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8-K - 8-K - Easterly Government Properties, Inc.dea-8k_20210224.htm
EX-99.1 - EX-99.1 - Easterly Government Properties, Inc.dea-ex991_7.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; the continuing adverse impact of the novel coronavirus (COVID-19) on the U.S., regional and global economies and the financial condition and results of operations of the Company; 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, 2020, to be filed with the Securities and Exchange Commission, or the SEC, on or about February 24, 2021 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 year ended December 31, 2020 that will be released in our Form 10-K to be filed with the SEC on or about February 24, 2021.

 

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 net 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, 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, is not indicative of operating income or cash provided by operating activities as determined under GAAP and may be presented on a pro forma basis. 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, in accordance with the Nareit FFO White Paper - 2018 Restatement, as net income (loss), calculated in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. 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, amortization of above-/below-market leases, amortization of deferred revenue (which results from landlord assets funded by tenants), non-cash interest expense, non-cash compensation and other non-cash items. 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

3


Supplemental Definitions

 

 

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. Certain prior year amounts have been updated to conform to the current year FFO, as Adjusted definition.

Net Operating Income (NOI) and Cash NOI. NOI is calculated as net income adjusted to exclude depreciation and amortization, acquisition costs, corporate general and administrative costs, interest expense and gains or losses from sales of property. Cash NOI excludes from NOI straight-line rent, amortization of above-/below-market leases, and amortization of deferred revenue (which results from landlord assets funded by tenants). 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. Certain prior year amounts have been updated to conform to the current year Cash NOI definition.

Net Debt and Adjusted Net Debt. Net Debt represents consolidated debt (reported in accordance with GAAP) adjusted to exclude unamortized premiums and discounts and deferred financing fees, less cash and cash equivalents. By excluding these items, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. The Company believes this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding its financial condition. Adjusted Net Debt is Net Debt reduced by 1) for each project under construction or in design, the lesser of i) outstanding lump-sum reimbursement amounts and ii) the cost to date, 2) 40% times the amount by which the cost to date exceeds total lump-sum reimbursement amounts for each project under construction or in design and 3) outstanding lump-sum reimbursement amounts for projects previously completed. These adjustments are made to 1) remove the estimated portion of each project under construction, in design or previously completed that has been financed with debt which may be repaid with outstanding cost reimbursement payments from the US Government and 2) remove the estimated portion of each project under construction or in design, in excess of total lump-sum reimbursements, that has been financed with debt but has not yet produced earnings. See page 20 for further information. The Company’s method of calculating Net Debt and Adjusted Net Debt may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

 

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

 

 

 

 

 

Leased Operating Property Overview

 

14

 

 

 

Tenants

 

17

 

 

 

Lease Expirations

 

19

 

 

 

Summary of Re/Development Projects

 

20

 

 

 

 

 

 

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

Emil Henry Jr.

Michael Ibe, Vice-Chairman and EVP

Meghan Baivier, CFO & COO

Darrell Crate

Michael Ibe

Alison Bernard, CAO

Ronald Kendall, EVP

Cynthia Fisher

Tara Innes

Andrew Pulliam, EVP

 

Scott Freeman

William Trimble III

 

 

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

Truist Securities

Compass Point Research & Trading, LLC

Jonathan Petersen / Peter Abramowitz

Michael R. Lewis

Merrill Ross

212-284-1705 / 212-336-7241

212-319-5659

202-534-1392

 

 

 

BMO Capital Markets

 

 

John P. Kim

 

 

212-885-4115

 

 

 

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 and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding Classes of Stock and Partnership Units - Fully Diluted Basis

 

At December 31, 2020

 

 

Earnings

 

 

Three months ended

December 31, 2020

 

 

Three months ended

December 31, 2019

 

Common shares

 

 

82,016,365

 

 

Net income available to Easterly Government Properties, Inc.

 

$

2,334

 

 

$

1,432

 

Unvested restricted shares

 

 

89,891

 

 

Net income available to Easterly Government Properties, Inc.

 

 

 

 

 

 

 

 

Common partnership and vested LTIP units

 

 

10,339,966

 

 

per share:

 

 

 

 

 

 

 

 

 

Total - fully diluted basis

 

 

92,446,222

 

 

Basic

 

 

$

0.03

 

 

$

0.02

 

 

 

 

 

 

 

Diluted

 

 

$

0.03

 

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Capitalization

 

At December 31, 2020

 

 

Net income

 

 

$

2,626

 

 

$

1,611

 

Price of Common Shares

 

$

22.65

 

 

Net income, per share - fully diluted basis

 

 

$

0.03

 

 

$

0.02

 

Total equity market capitalization - fully diluted basis

 

$

2,093,907

 

 

Funds From Operations (FFO)

 

 

$

29,692

 

 

$

25,333

 

Net Debt

 

 

974,977

 

 

FFO, per share - fully diluted basis

 

 

$

0.32

 

 

$

0.30

 

Total enterprise value

 

$

3,068,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO, as Adjusted

 

 

$

27,395

 

 

$

25,896

 

 

 

 

 

 

 

FFO, as Adjusted, per share - fully diluted basis

 

 

$

0.30

 

 

$

0.31

 

Ratios

 

At December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Net debt to total enterprise value

 

 

31.8

%

 

Cash Available for Distribution (CAD)

 

 

$

21,205

 

 

$

22,406

 

Net debt to annualized quarterly EBITDA

 

 

6.3

x

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Debt to annualized quarterly pro

 

 

 

 

 

Liquidity

 

 

 

 

 

 

At December 31, 2020

 

forma EBITDA

 

 

6.0

x

 

Cash and cash equivalents

 

 

 

 

 

 

$

8,465

 

Cash interest coverage ratio

 

 

4.5

x

 

 

 

 

 

 

 

 

 

 

 

Cash fixed charge coverage ratio

 

 

4.1

x

 

Available under $450 million unsecured revolving credit facility(1)

 

 

$

370,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)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)

 

 

 

 

 

 

December 31, 2020

 

 

December 31, 2019

 

Assets

 

 

 

 

 

 

 

 

Real estate properties, net

 

$

2,208,661

 

 

$

1,988,726

 

Cash and cash equivalents

 

 

8,465

 

 

 

12,012

 

Restricted cash

 

 

6,204

 

 

 

3,537

 

Deposits on acquisitions

 

 

1,300

 

 

 

1,800

 

Rents receivable

 

 

30,280

 

 

 

27,788

 

Accounts receivable

 

 

14,959

 

 

 

15,820

 

Deferred financing, net

 

 

1,039

 

 

 

1,749

 

Intangible assets, net

 

