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):
November 7, 2017
Easterly Government Properties, Inc.
(Exact name of Registrant as Specified in Its Charter)
Maryland |
001-36834 |
47-2047728 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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2101 L Street NW, Suite 650, Washington, D.C. |
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20037 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: (202) 595-9500
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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. below):
☐ |
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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑
Item 2.02 Results of Operations and Financial Condition.
On November 7, 2017, we issued a press release announcing our results of operations for the third quarter ended September 30, 2017. 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 Standard time on November 7, 2017, to review our third quarter 2017 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 November 21, 2017, by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and entering the passcode 13672234. 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 |
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Description |
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99.1 |
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99.2 |
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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. |
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By: |
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/s/ William C. Trimble, III |
Name: |
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William C. Trimble, III |
Title: |
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Chief Executive Officer and President |
Date: November 7, 2017
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Exhibit 99.1 |
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EASTERLY GOVERNMENT PROPERTIES
REPORTS THIRD QUARTER 2017 RESULTS
WASHINGTON, D.C. – November 7, 2017 – 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 September 30, 2017.
Highlights for the Quarter Ended September 30, 2017
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• |
Net income was $0.9 million, or $0.02 per share on a fully diluted basis |
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• |
FFO was $15.1 million, or $0.32 per share on a fully diluted basis |
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• |
FFO, as Adjusted was $13.4 million, or $0.28 per share on a fully diluted basis |
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• |
CAD was $10.5 million |
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• |
Completed the acquisition of the Salt Lake City FBI field office (“FBI - Salt Lake City”), a 169,542-square foot Class A, LEED Gold certified facility leased to the GSA with approximately 16 years remaining on a total initial, non-cancelable lease term of 20 years |
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Physically settled the forward equity sales agreements entered into on March 27, 2017 by issuing 4.945 million shares of the Company’s common stock |
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• |
Portfolio occupancy at 100% |
“We were pleased to further enhance and scale the portfolio this quarter by adding young, fully-occupied mission critical assets,” said William C. Trimble, III, Easterly’s Chief Executive Officer. “For example, FBI - Salt Lake City grew the portfolio over 2% by gaining exposure to one of our top target agencies under an initial 20-year lease.”
Financial Results for the Nine Months Ended September 30, 2017
Net income was $3.3 million, or $0.07 per share on a fully diluted basis for the nine months ended September 30, 2017
FFO was $44.0 million, or $0.94 per share on a fully diluted basis for the nine months ended September 30, 2017
FFO, as Adjusted was $40.5 million, or $0.87 per share on a fully diluted basis for the nine months ended September 30, 2017
CAD was $34.1 million for the nine months ended September 30, 2017
Portfolio Operations
As of September 30, 2017, the Company wholly owned 46 operating properties in the United States, encompassing approximately 3.7 million square feet in the aggregate, including 43 properties that were leased primarily to U.S. Government tenant agencies and three properties that were entirely leased to private tenants. As of September 30, 2017, the portfolio had an average age of 12.0 years, was 100% occupied, and had a weighted average remaining lease term of 6.9 years. With approximately 14.4% of leases based on square footage, or 13.5% based on total annualized lease income scheduled to expire before 2019, Easterly expects to continue to provide a highly visible and stable cash-flow stream.
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Acquisitions
On September 28, 2017, the Company completed the acquisition of a 169,542-square foot FBI field office located in Salt Lake City, Utah. The field office was constructed in 2012 and is 100% occupied by the FBI. The lease has approximately 16 years remaining on a total initial, non-cancelable lease term of 20 years. FBI - Salt Lake City is a Class A, LEED Gold certified, four-story single tenant facility located on a 7.5-acre campus and houses the FBI’s Salt Lake City Division, which oversees federal operations in all of Utah, Idaho and Montana. FBI - Salt Lake City acts as a regional headquarters for the Bureau and directs 18 satellite offices, also known as resident agencies, located throughout the three surrounding states. The campus features both public and secure spaces, modernized technology, a sophisticated security system, a restricted visitor screening facility, metal blockades to restrict automobile traffic, and perimeter fencing. Upon closing, Easterly Government Properties now owns seven of the 56 FBI field offices, making Easterly the single largest private owner of FBI field offices in the country.
Balance Sheet and Capital Markets Activities
As of September 30, 2017, the Company had total indebtedness of $539.9 million comprised of $59.3 million outstanding on its senior unsecured revolving credit facility, $100.0 million outstanding on its senior unsecured term loan facility, $175.0 million of senior unsecured notes, and $205.7 million of mortgage debt (excluding unamortized premiums and discounts and deferred financing fees). At September 30, 2017, Easterly’s outstanding debt had a weighted average maturity of 8.5 years and a weighted average interest rate of 3.6%. As of September 30, 2017, Easterly’s net debt to total enterprise value was 33.3% and its net debt to annualized quarterly EBITDA ratio was 6.1x, pro forma for a full quarter of operations from FBI - Salt Lake City, which the Company acquired on September 28, 2017.
On September 11, 2017 the Company physically settled the forward equity sales agreements entered into on March 27, 2017 by issuing 4.945 million shares of the Company’s common stock in exchange for approximately $92.7 million in gross proceeds. The forward equity sales agreements were entered into in conjunction with the closing of an underwritten offering on a forward basis and the announcement of the VA - Loma Linda and VA - South Bend acquisitions.
During the nine months ended September 30, 2017, the Company issued 674,480 shares of the Company’s common stock at an average price of $21.43 per share through the Company’s At-the-Market (ATM) program, raising gross proceeds of $14.5 million to maintain balance sheet strength.
Dividend
On November 2, 2017 the Board of Directors of Easterly approved a cash dividend for the third quarter of 2017 in the amount of $0.26 per common share. The dividend will be payable December 21, 2017 to shareholders of record on December 6, 2017.
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Outlook for the 12 Months Ending December 31, 2017
The Company is narrowing its expectations for 2017 FFO per share on a fully diluted basis in a range of $1.26 - $1.29.
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Low |
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High |
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Net income (loss) per share – fully diluted basis |
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$ |
0.10 |
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0.13 |
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Plus: real estate depreciation and amortization |
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$ |
1.16 |
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1.16 |
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FFO per share – fully diluted basis |
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$ |
1.26 |
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1.29 |
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This guidance assumes acquisitions of approximately $385 million in 2017, including the OSHA - Sandy acquisition completed in the first quarter, the VA - Loma Linda acquisition completed in the second quarter, the FBI - Salt Lake City acquisition completed in the third quarter, as well as the announced VA - South Bend acquisition with an anticipated closing date in Q4 2017, and does not contemplate any dispositions. 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.
Outlook for the 12 Months Ending December 31, 2018
The Company is introducing its guidance for 2018 FFO per share on a fully diluted basis in a range of $1.31 - $1.35.
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Low |
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High |
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Net income (loss) per share – fully diluted basis |
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$ |
0.23 |
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0.27 |
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Plus: real estate depreciation and amortization |
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$ |
1.08 |
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1.08 |
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FFO per share – fully diluted basis |
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$ |
1.31 |
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1.35 |
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This guidance assumes $250.0 million of acquisitions and $75 - 100 million of development-related investment in 2018. 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.
“The Easterly portfolio is an assemblage of young, mission critical assets occupied by one of the highest credit tenants in the world,” said Darrell Crate, Easterly’s Chairman. “The focus for this portfolio is to create the opportunity for strong FFO growth through stable, recurring cash flows backed by the full faith and credit of the U.S. Government.”
Non-GAAP Supplemental Financial Measures
This section contains definitions of certain non-GAAP financial measures and other terms that the Company uses in this press release and, where applicable, the reasons why management believes these non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations and the other purposes for which management uses the measures. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. Additional detail can be found in the Company’s most recent annual report on Form 10-K, as well as other documents filed with or furnished to the SEC from time to time.
