Q2 2024 Easterly Government Properties Inc Earnings Call

July 31, 2024

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Operator: Greetings. Welcome to the Easterly Government Properties second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Greetings.

Operator: After the speaker's presentation, there will be a question-and-answer session between the company's research analysts and Easterland's management team. To ask a question during the session, analysts would need to press star 11 on their telephone. They would then hear an automated message advising their hands are raised.

Unknown Attendee: Welcome to the Easterly Government Properties Second Quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session between the company's research analyst and Eastonland Management team. To ask the question during the session, analysts would need to press Star 11 on their telephone. They would then hear an automated message advising their hands are raised. Please be advised that today's conference has been recorded.

Speaker Change: Welcome to the easterly government properties second quarter 'twenty to 'twenty four earnings conference call.

Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session between the company's research analysts and eastern this management team.

Speaker Change: To ask a question during the session analysts would need to press star one on their telephone.

Speaker Change: They would then your automated message advising their hands raised please be advised that today's conference is being recorded.

Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lindsay Winterhalter, Head of Investor Relations. You may begin. Good morning. Before the call begins, please note that certain statements made during this conference call may include statements that are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes that its expectations as reflected in any forward-looking statements are reasonable, it can give no assurance that these expectations will be attained or achieved.

Unknown Attendee: I would now like to hand a conference over to your speaker today.

Lindsay Wentworth: I would now like to hand, the conference over to your Speaker today Lindsay you went to a halt head of Investor Relations you may begin.

Lindsay Winterhalter: Lindsay Winterhalter, Head of Investor Relations, you may begin. Good morning.

Operator: 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 the company's control, including, without limitation, those contained in the company's most recent Form 10-K filed with the SEC and in its other SEC filings. The company assumes no obligation to update publicly any forward-looking statements.

Lindsay: Good morning before the call begins please note that certain statements made during this conference call May include statements that are not historical facts and are considered forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Lindsay Winterhalter: Before the call begins, please note that certain statements made during this conference call may include statements that are not historical facts and are considered foreboding statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes that its expectations is reflected in any foreboding statements, are reasonable, it can give no assurance that these expectations will be attained or achieved. Furthermore, actual results may differ materially from those described in the foreboding statements and will be affected by a variety of risks and factors that are beyond the company's control, including, without limitation, those contained in the company's most recent form 10-K filed with the SEC and then its other SEC violence.

Lindsay: Although the company believes that its expectations as reflected in any forward looking statements are reasonable it can give no assurance that these expectations will be a tender achieved.

Lindsay: 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 the company's control, including without limitation those contained in the company's most recent Form 10-K filed with the SEC and then its other SEC filings the company assumes no.

Lindsay Winterhalter: The company assumes no obligation to update publicly any foreboding statements.

Lindsay: Asian to update publicly any forward looking statements.

Lindsay Winterhalter: Additionally, on this conference call, the company may refer to certain non-GAAP financial measures, such as funds from operations, core funds from operations, and cash available for distribution. You can find a tabular reconciliation of these non-GAAP financial measures to the most comparable current GAAP numbers in the company's earnings release and a separate supplemental information package on the Investor Relations page of the company's website at ir.easterlyread.com.

Lindsay Winterhalter: Additionally, on this conference call, the company may refer to certain non-GAAP financial measures, such as funds from operations, core funds from operations, and cash available for distribution. You can find a tabular reconciliation of these non-GAAP financial measures to the most comparable current GAAP numbers in the company's earnings release and a separate supplemental information package on the investor relations page of the company's website at ir.easterlyreit.com. I would now like to turn the conference call over to Darrell Crate, CEO of Easterly Government Properties. Thank you, Lindsay.

Speaker Change: Additionally, on this conference call the company may refer to certain non-GAAP financial measures such as funds from operations core funds from operations and cash available for distribution you can find a tabular reconciliation of these non-GAAP financial measures to the most comparable current GAAP numbers in the company's earnings release and separate supplemental.

Speaker Change: All information package on the Investor Relations page of the company's website at IR easterly REIT Dot com.

Darrell Crate: I would now like to turn the conference call over to Darryl Crete, CEO of East Really Government Properties. Thank you, Lindsay. Good morning, everyone, and thanks for joining us for the second quarter conference call. We had a busy quarter cultivating and closing transactions, driving results at our development sites, and serving as a strategic partner to our U.S. Government agencies. We've also spent considerable time bringing our investors into our buildings to help them appreciate the difference between our purpose-built mission-critical portfolio versus the more traditional office sector. As listeners on this call may have observed, we updated our website to help viewers better understand the mission-driven specifications of the buildings in our portfolio.

Speaker Change: I'd now like to turn the conference call over to Darrell Crate CEO of easterly government properties.

Darrell William Crate: Good morning, everyone, and thanks for joining us for the second quarter conference call. We had a busy quarter cultivating and closing transactions, driving results at our development sites, and serving as a strategic partner to our U.S. government agencies. We've also spent considerable time bringing our investors into our buildings to help them appreciate the difference between our purpose-built, mission-critical portfolio versus the more traditional office sector. As listeners on this call may have observed, we updated our website to help viewers better understand the mission-driven specifications of the buildings in our portfolio. And just recently, certain events underscore the importance of fulfilling a mission through real estate. Here are some examples.

Darrell William Crate: You Lindsay and good morning, everyone and thanks for joining us for the second quarter Conference call.

Darrell William Crate: We had a busy quarter cultivating and closing transactions driving results at our development sites and serving as a strategic partner to our U S government agencies.

We've also spent considerable time, bringing our investors into our buildings to help them. Appreciate the difference between our purpose built mission critical portfolio versus the more traditional office sector.

Speaker Change: As listeners on this call may have observed we updated our website to help viewers better understand the mission driven specifications of the buildings in our portfolio and.

Darrell Crate: And just recently, certain events underscore the importance of fulfilling mission through real estate. Here are some examples. First, the investigation following the assassination attempt at President Trump's rally in Pennsylvania has been spearheaded by FBI Pittsburgh, whose field office is one of our facilities. FBI field offices are very specialized buildings and must be constructed with anti-ballistic glass, gift rooms equipped in national intelligence security standards, including radio frequency shielding, and ductwork to prevent infiltration. We have to account for things like blast protection, security screening, and other structural requirements that are essential to agencies like the FBI being able to operate effectively in times like these.

Speaker Change: And just recently certain events underscore the importance of fulfilling mission through real estate here are some examples.

Darrell William Crate: First, the investigation following the assassination attempt at President Trump's rally in Pennsylvania has been spearheaded by FBI Pittsburgh, whose field office is one of our facilities. FBI field offices are very specialized buildings and must be constructed with anti-ballistic glass skiff rooms equipped with national intelligence security standards, including radio frequency shielding and duct work to prevent infiltration. We have to account for things like blast protection, security screening, and other structural requirements that are essential to agencies like the FBI being able to operate effectively in times like these. The FBI employs approximately 35,000 people, including special agents, intelligence analysts, linguists, scientists, and information technology specialists.

Speaker Change: First the investigation following the assassination attempt at President Trump's rally in Pennsylvania has been spearheaded by Spi Pittsburgh, whose field office is one of our facilities.

Speaker Change: <unk> field offices are very specialized buildings and must be constructed with anti ballistic glass skiff rooms equipped to national intelligence security standards, including radiofrequency shielding and duct work to prevent infiltration.

Speaker Change: We have to account for things like glass protection security screening and other structural requirements that are essential to agencies like the spi being able to operate effectively in times like these.

Darrell Crate: The FBI employs approximately 35,000 people, including special agents, intelligence analysts, linguists, scientists, and information technology specialists. Whenever there is an event and our U.S. government agencies are in proximity, they absolutely must be ready to go 24 hours a day, seven days a week, 365 days a year. Next, in last week's news about the apprehension of the arrest of alleged cartel leaders, including Joaquin Guzman Lopez, also known as El Chapo Jr., was carried out by agents in our FBI DEA El Paso facility. The FBI and DEA in our Joed El Paso facility worked together with HSI to apprehend cartel leaders that boarded a plane in Mexico and then crossed the border into the US, allowing law enforcement to arrest them.

Speaker Change: The FBI employees, approximately 35000 people, including special agents intelligence analysts linguists scientists and information technology specialists.

Darrell William Crate: Whenever there is an event and our U.S. government agencies are in proximity, they absolutely must be ready to go 24 hours a day, seven days a week, 365 days a year. Next, last week's news about the apprehension of the arrest of alleged cartel leaders, including Joaquin Guzman Lopez, also known as El Chapo, Jr., was carried out by agents in our FBI DEA El Pas The FBI and DEA in our Joy Del Paso facility worked together with HSI to apprehend cartel leaders that boarded a plane in Mexico and then crossed the border into the U.S., allowing law enforcement to arrest them.

Speaker Change: Whenever there is an event in our U S. Government agencies are in proximity they absolutely must be ready to go 24 hours a day seven days a week 365 days a year.

Speaker Change: Next and last week's news about the apprehension of the arrest of alleged cartel leaders, including Joaquin Guzman Lopez also known as El Chapo Junior was carried out by agents and our FBI DEA El Paso facility, the FBI DEA in our joy at El Paso.

Speaker Change: <unk> worked together with HSI to apprehend cartel leaders that boarded a plane in Mexico, and then cross the border into the U S, allowing law enforcement to arrest them. The three agencies all easterly tenants worked in tandem over the course of the next several months.