 

163,387

 

 

 

168,625

 

Interest rate swaps

 

 

-

 

 

 

541

 

Prepaid expenses and other assets

 

 

23,245

 

 

 

13,991

 

Total assets

 

$

2,457,540

 

 

$

2,234,589

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Revolving credit facility

 

 

79,250

 

 

 

-

 

Term loan facilities, net

 

 

248,966

 

 

 

248,602

 

Notes payable, net

 

 

447,171

 

 

 

446,927

 

Mortgage notes payable, net

 

 

202,871

 

 

 

206,312

 

Intangible liabilities, net

 

 

25,406

 

 

 

24,578

 

Deferred revenue

 

 

92,576

 

 

 

54,659

 

Interest rate swaps

 

 

12,781

 

 

 

5,837

 

Accounts payable, accrued expenses, and other liabilities

 

 

48,549

 

 

 

47,833

 

Total liabilities

 

 

1,157,570

 

 

 

1,034,748

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

82,106,256 and 74,832,292 shares issued and outstanding at

December 31, 2020 and December 31, 2019, respectively.

 

 

821

 

 

 

748

 

Additional paid-in capital

 

 

1,424,787

 

 

 

1,257,319

 

Retained earnings

 

 

31,965

 

 

 

20,004

 

Cumulative dividends

 

 

(291,652

)

 

 

(210,760

)

Accumulated other comprehensive loss

 

 

(11,351

)

 

 

(4,690

)

Total stockholders' equity

 

 

1,154,570

 

 

 

1,062,621

 

Non-controlling interest in Operating Partnership

 

 

145,400

 

 

 

137,220

 

Total equity

 

 

1,299,970

 

 

 

1,199,841

 

Total liabilities and equity

 

$

2,457,540

 

 

$

2,234,589

 

 

 

 

 

8


Income Statements

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

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31, 2020

 

 

December 31, 2019

 

 

December 31, 2020

 

 

December 31, 2019

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

62,155

 

 

$

56,161

 

 

$

238,131

 

 

$

208,544

 

Tenant reimbursements

 

 

2,228

 

 

 

3,602

 

 

 

4,497

 

 

 

10,210

 

Other income

 

 

820

 

 

 

1,014

 

 

 

2,450

 

 

 

2,968

 

Total revenues

 

 

65,203

 

 

 

60,777

 

 

 

245,078

 

 

 

221,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

13,944

 

 

 

13,974

 

 

 

48,430

 

 

 

48,279

 

Real estate taxes

 

 

7,143

 

 

 

6,415

 

 

 

27,125

 

 

 

23,643

 

Depreciation and amortization

 

 

23,071

 

 

 

23,722

 

 

 

93,803

 

 

 

92,439

 

Acquisition costs

 

 

414

 

 

 

297

 

 

 

2,087

 

 

 

1,738

 

Corporate general and administrative

 

 

5,065

 

 

 

5,902

 

 

 

20,630

 

 

 

20,184

 

Total expenses

 

 

49,637

 

 

 

50,310

 

 

 

192,075

 

 

 

186,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(8,945

)

 

 

(8,856

)

 

 

(35,480

)

 

 

(33,460

)

Gain (loss) on the sale of operating property

 

 

(3,995

)

 

 

-

 

 

 

(3,995

)

 

 

6,245

 

Net income

 

 

2,626

 

 

 

1,611

 

 

 

13,528

 

 

 

8,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest in Operating Partnership

 

 

(292

)

 

 

(179

)

 

 

(1,567

)

 

 

(1,017

)

Net income available to Easterly Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Properties, Inc.

 

$

2,334

 

 

$

1,432

 

 

$

11,961

 

 

$

7,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Easterly Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Properties, Inc. per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

 

$

0.02

 

 

$

0.15

 

 

$

0.10

 

Diluted

 

$

0.03

 

 

$

0.02

 

 

$

0.15

 

 

$

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

81,420,230

 

 

 

73,990,247

 

 

 

78,219,491

 

 

 

68,769,526

 

Diluted

 

 

82,017,358

 

 

 

74,523,217

 

 

 

78,791,453

 

 

 

69,208,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income, per share - fully diluted basis

 

$

0.03

 

 

$

0.02

 

 

$

0.15

 

 

$

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

fully diluted basis

 

 

91,865,087

 

 

 

83,696,279

 

 

 

88,567,929

 

 

 

78,566,181

 

 

9


Net Operating Income

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

December 31, 2020

 

 

December 31, 2019

 

 

December 31, 2020

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,626

 

 

$

1,611

 

 

$

13,528

 

 

$

8,224

 

 

Depreciation and amortization

 

 

23,071

 

 

 

23,722

 

 

 

93,803

 

 

 

92,439

 

 

Acquisition costs

 

 

414

 

 

 

297

 

 

 

2,087

 

 

 

1,738

 

 

Corporate general and administrative

 

 

5,065

 

 

 

5,902

 

 

 

20,630

 

 

 

20,184

 

 

Interest expense

 

 

8,945

 

 

 

8,856

 

 

 

35,480

 

 

 

33,460

 

 

(Gain) loss on the sale of operating property

 

 

3,995

 

 

 

-

 

 

 

3,995

 

 

 

(6,245

)

 

Net Operating Income

 

 

44,116

 

 

 

40,388

 

 

 

169,523

 

 

 

149,800

 

 

Adjustments to Net Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line rent and other non-cash adjustments

 

 

(1,312

)

 

 

(590

)

 

 

(3,377

)

 

 

(2,239

)

 

Amortization of above-/below-market leases

 

 

(1,395

)

 

 

(1,559

)

 

 

(5,894

)

 

 

(6,320

)

 

Amortization of deferred revenue

 

 

(1,390

)

 

 

(697

)

 

 

(3,528

)

 

 

(1,007

)

 

Cash Net Operating Income

 

$

40,019

 

 

$

37,542

 

 

$

156,724

 

 

$

140,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10


EBITDA, FFO and CAD

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

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31, 2020

 

 

December 31, 2019

 

 

December 31, 2020

 

 

December 31, 2019

 

Net income

 

$

2,626

 

 

$

1,611

 

 

$

13,528

 

 

$

8,224

 

Depreciation and amortization

 

 

23,071

 

 

 

23,722

 

 

 

93,803

 

 

 

92,439

 

Interest expense

 

 

8,945

 

 

 

8,856

 

 

 

35,480

 

 

 

33,460

 

Tax expense

 

 

155

 

 

 

264

 

 

 

460

 

 

 

690

 

(Gain) loss on the sale of operating property

 

 

3,995

 

 

 

-

 