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
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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 FFO to present an alternative measure of our operating performance, which, when applicable, excludes the impact of acquisition costs, straight-line rent, above-/below-market leases, non-cash interest expense and non-cash compensation. By excluding income and expense items such as straight-line rent, above-/below-market leases, non-cash interest expense and non-cash compensation from FFO, as Adjusted, the Company believes it provides useful information as these items have no cash impact. In addition, by excluding acquisition related costs the Company believes FFO, as Adjusted provides useful information that is comparable across periods and more accurately reflects the operating performance of the Company’s properties.
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 shares of restricted stock, 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.
Conference Call Information
The Company will host a webcast and conference call at 10:00 a.m. Eastern Standard time on November 7, 2017 to review the third quarter 2017 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 November 21, 2017 by dialing 844-512-2921 (domestic) and 412-317-6671 (international) and entering the passcode 13672234. 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.
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Easterly Government Properties, Inc.
Lindsay S. Winterhalter
Vice President, Investor Relations & Operations
202-596-3947
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 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, 2016, filed with the Securities and Exchange Commission on March 2, 2017 and the factors included under the heading “Risk Factors” in our other public filings. 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.
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(Unaudited, in thousands, except share amounts)
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September 30, 2017 |
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December 31, 2016 |
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Assets |
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Real estate properties, net |
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$ |
1,195,618 |
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$ |
901,066 |
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Cash and cash equivalents |
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6,551 |
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4,845 |
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Restricted cash |
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3,866 |
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|
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1,646 |
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Deposits on acquisitions |
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1,100 |
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|
|
1,750 |
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Rents receivable |
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9,664 |
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8,544 |
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Accounts receivable |
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7,532 |
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5,823 |
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Deferred financing, net |
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1,158 |
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|
|
2,787 |
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Intangible assets, net |
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131,408 |
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113,795 |
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Interest rate swap |
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|
3,088 |
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|
|
3,785 |
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Prepaid expenses and other assets |
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8,050 |
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|
|
1,422 |
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Total assets |
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$ |
1,368,035 |
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$ |
1,045,463 |
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Liabilities |
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Revolving credit facility |
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59,250 |
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|
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212,167 |
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Term loan facility, net |
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99,167 |
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- |
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Notes payable, net |
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173,676 |
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- |
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Mortgage notes payable, net |
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|
203,999 |
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|
80,806 |
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Intangible liabilities, net |
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|
40,866 |
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41,840 |
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Accounts payable and accrued liabilities |
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21,946 |
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13,784 |
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Total liabilities |
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598,904 |
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348,597 |
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Equity |
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Common stock, par value $0.01, 200,000,000 shares authorized, |
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43,873,796 and 36,874,810 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively. |
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|
439 |
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|
369 |
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Additional paid-in capital |
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718,880 |
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596,971 |
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Retained earnings |
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4,414 |
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|
|
1,721 |
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Cumulative dividends |
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(72,195 |
) |
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(42,794 |
) |
Accumulated other comprehensive income |
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2,627 |
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|
|
3,038 |
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Total stockholders' equity |
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654,165 |
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559,305 |
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Non-controlling interest in Operating Partnership |
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114,966 |
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137,561 |
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Total equity |
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769,131 |
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696,866 |
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Total liabilities and equity |
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$ |
1,368,035 |
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$ |
1,045,463 |
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(Unaudited, in thousands, except share and per share amounts)
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Three Months Ended |
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Nine Months Ended |
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September 30, 2017 |
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September 30, 2016 |
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September 30, 2017 |
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September 30, 2016 |
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Revenues |
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Rental income |
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$ |
30,079 |
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$ |
24,493 |
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$ |
83,600 |
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$ |
68,520 |
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Tenant reimbursements |
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|
3,554 |
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|
|
2,385 |
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|
|
10,156 |
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|
|
7,016 |
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Other income |
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|
225 |
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|
|
97 |
|
|
|
592 |
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|
|
331 |
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Total revenues |
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33,858 |
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|
|
26,975 |
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|
|
94,348 |
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|
|
75,867 |
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Operating expenses |
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Property operating |
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6,718 |
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5,308 |
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18,904 |
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14,726 |
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Real estate taxes |
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3,452 |
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|
|
2,533 |
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9,166 |
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|
|
7,233 |
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Depreciation and amortization |
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14,141 |
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|
|
12,237 |
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|
|
40,663 |
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|
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34,174 |
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Acquisition costs |
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206 |
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|
|
660 |
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|
|
1,194 |
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|
|
1,339 |
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Corporate general and administrative |
