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EX-99.1 - EX-99.1 - Easterly Government Properties, Inc.dea-ex991_7.htm
8-K - Q3 2018 EARNINGS 8-K - Easterly Government Properties, Inc.dea-8k_20181105.htm

 Exhibit 99.2

 

 

 


Disclaimers

 

 

Forward-looking Statement

We make statements in this Supplemental Information Package that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement in this Supplemental Information Package for purposes of complying with those safe harbor provisions.  These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made.  Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: risks associated with our dependence on the U.S. Government and its agencies for substantially all of our revenues; risks associated with ownership and development of real estate; the risk of decreased rental rates or increased vacancy rates; loss of key personnel; general volatility of the capital and credit markets and the market price of our common stock; the risk we may lose one or more major tenants; difficulties in completing and successfully integrating acquisitions; failure of acquisitions or development projects to occur at anticipated levels or to yield anticipated results; risks associated with actual or threatened terrorist attacks; intense competition in the real estate market that may limit our ability to attract or retain tenants or re-lease space; insufficient amounts of insurance or exposure to events that are either uninsured or underinsured; uncertainties and risks related to adverse weather conditions, natural disasters and climate change; exposure to liability relating to environmental and health and safety matters; limited ability to dispose of assets because of the relative illiquidity of real estate investments and the nature of our assets; exposure to litigation or other claims; risks associated with breaches of our data security; risks associated with our indebtedness; and other risks and uncertainties detailed in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on March 1, 2018 and the factors included under the heading “Risk Factors” in our other public filings.  In addition, our qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, or the Code, and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership.  We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Ratings

Ratings are not recommendations to buy, sell or hold the Company’s securities.

The following discussion related to the consolidated financial statements of the Company should be read in conjunction with the financial statements for the quarter ended September 30, 2018 that will be released on Form 10-Q to be filed on or about November 5, 2018.

 

 

2


Supplemental Definitions

 

 

This section contains definitions of certain non-GAAP financial measures and other terms that the Company uses in this Supplemental Information Package and, where applicable, the reasons why management believes these non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations and the other purposes for which management uses the measures. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. Additional detail can be found in the Company’s most recent quarterly report on Form 10-Q and the Company’s most recent annual report on Form 10-K, as well as other documents filed with or furnished to the SEC from time to time.

 

Annualized lease income is defined as the annualized contractual base rent for the last month in a specified period, plus the annualized straight-line rent adjustments for the last month in such period and the annualized expense reimbursements earned by us for the last month in such period.

Cash Available for Distribution (CAD) is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is calculated in accordance with the current NAREIT definition as FFO minus normalized recurring real estate-related expenditures and other non-cash items and nonrecurring expenditures. CAD is presented solely as a supplemental disclosure because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.

Cash fixed charge coverage ratio is calculated as EBITDA divided by the sum of principal amortization and interest expense, excluding amortization of premiums / discounts and deferred financing fees, for the most recent quarter.

Cash interest coverage ratio is calculated as EBITDA divided by interest expense, excluding amortization of premiums / discounts and deferred financing fees, for the most recent quarter.

EBITDA is calculated as the sum of net income (loss) before interest expense, income taxes, depreciation and amortization. EBITDA is not intended to represent cash flow for the period, is not presented as an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and is not indicative of operating income or cash provided by operating activities as determined under GAAP. EBITDA is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to service or incur debt. Because all companies do not calculate EBITDA the same way, the presentation of EBITDA may not be comparable to similarly titled measures of other companies.

Fully diluted basis assumes the exchange of all outstanding common units representing limited partnership interests in the Company’s operating partnership, or common units, the full vesting of all shares of restricted stock, and the exchange of all earned and vested LTIP units in the Company’s operating partnership for shares of common stock on a one-for-one basis, which is not the same as the meaning of “fully diluted” under GAAP.

Funds From Operations (FFO) is defined by NAREIT as net income (loss), calculated in accordance with GAAP, excluding gains or losses from sales of property and impairment losses on depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors.

Funds From Operations, as Adjusted (FFO, as Adjusted) adjusts FFO to present an alternative measure of our operating performance, which, when applicable, excludes the impact of acquisition costs, straight-line rent, above-/below-market leases, non-cash interest expense, non-cash compensation and other non-cash items including amortization of lease inducements. By excluding these income and expense items from FFO, as Adjusted, the Company believes it provides useful information as these items have no cash impact. In addition, by excluding acquisition related costs the Company believes FFO, as Adjusted provides useful information that is comparable across periods and more accurately reflects the operating performance of the Company’s properties.

3


Supplemental Definitions

 

 

Net Operating Income (NOI) is calculated as net income plus depreciation and amortization, acquisition costs, corporate general and administrative costs, interest expense and the amortization of lease inducements. Cash NOI excludes from NOI straight-line rent and amortization of above-/below market leases. NOI and Cash NOI presented by the Company may not be comparable to NOI and Cash NOI reported by other REITs that define NOI and Cash NOI differently. The Company believes that NOI and Cash NOI provide investors with useful measures of the operating performance of our properties. NOI and Cash NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions.

 

4


Table of Contents

 

 

 

Overview

 

 

 

 

 

Corporate Information and Analyst Coverage

 

6

 

 

 

Executive Summary

 

7

 

 

 

Corporate Financials

 

 

 

 

 

Balance Sheets

 

8

 

 

 

Income Statements

 

9

 

 

 

Net Operating Income

 

10

 

 

 

EBITDA, FFO and CAD

 

11

 

 

 

Debt

 

 

 

 

 

Debt Schedules

 

12

 

 

 

Debt Maturities

 

13

 

 

 

Properties

 

 

 

 

 

Operating Property Overview

 

14

 

 

 

Tenants

 

16

 

 

 

Lease Expirations

 

18

 

 

 

Summary of Re/Development Projects

 

19

 

 

 

 

 

 

5


Corporate Information and Analyst Coverage

 

 

 

Corporate Information

 

 

 

 

Corporate Headquarters

Stock Exchange Listing

Information Requests

Investor Relations

2101 L Street NW

New York Stock Exchange

Please contact ir@easterlyreit.com

Lindsay Winterhalter,

Suite 650

 

or 202-596-3947 to request an

VP, Investor Relations

Washington, DC 20037

Ticker

Investor Relations package

& Operations

202-595-9500

DEA

 

 

 

Executive Team

 

Board of Directors

 

William Trimble III, CEO

Darrell Crate, Chairman

William Binnie, Lead Independent Director

Michael Ibe

Michael Ibe, Vice-Chairman and EVP

Meghan Baivier, CFO & COO

Darrell Crate

James Mead

Alison Bernard, CAO

Ronald Kendall, EVP

Cynthia Fisher

William Trimble III

 

 

Emil Henry Jr.