 

 

3,995

 

 

 

(6,245

)

EBITDA

 

$

38,792

 

 

$

34,453

 

 

$

147,266

 

 

$

128,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma adjustments(1)

 

 

1,390

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma EBITDA

 

$

40,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,626

 

 

$

1,611

 

 

$

13,528

 

 

$

8,224

 

Depreciation and amortization

 

 

23,071

 

 

 

23,722

 

 

 

93,803

 

 

 

92,439

 

(Gain) loss on the sale of operating property

 

 

3,995

 

 

 

-

 

 

 

3,995

 

 

 

(6,245

)

FFO

 

$

29,692

 

 

$

25,333

 

 

$

111,326

 

 

$

94,418

 

Adjustments to FFO:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

 

414

 

 

 

297

 

 

 

2,087

 

 

 

1,738

 

Straight-line rent and other non-cash adjustments

 

 

(1,326

)

 

 

(600

)

 

 

(3,432

)

 

 

(2,276

)

Amortization of above-/below-market leases

 

 

(1,395

)

 

 

(1,559

)

 

 

(5,894

)

 

 

(6,320

)

Amortization of deferred revenue

 

 

(1,390

)

 

 

(697

)

 

 

(3,528

)

 

 

(1,007

)

Non-cash interest expense

 

 

363

 

 

 

358

 

 

 

1,441

 

 

 

1,333

 

Non-cash compensation

 

 

1,037

 

 

 

2,764

 

 

 

4,093

 

 

 

4,909

 

FFO, as Adjusted

 

$

27,395

 

 

$

25,896

 

 

$

106,093

 

 

$

92,795

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO, per share - fully diluted basis

 

$

0.32

 

 

$

0.30

 

 

$

1.26

 

 

$

1.20

 

FFO, as Adjusted, per share - fully diluted basis

 

$

0.30

 

 

$

0.31

 

 

$

1.20

 

 

$

1.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO, as Adjusted

 

$

27,395

 

 

$

25,896

 

 

$

106,093

 

 

$

92,795

 

Acquisition costs

 

 

(414

)

 

 

(297

)

 

 

(2,087

)

 

 

(1,738

)

Principal amortization

 

 

(929

)

 

 

(861

)

 

 

(3,564

)

 

 

(3,391

)

Maintenance capital expenditures

 

 

(2,967

)

 

 

(1,367

)

 

 

(7,851

)

 

 

(4,421

)

Contractual tenant improvements

 

 

(1,880

)

 

 

(965

)

 

 

(3,188

)

 

 

(1,906

)

Cash Available for Distribution (CAD)

 

$

21,205

 

 

$

22,406

 

 

$

89,403

 

 

$

81,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

fully diluted basis

 

 

91,865,087

 

 

 

83,696,279

 

 

 

88,567,929

 

 

 

78,566,181

 

 

(1)Pro forma assuming a full quarter of operations from the four properties acquired and one property disposed in the fourth quarter of 2020.

 

11


Debt Schedules

(Unaudited, in thousands)

 

 

 

 

Debt Instrument

Maturity Date

 

 

December 31, 2020

Interest Rate

 

December 31, 2020

Balance(1)

 

December 31, 2020

Percent of

Total Indebtedness

 

Unsecured debt

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving Credit facility

18-Jun-22(2)

 

 

LIBOR + 130bps

 

$

79,250

 

8.1%

 

2016 Term Loan facility

29-Mar-24

 

 

2.67%(3)

 

 

100,000

 

10.2%

 

2018 Term Loan facility

19-Jun-23

 

 

3.96%(4)

 

 

150,000

 

15.2%

 

2017 Series A Senior Notes

25-May-27

 

 

4.05%

 

 

95,000

 

9.7%

 

2017 Series B Senior Notes

25-May-29

 

 

4.15%

 

 

50,000

 

5.1%

 

2017 Series C Senior Notes

25-May-32

 

 

4.30%

 

 

30,000

 

3.0%

 

2019 Series A Senior Notes

12-Sep-29

 

 

3.73%

 

 

85,000

 

8.6%

 

2019 Series B Senior Notes

12-Sep-31

 

 

3.83%

 

 

100,000

 

10.2%

 

2019 Series C Senior Notes

12-Sep-34

 

 

3.98%

 

 

90,000

 

9.1%

 

Total unsecured debt

6.7 years

 

 

3.54%

 

$

779,250

 

79.2%

 

 

(wtd-avg maturity)

 

 

(wtd-avg rate)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured mortgage debt

 

 

 

 

 

 

 

 

 

 

 

 

 

DEA - Pleasanton

18-Oct-23

 

 

LIBOR + 150bps

 

$

15,700

 

1.6%

 

VA - Golden

1-Apr-24

 

 

5.00%

 

 

9,011

 

0.9%

 

MEPCOM - Jacksonville

14-Oct-25

 

 

4.41%

 

 

7,926

 

0.8%

 

USFS II - Albuquerque

14-Jul-26

 

 

4.46%

 

 

15,914

 

1.6%

 

ICE - Charleston

15-Jan-27

 

 

4.21%

 

 

16,150

 

1.7%

 

VA - Loma Linda

6-Jul-27

 

 

3.59%

 

 

127,500

 

13.0%

 

CBP - Savannah

10-Jul-33

 

 

3.40%

 

 

11,991

 

1.2%

 

Total secured mortgage debt

6.3 years

 

 

3.64%

 

$

204,192

 

20.8%

 

 

(wtd-avg maturity)

 

 

(wtd-avg rate)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Statistics

December 31, 2020

 

 

 

 

 

 

 

 

December 31, 2020

 

Variable rate debt - unhedged

$

94,950

 

 

% Variable rate debt - unhedged

 

 

9.7

%

Fixed rate debt

 

888,492

 

 

% Fixed rate debt

 

 

90.3

%

Total Debt(1)

$

983,442

 

 

 

 

 

 

 

 

 

 

 

Less: cash and cash equivalents

 

(8,465

)

 

Weighted average maturity

 

6.6 years

 

Net Debt

$

974,977

 

 

Weighted average interest rate

 

 

3.6

%

Less: adjustment for development projects(5)

 

(11,188

)

 

 

 

 

 

 

 

 

 

 

Adjusted Net Debt

$

963,789

 

 

 

 

 

 

 

 

 

 

 

 

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

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

(3)Calculated based on two interest rate swaps with an aggregate notional value of $100.0 million, which effectively fix the interest rate at 2.67% annually based on the Company’s current leverage ratio.

(4)Calculated based on four interest rate swaps with an aggregate notional value of $150.0 million, which effectively fix the interest rate at 3.96% annually based on the Company’s current leverage ratio.

