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What changed in Easterly Government Properties, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Easterly Government Properties, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+261 added−266 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in Easterly Government Properties, Inc.'s 2024 10-K

261 paragraphs added · 266 removed · 211 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeTo further these objectives, we have established a number of policies and programs and undertaken various initiatives, including: • Diversity and Inclusion . We value diversity of views, experience, skill sets, gender and ethnicity throughout our organization, including our board of directors, and are committed to fostering a culture of diversity and inclusion.
Biggest changeOur human capital objectives include identifying, recruiting, retaining, developing, incentivizing and integrating our existing and prospective employees. To further these objectives, we have established a number of policies and programs and undertaken various initiatives, including: • Employee Training and Professional Development .
In addition, U.S. Government tenants are viewed as desirable tenants by other landlords because of their strong credit profile, and properties leased to U.S. Government tenant agencies often attract many potential buyers. This competition could increase prices for properties of the type we may pursue and adversely affect our profitability and impede our growth.
In addition, U.S. Government tenants are viewed as desirable tenants by other landlords 6 because of their strong credit profile, and properties leased to U.S. Government tenant agencies often attract many potential buyers. This competition could increase prices for properties of the type we may pursue and adversely affect our profitability and impede our growth.
Government-leased property that meets our investment criteria as well as information about the building’s ownership. This proprietary database incorporates recent updates to the GSA inventory and the current portfolio of VA leased assets across the United States. We believe that our longstanding industry relationships, coupled with our proprietary database, improve our ability to source and execute attractive acquisition opportunities.
Government-leased property that meets our investment criteria as well as information about the building’s ownership. This proprietary database incorporates recent updates to the GSA inventory and the portfolio of VA leased assets across the United States. We believe that our longstanding industry relationships, coupled with our proprietary database, improve our ability to source and execute attractive acquisition opportunities.
We offer a comprehensive benefits program as well as a 401(k) with a matching employer contribution, flexible spending accounts, income protection through our sick pay, salary continuation and long term disability policies, paid vacation, paid maternity, paternity and adoption leave and holiday and personal days to balance work and personal life.
We offer a comprehensive benefits program as well as a 401(k) with a matching employer contribution, flexible spending accounts, remote work policies, income protection through our sick pay, salary continuation and long term disability policies, paid vacation, paid maternity, paternity and adoption leave and holiday and personal days to balance work and personal life.
Furthermore, we provide a professional development allowance to each of our employees on an annual basis for them to pursue development opportunities such as but not limited to conferences, workshops, webinar and education courses. We also provide all employees with biannual performance and career development reviews. • Employee Compensation and Benefits .
Furthermore, we provide a professional development allowance to each of our employees on an annual basis for them to pursue development opportunities such as but not limited to conferences, workshops, webinar and education courses. We also provide all employees with biannual performance and career development reviews. • Employee Retention, Compensation and Benefits .
For further information on the composition of our tenant base, see Item 2, “Properties.” 6 Insurance We carry comprehensive general liability coverage on all of our properties, with limits of liability customary within the industry to insure against liability claims and related defense costs.
For further information on the composition of our tenant base, see Item 2, “Properties.” Insurance We carry comprehensive general liability coverage on all of our properties, with limits of liability customary within the industry to insure against liability claims and related defense costs.
We work in close partnership with the U.S. Government tenant agencies to manage the construction of specialized, agency-specific design enhancements. These highly tailored build-outs substantially increase the likelihood of the tenant agency’s renewal and also typically generate a construction management fee paid by the tenant agency to us in the amount of approximately 12% of the actual cost of construction.
We work in close partnership with the U.S. Government tenant agencies to manage the construction of specialized, agency-specific design enhancements. These highly tailored build-outs substantially increase the likelihood of the tenant agency’s renewal and also typically generate a construction management fee paid by the tenant agency to us in the amount of approximately 10% of the actual cost of construction.
These properties generally meet our investment criteria, which target major federal buildings of Class A construction that are less than 20 years old, or have undergone a substantial renovation-to-suit for the tenant agency, are at least 85% leased to a single U.S.
These properties generally meet our investment criteria, which targets major federal buildings of Class A construction that are less than 20 years old, or have undergone a substantial renovation-to-suit for the tenant agency, are at least 85% leased to a single U.S.
Additionally, over 47% of our assets have achieved at least one sustainability related certification such as ENERGY STAR, LEED, or Green Globes. Corporate Responsibility We are committed to volunteerism and philanthropy and strive to positively impact the communities in which we work and live.
Additionally, over 45% of our assets have achieved at least one sustainability related certification such as ENERGY STAR, LEED, or Green Globes. Corporate Responsibility We are committed to volunteerism and philanthropy and strive to positively impact the communities in which we work and live.
Our senior management team has a proven track record of sourcing, acquiring, developing and managing properties leased to government agencies. For example, our senior management team has collectively been responsible for the acquisition of an aggregate of approximately 9.0 million square feet of U.S.
Our senior management team has a proven track record of sourcing, acquiring, developing and managing properties leased to government agencies. For example, our senior management team has collectively been responsible for the acquisition of an aggregate of approximately 10.0 million square feet of U.S.
Our team seeks to leverage these relationships to access a wide variety of sourcing opportunities, frequently resulting in the acquisition of properties that were not broadly marketed. In addition, we maintain a proprietary database that tracks buildings encompassing approximately 94 million rentable square feet and includes substantially every major U.S.
Our team seeks to leverage these relationships to access a wide variety of sourcing opportunities, frequently resulting in the acquisition of properties that were not broadly marketed. In addition, we maintain a proprietary database that tracks buildings encompassing approximately 96.7 million rentable square feet and includes substantially every major U.S.
We are an internally managed real estate investment trust, or REIT, focused primarily on the acquisition, development and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate substantially all of our revenue by leasing our properties to such agencies either directly or through the U.S. General Services Administration (“GSA”).
We are an internally managed real estate investment trust, or REIT, focused primarily on the acquisition, development and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate over 90% of our revenue by leasing our properties to such agencies either directly or through the U.S. General Services Administration (“GSA”).
We make available free of charge on our website or provide a link on our website to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including exhibits and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the SEC.
We make available free of charge on our website or provide a link on our website to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including exhibits and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).
Government requirements and the needs of tenant agencies. Since 1994, members of our senior management team have developed an average of approximately 47,600 square feet per year of U.S. Government-leased build-to-suit properties. We believe that our thorough understanding of the U.S. Government’s procurement processes and standards, our longstanding relationships with the GSA and other agencies of the U.S.
Government requirements and the needs of tenant agencies. Since 1994, members of our senior management team have developed an average of approximately 46,000 square feet per year of U.S. Government-leased build-to-suit properties. We believe that our thorough understanding of the U.S. Government’s procurement processes and standards, our longstanding relationships with the GSA and other agencies of the U.S.
For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned one property under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned two properties under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
Government agency, are in excess of 40,000 rentable square feet with expansion potential, are in strategic locations to facilitate the tenant agency’s mission, include build-to-suit features and are focused on environmental sustainability. • Develop Build-to-Suit U.S. Government Properties. We target attractive opportunities to develop build-to-suit properties for the benefit of certain U.S. Government agencies. As U.S.
Government agency, are in excess of 40,000 rentable square feet with expansion potential, and are in strategic locations to facilitate the tenant agency’s mission and include build-to-suit features. • Develop Build-to-Suit U.S. Government Properties. We target attractive opportunities to develop build-to-suit properties for the benefit of certain U.S. Government agencies. As U.S.
In 2023, we were recognized as a Premier Member of the EPA’s ENERGY STAR Certification Nation as well as a Silver Level Green Lease Leader by the Department of Energy’s Better Building Alliance. For the 2023 certification year, we had 16 ENERGY STAR certified 7 buildings.
In 2023, we were recognized as a Premier Member of the EPA’s ENERGY STAR Certification Nation as well as a Silver Level Green Lease Leader by the Department of Energy’s Better Building Alliance. For the 2024 certification year, we had 19 ENERGY STAR certified buildings.
Government rental rates are typically reset based on a number of factors, including inflation, the replacement cost of the building at the time of renewal and enhancements to the property since the date of the prior lease. During the term of a U.S.
Government rental rates have historically reset based on a number of factors, including inflation, the replacement cost of the building at the time of renewal and enhancements to the property since the date of the prior lease. During the term of a U.S.
In 2023, we published our second annual Environmental, Social, and Governance (“ESG”) report which included information on our progress towards meeting our previously announced environmental and social goals as well as an update to our alignment with five United Nations Sustainable Development Goals. These goals aim to help reduce our greenhouse gas emissions and address climate change performance.
In 2024, we published our third annual Environmental, Social, and Governance (“ESG”) report which included information on our progress towards meeting our previously announced environmental and social goals as well as an update to our alignment with five United Nations Sustainable Development Goals. These goals aim to help reduce our greenhouse gas emissions and address climate change performance. The U.S.
As of December 31, 2023, the weighted average age of our wholly owned and unconsolidated operating properties was approximately 14.6 years based on the date the property was built or renovated-to-suit, where applicable, and the weighted average remaining lease term was approximately 10.5 years. • Primarily U.S. Government Tenant Base with Strong History of Renewal . Our leases with U.S.
As of December 31, 2024, the weighted average age of our wholly owned and unconsolidated operating properties was approximately 15.7 years based on the date the property was built or renovated-to-suit, where applicable, and the weighted average remaining lease term was approximately 10.0 years. • Primarily U.S. Government Tenant Base with Strong History of Renewal . Our leases with U.S.
When we acquire a 5 property, we review all property-level operating expenditures to determine whether and how the property can be managed more efficiently. Employees and Human Capital As of December 31, 2023, we had 56 employees, including 38 employees based in our corporate headquarters in Washington, D.C. and 18 employees based in other locations throughout the United States.
When we acquire a property, we review all property-level operating expenditures to determine whether and how the property can be managed more efficiently. 5 Employees and Human Capital As of December 31, 2024, we had 50 employees, including 34 employees based in our corporate headquarters in Washington, D.C. and 16 employees based in other locations throughout the United States.
Our operating partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of our operating partnership and owned approximately 93.8% of the aggregate limited partnership interests in our operating partnership, which we refer to herein as common units, as of December 31, 2023.
Our operating partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of our operating partnership and owned approximately 95.2% of the aggregate limited partnership interests in our operating partnership, which we refer to herein as common units, as of December 31, 2024.
Government agency, are in excess of 40,000 rentable square feet with expansion potential, are in strategic locations to facilitate the tenant agency’s mission, include build-to-suit features and are focused on environmental sustainability.
Government agency, are in excess of 40,000 rentable square feet with expansion potential, are in strategic locations to facilitate the tenant agency’s mission, include build-to-suit features.
Government agencies expand, they often require additional space tailored specifically to their needs, which may not be available in the agency’s target market and therefore require new construction. The U.S. Government typically solicits proposals from private companies to develop and lease such properties to the agency, rather than developing and owning the property itself.
Government agencies expand, they often require additional space tailored specifically to their needs, which may not be available in the agency’s target market and therefore require new construction. The U.S. Government has historically solicited proposals to develop and lease such properties to the agency, rather than developing and owning the property itself.
We seek to pursue strategic and disciplined acquisitions of properties that we believe are directly and indirectly essential to the mission of select government agencies and that, in many cases, contain agency-specific design enhancements that allow each tenant agency to better satisfy its mission.
We pursue the following strategies to achieve these goals: • Pursue Attractive Acquisition Opportunities. We seek to pursue strategic and disciplined acquisitions of properties that we believe are directly and indirectly essential to the mission of select government agencies and that, in many cases, contain agency-specific design enhancements that allow each tenant agency to better satisfy its mission.
We believe the U.S. Government serves as the natural partner for our environmentally-friendly endeavors. The U.S. Government maintains “green lease” policies that include the “Promotion of Energy Efficiency and Use of Renewable Energy” as one of the many factors it considers when leasing property and we continue to partner with the GSA to promote sustainability.
Government maintains “green lease” policies that include the “Promotion of Energy Efficiency and Use of Renewable Energy” as one of the many factors it considers when leasing property and we continue to partner with the GSA to promote sustainability.
We also seek to reduce operating costs at all of our properties, often by implementing environmentally-driven energy efficiency programs that help the U.S. Government achieve its conservation and efficiency goals. Our asset management team also conducts frequent audits of each of our properties in concert with the U.S.
We also seek to reduce operating costs at all of our properties, often by implementing energy efficiency programs. Our asset management team also conducts frequent audits of each of our properties in concert with the U.S.
Government-leased properties, of which 1.0 million square feet is through the JV and the development of approximately 1.4 million aggregate square feet of such properties. We believe that our management expertise provides us with a significant advantage over our competitors when pursuing acquisition opportunities and engaging U.S.
Government, state, local and private-leased properties, of which 1.2 million square feet was acquired through the JV and approximately 1.4 million aggregate square feet was internally developed. We believe that our management expertise provides us with a significant advantage over our competitors when pursuing acquisition opportunities and engaging U.S.
As of December 31, 2023, we wholly owned 81 operating properties and nine operating properties through an unconsolidated joint venture (the “JV”) in the United States encompassing approximately 8.8 million leased square feet (8.3 million pro rata), including 88 operating properties that were leased primarily to U.S.
As of December 31, 2024, we wholly owned 90 operating properties and ten operating properties through an unconsolidated joint venture (the “JV”) in the United States encompassing approximately 9.7 million leased square feet (9.2 million pro rata), including 92 operating properties that were leased primarily to U.S.
Government tenant agencies, one operating property entirely leased to tenant agencies of a U.S. state government and one operating property that was entirely leased to a private tenant. As of December 31, 2023, our operating properties were 97% leased.
Government tenant agencies, four operating properties leased to tenant agencies of a U.S. state or local government and three operating properties that were entirely leased to private tenants. As of December 31, 2024, our operating properties were 97% leased.
From the top down, including our board of directors and senior management team, we are committed to cultivating an inclusive company culture that attracts top talent and creates an environment that fosters collaboration, innovation and diversity, while providing professional development opportunities and training. Our human capital objectives include identifying, recruiting, retaining, developing, incentivizing and integrating our existing and prospective employees.
From the top down, including our board of directors and senior management team, we are committed to cultivating an inclusive company culture that attracts top talent and creates an environment that fosters collaboration, innovation and a variety of perspectives, while providing professional development opportunities and training.
In support of this, we have implemented a remote working policy. • Employee Training and Professional Development . We encourage our employees to take advantage of various internal training opportunities, as well as those provided by outside service providers to the extent they are business related.
We encourage our employees to take advantage of various internal training opportunities, as well as those provided by outside service providers to the extent they are business related.
Significant Tenants Substantially all of our rents come from U.S. Government tenant agencies. As of December 31, 2023, our U.S. Government tenant agencies accounted for 97.3% of our annualized lease income.
Significant Tenants As of December 31, 2024, our U.S. Government tenant agencies accounted for 93.3% of our annualized lease income.
REIT Qualification We believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015.
To the extent the Vendor Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, or, as applicable, the Federal Acquisition Regulations, our Vendors are expected to adhere to these higher standards. 7 REIT Qualification We believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015.
We maintain cash- and equity-based compensation programs designed to attract, retain and motivate our employees. As an affirmative action and equal opportunity employer, we are committed to diversity, recognition and inclusion and reward our employees based on merit and their contributions. • Employee Health and Safety .
We value employee retention and actively seek to promote from within our company. We maintain cash- and equity-based compensation programs designed to attract, retain and motivate our employees based on merit and their contributions. • Employee Health and Safety .
Additionally, during 2021, we formed the JV, in which we own a 53% interest, with a leading global investor to acquire a portfolio of properties.
Additionally, during 2021, we formed the JV with a leading global investor to acquire a portfolio of properties, in which we own a 53% interest. During the year ended December 31, 2024, we received net proceeds of $71.1 million through the issuance of 5,491,217 shares of our common stock under our ATM Programs.
All shares were issued in settlement of previously entered into forward sale transactions in connection with the ATM Programs and the underwritten public offering.
All shares were issued in settlement of previously entered into forward sale transactions in connection with the ATM Programs. As of December 31, 2024, there were no unsettled shares outstanding under our ATM Programs, and we had the capacity to issue an additional $315.4 million under such programs.
Business & Growth Strategies Our objective is to generate attractive risk-adjusted returns for our stockholders over the long term through dividends and capital appreciation. We pursue the following strategies to achieve these goals: • Pursue Attractive Acquisition Opportunities.
As of December 31, 2024, we had total indebtedness of approximately $1.6 billion, including borrowings of approximately $274.6 million outstanding under our $400.0 million senior unsecured revolving credit facility. Business & Growth Strategies Our objective is to generate attractive risk-adjusted returns for our stockholders over the long term through dividends and capital appreciation.
Removed
During the year ended December 31, 2023, we received net proceeds of $39.3 million through the issuance of 1,950,000 shares of our common stock under our ATM Programs and $46.8 million through the issuance of 2,309,000 shares in connection with our underwritten public offering during the third quarter of 2021.
Removed
As of December 31, 2023, we expect to receive aggregate net proceeds of approximately $6.8 million from the sale of an aggregate 500,000 shares of the Company's common stock that have not yet been settled under our ATM Programs, assuming these forward sales transactions are physically settled in full using a net weighted average combined initial forward sales price of $13.52 per share.
Removed
As of December 31, 2023, we also had the capacity to issue an additional $380.6 million under our ATM Programs. As of December 31, 2023, we had total indebtedness of approximately $1.3 billion, including borrowings of approximately $79.0 million outstanding under our $450.0 million senior unsecured revolving credit facility.
Removed
As of December 31, 2023: o 41% and 32% of our employees were female and non-white, respectively; o two of our five named executive officers were women, including Meghan G. Baivier and Allison E.
Removed
Marino who the board of directors promoted to serve as our President and Chief Operating Officer and our Chief Financial Officer and Chief Accounting Officer, respectively, effective January 1, 2024; and o two of the three standing committees of our board of directors were chaired by women, including Tara S. Innes, Chair of the Audit Committee, and Cynthia A.
Removed
Fisher, Chair of the Nominating and Corporate Governance Committee. • Employee Retention . We value employee retention and actively seek to promote from within our company. While we believe our culture thrives on hard work, collaboration and teamwork, we also understand that the flexibility to work remotely, on occasion, can be valuable.
Removed
To the extent the Vendor Code requires a higher standard than required by commercial practice or applicable laws, rules or regulations, or, as applicable, the Federal Acquisition Regulations, our Vendors are expected to adhere to these higher standards.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf economic conditions deteriorate, the ability of lenders to fulfill their obligations under working capital or other credit facilities that we may have in the future may be adversely impacted. 12 We may be unable to identify and successfully complete acquisitions and, even if acquisitions are identified and completed, completed acquisitions may not achieve the intended benefits or may disrupt our plans and operations.
Biggest changeIn addition, the price of common stock may fluctuate significantly or decline in a high interest rate or volatile economic environment. If economic conditions deteriorate, the ability of lenders to fulfill their obligations under working capital or other credit facilities that we may have in the future may be adversely impacted.
To the extent that weak economic or real estate conditions or natural disasters affect California, our business, financial condition and results of operations could be negatively impacted. We are subject to risks from natural disasters and climate change.
To the extent that weak economic conditions, real estate conditions or natural disasters affect California, our business, financial condition and results of operations could be negatively impacted. We are subject to risks from natural disasters and climate change.