Darrell Crate: The three agencies, all Easterly tenants, worked in tandem over the course of the next several months in order to execute this high-stakes plan. This is a clear example of what you have heard me previously say about how our specialized facilities enable these agents used to thwart and stop cartel activities and reduce drug trafficking. Our DEA facilities must be equipped for highly specialized and complicated testing of synthetic drugs, some of which we have never been seen or examined before. Through drug signature programs that analyze samples to determine processing methods, geographic origins, and manufacturers for heroin, cocaine, and methamphetamine.

Darrell William Crate: The three agencies, all Easterly tenants, worked in tandem over the course of the next several months in order to execute this high-stakes plan. This is a clear example of what you have heard me previously say about how our specialized facilities enable these agencies to thwart and stop cartel activities and reduce drug traffic. Our DEA facilities must be equipped for highly specialized and complicated testing of synthetic drugs, some of which have never been seen or examined before, through drug signature programs that analyze samples to determine processing methods, geographic origins, and manufacturers for heroin, cocaine, and methamphetamine.

Speaker Change: In order to execute this high Stakes plan.

Speaker Change: This is a clear example of what you have heard me previously say about how our specialized facilities enable these agents used to thwart and stop cartel activities and reduced drug drug trafficking.

Speaker Change: Our DEA facilities must be equipped for highly specialized and complicated testing of synthetic drugs.

Speaker Change: Some of which have never been seen are examined before.

Speaker Change: Drug signature programs that analyze samples to determine processing methods geographic origins and manufacturers for heroin and cocaine and methamphetamine.

Speaker Change: We have machines in our facilities that can take an organic drug and identify its origin down to a specific parcel of land, where the organic substance with source.

Speaker Change: This isn't conceptual it's not a SIFI movie just last Thursday in connection with the rest of the alleged cartel leaders Attorney General Merit Garland said fentanyl is the deadliest drug threat, our country has ever faced and the Justice Department will not rest until every single cartel leader member and associated responsible for Paul.

Darrell William Crate: Just last Thursday, in connection with the arrest of the alleged cartel leaders, Attorney General Merrick Garland said fentanyl is the deadliest drug threat our country has ever faced, and the Justice Department will not rest until every single cartel leader, member, and associate responsible for poisoning our communities is held accountable. This is what the FBI and DEA agents depend on us for each day in order for them to do their mission-critical work.

Darrell Crate: Just last Thursday, in connection with the arrest of the alleged cartel leaders, Attorney General Merrick Garland said, "Fentanyl is the deadliest drug threat our country has ever faced, and the Justice Department will not rest until every single cartel leader, member, and associate responsible for poisoning our communities is held accountable." This is what the FBI and DEA agents depend on. Us for each day in order for them to do their mission critical work. So much of this work can't be done outside of our specialized facilities. They are the definition of mission critical assets.

Speaker Change: <unk> our communities is held accountable.

Speaker Change: This is what the FBI DEA agents depend on.

Speaker Change: US for each day in order for them to do their mission critical work so.

Darrell William Crate: So much of this work can't be done outside of our specialized facilities. They are the definition of mission critical assets. Finally, I'll give you one more example. Let's talk about the Veterans Administration, which is one of our top ten at the moment. Over half of all veterans used at least one VA benefit or service in 2021.

Speaker Change: So much of this work can be done outside of our specialized facilities. They are the definition of mission critical assets.

Darrell Crate: Finally, I'll give you one more example. Let's talk about the Veterans Administration, which is our top tenant. Over half of all veterans used at least one VA benefit or service in 2021. And of those 9.8 million users, approximately 51% use multiple benefits, up from 36% in 2010. Our VA properties include community-based outpatient clinics that are designed to be a one-stop shop for veteran care. These regionally focused centers can have a specialized mix of departments, from radiology, dental, and optometry, to mental health, physical therapy, prosthetics, and phlebotomy. And each department has its own set of physical requirements.

Speaker Change: Finally, I'll give you one more example.

Darrell William Crate: And of those 9.8 million users, approximately 51% use multiple benefits, up from 36% in 2010. VA properties include community-based outpatient clinics that are designed to be a one-stop shop for veteran care. These regionally focused centers can have a specialized mix of departments, from radiology, dental, and optometry to mental health, physical therapy, prosthetics, and phlebotomy. And each department has its own set of physical requirements. For example, radiology has its own baseline for humidity and temperature control, while pharmaceutical requires specialized security systems.

Speaker Change: Let's talk about the veterans administration, which is our top tenant.

Speaker Change: Over half of all veterans used at least one VA benefit or service in 2021 and.

Speaker Change: And of those $9 8 million users approximately 51% use multiple benefits up from 36% in 2010.

Speaker Change: Our VA properties include community based outpatient clinics that are designed to be a one stop shop for veteran care.

Speaker Change: Regionally focused centers can have a specialized mix of departments from radiology, dental and optometry to mental health physical therapy prosthetics and phlebotomy.

Speaker Change: And each department has its own set of physical requirements for.

Darrell Crate: For example, radiology has its own baseline for humidity and temperature control, while pharmaceutical requires specialized security systems. In VA Phoenix, we have a customized kitchen, and these models are built directly into the walls of certain rooms so that care providers can assist veterans with various disabilities with self-sufficiency and the reactivating to their homes. This is our definable edge.

Speaker Change: For example.

Speaker Change: Radiology has its own baseline for humidity and temperature control, while pharmaceutical require specialized security systems.

Darrell William Crate: In VA Phoenix, we have a customized kitchen, and these models are built directly into the walls of certain rooms so that care providers can assist veterans with various disabilities with self-sufficiency and reacclimating to their home. This is our definable edge. If you take one thing away from this call today, I hope it's that you understand how essential the infrastructure we provide is to these U.S. government agencies. We are meaningfully differentiated from an office portfolio, and this provides our shareholders with greater stability and lower volatility of cash flow. Real estate markets have suffered, but our portfolio continues to perform well.

Speaker Change: In Phoenix, we have a customized kitchen.

Speaker Change: And these models are built directly into the walls of certain rooms, so that care providers can assist veterans with various disabilities with self sufficiency in the reactivating to their homes.

Speaker Change: This is our definable edge, if we take once and if you take one thing away from this call today I hope that you understand how essential the infrastructure, we provide to these <unk> U S government agencies.

Darrell Crate: If we take one thing away from this call today, I hope it's that you understand how essential the infrastructure we provide is to these U.S. government agencies. We are meaningfully differentiated from an office portfolio, and this provides our shareholders with greater stability and lower volatility of cash flow. Real estate markets have suffered, but our portfolio continues to perform well, and during this time we've taken the opportunity to expand on our strengths and broaden our strategy to provide attractive returns to our shareholders. Rather than remaining idle, we're focused on cultivating opportunity.

Speaker Change: We are meaningfully differentiated from an office portfolio and this provides our shareholders with greater stability and lower volatility of cash flow.

Speaker Change: Real estate markets have suffered but our portfolio continues to perform well and during this time, we've taken the opportunity to expand on our strengths and broadened our strategy to provide attractive returns to our shareholders.

Darrell William Crate: And during this time, we've taken the opportunity to expand on our strengths and broaden our strategy to provide attractive returns to our shareholders. Rather than remaining idle, we are focused on cultivating opportunities. For institutional investors revisiting the space with an eye towards easing interest rates, it's important to remember these three key truths.

Speaker Change: Rather than remaining idle we are focused on cultivating opportunity.

Darrell Crate: For institutional investors revisiting the space with an eye towards easing interest rates, it's important to remember that these three key truths. We're focused on growth. We believe we have the resources to execute, and we anticipate our core strategy will have additional tailwinds in a declining rate environment. Given the strategy we laid out and the growth opportunities we have in front of us, we see a path to achieving a payout ratio in the next 24 months that is consistent with our historical levels. We have a development pipeline that's significant, and we're working not only with US government agencies but also with high credit government-adjacent companies like those in the defense industry, which have government contracts and need customized facilities similar to the ones that we have owned and developed to support their own missions alongside their US government partners.

Speaker Change: For institutional investors revisiting this space with an eye towards easing interest rates. It is important to remember that these these three key truths were focused on growth. We believe we have the resources to execute and we anticipate our core strategy will have additional tailwind in a declining rate environment.

Darrell William Crate: We're focused on growth, and we believe we have the resources to execute. And we anticipate our core strategy will have additional tailwinds in a declining rate environment. Given the strategy we laid out and the growth opportunities we have in front of us, we see a path to achieving a payout ratio in the next 24 months that is consistent with our historical levels. We have a development pipeline that's significant, and we are working not only with U.S. government agencies but also with high-credit government-related companies, like those in the defense industry, which have government contracts and need customized facilities similar to the ones that we have owned and developed to support their own missions alongside their U.S. government partners.

Speaker Change: Given the strategy, we laid out and the growth opportunities we have in front of us we see a path to achieving a payout ratio in the next 24 months.

Speaker Change: That is consistent with our historical levels.

Speaker Change: We have a development pipeline that is significant and we're working not only with U S government agencies.

Speaker Change: But also with high credit government adjacent companies like those in the defense industry, which have government contracts and the customized facilities similar to the ones that we have owned and developed to support their own missions alongside their U S government partners.

Darrell Crate: We're focused on being a chosen partner to the organizations we work with by building and developing properties that help them meet and facilitate their critical missions.

Darrell William Crate: We're focused on being a chosen partner to the organizations we work with by building and developing properties that help them meet and facilitate their critical mission. Thank you again for taking the time to join us this morning, and now I'll hand things over to Meghan Baivier, our President and Chief Operating Officer. Thanks, Darrell, and good morning.