(5)See definition of Adjusted Net Debt on Page 4.

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

 

2021

 

 

4,233

 

 

 

-

 

 

 

-

 

 

 

4,233

 

 

 

0.4

%

 

-

 

2022

 

 

5,297

 

 

 

-

 

 

 

79,250

 

 

 

84,547

 

 

 

8.6

%

 

 

1.45

%

2023

 

 

5,586

 

 

 

15,700

 

 

 

150,000

 

 

 

171,286

 

 

 

17.4

%

 

 

3.74

%

2024

 

 

5,731

 

 

 

8,395

 

 

 

100,000

 

 

 

114,126

 

 

 

11.6

%

 

 

2.86

%

2025

 

 

5,633

 

 

 

1,917

 

 

 

-

 

 

 

7,550

 

 

 

0.8

%

 

 

4.41

%

2026

 

 

3,686

 

 

 

6,368

 

 

 

-

 

 

 

10,054

 

 

 

1.0

%

 

 

4.46

%

2027

 

 

1,093

 

 

 

134,640

 

 

 

95,000

 

 

 

230,733

 

 

 

23.5

%

 

 

3.82

%

2028

 

 

983

 

 

 

-

 

 

 

-

 

 

 

983

 

 

 

0.1

%

 

-

 

2029

 

 

1,016

 

 

 

-

 

 

 

135,000

 

 

 

136,016

 

 

 

13.8

%

 

 

3.89

%

2030

 

 

1,049

 

 

 

-

 

 

 

-

 

 

 

1,049

 

 

 

0.1

%

 

-

 

2031

 

 

1,081

 

 

 

-

 

 

 

100,000

 

 

 

101,081

 

 

 

10.3

%

 

 

3.83

%

2032

 

 

1,116

 

 

 

-

 

 

 

30,000

 

 

 

31,116

 

 

 

3.2

%

 

 

4.30

%

2033

 

 

668

 

 

 

-

 

 

 

-

 

 

 

668

 

 

 

0.1

%

 

-

 

2034

 

 

-

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

9.1

%

 

 

3.98

%

Total

 

$

37,172

 

 

$

167,020

 

 

$

779,250

 

 

$

983,442

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

13


Leased Operating Property Overview

(As of December 31, 2020, unaudited)

 

 

 

 

Property Name

 

Location

 

Property Type

 

Tenant

Lease

Expiration

Year

 

Year Built /

Renovated

 

Leased

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

 

 

$

16,388,079

 

 

 

6.7

%

 

$

50.02

 

Various GSA - Buffalo

 

Buffalo, NY

 

Office

 

2020 - 2025(1)

 

2004

 

 

267,768

 

 

 

8,507,053

 

 

 

3.5

%

 

 

31.77

 

JSC - Suffolk

 

Suffolk, VA

 

Office

 

2028(2)

 

1993 / 2004

 

 

403,737

 

 

 

8,104,091

 

 

 

3.3

%

 

 

20.07

 

FBI - Salt Lake

 

Salt Lake City, UT

 

Office

 

2032

 

2012

 

 

169,542

 

 

 

6,796,457

 

 

 

2.8

%

 

 

40.09

 

IRS - Fresno

 

Fresno, CA

 

Office

 

2033

 

2003

 

 

180,481

 

 

 

6,650,903

 

 

 

2.7

%

 

 

36.85

 

Various GSA - Chicago

 

Des Plaines, IL

 

Office

 

2022 / 2023

 

1971 / 1999

 

 

204,020

 

 

 

6,519,508

 

 

 

2.7

%

 

 

31.96

 

Various GSA - Portland

 

Portland, OR

 

Office

 

2022 - 2028(3)

 

2002

 

 

212,845

 

 

 

6,465,482

 

 

 

2.6

%

 

 

30.38

 

PTO - Arlington

 

Arlington, VA

 

Office

 

2035

 

2009

 

 

190,546

 

 

 

6,170,884

 

 

 

2.5

%

 

 

32.39

 

VA - San Jose

 

San Jose, CA

 

Outpatient Clinic

 

2038

 

2018

 

 

90,085

 

 

 

5,852,184

 

 

 

2.4

%

 

 

64.96

 

EPA - Lenexa

 

Lenexa, KS

 

Office

 

2027(2)

 

2007 / 2012

 

 

169,585

 

 

 

5,541,749

 

 

 

2.3

%

 

 

32.68

 

FBI - San Antonio

 

San Antonio, TX

 

Office

 

2021

 

2007

 

 

148,584

 

 

 

5,187,090

 

 

 

2.1

%

 

 

34.91

 

FEMA - Tracy

 

Tracy, CA

 

Warehouse

 

2038

 

2018

 

 

210,373

 

 

 

4,614,143

 

 

 

1.9

%

 

 

21.93

 

FDA - Alameda

 

Alameda, CA

 

Laboratory

 

2039

 

2019

 

 

69,624

 

 

 

4,561,039

 

 

 

1.9

%

 

 

65.51

 

FBI - Omaha

 

Omaha, NE

 

Office

 

2024

 

2009

 

 

112,196

 

 

 

4,426,771

 

 

 

1.8

%

 

 

39.46

 

TREAS - Parkersburg

 

Parkersburg, WV

 

Office

 

2021

 

2004 / 2006

 

 

182,500

 

 

 

4,418,656

 

 

 

1.8

%

 

 

24.21

 

EPA - Kansas City

 

Kansas City, KS

 

Laboratory

 

2023

 

2003

 

 

71,979

 

 

 

4,210,244

 

 

 

1.7

%

 

 

58.49

 

FBI / DEA - El Paso

 

El Paso, TX

 

Office/Warehouse

 

2028

 

1998 - 2005

 

 

203,269

 

 

 

4,047,753

 

 

 

1.7

%

 

 

19.91

 

VA - South Bend

 

Mishakawa, IN

 

Outpatient Clinic

 

2032

 

2017

 

 

86,363

 

 

 

4,011,573

 

 

 

1.6

%

 

 

46.45

 

FDA - Lenexa

 

Lenexa, KS

 

Laboratory

 

2040

 

2020

 

 

59,690

 

 

 

3,889,133

 

 

 

1.6

%

 

 

65.16

 

ICE - Charleston

 

North Charleston, SC

 

Office

 

2021 / 2027

 

1994 / 2012

 

 

86,733

 

 

 

3,874,571

 

 

 

1.6

%

 

 

44.67

 

USCIS - Lincoln

 

Lincoln, NE

 

Office

 

2025

 

2005

 