Our development activities may be subject to risks relating to various local, state and federal statutes, ordinances, rules and regulations concerning zoning, building design, construction and similar matters, including local regulations that impose restrictive zoning requirements.
Our development activities may be subject to risks relating to various local, state and federal statutes, ordinances, rules and regulations concerning zoning, building design, construction and similar matters, including local regulations that impose restrictive zoning requirements.
Under some circumstances, we may be required to pay distributions in excess of cash available for distribution in order to meet these distribution requirements or to avoid or minimize the imposition of tax, and we may need to borrow funds or dispose of assets at disadvantageous prices, distribute amounts that would otherwise be invested in future acquisitions or capital expenditures or used for the repayment of debt, pay dividends in the form of “taxable stock dividends” or find another alternative source of funds to make such distributions, which could have a material adverse effect on our financial condition, results of operations, cash flow and trading price of our common stock.
Under some circumstances, we may be required to pay distributions in excess of cash available for distribution in order to meet these distribution requirements or to avoid or minimize the imposition of tax, and we may need to borrow funds or dispose of assets at disadvantageous prices, distribute amounts that would otherwise be invested in future acquisitions or capital expenditures or used for the repayment of debt, pay dividends in the form of “taxable stock dividends” or find another alternative source of funds to make such distributions, which could have a material adverse effect on our financial condition, results of operations, cash flow and the trading price of our common stock.
Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: • require us to dedicate a substantial portion of cash flow from operations to the payment of principal and interest on indebtedness, thereby reducing the funds available for other purposes; • make it more difficult for us to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs; 19 • force us to dispose of one or more of our properties, possibly on unfavorable terms (including the possible application of the 100% tax on income from “prohibited transactions”), or in violation of certain covenants to which we may be subject; • subject us to increased sensitivity to interest rate increases; • make us more vulnerable to economic downturns, adverse industry conditions or catastrophic external events; • limit our ability to withstand competitive pressures; • limit our ability to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • reduce our flexibility in planning for or responding to changing business, industry and economic conditions; or • place us at a competitive disadvantage to competitors that have relatively less debt than we have.
Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: • require us to dedicate a substantial portion of cash flow from operations to the payment of principal and interest on indebtedness, thereby reducing the funds available for other purposes; • make it more difficult for us to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs; • force us to dispose of one or more of our properties, possibly on unfavorable terms (including the possible application of the 100% tax on income from “prohibited transactions”), or in violation of certain covenants to which we may be subject; • subject us to increased sensitivity to interest rate increases; • make us more vulnerable to economic downturns, adverse industry conditions or catastrophic external events; • limit our ability to withstand competitive pressures; 19 • limit our ability to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • reduce our flexibility in planning for or responding to changing business, industry and economic conditions; or • place us at a competitive disadvantage to competitors that have relatively less debt than we have.
If any one of these events were to occur, our financial condition, results of operations, cash flow and trading price of our common stock could be adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code.
If any one of these events were to occur, our financial condition, results of operations, cash flow and the trading price of our common stock could be adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code.
In addition, as a REIT, we will be subject to U.S. federal income tax to the extent that we distribute less than 100% of our taxable income (including capital gains) and will be subject to a 4% nondeductible excise tax on the amount by which our distributions in any calendar year are less than a minimum amount specified by the Code.
In addition, as a REIT, we will be subject to U.S. federal income tax to the extent that we distribute less than 100% of our taxable income (including capital gains) and will be subject to a 4% nondeductible excise tax on the amount by which our distributions in any calendar year are less than a minimum amount specified by the Code.
Our cash flow from operations may be insufficient to fund required distributions, for example, as a result of differences in timing between our cash flow, the receipt of income for GAAP purposes and the recognition of income for U.S. federal income tax purposes, the effect of non-deductible capital expenditures, the effect of limitations on interest and net operating loss deductibility, the creation of reserves, payment of required debt service or amortization payments, or the need to make additional investments in qualifying real estate assets.
Our cash flow from operations may be insufficient to fund required distributions, for example, as a result of differences in timing between our cash flow, the receipt of income for GAAP purposes and the recognition of income for U.S. federal 25 income tax purposes, the effect of non-deductible capital expenditures, the effect of limitations on interest and net operating loss deductibility, the creation of reserves, payment of required debt service or amortization payments, or the need to make additional investments in qualifying real estate assets.
Because these properties have been designed or physically modified to meet the needs of a particular tenant agency, if the current lease is terminated or not renewed, we may be required to renovate the property at substantial costs, decrease the rent we intend to charge or provide other concessions in order to lease the property to another tenant, which could adversely affect our business, financial condition and results of operations.
Because these properties have been designed or physically modified to meet the needs of a particular tenant agency, if the current lease is terminated or not renewed, we 8 may be required to renovate the property at substantial costs, decrease the rent we intend to charge or provide other concessions in order to lease the property to another tenant, which could adversely affect our business, financial condition and results of operations.
In order to help us qualify as a REIT, our charter generally prohibits any person or entity from actually or being deemed to own by virtue of the applicable constructive ownership provisions of the Code, (i) more than 7.1% (in value or in number of shares, whichever is more restrictive) of the issued and outstanding shares of any class or series of our stock or (ii) more than 7.1% in value of the aggregate of the outstanding shares of all classes and series of our stock (the “ownership limits”).
In order to help us qualify as a REIT, our charter generally prohibits any person or entity from actually owning or being deemed to own by virtue of the applicable constructive ownership provisions of the Code, (i) more than 7.1% (in value or in number of shares, whichever is more restrictive) of the issued and outstanding shares of any class or series of our stock or (ii) more than 7.1% in value of the aggregate of the outstanding shares of all classes and series of our stock (the “ownership limits”).
This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have an adverse effect on our financial condition, results of operations, cash flow and trading price of our common stock. 22 The form, timing or amount of dividend distributions in future periods may vary and be impacted by economic and other considerations.
This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have an adverse effect on our financial condition, results of operations, cash flow and trading price of our common stock. The form, timing or amount of dividend distributions in future periods may vary and be impacted by economic and other considerations.
We also may be forced to limit distributions and may be unable to meet the REIT distribution requirements imposed by the Code. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would likely have a negative impact on our financial condition and results of operations and could adversely affect our ability to make distributions to our stockholders.
We also may be forced to limit distributions and may be unable to meet the REIT distribution requirements imposed by the Code. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would likely have a negative impact on our business, financial condition and results of operations and could adversely affect our ability to make distributions to our stockholders.
Unfavorable market conditions in the geographic markets in which we operate and unfavorable economic conditions in the United States and globally may significantly affect our occupancy levels, rental rates, rent collections, operating expenses, the market value of our assets and our ability to strategically acquire, dispose of, recapitalize or refinance our properties on economically 9 favorable terms or at all.
Unfavorable market conditions in the geographic markets in which we operate and unfavorable economic conditions in the United States and globally may significantly affect our occupancy levels, rental rates, rent collections, operating expenses, the market value of our assets and our ability to strategically acquire, dispose of, recapitalize or refinance our properties on economically favorable terms or at all.
In addition, rules impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are 26 treated as not being conducted on an arm’s-length basis. We have jointly elected with three subsidiaries for such subsidiaries to be treated as TRSs for U.S. federal income tax purposes.
In addition, rules impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are treated as not being conducted on an arm’s-length basis. We have jointly elected with three subsidiaries for such subsidiaries to be treated as TRSs for U.S. federal income tax purposes.
The loss of services of one or more of these members of our senior management team, or our inability to attract and retain highly qualified personnel, could have a material adverse effect on our business, financial 27 condition and results of operations and weaken our relationships with lenders, business partners, industry participants, the GSA and U.S. Government agencies.
The loss of services of one or more of these members of our senior management team, or our inability to attract and retain highly qualified personnel, could have a material adverse effect on our business, financial condition and results of operations and weaken our relationships with lenders, business partners, industry participants, the GSA and U.S. Government agencies.
As a result of this concentration, a material portion of our portfolio may be exposed to the effects of economic and real estate conditions in California markets, such as the supply of competing properties, general levels of employment and economic activity. In addition, historically, California has been vulnerable 10 to natural disasters, such as earthquakes, wildfires, floods and mudslides.
As a result of this concentration, a material portion of our portfolio may be exposed to the effects of economic and real estate conditions in California markets, such as the supply of competing properties, general levels of employment and economic activity. In addition, historically, California has been vulnerable to natural disasters, such as earthquakes, wildfires, floods and mudslides.
This competition may affect our ability to attract and retain tenants, may reduce the rents we are able to charge and could have a material adverse effect on our business, financial condition and results of operations. 13 We may be subject to increased costs of insurance and limitations on coverage, particularly regarding acts of terrorism.
This competition may affect our ability to attract and retain tenants, may reduce the rents we are able to charge and could have a material adverse effect on our business, financial condition and results of operations. We may be subject to increased costs of insurance and limitations on coverage, particularly regarding acts of terrorism.
The presence of contamination or the failure to remediate contamination on our properties may adversely affect our ability to attract or retain tenants and our ability to develop or sell or borrow against those properties. In addition to potential liability for cleanup costs, private plaintiffs may bring claims for personal injury, property damage or for similar reasons.
The presence of contamination or the failure to remediate contamination on our properties may adversely affect our ability to attract or retain tenants and our ability to develop or sell or borrow against those 13 properties. In addition to potential liability for cleanup costs, private plaintiffs may bring claims for personal injury, property damage or for similar reasons.
Government tenant agencies, we retain certain obligations with respect to the property, including, among other things, the responsibility for maintenance and repair of the property, the provision of adequate parking, maintenance of common areas, responsibility for capital improvements such as roof replacement and major structural improvements and compliance with other affirmative covenants in the lease.
Government tenant agencies, we retain certain obligations with respect to the property, including, among other things, the responsibility for maintenance and repair of the property, the provision of adequate parking, maintenance of common areas, responsibility for capital improvements such as roof replacement and major structural 11 improvements and compliance with other affirmative covenants in the lease.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income 21 on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the distribution requirements applicable to REITs under the Code.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the distribution requirements applicable to REITs under the Code.
In addition, payments of principal and interest made to service our debts may leave us with insufficient cash to make distributions necessary to meet the distribution requirements imposed on REITs under the Code. Risks Related to Our Common Stock The market price and trading volume of our common stock may be volatile.
In addition, payments of principal and interest made to service our debts may leave us with insufficient cash to make distributions necessary to meet the distribution requirements imposed on REITs under the Code. 21 Risks Related to Our Common Stock The market price and trading volume of our common stock may be volatile.
Deficiencies, including any material weakness, in our internal controls over financial reporting which may occur in the future could result in misstatements of our results of operations that could require a restatement, failing to meet our public company 28 reporting obligations and causing investors to lose confidence in our reported financial information.
Deficiencies, including any material weakness, in our internal controls over financial reporting which may occur in the future could result in misstatements of our results of operations that could require a restatement, failing to meet our public company reporting obligations and causing investors to lose confidence in our reported financial information.
Moreover, in order to qualify as a REIT, we must meet, on an ongoing basis, various tests regarding the nature and diversification of 23 our assets and our income, the ownership of our outstanding stock, the absence of inherited retained earnings from non-REIT periods and the amount of our distributions.
Moreover, in order to qualify as a REIT, we must meet, on an ongoing basis, various tests regarding the nature and diversification of our assets and our income, the ownership of our outstanding stock, the absence of inherited retained earnings from non-REIT periods and the amount of our distributions.
These investments may also have the potential risk of impasses on decisions such as a sale, because neither we, nor the partner, would have full control over the joint venture. In addition, we may in certain circumstances be liable for the actions of our partners.
These investments may also have the potential risk of impasses on decisions such as a sale, because neither we, nor the partner, would have full control over the joint venture. In addition, we may in certain circumstances 16 be liable for the actions of our partners.
Accordingly, in the event that actions taken in good faith by any of our directors or officers impede the performance of our company, your ability to recover damages from such director or officer will be limited with respect to directors and may be limited with respect to officers.
Accordingly, in the event that actions taken in good faith by any of our directors or officers impede the performance of our company, your ability to recover damages from such director or officer will be limited with respect to 18 directors and may be limited with respect to officers.
In addition, repurchases of our common stock pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of our share repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
In addition, 22 repurchases of our common stock pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of our share repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
A material failure to comply with 14 these laws could subject us to fines, penalties and damages, cause us to be in default of our leases and other contracts with the U.S. Government and bar us from entering into future leases and other contracts with the U.S. Government.
A material failure to comply with these laws could subject us to fines, penalties and damages, cause us to be in default of our leases and other contracts with the U.S. Government and bar us from entering into future leases and other contracts with the U.S. Government.
Real estate investments are relatively illiquid and may limit our flexibility. Real estate investments are relatively illiquid, which may tend to limit our ability to react promptly to changes in economic or other market conditions. Our ability to dispose of assets in the future will depend on prevailing economic and market conditions.
Real estate investments are relatively illiquid, which may tend to limit our ability to react promptly to changes in economic or other market conditions. Our ability to dispose of assets in the future will depend on prevailing economic and market conditions.
Unknown or contingent liabilities might include liabilities for clean-up or 15 remediation of environmental conditions, claims of customers, vendors or other persons dealing with the acquired entities, tax liabilities and other liabilities whether incurred in the ordinary course of business or otherwise.
Unknown or contingent liabilities might include liabilities for clean-up or remediation of environmental conditions, claims of customers, vendors or other persons dealing with the acquired entities, tax liabilities and other liabilities whether incurred in the ordinary course of business or otherwise.
In addition, the total amount of costs and expenses that we may incur with respect to liabilities associated with acquired properties and entities may exceed our expectations, which may adversely affect our business, financial condition and results of operations.
In 15 addition, the total amount of costs and expenses that we may incur with respect to liabilities associated with acquired properties and entities may exceed our expectations, which may adversely affect our business, financial condition and results of operations.
These debt agreements, in some cases, also subject us to guarantor and liquidity covenants and our senior unsecured revolving credit facility, our senior unsecured term loan facility, our senior unsecured notes, and other future debt may, require us to maintain various financial ratios.
These debt agreements, in some cases, also subject us to guarantor and liquidity covenants and our senior unsecured revolving credit facility, our senior unsecured term loan facilities, our senior unsecured notes, and other future debt may, require us to maintain various financial ratios.
Some of our debt agreements contain certain cash flow sweep requirements and mandatory escrows, 20 and our property mortgages generally require certain mandatory prepayments upon disposition of underlying collateral. Early repayment of certain mortgages may be subject to prepayment penalties.
Some of our debt agreements contain certain cash flow sweep requirements and mandatory escrows, and our property mortgages generally require certain mandatory prepayments upon disposition of underlying collateral. Early repayment of certain mortgages may be subject to prepayment penalties.
Government tenant agencies and new developments for anticipated tenant agencies and, as a result, will be subject to certain risks, which could adversely affect us, including our financial condition and results of operations.
Government tenant agencies and new developments for anticipated tenant agencies and, as a result, will be subject to certain risks, which could adversely affect us, including our business, financial condition and results of operations.
As a result, the amount available for distribution to holders of our common stock would be reduced for the year or years involved, and we would no longer be required to make distributions to our stockholders.
As a result, the 23 amount available for distribution to holders of our common stock would be reduced for the year or years involved, and we would no longer be required to make distributions to our stockholders.
Some of the potential share issuances that may adversely affect the market price of the shares of our common stock could include: the exchange of our common units in our operating partnership for our common stock, the granting, exercise or vesting of any options, restricted stock or restricted stock units or long-term incentive units in our operating partnership granted or that may be granted to certain directors, executive officers and other employees under our 2015 Equity Incentive Plan, as amended, and other issuances of our common stock or our operating partnership’s securities exchangeable for or convertible into our common stock.
Some of the potential share issuances that may adversely affect the market price of the shares of our common stock could include: the exchange of our common units in our operating partnership for our common stock, the granting, exercise or vesting of any options, restricted stock or restricted stock units or long-term incentive units in our operating partnership granted or that may be granted to certain directors, executive officers and other employees under our 2024 Equity Incentive Plan, as amended, and other issuances of our common stock or our operating partnership’s securities exchangeable for or convertible into our common stock.
Based upon our investment objectives, we believe that overall, our 25 properties should not be considered property held primarily for sale to customers in the ordinary course of business.
Based upon our investment objectives, we believe that overall, our properties should not be considered property held primarily for sale to customers in the ordinary course of business.
Should the impact of climate change be material in nature, our financial condition or results of operations would be adversely affected. In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties in order to comply with such regulations.
Should the impact of climate change be material in nature, our business, financial condition or results of operations would be adversely affected. 10 In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties in order to comply with such regulations.
As a result of climate change, we may also experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage to, or decreased demand for, our properties, increases in the cost of insurance for our properties located in the areas affected by these conditions and impact our ability to lease, develop or dispose of our properties.
As a result of climate change, we may also experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage to, or decreased demand for, our properties, increases in the cost of insurance for our properties located in the areas affected by these conditions and impacts to our ability to lease, develop or dispose of our properties.
Under current law, Section 1031 exchanges only apply to real property and do not apply to any related personal property transferred with the real property.
Under current law, Section 1031 exchanges only apply to real property and do not apply to any 26 related personal property transferred with the real property.
We may decide to change our investment strategy without stockholder approval and seek to acquire and develop properties that are not leased to U.S. Government tenant agencies. Any change to our investment strategy, including the making of investments outside our target market, could have a material adverse effect on our business, financial condition and results of operations.
We may decide to change our investment strategy without stockholder approval and seek to acquire and develop properties that are not leased to U.S. Government agencies that serve essential functions. Any change to our investment strategy, including the making of investments outside our target market, could have a material adverse effect on our business, financial condition and results of operations.
We are exposed to risks associated with property development and redevelopment, including new developments for anticipated tenant agencies and build-to-suit renovations for existing tenant agencies. As of December 31, 2023, we had one property under development. We intend to continue to engage in development and redevelopment activities with respect to our properties, including build-to-suit renovations for existing U.S.
We are exposed to risks associated with property development and redevelopment, including new developments for anticipated tenant agencies and build-to-suit renovations for existing tenant agencies. As of December 31, 2024, we had two properties under development. We intend to continue to engage in development and redevelopment activities with respect to our properties, including build-to-suit renovations for existing U.S.
This section contains forward looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements beginning on page 1. 8 Risks Related to our Business and Operations We depend on the U.S. Government and its agencies for substantially all of our revenues and any failure by the U.S.
This section contains forward looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements beginning on page 1. Risks Related to our Business and Operations We depend on the U.S. Government and its agencies for over 90% of our revenues and any failure by the U.S.
Certain mortgages on our properties contain customary negative covenants that, among other things, limit our ability, without the prior consent of the lender, to further mortgage the property and to reduce or change insurance coverage. As of December 31, 2023, we had $220.6 million of combined United States property mortgages and other secured debt.
Certain mortgages on our properties contain customary negative covenants that, among other things, limit our ability, without the prior consent of the lender, to further mortgage the property and to reduce or change insurance coverage. As of December 31, 2024, we had $156.3 million of combined United States property mortgages and other secured debt.