 

 

Equity Research Coverage

 

 

 

 

 

Citigroup

Raymond James & Associates

RBC Capital Markets

Michael Bilerman / Emmanuel Korchman

Bill Crow / Paul Puryear

Michael Carroll

212-816-1383 / 212-816-1382

727-567-2594 / 727-567-2253

440-715-2649

 

 

 

Jefferies

SunTrust Robinson Humphrey

 

Jonathan Petersen

Michael R. Lewis

 

212-284-1705

212-319-5659

 

 

Any opinions, estimates, forecasts or predictions regarding Easterly Government Properties, Inc.’s performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts or predictions of Easterly Government Properties, Inc. or its management. Easterly Government Properties, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such opinions, estimates, forecasts or predictions.

 

 

 

 

6


Executive Summary

(In thousands, except share amounts)

 

 

 

Price of Common Shares

 

Three months ended

September 30, 2018

 

 

Earnings

 

Three months ended

September 30, 2018

 

 

Three months ended

September 30, 2017(4)

 

High closing price during period

 

$

20.45

 

 

Net income available to Easterly Government Properties, Inc.

 

$

2,155

 

 

$

942

 

Low closing price during period

 

$

18.80

 

 

Net income available to Easterly Government Properties, Inc.

 

 

 

 

 

 

 

 

End of period closing price

 

$

19.37

 

 

per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

 

$

0.02

 

Outstanding Classes of Stock and

 

 

 

 

 

Diluted

 

$

0.03

 

 

$

0.02

 

Partnership Units - Fully Diluted Basis

 

At September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

60,794,821

 

 

Net income

 

$

2,482

 

 

$

1,117

 

Unvested restricted shares

 

 

24,020

 

 

Net income, per share - fully diluted basis

 

$

0.04

 

 

$

0.02

 

Common partnership and vested LTIP units

 

 

8,679,294

 

 

 

 

 

 

 

 

 

 

 

Total - fully diluted basis

 

 

69,498,135

 

 

Funds From Operations ("FFO")

 

$

18,591

 

 

$

15,067

 

 

 

 

 

 

 

FFO, per share - fully diluted basis

 

$

0.27

 

 

$

0.32

 

Market Capitalization

 

At September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

Total equity market capitalization - fully diluted basis

 

$

1,346,179

 

 

Funds From Operations, as Adjusted

 

$

16,507

 

 

$

13,383

 

Consolidated debt(1)

 

 

669,971

 

 

FFO, as Adjusted, per share - fully diluted basis

 

$

0.24

 

 

$

0.28

 

Cash and cash equivalents

 

 

(6,922

)

 

 

 

 

 

 

 

 

 

 

Total enterprise value

 

$

2,009,228

 

 

Cash Available for Distribution

 

$

13,669

 

 

$

10,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios

 

At September 30, 2018

 

 

Liquidity

 

 

 

 

 

At September 30, 2018

 

Net debt to total enterprise value(2)

 

 

33.0

%

 

Cash and cash equivalents

 

 

 

 

 

$

6,922

 

Net debt to annualized quarterly EBITDA(2)

 

 

7.0

x

 

 

 

 

 

 

 

 

 

 

Pro forma net debt to annualized quarterly EBITDA(3)

 

 

6.0

x

 

Available under $450 million unsecured revolving credit facility(5)

 

 

 

 

 

$

417,000

 

Cash interest coverage ratio

 

 

5.1

x

 

 

 

 

 

 

 

Cash fixed charge coverage ratio

 

 

4.3

x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)Excludes unamortized premiums / discounts and deferred financing fees.

(2)Net debt is equal to consolidated debt less cash and cash equivalents.

(3)Pro-forma assuming a full quarter of operations from the nine properties acquired in the third quarter of 2018.

(4)In the fourth quarter of 2017, the Company revised the prior period depreciation and amortization expense amount. Refer to the Company's Annual Report on Form 10-K for the year ended

December 31, 2017, for a detailed discussion of the revision.  

(5)Revolving credit facility has an accordion feature that provides additional capacity, subject to the satisfaction of customary terms and conditions, of up to $250 million, for a total revolving credit facility size of not more than $700 million.

 

7


Balance Sheets

(Unaudited, in thousands, except share amounts)

 

 

 

 

 

September 30, 2018

 

 

December 31, 2017

 

Assets

 

 

 

 

 

 

 

 

Real estate properties, net

 

$

1,546,600

 

 

$

1,230,162

 

Cash and cash equivalents

 

 

6,922

 

 

 

12,682

 

Restricted cash

 

 

4,388

 

 

 

3,519

 

Deposits on acquisitions

 

 

7,225

 

 

 

750

 

Rents receivable

 

 

17,394

 

 

 

12,751

 

Accounts receivable

 

 

9,186

 

 

 

9,347

 

Deferred financing, net

 

 

2,636

 

 

 

945

 

Intangible assets, net

 

 

167,044

 

 

 

143,063

 

Interest rate swaps

 

 

6,958

 

 

 

4,031

 

Prepaid expenses and other assets

 

 

10,158

 

 

 

8,088

 

Total assets

 

$

1,778,511

 

 

$

1,425,338

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Revolving credit facility

 

 

33,000

 

 

 

99,750

 

Term loan facilities, net

 

 

248,413

 

 

 

99,202

 

Notes payable, net

 

 

173,752

 

 

 

173,692

 

Mortgage notes payable, net

 

 

210,388

 

 

 

203,250

 

Intangible liabilities, net

 

 

33,038

 

 

 

38,569

 

Accounts payable and accrued liabilities

 

 

38,618

 

 

 

19,786

 

Total liabilities

 

 

737,209

 

 

 

634,249

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock, par value $0.01, 200,000,000 shares authorized,

 

 

 

 

 

 

 

 

60,818,841 and 44,787,040 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively.