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2,920 |
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|
3,066 |
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|
|
9,506 |
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|
|
9,154 |
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Total expenses |
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27,437 |
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|
23,804 |
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|
|
79,433 |
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|
|
66,626 |
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Operating income |
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|
6,421 |
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|
|
3,171 |
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|
|
14,915 |
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|
|
9,241 |
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|
|
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Other expenses |
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|
|
|
|
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Interest expense, net |
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(5,495 |
) |
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|
(2,043 |
) |
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|
(11,626 |
) |
|
|
(5,967 |
) |
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Net income |
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|
926 |
|
|
|
1,128 |
|
|
|
3,289 |
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|
|
3,274 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Non-controlling interest in Operating Partnership |
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|
(144 |
) |
|
|
(233 |
) |
|
|
(596 |
) |
|
|
(1,005 |
) |
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Net income available to Easterly Government |
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|
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|
|
|
|
|
|
|
|
|
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Properties, Inc. |
|
$ |
782 |
|
|
$ |
895 |
|
|
$ |
2,693 |
|
|
$ |
2,269 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Net income available to Easterly Government |
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|
|
|
Properties, Inc. per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
Diluted |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.07 |
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
39,962,471 |
|
|
|
34,967,482 |
|
|
|
38,098,805 |
|
|
|
28,886,697 |
|
|
Diluted |
|
|
41,903,977 |
|
|
|
36,904,564 |
|
|
|
40,012,282 |
|
|
|
30,722,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, per share - fully diluted basis |
|
$ |
0.02 |
|
|
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
fully diluted basis |
|
|
47,683,701 |
|
|
|
44,446,991 |
|
|
|
46,525,052 |
|
|
|
41,717,726 |
|
|
|
|
(Unaudited, in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||
|
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
||||||
|
Net income |
|
$ |
926 |
|
|
$ |
1,128 |
|
|
$ |
3,289 |
|
|
$ |
3,274 |
|
||
|
Depreciation and amortization |
|
|
14,141 |
|
|
|
12,237 |
|
|
|
40,663 |
|
|
|
34,174 |
|
||
|
Interest expense |
|
|
5,495 |
|
|
|
2,043 |
|
|
|
11,626 |
|
|
|
5,967 |
|
||
|
EBITDA |
|
$ |
20,562 |
|
|
$ |
15,408 |
|
|
$ |
55,578 |
|
|
$ |
43,415 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
926 |
|
|
$ |
1,128 |
|
|
$ |
3,289 |
|
|
$ |
3,274 |
|
||
|
Depreciation and amortization |
|
|
14,141 |
|
|
|
12,237 |
|
|
|
40,663 |
|
|
|
34,174 |
|
||
|
Funds From Operations (FFO) |
|
$ |
15,067 |
|
|
$ |
13,365 |
|
|
$ |
43,952 |
|
|
$ |
37,448 |
|
||
|
Adjustments to FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Acquisition costs |
|
|
206 |
|
|
|
660 |
|
|
|
1,194 |
|
|
|
1,339 |
|
||
|
Straight-line rent |
|
|
(883 |
) |
|
|
(50 |
) |
|
|
(1,376 |
) |
|
|
(17 |
) |
||
|
Above-/below-market leases |
|
|
(2,065 |
) |
|
|
(1,816 |
) |
|
|
(6,283 |
) |
|
|
(5,225 |
) |
||
|
Non-cash interest expense |
|
|
310 |
|
|
|
196 |
|
|
|
784 |
|
|
|
585 |
|
||
|
Non-cash compensation |
|
|
748 |
|
|
|
742 |
|
|
|
2,215 |
|
|
|
2,164 |
|
||
|
Funds From Operations, as Adjusted |
|
$ |
13,383 |
|
|
$ |
13,097 |
|
|
$ |
40,486 |
|
|
$ |
36,294 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
FFO, per share - fully diluted basis |
|
$ |
0.32 |
|
|
$ |
0.30 |
|
|
$ |
0.94 |
|
|
$ |
0.90 |
|
||
|
FFO, as Adjusted, per share - fully diluted basis |
|
$ |
0.28 |
|
|
$ |
0.29 |
|
|
$ |
0.87 |
|
|
$ |
0.87 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Funds From Operations, as Adjusted |
|
$ |
13,383 |
|
|
$ |
13,097 |
|
|
$ |
40,486 |
|
|
$ |
36,294 |
|
||
|
Acquisition costs |
|
|
(206 |
) |
|
|
(660 |
) |
|
|
(1,194 |
) |
|
|
(1,339 |
) |
||
|
Principal amortization |
|
|
(748 |
) |
|
|
(717 |
) |
|
|
(2,221 |
) |
|
|
(2,131 |
) |
||
|
Maintenance capital expenditures |
|
|
(1,726 |
) |
|
|
(463 |
) |
|
|
(2,677 |
) |
|
|
(781 |
) |
||
|
Contractual tenant improvements |
|
|
(183 |
) |
|
|
(22 |
) |
|
|
(335 |
) |
|
|
(31 |
) |
||
|
Cash Available for Distribution (CAD) |
|
$ |
10,520 |
|
|
$ |
11,235 |
|
|
$ |
34,059 |
|
|
$ |
32,012 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Weighted average common shares outstanding - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
fully diluted basis |
|
|
47,683,701 |
|
|
|
44,446,991 |
|
|
|
46,525,052 |
|
|
|
41,717,726 |
|
Exhibit 99.2
Disclaimers |
|
|
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 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 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, 2016, filed with the Securities and Exchange Commission on March 2, 2017 and the factors included under the heading “Risk Factors” in our other public filings. 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.
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 statements for the quarter ended September 30, 2017 that will be released on Form 10-Q to be filed on or about November 7, 2017.
2
Supplemental Definitions |
|
|
This section contains definitions of certain non-GAAP financial measures and other terms that the Company uses in this Supplemental Information Package and, where applicable, the reasons why management believes these non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations and the other purposes for which management uses the measures. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. Additional detail can be found in the Company’s most recent quarterly report on Form 10-Q and the Company’s most recent annual report on Form 10-K, as well as other documents filed with or furnished to the SEC from time to time.
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 shares of restricted stock, 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 FFO to present an alternative measure of our operating performance, which, when applicable, excludes the impact of acquisition costs, straight-line rent, above-/below-market leases, non-cash interest expense and non-cash compensation. By excluding income and expense items such as straight-line rent, above-/below-market leases, non-cash interest expense and non-cash compensation from FFO, as Adjusted, the Company believes it provides useful information as these items have no cash impact. In addition, by excluding acquisition related costs the Company believes FFO, as Adjusted provides useful information that is comparable across periods and more accurately reflects the operating performance of the Company’s properties.
3
Supplemental Definitions |
|
|
Net Operating Income (NOI) is calculated as net income plus depreciation and amortization, acquisition costs, corporate general and administrative costs and interest expense. 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.
4
Table of Contents |
|
|
Overview |
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
Corporate Financials |
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Debt |
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
Properties |
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
`5
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 |
Lindsay Winterhalter, |
Suite 650 |
|
or 202-596-3947 to request an |
VP, Investor Relations |
Washington, DC 20037 |
Ticker |
Investor Relations package |
& Operations |
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 |
|
|
|
Jefferies |
SunTrust Robinson Humphrey |
|
Jonathan Petersen |
Michael R. Lewis |
|
212-284-1705 |
212-319-5659 |
|
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.
`6
Price of Common Shares |
|
Three months ended September 30, 2017 |
|
|
Earnings |
|
Three months ended September 30, 2017 |
|
|
Three months ended September 30, 2016 |
|
|||
High closing price during period |
|
$ |
21.13 |
|
|
Net income available to Easterly Government Properties, Inc. |
|
$ |
782 |
|
|
$ |
895 |
|
Low closing price during period |
|
$ |
19.61 |
|
|
Net income available to Easterly Government Properties, Inc. |
|
|
|
|
|
|
|
|
End of period closing price |
|
$ |
20.67 |
|
|
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
Outstanding Classes of Stock and |
|
|
|
|
|
Diluted |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
Partnership Units - Fully Diluted Basis |
|
At September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Common shares |
|
|
43,855,884 |
|
|
Net income |
|
$ |
926 |
|
|
$ |
1,128 |
|
Unvested restricted shares |
|
|
17,912 |
|
|
Net income, per share - fully diluted basis |
|
$ |
0.02 |
|
|
$ |
0.03 |
|
Common partnership units outstanding |
|
|
7,710,587 |
|
|
|
|
|
|
|
|
|
|
|
Total - fully diluted basis |
|
|
51,584,383 |
|
|
Funds From Operations ("FFO") |
|
$ |
15,067 |
|
|
$ |
13,365 |
|
|
|
|
|
|
|
FFO, per share - fully diluted basis |
|
$ |
0.32 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Capitalization |
|
At September 30, 2017 |
|
|
Funds From Operations, as Adjusted |
|
$ |
13,383 |
|
|
$ |
13,097 |
|
|
Total equity market capitalization - fully diluted basis |
|
$ |
1,066,249 |
|
|
FFO, as Adjusted, per share - fully diluted basis |
|
$ |
0.28 |
|
|
$ |
0.29 |
|
Consolidated debt(1) |
|
|
539,911 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
(6,551 |
) |
|
Cash Available for Distribution |
|
$ |
10,520 |
|
|
$ |
11,235 |
|
Total enterprise value |
|
$ |
1,599,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity |
|
|
|
|
|
At September 30, 2017 |
|
|
Ratios |
|
At September 30, 2017 |
|
|
Cash and cash equivalents |
|
|
|
|
|
$ |
6,551 |
|
|
Net debt to total enterprise value |
|
|
33.3 |
% |
|
|
|
|
|
|
|
|
|
|
Net debt to annualized quarterly EBITDA |
|
|
6.5 |
x |
|
Unsecured revolving credit facility |
|
|
|
|
|
|
|
|
Cash interest coverage ratio |
|
|
4.0 |
x |
|
Total current facility size (2) |
|
|
|
|
|
$ |
400,000 |
|
Cash fixed charge coverage ratio |
|
|
3.5 |
x |
|
Less: outstanding balance |
|
|
|
|
|
|
(59,250 |
) |
Pro forma net debt to annualized quarterly EBITDA(3) |
|
|
6.1 |
x |
|
Available under unsecured revolving credit facility |
|
|
|
|
|
$ |
340,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Excludes unamortized premiums / discounts and deferred financing fees.
(2)Credit facility has an accordion feature that provides additional capacity, subject to the satisfaction of customary terms and conditions, of up to $250 million, for a total facility size of not more than $650 million.
(3)Pro-forma assuming a full quarter of operations from FBI - Salt Lake City.
