WASHINGTON, D.C. — Easterly Government Properties (NYSE: DEA), an office REIT that owns assets leased to the U.S. government and affiliates, has released its fourth-quarter 2024 results. The company exceeded its initial full-year guidance and achieved results at the upper end of raised guidance, with a net income of $20.6 million.
In 2024 alone, Easterly purchased 10 properties either solely or in joint venture arrangements totaling $230 million. The company also expanded its investment strategy to include office properties leased to private sector government contractors and reduced its total portfolio energy consumption by 4 percent year-over-year.
“We are pleased with the position of our portfolio,” said Darrell Crate, president and CEO of Easterly.
Easterly has been directly affected by the recent activities of the Department of Government Efficiency (DOGE), a newly created federal department championed by Elon Musk, owner of Tesla, X (formerly Twitter) and SpaceX. According to multiple media outlets, DOGE has announced that it has terminated 2.3 million square feet of federal office leases and saved $145 million.
DOGE is now targeting the termination or consolidation of nearly 100 more leases at government offices in several markets, most notably in the nation’s capital, according to The Wall Street Journal.
As an owner of Class A offices leased to U.S. government agencies, Crate says that Easterly is uniquely positioned to benefit from the streamlining efforts of DOGE at the property level.
“Through the DOGE effort, the federal government has recognized the value and efficiency of leasing versus owning its real estate,” said Crate. “We are specialists in delivering mission-critical facilities to key government agencies, and we remain committed to our ongoing public-private partnership.”
Earlier this month, Crate, who is also a former chairman of the Massachusetts Republican Party, stated that the DOGE effort represented an “exciting opportunity” for the federal government to restructure the General Services Administration (GSA), the real estate operating arm of the U.S. government.
“We have witnessed firsthand how slow decision-making and archaic financial rules have cost the American people significant resources,” said Crate. “As the government undergoes this transformation, we stand aligned with DOGE’s efforts and are ready to leverage our expertise to help streamline operations, reduce costs and ensure that taxpayer dollars are used efficiently.”
Easterly went on to suggest specific reforms for the GSA, which include addressing The Automated Prospectus Systems (TAPS), GSA’s online property management and financial analysis tool; addressing deferred maintenance at existing government facilities; adjust self-imposed accounting rules to allow for more public-private partnerships; streamlining its prospectus planning process for lease renewals that Easterly states is “protracted”; and modifying lease structures to reflect market realities.
As of year-end 2024, Easterly owns 100 operating properties in the United States encompassing approximately 9.7 million leased square feet, including 92 properties that were leased primarily to federal government agencies, three properties that were entirely leased to private tenants and four properties leased primarily to tenant agencies of state governments.
Easterly’s stock price closed on Tuesday, Feb. 25 at $11.45 per share, up slightly from $11.36 a year ago.
— Staff Reports