 

 

608

 

 

 

448

 

Additional paid-in capital

 

 

1,015,603

 

 

 

740,546

 

Retained earnings

 

 

12,241

 

 

 

7,127

 

Cumulative dividends

 

 

(123,282

)

 

 

(83,718

)

Accumulated other comprehensive income

 

 

6,089

 

 

 

3,403

 

Total stockholders' equity

 

 

911,259

 

 

 

667,806

 

Non-controlling interest in Operating Partnership

 

 

130,043

 

 

 

123,283

 

Total equity

 

 

1,041,302

 

 

 

791,089

 

Total liabilities and equity

 

$

1,778,511

 

 

$

1,425,338

 

 

 

 

 

8


Income Statements

(Unaudited, in thousands, except share and per share amounts)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

2018

 

 

September 30,

2017(1)

 

 

September 30,

2018

 

 

September 30,

2017(1)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

35,219

 

 

$

30,079

 

 

$

99,967

 

 

$

83,600

 

Tenant reimbursements

 

 

4,086

 

 

 

3,554

 

 

 

11,658

 

 

 

10,156

 

Other income

 

 

132

 

 

 

225

 

 

 

758

 

 

 

592

 

Total revenues

 

 

39,437

 

 

 

33,858

 

 

 

112,383

 

 

 

94,348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

7,780

 

 

 

6,718

 

 

 

21,563

 

 

 

18,904

 

Real estate taxes

 

 

4,228

 

 

 

3,452

 

 

 

11,773

 

 

 

9,166

 

Depreciation and amortization

 

 

16,109

 

 

 

13,950

 

 

 

45,331

 

 

 

40,091

 

Acquisition costs

 

 

300

 

 

 

206

 

 

 

1,023

 

 

 

1,194

 

Corporate general and administrative

 

 

3,614

 

 

 

2,920

 

 

 

10,696

 

 

 

9,506

 

Total expenses

 

 

32,031

 

 

 

27,246

 

 

 

90,386

 

 

 

78,861

 

Operating income

 

 

7,406

 

 

 

6,612

 

 

 

21,997

 

 

 

15,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(4,924

)

 

 

(5,495

)

 

 

(15,981

)

 

 

(11,626

)

Net income

 

 

2,482

 

 

 

1,117

 

 

 

6,016

 

 

 

3,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest in Operating Partnership

 

 

(327

)

 

 

(175

)

 

 

(902

)

 

 

(700

)

Net income available to Easterly Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Properties, Inc.

 

$

2,155

 

 

$

942

 

 

$

5,114

 

 

$

3,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Easterly Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Properties, Inc. per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

 

$

0.02

 

 

$

0.08

 

 

$

0.08

 

Diluted

 

$

0.03

 

 

$

0.02

 

 

$

0.08

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

60,446,199

 

 

 

39,962,471

 

 

 

51,051,388

 

 

 

38,098,805

 

Diluted

 

 

61,978,998

 

 

 

41,903,977

 

 

 

52,600,858

 

 

 

40,012,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income, per share - fully diluted basis

 

$

0.04

 

 

$

0.02

 

 

$

0.10

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

fully diluted basis

 

 

69,498,135

 

 

 

47,683,701

 

 

 

60,088,521

 

 

 

46,525,052

 

 

(1)In the fourth quarter of 2017, the Company revised the prior period depreciation and amortization expense amount. Refer to the Company's Annual Report on Form 10-K for the year ended

December 31, 2017, for a detailed discussion of the revision.  

 

 

9


Net Operating Income

(Unaudited, in thousands)

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

2018

 

 

September 30,
2017(1)

 

 

September 30,

2018

 

 

September 30,
2017(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,482

 

 

$

1,117

 

 

$

6,016

 

 

$

3,861

 

Depreciation and amortization

 

 

16,109

 

 

 

13,950

 

 

 

45,331

 

 

 

40,091

 

Acquisition costs

 

 

300

 

 

 

206

 

 

 

1,023

 

 

 

1,194

 

Corporate general and administrative

 

 

3,614

 

 

 

2,920

 

 

 

10,696

 

 

 

9,506

 

Interest expense

 

 

4,924

 

 

 

5,495

 

 

 

15,981

 

 

 

11,626

 

Amortization of lease inducements

 

 

(28

)

 

 

-

 

 

 

(3

)

 

 

-

 

Net Operating Income

 

 

27,401

 

 

 

23,688

 

 

 

79,044

 

 

 

66,278

 

Adjustments to Net Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line rent

 

 

(1,174

)

 

 

(881

)

 

 

(4,238

)

 

 

(1,376

)

Above-/below-market leases

 

 

(2,219

)

 

 

(2,065

)

 

 

(6,737

)

 

 

(6,283

)

Cash Net Operating Income

 

$

24,008

 

 

$

20,742

 

 

$

68,069

 

 

$

58,619

 

 

(1)In the fourth quarter of 2017, the Company revised the prior period depreciation and amortization expense amount. Refer to the Company's Annual Report on Form 10-K for the year ended

December 31, 2017, for a detailed discussion of the revision.  

 

10


EBITDA, FFO and CAD

(Unaudited, in thousands, except share and per share amounts)

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

2018

 

 

September 30,

2017(1)

 

 

September 30,

2018

 

 

September 30,

2017(1)

 

Net income

 

$

2,482

 

 

$

1,117

 

 

$

6,016

 

 

$

3,861

 

Depreciation and amortization

 

 

16,109

 

 

 

13,950

 

 

 

45,331

 

 

 

40,091

 

Interest expense

 

 

4,924

 

 

 

5,495

 

 

 

15,981

 

 

 

11,626

 

EBITDA

 

$

23,515

 

 

$

20,562

 

 

$

67,328

 

 

$

55,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma adjustments(2)

 

 

4,069

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma EBITDA

 

$

27,584

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,482

 

 

$

1,117

 

 

$

6,016

 

 

$

3,861

 

Depreciation and amortization

 

 

16,109

 

 

 

13,950

 

 

 

45,331

 

 

 

40,091

 

Funds From Operations (FFO)

 

$

18,591

 

 

$

15,067

 

 

$

51,347

 

 

$

43,952

 

Adjustments to FFO:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

 

300

 

 

 

206

 

 

 

1,023

 

 

 

1,194

 

Straight-line rent and amortization of lease inducements

 

 

(1,209

)

 

 

(883

)