 

137,671

 

 

 

3,791,205

 

 

 

1.5

%

 

 

27.54

 

VA - Mobile

 

Mobile, AL

 

Outpatient Clinic

 

2033

 

2018

 

 

79,212

 

 

 

3,778,352

 

 

 

1.5

%

 

 

47.70

 

DOI - Billings

 

Billings, MT

 

Office/Warehouse

 

2033

 

2013

 

 

149,110

 

 

 

3,725,623

 

 

 

1.5

%

 

 

24.99

 

FBI - New Orleans

 

New Orleans, LA

 

Office

 

2029(4)

 

1999 / 2006

 

 

137,679

 

 

 

3,689,091

 

 

 

1.5

%

 

 

26.79

 

FBI - Birmingham

 

Birmingham, AL

 

Office

 

2022

 

2005

 

 

96,278

 

 

 

3,683,969

 

 

 

1.5

%

 

 

38.26

 

FBI - Pittsburgh

 

Pittsburgh, PA

 

Office

 

2027

 

2001

 

 

100,054

 

 

 

3,622,548

 

 

 

1.5

%

 

 

36.21

 

DOT - Lakewood

 

Lakewood, CO

 

Office

 

2024

 

2004

 

 

122,225

 

 

 

3,489,124

 

 

 

1.4

%

 

 

28.55

 

VA - Chico

 

Chico, CA

 

Outpatient Clinic

 

2034

 

2019

 

 

51,647

 

 

 

3,172,357

 

 

 

1.3

%

 

 

61.42

 

USFS II - Albuquerque

 

Albuquerque, NM

 

Office

 

2026(2)

 

2011

 

 

98,720

 

 

 

3,063,160

 

 

 

1.3

%

 

 

31.03

 

FDA - College Park

 

College Park, MD

 

Laboratory

 

2029

 

2004

 

 

80,677

 

 

 

3,017,567

 

 

 

1.2

%

 

 

37.40

 

OSHA - Sandy

 

Sandy, UT

 

Laboratory

 

2024(5)

 

2003

 

 

75,000

 

 

 

3,008,391

 

 

 

1.2

%

 

 

40.11

 

USCIS - Tustin

 

Tustin, CA

 

Office

 

2034

 

1979 / 2019

 

 

66,818

 

 

 

3,006,961

 

 

 

1.2

%

 

 

45.00

 

USFS I - Albuquerque

 

Albuquerque, NM

 

Office

 

2021(2)

 

2006

 

 

92,455

 

 

 

2,924,234

 

 

 

1.2

%

 

 

31.63

 

DEA - Vista

 

Vista, CA

 

Laboratory

 

2020

 

2002

 

 

54,119

 

 

 

2,811,893

 

 

 

1.1

%

 

 

51.96

 

FBI - Richmond

 

Richmond, VA

 

Office

 

2041

 

2001

 

 

96,607

 

 

 

2,776,811

 

 

 

1.1

%

 

 

28.74

 

ICE - Albuquerque

 

Albuquerque, NM

 

Office

 

2027

 

2011

 

 

71,100

 

 

 

2,745,454

 

 

 

1.1

%

 

 

38.61

 

JUD - Del Rio

 

Del Rio, TX

 

Courthouse/Office

 

2024

 

1992 / 2004

 

 

89,880

 

 

 

2,705,056

 

 

 

1.1

%

 

 

30.10

 

VA - Orange(6)

 

Orange, CT

 

Outpatient Clinic

 

2034

 

2019

 

 

56,330

 

 

 

2,685,326

 

 

 

1.1

%

 

 

47.67

 

 

14


Leased Operating Property Overview (Cont.)

(As of December 31, 2020, unaudited)

 

 

 

 

Property Name

 

Location

 

Property Type

 

Tenant

Lease

Expiration

Year

 

Year Built /

Renovated

 

Leased

Square

Feet

 

 

Annualized

Lease

Income

 

 

Percentage

of Total

Annualized

Lease

Income

 

 

Annualized

Lease

Income per

Leased

Square Foot

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Leased Properties (Cont.)

 

DEA - Pleasanton

 

Pleasanton, CA

 

Laboratory

 

2035

 

2015

 

 

42,480

 

 

 

2,683,459

 

 

 

1.1

%

 

 

63.17

 

JUD - El Centro

 

El Centro, CA

 

Courthouse/Office

 

2034

 

2004

 

 

43,345

 

 

 

2,663,767

 

 

 

1.1

%

 

 

61.46

 

FBI - Mobile

 

Mobile, AL

 

Office

 

2029(2)

 

2001

 

 

76,112

 

 

 

2,616,413

 

 

 

1.1

%

 

 

34.38

 

SSA - Charleston

 

Charleston, WV

 

Office

 

2024(2)

 

1959 / 2000

 

 

110,000

 

 

 

2,596,982

 

 

 

1.1

%

 

 

23.61

 

DEA - Sterling

 

Sterling, VA

 

Laboratory

 

2022

 

2001

 

 

49,692

 

 

 

2,574,759

 

 

 

1.1

%

 

 

51.81

 

TREAS - Birmingham

 

Birmingham, AL

 

Office

 

2029

 

2014

 

 

83,676

 

 

 

2,442,804

 

 

 

1.0

%

 

 

29.19

 

FBI - Albany

 

Albany, NY

 

Office

 

2035

 

1998

 

 

98,184

 

 

 

2,434,918

 

 

 

1.0

%

 

 

24.80

 

DEA - Dallas Lab

 

Dallas, TX

 

Laboratory

 

2021

 

2001

 

 

49,723

 

 

 

2,408,771

 

 

 

1.0

%

 

 

48.44

 

JUD - Charleston

 

Charleston, SC

 

Courthouse/Office

 

2040

 

1999

 

 

50,888

 

 

 

2,333,282

 

 

 

1.0

%

 

 

45.85

 

DHA - Aurora

 

Aurora, CO

 

Office

 

2034

 

1998 / 2018

 

 

101,285

 

 

 

2,307,796

 

 

 

0.9

%

 

 

22.79

 

DEA - Upper Marlboro

 

Upper Marlboro, MD

 

Laboratory

 

2022

 

2002

 

 

50,978

 

 

 

2,294,520

 

 

 

0.9

%

 

 

45.01

 

FBI - Little Rock

 

Little Rock, AR

 

Office

 

2021

 

2001

 

 

101,977

 

 

 

2,271,725

 

 

 

0.9

%

 

 

22.28

 

MEPCOM - Jacksonville

 

Jacksonville, FL

 

Office

 

2025

 

2010

 

 

30,000

 

 

 