`7
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
|
December 31, 2016 |
|
||
Assets |
|
|
|
|
|
|
|
|
Real estate properties, net |
|
$ |
1,195,618 |
|
|
$ |
901,066 |
|
Cash and cash equivalents |
|
|
6,551 |
|
|
|
4,845 |
|
Restricted cash |
|
|
3,866 |
|
|
|
1,646 |
|
Deposits on acquisitions |
|
|
1,100 |
|
|
|
1,750 |
|
Rents receivable |
|
|
9,664 |
|
|
|
8,544 |
|
Accounts receivable |
|
|
7,532 |
|
|
|
5,823 |
|
Deferred financing, net |
|
|
1,158 |
|
|
|
2,787 |
|
Intangible assets, net |
|
|
131,408 |
|
|
|
113,795 |
|
Interest rate swap |
|
|
3,088 |
|
|
|
3,785 |
|
Prepaid expenses and other assets |
|
|
8,050 |
|
|
|
1,422 |
|
Total assets |
|
$ |
1,368,035 |
|
|
$ |
1,045,463 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Revolving credit facility |
|
|
59,250 |
|
|
|
212,167 |
|
Term loan facility, net |
|
|
99,167 |
|
|
|
- |
|
Notes payable, net |
|
|
173,676 |
|
|
|
- |
|
Mortgage notes payable, net |
|
|
203,999 |
|
|
|
80,806 |
|
Intangible liabilities, net |
|
|
40,866 |
|
|
|
41,840 |
|
Accounts payable and accrued liabilities |
|
|
21,946 |
|
|
|
13,784 |
|
Total liabilities |
|
|
598,904 |
|
|
|
348,597 |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Common stock, par value $0.01, 200,000,000 shares authorized, |
|
|
|
|
|
|
|
|
43,873,796 and 36,874,810 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively. |
|
|
439 |
|
|
|
369 |
|
Additional paid-in capital |
|
|
718,880 |
|
|
|
596,971 |
|
Retained earnings |
|
|
4,414 |
|
|
|
1,721 |
|
Cumulative dividends |
|
|
(72,195 |
) |
|
|
(42,794 |
) |
Accumulated other comprehensive income |
|
|
2,627 |
|
|
|
3,038 |
|
Total stockholders' equity |
|
|
654,165 |
|
|
|
559,305 |
|
Non-controlling interest in Operating Partnership |
|
|
114,966 |
|
|
|
137,561 |
|
Total equity |
|
|
769,131 |
|
|
|
696,866 |
|
Total liabilities and equity |
|
$ |
1,368,035 |
|
|
$ |
1,045,463 |
|
`8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
||||
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income |
|
$ |
30,079 |
|
|
$ |
24,493 |
|
|
$ |
83,600 |
|
|
$ |
68,520 |
|
|
Tenant reimbursements |
|
|
3,554 |
|
|
|
2,385 |
|
|
|
10,156 |
|
|
|
7,016 |
|
|
Other income |
|
|
225 |
|
|
|
97 |
|
|
|
592 |
|
|
|
331 |
|
|
Total revenues |
|
|
33,858 |
|
|
|
26,975 |
|
|
|
94,348 |
|
|
|
75,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating |
|
|
6,718 |
|
|
|
5,308 |
|
|
|
18,904 |
|
|
|
14,726 |
|
|
Real estate taxes |
|
|
3,452 |
|
|
|
2,533 |
|
|
|
9,166 |
|
|
|
7,233 |
|
|
Depreciation and amortization |
|
|
14,141 |
|
|
|
12,237 |
|
|
|
40,663 |
|
|
|
34,174 |
|
|
Acquisition costs |
|
|
206 |
|
|
|
660 |
|
|
|
1,194 |
|
|
|
1,339 |
|
|
Corporate general and administrative |
|
|
2,920 |
|
|
|
3,066 |
|
|
|
9,506 |
|
|
|
9,154 |
|
|
Total expenses |
|
|
27,437 |
|
|
|
23,804 |
|
|
|
79,433 |
|
|
|
66,626 |
|
|
Operating income |
|
|
6,421 |
|
|
|
3,171 |
|
|
|
14,915 |
|
|
|
9,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(5,495 |
) |
|
|
(2,043 |
) |
|
|
(11,626 |
) |
|
|
(5,967 |
) |
|
Net income |
|
|
926 |
|
|
|
1,128 |
|
|
|
3,289 |
|
|
|
3,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest in Operating Partnership |
|
|
(144 |
) |
|
|
(233 |
) |
|
|
(596 |
) |
|
|
(1,005 |
) |
|
Net income available to Easterly Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties, Inc. |
|
$ |
782 |
|
|
$ |
895 |
|
|
$ |
2,693 |
|
|
$ |
2,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to Easterly Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties, Inc. per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
Diluted |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.07 |
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
39,962,471 |
|
|
|
34,967,482 |
|
|
|
38,098,805 |
|
|
|
28,886,697 |
|
|
Diluted |
|
|
41,903,977 |
|
|
|
36,904,564 |
|
|
|
40,012,282 |
|
|
|
30,722,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, per share - fully diluted basis |
|
$ |
0.02 |
|
|
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
fully diluted basis |
|
|
47,683,701 |
|
|
|
44,446,991 |
|
|
|
46,525,052 |
|
|
|
41,717,726 |
|
`9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
926 |
|
|
$ |
1,128 |
|
|
$ |
3,289 |
|
|
$ |
3,274 |
|
|
Depreciation and amortization |
|
|
14,141 |
|
|
|
12,237 |
|
|
|
40,663 |
|
|
|
34,174 |
|
|
Acquisition costs |
|
|
206 |
|
|
|
660 |
|
|
|
1,194 |
|
|
|
1,339 |
|
|
Corporate general and administrative |
|
|
2,920 |
|
|
|
3,066 |
|
|
|
9,506 |
|
|
|
9,154 |
|
|
Interest expense |
|
|
5,495 |
|
|
|
2,043 |
|
|
|
11,626 |
|
|
|
5,967 |
|
|
Net Operating Income |
|
|
23,688 |
|
|
|
19,134 |
|
|
|
66,278 |
|
|
|
53,908 |
|
|
Adjustments to Net Operating Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line rent |
|
|
(881 |
) |
|
|
(115 |
) |
|
|
(1,376 |
) |
|
|
(155 |
) |
|
Above-/below-market leases |
|
|
(2,065 |
) |
|
|
(1,816 |
) |
|
|
(6,283 |
) |
|
|
(5,225 |
) |
|
Cash Net Operating Income |
|
$ |
20,742 |
|
|
$ |