 

 

(4,256

)

 

 

(1,376

)

Above-/below-market leases

 

 

(2,219

)

 

 

(2,065

)

 

 

(6,737

)

 

 

(6,283

)

Non-cash interest expense

 

 

313

 

 

 

310

 

 

 

876

 

 

 

784

 

Non-cash compensation

 

 

731

 

 

 

748

 

 

 

2,307

 

 

 

2,215

 

Funds From Operations, as Adjusted

 

$

16,507

 

 

$

13,383

 

 

$

44,560

 

 

$

40,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO, per share - fully diluted basis

 

$

0.27

 

 

$

0.32

 

 

$

0.85

 

 

$

0.94

 

FFO, as Adjusted, per share -  fully diluted basis

 

$

0.24

 

 

$

0.28

 

 

$

0.74

 

 

$

0.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations, as Adjusted

 

$

16,507

 

 

$

13,383

 

 

$

44,560

 

 

$

40,486

 

Acquisition costs

 

 

(300

)

 

 

(206

)

 

 

(1,023

)

 

 

(1,194

)

Principal amortization

 

 

(803

)

 

 

(748

)

 

 

(2,363

)

 

 

(2,221

)

Maintenance capital expenditures

 

 

(830

)

 

 

(1,726

)

 

 

(2,305

)

 

 

(2,677

)

Contractual tenant improvements

 

 

(680

)

 

 

(183

)

 

 

(1,231

)

 

 

(335

)

Leasing related expenditures

 

 

(225

)

 

 

(66

)

 

 

(1,140

)

 

 

(347

)

Cash Available for Distribution (CAD)

 

$

13,669

 

 

$

10,454

 

 

$

36,498

 

 

$

33,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

fully diluted basis

 

 

69,498,135

 

 

 

47,683,701

 

 

 

60,088,521

 

 

 

46,525,052

 

 

(1)In the fourth quarter of 2017, the Company revised the prior period depreciation and amortization expense amount. Refer to the Company's Annual Report on Form 10-K for the year ended

December 31, 2017, for a detailed discussion of the revision.  

(2)Pro-forma assuming a full quarter of operations from the nine properties acquired in the third quarter of 2018.

 

 

 

11


Debt Schedules

(Unaudited, in thousands)

 

 

Debt Instrument

Maturity Date

 

Stated Rate(1)

 

September 30, 2018

Balance(2)

 

September 30, 2018

Percent of

Total Indebtedness

 

Unsecured debt

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured revolving credit facility(3)

18-Jun-22(4)

 

LIBOR + 125bps

 

$

33,000

 

4.9%

 

2018 Unsecured term loan facility

19-Jun-23

 

LIBOR + 120bps

 

 

150,000

 

22.4%

 

2016 Unsecured term loan facility

29-Sep-23

 

3.12%(5)

 

 

100,000

 

14.9%

 

Notes payable - series A

25-May-27

 

4.05%

 

 

95,000

 

14.2%

 

Notes payable - series B

25-May-29

 

4.15%

 

 

50,000

 

7.5%

 

Notes payable - series C

25-May-32

 

4.30%

 

 

30,000

 

4.5%

 

 

6.8 years

 

3.60%

 

$

458,000

 

68.4%

 

Total unsecured debt

(wtd-avg maturity)

 

(wtd-avg rate)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured mortgage debt

 

 

 

 

 

 

 

 

 

 

 

 

VA - Loma Linda

6-Jul-27

 

3.59%

 

$

127,500

 

19.0%

 

ICE - Charleston

15-Jan-27

 

4.21%

 

 

18,934

 

2.9%

 

USFS II - Albuquerque

14-Jul-26

 

4.46%

 

 

16,660

 

2.5%

 

DEA - Pleasanton

18-Oct-23

 

LIBOR + 150bps

 

 

15,700

 

2.3%

 

CBP - Savannah

10-Jul-33

 

3.40%

 

 

13,676

 

2.0%

 

MEPCOM - Jacksonville

14-Oct-25

 

4.41%

 

 

10,121

 

1.5%

 

VA - Golden

1-Apr-24

 

5.00%

 

 

9,380

 

1.4%

 

 

8.5 years

 

3.80%

 

$

211,971

 

31.6%

 

Total secured mortgage debt

(wtd-avg maturity)

 

(wtd-avg rate)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Statistics

September 30, 2018

 

 

 

 

 

 

 

 

 

 

Variable rate debt - unhedged

$

198,700

 

 

 

 

 

 

 

 

 

 

Fixed rate debt

 

471,271

 

 

 

 

 

 

 

 

 

 

Total debt(2)

$

669,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Variable rate debt - unhedged

 

29.7

%

 

 

 

 

 

 

 

 

 

% Fixed rate debt

 

70.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average maturity

7.0 years

 

 

 

 

 

 

 

 

 

 

Weighted average interest rate

 

3.7

%

 

 

 

 

 

 

 

 

 

 

(1)Average stated rates represent the weighted average interest rate at September 30, 2018.

(2)Excludes unamortized premiums / discounts and deferred financing fees.

(3)Revolving credit facility has available capacity of $417.0 million as of September 30, 2018.

(4)Revolving credit facility has two six-month as-of-right extension options, subject to certain conditions and the payment of an extension fee.

(5)The stated rate is calculated based on two interest rate swaps with an aggregate notional value of $100.0 million, which effectively fix the interest rate at 3.12% annually based on the Company’s current leverage ratio.