Speaker Change: We're focused on being a chosen partner to the organizations, we work with by building and developing properties that help them meet and facilitate their critical missions.

Meghan Baivier: Thank you again for taking the time to join us this morning, and now I'll hand things over to Megan Bevere, our President and Chief Operating Officer. Thanks, Darrell, and good morning. We are excited to have you join us this morning, and I echo Darrell's enthusiasm for the opportunities on the horizon. While the read sector is faced outflows over the past several years, Easterly has been working hard to harvest an incredible pipeline of long-term growth opportunities. The missions of our tenant agencies continue to grow both in terms of scale and criticality, and they have an ongoing need for specialized facilities.

Meghan G. Baivier: Thank you again for taking the time to join US This morning, and now I'll hand things over to Megan <unk>, our president and Chief operating officer.

Meghan G. Baivier: We are excited to have you join us this morning, and I echo Darrell's enthusiasm for the opportunities on the horizon. While the REIT sector has faced outflows over the past several years, Easterly has been working hard to harvest an incredible pipeline of long-term growth opportunities. The missions of our tenant agencies continue to grow, both in terms of scale and criticality, and they have an ongoing need for specialized facilities. The same is true for the government-adjacent tenants on which we focus.

Megan: Thanks, Darryl and good morning, we're excited to have you join us this morning, and I Echo Durals enthusiasm for the opportunities on the horizon, while the REIT sector has faced outflows over the past several years easterly has been working hard to harvest an incredible pipeline of long term growth opportunities.

Megan: Emissions of our tenant agencies continue to grow both in terms of scale and criticality and they have an ongoing need for specialized facilities. The.

Meghan Baivier: The same is true for the government adjacent tenants on which we focus. We are seeing large-scale net lease projects with contractual escalators that fulfill our strict definition of mission critical real estate. We believe Easterly has the platform, balance sheet, and access to capital to uniquely pursue these types of opportunities and further enhance shareholder returns. An increasingly favorable cost of equity aligns with our growth strategy and allows us to target strategic assets that not only complement our existing business lines but also have the potential of long-term earnings growth. Our goal is not just to acquire assets but to integrate them seamlessly into our operations, thereby maximizing synergies and operational efficiencies.

Megan: The same is true for the government adjacent tenants on which we focus we are seeing large scale net lease projects with contractual escalators that fulfill our strict definition of mission critical real estate. We believe easterly has the platform balance sheet and access to capital to uniquely pursue these types of opportunities and further enhanced.

Meghan G. Baivier: We are seeing large-scale net lease projects with contractual escalators that fulfill our strict definition of mission-critical real estate. We believe Easterly has the platform, balance sheet, and access to capital to uniquely pursue these types of opportunities and further enhance shareholder returns. An increasingly favorable cost of equity aligns with our growth strategy and allows us to target strategic assets that not only complement our existing business lines but also have the potential to drive long-term earnings growth.

Megan: Shareholder returns.

Speaker Change: And increasingly favorable cost of equity aligns with our growth strategy and allows us to target strategic assets that not only complement our existing business lines, but also have the potential to drive long term earnings growth. Our goal is not just to acquire assets, but to integrate them seamlessly into our operations, thereby maximizing synergies and operational.

Meghan G. Baivier: Our goal is not just to acquire assets but to integrate them seamlessly into our operations, thereby maximizing synergies and operational efficiencies. By leveraging this opportunity, we aim to strengthen our market position and deliver sustainable value to our shareholders. Since the time of our last call, we have capitalized on our growth strategy and acquired two additional assets, both in Orlando, Florida, and both critical to the safety, security, and infrastructure of our country.

Meghan Baivier: By leveraging this opportunity, we aim to strengthen our market position and deliver sustainable value to our shareholders. Since the time of our last call, we have capitalized on our growth strategy and acquired two additional assets, both in Orlando, Florida, and both critical to the safety, security, and infrastructure of our country. We have successfully transacted on three accretive deals in 2024, despite a backdrop of lower market volume, highlighting our ability to source and execute in challenging environments. In addition to acquisitions, we continue investing in our assets to further bolster our strong partnership with our important tenants.

Speaker Change: Efficiencies.

Speaker Change: By leveraging this opportunity, we aimed to strengthen our market position and deliver sustainable value to our shareholders.

Speaker Change: Since the time of our last call we have capitalized on our growth strategy and acquired two additional assets both in Orlando, Florida, and both critical to the safety security and infrastructure of our country. We.

Meghan G. Baivier: We have successfully transacted on three accretive deals in 2024, despite a backdrop of lower market volume, highlighting our ability to source and execute in challenging environments. In addition to acquisitions, we continue investing in our assets to further bolster our strong partnership with our important tenants. This is part of our competitive edge relative to other owners of mission-critical government leased real estate and is an important component of our ability to consistently deliver stable cash flows to shareholders.

Speaker Change: We have successfully transacted on three accretive deals in 2024, despite a backdrop of lower market volume, highlighting our ability to source and execute in challenging environments.

Speaker Change: In addition to acquisitions, we continue investing in our assets to further bolster our strong partnership with our important tenants. This is part of our competitive edge relative to other owners of mission critical government leased real estate and is an important component of our ability to consistently deliver stable cash flows to shareholders.

Meghan Baivier: This is part of our competitive edge, relative to other owners of Mission Critical Government, least real estate, and is an important component of our ability to consistently deliver stable cash flows to shareholders. Looking forward, we see an outsized pipeline of opportunities that we believe will further our ability to meet our stated goal of delivering two to three percent core FFO per share growth year over year for years to come. We are making progress with an opportunity to serve as lender and then buyer of Mission Critical Assets that we believe will further change the growth trajectory of this organization.

Meghan G. Baivier: Looking forward, we see an outsized pipeline of opportunities that we believe will further our ability to meet our stated goal of delivering two to 3% core FFO per share growth year over year for years to come. We are making progress with an opportunity to serve as lender and then buyer of mission-critical assets that we believe will further change the growth trajectory of this organization. We look forward to keeping you apprised as this develops.

Speaker Change: Looking forward, we see an outsized pipeline of opportunities that we believe will further our ability to meet our stated goal of delivering 2% to 3% core <unk> per share growth year over year for years to come we.

Speaker Change: We are making progress with an opportunity to serve as lender and then buyer of mission critical assets that we believe will further change the growth trajectory of this organization. We look forward to keeping you apprised as this develops with that thank you for your time. This morning I encourage attendees on this call to spend some time digging into the easterly model to.

Meghan Baivier: We look forward to keeping you apprised as this develops.

Meghan G. Baivier: With that, thank you for your time this morning. I encourage attendees on this call to spend some time digging into the Easterly Model to understand our opportunity for getting on a path for outsized growth over the next several years. I will now hand the call over to Allison. Thanks, Meghan. Good morning, everyone. I'm pleased to report the financial results for the second quarter. Both On a fully diluted basis, net income per share was $0.04, and core FFO per share was $0.29.

Meghan Baivier: With that, thank you for your time this morning. I encourage attendees on this call to spend some time digging into the easterly model to understand our opportunity. Thank you for getting on a path for outsized growth over the next several years.

Speaker Change: To understand our opportunity for getting on a path for outsized growth over the next several years I will now hand, the call over to Alison.

Allison Marino: I will now hand the call over to Allison. Thanks, Megan. Good morning, everyone. I am pleased to report the financial results for the second quarter. Both on a fully diluted basis, net income per share was 4 cents and core FFO per share was 29 cents. Our cash available for distribution was $24.8 million. We maintain our focus on growing the enterprise through the acquisition, development, and renewal of Mission Critical Assets, at least primarily to the U.S. government, as well as its adjacent partners. While calm on the surface, behind the scenes our team is working at a rapid pace to execute on the roughly billion and a half to $2 billion worth of pipeline opportunities we see today.

Meghan: Meghan good morning, everyone.

Alison: I am pleased to report the financial results for the second quarter, both on a fully diluted basis net income per share was <unk> <unk> and core <unk> per share was 29.

Allison E. Marino: Our cash available for distribution was $24.8 million. We maintain our focus on growing the enterprise through the acquisition, development, and renewal of mission-critical assets leased primarily to the U.S. government, as well as its adjacent partners. While calm on the surface, behind the scenes, our team is working at a rapid pace to execute on the roughly $1.5 billion to $2 billion worth of pipeline opportunities we see today. As a company with a $1.4 billion market cap, this outsized growth opportunity is extremely exciting for the company and, hopefully, our prospective shareholders.

Speaker Change: Our cash available for distribution was $24 8 million.

Alison: We maintain our focus on growing the enterprise through the acquisition development and renewal of mission critical assets leased primarily to the U S government as well as its adjacent partners well.

Alison: On the surface behind the scenes our team is working at a rapid pace to execute on the roughly 1 billion and a half to $2 billion worth of pipeline opportunities we see today.

Allison Marino: As a company with a $1.4 billion market cap, this outsized growth opportunity is extremely exciting for the company and hopefully our prospective shareholders. The easterly team has done a great job of getting the balance sheet poised and ready to absorb the anticipated capital needs to fund this unique opportunity. First, we are once again met with great success in the private placement market with the execution of $200 million of fixed-rate senior unsecured notes with nine-year maturities. This is our fourth entry into this market, and we were pleased with the over-subscribed interest from new and existing investors alike.

Speaker Change: As a company with a $1 $4 billion market cap, that's outsized growth opportunity is extremely exciting for the company and hopefully our prospective shareholders.

