Easterly Government Properties Wednesday announced it has formed a joint venture with a global real estate investor.
The joint venture will serve as the investment vehicle for the acquisition of an anticipated 1,214,165 leased square foot portfolio of 10 properties expected to close on a rolling basis by the end of 2023, which is 100% leased to the Department of Veterans Affairs (VA), for a purchase price of approximately $635.6 million under predominately 20-year firm term leases.
Easterly’s JV partner will retain a 47.0% stake in the JV. Easterly will retain a 53.0% stake in the JV.
Easterly will also receive asset management fees from the JV partner and be responsible for the day-to-day management of the properties.
“Easterly is excited to announce a strategic partnership with one of the most sophisticated real estate investors in the world,” said Meghan G. Baivier, Easterly’s Chief Financial and Operating Officer. “This partnership expands our ability to execute on our disciplined external growth strategy by enhancing and diversifying our cost of capital, which will serve to further differentiate the company from its competitors.”
The 100% build-to-suit VA portfolio is entirely comprised of state-of-the-art, Class A Green Globe® Certified facilities, either recently delivered or under construction.
The JV closed on the acquisition of two of the 10 properties in the VA portfolio, which are currently operating. Further, and subject to the completion of customary closing conditions, the JV expects to close on the acquisition of the remaining eight properties on a rolling basis by the end of 2023, in connection with construction completion and lease commencement dates.
Once delivered, these facilities will be the newest VA medical care centers in six of the 18 Veterans Integrated Services Networks (VISNs), which six VISNs offer critical healthcare services for approximately 7.2 million veterans, or approximately one third of the entire U.S. veteran population.
“The VA portfolio is ideally suited for Easterly,” said William C. Trimble III, Easterly’s Chief Executive Officer.
“All 1.2 million square feet in this portfolio are considered ‘the center of the bullseye’ as these brand-new facilities fulfill every one of our long-held underwriting requirements. Each of the 10 assets are 100% leased to the United States Government through the Department of Veterans Affairs for a weighted average lease term of 19.6 years. In addition, all are built-tosuit, Class A, mission critical, green facilities and will help provide enhanced medical care for our nation’s deserving veterans. Easterly looks forward to further expanding its partnership with the Department of Veterans Affairs and to serving as its landlord for decades to come,” he added.
The VA Portfolio is comprised of the following 10 properties;
- VA – Phoenix, AZ
- VA – Marietta, GA
- VA – Corpus Christi, TX
- VA – Jacksonville, FL
- VA – Columbus, GA
- VA – Birmingham, AL
- VA – San Antonio, TX
- VA – Chattanooga, TN
- VA – Lubbock, TX
- VA – Lenexa, KS