Tenants occupying approximately 7.2% of our leased square feet and contributing approximately 6.9% of our annualized lease income (in each case, as of December 31, 2023) currently have exercisable rights to terminate their leases before the stated soft-term of their lease expires. For fiscal policy reasons, security concerns or other reasons, some or all of our U.S.
Tenants occupying approximately 5.8% of our leased square feet and contributing approximately 5.2% of our annualized lease income (in each case, as of December 31, 2024) currently have exercisable rights to terminate their leases before the stated soft-term of their lease expires. For fiscal policy reasons, security concerns or other reasons, some or all of our U.S.
We currently have a concentration of properties located in California and are exposed to changes in market conditions and natural disasters in this state. Eighteen of our properties are located in California, accounting for approximately 15.7% of our total leased square feet and approximately 20.2% of our total annualized lease income as of December 31, 2023.
We currently have a concentration of properties located in California and are exposed to changes in market conditions and natural disasters in this state. Eighteen of our properties are located in California, accounting for approximately 14.2% of our total leased square feet and approximately 18.7% of our total annualized lease income as of December 31, 2024.
Government workforce; and • economic conditions that could cause an increase in our operating expenses, such as inflation, increases in property taxes (particularly as a result of increased local, state and national government budget deficits and debt and potentially reduced federal aid to state and local governments), utilities, insurance, compensation of on-site associates and routine maintenance.
Government workforce; and • economic conditions that could cause an increase in our operating expenses, such as inflation, increases in property taxes (particularly as a result of increased local, state and national government budget deficits and debt and potentially reduced federal aid to state and local governments), utilities, insurance, compensation of on-site associates and routine maintenance. 9 Our properties are leased to a limited number of U.S.
Government tenant agencies, the Department of Veteran Affairs (“VA”), Federal Bureau of Investigation (“FBI”), and Drug Enforcement Administration (“DEA”), accounted for an aggregate of approximately 47.2% of our total leased square feet and an aggregate of approximately 53.2% of our total annualized lease income. Each U.S.
Government tenant agencies, the Department of Veteran Affairs (“VA”), Federal Bureau of Investigation (“FBI”), and Drug Enforcement Administration (“DEA”), accounted for an aggregate of approximately 44.9% of our total leased square feet and an aggregate of approximately 51.4% of our total annualized lease income. Each U.S.
In addition, risks beyond our control, such as weather, labor conditions, material shortages caused by supply chain disruptions, or inflationary price increases for materials, could lead to cost overruns and untimely completion of projects.
In addition, risks beyond our control, such as weather, labor conditions, material shortages caused by supply chain disruptions, or inflationary price increases for materials, could lead to cost overruns and untimely completion of projects. On February 1, 2025, President Donald J.
As of December 31, 2023, we had $79.0 million of outstanding consolidated debt that, pursuant to the documentation governing such debt, bears interest at variable rates, and we expect that we may also borrow additional money at variable interest rates in the future.
As of December 31, 2024, we had $249.1 million of outstanding consolidated debt that, pursuant to the documentation governing such debt, bears interest at variable rates, and we expect that we may also borrow additional money at variable interest rates 20 in the future.
As of December 31, 2023, we had three interest rate swaps in place with an aggregate notional value of $300.0 million to mitigate our exposure to fluctuations in short term interest rates and fix the interest rate on our 2016 term loan facility and 2018 term loan facility.
As of December 31, 2024, we had five interest rate swaps in place with an aggregate notional value of $300.0 million to mitigate our exposure to fluctuations in short term interest rates and fix the interest rate on our 2016 term loan facility, 2018 term loan facility and a portion of our revolving credit facility.
Our properties are leased to a limited number of U.S. Government tenant agencies, and a change to any of these agencies’ missions could have a material adverse effect on our business, financial condition and results of operations. As of December 31, 2023, three of our U.S.
Government tenant agencies, and a change to any of these agencies’ missions could have a material adverse effect on our business, financial condition and results of operations. As of December 31, 2024, three of our U.S.
As of December 31, 2023, we had total indebtedness of approximately $1.3 billion, including approximately $79.0 million outstanding under our $450.0 million senior unsecured revolving credit facility, which we refer to as our revolving credit facility, $200.0 million outstanding under our $200.0 million senior unsecured term loan facility, which we refer to as our 2018 term loan facility, $100.0 million outstanding under our $100.0 million senior unsecured term loan facility, which we refer to as our 2016 term loan facility, $175.0 million of outstanding fixed rate, senior unsecured notes, which we refer to as our 2017 senior unsecured notes, $275.0 million of outstanding fixed rate, senior unsecured notes, which we refer to as our 2019 senior unsecured notes and $250.0 million of outstanding fixed rate, senior unsecured notes, which we refer to as our 2021 senior unsecured notes.
As of December 31, 2024, we had total indebtedness of approximately $1.6 billion, including approximately $274.6 million outstanding under our $400.0 million senior unsecured revolving credit facility, which we refer to as our 2024 revolving credit facility, $174.5 million outstanding under our $200.0 million senior unsecured term loan facility, which we refer to as our 2018 term loan facility, $100.0 million outstanding under our $100.0 million senior unsecured term loan facility, which we refer to as our 2016 term loan facility, $175.0 million of outstanding fixed rate, senior unsecured notes, which we refer to as our 2017 senior unsecured notes, $275.0 million of outstanding fixed rate, senior unsecured notes, which we refer to as our 2019 senior unsecured notes, $250.0 million of outstanding fixed rate, senior unsecured notes, which we refer to as our 2021 senior unsecured notes and $200.0 million of outstanding fixed rate, senior unsecured notes, which we refer to as our 2024 senior unsecured notes.
Government tenant agencies, a significant reduction in the agency’s workforce, a relocation of personnel resources, other internal reorganization or a change in the tenant agency occupying the leased space, could affect our lease renewal opportunities and have a material adverse effect on our business, financial condition and results of operations. Some of our leases with U.S.
A change in the mission of any one of these agencies, a significant reduction in the agency’s workforce, a relocation of personnel resources, other internal reorganization or a change in the tenant agency occupying the leased space, could affect our lease renewal opportunities and have a material adverse effect on our business, financial condition and results of operations.
As of December 31, 2023, we had total indebtedness of approximately $1.3 billion including approximately $79.0 million outstanding under our revolving credit facility, $300.0 million outstanding in the aggregate under our 2018 term loan facility and our 2016 term loan facility and $700.0 million in the aggregate under our 2017 senior unsecured notes, 2019 senior unsecured notes and 2021 senior unsecured notes.
As of December 31, 2024, we had total indebtedness of approximately $1.6 billion including approximately $274.6 million outstanding under our revolving credit facility, $274.5 million outstanding in the aggregate under our 2018 term loan facility and our 2016 term loan facility and $900.0 million in the aggregate under our 2017 senior unsecured notes, 2019 senior unsecured notes, 2021 senior unsecured notes and 2024 senior unsecured notes.
Although the reduced U.S. federal income tax rate applicable to dividend income from regular corporate dividends does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts and estates or are otherwise sensitive to these lower rates to perceive investments in REITs to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock.
Although the reduced U.S. federal income tax rate applicable to dividend income from regular corporate dividends does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts and estates or are otherwise sensitive to these lower rates to perceive investments in REITs to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock. 24 A portion of our distributions may be treated as a return of capital for U.S. federal income tax purposes, which could reduce the basis of a stockholder’s investment in shares of our common stock and, if greater than such basis, may trigger taxable gain.
Our charter limits the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or • a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated. 18 In addition, our charter authorizes us, and our bylaws require us, to indemnify our directors for actions taken by them in those capacities to the maximum extent permitted by Maryland law.
Our charter limits the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from: • actual receipt of an improper benefit or profit in money, property or services; or • a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated.
Government tenant agencies under leases within the soft-term period may decide to exercise their termination rights before the stated term of their lease expires.
Government tenant agencies under leases within the soft-term period may decide to exercise their termination rights before the stated term of their lease expires. Due to such concentration, any failure by the U.S.
As of December 31, 2023, leases representing approximately 13.7% of our total annualized lease income and approximately 14.4% of the square footage of the properties in our portfolio will expire by the end of 2026.
As of December 31, 2024, leases representing approximately 15.4% of our total annualized lease income and approximately 15.8% of the square footage of the properties in our portfolio will expire by the end of 2027.
In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flow, expose us to increased risks that would be uninsured, or adversely impact our ability to attract officers and directors.
In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flow, expose us to increased risks that would be uninsured, or adversely impact our ability to attract officers and directors. 27 We rely on information technology (“IT”) in our operations and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
Any delay or failure on our part to identify, negotiate, finance and consummate such acquisitions in a timely manner and on favorable terms, or operate acquired properties to meet our financial expectations, could impede our growth and have an adverse effect on us, including our financial condition, results of operations, cash flow and the market value of our securities.
Any delay or failure on our part to identify, negotiate, finance and consummate such acquisitions in a timely manner and on favorable terms, or operate acquired properties to meet our financial expectations, could impede our growth and have an adverse effect on us, including our financial condition, results of operations, cash flow and the market value of our securities. 12 Certain of our properties are leased to private tenants and we may be unable to collect balances due from private tenants that file for bankruptcy protection.
Government tenant agencies permit the tenant agency to vacate the property and discontinue paying rent prior to their lease expiration date. Some of our leases are currently in the soft-term period of the lease and tenants under such leases have the right to vacate their space during a specified period before the stated terms of their leases expire.
Some of our leases are currently in the soft-term period of the lease and tenants under such leases have the right to vacate their space during a specified period before the stated terms of their leases expire.
Certain of our properties are leased to private tenants and we may be unable to collect balances due from private tenants that file for bankruptcy protection. If a private tenant or lease guarantor files for bankruptcy, we will become a creditor of such entity, but may not be able to collect all pre-bankruptcy amounts owed by that party.
If a private tenant or lease guarantor files for bankruptcy, we will become a creditor of such entity, but may not be able to collect all pre-bankruptcy amounts owed by that party.
Government assigned contracting officer or through the Civilian Board of Directors of Contract Appeals and ultimately before the U.S. Court of Federal Claims. Furthermore, we may not be able to successfully appeal a condemnation proceeding brought by a U.S.
Government assigned contracting officer or through the Civilian Board of Directors of Contract Appeals and ultimately before the U.S. Court of Federal Claims. Furthermore, we may not be able to successfully appeal a condemnation proceeding brought by a U.S. Government tenant agency which could have a material adverse effect on our business, financial condition and results of operations.
Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. The REIT provisions of the Code limit our ability to hedge our liabilities.
Failure to hedge effectively against interest rate changes may adversely affect our results of operations. Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. The REIT provisions of the Code limit our ability to hedge our liabilities.
A property’s value is considered to be impaired only if the estimated aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property.
On a quarterly basis, we assess whether there are any indicators that the value of our properties may be impaired. A property’s value is considered to be impaired only if the estimated aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property.
The maximum U.S. federal income tax rate for certain qualified dividends payable to United States stockholders that are individuals, trusts and estates generally is currently 20%. Dividends payable by REITs, however, are generally not eligible for the reduced rates and therefore are taxable as ordinary income when paid to such stockholders.
Dividends payable by REITs generally do not qualify for reduced tax rates applicable to non-corporate taxpayers. The maximum U.S. federal income tax rate for certain qualified dividends payable to United States stockholders that are individuals, trusts and estates generally is currently 20%.
Government agency to occupy all or a portion of the leased property. A change in the structure, mission, or leasing requirements of any one of our U.S.
Government agency to occupy all or a portion of the leased property. The recent change in the Administration of the U.S. Government may also add uncertainty to future plans for the structure, mission, or leasing requirements of any one of our U.S. Government tenant agencies.
Government tenant agencies accounted for 97.3% of our annualized lease income. We expect that leases to agencies of the U.S. Government will continue to be the primary source of our revenues for the foreseeable future. Due to such concentration, any failure by the U.S.
Government will continue to be the primary source of our revenues for the foreseeable future. Due to such concentration, any failure by the U.S.
Finally, indemnification agreements between us and the sellers typically provide that the sellers will retain certain specified liabilities relating to the assets and entities acquired by us.
Finally, indemnification agreements between us and the sellers typically provide that the sellers will retain certain specified liabilities relating to the assets and entities acquired by us. We may need to borrow funds or dispose of assets to meet our distribution requirements. We may need to borrow funds or dispose of assets to meet our distribution requirements.
Government and its agencies to perform their obligations under their leases or renew their leases upon expiration could have a material adverse effect on our business, financial condition and results of operations. Substantially all of our current rents come from U.S. Government tenant agencies. As of December 31, 2023, our U.S.
Government and its agencies to perform their obligations under their leases or renew their leases upon expiration could have a material adverse effect on our business, financial condition and results of operations. As of December 31, 2024, our U.S. Government tenant agencies accounted for 93.3% of our annualized lease income. We expect that leases to agencies of the U.S.
Such takeover defenses may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change in control of us under the circumstances that otherwise could provide our common stockholders with the opportunity to realize a premium over the then current market price.
Moreover, our charter provides that, without the affirmative vote of a majority of the votes cast on the matter by our stockholders entitled to vote generally in the election of directors, we may not elect to be subject to any of these additional provisions of Subtitle 8. 17 Such takeover defenses may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change in control of us under the circumstances that otherwise could provide our common stockholders with the opportunity to realize a premium over the then current market price.
However, current law provides a deduction of 20% of a non-corporate taxpayer’s ordinary REIT dividends with such deduction scheduled to expire for taxable years beginning after December 31, 2025.
Dividends payable by REITs, however, are generally not eligible for the reduced rates and therefore are taxable as ordinary income when paid to such stockholders. However, current law provides a deduction of 20% of a non-corporate taxpayer’s ordinary REIT dividends with such deduction scheduled to expire for taxable years beginning after December 31, 2025.
Government tenant agency which could have a material adverse effect on our business, financial condition and results of operations. 11 The impact of prolonged government shutdowns and budgetary reductions or impasses could have a material adverse effect on our business, financial condition and results of operations.
The impact of prolonged government shutdowns and budgetary reductions or impasses could have a material adverse effect on our business, financial condition and results of operations. Substantially all of our revenue is dependent on the receipt of rent payments from the GSA and U.S. Government tenant agencies.
We do not intend to issue stock to former stockholders of an Easterly Fund REIT if we believe it could cause us to be treated as its successor.
We do not intend to issue stock to former stockholders of an Easterly Fund REIT if we believe it could cause us to be treated as its successor. Our charter contains ownership restrictions that will prevent any overlapping ownership that would cause us to be a successor of an Easterly Fund REIT, and we intend to enforce such provisions.
We may be unable to acquire additional properties and grow our business and any acquisitions we make may prove unsuccessful. Agreements for the acquisition of properties are subject to customary conditions to closing, including completion of due diligence investigations and other conditions that are not within our control that may not be satisfied.
Agreements for the acquisition of properties are subject to customary conditions to closing, including completion of due diligence investigations and other conditions that are not within our control that may not be satisfied. In this event, we may be unable to complete an acquisition after incurring certain acquisition-related costs.
We believe our existing properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, the obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect.
We believe our existing properties are in substantial compliance with the ADA and that we will not be required to make substantial capital 14 expenditures to address the requirements of the ADA.
We have acquired, are currently acquiring and may in the future acquire and own properties in joint ventures with other persons or entities when we believe circumstances warrant the use of such structures. Therefore, we may not be in a position to exercise sole decision-making authority regarding such joint venture or the properties held by such joint venture.
We are subject to risks involved in real estate activity through joint ventures. We have acquired, are currently acquiring and may in the future acquire and own properties in joint ventures with other persons or entities when we believe circumstances warrant the use of such structures.
Therefore, although it may be in our stockholders’ best interests that we sell a contributed property, it may be economically prohibitive for us to do so because of these obligations.
Therefore, although it may be in our stockholders’ best interests that we sell a contributed property, it may be economically prohibitive for us to do so because of these obligations. In the future, we and our operating partnership may enter into additional tax protection agreements which could further limit our flexibility to sell or otherwise dispose of our properties.
This bylaw provision may be amended, which we refer to as an opt-in to the control share acquisition provisions, only with the affirmative vote of a majority of the votes cast on such an amendment by holders of outstanding shares of our common stock. 17 Subtitle 8 of Title 3 of the MGCL permits a board of directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to implement certain takeover defenses, including adopting a classified board or increasing the vote required to remove a director.
This bylaw provision may be amended, which we refer to as an opt-in to the control share acquisition provisions, only with the affirmative vote of a majority of the votes cast on such an amendment by holders of outstanding shares of our common stock.
In this event, we may be unable to complete an acquisition after incurring certain acquisition-related costs. In the case of a portfolio acquisition with staggered closings, we cannot ensure they will close on the timeline anticipated or at all.
In the case of a portfolio acquisition with staggered closings, we cannot ensure they will close on the timeline anticipated or at all. In addition, if mortgage debt is unavailable at reasonable rates, we may be unable to finance the acquisition on favorable terms in the time period we desire, or at all.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed11 unchanged
Biggest changeThese processes are supported by a multidisciplinary team, including our legal department, management and third-party information security service providers, as described further below.
Biggest changeWe have implemented information security processes designed to identify, assess and manage risks from cybersecurity threats to our systems and data. 28 These processes are supported by a multidisciplinary team, including our legal department, management and third-party information security service providers, as described further below.
Management is responsible for hiring personnel to support our cybersecurity strategy, as appropriate, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. 29 Management is also responsible for approving technology budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters.
Management is responsible for hiring personnel to support our cybersecurity strategy, as appropriate, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Management is also responsible for approving technology budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters.
The contracted Chief Technology Officer has approximately 15 years of information technology experience, including nine years in the finance and real estate sectors, and our Head of Internal Audit, has approximately 30 years of audit experience, including 20 years in the real estate and financial services sectors.
The contracted Chief Technology Officer has approximately 16 years of information technology experience, including nine years in the finance and real estate sectors, and our Head of Internal Audit, has approximately 31 years of audit experience, including 21 years in the real estate and financial services sectors.
Item 1C. Cybersecurity Risk management and strategy We rely on IT networks and systems to process, transmit and store electronic information and to manage or support our business. We have implemented information security processes designed to identify, assess and manage risks from cybersecurity threats to our systems and data.
Item 1C. Cybersecurity Risk management and strategy We rely on IT networks and systems to process, transmit and store electronic information and to manage or support our business.