12


Debt Maturities

(Unaudited, in thousands)

 

 

 

 

 

Secured Debt

 

 

Unsecured Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

Scheduled

Amortization

 

 

Scheduled

Maturities

 

 

Scheduled

Maturities

 

 

Total

 

 

Percentage of

Debt Maturing

 

 

Weighted Average

Interest Rate of

Scheduled Maturities

 

2018

$

 

826

 

$

-

 

$

-

 

$

 

826

 

 

 

0.1

%

 

-

 

2019

 

 

3,391

 

 

-

 

 

-

 

 

 

3,391

 

 

 

0.5

%

 

-

 

2020

 

 

3,564

 

 

-

 

 

-

 

 

 

3,564

 

 

 

0.5

%

 

-

 

2021

 

 

4,233

 

 

-

 

 

-

 

 

 

4,233

 

 

 

0.6

%

 

-

 

2022

 

 

5,297

 

 

-

 

 

 

33,000

 

 

 

38,297

 

 

 

5.7

%

 

 

3.45

%

2023

 

 

5,585

 

 

 

15,700

 

 

 

250,000

 

 

 

271,285

 

 

 

40.7

%

 

 

3.27

%

2024

 

 

5,730

 

 

 

8,395

 

 

-

 

 

 

14,125

 

 

 

2.1

%

 

 

5.00

%

2025

 

 

5,633

 

 

 

1,917

 

 

-

 

 

 

7,550

 

 

 

1.1

%

 

 

4.41

%

2026

 

 

3,686

 

 

 

6,368

 

 

-

 

 

 

10,054

 

 

 

1.5

%

 

 

4.46

%

2027

 

 

1,093

 

 

 

134,640

 

 

 

95,000

 

 

 

230,733

 

 

 

34.4

%

 

 

3.82

%

2028

 

 

983

 

 

-

 

 

-

 

 

 

983

 

 

 

0.1

%

 

-

 

2029

 

 

1,016

 

 

-

 

 

 

50,000

 

 

 

51,016

 

 

 

7.6

%

 

 

4.15

%

2030

 

 

1,049

 

 

-

 

 

-

 

 

 

1,049

 

 

 

0.2

%

 

-

 

2031

 

 

1,081

 

 

-

 

 

-

 

 

 

1,081

 

 

 

0.2

%

 

-

 

2032

 

 

1,116

 

 

-

 

 

 

30,000

 

 

 

31,116

 

 

 

4.6

%

 

 

4.30

%

2033

 

 

668

 

 

-

 

 

-

 

 

 

668

 

 

 

0.1

%

 

-

 

Total

$

 

44,951

 

$

 

167,020

 

$

 

458,000

 

$

 

669,971

 

 

 

100.0

%

 

 

 

 

 

 

13


Operating Property Overview

(As of September 30, 2018, unaudited)

 

 

 

Property Name

 

Location

 

Property Type

 

Tenant

Lease

Expiration

Year

 

Year Built /

Renovated

 

Rentable

Square

Feet

 

 

Annualized

Lease

Income

 

 

Percentage

of Total

Annualized

Lease

Income

 

 

Annualized

Lease

Income per

Leased

Square Foot

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Leased Properties

 

VA - Loma Linda

 

Loma Linda, CA

 

Outpatient Clinic

 

2036

 

2016

 

 

327,614

 

 

$

16,053,017

 

 

 

9.6

%

 

$

49.00

 

Various GSA - Buffalo

 

Buffalo, NY

 

Office

 

2018 - 2025

 

2004

 

 

267,766

 

 

 

8,461,644

 

 

 

5.0

%

 

 

31.60

 

IRS - Fresno

 

Fresno, CA

 

Office

 

2033

 

2003

 

 

180,481

 

 

 

7,499,545

 

 

 

4.4

%

 

 

41.55

 

FBI - Salt Lake

 

Salt Lake City, UT

 

Office

 

2032

 

2012

 

 

169,542

 

 

 

6,803,228

 

 

 

4.1

%

 

 

40.13

 

PTO - Arlington

 

Arlington, VA

 

Office

 

2019 / 2020

 

2009

 

 

189,871

 

 

 

6,617,464

 

 

 

4.0

%

 

 

34.85

 

Various GSA - Chicago

 

Des Plaines, IL

 

Office

 

2020 / 2022

 

1971 / 1999

 

 

232,759

 

 

 

6,395,004

 

 

 

3.8

%

 

 

28.52

 

VA - San Jose

 

San Jose, CA

 

Outpatient Clinic

 

2038

 

2018

 

 

90,085

 

 

 

5,781,091

 

 

 

3.5

%

 

 

64.17

 

FBI - San Antonio

 

San Antonio, TX

 

Office

 

2021

 

2007

 

 

148,584

 

 

 

5,129,841

 

 

 

3.1

%

 

 

34.52

 

TREAS - Parkersburg

 

Parkersburg, WV

 

Office

 

2021

 

2004 / 2006

 

 

182,500

 

 

 

4,619,514

 

 

 

2.8

%

 

 

25.31

 

FBI - Omaha

 

Omaha, NE

 

Office

 

2024

 

2009

 

 

112,196

 

 

 

4,449,165

 

 

 

2.7

%

 

 

39.66

 

EPA - Kansas City

 

Kansas City, KS

 

Laboratory

 

2023

 

2003

 

 

71,979

 

 

 

4,183,838

 

 

 

2.5

%

 

 

58.13

 

VA - South Bend

 

Mishakawa, IN

 

Outpatient Clinic

 

2032

 

2017

 

 

86,363

 

 

 

3,985,309

 

 

 

2.4

%

 

 

46.15

 

ICE - Charleston

 

North Charleston, SC

 

Office

 

2021 / 2027

 

1994 / 2012

 

 

86,733

 

 

 

3,788,417

 

 

 

2.3

%

 

 

43.68

 

DOT - Lakewood

 

Lakewood, CO

 

Office

 

2024

 

2004

 

 

122,225

 

 

 

3,408,756

 

 

 

2.0

%

 

 

27.89

 

FBI - Pittsburgh

 

Pittsburgh, PA

 

Office

 

2027

 

2001

 

 

100,054

 

 

 

3,386,688

 

 

 

2.0

%

 

 

33.85

 

USCIS - Lincoln

 

Lincoln, NE

 

Office

 

2020

 

2005

 

 

137,671

 

 

 

3,310,841

 

 

 

2.0

%

 

 

24.05

 

FBI - Birmingham

 

Birmingham, AL

 

Office

 

2020

 

2005

 

 

96,278

 

 

 

3,148,764

 

 

 

1.9

%

 

 

32.70

 

AOC - El Centro

 

El Centro, CA

 

Courthouse/Office

 

2019

 

2004

 

 

46,813

 

 

 

3,097,404

 

 

 

1.9

%

 

 

66.17

 

OSHA - Sandy

 

Sandy, UT

 

Laboratory

 

2024

 

2003

 

 

75,000

 

 

 

2,982,868

 

 

 

1.8

%

 

 

39.77

 

USFS II - Albuquerque

 

Albuquerque, NM

 

Office

 

2026

 

2011

 

 

98,720

 

 

 

2,870,004

 

 

 

1.7

%

 