Allison E. Marino: The Easterly team has done a great job of getting the balance sheet poised and ready to absorb the anticipated capital needs to fund this unique opportunity. First, we have once again met with great success in the private placement market with the execution of $200 million of fixed rate senior unsecured notes with nine year maturity. This is our fourth entry into this market, and we were pleased with the oversubscribed interest from new and existing investors alike.

Speaker Change: The easterly team has done a great job of getting the balance sheet poised and ready to absorb the anticipated capital needs to fund this unique opportunity.

Speaker Change: First we are once again met with great success in the private placement market with the execution of $200 million of fixed rate senior unsecured notes with nine year maturities. This is our first entry into this market and we were pleased with the oversubscribed interest from new and existing investors alike.

Allison Marino: We believe the credit quality of our underlying U.S. government tenant is a significant draw on this market and our trip will be stable rating from coal provides third party validation of that. As of today, we have closed the first $150 million tranche of Series A notes, and we remain on track to close the second $50 million tranche of Series B notes on August 14th, subject to customary closing conditions. Second, we were pleased to partner with our premier syndicate of banks and execute a new $400 million revolving credit facility with an accordion feature that allows for total borrowing capacity of up to $700 million.

Allison E. Marino: We believe the credit quality of our underlying U.S. government tenant is a significant draw on this market, and our triple B stable rating from Kroll provides third-party validation of that. As of today, we have closed the first $150 million tranche of Series A notes, and we remain on track to close the second $50 million tranche of Series B notes on August 14, subject to customary closing conditions.

Speaker Change: We believe the credit quality of our underlying U S. Government tenant is a significant draw in this market and our triple will be stable rating from Kroll provides third party validation of that.

Speaker Change: As of today, we have closed the first $150 million tranche of series a notes and we remain on track to close the second $50 million tranche of series B notes on August 14th subject to customary closing conditions.

Allison E. Marino: Second, we were pleased to partner with our premier syndicate of banks and execute a new $400 million revolving credit facility with an accordion feature that allows for total borrowing capacity of up to $700 million. With an initial maturity date of June 2028 and two six-month as of right extension options, we are pleased to extend the term of lender commitments and secure the liquidity necessary to pursue a creative capital deployment opportunity. I would like to thank our capital partners for the successful execution of both transactions and a special thanks to Citi, PNC, Truist, and Wells Fargo for serving as joint lead arrangers on our revolver. In total, we believe the success highlights our unique strategy, superior credit quality, and attractive platform relative to other regions. Turning to guidance,

Speaker Change: Second we were pleased to partner with our Premier syndicate of banks and execute a new $400 million revolving credit facility with an accordion feature that allows for a total borrowing capacity of up to $700 million.

Allison Marino: With an initial maturity date of June 2028 and two six-month as-of-right extension options, we are pleased to extend the term of lender commitments and secure the liquidity necessary to pursue creative capital deployment opportunities.

Speaker Change: With an initial maturity date of June 2028, and two six months as of right extension options. We are pleased to extend the term of lender commitments and secured the liquidity necessary to pursue accretive capital deployment opportunities.

Allison Marino: I would like to thank our capital partners and the successful successful execution of both transactions, and a special thanks to City, PNC, Truist, and Wells Fargo for serving as joint lead arrangers on our revolver. In total, we believe this success highlights our unique strategy, superior credit quality, and attractive platform relative to other REITS. Turning to guidance, after a recent raise subsequent to last quarter's call, I am happy to share that we are maintaining our full year core FFO per share guidance for 2024 in a range of $1.15 to $1.17 on a fully diluted basis. This guidance assumes the closing of VA Jacksonville through the company's joint venture at a pro rata acquisition price of four.

Speaker Change: I would like to thank our capital partners and our success successful execution of both transactions and a special thanks to city P&C <unk> Wells Fargo for serving as joint lead Arrangers on our revolver.

Speaker Change: In total we believe the success highlights our unique strategy superior credit quality and attractive platform relative to other Reits.

Speaker Change: Turning to guidance.

Allison E. Marino: After a recent raise subsequent to last quarter's call, I am happy to share that we are maintaining our full-year core FFO per share guidance for 2024 in a range of $1.15 to $1.17 on a fully diluted basis. This guidance assumes the closing of VA Jacksonville through the company's joint venture at a pro rata acquisition price of $41 million, approximately $50 million in wholly owned acquisitions throughout 2024, and $100 to $110 million of growth development related investment during the year.

Speaker Change: After recent raise subsequent to last quarter's call I am happy to share that we are maintaining our full year core <unk> per share guidance for 2024, and a range of $1 15 to $1 17 on a fully diluted basis. This guidance assumes the closing of VA Jacksonville through the Companys joint venture at our pro rata acquisition.

Allison Marino: $41 million, approximately $50 million, and wholly owned acquisitions throughout 2024, and $100 to $110 million of growth development related investment during the year. At its midpoint, this sets a path for Easterly to deliver strong core FFO per share earnings growth to shareholders this year. And as we start to execute on the outsize pipeline of opportunities that we have identified, we expect an outsized growth opportunity for our shareholders will then follow.

Speaker Change: Priced at $41 million approximately $50 million in wholly owned acquisitions throughout 2024, and $100 million to $110 million of gross development related investment during the year.

Allison E. Marino: At its midpoint, this sets a path for Easterly to deliver strong core FFO per share earnings growth to shareholders this year. And as we start to execute on the outsized pipeline of opportunities that we have identified, we expect an outsized growth opportunity for our shareholders will then follow. With that, we thank you for your time this morning and appreciate your partnership. I will now turn the call back to Tawanda.

Speaker Change: At its midpoint this sets a path for easterly to deliver strong <unk> per share earnings growth to shareholders. This year and as we start to execute on the outsized pipeline of opportunities that we have identified we expect an outsized growth opportunity for our shareholders. We will then follow.

Allison Marino: So, with that, we thank you for your time this morning and appreciate your partnership.

Speaker Change: With that we thank you for your time this morning, and appreciate your partnership I will now turn the call back to Taiwan to us.

Unknown Attendee: I will now turn the call back to those. Thank you. As a reminder to the analysts to ask the question, you will need to press star 11 on your telephone. Please stand by while we compile the Q&A roster.

Operator: Thank you. As a reminder to the analysts to ask a question, you will need to press star 11 on your telephone. Please stand by while we compile the Q&A, Ross. Our first question comes from the line of Michael Griffin with Citi. Your line is open.

Taiwan: Thank you.

Speaker Change: As a reminder to the analysts to ask a question you will need to press star one on your telephone.

Speaker Change: Please standby, while we compile the Q&A Boston.

Michael Griffin: Our first question comes from the line of Michael Griffin with City. Your line is open. Great. Thanks. I'm appreciated the color in the opening remarks.

Speaker Change: Our first question comes from the line of Michael Griffin with Citi. Your line is open.

Michael Anderson Griffin: Great, thanks. I appreciated the color in the opening remarks. Just wondering if you could expand a bit kind of on the acquisition opportunities you're seeing. I think we've seen the transaction market thaw somewhat, so maybe an expectation about when they could pick up, and then if you could give us a sense of where investment spreads are relative to your current cost of capital. Yeah, maybe just, you know, to start at the top.

Michael Anderson Griffin: Great. Thanks, I appreciated the color in the opening remarks I was wondering if you could expand a bit kind of on the acquisition opportunities you're seeing I think we've seen the transaction market saw somewhat so maybe an expectation about when they could pick up and then if you could give us a sense on where investment spreads are relative to your current <unk>.

Darrell Crate: Just wondering if you could expand a bit kind of on the acquisition opportunities you're seeing. You know, I think we've seen the transaction market law. Some what's maybe an expectation about when they could pick up and then if you give us a sense on where investment spreads are relative to your current cost capital. Yeah, maybe, maybe just, you know, to start at the top, we, you know, as we talked a lot in last quarter, you know, the bid aspect was wide, and we obviously, you know, see that, see that shrinking. We are, you know, in a place today where, you know, especially, you know, buildings where folks have debt that's maturing, you know, time is a little bit on our side, you know, as we, as we move forward.

Michael Anderson Griffin: Capital.

Speaker Change: Yes, maybe just.

Speaker Change: To start at the top.

Darrell William Crate: We, you know, as we talked about in the last quarter, the bid-ask spread was wide, and we obviously, you know, see that shrinking. We are, you know, in a place today where, especially, buildings where folks have debt that's maturing, time is a little bit on our side as we move forward, and that's having a powerful impact on, again, taking that bid-ask spread and shrinking it a bit.

Speaker Change: As we talked about last quarter, the bid ask spread was wide and we obviously see that see that shrinking.

Speaker Change: We are in a place today.

Speaker Change: We're especially buildings where folks have debt that's maturing.

Speaker Change: Time is.

Speaker Change: A little bit on our side as we as we move forward and that's having a powerful impact on again, taking that bid ask spread and shrink in the debate.

Darrell Crate: And, you know, that's having a powerful impact on, again, taking that bid aspect and shrink into the bit. You know, for us, you know, our cost to capital today is just about seven and a quarter. And, you know, stepping back when we, you know, talked about our growth strategy and sort of, you know, two to three percent growth, you know, going forward and how we were, you know, continuing to build out our, you know, our growth strategy. You know, the stock was at $12, you know, so that as we've seen the stock appreciate almost 10 percent, a little bit more since then.