Item 2. Properties

Properties — owned and leased real estate

23 edited+4 added−3 removed3 unchanged
Biggest changeGovernment Leased Properties (Cont.) DEA - Pleasanton Pleasanton, CA L 2035 42,480 $ 2,765,720 0.9 % $ 65.11 DEA - Upper Marlboro Upper Marlboro, MD L 2037 50,978 2,745,212 0.9 % 53.85 SSA - Charleston Charleston, WV O 2029 110,000 2,706,668 0.9 % 24.61 FBI - Albany Albany, NY O 2036 69,476 2,697,700 0.9 % 38.83 TREAS - Birmingham Birmingham, AL O 2029 83,676 2,613,424 0.8 % 31.23 USAO - Louisville Louisville, KY O 2031 60,000 2,539,045 0.8 % 42.32 JUD - Charleston Charleston, SC C/O 2040 52,339 2,522,970 0.8 % 48.20 JUD - Jackson Jackson, TN C/O 2043 75,043 2,386,456 0.8 % 31.80 NARA - Broomfield Broomfield, CO O/W 2032 161,730 2,373,591 0.7 % 14.68 CBP - Savannah Savannah, GA L 2033 35,000 2,267,962 0.7 % 64.80 Various GSA - Cleveland (6) Brooklyn Heights, OH O 2028 - 2040 61,384 2,262,036 0.7 % 36.85 DEA - Dallas Dallas, TX O 2041 71,827 2,251,355 0.7 % 31.34 NWS - Kansas City Kansas City, MO O 2033 94,378 2,143,349 0.7 % 22.71 GSA - Clarksburg Clarksburg, WV O 2039 63,750 2,094,870 0.7 % 32.86 DEA - Santa Ana Santa Ana, CA O 2029 39,905 2,002,191 0.6 % 50.17 NPS - Omaha Omaha, NE O 2029 62,772 1,954,754 0.6 % 31.14 DEA - North Highlands Sacramento, CA O 2033 37,975 1,914,312 0.6 % 50.41 VA - Golden Golden, CO O/W 2026 56,753 1,769,302 0.6 % 31.18 JUD - Newport News Newport News, VA C/O 2033 35,005 1,660,941 0.5 % 47.45 USCG - Martinsburg Martinsburg, WV O 2027 59,547 1,611,989 0.5 % 27.07 JUD - Aberdeen Aberdeen, MS C/O 2025 46,979 1,562,188 0.5 % 33.25 VA - Charleston (7) North Charleston, SC W 2024 / 2040 102,718 1,553,987 0.5 % 15.13 DHS - Atlanta (8) Atlanta, GA O 2031 - 2038 47,110 1,467,480 0.5 % 31.15 DEA - Albany Albany, NY O 2025 31,976 1,400,197 0.4 % 43.79 USAO - Springfield Springfield, IL O 2038 43,600 1,381,505 0.4 % 31.69 DEA - Riverside Riverside, CA O 2032 34,354 1,310,541 0.4 % 38.15 DEA - Birmingham Birmingham, AL O 2038 35,616 1,296,804 0.4 % 36.41 JUD - Council Bluffs Council Bluffs, IA C/O 2041 28,900 1,287,379 0.4 % 44.55 SSA - Dallas Dallas, TX O 2035 27,200 1,061,702 0.3 % 39.03 JUD - South Bend South Bend, IN C/O 2027 30,119 796,519 0.3 % 26.45 ICE - Louisville Louisville, KY O 2036 17,420 654,219 0.2 % 37.56 DEA - San Diego San Diego, CA W 2032 16,100 556,881 0.2 % 34.59 DEA - Bakersfield Bakersfield, CA O 2038 9,800 487,590 0.2 % 49.75 SSA - San Diego San Diego, CA O 2032 10,059 447,488 0.1 % 44.49 ICE - Otay San Diego, CA O 2027 7,434 259,066 0.1 % 34.85 Subtotal 7,618,634 $ 270,421,014 85.5 % $ 35.49 Wholly Owned State and Local Government Leased Property CA - Anaheim Anaheim, CA O 2033 / 2034 95,273 3,256,203 1.0 % $ 34.18 Subtotal 95,273 $ 3,256,203 1.0 % $ 34.18 Wholly Owned Privately Leased Property 501 East Hunter Street - Lummus Corporation Lubbock, TX W/D 2028 70,078 400,380 0.1 % $ 5.71 Subtotal 70,078 $ 400,380 0.1 % $ 5.71 Wholly Owned Properties Total / Weighted Average 7,783,985 274,077,597 86.6 % $ 35.21 32 Property Name Location Property Type (1) Tenant Lease Expiration Year (2) Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income Annualized Lease Income per Leased Square Foot Unconsolidated Real Estate Venture U.S.
Biggest changeGovernment Leased Properties (Cont.) VA - Indianapolis Brownsburg, IN OC 2041 80,000 2,980,495 0.9 % 37.26 ICE - Albuquerque Albuquerque, NM SF 2027 71,100 2,841,105 0.8 % 39.96 JUD - El Centro El Centro, CA C 2034 43,345 2,814,240 0.8 % 64.93 SSA - Charleston Charleston, WV O 2029 110,000 $ 2,805,454 0.8 % $ 25.50 DEA - Dallas Lab Dallas, TX L 2038 49,723 2,798,999 0.8 % 56.29 DEA - Pleasanton Pleasanton, CA L 2035 42,480 2,779,748 0.8 % 65.44 DEA - Upper Marlboro Upper Marlboro, MD L 2037 50,978 2,761,612 0.8 % 54.17 NARA - Broomfield Broomfield, CO W 2032 161,730 2,690,321 0.8 % 16.63 TREAS - Birmingham Birmingham, AL O 2029 83,676 2,627,473 0.8 % 31.40 DHS - Atlanta (7) Atlanta, GA SF 2031 - 2038 91,185 2,579,815 0.7 % 28.29 USAO - Louisville Louisville, KY SF 2031 60,000 2,540,094 0.7 % 42.33 JUD - Charleston Charleston, SC C 2040 52,339 2,518,931 0.7 % 48.13 JUD - Jackson Jackson, TN C 2043 75,043 2,403,192 0.7 % 32.02 IRS - Ogden Ogden, UT W 2029 100,000 2,352,291 0.7 % 23.52 CBP - Savannah Savannah, GA L 2033 35,000 2,289,518 0.7 % 65.41 DEA - Dallas Dallas, TX SF 2041 71,827 2,272,075 0.7 % 31.63 Various GSA - Cleveland (8) Brooklyn Heights, OH O 2028 - 2040 61,384 2,245,513 0.6 % 36.58 NWS - Kansas City Kansas City, MO SF 2033 94,378 2,155,680 0.6 % 22.84 DEA - Santa Ana Santa Ana, CA SF 2029 39,905 2,019,910 0.6 % 50.62 NPS - Omaha Omaha, NE SF 2029 62,772 1,891,182 0.5 % 30.13 DEA - North Highlands Sacramento, CA SF 2033 37,975 1,885,075 0.5 % 49.64 GSA - Clarksburg Clarksburg, WV O 2039 70,495 1,880,219 0.5 % 26.67 VA - Golden Golden, CO W 2026 56,753 1,782,038 0.5 % 31.40 JUD - Newport News Newport News, VA C 2033 35,005 1,676,464 0.5 % 47.89 ICE - Orlando Orlando, FL SF 2040 49,420 1,668,211 0.5 % 33.76 USCG - Martinsburg Martinsburg, WV SF 2027 59,547 1,624,577 0.5 % 27.28 JUD - Aberdeen Aberdeen, MS C 2025 46,979 1,577,074 0.5 % 33.57 VA - Charleston North Charleston, SC W 2040 97,718 1,504,645 0.4 % 15.40 DEA - Albany Albany, NY SF 2042 31,976 1,407,704 0.4 % 44.02 USAO - Springfield Springfield, IL SF 2038 43,600 1,391,454 0.4 % 31.91 JUD - Council Bluffs Council Bluffs, IA C 2041 28,900 1,367,675 0.4 % 47.32 DEA - Riverside Riverside, CA SF 2032 34,354 1,321,949 0.4 % 38.48 DEA - Birmingham Birmingham, AL SF 2038 35,616 1,256,899 0.4 % 35.29 HSI - Orlando Orlando, FL SF 2036 27,840 1,075,437 0.3 % 38.63 SSA - Dallas Dallas, TX SF 2035 27,200 1,069,445 0.3 % 39.32 JUD - South Bend South Bend, IN C 2027 30,119 802,002 0.2 % 26.63 ICE - Louisville Louisville, KY SF 2036 17,420 657,841 0.2 % 37.76 DEA - San Diego San Diego, CA W 2032 16,100 561,172 0.2 % 34.86 DEA - Bakersfield Bakersfield, CA SF 2038 9,800 493,373 0.1 % 50.34 SSA - San Diego San Diego, CA SF 2032 10,059 452,386 0.1 % 44.97 ICE - Otay San Diego, CA O 2027 7,434 261,222 0.1 % 35.14 Subtotal 7,858,905 $ 278,371,939 80.4 % $ 35.42 31 Wholly Owned State and Local Government Leased Property Wake County III - Cary (9) Cary, NC O 2027 / 2034 113,722 3,555,902 1.0 % $ 31.27 CA - Anaheim Anaheim, CA O 2033 / 2034 95,273 3,364,379 1.0 % $ 35.31 Wake County II - Cary Cary, NC O 2034 98,340 2,953,908 0.9 % $ 30.04 Wake County I - Cary Cary, NC O 2034 75,401 2,254,676 0.7 % $ 29.90 Subtotal 382,736 $ 12,128,865 3.6 % $ 31.69 Wholly Owned Privately Leased Property Northrop Grumman - Dayton Beavercreek, OH SF 2029 99,246 2,579,090 0.7 % $ 25.99 Northrop Grumman - Aurora Aurora, CO SF 2032 104,136 2,368,386 0.7 % $ 22.74 501 East Hunter Street - Lummus Corporation Lubbock, TX W 2028 70,078 412,024 0.1 % $ 5.88 Subtotal 273,460 $ 5,359,500 1.5 % $ 19.60 Wholly Owned Properties Total / Weighted Average 8,515,101 295,860,304 85.5 % $ 34.75 Property Name Location Property Type (1) Tenant Lease Expiration Year (2) Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income Annualized Lease Income per Leased Square Foot Unconsolidated Real Estate Venture U.S.
While some of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the average age of these properties based on the date the property was built or renovated-to-suit where applicable (approximately 19.0 years), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties.
While some of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the average age of these properties based on the date the property was built or renovated-to-suit where applicable (approximately 19.5 years), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties.
The following table provides information about the tenants that leased our properties as of December 31, 2023, and includes tenants of properties held by our unconsolidated joint venture: Tenant (1) Weighted Average Remaining Lease Term (2) Leased Square Feet Percentage of Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income U.S.
The following table provides information about the tenants that leased our properties as of December 31, 2024, and includes tenants of properties held by our unconsolidated joint venture: Tenant (1) Weighted Average Remaining Lease Term (2) Leased Square Feet Percentage of Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income U.S.
We calculate annualized lease income as 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 net expense reimbursements earned by us for the last month in such period. 30 The table set forth below shows information relating to the properties we owned, or in which we had an ownership interest, at December 31, 2023, and it includes properties held by our unconsolidated joint venture: Property Name Location Property Type (1) Tenant Lease Expiration Year (2) Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income Annualized Lease Income per Leased Square Foot Wholly Owned U.S.
We calculate annualized lease income as 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 net expense reimbursements earned by us for the last month in such period. 29 The table set forth below shows information relating to the properties we owned, or in which we had an ownership interest, at December 31, 2024, and it includes properties held by the JV: Property Name Location Property Type (1) Tenant Lease Expiration Year (2) Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income Annualized Lease Income per Leased Square Foot Wholly Owned U.S.
Government agencies. Our U.S. Government tenant agencies include a number of the U.S. Government’s largest and most essential agencies. As of December 31, 2023 our operating properties were 97% leased by 54 tenants.
Government agencies. Our U.S. Government tenant agencies include a number of the U.S. Government’s largest and most essential agencies. As of December 31, 2024 our operating properties were 97% leased by 59 tenants.
As of December 31, 2023, our operating properties were 97% leased with a weighted average annualized lease income per leased square foot of $35.98 ($35.64 pro rata) and a weighted average age of approximately 14.6 years based on the date the property was built or renovated-to-suit, where applicable.
As of December 31, 2024, our operating properties were 97% leased with a weighted average annualized lease income per leased square foot of $35.60 ($35.22 pro rata) and a weighted average age of approximately 15.7 years based on the date the property was built or renovated-to-suit, where applicable.
Government tenant agencies, one operating property entirely leased to tenant agencies of a U.S. state government and one operating property leased entirely to a private tenant. In addition, we wholly owned one property under development that we expect to encompass approximately 0.2 million leased square feet upon completion.
Government tenant agencies, four operating properties leased to tenant agencies of a U.S. state or local government and three operating properties leased entirely to private tenants. In addition, we wholly owned two properties under development that we expect to encompass approximately 0.2 million leased square feet upon completion.
As of December 31, 2023, 11 leases occupying approximately 7.2% of our leased square feet and contributing approximately 6.9% of our annualized lease income have exercisable rights to terminate their leases before the stated term of their lease expires. 36 Information about our development property as of December 31, 2023 is set forth in the table below: Property Name Location Tenant Property Type (1) Lease Term Estimated Leased Square Feet FDA - Atlanta Atlanta, GA Food and Drug Administration L 20-year 162,000 Total 162,000 (1) L=Laboratory.
As of December 31, 2024, 8 leases occupying approximately 5.8% of our leased square feet and contributing approximately 5.2% of our annualized lease income have exercisable rights to terminate their leases before the stated term of their lease expires. 35 Information about our development property as of December 31, 2024 is set forth in the table below: Property Name Location Tenant Property Type Lease Term Estimated Leased Square Feet FDA - Atlanta Atlanta, GA Food and Drug Administration L (1) 20-year 162,000 JUD - Flagstaff Flagstaff, AZ Judiciary of the U.S.
(8) A private tenant occupies 17,373 leased square feet. (9) We own 53.0% of the property through an unconsolidated joint venture. (10) Asset is subject to a ground lease where we are the lessee. 33 Our assets are located throughout the United States.
(8) A private tenant occupies 11,402 leased square feet. (9) A private tenant occupies 37,858 leased square feet. (10) We own 53.0% of the property through the JV. (11) Asset is subject to a ground lease where the JV is the lessee. 32 Our assets are located throughout the United States.
(2) The year of lease expiration does not include renewal options. (3) Private tenants occupy 100,081 leased square feet. (4) Private tenants occupy 36,610 leased square feet. (5) A state tenant occupies 14,274 leased square feet. (6) A private tenant occupies 11,402 leased square feet. (7) A private tenant occupies 5,000 leased square feet.
(2) The year of lease expiration does not include renewal options. (3) Private tenants occupy 86,860 leased square feet. (4) Private tenants occupy 36,610 leased square feet. (5) A state government tenant occupies 14,274 leased square feet. (6) Private tenants occupy 48,523 leased square feet. (7) A private tenant occupies 17,373 leased square feet.
Item 2. Pr operties As of December 31, 2023, we wholly owned 81 operating properties and nine operating properties through an unconsolidated joint venture in the United States encompassing approximately 8.8 million leased square feet (8.3 million pro rata), including 88 operating properties that were leased to U.S.
Item 2. Pr operties As of December 31, 2024, we wholly owned 90 operating properties and ten operating properties through the JV in the United States encompassing approximately 9.7 million leased square feet (9.2 million pro rata), including 92 operating properties that were leased to U.S.
Item 3. Legal Proceedings We are not currently involved in any material litigation nor, to our knowledge, is any material litigation threatened against us. Item 4. Mine Saf ety Disclosure Not applicable. 37 PART II
Government C (2) 20-year 50,777 Total 212,777 (1) L=Laboratory (2) C=Courthouse Item 3. Legal Proceedings We are not currently involved in any material litigation nor, to our knowledge, is any material litigation threatened against us. Item 4. Mine Saf ety Disclosure Not applicable. 36 PART II
Government Leased Properties VA - Loma Linda Loma Linda, CA OC 2036 327,614 $ 16,656,342 5.2 % $ 50.84 USCIS - Kansas City (3) Lee's Summit, MO O/W 2024 - 2042 416,399 10,282,368 3.2 % 24.69 JSC - Suffolk Suffolk, VA O 2028 403,737 8,427,298 2.7 % 20.87 Various GSA - Chicago Des Plaines, IL O 2026 188,768 7,765,015 2.5 % 41.14 FBI - Salt Lake Salt Lake City, UT O 2032 169,542 6,953,528 2.2 % 41.01 IRS - Fresno Fresno, CA O 2033 180,481 6,908,070 2.2 % 38.28 Various GSA - Portland (4) Portland, OR O 2024 - 2039 205,478 6,855,312 2.2 % 33.36 Various GSA - Buffalo (5) Buffalo, NY O 2025 - 2039 273,678 6,822,162 2.2 % 24.93 VA - San Jose San Jose, CA OC 2038 90,085 5,770,504 1.8 % 64.06 EPA - Lenexa Lenexa, KS O 2027 169,585 5,732,732 1.8 % 33.80 FBI - Tampa Tampa, FL O 2040 138,000 5,313,544 1.7 % 38.50 FBI - San Antonio San Antonio, TX O 2025 148,584 5,208,055 1.6 % 35.05 PTO - Arlington Arlington, VA O 2035 190,546 5,028,972 1.6 % 26.39 FDA - Alameda Alameda, CA L 2039 69,624 4,898,064 1.5 % 70.35 FBI / DEA - El Paso El Paso, TX O/W 2028 203,683 4,653,875 1.5 % 22.85 FEMA - Tracy Tracy, CA W 2038 210,373 4,650,064 1.5 % 22.10 FBI - Omaha Omaha, NE O 2024 112,196 4,435,691 1.4 % 39.54 TREAS - Parkersburg Parkersburg, WV O 2041 182,500 4,355,673 1.4 % 23.87 FDA - Lenexa Lenexa, KS L 2040 59,690 4,254,683 1.3 % 71.28 DOT - Lakewood Lakewood, CO O 2039 122,225 4,154,365 1.3 % 33.99 VA - South Bend Mishakawa, IN OC 2032 86,363 4,068,428 1.3 % 47.11 FBI - Pittsburgh Pittsburgh, PA O 2027 100,054 4,037,239 1.3 % 40.35 FBI - New Orleans New Orleans, LA O 2029 137,679 3,970,218 1.3 % 28.84 USCIS - Lincoln Lincoln, NE O 2025 137,671 3,937,828 1.2 % 28.60 JUD - Del Rio Del Rio, TX C/O 2041 89,880 3,822,377 1.2 % 42.53 VA - Mobile Mobile, AL OC 2033 79,212 3,676,952 1.2 % 46.42 FBI - Knoxville Knoxville, TN O 2025 99,130 3,607,505 1.1 % 36.39 EPA - Kansas City Kansas City, KS L 2043 55,833 3,497,886 1.1 % 62.65 FBI - Birmingham Birmingham, AL O 2042 96,278 3,474,546 1.1 % 36.09 ICE - Charleston North Charleston, SC O 2027 65,124 3,343,735 1.1 % 51.34 USFS II - Albuquerque Albuquerque, NM O 2026 98,720 3,340,675 1.1 % 33.84 VA - Chico Chico, CA OC 2034 51,647 3,324,046 1.0 % 64.36 FBI - Richmond Richmond, VA O 2041 96,607 3,307,199 1.0 % 34.23 FBI - Little Rock Little Rock, AR O 2041 102,377 3,217,259 1.0 % 31.43 DEA - Sterling Sterling, VA L 2038 57,692 3,209,041 1.0 % 55.62 USFS I - Albuquerque Albuquerque, NM O 2026 92,455 3,194,580 1.0 % 34.55 USCIS - Tustin Tustin, CA O 2034 66,818 3,159,364 1.0 % 47.28 DEA - Vista Vista, CA L 2035 52,293 3,130,467 1.0 % 59.86 VA - Orange Orange, CT OC 2034 56,330 2,990,034 0.9 % 53.08 VA - Indianapolis Brownsburg, IN OC 2041 80,000 2,954,619 0.9 % 36.93 FBI - Mobile Mobile, AL O 2029 76,112 2,826,776 0.9 % 37.14 ICE - Albuquerque Albuquerque, NM O 2027 71,100 2,822,205 0.9 % 39.69 JUD - El Centro El Centro, CA C/O 2034 43,345 2,800,983 0.9 % 64.62 DEA - Dallas Lab Dallas, TX L 2038 49,723 2,773,342 0.9 % 55.78 31 Property Name Location Property Type (1) Tenant Lease Expiration Year (2) Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income Annualized Lease Income per Leased Square Foot Wholly Owned U.S.