 

29.07

 

ICE - Albuquerque

 

Albuquerque, NM

 

Office

 

2027

 

2011

 

 

71,100

 

 

 

2,804,426

 

 

 

1.7

%

 

 

39.44

 

DEA - Pleasanton

 

Pleasanton, CA

 

Laboratory

 

2035

 

2015

 

 

42,480

 

 

 

2,785,682

 

 

 

1.7

%

 

 

65.58

 

DEA - Vista

 

Vista, CA

 

Laboratory

 

2020

 

2002

 

 

54,119

 

 

 

2,777,302

 

 

 

1.7

%

 

 

51.32

 

USFS I - Albuquerque

 

Albuquerque, NM

 

Office

 

2021

 

2006

 

 

92,455

 

 

 

2,749,070

 

 

 

1.6

%

 

 

29.73

 

FBI - Richmond

 

Richmond, VA

 

Office

 

2021

 

2001

 

 

96,607

 

 

 

2,740,032

 

 

 

1.6

%

 

 

28.36

 

AOC - Del Rio

 

Del Rio, TX

 

Courthouse/Office

 

2024

 

1992 / 2004

 

 

89,880

 

 

 

2,695,482

 

 

 

1.6

%

 

 

29.99

 

DEA - Dallas Lab

 

Dallas, TX

 

Laboratory

 

2021

 

2001

 

 

49,723

 

 

 

2,424,579

 

 

 

1.4

%

 

 

48.76

 

SSA - Charleston

 

Charleston, WV

 

Office

 

2019

 

1959 / 2000

 

 

110,000

 

 

 

2,273,040

 

 

 

1.4

%

 

 

20.66

 

FBI - Little Rock

 

Little Rock, AR

 

Office

 

2021

 

2001

 

 

101,977

 

 

 

2,206,381

 

 

 

1.3

%

 

 

21.64

 

MEPCOM - Jacksonville

 

Jacksonville, FL

 

Office

 

2025

 

2010

 

 

30,000

 

 

 

2,183,945

 

 

 

1.3

%

 

 

72.80

 

CBP - Savannah

 

Savannah, GA

 

Laboratory

 

2033

 

2013

 

 

35,000

 

 

 

2,137,168

 

 

 

1.3

%

 

 

61.06

 

 

14


Operating Property Overview (Cont.)

(As of September 30, 2018, unaudited)

 

 

Property Name

 

Location

 

Property Type

 

Tenant

Lease

Expiration

Year

 

Year Built /

Renovated

 

Rentable

Square

Feet

 

 

Annualized

Lease

Income

 

 

Percentage

of Total

Annualized

Lease

Income

 

 

Annualized

Lease

Income per

Leased

Square Foot

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Leased Properties (Cont.)

 

FBI - Albany

 

Albany, NY

 

Office

 

2019

 

1998

 

 

98,184

 

 

 

2,092,524

 

 

 

1.3

%

 

 

21.31

 

DEA - Santa Ana

 

Santa Ana, CA

 

Office

 

2024

 

2004

 

 

39,905

 

 

 

2,090,935

 

 

 

1.2

%

 

 

52.40

 

CBP - Chula Vista

 

Chula Vista, CA

 

Office

 

2028

 

1998

 

 

59,322

 

 

 

2,080,111

 

 

 

1.2

%

 

 

35.06

 

DOE - Lakewood

 

Lakewood, CO

 

Office

 

2029

 

1999

 

 

115,650

 

 

 

2,068,524

 

 

 

1.2

%

 

 

17.89

 

NPS - Omaha

 

Omaha, NE

 

Office

 

2024

 

2004

 

 

62,772

 

 

 

1,772,276

 

 

 

1.1

%

 

 

28.23

 

DEA - Dallas

 

Dallas, TX

 

Office

 

2021

 

2001

 

 

71,827

 

 

 

1,769,575

 

 

 

1.1

%

 

 

24.64

 

ICE - Otay

 

San Diego, CA

 

Office

 

2022 / 2026

 

2001

 

 

52,881

 

 

 

1,746,593

 

 

 

1.0

%

 

 

35.32

 

VA - Golden

 

Golden, CO

 

Office/Warehouse

 

2026

 

1996 / 2011

 

 

56,753

 

 

 

1,686,982

 

 

 

1.0

%

 

 

29.72

 

CBP - Sunburst

 

Sunburst, MT

 

Office

 

2028

 

2008

 

 

33,000

 

 

 

1,597,758

 

 

 

1.0

%

 

 

48.42

 

USCG - Martinsburg

 

Martinsburg, WV

 

Office

 

2027

 

2007

 

 

59,547

 

 

 

1,585,903

 

 

 

0.9

%

 

 

26.63

 

DEA - Otay

 

San Diego, CA

 

Office

 

2018

 

1997

 

 

32,560

 

 

 

1,492,827

 

 

 

0.9

%

 

 

45.85

 

AOC - Aberdeen

 

Aberdeen, MS

 

Courthouse/Office

 

2025

 

2005

 

 

46,979

 

 

 

1,465,665

 

 

 

0.9

%

 

 

31.20

 

DEA - Birmingham

 

Birmingham, AL

 

Office

 

2020

 

2005

 

 

35,616

 

 

 

1,460,619

 

 

 

0.9

%

 

 

41.01

 

DEA - North Highlands

 

Sacramento, CA

 

Office

 

2033

 

2002

 

 

37,975

 

 

 

1,435,217

 

 

 

0.9

%

 

 

37.79

 

GSA - Clarksburg

 

Clarksburg, WV

 

Office

 

2024

 

1999

 

 

63,750

 

 

 

1,381,968

 

 

 

0.8

%

 

 

21.68

 

DEA - Albany

 

Albany, NY

 

Office

 

2025

 

2004

 

 

31,976

 

 

 

1,349,054

 

 

 

0.8

%

 

 

42.19

 

DEA - Riverside

 

Riverside, CA

 

Office

 

2032

 

1997

 

 

34,354

 

 

 

1,246,594

 

 

 

0.7

%

 

 

36.29

 

SSA - Dallas

 

Dallas, TX

 

Office

 

2020

 

2005

 

 

27,200

 

 

 

1,087,236

 

 

 

0.6

%

 

 

39.97

 

ICE - Pittsburgh

 

Pittsburgh, PA

 

Office

 