Darrell William Crate: You know, for us, our cost of capital today is just about $7.25, and, you know, stepping back when we talked about our growth strategy and sort of, you know, 2 to 3 percent growth going forward and how we were, you know, continuing to, you know, build out our, you know, growth strategy, the stock was at $12. So that is, we've seen this stock appreciate almost 10 percent, a little bit more since then. You know, that only means, you know, more accretion, a better cost of capital, and, you know, all those things that make REITs go around.

Speaker Change: For us our cost of capital today is just about seven and a quarter.

Speaker Change: And stepping back when we talked about our growth strategy and sort of 2% to 3% growth going forward and how we were continuing to build out our our growth strategy.

Speaker Change: <unk> was at $12, so that as we've seen the stock appreciate almost 10% a little bit more since then.

Darrell Crate: You know, that only means, you know, more creation, better cost to capital, and, you know, all those things that make reeds go around. We have a robust pipeline; you know, as I said, we're working not only on US government agencies, as well as state and local, but also, you know, those high credits, you know, government-adjacent tenants. And we feel very excited about the growth prospects as we go forward.

Speaker Change: That only means more accretion better cost of capital and all those things that make rates go around.

Darrell William Crate: We have a robust pipeline, you know, as I said, we're working not only with U.S. government agencies as well as state and local but also, you know, those high-credit, government-adjacent tenants, and we feel very excited about the growth prospects as we go forward. Appreciate that, Darrell.

Speaker Change: We have a robust pipeline as I said, we're working not only on U S government agencies as well as state and local but also those high credits government adjacent tenants.

Speaker Change: And we feel very excited about the growth prospects as we go forward.

Darrell Crate: Appreciate that, Darrell. And then maybe just kind of one broad comment around the upcoming election and if there's any chance of potential change in the administration could impact various aspects of your business. I mean, we are in our core strategy of US government assets. We've always picked agencies that really aren't swayed by the political wins. So VA, FBI, DEA; I think both parties agree that each of those serve a very important, critical mission. You know, we're not a Department of Education is not on our list. And so most of the folks who you hear are vulnerable to, you know, when one party's preference over the other are not our major tenants.

Darrell William Crate: And then maybe just kind of one, you know, broad comments around the upcoming election and if there's any chance that a potential change in administration could impact various aspects of your business. I mean, you know, we are in our core strategy of, you know, U.S. government assets. We've always picked agencies that really aren't swayed by, you know, the political winds. So, you know, the VA, the FBI, you know, the DEA, I think both parties agree that each of those serves a very important, critical mission.

Speaker Change: I appreciate that Darryl and then maybe just kind of one broad comment around the upcoming election, and if theres any chance of potential change in administration could impact various aspects of your business.

Speaker Change: I mean, we are.

Speaker Change: Our core strategy of U S government assets, we've always picked agencies that really arent swayed by the political wins so.

Speaker Change: I think I think both parties agree the each of those serve a very important critical mission.

Darrell William Crate: You know, we're not, you know, the Department of Education is not on our list, and so most of the folks who you hear are vulnerable to, you know, one party's preference over the other are not our major tenants.

Speaker Change: We're not in the department of Education is not on our list and so most of the folks who you here.

Speaker Change: Our vulnerable to when one party's preference over the other or not our major tenants.

Michael Griffin: Great. That's it for me. Thanks for the time. Thanks a lot. Thank you. Please stand by for our next question.

Michael Anderson Griffin: Great, that's it for me. Thanks for the time. Hey, thanks a lot.

Speaker Change: Great. That's it for me thanks for the time, Hey, Thanks, a lot.

Speaker Change: Thank you ladies.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Michael Carroll with RBC. Your line is open.

Speaker Change: Please standby for our next question.

Michael Carroll: Our next question comes from the line of Michael Carol with RBC. Yeah, line is open. Yeah, thank you.

Speaker Change: Our next question comes from the line of Michael Carroll with RBC. Your line is open.

Michael Albert Carroll: Yep, thank you. I guess, Megan, can you give us an update on your leasing activity? I know it looks like the lease expiration schedule hasn't really changed much. So I'm assuming nothing was really signed this quarter.

Michael Albert Carroll: Yes. Thank you I guess, making can you give us an update on your leasing activity I know it looks like the lease expiration schedule Hasnt really changed much. So I'm, assuming nothing else really sign this quarter and I know last quarter, you are pretty optimistic by some of those progresses. So maybe can you give us an idea of the timing of when you can satisfy the 2024.

Meghan Baivier: I guess, Megan, can you give us an update on your leasing activity? I know it looks like the lease expiration schedule hasn't really changed much. So I'm assuming nothing really signed this quarter. And I know last quarter you're pretty optimistic by some of those progress. So maybe can you give us an idea of the timing of when you can satisfy the 2024 leases and what's the outlook for the 2025 exp. Yeah, happy to do that. As we look at the remainder of 2024, right, the two largest, well, one is outside. It's our FBI and Omaha.

Meghan G. Baivier: And I know last quarter you were pretty optimistic about some of those progresses. So maybe can you give us an idea of the timing of when you can satisfy the 2024 leases? And what's the outlook for the 2025 expirations? Yeah, happy to do that.

Speaker Change: Leases and what's the outlook for the 2025 explorations.

Meghan G. Baivier: As we look at the remainder of 2024, the two largest, well, one is outsized, it's our FBI in Omaha, and then we have an FBI tenancy in our Portland asset, as well as two other small tenancies. And I would say, certainly the FBI in Omaha, I wish I could have had positive commentary for you today, but we feel very good about that as we do about the others. Looking to 2025, you know, as those become more firmly in view, we've got a handful of FBIs.

Speaker Change: Yes happy to do that as.

Speaker Change: As we look at the remainder of 2024 and the two largest one is outsize, it's our FBI in Omaha, and then we have an FBI tendency in our Portland asset as well.

Meghan Baivier: And then we have an FBI tendency in our Portland asset, as well as two other small tendencies. And I would say, you know, certainly the FBI Omaha. I wish I could have had positive commentary for you today. But we feel very good about that, as we do about the others. Looking to 2025, you know, as those become more firmly in view, we've got a handful of FBI and a courthouse and Aberdeen. I'd say the same sentiment applies there for positive news on the horizon; those procurements being in being at stages and in a position where we, you know, appreciate the progress and look to see a positive outcome.

Speaker Change: Well as two other small tenancies and I would say certainly the FBI Omaha.

Speaker Change: I wish I could have had positive commentary for you today, but we feel very good about that as we do about about the others.

Speaker Change: Looking to 2025.

Speaker Change: As those become more firmly in view, we've got a handful of FB eyes in a courthouse in Aberdeen I'd say the same sentiment applies therefore.

Michael Albert Carroll: Courthouse in Aberdeen, I'd say the same sentiment applies there, positive news on the horizon, those procurements being in, being at stages, and in a position where we, you know, we appreciate the progress and look to see a positive outcome. Okay, and then with these being the, I guess a lot of the expirations being kind of in the center of your bullseye that you're typically targeting, can we assume cash lease spreads? Are these in the 15 to 20% range?

Speaker Change:

Speaker Change: Positive news on the horizon, those procurements being in.

Speaker Change: Being at stages and in a position where we appreciate the progress and look to see a positive outcome.

Meghan Baivier: Okay, and then with these being the, I guess a lot of the expiration being kind of in the center of your of your bull die that you're typically targeting, can we assume cash lease breads are these in the 15 to 20% range? Or is there something unique that we should be thinking about? Yeah, FBI Omaha is subject to a perspective. We've known that, so that renewal likely looks more like a flat renewal. But as we look to the two FBI's in the courthouse in 2025, yes, Mike, I would tell you those are our expectations are squarely in that high teens, high teens range from a net effective spread.

Speaker Change: Okay, and then with these being the I guess a lot of the exploration being kind of in the center of your bullseye that you're typically targeting can we assume cash lease spreads or are these in the 15% to 20% range or is there something unique that we should be thinking about.

Meghan G. Baivier: Or is there something unique that we should be thinking about? Yeah, FBI Omaha is subject to a prospectus. We've known that. So that renewal likely looks more like a flat rate renewal. But as we look to the two FBI's in the courthouse in 2025, yes, Mike, I would tell you those are our expectations are squarely in that high teens, high teens range, and Net Effective Spread. Okay, great. And then just two, I guess, kind of modeling-type questions on the JV deal, like what's the timing of completing that JV acquisition, the last acquisition from that transaction?

Speaker Change: Yeah.

Speaker Change: On the high subject to a perspective, we've known that.

Mike: That renewal likely looks more like a flat renewal, but as we look to the two <unk> in the courthouse and 2025, yes, Mike I would tell you those are our expectations are squarely in that high teens.

Speaker Change: High teens range from a net effective spread.

Michael Carroll: Okay, great.

Speaker Change: Okay, Great and then just to I guess kind of modeling type questions, but on the JV deal like what's the timing of completing the <unk> acquisition the last acquisition from that transaction.

Michael Carroll: And then just two, I guess, kind of modeling type questions that on the JV deal, like what's the timing of completing that JV acquisition, the last acquisition from that transaction? Yep, that last, the Jacksonville, excuse me, the Jacksonville VA; we, it is our expectation that that is teed up to close in the quarter. And that would be the last transaction.

Meghan G. Baivier: Yep, that last one, the Jacksonville VA, it is our expectation that that is teed up to close in the quarter, and that would be the last. Okay, and then final one for me, I know there was a small, and I don't really want to, it's so small, I'm not sure it's worth talking about, but there is a loan provision for credit losses that was added back to FFO. Can you kind of explain what that is?

Speaker Change: Yes.

Speaker Change: That last.