17,203 |
|
|
$ |
58,619 |
|
|
$ |
48,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
`10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
|
September 30, 2017 |
|
|
September 30, 2016 |
|
||||
|
Net income |
|
$ |
926 |
|
|
$ |
1,128 |
|
|
$ |
3,289 |
|
|
$ |
3,274 |
|
|
Depreciation and amortization |
|
|
14,141 |
|
|
|
12,237 |
|
|
|
40,663 |
|
|
|
34,174 |
|
|
Interest expense |
|
|
5,495 |
|
|
|
2,043 |
|
|
|
11,626 |
|
|
|
5,967 |
|
|
EBITDA |
|
$ |
20,562 |
|
|
$ |
15,408 |
|
|
$ |
55,578 |
|
|
$ |
43,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
926 |
|
|
$ |
1,128 |
|
|
$ |
3,289 |
|
|
$ |
3,274 |
|
|
Depreciation and amortization |
|
|
14,141 |
|
|
|
12,237 |
|
|
|
40,663 |
|
|
|
34,174 |
|
|
Funds From Operations (FFO) |
|
$ |
15,067 |
|
|
$ |
13,365 |
|
|
$ |
43,952 |
|
|
$ |
37,448 |
|
|
Adjustments to FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs |
|
|
206 |
|
|
|
660 |
|
|
|
1,194 |
|
|
|
1,339 |
|
|
Straight-line rent |
|
|
(883 |
) |
|
|
(50 |
) |
|
|
(1,376 |
) |
|
|
(17 |
) |
|
Above-/below-market leases |
|
|
(2,065 |
) |
|
|
(1,816 |
) |
|
|
(6,283 |
) |
|
|
(5,225 |
) |
|
Non-cash interest expense |
|
|
310 |
|
|
|
196 |
|
|
|
784 |
|
|
|
585 |
|
|
Non-cash compensation |
|
|
748 |
|
|
|
742 |
|
|
|
2,215 |
|
|
|
2,164 |
|
|
Funds From Operations, as Adjusted |
|
$ |
13,383 |
|
|
$ |
13,097 |
|
|
$ |
40,486 |
|
|
$ |
36,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, per share - fully diluted basis |
|
$ |
0.32 |
|
|
$ |
0.30 |
|
|
$ |
0.94 |
|
|
$ |
0.90 |
|
|
FFO, as Adjusted, per share - fully diluted basis |
|
$ |
0.28 |
|
|
$ |
0.29 |
|
|
$ |
0.87 |
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations, as Adjusted |
|
$ |
13,383 |
|
|
$ |
13,097 |
|
|
$ |
40,486 |
|
|
$ |
36,294 |
|
|
Acquisition costs |
|
|
(206 |
) |
|
|
(660 |
) |
|
|
(1,194 |
) |
|
|
(1,339 |
) |
|
Principal amortization |
|
|
(748 |
) |
|
|
(717 |
) |
|
|
(2,221 |
) |
|
|
(2,131 |
) |
|
Maintenance capital expenditures |
|
|
(1,726 |
) |
|
|
(463 |
) |
|
|
(2,677 |
) |
|
|
(781 |
) |
|
Contractual tenant improvements |
|
|
(183 |
) |
|
|
(22 |
) |
|
|
(335 |
) |
|
|
(31 |
) |
|
Cash Available for Distribution (CAD) |
|
$ |
10,520 |
|
|
$ |
11,235 |
|
|
$ |
34,059 |
|
|
$ |
32,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
fully diluted basis |
|
|
47,683,701 |
|
|
|
44,446,991 |
|
|
|
46,525,052 |
|
|
|
41,717,726 |
|
`11
Debt Instrument |
Maturity Date |
|
Stated Rate(1) |
|
September 30, 2017 Balance(2) |
|
September 30, 2017 Percent of Total Indebtedness |
|
||||
Unsecured debt |
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facility(3) |
11-Feb-19(4) |
|
LIBOR + 150bps |
|
$ |
59,250 |
|
|
11.0% |
|
||
Unsecured term loan facility |
29-Sep-23 |
|
3.17%(5) |
|
|
100,000 |
|
|
18.4% |
|
||
Notes payable - series A |
25-May-27 |
|
|
4.05% |
|
|
95,000 |
|
|
17.6% |
|
|
Notes payable - series B |
25-May-29 |
|
|
4.15% |
|
|
50,000 |
|
|
9.3% |
|
|
Notes payable - series C |
25-May-32 |
|
|
4.30% |
|
|
30,000 |
|
|
5.6% |
|
|
|
7.8 years |
|
|
3.59% |
|
$ |
334,250 |
|
|
61.9% |
|
|
Total unsecured debt |
(wtd-avg maturity) |
|
(wtd-avg rate) |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured mortgage debt |
|
|
|
|
|
|
|
|
|
|
|
|
VA - Loma Linda |
6-Jul-27 |
|
|
3.59% |
|
|
127,500 |
|
|
23.6% |
|
|
ICE - Charleston |
15-Jan-27 |
|
|
4.21% |
|
|
20,088 |
|
|
3.7% |
|
|
USFS II - Albuquerque |
14-Jul-26 |
|
|
4.46% |
|
|
16,969 |
|
|
3.1% |
|
|
DEA - Pleasanton |
18-Oct-23 |
|
LIBOR + 150bps |
|
|
15,700 |
|
|
2.9% |
|
||
CBP - Savannah |
10-Jul-33 |
|
|
3.40% |
|
|
14,388 |
|
|
2.7% |
|
|
MEPCOM - Jacksonville |
14-Oct-25 |
|
|
4.41% |
|
|
11,016 |
|
|
2.0% |
|
|
|
9.7 years |
|
|
3.69% |
|
$ |
205,661 |
|
|
38.1% |
|
|
Total secured mortgage debt |
(wtd-avg maturity) |
|
(wtd-avg rate) |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Statistics |
September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Variable rate debt - unhedged |
$ |
74,950 |
|
|
|
|
|
|
|
|
|
|
Fixed rate debt |
|
464,961 |
|
|
|
|
|
|
|
|
|
|
Total debt(2) |
$ |
539,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Variable rate debt - unhedged |
|
13.9 |
% |
|
|
|
|
|
|
|
|
|
% Fixed rate debt |
|
86.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average maturity |
8.5 years |
|
|
|
|
|
|
|
|
|
|
|
Weighted average interest rate |
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
(1)Average stated rates represent the weighted average interest rate at September 30, 2017.
(2)Excludes unamortized premiums / discounts and deferred financing fees.
(3)Credit facility has available capacity of $340,750 as of September 30, 2017.
(4)Credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee.
(5)Entered into two interest rate swaps with an effective date of March 29, 2017 with an aggregate notional value of $100 million to effectively fix the interest rate at 3.17% annually based on the Company’s current leverage ratio.
`12
|
|