2022 / 2023

 

2004

 

 

33,425

 

 

 

839,772

 

 

 

0.5

%

 

 

33.26

 

AOC - South Bend

 

South Bend, IN

 

Courthouse/Office

 

2027

 

1996 / 2011

 

 

30,119

 

 

 

820,347

 

 

 

0.5

%

 

 

27.24

 

DEA - San Diego

 

San Diego, CA

 

Warehouse

 

2032

 

1999

 

 

16,100

 

 

 

556,358

 

 

 

0.3

%

 

 

34.56

 

SSA - Mission Viejo

 

Mission Viejo, CA

 

Office

 

2020

 

2005

 

 

11,590

 

 

 

529,616

 

 

 

0.3

%

 

 

45.70

 

SSA - San Diego

 

San Diego, CA

 

Office

 

2032

 

2003

 

 

10,856

 

 

 

327,423

 

 

 

0.2

%

 

 

32.55

 

Subtotal

 

 

 

 

 

 

 

 

 

 

4,658,916

 

 

$

166,233,386

 

 

 

99.4

%

 

$

35.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Privately Leased Properties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5998 Osceola Court - United Technologies

 

Midland, GA

 

Warehouse/Manufacturing

 

2023

 

2014

 

 

105,641

 

 

 

544,330

 

 

 

0.3

%

 

 

5.15

 

501 East Hunter Street - Lummus Corporation

 

Lubbock, TX

 

Warehouse/Distribution

 

2028

 

2013

 

 

70,078

 

 

 

520,918

 

 

 

0.3

%

 

 

7.43

 

Subtotal

 

 

 

 

 

 

 

 

 

 

175,719

 

 

$

1,065,248

 

 

 

0.6

%

 

$

6.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total / Weighted Average

 

 

 

 

 

 

 

 

 

 

4,834,635

 

 

$

167,298,634

 

 

 

100.0

%

 

$

34.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15


Tenants

(As of September 30, 2018, unaudited)

 

 

 

Tenant

 

Weighted

Average

Remaining

Lease Term(1)

 

 

Leased

Square Feet

 

 

Percentage

of Leased

Square Feet

 

 

Annualized

Lease Income

 

 

Percentage

of Total

Annualized

Lease

Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Department of Veteran Affairs ("VA")

 

 

14.1

 

 

 

665,998

 

 

 

13.8

%

 

$

30,860,603

 

 

 

18.4

%

Federal Bureau of Investigation ("FBI")

 

 

5.5

 

 

 

926,535

 

 

 

19.2

%

 

 

30,024,111

 

 

 

18.0

%

Drug Enforcement Administration ("DEA")

 

 

6.7

 

 

 

446,843

 

 

 

9.3

%

 

 

19,299,197

 

 

 

11.5

%

Internal Revenue Service ("IRS")

 

 

11.9

 

 

 

241,815

 

 

 

5.0

%

 

 

9,386,677

 

 

 

5.6

%

Administrative Office of the U.S. Courts ("AOC")

 

 

5.1

 

 

 

213,791

 

 

 

4.4

%

 

 

8,078,898

 

 

 

4.8

%

Immigration and Customs Enforcement ("ICE")

 

 

6.7

 

 

 

193,661

 

 

 

4.0

%

 

 

7,955,291

 

 

 

4.8

%

Patent and Trademark Office ("PTO")

 

 

0.6

 

 

 

189,871

 

 

 

3.9

%

 

 

6,617,464

 

 

 

4.0

%

Federal Aviation Administration ("FAA")

 

 

2.1

 

 

 

209,970

 

 

 

4.4

%

 

 

6,015,804

 

 

 

3.6

%

Customs and Border Protection ("CBP")

 

 

11.1

 

 

 

127,322

 

 

 

2.6

%

 

 

5,815,037

 

 

 

3.5

%

U.S. Forest Service ("USFS")

 

 

5.3

 

 

 

191,175

 

 

 

4.0

%

 

 

5,619,074

 

 

 

3.4

%

Social Security Administration ("SSA")

 

 

2.9

 

 

 

200,866

 

 

 

4.2

%

 

 

5,128,175

 

 

 

3.1

%

Bureau of the Fiscal Service ("BFS")

 

 

2.5

 

 

 

182,500

 

 

 

3.8

%

 

 

4,619,514

 

 

 

2.8

%

Environmental Protection Agency ("EPA")

 

 

4.5

 

 

 

71,979

 

 

 

1.5

%

 

 

4,183,838

 

 

 

2.5

%

Department of Transportation ("DOT")

 

 

5.6

 

 

 

129,659

 

 

 

2.7

%

 

 

3,656,223

 

 

 

2.2

%

U.S. Citizenship and Immigration Services ("USCIS")

 

 

1.9

 

 

 

137,671

 

 

 

2.9

%

 

 

3,310,841

 

 

 

2.0

%

Occupational Safety and Health Administration ("OSHA")

 

 

5.3

 

 

 

75,000

 

 

 

1.6

%

 

 

2,982,868

 

 

 

1.8

%

Military Entrance Processing Command ("MEPCOM")

 

 

7.0

 

 

 

30,000

 

 

 

0.6

%

 

 

2,183,945

 

 

 

1.3

%

Department of Energy ("DOE")

 

 

11.1

 

 

 

115,650

 

 

 

2.4

%

 

 

2,068,524

 

 

 

1.2

%

National Park Service ("NPS")

 

 

5.7

 

 

 

62,772

 

 

 

1.3

%

 

 

1,772,276

 

 

 

1.1

%

U.S. Coast Guard ("USCG")

 

 

9.2

 

 

 

59,547

 

 

 

1.2

%

 

 

1,585,903

 

 

 

0.9

%

Small Business Administration ("SBA")

 

 

3.5

 

 

 

37,253

 

 

 

0.8

%

 

 

1,184,556

 

 

 

0.7

%

National Labor Relations Board ("NLRB")

 

 

7.0

 

 

 

36,640

 

 

 

0.8

%

 

 

1,011,168

 

 

 

0.6

%

General Services Administration - Other

 

 

0.1

 

 

 

17,235

 

 

 

0.4

%

 

 

743,880

 

 

 

0.4

%

U.S. Department of Agriculture ("USDA")

 

 

2.7

 

 

 

12,774

 

 

 

0.3

%

 

 

389,667

 