Speaker Change: The Jacksonville excuse me the Jacksonville.

Speaker Change: VA.

Speaker Change: It is our expectation that that is teed up to close in the quarter.

Speaker Change: And and and.

Speaker Change: That would be the.

Speaker Change: The last the last transaction.

Meghan Baivier: Okay, and then final one for me. I know there was a small, and I don't really know what it's so small, I'm not sure what we're talking about, but there is a loan provision for credit losses that was added back to FFO. Can you kind of explain what that is, and should we expect any additional credit loss provisions to be recorded over the next few quarters? Sure, I can take that one. So, as we've shared, there's an opportunity in the market for us to partner with developers on projects and act in a lender position. We have a small pre-leased award loan out to a developer, and while that loan is not experiencing actual loss through default, accounting rules require us to estimate a credit loss probability for this asset for the term it's outstanding.

Speaker Change: Okay, and then final one from me I know there was a small.

Speaker Change: I'm wondering really what it is so small so I'm not sure if we're talking about but there is AG.

Speaker Change: Loan provision for credit losses that was added back to <unk> can you kind of explain what that is.

Speaker Change: Should we expect any additional.

Speaker Change: Credit loss provisions to be recorded over the next few quarters.

Meghan G. Baivier: And should we expect any additional credit loss provisions to be recorded over the next few quarters? Sure, I can take that one. So, as we've shared, there's an opportunity in the market for us to partner with developers on projects and act in a lender position. We have a small pre-lease award loan out to a developer, and while that loan is not experiencing actual loss or default, accounting rules require us to estimate a credit loss probability for this asset for the term it's outstanding, so that will continue to get tweaked through its maturity date.

Speaker Change: Sure I can take that one so as we've shared there's an opportunity in the market for us to partner with developers on projects and act in a lender position, we have a small pre lease award loan out to a developer and while that loan is not experiencing actual loss or a default.

Speaker Change: Rounding rules require us to estimated credit loss probability for this asset.

Speaker Change: The term its outstanding so that that will continue to get tweaked.

Michael Carroll: So that will continue to get tweaked through its maturity date. Okay, great, thank you. Thank you. As a reminder, that start 1-1 to ask the question. Will you stand by for our next question?

Speaker Change: Through its maturity date.

Michael Albert Carroll: Okay, great. Thank you. Thank you. As a reminder, that's star 11 to ask a question.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thank you.

Speaker Change: As a reminder, that star one to ask a question.

Operator: Please stand by for our next question. Our next question comes from the line of Christopher Skrakovic with Jeffries. Your line is open. Hey guys, Seb again here for Peter. Just wanted to touch on maintenance CapEx. It was a little bit higher this quarter.

Speaker Change: Please standby for our next question.

Christopher Sreckovich: Our next question comes from the line of Christopher Sreckovich with Jeffries. The line is open.

Speaker Change: Our next question comes from the line of Christopher Retrofits with Jefferies. Your line is open.

Christopher Sreckovich: Hey guys, stepping in here for Peter. Just wanted to touch on Maintenance CapEx was a little bit higher this quarter. You talk about expected run rate going forward and any items we should look out for for the rest of the year from a FFO perspective. Thanks. As you can probably expect, there's always timing as projects kick off and complete throughout the year. So I would say there's not, not change changes to our run rate expectations on that line.

Christopher Skrakovic: Can you talk about expected run rate going forward and any items we should look out for the rest of the year from an AFFO perspective? As you can probably expect, there's always timing as projects kick off and complete throughout the year. So I would say there are no changes to our run rate expectations on that line.

Christopher Retrofits: Hey, guys stepping in here for Peter just wanted to touch on maintenance Capex was a little bit higher this quarter when you talked about.

Speaker Change: <unk> run rate going forward and any items, we should look out for the rest of the year from a micro perspective. Thanks.

Speaker Change: As you can probably expect that there is always timing as projects kickoff and complete throughout the year. So I would say there is not that change.

Speaker Change: Changes to our run rate expectations on that on that line.

Christopher Sreckovich: Okay, great, thanks.

Meghan G. Baivier: Okay, great, thanks. And then, I guess we're generally on the acquisition front. We kind of touched on it a little bit. But, you know, as rates come down, generally, you get a different pool of buyers looking at these assets. Do you think you'll see more competition for the assets you're targeting? And kind of how will that impact price? take that.

Speaker Change: Okay, great. Thanks, and then I guess more generally on the acquisition front, you kind of touched on it a little bit but as rates come down generally you get a different pool of buyers looking at these assets do you think you'll see more competition for the assets, you're targeting and kind of how will that impact pricing.

Christopher Sreckovich: And then I guess we're generally on the acquisition front. We kind of touched on it a little bit, but you know, as rates come down generally, you get a different pool of buyers looking at these assets. Do you think you'll see more competition for the assets you're targeting, and kind of how will that impact pricing? I think we are excited for the cost of our cost of capital to be normalizing and really presenting increased opportunities to acquire at a healthy 50 to 100 basis point spread. You know, that cost of capital is still leading in the industry, right?

Meghan G. Baivier: I mean, I think we are excited for the cost of our cost of capital to be normalizing and really presenting increased opportunities to acquire it. At a healthy 50 to 100 basis point spread, that cost of capital is still leading in the industry, right? Our ability to access the private placement market in the way we did the equity cost today of the stock, right. So our blended cost of capital is still a competitive advantage as we go into the marketplace. It's been It's really more about meeting sellers' expectations.

Speaker Change: I'll take that.

Speaker Change: Thank you.

Speaker Change: And are excited for the cost of our cost of capital to be.

Speaker Change: Normalizing in really presenting increased opportunities to acquire it.

Speaker Change: The 50 to 100 basis points spread.

Speaker Change: That cost of capital is still leading in the industry right our ability to access.

Meghan Baivier: Our ability to access the private placement market in the way we did, the equity cost today of the stock rate. So our blended cost of capital is still a competitive advantage as we go into the marketplace. It's been it's really more about meeting sellers' expectations.

Speaker Change: The private placement market and the way we did.

Speaker Change: The equity cost today.

Speaker Change: The stock right. So our blended cost of capital is still.

Speaker Change: <unk> advantage as we go into the marketplace. It's been it's really more about <unk>.

Speaker Change: Meeting sellers expectations.

Christopher Skrakovic: Transcribed by https://otter.ai, Great, that's helpful. Thank you. Thank you. I'm showing no further questions in the queue.

Christopher Sreckovich: Great, that's helpful. Thank you.

Speaker Change: Great. That's helpful. Thank you.

Speaker Change: Thank you.

Unknown Attendee: I'm showing no further questions in the queue.

Speaker Change: I'm showing no further questions in the queue I would now like to turn the call back to Darrell Crate chairman of easterly government properties for closing remarks.

Darrell Crate: I will now like to turn the call back to Darryl, great chairman of the easing government property, for closing remarks. Thank you, everyone. And thanks for joining the Easterly Government Properties second quarter 2024 conference call. We look forward to keeping you posted on the coming quarters and as we make progress on our pipeline of growth opportunities.

Darrell William Crate: Thank you everyone and thanks for joining the easterly government properties second quarter 2024 conference call. We look forward to keeping you posted on the coming quarters and as we make progress on our pipeline of growth opportunities.

Unknown Attendee: This concludes today's conference call. Thank you for participating.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Unknown Attendee: You may now disconnect.

Unknown Attendee: Thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you Thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you .

Darrell William Crate: Okay.

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Unknown Attendee: Thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us Thank you very much joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us today, thank you very much for joining us Thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us Thank you so much for joining us Thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today Thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for joining us today, thank you so much for Please be advised that today's conference has been recorded.

Speaker Change: Okay.

Speaker Change: Yes.

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Speaker Change: Great.

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Darrell Crate: Yes.

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Christopher Skrakovic: Yes.

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Christopher Skrakovic: Yes.

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Christopher Skrakovic: Okay.

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Christopher Skrakovic: Okay.

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Christopher Skrakovic: Okay.

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Christopher Skrakovic: Great.

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Christopher Skrakovic: Perfect.

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Christopher Skrakovic: Yes.

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Christopher Skrakovic: Okay.

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Speaker Change: Yes.

Darrell Crate: Okay.

Christopher Skrakovic: Okay.

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Christopher Skrakovic: Yes.

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Speaker Change: Thanks.

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Christopher Skrakovic: Thanks.

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Speaker Change: Thanks.

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Speaker Change: Okay.

Speaker Change: Welcome to the easterly government properties second quarter 2024 earnings conference call at.

Christopher Skrakovic: To ask a question during the session analysts would need to press star one on their telephone.

Speaker Change: They would then youre automated message advising their hands as Ray please.

Speaker Change: Please be advised that today's conference is being recorded.

Lindsay Winterhalter: I would now like to hand a conference over to your speaker today, Lindsay Winterhalter, and of Investor Relations. You may begin.

Darrell William Crate: I would now like to turn the call back to Darrell Crate, Chairman of Easterly Government Properties, for closing remarks. Thank you everyone and thanks for joining the Easterly Government Properties second quarter 2024 conference call. We look forward to keeping you posted on the coming quarters and as we make progress on our pipeline of growth opportunities. This concludes today's conference call. Thank you for participating. You may now disconnect.

Lindsay Wentworth: I would now like to hand, the conference over to your Speaker today Lindsay went to hall head of Investor Relations.

Speaker Change: You may begin.

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Speaker Change: Good morning before the call begins please note that certain statements made during this conference call May include statements that are not historical facts and are considered forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.

