New Easterly Government Properties JV To Invest $636M In 1.2M SF Portfolio
Easterly Government Properties, a REIT that specializes in owning properties leased to U.S. government entities, is acquiring a portfolio of 10 properties totaling about 1.21M SF, all of which will be leased to the Department of Veterans Affairs.
The acquisition is set to be via a joint venture Easterly is forming with an unnamed major international investor that will close on the properties as they are developed. The JV is expected to pay about $635.6M for the assets, which are mainly leased by the VA for 20 years each.
"This partnership expands our ability to execute on our external growth strategy by enhancing and diversifying our cost of capital,” Easterly Chief Financial Officer and Chief Operating Officer Meghan Baivier said in a statement.
Easterly will retain a 53% stake in the JV while its partner will own 47%. Easterly will be responsible for the day-to-day management of the properties and receive asset management fees from its partner. The JV has already closed on the acquisition of two of the portfolio's 10 properties, which are currently operating. The buyers expect to close on the remaining eight properties by the end of 2023 as they are completed and leased.
The two completed facilities are a 120K SF clinic in Lubbock, Texas, and a 31K SF facility in Lenexa, Kansas, both of which provide primary and specialty care services, such as audiology, dentistry, pathology and lab services. The other facilities will be in Alabama, Arizona, Florida, Georgia, Tennessee and Texas.
Each new facility will enable the VA to expand its current services in its respective market by replacing smaller existing clinics or supplementing existing facilities, Easterly said.
Not counting the new acquisition, the Washington, D.C.-based Easterly owns 83 properties nationwide totaling about 7.6M SF, including 81 properties leased to U.S. government tenant agencies and two leased to private tenants. As of Q2, the company is also at work on redeveloping a 200K SF property in Atlanta that will be leased to the Food and Drug Administration.