 

 

0.2

%

Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”)

 

 

2.2

 

 

 

8,680

 

 

 

0.2

%

 

 

355,968

 

 

 

0.2

%

U.S. Attorney Office ("USAO")

 

 

5.3

 

 

 

6,408

 

 

 

0.1

%

 

 

138,900

 

 

 

0.1

%

U.S. Marshals Service ("USMS")

 

 

8.3

 

 

 

1,054

 

 

 

0.0

%

 

 

47,400

 

 

 

0.0

%

Department of Labor ("DOL")

 

 

5.3

 

 

 

1,004

 

 

 

0.0

%

 

 

21,756

 

 

 

0.0

%

U.S. Probation Office ("USPO")

 

 

5.3

 

 

 

452

 

 

 

0.0

%

 

 

9,804

 

 

 

0.0

%

Subtotal

 

 

6.8

 

 

 

4,594,125

 

 

 

95.4

%

 

$

165,067,362

 

 

 

98.7

%

 

 

 

16


Tenants (Cont.)

(As of September 30, 2018, unaudited)

 

 

 

Tenant

 

Weighted

Average

Remaining

Lease Term(1)

 

 

Leased

Square Feet

 

 

Percentage

of Leased

Square Feet

 

 

Annualized

Lease Income

 

 

Percentage

of Total

Annualized

Lease

Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private Tenants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

We Are Sharing Hope SC

 

 

3.0

 

 

 

21,609

 

 

 

0.4

%

 

$

603,764

 

 

 

0.4

%

Other Private Tenants

 

 

3.3

 

 

 

22,215

 

 

 

0.5

%

 

 

562,260

 

 

 

0.3

%

United Technologies (Pratt & Whitney)

 

 

5.3

 

 

 

105,641

 

 

 

2.2

%

 

 

544,330

 

 

 

0.3

%

Lummus Corporation

 

 

9.8

 

 

 

70,078

 

 

 

1.5

%

 

 

520,918

 

 

 

0.3

%

Subtotal

 

 

6.3

 

 

 

219,543

 

 

 

4.6

%

 

$

2,231,272

 

 

 

1.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total / Weighted Average

 

 

6.8

 

 

 

4,813,668

 

 

 

100.0

%

 

$

167,298,634

 

 

 

100.0

%

 

(1)Weighted based on leased square feet.

 

17


Lease Expirations

(As of September 30, 2018, unaudited)

 

 

 

Year of Lease Expiration

 

Number of

Leases

Expiring

 

 

Square

Footage

Expiring

 

 

Percentage of

Total Square

Footage

Expiring

 

 

Annualized

Lease Income

Expiring

 

 

Percentage of

Total Annualized

Lease Income

Expiring

 

 

Annualized

Lease Income

per Leased

Square Foot Expiring

 

2018

 

3

 

 

 

49,795

 

 

 

1.0

%

 

$

2,236,707

 

 

 

1.3

%

 

$

44.92

 

2019

 

5

 

 

 

435,518

 

 

 

9.0

%

 

 

13,598,057

 

 

 

8.1

%

 

 

31.22

 

2020

 

14

 

 

 

668,669

 

 

 

13.9

%

 

 

21,397,897

 

 

 

12.8

%

 

 

32.00

 

2021

 

11

 

 

 

904,686

 

 

 

18.8

%

 

 

26,736,336

 

 

 

16.0

%

 

 

29.55

 

2022

 

4

 

 

 

71,145

 

 

 

1.5

%

 

 

2,415,086

 

 

 

1.4

%

 

 

33.95

 

2023

 

3

 

 

 

181,474

 

 

 

3.8

%

 

 

4,851,324

 

 

 

2.9

%

 

 

26.73

 

2024

 

13

 

 

 

565,728

 

 

 

11.8

%

 

 

18,781,450

 

 

 

11.2

%

 

 

33.20

 

2025

 

4

 

 

 

145,595

 

 

 

3.0

%

 

 

6,009,832

 

 

 

3.6

%

 

 

41.28

 

2026

 

3

 

 

 

157,011

 

 

 

3.3

%

 

 

4,611,985

 

 

 

2.8

%

 

 

29.37

 

2027

 

7

 

 

 

325,944

 

 

 

6.8

%

 

 

11,782,017

 

 

 

7.0

%

 

 

36.15

 

Thereafter

 

5

 

 

 

1,308,103

 

 

 

27.1

%

 

 

54,877,943

 

 

 

32.9

%

 

 

41.95

 

Total / Weighted Average

 

72

 

 

 

4,813,668

 

 

 

100.0

%

 

$

167,298,634

 

 

 

100.0

%

 

$

34.75

 

 

 

 

18


Summary of Re/Development Projects

(As of September 30, 2018, unaudited, costs in thousands)

 

 

 

Projects Under Construction(1)

 

Property Name

 

Location

 

Property Type

 

Total Rentable Square Feet

 

 

Percentage Leased

 

 

Lease Term

 

Anticipated Total Cost

 

 

Cost to Date

 

 

Anticipated Completion Date

 

Anticipated / Actual Lease Commencement

 

FDA - Alameda

 

Alameda, CA

 

Laboratory

 

 

69,624

 

 

100%

 

 

20-Year

 

$

83,446

 

 

$

37,952

 

 

4Q 2019

 

4Q 2019

 

FEMA - Tracy

 

Tracy, CA

 

Warehouse/Office

 

 

210,373

 

 

100%

 

 

20-Year

 

 

43,790

 

 

 

43,028

 

 

4Q 2018

 

October 1, 2018

 

Total

 

 

 

 

 

 

279,997

 

 

 

 

 

 

 

 

$

127,236

 

 

$

80,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects in Design(2)

 

 

 

 

 

 

Property Name

 

Location

 

Property Type

 

Total Estimated Rentable Square Feet

 

 

Percentage Leased

 

 

Lease Term

 

Anticipated Completion Date

 

 

Anticipated Lease Commencement

 

 

 

 

 

 

FDA - Lenexa

 

Lenexa, KS

 

Laboratory

 

 

59,690

 

 

100%

 

 

20-Year

 

2Q 2020

 

 

2Q 2020

 

 

 

 

 

 

Total

 

 

 

 

 

 

59,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)Includes properties under construction for which design is complete.

(2)Includes properties in the design phase for which project scope is not fully determined.

19