Speaker Change: Although the company believes that its expectations as reflected in any forward looking statements are reasonable it can give no assurance that these expectations will be attained or achieved.

Lindsay Winterhalter: If we reflect it in any forward-looking statements, are reasonable, it can give no assurance that these expectations 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 the company's control, including, without limitation, those contained in the company's most recent Form 10-K filed with the SEC and then its other SEC filings.

Speaker Change: 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 the company's control, including without limitation those contained in the company's most recent Form 10-K filed with the SEC and then its other SEC filings the company assumes no.

Lindsay Winterhalter: The company assumes no obligation to update publicly any for-looking statements. Additionally, on this conference call, the company may refer to certain non-GAAP financial measures, such as funds from operations, core funds for operations, and cash available for distribution. You can find a tabular reconciliation of these non-GAAP financial measures to the most comparable current GAAP numbers in the company's earnings release and its separate supplemental information package on the investor relations page of the company's website at ir.easterlyread.com.

Speaker Change: To update publicly any forward looking statements.

Speaker Change: You can find a tabular reconciliation of these non-GAAP financial measures to the most comparable current GAAP numbers in the company's earnings release and separate supplemental information package on the Investor Relations page of the company's web site at IR easterly REIT Dot com.

Operator: Title Microsoft Office Word Document MSWordDoc Word. Document.8, At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session between the company's research analysts and Easterland's management team. To ask a question during the session, analysts would need to press star 11 on their telephone. They would then hear an automated message advising their hands are raised.

Darrell Crate: I would now like to turn the conference call over to Darrell Crate, CEO of Easterly Government Properties. Thank you, Lindsay. Good morning, everyone, and thanks for joining us for the second quarter conference call. We had a BDZ quarter cultivating and closing transactions, driving results at our development sites, and serving as a strategic partner to our US government agencies. We've also spent considerable time bringing our investors into our buildings to help them appreciate the difference between our purpose-built, mission-critical portfolio versus the more traditional office sector. As listeners on this call may have observed, we updated our website to help viewers better understand the mission-driven specifications of the buildings in our portfolio.

Operator: I'd now like to turn the conference call over to Darrell Crate CEO of easterly government properties. Thank.

Lindsay Winterhalter: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lindsay Winterhalter, Head of Investor Relations. You may begin. Good morning.

Lindsay Winterhalter: Before the call begins, please note that certain statements made during this conference call may include statements that are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes that its expectations as reflected in any forward-looking statements are reasonable, it can give no assurance that these expectations 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 the company's control, including without limitation those contained in the company's most recent Form 10-K filed with the SEC and in its other SEC filings. The company assumes no obligation to update publicly any forward-looking statements.

Speaker Change: Thank you Lindsey and good morning, everyone and thanks for joining us for the second quarter Conference call. We.

Lindsay Winterhalter: Additionally, on this conference call, the company may refer to certain non-GAAP financial measures, such as funds from operations, core funds from operations, and cash available for distribution. You can find a tabular reconciliation of these non-GAAP financial measures to the most comparable current GAAP numbers in the company's earnings release and a separate supplemental information package on the investor relations page of the company's website at ir.easterlyreit.com. I would now like to turn the conference call over to Darrell Crate, CEO of Easterly Government Properties. Thank you, Lindsay.

Speaker Change: We had a busy quarter cultivating and closing transactions driving results at our development sites and serving as a strategic partner to our U S government agencies.

Darrell William Crate: We've also spent considerable time, bringing our investors into our buildings to help them. Appreciate the difference between our purpose built mission critical portfolio versus the more traditional office sector.

Darrell William Crate: As listeners on this call may have observed we updated our website to help viewers better understand the mission driven specifications of the buildings in our portfolio.

Darrell Crate: And just recently, certain events underscore the importance of fulfilling mission through real estate. Here are some examples. First, the investigation following the assassination attempt at President Trump's rally in Pennsylvania has been spearheaded by FBI Pittsburgh, whose field office is one of our facilities. FBI field offices are very specialized buildings and must be constructed with anti-ballistic glass, skip rooms equipped in national intelligence security standards, including radio frequency shielding and duct work to prevent infiltration. We have to account for things like blast protection, security screening, and other structural requirements that are essential to agencies like the FBI being able to operate effectively in times like these.

Darrell William Crate: And just recently certain events underscore the importance of fulfilling mission through real estate here are some examples.

Darrell William Crate: First, the investigation following the assassination attempt at President Trump's rally in Pennsylvania has been spearheaded by FBI Pittsburgh, whose field office is one of our facilities. FBI field offices are very specialized buildings and must be constructed with anti-ballistic glass, SCIF rooms equipped to national intelligence security standards, including radio frequency shielding and duct work to prevent infiltration. We have to account for things like blast protection, security screening, and other structural requirements that are essential to agencies like the FBI being able to operate effectively in times like these. The FBI employs approximately 35,000 people, including special agents, intelligence analysts, linguists, scientists, and information technology specialists.

Darrell William Crate: First the investigation following the assassination attempt to President Trump's rally in Pennsylvania has been spearheaded by Spi Pittsburgh, whose field office is one of our facilities.

Darrell William Crate: Field offices are very specialized buildings and must be constructed with anti ballistic glass skiff rooms equipped to national intelligence security standards, including radiofrequency shielding and duct work to prevent infiltration.

Darrell William Crate: We have to account for things like glass protection security screening and other structural requirements that are essential to agencies like the FBI being able to operate effectively in times like these.

Darrell Crate: The FBI employs approximately 35,000 people, including special agents, intelligence analysts, linguists, scientists, and information technology specialists. Whenever there is an event and our U.S. government agencies are in proximity, they absolutely must be ready to go 24 hours a day, seven days a week, 365 days a year. Next, in last week's news about the apprehension of the arrest of alleged cartel leaders, including Joaquin Guzman Lopez, also known as El Chapo Jr., was carried out by agents in our FBI DEA El Paso facility. The FBI and DEA, in our Joed El Paso facility, worked together with HSI to apprehend cartel leaders that boarded a plane in Mexico and then crossed the border into the U.S.

Darrell William Crate: The FBI employees, approximately 35000 people, including special agents intelligence analysts linguists scientists and information technology specialists.

Darrell William Crate: Whenever there is an event in our U S. Government agencies are in proximity they absolutely must be ready to go 24 hours a day seven days a week 365 days a year.

Darrell William Crate: Next and last week's news about the apprehension of the arrest of alleged cartel leaders, including Joaquin Guzman Lopez also known as El Chapo Junior.

Darrell William Crate: Was carried out by agents and our FBI DEA El Paso facility. The FBI DEA in our Joy at El Paso facility work together with HSI to apprehend cartel leaders that boarded a plane in Mexico, and then cross the border into the U S, allowing law enforcement to our rest of them.

Darrell Crate: allowing law enforcement to arrest them. The three agencies, all Easterly tenants, worked in tandem over the course of the next several months in order to execute this high-stakes plan. This is a clear example of what you have heard me previously say about how our specialized facilities enable these agencies to thwart and stop cartel activities and reduce drug trafficking. Our DEA facilities must be equipped for highly specialized and complicated testing of synthetic drugs, some of which we have never been seen or examined before. Through drug signature programs that analyze samples to determine processing methods, geographic origins, and manufacturers for heroin, cocaine, and methamphetamine.

Speaker Change: Three agencies, all easterly tenants worked in tandem over the course of the next several months.

Darrell William Crate: In order to execute this high Stakes plan.

Darrell William Crate: This is a clear example of what you have heard me previously say about how our specialized facilities enabled these agents Houston toward and stop cartel activities and reduced drug drug trafficking.

Darrell William Crate: Our DEA facilities must be equipped for highly specialized and complicated testing of synthetic drugs.

Darrell William Crate: Some of which have never been seen are examined before.

Darrell William Crate: Drug signature programs that analyze samples to determine processing methods geographic origins and manufacturers for heroin and cocaine and methamphetamine.

Darrell Crate: We have machines in our facilities that can take an organic drug and identify its origin down to a specific parcel of land where the organic substance was sourced. This isn't conceptual; it's not a sci-fi movie, just last Thursday in connection with the arrest of the alleged cartel leaders. Attorney General Merrick Garland said fentanyl is the deadliest drug threat our country has ever faced, and the Justice Department will not rest until every single cartel leader, member, and associate responsible for poisoning our communities is held accountable. This is what the FBI and DEA agents depend on, us for each day in order for them to do their mission critical work.

Darrell William Crate: We have machines in our facilities that can take an organic drug and identify its origin down to a specific parcel of land where the organic substance was sourced. This isn't conceptual; it's not a sci-fi movie. Just last Thursday, in connection with the arrest of the alleged cartel leaders, Attorney General Merrick Garland said fentanyl is the deadliest drug threat our country has ever faced, and the Justice Department will not rest until every single cartel leader, member, and associate responsible for poisoning our communities is held accountable.

Darrell William Crate: We have machines in our facilities that can taken organic drug and identify its origin down to a specific parcel of land, where the organic substance with source.

Darrell William Crate: This isn't conceptual it's not a SIFI movie.

Darrell William Crate: Last Thursday in connection with the rest of the alleged cartel leaders Attorney General Merit Garland said fentanyl is the deadliest drug threat, our country has ever faced and the Justice Department will not rest until every single cartel leader member and associated responsible for poisoning. Our communities is held accountable.

Darrell William Crate: This is what the FBI and DEA agents depend on us for each day in order for them to do their mission critical work. So much of this work can't be done outside of our specialized facilities. They are the definition of mission critical assets. Finally, I'll give you one more example.