Government Leased Properties VA - Loma Linda Loma Linda, CA OC 2036 327,614 $ 16,850,124 4.9 % $ 51.43 USCIS - Kansas City (3) Lee's Summit, MO O 2025 - 2042 403,178 10,007,859 2.9 % 24.82 JSC - Suffolk Suffolk, VA SF 2028 403,737 8,503,831 2.5 % 21.06 Various GSA - Chicago Des Plaines, IL O 2026 188,768 7,789,151 2.2 % 41.26 IRS - Fresno Fresno, CA O 2033 180,481 6,972,352 2.0 % 38.63 Various GSA - Portland (4) Portland, OR O 2025 - 2039 205,478 6,927,716 2.0 % 33.72 Various GSA - Buffalo (5) Buffalo, NY O 2025 - 2039 273,678 6,893,503 2.0 % 25.19 FBI - Salt Lake Salt Lake City, UT SF 2032 169,542 6,789,358 2.0 % 40.05 VA - San Jose San Jose, CA OC 2038 90,085 5,819,576 1.7 % 64.60 EPA - Lenexa Lenexa, KS O 2027 169,585 5,796,626 1.7 % 34.18 FBI - Tampa Tampa, FL SF 2040 138,000 5,314,469 1.5 % 38.51 FBI - San Antonio San Antonio, TX SF 2025 148,584 5,206,053 1.5 % 35.04 FDA - Alameda Alameda, CA L 2039 69,624 4,966,674 1.4 % 71.34 FBI / DEA - El Paso El Paso, TX SF 2028 203,683 4,727,462 1.4 % 23.21 PTO - Arlington Arlington, VA SF 2035 190,546 4,683,980 1.4 % 24.58 FEMA - Tracy Tracy, CA W 2038 210,373 4,652,852 1.3 % 22.12 TREAS - Parkersburg Parkersburg, WV O 2041 182,500 4,399,697 1.3 % 24.11 FDA - Lenexa Lenexa, KS L 2040 59,690 4,333,387 1.3 % 72.60 ICE - Dallas (6) Irvine, TX SF 2032 / 2040 129,046 4,090,572 1.2 % 31.70 FBI - Pittsburgh Pittsburgh, PA SF 2027 100,054 4,079,780 1.2 % 40.78 VA - South Bend Mishakawa, IN OC 2032 86,363 4,026,610 1.2 % 46.62 FBI - New Orleans New Orleans, LA SF 2029 137,679 3,968,050 1.1 % 28.82 FBI - Omaha Omaha, NE SF 2044 112,196 3,959,898 1.1 % 35.29 USCIS - Lincoln Lincoln, NE O 2025 137,671 3,904,639 1.1 % 28.36 VA - Mobile Mobile, AL OC 2033 79,212 3,798,371 1.1 % 47.95 FBI - Birmingham Birmingham, AL SF 2042 96,278 3,692,036 1.1 % 38.35 FBI - Knoxville Knoxville, TN SF 2025 99,130 3,629,035 1.0 % 36.61 FBI - Albany Albany, NY SF 2036 69,476 3,591,446 1.0 % 51.69 EPA - Kansas City Kansas City, KS L 2043 55,833 3,589,765 1.0 % 64.29 USFS II - Albuquerque Albuquerque, NM O 2026 98,720 3,553,436 1.0 % 36.00 DOT - Lakewood Lakewood, CO O 2039 116,046 3,416,355 1.0 % 29.44 ICE - Charleston North Charleston, SC SF 2027 65,124 3,373,468 1.0 % 51.80 VA - Chico Chico, CA OC 2034 51,647 3,341,875 1.0 % 64.71 FBI - Richmond Richmond, VA SF 2041 96,607 3,334,875 1.0 % 34.52 JUD - Del Rio Del Rio, TX C 2041 89,880 3,291,972 1.0 % 36.63 FBI - Mobile Mobile, AL SF 2029 76,112 3,262,209 0.9 % 42.86 FBI - Little Rock Little Rock, AR SF 2041 102,377 3,237,405 0.9 % 31.62 DEA - Sterling Sterling, VA L 2038 57,692 3,222,788 0.9 % 55.86 DEA - Vista Vista, CA L 2035 52,293 3,147,780 0.9 % 60.20 USCIS - Tustin Tustin, CA O 2034 66,818 3,142,255 0.9 % 47.03 VA - Orange Orange, CT OC 2034 56,330 2,998,139 0.9 % 53.22 30 Property Name Location Property Type (1) Tenant Lease Expiration Year (2) Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income Annualized Lease Income per Leased Square Foot Wholly Owned U.S.
Army Corps of Engineers (“ACOE”) 1.1 39,320 0.4 % 1,146,042 0.4 % Small Business Administration (“SBA”) 15.6 44,753 0.5 % 1,040,562 0.3 % Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) 9.2 23,775 0.3 % 743,335 0.2 % Federal Energy Regulatory Commission (“FERC”) 15.6 6,214 0.1 % 246,845 0.1 % Department of Energy (“DOE”) 9.3 4,846 0.1 % 187,782 0.1 % U.S.
Army Corps of Engineers (“ACOE”) 0.1 39,320 0.4 % 1,147,120 0.3 % Small Business Administration (“SBA”) 14.6 44,969 0.5 % 1,114,230 0.3 % Homeland Security Investigations (“HSI”) 11.2 27,840 0.3 % 1,075,437 0.3 % Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) 8.2 23,775 0.2 % 734,101 0.2 % Federal Energy Regulatory Commission (“FERC”) 14.6 6,214 0.1 % 248,307 0.1 % Department of Energy (“DOE”) 8.3 4,846 0.0 % 187,782 0.1 % U.S.
Government Department of Veteran Affairs (“VA”) 14.7 2,058,031 23.3 % $ 88,091,238 27.7 % Federal Bureau of Investigation (“FBI”) 8.4 1,501,720 17.0 % 52,774,609 16.7 % Drug Enforcement Administration (“DEA”) 10.8 607,064 6.9 % 27,846,156 8.8 % Judiciary of the U.S. (“JUD”) 13.4 401,610 4.6 % 16,839,813 5.3 % U.S.
Government Department of Veteran Affairs (“VA”) 14.1 2,251,131 23.2 % $ 96,083,994 27.8 % Federal Bureau of Investigation (“FBI”) 9.0 1,498,607 15.5 % 53,767,038 15.5 % Drug Enforcement Administration (“DEA”) 10.7 607,290 6.2 % 27,941,589 8.1 % Judiciary of the U.S. (“JUD”) 12.3 401,610 4.1 % 16,451,550 4.8 % U.S.
Attorney Office (“USAO”) 10.9 110,008 1.2 % 4,131,106 1.3 % Customs and Border Protection (“CBP”) 11.7 64,737 0.7 % 3,199,589 1.0 % National Archives and Records Administration (“NARA”) 8.4 161,730 1.8 % 2,373,591 0.7 % National Weather Service (“NWS”) 10.0 94,378 1.1 % 2,143,349 0.7 % National Park Service (“NPS”) 5.5 62,772 0.7 % 1,954,754 0.6 % U.S.
Forest Service (“USFS”) 1.5 98,720 1.0 % 3,553,436 1.0 % Customs and Border Protection (“CBP”) 10.7 64,737 0.7 % 3,226,943 0.9 % National Archives and Records Administration (“NARA”) 7.4 161,730 1.7 % 2,690,321 0.8 % National Weather Service (“NWS”) 9.0 94,378 1.0 % 2,155,680 0.6 % U.S.
Luke’s Health System 3.0 32,043 0.4 % 907,488 0.3 % Providence Health & Services 1.7 21,643 0.2 % 730,731 0.2 % Lummus Corporation 4.6 70,078 0.8 % 400,380 0.1 % Subtotal 3.4 240,544 2.8 % $ 4,993,472 1.5 % Total / Weighted Average 10.5 8,805,050 100.0 % $ 316,793,566 100.0 % (1) If a property is leased to multiple tenants the weighted average remaining lease term, leased square feet, annualized lease income and percentage of total annualized lease income have been allocated to the respective tenant agency.
Luke's Health System 2.0 32,043 0.3 % 924,624 0.3 % HUB International Midwest Limited 7.8 29,074 0.3 % 841,506 0.2 % CVS Health 0.4 39,690 0.4 % 776,210 0.2 % Providence Health & Services 0.7 21,643 0.2 % 747,258 0.2 % Pate Rehabilitation Endeavors, LLC 7.1 19,449 0.2 % 639,798 0.2 % Lummus Corporation 3.6 70,078 0.7 % 412,024 0.1 % Subtotal 4.4 512,086 5.2 % $ 12,121,877 3.4 % Total / Weighted Average 10.0 9,729,266 100.0 % $ 346,325,560 100.0 % (1) If a property is leased to multiple tenants the weighted average remaining lease term, leased square feet, annualized lease income and percentage of total annualized lease income have been allocated to the respective tenant agency.
Citizenship and Immigration Services (“USCIS”) 12.8 520,807 5.9 % 14,955,067 4.7 % Environmental Protection Agency (“EPA”) 7.7 225,418 2.6 % 9,230,618 2.9 % Food and Drug Administration (“FDA”) 16.2 129,314 1.5 % 9,152,747 2.9 % U.S.
Citizenship and Immigration Services (“USCIS”) 11.8 520,807 5.4 % 15,012,669 4.3 % Immigration and Customs Enforcement (“ICE”) 8.8 313,837 3.2 % 12,186,554 3.5 % Internal Revenue Service (“IRS”) 7.2 333,334 3.4 % 10,626,239 3.1 % Environmental Protection Agency (“EPA”) 6.7 225,418 2.3 % 9,386,391 2.7 % Food and Drug Administration (“FDA”) 15.2 129,314 1.3 % 9,300,061 2.7 % U.S.
The following table sets forth the geographic diversification of our operating properties, by market, based on the GSA’s definition of regions, as of December 31, 2023, and it includes properties held by our unconsolidated joint venture: Location Market Number of Properties Number of Leases Leased Square Feet Percentage of Total Leased Square Feet Percent Leased Annualized Lease Income Percentage of Total Annualized Lease Income State California Pacific Rim 18 22 1,385,660 15.7 % 97 % $ 64,297,896 20.2 % Texas (1) Greater Southwest 10 12 1,077,315 12.2 % 100 % 36,502,212 11.5 % Virginia National Capital 5 5 783,587 8.9 % 100 % 21,633,451 6.8 % Alabama Southeast Sunbelt 6 6 448,022 5.1 % 100 % 17,064,073 5.4 % Kansas The Heartland 4 4 316,170 3.6 % 95 % 14,794,923 4.7 % Missouri The Heartland 2 7 510,777 5.8 % 86 % 12,425,717 3.9 % New York Northeast & Caribbean 3 8 375,130 4.3 % 100 % 10,920,059 3.4 % West Virginia Mid-Atlantic 4 4 415,797 4.7 % 100 % 10,769,200 3.4 % Arizona Pacific Rim 1 1 257,294 2.9 % 100 % 10,678,873 3.4 % Georgia Southeast Sunbelt 4 5 226,785 2.6 % 100 % 10,600,586 3.3 % Tennessee Southeast Sunbelt 3 3 268,739 3.1 % 100 % 10,349,594 3.3 % Nebraska The Heartland 3 3 312,639 3.6 % 100 % 10,328,273 3.3 % New Mexico Greater Southwest 3 3 262,275 3.0 % 100 % 9,357,460 3.0 % Illinois Great Lakes 2 2 232,368 2.6 % 84 % 9,146,520 2.9 % Colorado Rocky Mountain 3 3 340,708 3.9 % 100 % 8,297,258 2.6 % Indiana Great Lakes 3 3 196,482 2.2 % 100 % 7,819,566 2.5 % South Carolina Southeast Sunbelt 3 4 220,181 2.5 % 91 % 7,420,692 2.3 % Utah Rocky Mountain 1 1 169,542 1.9 % 100 % 6,953,528 2.2 % Oregon Northwest Arctic 1 15 205,478 2.3 % 92 % 6,855,312 2.2 % Florida Southeast Sunbelt 1 1 138,000 1.6 % 100 % 5,313,544 1.7 % Pennsylvania Mid-Atlantic 1 1 100,054 1.1 % 100 % 4,037,239 1.3 % Louisiana Greater Southwest 1 1 137,679 1.6 % 100 % 3,970,218 1.3 % Arkansas Greater Southwest 1 1 102,377 1.2 % 100 % 3,217,259 1.0 % Kentucky Southeast Sunbelt 2 2 77,420 0.9 % 100 % 3,193,264 1.0 % Connecticut New England 1 1 56,330 0.6 % 100 % 2,990,034 0.9 % Maryland National Capital 1 1 50,978 0.6 % 100 % 2,745,212 0.9 % Ohio Great Lakes 1 3 61,384 0.7 % 100 % 2,262,036 0.7 % Mississippi Southeast Sunbelt 1 1 46,979 0.5 % 100 % 1,562,188 0.5 % Iowa The Heartland 1 1 28,900 0.3 % 100 % 1,287,379 0.4 % Total / Weighted Average 90 124 8,805,050 100.0 % 97 % $ 316,793,566 100.0 % Market Pacific Rim 19 23 1,642,954 18.6 % 97 % 74,976,769 23.7 % Southeast Sunbelt 20 22 1,426,126 16.2 % 99 % 55,503,941 17.5 % Greater Southwest (1) 15 17 1,579,646 17.9 % 100 % 53,047,149 16.7 % The Heartland 10 15 1,168,486 13.3 % 92 % 38,836,292 12.3 % National Capital 6 6 834,565 9.5 % 100 % 24,378,663 7.7 % Great Lakes 6 8 490,234 5.6 % 92 % 19,228,122 6.1 % Rocky Mountain 4 4 510,250 5.8 % 100 % 15,250,786 4.8 % Mid-Atlantic 5 5 515,851 5.9 % 100 % 14,806,439 4.7 % Northeast & Caribbean 3 8 375,130 4.3 % 100 % 10,920,059 3.4 % Northwest Arctic 1 15 205,478 2.3 % 92 % 6,855,312 2.2 % New England 1 1 56,330 0.6 % 100 % 2,990,034 0.9 % Total / Weighted Average 90 124 8,805,050 100.0 % 97 % $ 316,793,566 100.0 % (1) One property entirely leased to a private tenant is located in the Greater Southwest region. 34 Our portfolio of operating properties has a stable tenant base that is diversified among U.S.
The following table sets forth the geographic diversification of our operating properties, by market, based on the GSA’s definition of regions, as of December 31, 2024, and it includes properties held by the JV: Location Market Number of Properties Number of Leases Leased Square Feet Percentage of Total Leased Square Feet Percent Leased Annualized Lease Income Percentage of Total Annualized Lease Income State California Pacific Rim 18 22 1,385,660 14.2 % 97 % $ 64,846,942 18.7 % Texas (1) Greater Southwest 11 15 1,206,361 12.4 % 100 % 40,375,454 11.7 % Virginia National Capital 5 5 783,587 8.1 % 100 % 21,421,938 6.2 % Alabama Southeast Sunbelt 6 6 448,022 4.6 % 100 % 17,829,349 5.1 % Florida Southeast Sunbelt 4 4 408,360 4.2 % 100 % 15,430,817 4.5 % Kansas The Heartland 4 4 316,170 3.2 % 96 % 15,069,535 4.4 % Missouri The Heartland 2 6 497,556 5.1 % 84 % 12,163,539 3.5 % New York Northeast & Caribbean 3 8 375,130 3.9 % 100 % 11,892,653 3.4 % Georgia Southeast Sunbelt 4 6 270,860 2.8 % 100 % 11,745,631 3.4 % Arizona Pacific Rim 1 1 257,294 2.6 % 100 % 10,781,681 3.1 % West Virginia Mid-Atlantic 4 4 422,542 4.3 % 99 % 10,709,947 3.1 % Tennessee Southeast Sunbelt 3 3 268,739 2.8 % 100 % 10,417,834 3.0 % Colorado Rocky Mountain 4 4 438,665 4.5 % 100 % 10,257,100 3.0 % Nebraska The Heartland 3 3 312,639 3.2 % 100 % 9,755,719 2.8 % Illinois Great Lakes 2 2 232,368 2.4 % 84 % 9,180,605 2.7 % Utah Rocky Mountain 2 2 269,542 2.8 % 100 % 9,141,649 2.6 % North Carolina Southeast Sunbelt 3 4 287,463 3.0 % 100 % 8,764,486 2.5 % Indiana Great Lakes 3 3 196,482 2.0 % 100 % 7,809,107 2.3 % South Carolina Southeast Sunbelt 3 3 215,181 2.2 % 89 % 7,397,044 2.1 % Oregon Northwest Arctic 1 15 205,478 2.1 % 92 % 6,927,716 2.0 % New Mexico Greater Southwest 3 2 169,820 1.7 % 65 % 6,394,541 1.8 % Ohio Great Lakes 2 4 160,630 1.7 % 100 % 4,824,603 1.4 % Pennsylvania Mid-Atlantic 1 1 100,054 1.0 % 100 % 4,079,780 1.2 % Louisiana Greater Southwest 1 1 137,679 1.4 % 100 % 3,968,050 1.1 % Arkansas Greater Southwest 1 1 102,377 1.1 % 100 % 3,237,405 0.9 % Kentucky Southeast Sunbelt 2 2 77,420 0.8 % 100 % 3,197,935 0.9 % Connecticut New England 1 1 56,330 0.6 % 100 % 2,998,139 0.9 % Maryland National Capital 1 1 50,978 0.5 % 100 % 2,761,612 0.8 % Mississippi Southeast Sunbelt 1 1 46,979 0.5 % 100 % 1,577,074 0.5 % Iowa The Heartland 1 1 28,900 0.3 % 100 % 1,367,675 0.4 % Total / Weighted Average 100 135 9,729,266 100.0 % 97 % $ 346,325,560 100.0 % Market Southeast Sunbelt 26 29 2,023,024 20.7 % 99 % 76,360,170 22.0 % Pacific Rim 19 23 1,642,954 16.8 % 97 % 75,628,623 21.8 % Greater Southwest 16 19 1,616,237 16.6 % 95 % 53,975,450 15.6 % The Heartland 10 14 1,155,265 11.9 % 91 % 38,356,468 11.1 % National Capital 6 6 834,565 8.6 % 100 % 24,183,550 7.0 % Great Lakes 7 9 589,480 6.1 % 93 % 21,814,315 6.3 % Rocky Mountain 6 6 708,207 7.3 % 100 % 19,398,749 5.6 % Mid-Atlantic 5 5 522,596 5.4 % 99 % 14,789,727 4.3 % Northeast & Caribbean 3 8 375,130 3.9 % 100 % 11,892,653 3.4 % Northwest Arctic 1 15 205,478 2.1 % 92 % 6,927,716 2.0 % New England 1 1 56,330 0.6 % 100 % 2,998,139 0.9 % Total / Weighted Average 100 135 9,729,266 100.0 % 97 % $ 346,325,560 100.0 % 33 Our portfolio of operating properties has a stable tenant base that is diversified among U.S.