Secured Debt |
|
|
Unsecured Debt |
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
|||||||
Year |
|
Scheduled Amortization |
|
|
Scheduled Maturities |
|
|
Scheduled Maturities |
|
|
Total |
|
|
Percentage of Debt Maturing |
|
|
Interest Rate of Scheduled Maturities |
|
||||||
2017 |
|
|
756 |
|
|
- |
|
|
- |
|
|
|
756 |
|
|
|
0.1 |
% |
|
- |
|
|||
2018 |
|
|
3,100 |
|
|
- |
|
|
- |
|
|
|
3,100 |
|
|
|
0.6 |
% |
|
- |
|
|||
2019 |
|
|
3,229 |
|
|
- |
|
|
|
59,250 |
|
|
|
62,479 |
|
|
|
11.6 |
% |
|
|
2.74 |
% |
|
2020 |
|
|
3,395 |
|
|
- |
|
|
- |
|
|
|
3,395 |
|
|
|
0.6 |
% |
|
- |
|
|||
2021 |
|
|
4,054 |
|
|
- |
|
|
- |
|
|
|
4,054 |
|
|
|
0.8 |
% |
|
- |
|
|||
2022 |
|
|
5,109 |
|
|
- |
|
|
- |
|
|
|
5,109 |
|
|
|
0.9 |
% |
|
- |
|
|||
2023 |
|
|
5,388 |
|
|
|
15,700 |
|
|
|
100,000 |
|
|
|
121,088 |
|
|
|
22.4 |
% |
|
|
3.11 |
% |
2024 |
|
|
5,679 |
|
|
- |
|
|
- |
|
|
|
5,679 |
|
|
|
1.1 |
% |
|
- |
|
|||
2025 |
|
|
5,633 |
|
|
|
1,917 |
|
|
- |
|
|
|
7,550 |
|
|
|
1.4 |
% |
|
|
4.41 |
% |
|
2026 |
|
|
3,686 |
|
|
|
6,368 |
|
|
- |
|
|
|
10,054 |
|
|
|
1.9 |
% |
|
|
4.46 |
% |
|
2027 |
|
|
1,093 |
|
|
|
134,640 |
|
|
|
95,000 |
|
|
|
230,733 |
|
|
|
42.7 |
% |
|
|
3.82 |
% |
2028 |
|
|
983 |
|
|
- |
|
|
- |
|
|
|
983 |
|
|
|
0.2 |
% |
|
- |
|
|||
2029 |
|
|
1,016 |
|
|
- |
|
|
|
50,000 |
|
|
|
51,016 |
|
|
|
9.4 |
% |
|
|
4.15 |
% |
|
2030 |
|
|
1,049 |
|
|
- |
|
|
- |
|
|
|
1,049 |
|
|
|
0.2 |
% |
|
- |
|
|||
2031 |
|
|
1,082 |
|
|
- |
|
|
- |
|
|
|
1,082 |
|
|
|
0.2 |
% |
|
- |
|
|||
2032 |
|
|
1,116 |
|
|
- |
|
|
|
30,000 |
|
|
|
31,116 |
|
|
|
5.8 |
% |
|
|
4.30 |
% |
|
2033 |
|
|
668 |
|
|
- |
|
|
- |
|
|
|
668 |
|
|
|
0.1 |
% |
|
- |
|
|||
Total |
$ |
|
47,036 |
|
$ |
|
158,625 |
|
$ |
|
334,250 |
|
$ |
|
539,911 |
|
|
|
100.0 |
% |
|
|
|
|
13
Property Name |
|
Location |
|
Property Type |
|
Tenant Lease Expiration Year |
|
Year Built / Renovated |
|
Rentable Square Feet |
|
|
Annualized Lease Income |
|
|
Percentage of Total Annualized Lease Income |
|
|
Annualized Lease Income per Leased Square Foot |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government Leased Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VA - Loma Linda |
|
Loma Linda, CA |
|
Outpatient Clinic |
|
2036 |
|
2016 |
|
|
327,614 |
|
|
$ |
16,039,347 |
|
|
|
12.5 |
% |
|
$ |
48.96 |
|
IRS - Fresno |
|
Fresno, CA |
|
Office |
|
2018 |
|
2003 |
|
|
180,481 |
|
|
|
7,495,047 |
|
|
|
5.9 |
% |
|
|
41.53 |
|
FBI - Salt Lake |
|
Salt Lake City, UT |
|
Office |
|
2032 |
|
2012 |
|
|
169,542 |
|
|
|
6,723,832 |
|
|
|
5.3 |
% |
|
|
39.66 |
|
PTO - Arlington |
|
Arlington, VA |
|
Office |
|
2019 / 2020 |
|
2009 |
|
|
189,871 |
|
|
|
6,550,786 |
|
|
|
5.1 |
% |
|
|
34.50 |
|
FBI - San Antonio |
|
San Antonio, TX |
|
Office |
|
2021 |
|
2007 |
|
|
148,584 |
|
|
|
5,037,895 |
|
|
|
3.9 |
% |
|
|
33.91 |
|
FBI - Omaha |
|
Omaha, NE |
|
Office |
|
2024 |
|
2009 |
|
|
112,196 |
|
|
|
4,433,604 |
|
|
|
3.5 |
% |
|
|
39.52 |
|
EPA - Kansas City |
|
Kansas City, KS |
|
Laboratory |
|
2023 |
|
2003 |
|
|
71,979 |
|
|
|
3,852,671 |
|
|
|
3.0 |
% |
|
|
53.52 |
|
ICE - Charleston |
|
North Charleston, SC |
|
Office |
|
2021 / 2027 |
|
1994 / 2012 |
|
|
86,733 |
|
|
|
3,758,257 |
|
|
|
2.9 |
% |
|
|
43.33 |
|
DOT - Lakewood |
|
Lakewood, CO |
|
Office |
|
2024 |
|
2004 |
|
|
122,225 |
|
|
|
3,492,465 |
|
|
|
2.8 |
% |
|
|
28.57 |
|
USCIS - Lincoln |
|
Lincoln, NE |
|
Office |
|
2020 |
|
2005 |
|
|
137,671 |
|
|
|
3,257,771 |
|
|
|
2.6 |
% |
|
|
23.66 |
|
AOC - El Centro |
|
El Centro, CA |
|
Courthouse/Office |
|
2019 |
|
2004 |
|
|
46,813 |
|
|
|
3,079,731 |
|
|
|
2.4 |
% |
|
|
65.79 |
|
FBI - Birmingham |
|
Birmingham, AL |
|
Office |
|
2020 |
|
2005 |
|
|
96,278 |
|
|
|
3,017,500 |
|
|
|
2.4 |
% |
|
|
31.34 |
|
OSHA - Sandy |
|
Sandy, UT |
|
Laboratory |
|
2024 |
|
2003 |
|
|
75,000 |
|
|
|
2,972,463 |
|
|
|
2.3 |
% |
|
|
39.63 |
|
USFS II - Albuquerque |
|
Albuquerque, NM |
|
Office |
|
2026 |
|
2011 |
|
|
98,720 |
|
|
|
2,856,679 |
|
|
|
2.2 |
% |
|
|
28.94 |
|
ICE - Albuquerque |
|
Albuquerque, NM |
|
Office |
|
2027 |
|
2011 |
|
|
71,100 |
|
|
|
2,794,202 |
|
|
|
2.2 |
% |
|
|
39.30 |
|
DEA - Vista |
|
Vista, CA |
|
Laboratory |
|
2020 |
|
2002 |
|
|
54,119 |
|
|
|
2,761,077 |
|
|
|
2.2 |
% |
|
|
51.02 |
|
FBI - Richmond |
|
Richmond, VA |
|
Office |
|
2021 |
|
2001 |
|
|
96,607 |
|
|
|
2,756,395 |
|
|
|
2.2 |
% |
|
|
28.53 |
|
DEA - Pleasanton |
|
Pleasanton, CA |
|
Laboratory |
|
2035 |
|
2015 |
|
|
42,480 |
|
|
|
2,741,304 |
|
|
|
2.1 |
% |
|
|
64.53 |
|
USFS I - Albuquerque |
|
Albuquerque, NM |
|
Office |
|
2021 |
|
2006 |
|
|
92,455 |
|
|
|
2,737,373 |
|
|
|
2.1 |
% |
|
|
29.61 |
|
AOC - Del Rio |
|
Del Rio, TX |
|
Courthouse/Office |
|
2024 |
|
1992 / 2004 |
|
|
89,880 |
|
|
|
2,666,267 |
|
|
|
2.1 |
% |
|
|
29.66 |
|
DEA - Dallas Lab |
|
Dallas, TX |
|
Laboratory |
|
2021 |
|
2001 |
|
|
49,723 |
|
|
|
2,395,557 |
|
|
|
2.0 |
% |
|
|
48.18 |
|
MEPCOM - Jacksonville |
|
Jacksonville, FL |
|