2,204,537

 

 

 

0.9

%

 

 

73.48

 

CBP - Savannah

 

Savannah, GA

 

Laboratory

 

2033

 

2013

 

 

35,000

 

 

 

2,158,730

 

 

 

0.9

%

 

 

61.68

 

DOE - Lakewood

 

Lakewood, CO

 

Office

 

2029

 

1999

 

 

115,650

 

 

 

2,093,584

 

 

 

0.9

%

 

 

18.10

 

JUD - Jackson

 

Jackson, TN

 

Courthouse/Office

 

2023(2)

 

1998

 

 

73,397

 

 

 

2,052,341

 

 

 

0.8

%

 

 

27.96

 

DEA - Santa Ana

 

Santa Ana, CA

 

Office

 

2024

 

2004

 

 

39,905

 

 

 

1,878,451

 

 

 

0.8

%

 

 

47.07

 

ICE - Otay

 

San Diego, CA

 

Office

 

2022 / 2026

 

2001

 

 

49,457

 

 

 

1,771,268

 

 

 

0.7

%

 

 

35.81

 

NPS - Omaha

 

Omaha, NE

 

Office

 

2024

 

2004

 

 

62,772

 

 

 

1,767,157

 

 

 

0.7

%

 

 

28.15

 

VA - Golden

 

Golden, CO

 

Office/Warehouse

 

2026

 

1996 / 2011

 

 

56,753

 

 

 

1,753,834

 

 

 

0.7

%

 

 

30.90

 

DEA - Dallas

 

Dallas, TX

 

Office

 

2040

 

2001

 

 

71,827

 

 

 

1,726,977

 

 

 

0.7

%

 

 

24.04

 

CBP - Sunburst

 

Sunburst, MT

 

Office

 

2028

 

2008

 

 

33,000

 

 

 

1,616,901

 

 

 

0.7

%

 

 

49.00

 

USCG - Martinsburg

 

Martinsburg, WV

 

Office

 

2027

 

2007

 

 

59,547

 

 

 

1,605,912

 

 

 

0.7

%

 

 

26.97

 

DEA - Birmingham

 

Birmingham, AL

 

Office

 

2020

 

2005

 

 

35,616

 

 

 

1,535,155

 

 

 

0.6

%

 

 

43.10

 

JUD - Aberdeen

 

Aberdeen, MS

 

Courthouse/Office

 

2025

 

2005

 

 

46,979

 

 

 

1,488,184

 

 

 

0.6

%

 

 

31.68

 

GSA - Clarksburg

 

Clarksburg, WV

 

Office

 

2024(2)

 

1999

 

 

63,750

 

 

 

1,468,544

 

 

 

0.6

%

 

 

23.04

 

DEA - North Highlands

 

Sacramento, CA

 

Office

 

2033

 

2002

 

 

37,975

 

 

 

1,446,712

 

 

 

0.6

%

 

 

38.10

 

VA - Charleston

 

North Charleston, SC

 

Warehouse

 

2040

 

2020

 

 

97,718

 

 

 

1,383,687

 

 

 

0.6

%

 

 

14.16

 

DEA - Albany

 

Albany, NY

 

Office

 

2025

 

2004

 

 

31,976

 

 

 

1,350,924

 

 

 

0.6

%

 

 

42.25

 

DEA - Riverside

 

Riverside, CA

 

Office

 

2032

 

1997

 

 

34,354

 

 

 

1,249,772

 

 

 

0.5

%

 

 

36.38

 

SSA - Dallas

 

Dallas, TX

 

Office

 

2035

 

2005

 

 

27,200

 

 

 

977,296

 

 

 

0.4

%

 

 

35.93

 

HRSA - Baton Rouge

 

Baton Rouge, LA

 

Office

 

2040

 

1981 / 2020

 

 

27,569

 

 

 

838,276

 

 

 

0.3

%

 

 

30.41

 

ICE - Pittsburgh

 

Pittsburgh, PA

 

Office

 

2022 / 2023(7)

 

2004

 

 

25,245

 

 

 

800,087

 

 

 

0.3

%

 

 

31.69

 

VA - Baton Rouge

 

Baton Rouge, LA

 

Outpatient Clinic

 

2024

 

2004

 

 

30,000

 

 

 

793,356

 

 

 

0.3

%

 

 

26.45

 

JUD - South Bend

 

South Bend, IN

 

Courthouse/Office

 

2027

 

1996 / 2011

 

 

30,119

 

 

 

763,813

 

 

 

0.3

%

 

 

25.36

 

DEA - San Diego

 

San Diego, CA

 

Warehouse

 

2032

 

1999

 

 

16,100

 

 

 

537,952

 

 

 

0.2

%

 

 

33.41

 

 

15


Leased Operating Property Overview (Cont.)

(As of December 31, 2020, unaudited)

 

 

 

 

 

Property Name

 

Location

 

Property Type

 

Tenant

Lease

Expiration

Year

 

Year Built /

Renovated

 

Leased

Square

Feet

 

 

Annualized

Lease

Income

 

 

Percentage

of Total

Annualized

Lease

Income

 

 

Annualized

Lease

Income per

Leased

Square Foot

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Leased Properties (Cont.)

 

SSA - Mission Viejo

 

Mission Viejo, CA

 

Office

 

2022

 

2005

 

 

11,590

 

 

 

474,045

 

 

 

0.2

%

 

 

40.90

 

DEA - Bakersfield

 

Bakersfield, CA

 

Office

 

2021

 

2000

 

 

9,800

 

 

 

370,497

 

 

 

0.2

%

 

 

37.81

 

SSA - San Diego

 

San Diego, CA

 

Office

 

2032

 

2003

 

 

10,059

 

 

 

340,912

 

 

 

0.1

%

 

 

33.89

 

Subtotal

 

 

 

 

 

 

 

 

 

 

7,124,814

 

 

$

244,012,585

 

 

 

99.6

%

 

$

34.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Privately Leased Properties

 

5998 Osceola Court - United Technologies

 

Midland, GA

 

Warehouse/Manufacturing

 

2023(8)

 

2014

 

 

105,641

 

 

 

543,818

 

 

 

0.2

%

 

 

5.15

 

501 East Hunter Street - Lummus Corporation

 

Lubbock, TX

 

Warehouse/Distribution

 

2028(5)

 

2013

 

 

70,078

 

 

 

410,157

 

 

 

0.2

%

 

 

5.85

 

Subtotal

 

 

 

 

 

 

 

 

 

 

175,719

 

 

$

953,975

 

 

 

0.4

%

 

$

5.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total / Weighted Average

 

 

 

 

 

 

 

 

 

 

7,300,533

 

 

$

244,966,560

 

 

 

100.0

%

 

$

33.55

 

 

 

(1)14,274 square feet leased to a private tenant will expire on September 30, 2021 and contains one five-year renewal option.