Government Leased Properties VA - Phoenix (9) Phoenix, AZ OC 2042 257,294 $ 10,678,873 3.4 % $ 41.50 VA - San Antonio (9) San Antonio, TX OC 2041 226,148 9,185,752 2.9 % 40.62 VA - Chattanooga (9) Chattanooga, TN OC 2035 94,566 4,355,633 1.4 % 46.06 VA - Lubbock (9)(10) Lubbock, TX OC 2040 120,916 4,206,784 1.3 % 34.79 VA - Marietta (9) Marietta, GA OC 2041 76,882 3,955,701 1.2 % 51.45 VA - Birmingham (9) Irondale, AL OC 2041 77,128 3,175,571 1.0 % 41.17 VA - Corpus Christi (9) Corpus Christi, TX OC 2042 69,276 2,938,590 0.9 % 42.42 VA - Columbus (9) Columbus, GA OC 2042 67,793 2,909,443 0.9 % 42.92 VA - Lenexa (9) Lenexa, KS OC 2041 31,062 1,309,622 0.4 % 42.16 1,021,065 $ 42,715,969 13.4 % $ 41.83 Total / Weighted Average 8,805,050 $ 316,793,566 100.0 % $ 35.98 Total / Weighted Average at Easterly's Share 8,325,148 $ 296,717,063 $ 35.64 (1) OC=Outpatient Clinic; O=Office; C=Courthouse; L=Laboratory; W=Warehouse; D=Distribution.
Government Leased Properties VA - Phoenix (10) Phoenix, AZ OC 2042 257,294 $ 10,781,681 3.1 % $ 41.90 VA - San Antonio (10) San Antonio, TX OC 2041 226,148 9,308,441 2.7 % 41.16 VA - Jacksonville (10) Jacksonville, FL OC 2043 193,100 7,372,700 2.1 % 38.18 VA - Chattanooga (10) Chattanooga, TN OC 2035 94,566 4,385,607 1.3 % 46.38 VA - Lubbock (10)(11) Lubbock, TX OC 2040 120,916 4,251,052 1.2 % 35.16 VA - Marietta (10) Marietta, GA OC 2041 76,882 3,958,402 1.1 % 51.49 VA - Birmingham (10) Irondale, AL OC 2041 77,128 3,192,361 0.9 % 41.39 VA - Corpus Christi (10) Corpus Christi, TX OC 2042 69,276 2,947,359 0.9 % 42.55 VA - Columbus (10) Columbus, GA OC 2042 67,793 2,917,896 0.8 % 43.04 VA - Lenexa (10) Lenexa, KS OC 2041 31,062 1,349,757 0.4 % 43.45 1,214,165 $ 50,465,256 14.5 % $ 41.56 Total / Weighted Average 9,729,266 $ 346,325,560 100.0 % $ 35.60 Total / Weighted Average at Easterly's Share 9,158,607 $ 322,606,890 $ 35.22 (1) OC=Outpatient Clinic; SF=Specialized Facility; O=Office; C=Courthouse; L=Laboratory; W=Warehouse.
The following table sets forth a schedule of lease expirations for leases in place as of December 31, 2023, and includes leases in place for properties held by our unconsolidated joint venture: Year of Lease Expiration (1) Number of Leases Expiring Square Footage Expiring Percentage of Portfolio Square Footage Expiring Annualized Lease Income Expiring Percentage of Total Annualized Lease Income Expiring Annualized Lease Income per Leased Square Foot Expiring 2024 4 155,176 1.8 % $ 5,504,512 1.7 % $ 35.47 2025 14 629,156 7.1 % 20,639,041 6.5 % 32.80 2026 6 483,013 5.5 % 17,370,921 5.5 % 35.96 2027 9 506,510 5.8 % 18,731,963 5.9 % 36.98 2028 11 802,397 9.1 % 17,491,834 5.5 % 21.80 2029 6 510,144 5.8 % 16,074,031 5.1 % 31.51 2030 1 1,536 0.0 % 58,893 0.0 % 38.34 2031 3 117,875 1.3 % 4,613,758 1.5 % 39.14 2032 7 531,001 6.0 % 16,801,083 5.3 % 31.64 2033 9 522,122 5.9 % 20,815,244 6.6 % 39.87 Thereafter 54 4,546,120 51.7 % 178,692,286 56.4 % 39.31 Total / Weighted Average 124 8,805,050 100.0 % $ 316,793,566 100.0 % $ 35.98 (1) The year of lease expirations is pursuant to current contract terms.
The following table sets forth a schedule of lease expirations for leases in place as of December 31, 2024, and includes leases in place for properties held by our unconsolidated joint venture: Year of Lease Expiration (1) Number of Leases Expiring Square Footage Expiring Percentage of Portfolio Square Footage Expiring Annualized Lease Income Expiring Percentage of Total Annualized Lease Income Expiring Annualized Lease Income per Leased Square Foot Expiring 2025 12 592,906 6.1 % 18,868,413 5.4 % 31.82 2026 6 394,832 4.1 % 14,600,404 4.2 % 36.98 2027 10 544,368 5.6 % 20,068,900 5.8 % 36.87 2028 11 802,397 8.2 % 17,652,883 5.1 % 22.00 2029 9 731,036 7.5 % 22,205,212 6.4 % 30.37 2030 1 1,536 0.0 % 59,478 0.0 % 38.72 2031 3 117,875 1.2 % 4,549,908 1.3 % 38.60 2032 10 683,660 7.0 % 20,993,082 6.1 % 30.71 2033 10 566,197 5.8 % 22,077,072 6.4 % 38.99 2034 10 507,793 5.2 % 21,315,514 6.2 % 41.98 Thereafter 53 4,786,666 49.3 % 183,934,694 53.1 % 38.43 Total / Weighted Average 135 9,729,266 100.0 % $ 346,325,560 100.0 % $ 35.60 (1) The year of lease expirations is pursuant to current contract terms.
Department of Agriculture (“USDA”) 4.1 60,257 0.7 % 1,907,054 0.6 % General Services Administration - Other 1.7 55,807 0.6 % 1,798,673 0.6 % U.S. Coast Guard (“USCG”) 4.0 59,547 0.7 % 1,611,989 0.5 % National Oceanic and Atmospheric Administration (“NOAA”) 7.7 33,403 0.4 % 1,421,067 0.4 % U.S.
Department of Agriculture (“USDA”) 3.1 60,257 0.6 % 1,909,389 0.6 % National Park Service (“NPS”) 4.5 62,772 0.6 % 1,891,182 0.5 % General Services Administration - Other 0.7 55,807 0.6 % 1,714,806 0.5 % U.S.
Probation Office (“USPO”) 15.1 452 0.0 % 14,863 0.0 % Subtotal 10.7 8,454,959 96.0 % $ 308,150,030 97.3 % 35 Tenant (1) Weighted Average Remaining Lease Term (2) Leased Square Feet Percentage of Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income State and Local Government Tenants State of California Employee Development Department 9.9 65,133 0.7 % $ 2,140,000 0.7 % State of California Department of Industrial Relations 9.8 30,140 0.3 % 1,116,203 0.4 % New York State Court of Claims 2.8 14,274 0.2 % 393,861 0.1 % Subtotal 9.0 109,547 1.2 % $ 3,650,064 1.2 % Private Tenants Other Private Tenants 4.0 77,090 0.9 % 2,022,945 0.6 % CVS Health 1.4 39,690 0.5 % 931,928 0.3 % St.
Marshals Service (“USMS”) 2.1 1,054 0.0 % 50,583 0.0 % Department of Labor (“DOL”) 14.1 574 0.0 % 15,316 0.0 % Subtotal 10.3 8,858,028 91.1 % $ 322,842,215 93.3 % 34 Tenant (1) Weighted Average Remaining Lease Term (2) Leased Square Feet Percentage of Leased Square Feet Annualized Lease Income Percentage of Total Annualized Lease Income State and Local Government Tenants Wake County Public School System 9.5 249,605 2.6 % $ 7,605,214 2.2 % State of California Employee Development Department 9.1 65,133 0.7 % $ 2,296,631 0.7 % State of California Department of Industrial Relations 8.8 30,140 0.3 % 1,067,748 0.3 % New York State Court of Claims 1.7 14,274 0.1 % 391,875 0.1 % Subtotal 9.1 359,152 3.7 % $ 11,361,468 3.3 % Private Tenants Northrup Grumman Systems Corporation 5.9 203,382 2.1 % 4,947,476 1.4 % Other Private Tenants 4.2 58,869 0.6 % 1,673,709 0.5 % Jacobs Engineering Group, Inc. 3.0 37,858 0.4 % 1,159,272 0.3 % St.
Removed
Joint Staff Command (“JSC”) 4.4 403,737 4.6 % 8,427,298 2.7 % Internal Revenue Service (“IRS”) 9.6 233,334 2.7 % 7,998,696 2.5 % Immigration and Customs Enforcement (“ICE”) 5.0 183,894 2.1 % 7,871,695 2.5 % Federal Aviation Administration (“FAA”) 2.8 188,768 2.1 % 7,765,015 2.5 % Bureau of the Fiscal Service (“BFS”) 13.7 266,176 3.0 % 6,969,097 2.2 % U.S.
Added
Joint Staff Command (“JSC”) 3.4 403,737 4.1 % 8,503,831 2.5 % Federal Aviation Administration (“FAA”) 1.8 188,768 1.9 % 7,789,151 2.2 % Social Security Administration (“SSA”) 12.7 266,176 2.7 % 7,027,170 2.0 % Patent and Trademark Office (“PTO”) 8.0 192,185 2.0 % 5,525,502 1.6 % Federal Emergency Management Agency (“FEMA”) 10.0 190,546 2.0 % 4,683,980 1.4 % Patent and Trademark Office (“PTO”) 13.8 210,373 2.2 % 4,652,852 1.3 % U.S.
Removed
Forest Service (“USFS”) 2.4 191,175 2.2 % 6,535,255 2.1 % Social Security Administration (“SSA”) 8.9 189,276 2.1 % 5,596,570 1.8 % Patent and Trademark Office (“PTO”) 11.0 190,546 2.2 % 5,028,972 1.6 % Federal Emergency Management Agency (“FEMA”) 14.8 210,373 2.4 % 4,650,064 1.5 % Department of Transportation (“DOT”) 14.8 129,659 1.5 % 4,413,431 1.4 % U.S.
Added
Attorney Office (“USAO”) 9.9 110,776 1.1 % 4,122,947 1.2 % Department of Transportation (“DOT”) 13.7 123,480 1.3 % 3,677,577 1.1 % U.S.
Removed
Marshals Service (“USMS”) 3.1 1,054 0.0 % 50,101 0.0 % Department of Labor (“DOL”) 15.1 1,004 0.0 % 32,987 0.0 % U.S.
Added
Coast Guard (“USCG”) 3.0 59,547 0.6 % 1,624,577 0.5 % National Oceanic and Atmospheric Administration (“NOAA”) 6.7 33,403 0.3 % 1,426,062 0.4 % Transportation Security Administration (“TSA”) 9.0 44,075 0.5 % 1,161,242 0.3 % U.S.
Added
Probation Office (“USPO”) 14.1 6,621 0.1 % 176,606 0.1 % U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed5 unchanged
Biggest changeThe graph covers the period from December 31, 2018 through December 31, 2023 and assumes that $100 was invested in our common stock and in each index on December 31, 2018 and that all dividends were reinvested.
Biggest changeThe graph covers the period from December 31, 2019 through December 31, 2024 and assumes that $100 was invested in our common stock and in each index on December 31, 2019 and that all dividends were reinvested.
The information in this paragraph and the following performance graph are deemed to be furnished, not filed. 38 Recent Sales of Unregistered Securities None. Recent Purchases of Equity Securities None. Item 6. Reserved
The information in this paragraph and the following performance graph are deemed to be furnished, not filed. 37 Recent Sales of Unregistered Securities None. Recent Purchases of Equity Securities None. Item 6. Reserved
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Shares of our common stock are traded on the New York Stock Exchange under the symbol “DEA”. We had 26 stockholders of record of our common stock as of February 20, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Shares of our common stock are traded on the New York Stock Exchange under the symbol “DEA”. We had 31 stockholders of record of our common stock as of February 18, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

60 edited+30 added−30 removed51 unchanged
Biggest changeFor the years ended December 31, (Amounts in thousands) 2023 2022 Change Revenues Rental income $ 273,906 $ 284,488 $ (10,582 ) Tenant reimbursements 8,908 5,920 2,988 Asset management income 2,110 1,409 701 Other income 2,303 1,789 514 Total revenues 287,227 293,606 (6,379 ) Expenses Property operating 71,964 66,781 5,183 Real estate taxes 30,461 30,900 (439 ) Depreciation and amortization 91,292 98,254 (6,962 ) Acquisition costs 1,661 1,370 291 Corporate general and administrative 27,118 24,785 2,333 Total expenses 222,496 222,090 406 Other income (expense) Income from unconsolidated real estate venture 5,498 3,374 2,124 Interest expense, net (49,169 ) (47,378 ) (1,791 ) Gain on the sale of operating properties — 13,590 (13,590 ) Impairment loss — (5,540 ) 5,540 Net income $ 21,060 $ 35,562 $ (14,502 ) Revenues Total revenues decreased $6.4 million to $287.2 million for the year ended December 31, 2023 compared to $293.6 million for the year ended December 31, 2022. 40 The $10.6 million decrease in Rental income is primarily attributable to the disposal of ten operating properties during the year ended December 31, 2022 offset by an increase in revenues from the three operating properties acquired since December 31, 2022 and a full period of operations from the three operating properties acquired during the year ended December 31, 2022.
Biggest changeFor the years ended December 31, (Amounts in thousands) 2024 2023 Change Revenues Rental income $ 289,601 $ 273,906 $ 15,695 Tenant reimbursements 6,544 8,908 (2,364 ) Asset management income 2,302 2,110 192 Other income 3,605 2,303 1,302 Total revenues 302,052 287,227 14,825 Expenses Property operating 70,151 71,964 (1,813 ) Real estate taxes 30,924 30,461 463 Depreciation and amortization 96,333 91,292 5,041 Acquisition costs 1,878 1,661 217 Corporate general and administrative 24,450 27,118 (2,668 ) Provision for credit losses 1,527 — 1,527 Total expenses 225,263 222,496 2,767 Other income (expense) Income from unconsolidated real estate venture 6,051 5,498 553 Interest expense, net (62,433 ) (49,169 ) (13,264 ) Gain on the sale of real estate 171 — 171 Net income $ 20,578 $ 21,060 $ (482 ) Revenues Total revenues increased $14.8 million to $302.1 million for the year ended December 31, 2024 compared to $287.2 million for the year ended December 31, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion of our results of operations and financial condition in conjunction with the audited consolidated financial statements and related notes thereto as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 and the sections entitled “Risk Factors,” “Forward Looking Statements,” “Business,” and “Properties” contained elsewhere in this Annual Report on Form 10-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion of our results of operations and financial condition in conjunction with the audited consolidated financial statements and related notes thereto as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 and the sections entitled “Risk Factors,” “Forward Looking Statements,” “Business,” and “Properties” contained elsewhere in this Annual Report on Form 10-K.
Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of the earnings or losses, distributions received, and other-than-temporary impairments. 51 Our unconsolidated real estate venture is evaluated for impairment when conditions exist that may indicate that the decrease in the carrying amount of our investment has occurred and is other than temporary.
Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of the earnings or losses, distributions received, and other-than-temporary impairments. 52 Our unconsolidated real estate venture is evaluated for impairment when conditions exist that may indicate that the decrease in the carrying amount of our investment has occurred and is other than temporary.
We do not believe inflation has had a material impact on our historical financial position or results of operations. 50 Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions.
We do not believe inflation has had a material impact on our historical financial position or results of operations. 51 Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions.
We adjust FFO to present Core FFO as an alternative measure of our operating performance, which, when applicable, excludes items which we believe are not representative of ongoing operating results, such as liability management related costs (including losses on extinguishment of debt and modification costs), catastrophic event charges, depreciation of non-real estate assets, and the unconsolidated real estate venture’s allocated share of these adjustments.
We adjust FFO to present Core FFO as an alternative measure of our operating performance, which, when applicable, excludes items which we believe are not representative of ongoing operating results, such as liability management related costs (including losses on extinguishment of debt and modification costs), provision for credit losses, catastrophic event charges, depreciation of non-real estate assets, and the unconsolidated real estate venture’s allocated share of these adjustments.
Our revenue also includes amounts due from tenants for real estate taxes, projects and other reimbursements. Real estate taxes over the base year are reimbursed by the tenant. Substantially all of our rental income comes from U.S. Government tenants. We expect that leases to agencies of the U.S.
Our revenue also includes amounts due from tenants for real estate taxes, projects and other reimbursements. Real estate taxes over the base year are reimbursed by the tenant. Over 90% of our rental income comes from U.S. Government tenants. We expect that leases to agencies of the U.S.
See Note 5 to the Consolidated Financial Statements for additional information on our revolving credit facility, our 2018 term loan facility and our 2016 term loan facility. Our revolving credit facility, term loan facilities, notes payable, and mortgage notes payable are subject to ongoing compliance with a number of financial and other covenants.
See Note 6 to the Consolidated Financial Statements for additional information on our 2024 revolving credit facility, our 2018 term loan facility and our 2016 term loan facility. Our 2024 revolving credit facility, term loan facilities, notes payable, and mortgage notes payable are subject to ongoing compliance with a number of financial and other covenants.
Unconsolidated Real Estate Venture We consolidate entities in which we have a controlling interest or are the primary beneficiary in a variable interest entity. From time to time, we may have off-balance sheet unconsolidated real estate ventures and other unconsolidated arrangements with varying structures. As of December 31, 2023, our investment in the JV was $284.5 million.
Unconsolidated Real Estate Venture We consolidate entities in which we have a controlling interest or are the primary beneficiary in a variable interest entity. From time to time, we may have off-balance sheet unconsolidated real estate ventures and other unconsolidated arrangements with varying structures. As of December 31, 2024, our investment in the JV was $316.5 million.
We are an internally managed real estate investment trust, or REIT, focused primarily on the acquisition, development and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate substantially all of our revenue by leasing our properties to such agencies, either directly or through the U.S.
We are an internally managed real estate investment trust, or REIT, focused primarily on the acquisition, development and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate over 90% of our revenue by leasing our properties to such agencies, either directly or through the U.S.
For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned one property under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned two properties under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
We completed acquisitions of three wholly owned properties for an aggregate purchase price of $108.1 million during the year ended December 31, 2022. These transactions were accounted for as asset acquisitions, and the purchase price of each was allocated based on the relative fair value of the asset acquired and liabilities assumed.
We completed acquisitions of three wholly owned properties for an aggregate purchase price of $63.1 million during the year ended December 31, 2023. These transactions were accounted for as asset acquisitions, and the purchase price of each was allocated based on the relative fair value of the asset acquired and liabilities assumed.
Comparison of Results of Operations for the Years Ended December 31, 2022 and December 31, 2021 Information pertaining to fiscal year 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022 on page 42 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which was filed with the Securities and Exchange Commission, or SEC, on February 28, 2023.