Office |
|
2025 |
|
2010 |
|
|
30,000 |
|
|
|
2,180,022 |
|
|
|
1.8 |
% |
|
|
72.67 |
|
FBI - Little Rock |
|
Little Rock, AR |
|
Office |
|
2021 |
|
2001 |
|
|
101,977 |
|
|
|
2,165,285 |
|
|
|
1.7 |
% |
|
|
21.23 |
|
CBP - Savannah |
|
Savannah, GA |
|
Laboratory |
|
2033 |
|
2013 |
|
|
35,000 |
|
|
|
2,131,266 |
|
|
|
1.7 |
% |
|
|
60.89 |
|
FBI - Albany |
|
Albany, NY |
|
Office |
|
2018 |
|
1998 |
|
|
98,184 |
|
|
|
2,094,025 |
|
|
|
1.6 |
% |
|
|
21.33 |
|
DEA - Santa Ana |
|
Santa Ana, CA |
|
Office |
|
2024 |
|
2004 |
|
|
39,905 |
|
|
|
2,077,243 |
|
|
|
1.6 |
% |
|
|
52.05 |
|
DOE - Lakewood |
|
Lakewood, CO |
|
Office |
|
2029 |
|
1999 |
|
|
115,650 |
|
|
|
2,061,963 |
|
|
|
1.6 |
% |
|
|
17.83 |
|
DEA - Dallas |
|
Dallas, TX |
|
Office |
|
2021 |
|
2001 |
|
|
71,827 |
|
|
|
1,807,861 |
|
|
|
1.4 |
% |
|
|
25.17 |
|
NPS - Omaha |
|
Omaha, NE |
|
Office |
|
2024 |
|
2004 |
|
|
62,772 |
|
|
|
1,758,880 |
|
|
|
1.4 |
% |
|
|
28.02 |
|
ICE - Otay |
|
San Diego, CA |
|
Office |
|
2022 / 2026 |
|
2001 |
|
|
52,881 |
|
|
|
1,752,325 |
|
|
|
1.4 |
% |
|
|
35.43 |
|
`14
Operating Property Overview (Cont.) (As of September 30, 2017, unaudited) |
|
|
Property Name |
|
Location |
|
Property Type |
|
Tenant Lease Expiration Year |
|
Year Built / Renovated |
|
Rentable Square Feet |
|
|
Annualized Lease Income |
|
|
Percentage of Total Annualized Lease Income |
|
|
Annualized Lease Income per Leased Square Foot |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government Leased Properties (Cont.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CBP - Chula Vista |
|
Chula Vista, CA |
|
Office |
|
2018 |
|
1998 |
|
|
59,397 |
|
|
|
1,710,318 |
|
|
|
1.3 |
% |
|
|
28.79 |
|
DEA - North Highlands |
|
Sacramento, CA |
|
Office |
|
2017 |
|
2002 |
|
|
37,975 |
|
|
|
1,707,569 |
|
|
|
1.3 |
% |
|
|
44.97 |
|
CBP - Sunburst |
|
Sunburst, MT |
|
Office |
|
2028 |
|
2008 |
|
|
33,000 |
|
|
|
1,588,434 |
|
|
|
1.2 |
% |
|
|
48.13 |
|
USCG - Martinsburg |
|
Martinsburg, WV |
|
Office |
|
2027 |
|
2007 |
|
|
59,547 |
|
|
|
1,574,367 |
|
|
|
1.2 |
% |
|
|
26.44 |
|
AOC - Aberdeen |
|
Aberdeen, MS |
|
Courthouse/Office |
|
2025 |
|
2005 |
|
|
46,979 |
|
|
|
1,464,428 |
|
|
|
1.1 |
% |
|
|
31.17 |
|
DEA - Birmingham |
|
Birmingham, AL |
|
Office |
|
2020 |
|
2005 |
|
|
35,616 |
|
|
|
1,392,038 |
|
|
|
1.1 |
% |
|
|
39.08 |
|
DEA - Albany |
|
Albany, NY |
|
Office |
|
2025 |
|
2004 |
|
|
31,976 |
|
|
|
1,340,360 |
|
|
|
1.0 |
% |
|
|
41.92 |
|
DEA - Otay |
|
San Diego, CA |
|
Office |
|
2017 |
|
1997 |
|
|
32,560 |
|
|
|
1,301,353 |
|
|
|
1.0 |
% |
|
|
39.97 |
|
DEA - Riverside |
|
Riverside, CA |
|
Office |
|
2017 |
|
1997 |
|
|
34,354 |
|
|
|
1,300,738 |
|
|
|
1.0 |
% |
|
|
37.86 |
|
AOC - South Bend |
|
South Bend, IN |
|
Courthouse/Office |
|
2027 |
|
1996 / 2011 |
|
|
30,119 |
|
|
|
816,214 |
|
|
|
0.7 |
% |
|
|
27.10 |
|
SSA - Mission Viejo |
|
Mission Viejo, CA |
|
Office |
|
2020 |
|
2005 |
|
|
11,590 |
|
|
|
535,860 |
|
|
|
0.4 |
% |
|
|
46.23 |
|
DEA - San Diego |
|
San Diego, CA |
|
Warehouse |
|
2032 |
|
1999 |
|
|
16,100 |
|
|
|
534,011 |
|
|
|
0.4 |
% |
|
|
33.17 |
|
SSA - San Diego |
|
San Diego, CA |
|
Office |
|
2032 |
|
2003 |
|
|
10,856 |
|
|
|
442,966 |
|
|
|
0.3 |
% |
|
|
44.04 |
|
Subtotal |
|
|
|
|
|
|
|
|
|
|
3,408,336 |
|
|
$ |
125,157,749 |
|
|
|
97.9 |
% |
|
$ |
36.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Privately Leased Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2650 SW 145th Avenue - Parbel of Florida |
|
Miramar, FL |
|
Warehouse/Distribution |
|
2018 |
|
2007 |
|
|
81,721 |
|
|
|
1,668,732 |
|
|
|
1.3 |
% |
|
|
20.42 |
|
5998 Osceola Court - United Technologies |
|
Midland, GA |
|
Warehouse/Manufacturing |
|
2023 |
|
2014 |
|
|
105,641 |
|
|
|
538,932 |
|
|
|
0.4 |
% |
|
|
5.10 |
|
501 East Hunter Street - Lummus Corporation |
|
Lubbock, TX |
|
Warehouse/Distribution |
|
2028 |
|
2013 |
|
|
70,078 |
|
|
|
527,845 |
|
|
|
0.4 |
% |
|
|
7.53 |
|
Subtotal |
|
|
|
|
|
|
|
|
|
|
257,440 |
|
|
$ |
2,735,509 |
|
|
|
2.1 |
% |
|
$ |
10.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total / Weighted Average |
|
|
|
|
|
|
|
|
|
|
3,665,776 |
|
|
$ |
127,893,258 |
|
|
|
100.0 |
% |
|
$ |
34.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
`15
Tenant |
|
Number of Properties |
|
|
Number of Leases |
|
|
Weighted Average Remaining Lease Term(1) |
|
|
Leased Square Feet |
|
|
Percentage of Leased Square Feet |
|
|
Annualized Lease Income |
|
|
Percentage of Total Annualized Lease Income |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Bureau of Investigation ("FBI") |
|
|
7 |
|
|
|
7 |
|
|
|
6.0 |
|
|
|
823,368 |
|
|
|
22.5 |
% |
|
$ |
26,228,536 |
|
|
|
20.5 |
% |
Drug Enforcement Administration ("DEA") |
|
|
11 |
|
|
|
11 |
|
|
|
5.1 |
|
|
|
432,142 |
|
|
|
11.8 |
% |
|
|
18,787,524 |
|
|
|
14.7 |
% |
Department of Veteran Affairs ("VA") |
|
|
1 |
|
|
|
1 |
|
|
|
18.7 |
|
|
|
327,614 |
|
|
|
8.9 |
% |
|
|
16,039,347 |
|
|
|
12.5 |
% |