(2)Lease contains one five-year renewal option.

(3)37,811 square feet leased to the U.S. Army Corps of Engineers ("ACOE") will expire on February 19, 2025 and contains two five-year renewal options. 21,646 square feet leased to the Federal Bureau of Investigation ("FBI") will expire on December 31, 2024 and contains two five-year renewal options. 10,299 square feet leased to three private tenants will expire between 2022-2025 and all contain one five-year renewal option. 4,846 square feet leased to the Department of Energy ("DOE") will expire on April 14, 2023 and contains two five-year renewal options.

(4)Lease contains one ten-year renewal option.

(5)Lease contains two five-year renewal options.

(6)Previously named VA - Northeast.

(7)21,391 square feet leased to the Immigration and Customs Enforcement ("ICE") will expire on February 28, 2022 and contains one three-year renewal option.

(8)Lease contains three five-year renewal options.

 

 

 

 

 

 

 

16


Tenants

(As of December 31, 2020, 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")

 

 

12.7

 

 

 

979,979

 

 

 

13.3

%

 

$

43,172,668

 

 

 

17.7

%

Federal Bureau of Investigation ("FBI")

 

 

7.5

 

 

 

1,292,484

 

 

 

17.6

%

 

 

40,771,826

 

 

 

16.7

%

Drug Enforcement Administration ("DEA")

 

 

7.0

 

 

 

603,323

 

 

 

8.2

%

 

 

24,531,817

 

 

 

10.1

%

Judiciary of the U.S. ("JUD")

 

 

7.4

 

 

 

334,608

 

 

 

4.6

%

 

 

12,006,443

 

 

 

4.9

%

Food and Drug Administration ("FDA")

 

 

15.1

 

 

 

209,991

 

 

 

2.9

%

 

 

11,467,739

 

 

 

4.7

%

Environmental Protection Agency ("EPA")

 

 

5.5

 

 

 

241,564

 

 

 

3.3

%

 

 

9,751,993

 

 

 

4.0

%

Internal Revenue Service ("IRS")

 

 

10.1

 

 

 

236,233

 

 

 

3.2

%

 

 

8,480,235

 

 

 

3.5

%

U.S. Joint Staff Command ("JSC")

 

 

7.4

 

 

 

403,737

 

 

 

5.5

%

 

 

8,104,091

 

 

 

3.3

%

Immigration and Customs Enforcement ("ICE")

 

 

4.6

 

 

 

187,848

 

 

 

2.6

%

 

 

7,700,050

 

 

 

3.1

%

Bureau of the Fiscal Service ("BFS")

 

 

3.0

 

 

 

266,176

 

 

 

3.6

%

 

 

6,861,460

 

 

 

2.8

%

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

 

 

7.6

 

 

 

204,489

 

 

 

2.8

%

 

 

6,798,166

 

 

 

2.8

%

Federal Aviation Administration ("FAA")

 

 

2.8

 

 

 

194,540

 

 

 

2.7

%

 

 

6,258,839

 

 

 

2.6

%

Patent and Trademark Office ("PTO")

 

 

14.0

 

 

 

190,546

 

 

 

2.6

%

 

 

6,170,884

 

 

 

2.5

%

U.S. Forest Service ("USFS")

 

 

3.0

 

 

 

191,175

 

 

 

2.6

%

 

 

5,987,394

 

 

 

2.4

%

Social Security Administration ("SSA")

 

 

5.5

 

 

 

200,866

 

 

 

2.8

%

 

 

5,357,141

 

 

 

2.2

%

Federal Emergency Management Agency ("FEMA")

 

 

17.8

 

 

 

210,373

 

 

 

2.9

%

 

 

4,614,143

 

 

 

1.9

%

Customs and Border Protection ("CBP")

 

 

10.3

 

 

 

68,000

 

 

 

0.9

%

 

 

3,775,631

 

 

 

1.5

%

Department of Transportation ("DOT")

 

 

3.3

 

 

 

129,659

 

 

 

1.8

%

 

 

3,737,418

 

 

 

1.5

%

Occupational Safety and Health Administration ("OSHA")

 

 

3.1

 

 

 

75,000

 

 

 

1.0

%

 

 

3,008,391

 

 

 

1.2

%

Defense Health Agency ("DHA")

 

 

13.3

 

 

 

101,285

 

 

 

1.4

%

 

 

2,307,796

 

 

 

0.9

%

Department of Energy ("DOE")

 

 

8.6

 

 

 

120,496

 

 

 

1.7

%

 

 

2,213,404

 

 

 

0.9

%

Military Entrance Processing Command ("MEPCOM")

 

 

4.7

 

 

 

30,000

 

 

 

0.4

%

 

 

2,204,537

 

 

 

0.9

%

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

 

 

6.6

 

 

 

69,440

 

 

 

1.0

%

 

 

2,115,505

 

 

 

0.9

%

Bureau of Indian Affairs ("BIA")

 

 

11.5

 

 

 

78,184

 

 

 

1.1

%

 

 

2,010,629

 

 

 

0.8

%

National Park Service ("NPS")

 

 

3.5

 

 

 

62,772

 

 

 

0.9

%

 

 

1,767,157

 

 

 

0.7

%

Bureau of Reclamation ("BOR")

 

 

12.3

 

 

 

69,518

 

 

 

1.0

%

 

 

1,736,958

 

 

 

0.7

%

General Services Administration - Other

 

 

4.7

 

 

 

54,803

 

 

 

0.8

%

 

 

1,679,075

 

 

 

0.7

%

U.S. Coast Guard ("USCG")

 

 

7.0

 

 

 

59,547

 

 

 

0.8

%

 

 

1,605,912

 

 

 

0.7

%

Small Business Administration ("SBA")

 

 

1.2

 

 

 

42,835

 

 

 

0.6

%

 

 

1,335,628

 

 

 

0.5

%

     

 

 

 

 

 

 

17


Tenants (Cont.)