Comparison of Results of Operations for the Years Ended December 31, 2023 and December 31, 2022 Information pertaining to fiscal year 2022 was included in our Annual Report on Form 10-K for the year ended December 31, 2023 on page 40 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which was filed with the Securities and Exchange Commission, or SEC, on February 27, 2024.
As of December 31, 2023, we were in compliance with all applicable financial covenants.
As of December 31, 2024, we were in compliance with all applicable financial covenants.
Although we may seek to cost-effectively manage our exposure to future rate increases through such means, a portion of our overall debt may at various times float at then current rates. Development Activities As of December 31, 2023, we had one property under development.
Although we may seek to cost-effectively manage our exposure to future rate increases through such means, a portion of our overall debt may at various times float at then current rates. Development Activities As of December 31, 2024, we had two properties under development.
The $0.7 million increase in Asset management income is attributable to the fee earned by us for asset management of the JV from the one property acquired since December 31, 2022 and a full period of operations from the four properties acquired during the year ended December 31, 2022.
The $0.2 million increase in Asset management income is attributable to the fee earned by us for asset management of the JV from the one property acquired since December 31, 2023 and a full period of operations from the one property acquired during the year ended December 31, 2023.
Our operating partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of our operating partnership and owned approximately 93.8% of the aggregate limited partnership interests in our operating partnership, which we refer to herein as common units, as of December 31, 2023.
Our operating partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of our operating partnership and owned approximately 95.2% of the aggregate limited partnership interests in our operating partnership, which we refer to herein as common units, as of December 31, 2024.
During the year ended December 31, 2023 and 2022, no other-than-temporary impairment related to our unconsolidated real estate venture was identified.
During the years ended December 31, 2024 and 2023, no other-than-temporary impairment related to our unconsolidated real estate venture was identified.
A change in any of the above key assumptions can materially change not only the presentation of acquired properties in our consolidated financial statements but also our reported results of operations. We completed acquisitions of three wholly owned properties for an aggregate purchase price of $63.1 million during the year ended December 31, 2023.
A change in any of the above key assumptions can materially change not only the presentation of acquired properties in our consolidated financial statements but also our reported results of operations. We completed acquisitions of ten wholly owned properties for an aggregate purchase price of $184.9 million during the year ended December 31, 2024.
Income from unconsolidated real estate venture The $2.1 million increase in Income from unconsolidated real estate venture is primarily attributable to our pro rata share of operations from the one operating property acquired by the JV since December 31, 2022 and a full period of operations from the four operating properties acquired by the JV during the year ended December 31, 2022.
Income from unconsolidated real estate venture The $0.6 million increase in Income from unconsolidated real estate venture is primarily attributable to our pro rata share of operations from the one operating property acquired by the JV since December 31, 2023 and a full period of operations from the one operating property acquired by the JV during the year ended December 31, 2023.
Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations and cash flows. 48 The following table sets forth a reconciliation of our net income to FFO and Core FFO for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands): For the years ended December 31, 2023 2022 2021 Net income $ 21,060 $ 35,562 $ 33,957 Depreciation of real estate assets 90,288 97,262 91,189 Gain on sale of operating property — (13,590 ) (1,307 ) Impairment loss — 5,540 — Unconsolidated real estate venture allocated share of above adjustments 7,639 4,937 362 FFO 118,987 129,711 124,201 Adjustments to FFO: Loss on extinguishment of debt 14 20 — Natural disaster event expense, net of recovery 69 96 154 Depreciation of non-real estate assets 1,003 992 77 Unconsolidated real estate venture allocated share of above adjustments 66 66 — Core FFO $ 120,139 $ 130,885 $ 124,432 49 Factors That May Influence Future Results of Operations Revenue Our revenues primarily arise from the rental of space to tenants in our properties and tenant reimbursements, which include reimbursement for operating expenses, which are determined by the base year operating expenses and are subject to reimbursement in subsequent years based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations and cash flows. 49 The following table sets forth a reconciliation of our net income to FFO and Core FFO for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands): For the years ended December 31, 2024 2023 2022 Net income $ 20,578 $ 21,060 $ 35,562 Depreciation of real estate assets 95,326 90,288 97,262 Gain on sale of operating property (171 ) — (13,590 ) Impairment loss — — 5,540 Unconsolidated real estate venture allocated share of above adjustments 8,256 7,639 4,937 FFO 123,989 118,987 129,711 Adjustments to FFO: Loss on extinguishment of debt 260 14 20 Provision for credit losses 1,527 — — Natural disaster event expense, net of recovery 95 69 96 Depreciation of non-real estate assets 1,007 1,003 992 Unconsolidated real estate venture allocated share of above adjustments 66 66 66 Core FFO $ 126,944 $ 120,139 $ 130,885 50 Factors That May Influence Future Results of Operations Revenue Our revenues primarily arise from the rental of space to tenants in our properties and tenant reimbursements, which include reimbursement for operating expenses, which are determined by the base year operating expenses and are subject to reimbursement in subsequent years largely based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
As of December 31, 2023, the carrying amount of our investment in our unconsolidated real estate venture was $284.5 million, or approximately 9.9% of our total assets. As of December 31, 2022, the carrying amount of our investment in our unconsolidated real estate venture was $271.6 million, or approximately 9.6% of our total assets.
As of December 31, 2024, the carrying amount of our investment in our unconsolidated real estate venture was $316.5 million, or approximately 9.8% of our total assets. As of December 31, 2023, the carrying amount of our investment in our unconsolidated real estate venture was $284.5 million, or approximately 9.9% of our total assets.
Liquidity and Capital Resources We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months for all anticipated uses, including all scheduled principal and interest payments on our outstanding indebtedness, current and anticipated tenant improvements, development activities at FDA – Atlanta, planned and possible acquisitions of properties, including the final VA Portfolio property through the JV, stockholder distributions to maintain our qualification as a REIT and other capital obligations associated with conducting our business.
Liquidity and Capital Resources We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months for all anticipated uses, including all scheduled principal and interest payments on our outstanding indebtedness, current and anticipated tenant improvements, development activities at FDA – Atlanta and JUD – Flagstaff, planned and possible acquisitions of properties, stockholder distributions to maintain our qualification as a REIT, potential repurchases of common stock under our share repurchase program and other capital obligations associated with conducting our business.
As of December 31, 2023, we committed capital, net of return of over committed capital, to the JV totaling $291.7 million and have a remaining capital commitment of $46.6 million. None of the properties owned by the JV are encumbered by mortgage indebtedness.
As of December 31, 2024, we committed capital, net of return of over committed capital, to the JV totaling $329.7 million and have a remaining capital commitment of $8.5 million. None of the properties owned by the JV are encumbered by mortgage indebtedness.
Net cash provided by operating activities for the year ended December 31, 2022 included $121.4 million in net cash from rental activities net of expenses and distributions from investment in unconsolidated real estate venture of $6.4 million offset by $1.9 million related to the changes in tenant accounts receivables, prepaid expense and other assets, deferred revenue associated with operating leases, principal payments on operating lease obligations and accounts payable, accrued expenses and other liabilities.
Net cash provided by operating activities for the year ended December 31, 2024 included $107.0 million in net cash from rental activities net of expenses, $43.5 million related to the changes in tenant accounts receivables, prepaid expense and other assets, real estate loan interest receivable, deferred revenue associated with operating leases, principal payments on operating lease obligations and accounts payable, accrued expenses and other liabilities and distributions from investment in unconsolidated real estate venture of $12.1 million.
A summary of dividends declared by the board of directors per share of common stock and per common unit of our operating partnership at the date of record is as follows: Quarter Declaration Date Record Date Pay Date Dividend Q1 2023 April 26, 2023 May 11, 2023 May 23, 2023 0.265 Q2 2023 August 2, 2023 August 17, 2023 August 29, 2023 0.265 Q3 2023 October 26, 2023 November 9, 2023 November 21, 2023 0.265 Q4 2023 February 21, 2024 March 6, 2024 March 18, 2024 0.265 46 We use long-term investment partnership units in our operating partnership, which we refer to herein as LTIP units, as a form of performance-based award and service-based award for annual long-term incentive equity compensation.
A summary of dividends declared by the board of directors per share of common stock and per common unit of our operating partnership at the date of record is as follows: Quarter Declaration Date Record Date Pay Date Dividend Q1 2024 April 25, 2024 May 9, 2024 May 21, 2024 0.265 Q2 2024 July 17, 2024 August 1, 2024 August 13, 2024 0.265 Q3 2024 October 31, 2024 November 15, 2024 November 27, 2024 0.265 Q4 2024 February 19, 2025 March 5, 2025 March 17, 2025 0.265 We use long-term investment partnership units in our operating partnership (“LTIP units”), which we refer to herein as LTIP units, as a form of performance-based award and service-based award for annual long-term incentive equity compensation.
Investing Activities We used $127.0 million and $69.1 million in cash for investing activities during the years ended December 31, 2023 and 2022, respectively.
Investing Activities We used $409.6 million and $127.0 million in cash for investing activities during the years ended December 31, 2024 and 2023, respectively.
We have elected to be taxed as a REIT and believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015.
We have elected to be taxed as a REIT and believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015. 38 Acquisitions On April 12, 2024, we acquired a 129,046 leased square foot U.S.
Net cash used by financing activities for the year ended December 31, 2022 included $109.2 million in dividends, $10.9 million in mortgage debt repayment, and $0.1 million in payment of deferred offering costs offset by $51.0 million in net draws under the revolving credit facility and $9.5 million in gross proceeds from issuance of shares of our common stock. 47 Comparison of Cash Flow for the Years Ended December 31, 2022 and December 31, 2021 Information pertaining to fiscal year 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022 on page 49 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which was filed with SEC on February 28, 2023.
Net cash generated by financing activities for the year ended December 31, 2023 included $86.5 million in gross proceeds from issuance of shares of our common stock, $50.0 million delayed draw on our 2018 term loan and $13.5 million in net draws under the revolving credit facility offset by $112.4 million in dividends, $20.0 million in mortgage debt repayment and $0.4 million in the payment of deferred offering costs. 48 Comparison of Cash Flow for the Years Ended December 31, 2023 and December 31, 2022 Information pertaining to fiscal year 2022 was included in our Annual Report on Form 10-K for the year ended December 31, 2023 on page 47 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which was filed with SEC on February 27, 2024.
On January 23, 2024, we entered into the seventh amendment to our senior unsecured term loan agreement, dated as of September 29, 2016, to extend the maturity date of our 2016 term loan facility from March 29, 2024 to January 30, 2025.
(6) On January 8, 2025, we entered into the ninth amendment to our senior unsecured term loan agreement, dated as of September 29, 2016, to extend the maturity date of our 2016 term loan facility from January 30, 2025 to January 28, 2028.
Financing Activities We generated $17.2 million and used $59.7 million in cash from financing activities during the years ended December 31, 2023 and 2022, respectively.
Financing Activities We generated $252.9 million and $17.2 million in cash from financing activities during the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2023, we wholly owned 81 operating properties and nine operating properties through an unconsolidated joint venture (the “JV”) in the United States encompassing approximately 8.8 million leased square feet (8.3 million pro rata), including 88 operating properties that were leased primarily to U.S.
As of December 31, 2024, we wholly owned 90 operating properties and ten operating properties through an unconsolidated joint venture (the “JV”) in the United States encompassing approximately 9.7 million leased square feet (9.2 million pro rata), including 92 operating properties that were leased primarily to U.S.
The chart below details our debt capital structure as of December 31, 2023 (dollars in thousands): 45 Debt Capital Structure December 31, 2023 Total principal outstanding $ 1,299,597 Weighted average maturity 4.6 years Weighted average interest rate 4.2 % % Variable debt 6.1 % % Fixed debt (1) 93.9 % % Secured debt 17.1 % (1) Our 2016 term loan facility and 2018 term loan facility are swapped to be fixed and as such are included as fixed rate debt in the table above.
The chart below details our debt capital structure as of December 31, 2024 (dollars in thousands): Debt Capital Structure December 31, 2024 Total principal outstanding $ 1,605,348 Weighted average maturity 4.5 years Weighted average interest rate 4.6 % % Variable debt 15.5 % % Fixed debt (1) 84.5 % % Secured debt 9.8 % (1) Our 2016 term loan facility and 2018 term loan facility are swapped to be fixed and as such are included as fixed rate debt in the table above and $25.5 million of the 2024 revolving credit facility.
Government tenant agencies, one operating property entirely leased to tenant agencies of a U.S. state government and one operating property that was entirely leased to a private tenant. As of December 31, 2023, our operating properties were 97% leased.
Government tenant agencies, four operating properties leased to tenant agencies of a U.S. state or local government and three operating properties that were entirely leased to private tenants. As of December 31, 2024, our operating properties were 97% leased.
The $0.5 million increase in Other income is primarily attributable to an increase in interest income. Expenses Total expenses increased by $0.4 million to $222.5 million for the year ended December 31, 2023 compared to $222.1 million for the year ended December 31, 2022.
The $1.3 million increase in Other income is primarily attributable to an increase in interest income from our loan receivable. Expenses Total expenses increased by $2.8 million to $225.3 million for the year ended December 31, 2024 compared to $222.5 million for the year ended December 31, 2023.
The remeasurement resulted in an impairment loss of $5.5 million, which is included in "Impairment loss" in our Consolidated Statements of Operations. As of December 31, 2023, no impairment related to our long-lived assets was identified. Impairment of Unconsolidated Real Estate Venture We account for our investment in the unconsolidated real estate venture under the equity method.
The remeasurement resulted in an impairment loss of $5.5 million, which is included in "Impairment loss" in our Consolidated Statements of Operations for the year ended December 31, 2022. As of December 31, 2024 and 2023, no impairment related to our long-lived assets was identified.
Net cash used in investing activities for the year ended December 31, 2022 primarily included $143.8 million in investment in unconsolidated real estate venture, $93.7 million in real estate acquisitions and deposits, $22.6 million in additions to operating properties and $12.4 million in additions to development properties, offset by $202.4 million in proceeds from sale of operating properties, net and $1.0 million in distributions from investment in unconsolidated real estate venture.
Net cash used in investing activities for the year ended December 31, 2024 primarily included $188.1 million in real estate acquisitions and deposits, $116.0 million in additions to development properties, $40.1 million in investment in unconsolidated real estate venture, $35.4 million in additions to operating properties, and $34.2 million in investment in real estate loan receivable, net, offset by $2.2 million in proceeds from sale, net and $2.0 million in distributions from investment in unconsolidated real estate venture.
The $0.4 million decrease in Real estate taxes is also primarily attributable to the disposal of ten operating properties during the year ended December 31, 2022, offset by the three operating properties acquired since December 31, 2022 as well as a full period of operations from the three operating properties acquired during the year ended December 31, 2022.
The $0.5 million increase in Real estate taxes is primarily attributable to the nine operating properties acquired since December 31, 2023 as well as a full period of operations from the three operating properties acquired during the year ended December 31, 2023. 40 The $5.0 million increase in Depreciation and amortization is primarily attributable to the nine operating properties acquired since December 31, 2023 as well as a full period of operations from the three operating properties acquired during the year ended December 31, 2023.
As of December 31, 2023 , we had approximately $300.0 million of gross sales of our common stock available under the 2021 ATM Program and $80.6 million of gross sales of our common stock available under the 2019 ATM Program. 43 Share Repurchase Program On April 28, 2022, our board of directors authorized a share repurchase program whereby we may repurchase up to 4,538,994 shares of our common stock, or approximately 5% of our outstanding shares as of the authorization date.
Share Repurchase Program On April 28, 2022, our board of directors authorized a share repurchase program whereby we may repurchase up to 4,538,994 shares of our common stock, or approximately 5% of our outstanding shares as of the authorization date.
On February 3, 2023, we entered into three SOFR-based interest rate swaps each with a notional value of $100.0 million that were designated as cash flow hedges of interest rate risk. Two of the interest rate swaps, with an aggregate notional value of $200.0 million, became effective in June 2023.
On December 23, 2024, we entered into three SOFR-based interest rate swaps with a total notional value of $100.0 million that were designated as cash flow hedges of interest rate risk. The interest rate swaps became effective in December 2024 upon the maturity of our $100.0 million notional value interest rate swap on December 23, 2024.
(3) Our revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee.
The 2024 revolving credit facility has an initial four-year term and will mature in June 2028, with two six-month as-of-right extension options, subject to certain conditions and the payment of an extension fee.
Net cash generated in financing activities for the year ended December 31, 2023 included $112.4 million in dividends, $20.0 million in mortgage debt repayment and $0.4 million in payment of deferred offering costs offset by $86.5 million in gross proceeds from issuance of shares of our common stock, $50.0 million delayed draw on our 2018 term loan and $13.5 million in net draws under the revolving credit facility.
Net cash generated in financing activities for the year ended December 31, 2024 included $200.0 million in note payable issuances, $195.6 million in net draws under the revolving credit facility, and $71.8 million in gross proceeds from issuance of shares of our common stock offset by $115.9 million in dividends, $64.3 million in mortgage debt repayment, $25.5 million in term loan repayments, $7.9 million in deferred financing costs and $0.9 million in the payment of deferred offering costs.
The registration statement will be deemed automatically effective and provide for the registration of unspecified amounts of securities. However, there can be no assurance that we will be able to complete any offerings of securities in the future under such registration statement, once filed.
However, there can be no assurance that we will be able to complete any such offerings of securities in the future.
Our short-term liquidity requirements consist primarily of funds to pay for the following: • development and redevelopment activities, including major redevelopment, renovation or expansion programs at FDA – Atlanta and other individual properties; • property acquisitions under contract, including our JV share of the remaining Portfolio Acquisition properties; • tenant improvements allowances and leasing costs; • recurring maintenance and capital expenditures; • debt repayment requirements; • corporate and administrative costs; • interest payments on our outstanding indebtedness; • interest swap payments; • distribution payments; and • repurchases of common stock under our share repurchase program.
Our primary expected sources of capital are as follows: • existing cash balances; • operating cash flow; • distribution of cash flows from the JV; • available borrowings under our 2024 revolving credit facility; • issuance of long-term debt; • issuance of equity, including under our ATM Programs (as described below); and • asset sales. 41 Our short-term liquidity requirements consist primarily of funds to pay for the following: • development and redevelopment activities, including major redevelopment, renovation or expansion programs at FDA – Atlanta, JUD – Flagstaff and other individual properties; • potential property acquisitions; • tenant improvements, allowances and leasing costs; • recurring maintenance and capital expenditures; • debt repayment requirements; • commitments to fund advancements through loan receivables; • corporate and administrative costs; • interest payments on our outstanding indebtedness; • interest swap payments; • distribution payments; and • repurchases of common stock under our share repurchase program.
At December 31, 2023, we had approximately $21.9 million available in cash and cash equivalents and there was approximately $370.9 million available under our revolving credit facility.
At December 31, 2024, we had approximately $19.4 million available in cash and cash equivalents, $8.5 million of restricted cash and there was approximately $125.3 million available under our revolving credit facility.
(2) Our revolving credit facility had available capacity of $370.9 million at December 31, 2023, with an accordion feature that permits us to request additional lender commitments for up to $250.0 million of additional capacity, subject to the satisfaction of customary terms and conditions.
