1)Weighted based on leased square feet.
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Lease Expirations
Annualized
Percentage of Percentage of Lease Income
Number of Square Total Square Annualized Total Annualized per Leased
Leases Footage Footage Lease Income Lease Income Square Foot
Year of Lease Expiration Expiring Expiring Expiring Expiring Expiring Expiring
2016 1 16,100 0.6% $ 399,932 0.4% $ 24.84
2017 5 129,276 4.7% 5,191,835 5.8% 40.16
2018 2 239,878 8.7% 9,117,089 10.1% 38.01
2019 3 236,890 8.6% 9,496,039 10.5% 40.09
2020 4 224,783 8.1% 7,293,655 8.1% 32.45
2021 7 572,728 20.8% 17,059,958 18.9% 29.79
2022 3 105,441 3.8% 2,493,930 2.8% 23.65
2023 1 105,641 3.8% 540,715 0.6% 5.12
2024 5 426,978 15.5% 14,358,438 15.9% 33.63
2025 3 108,955 3.9% 4,940,047 5.5% 45.34
Thereafter 10 592,237 21.5% 19,270,947 21.4% 32.54
Total / Weighted Average 44 2,758,907 100.0% $ 90,162,585 100.0% $ 32.68
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