(As of December 31, 2020, 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 (Cont.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Army Corps of Engineers ("ACOE")

 

 

4.1

 

 

 

39,320

 

 

 

0.5

%

 

 

1,081,097

 

 

 

0.4

%

Health Resources and Services Administration ("HRSA")

 

 

19.6

 

 

 

27,569

 

 

 

0.4

%

 

 

838,276

 

 

 

0.3

%

National Oceanic and Atmospheric Administration ("NOAA")

 

 

2.1

 

 

 

25,612

 

 

 

0.4

%

 

 

799,198

 

 

 

0.3

%

Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF")

 

 

4.2

 

 

 

21,342

 

 

 

0.3

%

 

 

779,810

 

 

 

0.3

%

U.S. Attorney Office ("USAO")

 

 

3.1

 

 

 

6,408

 

 

 

0.1

%

 

 

147,604

 

 

 

0.1

%

Office of the Field Solicitor ("OFC")

 

 

12.3

 

 

 

4,526

 

 

 

0.1

%

 

 

113,085

 

 

 

0.0

%

Office of the Special Trustee for American Indians ("OST")

 

 

12.3

 

 

 

3,359

 

 

 

0.0

%

 

 

83,927

 

 

 

0.0

%

U.S. Marshals Service ("USMS")

 

 

6.1

 

 

 

1,054

 

 

 

0.0

%

 

 

48,361

 

 

 

0.0

%

Department of Labor ("DOL")

 

 

3.1

 

 

 

1,004

 

 

 

0.0

%

 

 

23,125

 

 

 

0.0

%

U.S. Probation Office ("USPO")

 

 

3.1

 

 

 

452

 

 

 

0.0

%

 

 

10,419

 

 

 

0.0

%

Subtotal

 

 

8.3

 

 

 

7,040,117

 

 

 

96.4

%

 

$

241,457,832

 

 

 

98.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private Tenants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Private Tenants

 

 

2.1

 

 

 

41,445

 

 

 

0.6

%

 

$

1,199,149

 

 

 

0.5

%

Providence Health & Services

 

 

4.7

 

 

 

21,643

 

 

 

0.3

%

 

 

725,079

 

 

 

0.3

%

We Are Sharing Hope SC

 

 

0.7

 

 

 

21,609

 

 

 

0.3

%

 

 

630,525

 

 

 

0.3

%

United Technologies (Pratt & Whitney)

 

 

3.0

 

 

 

105,641

 

 

 

1.4

%

 

 

543,818

 

 

 

0.2

%

Lummus Corporation

 

 

7.6

 

 

 

70,078

 

 

 

1.0

%

 

 

410,157

 

 

 

0.2

%

Subtotal

 

 

4.0

 

 

 

260,416

 

 

 

3.6

%

 

$

3,508,728

 

 

 

1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total / Weighted Average

 

 

8.2

 

 

 

7,300,533

 

 

 

100.0

%

 

$

244,966,560

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)Weighted based on leased square feet.

 

18


Lease Expirations

(As of December 31, 2020, unaudited)

 

 

 

 

Year of Lease Expiration

 

Number of

Leases

Expiring

 

 

Leased Square

Footage

Expiring

 

 

Percentage of

Total Leased Square

Footage

Expiring

 

 

Annualized

Lease Income

Expiring

 

 

Percentage of

Total Annualized

Lease Income

Expiring

 

 

Annualized

Lease Income

per Leased

Square Foot Expiring

 

2020

 

3

 

 

 

90,835

 

 

 

1.2

%

 

 

4,376,151

 

 

 

1.8

%

 

 

48.18

 

2021

 

12

 

 

 

818,513

 

 

 

11.2

%

 

 

25,010,373

 

 

 

10.2

%

 

 

30.56

 

2022

 

10

 

 

 

282,083

 

 

 

3.9

%

 

 

11,524,521

 

 

 

4.7

%

 

 

40.86

 

2023

 

12

 

 

 

502,538

 

 

 

6.9

%

 

 

14,823,900

 

 

 

6.1

%

 

 

29.50

 

2024

 

10

 

 

 

727,374

 

 

 

10.0

%

 

 

22,767,700

 

 

 

9.3

%

 

 

31.30

 

2025

 

12

 

 

 

371,827

 

 

 

5.1

%

 

 

12,655,165

 

 

 

5.2

%

 

 

34.04

 

2026

 

3

 

 

 

157,011

 

 

 

2.2

%

 

 

4,873,639

 

 

 

2.0

%

 

 

31.04

 

2027

 

6

 

 

 

495,529

 

 

 

6.8

%

 

 

17,523,522

 

 

 

7.2

%

 

 

35.36

 

2028

 

8

 

 

 

783,003

 

 

 

10.7

%

 

 

16,388,769

 

 

 

6.7

%

 

 

20.93

 

2029

 

5

 

 

 

493,794

 

 

 

6.8

%

 

 

13,859,459

 

 

 

5.7

%

 

 

28.07

 

2030

 

-

 

 

 

-

 

 

 

0.0

%

 

 

-

 

 

 

0.0

%

 

 

-

 

Thereafter

 

29

 

 

 

2,578,026

 

 

 

35.2

%

 

 

101,163,361

 

 

 

41.1

%

 

 

39.24

 

Total / Weighted Average

 

110

 

 

 

7,300,533

 

 

 

100.0

%

 

$

244,966,560

 

 

 

100.0

%

 

$

33.55

 

 

 

 

 

19


Summary of Re/Development Projects

(As of December 31, 2020, unaudited, in thousands, except square feet)

 

 

 

 

Projects Under Construction(1)

 

 

Property Name

 

Location

 

 

Property Type

 

 

Total Leased Square Feet

 

 

Lease Term

 

 

Anticipated Total Cost

 

 

Cost to Date

 

 

Total Lump-Sum Reimbursement

 

 

Anticipated Completion Date

 

 

Anticipated Lease Commencement

 

 

N/A

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects in Design(2)

 

 

 

 

 

 

 

 

 

 

Property Name

 

Location

 

 

Property Type

 

 

Total Estimated Leased Square Feet

 

 

Lease Term

 

 

Cost to Date

 

 

Anticipated Completion Date

 

 

Anticipated Lease Commencement

 

 

 

 

 

 

 

 

 

 

FDA - Atlanta

 

Atlanta, GA

 

 

Laboratory

 

 

 

162,000

 

 

20-Year

 

 

$

27,969

 

 

2Q 2023

 

 

2Q 2023

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

162,000

 

 

 

 

 

 

$

27,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Previously Completed with Outstanding Lump-Sum Reimbursements

 

 

 

 

 

 

 

 

 

 

Property Name

 

Location

 

 

Property Type

 

 

Total Leased Square Feet

 

 

Lease Term

 

 

Outstanding Lump-Sum Reimbursement(3)

 

 

Completion Date

 

 

Lease Commencement

 

 

 

 

 

 

 

 

 

 

N/A

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

$

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

(3)Includes reimbursement of lump-sum tenant improvement costs and development fees.

 

20