(2) The $400.0 million 2024 revolving credit facility (the “2024 revolving credit facility”) had available capacity of $125.3 million at December 31, 2024, which includes an accordion feature that provides us with additional capacity of up to $300.0 million, subject to syndication of the increase and the satisfaction of customary terms and conditions.
(6) Entered into two interest rate swaps with an effective date of June 23, 2023 with an aggregate notional value of $200.0 million to effectively fix the interest rate at 5.39% annually, based on our consolidated leverage ratio, as defined in our 2018 term loan facility agreement.
(7) Our 2018 term loan facility (as amended, our “2018 term loan facility”) is subject to two interest rate swaps with effective dates of June 23 and September 29, 2023 and an aggregate notional value of $200.0 million, of which $174.5 million is associated with our 2018 term loan facility, to effectively fix the interest rate on the $174.5 million at 5.23% annually.
Debt Indebtedness Outstanding The following table sets forth certain information with respect to our outstanding indebtedness as of December 31, 2023 (dollars in thousands): Principal Outstanding Interest Current Loan December 31, 2023 Rate (1) Maturity Revolving credit facility: Revolving credit facility (2) $ 79,000 S + 135bps July 2025 (3) Total revolving credit facility 79,000 Term loan facilities: 2016 term loan facility 100,000 5.05 (4) March 2024 (5) 2018 term loan facility 200,000 5.39 (6) July 2026 Total term loan facilities 300,000 Less: Total unamortized deferred financing fees (892 ) Total term loan facilities, net 299,108 Notes payable: 2017 series A senior notes 95,000 4.05% May 2027 2017 series B senior notes 50,000 4.15% May 2029 2017 series C senior notes 30,000 4.30% May 2032 2019 series A senior notes 85,000 3.73% September 2029 2019 series B senior notes 100,000 3.83% September 2031 2019 series C senior notes 90,000 3.98% September 2034 2021 series A senior notes 50,000 2.62% October 2028 2021 series B senior notes 200,000 2.89% October 2030 Total notes payable 700,000 Less: Total unamortized deferred financing fees (3,468 ) Total notes payable, net 696,532 Mortgage notes payable: VA - Golden 8,447 5.00% (7) April 2024 USFS II - Albuquerque 11,603 4.46% (7) July 2026 ICE - Charleston 11,998 4.21% (7) January 2027 VA - Loma Linda 127,500 3.59% (7) July 2027 CBP - Savannah 9,549 3.40% (7) July 2033 USCIS - Kansas City 51,500 3.68% (7) August 2024 Total mortgage notes payable 220,597 Less: Total unamortized deferred financing fees (944 ) Less: Total unamortized premium/discount 542 Total mortgage notes payable, net 220,195 Total debt $ 1,294,835 (1) At December 31, 2023, the USD SOFR with a five day lookback (“S”) was 5.31%.
No repurchases of shares of our common stock were made under the share repurchase program during the year ended December 31, 2024 . 43 Debt Indebtedness Outstanding The following table sets forth certain information with respect to our outstanding indebtedness as of December 31, 2024 (dollars in thousands): Principal Outstanding Interest Current Loan December 31, 2024 Rate (1) Maturity Revolving credit facility: 2024 revolving credit facility (2) $ 274,550 S + 145bps (3) June 2028 (4) Total revolving credit facility 274,550 Term loan facilities: 2016 term loan facility 100,000 5.31% (5) January 2025 (6) 2018 term loan facility 174,500 5.23% (7) July 2026 Total term loan facilities 274,500 Less: Total unamortized deferred financing fees (491 ) Total term loan facilities, net 274,009 Notes payable: 2017 series A senior notes 95,000 4.05% May 2027 2017 series B senior notes 50,000 4.15% May 2029 2017 series C senior notes 30,000 4.30% May 2032 2019 series A senior notes 85,000 3.73% September 2029 2019 series B senior notes 100,000 3.83% September 2031 2019 series C senior notes 90,000 3.98% September 2034 2021 series A senior notes 50,000 2.62% October 2028 2021 series B senior notes 200,000 2.89% October 2030 2024 series A senior notes 150,000 6.56% May 2033 2024 series B senior notes 50,000 6.56% August 2033 Total notes payable 900,000 Less: Total unamortized deferred financing fees (5,324 ) Total notes payable, net 894,676 Mortgage notes payable: USFS II - Albuquerque 9,624 4.46% (8) July 2026 ICE - Charleston 10,491 4.21% (8) January 2027 VA - Loma Linda 127,500 3.59% (8) July 2027 CBP - Savannah 8,683 3.40% (8) July 2033 Total mortgage notes payable 156,298 Less: Total unamortized deferred financing fees (579 ) Less: Total unamortized premium/discount (133 ) Total mortgage notes payable, net 155,586 Total debt $ 1,598,821 (1) The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums.
No sales of shares of our common stock were made under the 2021 ATM Program during the year ended December 31, 2023 . We used the net proceeds received from such sales for general corporate purposes.
We used the net proceeds received from such sales for general corporate purposes. As of December 31, 2024 , we had approximately $300.0 million of gross sales of our common stock available under the 2021 ATM Program and $15.4 million of gross sales of our common stock available under the 2019 ATM Program.
As of the date of this filing, there were no known commitments or events that would have a material impact on our liquidity. 42 Equity Shelf Registration Statement on Form S-3 We expect to file an automatic universal shelf registration statement on Form S-3 with the SEC following the filing of this Annual Report on Form 10-K.
As of the date of this filing, there were no known commitments or events that would have a material impact on our liquidity.
Additionally, the $7.0 million decrease in Depreciation and amortization is primarily attributable to the disposal of ten operating properties during the year ended December 31, 2022 and a decrease in amortization related to fully amortized lease intangibles, offset by three operating properties acquired since December 31, 2022, as well as a full period of operations from the three operating properties acquired during the year ended December 31, 2022.
The $15.7 million increase in Rental income is primarily attributable to the nine operating properties acquired since December 31, 2023 and a full period of operations from the three operating properties acquired during the year ended December 31, 2023. The $2.4 million decrease in Tenant reimbursements is primarily attributable to a decrease in tenant project reimbursements.
We anticipate the JV will acquire the tenth and final property in the VA Portfolio in 2024. Results of Operations Comparison of Results of Operations for the Years Ended December 31, 2023 and December 31, 2022 The financial information presented below summarizes the results of operations of our company for the years ended December 31, 2023 and 2022.
Government (“JUD”) over a 20 year non-cancelable term. 39 Results of Operations Comparison of Results of Operations for the Years Ended December 31, 2024 and December 31, 2023 The financial information presented below summarizes the results of operations of our company for the years ended December 31, 2024 and 2023.
The following table sets forth certain information with respect to issuances under the 2019 ATM Program in each fiscal quarter for the year ended December 31, 2023 (amounts in thousands except share amounts): 2019 ATM Program For the Three Months Ended: Number of Shares Issued (1) Net Proceeds (1) March 31, 2023 250,000 $ 5,562 June 30, 2023 — — September 30, 2023 1,700,000 33,717 December 31, 2023 — — Total 1,950,000 $ 39,279 (1) Shares issued by us, which were all issued in settlement of forward sales transactions.
Under each of the ATM Programs, we may enter into one or more forward transactions (each, a “forward sale transaction”) under separate master forward sale confirmations and related supplemental confirmations with each of the various financial institutions party to the respective ATM Program for the sale of shares of our common stock on a forward basis. 42 The following table sets forth certain information with respect to issuances under the 2019 ATM Program in each fiscal quarter for the year ended December 31, 2024 (amounts in thousands except share amounts): 2019 ATM Program For the Three Months Ended: Number of Shares Issued (1) Net Proceeds (1) March 31, 2024 — $ — June 30, 2024 589,647 7,903 September 30, 2024 2,631,727 35,077 December 31, 2024 2,269,843 28,112 Total 5,491,217 $ 71,092 (1) Shares issued by us, which were all issued in settlement of forward sale transactions.
(4) Entered into one interest rate swap with an effective date of September 29, 2023 with a notional value of $100.0 million to effectively fix the interest rate at 5.05% annually, based on our consolidated leverage ratio, as defined in our 2016 term loan facility agreement.
(3) Our 2024 revolving credit facility is subject to one interest rate swap with an effective date of June 23, 2023 and a notional value of $100.0 million, of which $25.5 million is associated with our 2024 revolving credit facility, to effectively fix the interest rate on the $25.5 million at 5.46% annually.
Cash Flow Comparison of Cash Flow for the Years Ended December 31, 2023 and December 31, 2022 The following table sets forth a summary of cash flows for our company for the years ended December 31, 2023 and 2022: For the years ended December 31, 2023 2022 Change (Amounts in thousands) Net cash provided by (used in): Operating activities $ 114,479 $ 125,941 $ (11,462 ) Investing activities (127,008 ) (69,103 ) (57,905 ) Financing activities 17,194 (59,707 ) 76,901 Operating Activities We generated $114.5 million and $125.9 million of cash from operating activities during the years ended December 31, 2023 and 2022, respectively.
Holders of LTIP units that are not subject to the attainment of performance goals are entitled to receive dividends per LTIP unit equal to 100% of the dividend paid per common unit beginning on the grant date. 47 Cash Flow Comparison of Cash Flow for the Years Ended December 31, 2024 and December 31, 2023 The following table sets forth a summary of cash flows for our company for the years ended December 31, 2024 and 2023: For the years ended December 31, 2024 2023 Change (Amounts in thousands) Net cash provided by (used in): Operating activities $ 162,635 $ 114,479 $ 48,156 Investing activities (409,645 ) (127,008 ) (282,637 ) Financing activities 252,875 17,194 235,681 Operating Activities We generated $162.6 million and $114.5 million of cash from operating activities during the years ended December 31, 2024 and 2023, respectively.
Interest expense, net Interest expense, net increased by $1.8 million to $49.2 million for the year ended December 31, 2023 compared to $47.4 million for the year ended December 31, 2022. The increase is primarily attributable to higher weighted average borrowings and interest rates on our swapped term loans.
Interest expense, net Interest expense, net increased by $13.3 million to $62.4 million for the year ended December 31, 2024 compared to $49.2 million for the year ended December 31, 2023.
No repurchases of shares of our common stock were made under the share repurchase program during the year ended December 31, 2023 .
As of December 31, 2024, we had settled all of our outstanding forward sale transactions under the 2019 ATM Program. We accounted for the forward sale transactions as equity. No sales of shares of our common stock were made under the 2021 ATM Program during the year ended December 31, 2024 .
Material Cash Commitments The following table shows our material cash commitments as of December 31, 2023 : Payments due by period Total 2024 2025 2026 2027 2028 Thereafter Mortgage principal and interest $ 242,166 $ 71,511 $ 10,319 $ 15,470 $ 138,367 $ 1,169 $ 5,330 Revolving credit facility principal and interest 88,435 6,041 82,394 — — — — Term loan facilities principal and interest 328,893 112,033 10,795 206,065 — — — Senior unsecured notes payable principal and interest 866,521 24,885 24,885 24,885 117,579 70,759 603,528 Development property obligations (1) 162,040 85,605 58,071 18,364 — — — Total $ 1,688,055 $ 300,075 $ 186,464 $ 264,784 $ 255,946 $ 71,928 $ 608,858 (1) Due to the long-term nature of certain construction and development contracts included in this line, the amounts reported in the table represent our estimate of the timing for the related obligations being paid .
Material Cash Commitments The following table shows our material cash commitments as of December 31, 2024 : Payments due by period Total 2025 2026 2027 2028 2029 Thereafter Mortgage principal and interest $ 170,655 $ 10,319 $ 15,470 $ 138,367 $ 1,169 $ 1,168 $ 4,162 Revolving credit facility principal and interest 329,480 16,038 16,038 16,038 281,366 — — Term loan facilities principal and interest 289,258 109,604 179,654 — — — — Senior unsecured notes payable principal and interest 1,152,644 38,005 38,005 130,699 83,879 165,652 696,404 Development property obligations (1) 53,756 44,574 9,182 — — — — Total $ 1,995,793 $ 218,540 $ 258,349 $ 285,104 $ 366,414 $ 166,820 $ 700,566 46 (1) Due to the long-term nature of certain construction and development contracts included in this line, the amounts reported in the table represent our estimate of the timing for the related obligations being paid .
(5) On January 23, 2024, we entered into the seventh amendment to the 2016 term loan facility agreement to extend the maturity date of the loan to January 30, 2025.
For more information on our interest rate swaps, see Note 7 to the Consolidated Financial Statements. On January 8, 2025, we entered into the ninth amendment to our senior unsecured term loan agreement, dated as of September 29, 2016, to extend the maturity date of our 2016 term loan facility from January 30, 2025 to January 28, 2028.
(7) Effective interest rates are as follows: VA – Golden 5.03%, USFS II – Albuquerque 3.92%, ICE – Charleston 3.93%, VA – Loma Linda 3.78%, CBP – Savannah 4.12%, USCIS – Kansas City 2.05%. On January 26, 2023, we used $15.7 million of available cash to extinguish the mortgage note obligation on DEA – Pleasanton.
The spread over SOFR is based on our consolidated leverage ratio, as defined in our 2018 term loan facility agreement. (8) Effective interest rates are as follows: USFS II – Albuquerque 3.92%, ICE – Charleston 3.93%, VA – Loma Linda 3.78%, CBP – Savannah 4.12%.
The $2.3 million increase in Corporate and general administrative costs was primarily due to an increase in employee costs.
The $2.7 million decrease in Corporate and general administrative costs was primarily due to a decrease in employee costs and non-cash compensation. The $1.5 million increase in Provision for credit losses is primarily due to a construction loan entered into on August 6, 2024 to lend up to $52.1 million to a developer.
Removed
Acquisitions 39 On October 3, 2023, we acquired a 95,273 leased square foot Class A facility located in Anaheim, California. The building was renovated in 2020.
Added
Immigration and Customs Enforcement (“ICE”) facility near Dallas, Texas that has lease expirations ranging from 2032 to 2040. On May 7, 2024, we acquired a 27,840 leased square foot Homeland Security Investigations (“HSI”) facility in Orlando, Florida with a 15-year lease that does not expire until March 2036.
Removed
The facility is 100% leased by tenant agencies of the state of California for beneficial use of the Employment Development Department and Department of Industrial Relations and has lease expirations ranging from 2033 to 2034. On October 3, 2023, we acquired a 91,185 leased square foot Department of Homeland Security (“DHS”) facility in Atlanta, Georgia.
Added
On May 9, 2024, we acquired a 49,420 leased square foot ICE facility in Orlando, Florida with a 20-year lease that does not expire until August 2040. On September 4, 2024, we acquired a 99,246 leased square foot Northrop Grumman facility near Dayton, Ohio with a 5-year lease through August 2029.
Removed
The building was renovated to suit in 2023. The facility is primarily leased to the GSA for beneficial use of the Customs and Border Protection and Transportation Security Administration agencies and has lease expirations ranging from 2031 to 2038. On October 19, 2023, we acquired a 35,005 leased square foot Judiciary of the U.S.
Added
On October 10, 2024, we acquired a 104,136 leased square foot Northrop Grumman facility in Aurora, Colorado with a 9-year lease through February 2032. On November 21, 2024, we acquired a 100,000 leased square foot Internal Revenue Service (“IRS”) facility in Ogden, Utah with a 5-year lease through January 2029.
Removed
Government (“JUD”) courthouse in Newport News, Virginia. The building is a build-to-suit courthouse completed in 2008. The facility is leased to the GSA for beneficial use of JUD with a lease expiration of July 2033.
Added
On November 27, 2024, we acquired a 295,253 square foot campus across three assets leased primarily to the Wake County Public School System with a 10-year lease through June 30, 2034.
Removed
Investment in unconsolidated real estate venture On October 13, 2021, we formed the JV with a global investor to fund the acquisition of a portfolio of ten properties anticipated to encompass 1,214,165 leased square feet (the “VA Portfolio”) that would be 100% leased to the Veterans Affairs (“VA”).
Added
Investment in unconsolidated real estate venture On August 29, 2024, the JV acquired a 193,100 square foot Veteran Affairs (“VA”) outpatient facility in Jacksonville, Florida with a 20-year lease that does not expire until October 2043. Development On April 4, 2024, we acquired land to develop a 50,777 square foot Federal courthouse in Flagstaff, Arizona.
Removed
We own a 53.0% interest in the JV, subject to preferred allocations as provided in the JV agreement. During the years ended 2022 and 2021, the JV closed on eight of the ten properties included in the Portfolio Acquisition. On September 22, 2023, the JV acquired a 69,276 square foot VA outpatient facility located in Corpus Christi, Texas.
Added
The courthouse will be primarily leased to the GSA for beneficial use of the Judiciary of the U.S.
Removed
The building is a build-to-suit property that was completed during 2022. The outpatient facility is leased to the VA and has a lease expiration of November 2042. The facility is the ninth of ten properties to be acquired in the previously announced the VA Portfolio.
Added
The $1.8 million decrease in Property operating expenses is primarily attributable to a decrease in tenant reimbursable projects and utility costs across the portfolio partially offset by an increase from the nine operating properties acquired since December 31, 2023 and a full period of operations from the three operating properties acquired during the year ended December 31, 2023.
Removed
The $3.0 million increase in Tenant reimbursements is primarily attributable to an increase in tenant project reimbursements.
Added
The increase is primarily attributable to the fixed rate, senior unsecured notes entered into during the three months ended June 30, 2024 and September 30, 2024 and higher weighted average interest rates across the Company's borrowings.
Removed
The $5.2 million increase in Property operating expenses is primarily attributable to an increase in tenant reimbursable projects.
Added
Gain on the sale of real estate For the year ended December 31, 2024, we recognized a Gain on the sale of a land parcel totaling $0.2 million.
Removed
Gain on the sale of operating properties In the fourth quarter of 2022, we recognized a Gain on the sale of operating properties totaling $13.6 million which was attributable to the disposition of a portfolio of ten properties. No dispositions were made during the year ended December 31, 2023.
Added
Equity Shelf Registration Statement on Form S-3 On February 28, 2024, we filed an automatic universal shelf registration statement on Form S-3 with the SEC, which was deemed automatically effective and provides for the registration of unspecified amounts of securities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed4 unchanged
Biggest changeAs of December 31, 2023, $1.2 billion, or 93.9% of our debt, excluding unamortized premiums and discounts, had fixed interest rates and $79.0 million, or 6.1%, had variable interest rates based on SOFR.
Biggest changeAs of December 31, 2024, $1.4 billion, or 84.5% of our debt, excluding unamortized premiums and discounts, had fixed interest rates or rates effectively fixed through interest rate swaps and $249.1 million, or 15.5%, had variable interest rates based on SOFR.
If market rates of interest on our variable rate debt fluctuate by 25 basis points, interest expense would increase or decrease, depending on rate movement, future earnings and cash flows, by $0.2 million annually. Item 8. Financial Statement s and Supplementary Data This item is included in a separate section at the end of this report beginning on page F-1.
If market rates of interest on our variable rate debt fluctuate by 25 basis points, interest expense would increase or decrease, depending on rate movement, future earnings and cash flows, by $0.6 million annually. Item 8. Financial Statement s and Supplementary Data This item is included in a separate section at the end of this report beginning on page F-1.

Other DEA 10-K year-over-year comparisons