Administrative Office of the U.S. Courts ("AOC") |
|
|
4 |
|
|
|
4 |
|
|
|
6.1 |
|
|
|
213,791 |
|
|
|
5.8 |
% |
|
|
8,026,639 |
|
|
|
6.3 |
% |
Immigration and Customs Enforcement ("ICE") |
|
|
3 |
|
|
|
3 |
|
|
|
8.1 |
|
|
|
182,522 |
|
|
|
5.0 |
% |
|
|
7,627,675 |
|
|
|
6.0 |
% |
Internal Revenue Service ("IRS") |
|
|
1 |
|
|
|
1 |
|
|
|
1.2 |
|
|
|
180,481 |
|
|
|
4.9 |
% |
|
|
7,495,047 |
|
|
|
5.9 |
% |
Patent and Trademark Office ("PTO") |
|
|
1 |
|
|
|
2 |
|
|
|
1.6 |
|
|
|
189,871 |
|
|
|
5.2 |
% |
|
|
6,550,786 |
|
|
|
5.1 |
% |
U.S. Forest Service ("USFS") |
|
|
2 |
|
|
|
2 |
|
|
|
6.4 |
|
|
|
191,175 |
|
|
|
5.2 |
% |
|
|
5,594,052 |
|
|
|
4.4 |
% |
Customs and Border Protection ("CBP") |
|
|
3 |
|
|
|
3 |
|
|
|
7.5 |
|
|
|
127,397 |
|
|
|
3.6 |
% |
|
|
5,430,018 |
|
|
|
4.2 |
% |
Environmental Protection Agency ("EPA") |
|
|
1 |
|
|
|
1 |
|
|
|
5.5 |
|
|
|
71,979 |
|
|
|
2.1 |
% |
|
|
3,852,671 |
|
|
|
3.0 |
% |
Department of Transportation ("DOT") |
|
|
1 |
|
|
|
2 |
|
|
|
6.6 |
|
|
|
129,659 |
|
|
|
3.5 |
% |
|
|
3,738,353 |
|
|
|
2.9 |
% |
U.S. Citizenship and Immigration Services ("USCIS") |
|
|
1 |
|
|
|
1 |
|
|
|
2.9 |
|
|
|
137,671 |
|
|
|
3.8 |
% |
|
|
3,257,771 |
|
|
|
2.5 |
% |
Occupational Safety and Health Administration ("OSHA") |
|
|
1 |
|
|
|
1 |
|
|
|
6.3 |
|
|
|
75,000 |
|
|
|
2.0 |
% |
|
|
2,972,463 |
|
|
|
2.3 |
% |
Military Entrance Processing Command ("MEPCOM") |
|
|
1 |
|
|
|
1 |
|
|
|
8.0 |
|
|
|
30,000 |
|
|
|
0.8 |
% |
|
|
2,180,022 |
|
|
|
1.7 |
% |
Department of Energy ("DOE") |
|
|
1 |
|
|
|
1 |
|
|
|
12.1 |
|
|
|
115,650 |
|
|
|
3.2 |
% |
|
|
2,061,963 |
|
|
|
1.6 |
% |
National Park Service ("NPS") |
|
|
1 |
|
|
|
1 |
|
|
|
6.7 |
|
|
|
62,772 |
|
|
|
1.7 |
% |
|
|
1,758,880 |
|
|
|
1.4 |
% |
U.S. Coast Guard ("USCG") |
|
|
1 |
|
|
|
1 |
|
|
|
10.2 |
|
|
|
59,547 |
|
|
|
1.6 |
% |
|
|
1,574,367 |
|
|
|
1.2 |
% |
Social Security Administration ("SSA") |
|
|
2 |
|
|
|
2 |
|
|
|
8.8 |
|
|
|
21,649 |
|
|
|
0.6 |
% |
|
|
978,827 |
|
|
|
0.9 |
% |
Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) |
|
|
0 |
|
|
|
0 |
|
|
|
3.2 |
|
|
|
8,680 |
|
|
|
0.2 |
% |
|
|
339,254 |
|
|
|
0.3 |
% |
U.S. Department of Agriculture ("USDA") |
|
|
0 |
|
|
|
1 |
|
|
|
8.3 |
|
|
|
1,538 |
|
|
|
0.0 |
% |
|
|
54,999 |
|
|
|
0.0 |
% |
Subtotal |
|
|
43 |
|
|
|
46 |
|
|
|
7.0 |
|
|
|
3,382,506 |
|
|
|
92.4 |
% |
|
$ |
124,549,193 |
|
|
|
97.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Tenants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parbel of Florida |
|
|
1 |
|
|
|
1 |
|
|
|
0.7 |
|
|
|
81,721 |
|
|
|
2.2 |
% |
|
$ |
1,668,732 |
|
|
|
1.3 |
% |
United Technologies (Pratt & Whitney) |
|
|
1 |
|
|
|
1 |
|
|
|
6.5 |
|
|
|
105,641 |
|
|
|
2.9 |
% |
|
|
608,556 |
|
|
|
0.5 |
% |
We Are Sharing Hope SC(3) |
|
|
0 |
|
|
|
1 |
|
|
|
4.3 |
|
|
|
21,609 |
|
|
|
0.6 |
% |
|
|
538,932 |
|
|
|
0.4 |
% |
Lummus Corporation |
|
|
1 |
|
|
|
1 |
|
|
|
11.1 |
|
|
|
70,078 |
|
|
|
1.9 |
% |
|
|
527,845 |
|
|
|
0.4 |
% |
Subtotal |
|
|
3 |
|
|
|
4 |
|
|
|
5.5 |
|
|
|
279,049 |
|
|
|
7.6 |
% |
|
$ |
3,344,065 |
|
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total / Weighted Average |
|
|
46 |
|
|
|
50 |
|
|
|
6.9 |
|
|
|
3,661,555 |
|
|
|
100.0 |
% |
|
$ |
127,893,258 |
|
|
|
100.0 |
% |
(1)Weighted based on leased square feet.
(2)ATF occupies the first floor of the DEA – Birmingham building in a joint lease with the DEA.
(3)LifePoint, Inc. changed its legal name to We Are Sharing Hope SC.
`16
Year of Lease Expiration |
|
Number of Leases Expiring |
|
|
Square Footage Expiring |
|
|
Percentage of Total Square Footage Expiring |
|
|
Annualized Lease Income Expiring |
|
|
Percentage of Total Annualized Lease Income Expiring |
|
|
Annualized Lease Income per Leased Square Foot Expiring |
|
||||||
2017 |
|
|
3 |
|
|
|
104,889 |
|
|
|
2.9 |
% |
|
$ |
4,309,660 |
|
|
|
3.4 |
% |
|
$ |
41.09 |
|
2018 |
|
|
4 |
|
|
|
419,783 |
|
|
|
11.5 |
% |
|
|
12,968,122 |
|
|
|
10.1 |
% |
|
|
30.89 |
|
2019 |
|
|
2 |
|
|
|
215,281 |
|
|
|
5.9 |
% |
|
|
8,860,647 |
|
|
|
6.9 |
% |
|
|
41.16 |
|
2020 |
|
|
7 |
|
|
|
356,677 |
|
|
|
9.7 |
% |
|
|
11,734,115 |
|
|
|
9.2 |
% |
|
|
32.90 |
|
2021 |
|
|
7 |
|
|
|
582,782 |
|
|
|
15.8 |
% |
|
|
17,508,922 |
|
|
|
13.7 |
% |
|
|
30.04 |
|
2022 |
|
|
2 |
|
|
|
47,919 |
|
|
|
1.3 |
% |
|
|
1,697,327 |
|
|
|
1.3 |
% |
|
|
35.42 |
|
2023 |
|
|
2 |
|
|
|
177,620 |
|
|
|
4.9 |
% |
|
|
4,391,603 |
|
|
|
3.4 |
% |
|
|
24.72 |
|
2024 |
|
|
6 |
|
|
|
501,978 |
|
|
|
13.7 |
% |
|
|
17,400,921 |
|
|
|
13.6 |
% |
|
|
34.66 |
|
2025 |
|
|
3 |
|
|
|
108,955 |
|
|
|
3.0 |
% |
|
|
4,984,810 |
|
|
|
3.9 |
% |
|
|
45.75 |
|
2026 |
|
|
2 |
|
|
|
100,258 |
|
|
|
2.7 |
% |
|
|
2,911,678 |
|
|
|
2.3 |
% |
|
|
29.04 |
|
Thereafter |
|
|
12 |
|
|
|
1,045,413 |
|
|
|
28.6 |
% |
|
|
41,125,453 |
|
|
|
32.2 |
% |
|
|
39.34 |
|
Total / Weighted Average |
|
|
50 |
|
|
|
3,661,555 |
|
|
|
100.0 |
% |
|
$ |
127,893,258 |
|
|
|
100.0 |
% |
|
$ |
34.93 |
|
`17