Darrell William Crate: This is what the FBI DEA agents depend on.

Speaker Change: As for each day in order for them to do their mission critical work.

Darrell Crate: So much of this work can't be done outside of our specialized facilities; they are the definition of mission critical assets.

Speaker Change: So much of this work can be done outside of our specialized facilities.

Darrell William Crate: Are the definition of mission critical assets.

Darrell Crate: Finally, I'll give you one more example. Let's talk about the Veterans Administration, which is our top tenant. Over half of all veterans used at least one VA benefit or service in 2021, and of those 9.8 million users, approximately 51% use multiple benefits, up from 36% in 2010. Our VA properties include community-based outpatient clinics that are designed to be a one-stop shop for veteran care. These regionally focused centers can have a specialized mix of departments from radiology, dental, and optometry, to mental health, physical therapy, prosthetics, and phlebotomy. And each department has its own set of physical requirements.

Darrell William Crate: Finally, I will give you one more example.

Darrell William Crate: Let's talk about the Veterans Administration, which is number 10 on our list at the moment. Over half of all veterans used at least one VA benefit or service in 2021. And of those 9.8 million users, approximately 51% use multiple benefits, up from 36% in 2010. VA properties include community-based outpatient clinics that are designed to be a one-stop shop for veteran care. These regionally focused centers can have a specialized mix of departments, from radiology, dental, and optometry to mental health, physical therapy, prosthetics, and phlebotomy. And each department has its own set of physical requirements. For example, radiology has its own baseline for humidity and temperature control, while pharmaceutical requires specialized security systems.

Darrell William Crate: Let's talk about the veterans administration, which is our top tenant.

Darrell William Crate: For half of all veterans used at least one VA benefit or service in 2021.

Darrell William Crate: And of those $9 8 million users approximately 51% used multiple benefits up from 36% in 2010.

Darrell William Crate: Our VA properties include community based outpatient clinics that are designed to be a one stop shop for veteran care.

Darrell William Crate: These regionally focused centers can have a specialized mix of departments from radiology dental and optometry to mental health physical therapy prosthetics and phlebotomy.

Darrell William Crate: In each department has its own set of physical requirements for.

Darrell Crate: For example, radiology has its own baseline for humidity and temperature control, while pharmaceutical requires specialized security systems. In VA Phoenix, we have a customized kitchen, and these models are built directly into the walls of certain rooms so that care providers can assist veterans with various disabilities, with self-sufficiency, and the reactivating to their homes.

Darrell William Crate: For example.

Darrell William Crate: Radiology has its own baseline for humidity and temperature control, while pharmaceutical require specialized security systems.

Darrell William Crate: In VA Phoenix, we have a customized kitchen, and these models are built directly into the walls of certain rooms so that care providers can assist veterans with various disabilities with self-sufficiency and re-acclimating to their home. This is our definable edge. If you take one thing away from this call today, I hope it's that you understand how essential the infrastructure we provide is to these U.S. government agencies. We are meaningfully differentiated from an office portfolio, and this provides our shareholders with greater stability and lower volatility of cash flow. Real estate markets have suffered, but our portfolio continues to perform well.

Darrell William Crate: In Phoenix, we have a customized kitchen.

Darrell William Crate: And these models are built directly into the walls of certain rooms, so that care providers can assist veterans with various disabilities with self sufficiency in the reactivating to their homes.

Darrell Crate: This is our definable edge. If you take one thing away from this call today, I hope it's that you understand how essential the infrastructure we provide is to these U.S. government agencies. We are meaningfully differentiated from an office portfolio, and this provides our shareholders with greater stability and lower volatility of cash flow. Real estate markets have suffered, but our portfolio continues to perform well, and during this time we've taken the opportunity to expand on our strengths and broaden our strategy to provide attractive returns to our shareholders. Rather than remaining idle, we're focused on cultivating opportunity.

Darrell William Crate: This is our definable edge, if we take one if you take one thing away from this call today I hope that you understand how essential the infrastructure, we provide to these <unk> U S government agencies.

Darrell William Crate: We are meaningfully differentiated from an office portfolio and this provides our shareholders with greater stability and lower volatility of cash flow.

Darrell William Crate: Real estate markets have suffered but our portfolio continues to perform well and during this time, we've taken the opportunity to expand on our strengths and broadened our strategy to provide attractive returns to our shareholders.

Darrell William Crate: And during this time, we've taken the opportunity to expand on our strengths and broaden our strategy to provide attractive returns to our shareholders. Rather than remaining idle, we're focused on cultivating opportunities. For institutional investors revisiting the space with an eye towards easing interest rates, it's important to remember these three key truths.

Darrell William Crate: Rather than remaining idle we are focused on cultivating opportunity.

Darrell Crate: For institutional investors revisiting the space with an eye towards easing interest rates, it's important to remember that these three key truths: we're focused on growth, we believe we have the resources to execute, and we anticipate our core strategy will have additional tailwinds in a declining rate environment. Given the strategy we laid out and the growth opportunities we have in front of us, we see a path to achieving a payout ratio in the next 24 months that is consistent with our historical levels. We have a development pipeline that's significant, and we're working not only with US government agencies, but also with high credit government-adjacent companies like those in the defense industry, which have government contracts and the customized facilities similar to the ones that we have owned and developed to support their own missions alongside their US government partners.

Darrell William Crate: For institutional investors revisiting this space with an eye towards easing interest rates. It is important to remember that these these three key truths were focused on growth. We believe we have the resources to execute and we anticipate our core strategy will have additional tailwind in a declining rate environment.

Darrell William Crate: We're focused on growth, and we believe we have the resources to execute. And we anticipate our core strategy will have additional tailwinds in a declining rate environment. Given the strategy we laid out and the growth opportunities we have in front of us, we see a path to achieving a payout ratio in the next 24 months that is consistent with our historical levels. We have a development pipeline that's significant, and we are working not only with US government agencies but also with high-credit government-related companies, like those in the defense industry, which have government contracts and need customized facilities similar to the ones that we have owned and developed to support their own missions alongside their U.S. government partners.

Darrell William Crate: Given the strategy, we laid out and the growth opportunities we have in front of us we see a path to achieving a payout ratio in the next 24 months.

Darrell William Crate: It is consistent with our historical levels.

Darrell William Crate: We have a development pipeline that is significant and we're working not only with U S government agencies.

Darrell William Crate: But also with high credit government adjacent companies like those in the defense industry, which have government contracts and the customized facilities similar to the ones that we have owned and developed to support their own missions alongside their U S government partners.

Darrell Crate: We're focused on being a chosen partner to the organizations we work with by building and developing properties that help them meet and facilitate their critical missions.

Darrell William Crate: We're focused on being a chosen partner to the organizations, we work with by building and developing properties that help them meet and facilitate their critical missions.

Meghan Baivier: Thank you again for taking the time to join us this morning, and now I'll hand things over to Megan Bavir, our president and chief operating officer. Thanks, Darrell, and good morning. We are excited to have you join us this morning, and I echo Darrell's enthusiasm for the opportunities on the horizon. While the REIT sector is faced with outflows over the past several years, Easterly has been working hard to harvest an incredible pipeline of long-term growth opportunities. The missions of our tenant agencies continue to grow both in terms of scale and criticality, and they have an ongoing need for specialized facilities.

Meghan G. Baivier: Thank you again for taking the time to join US This morning, and now I'll hand things over to Megan <unk>, our president and Chief operating officer.

Meghan G. Baivier: Thanks, Darryl and good morning, we're excited to have you join us this morning, and I Echo Durals enthusiasm for the opportunities on the horizon, while the REIT sector has faced outflows over the past several years easterly has been working hard to harvest an incredible pipeline of long term growth opportunities.

Meghan G. Baivier: <unk> of our tenant agencies continue to grow both in terms of scale and criticality and they have an ongoing need for specialized facilities. The.

Meghan Baivier: The same is true for the government adjacent tenants on which we focus. We are seeing large-scale net lease projects with contractual escalators that fulfill our strict definition of mission critical real estate. We believe Easterly has the platform, balance sheet, and access to capital to uniquely pursue these types of opportunities and further enhance shareholder returns. An increasingly favorable cost of equity aligns with our growth strategy and allows us to target strategic assets that not only complement our existing business lines but also have the potential to drive long-term earnings growth. Our goal is not just to acquire assets but to integrate them seamlessly into our operations, thereby maximizing synergies and operational efficiencies.

Meghan G. Baivier: The same is true for the government adjacent tenants on which we focus we are seeing large scale net lease projects with contractual escalators that fulfill our strict definition of mission critical real estate. We believe easterly has the platform balance sheet and access to capital to uniquely pursue these types of opportunities and further enhanced.

Meghan G. Baivier: Shareholder returns.

Meghan G. Baivier: And increasingly favorable cost of equity aligns with our growth strategy and allows us to target strategic assets that not only complement our existing business lines, but also have the potential to drive long term earnings growth. Our goal is not just to acquire assets, but to integrate them seamlessly into our operations, thereby maximizing synergies and operational.

Meghan Baivier: By leveraging this opportunity, we aim to strengthen our market position and deliver sustainable value to our shareholders. Since the time of our last call, we have capitalized on our growth strategy and acquired two additional assets, both in Orlando, Florida, and both critical to the safety, security, and infrastructure of our country. We have successfully transacted on three accretive deals in 2024 despite a backdrop of lower market volume, highlighting our ability to source and execute in challenging environments. In addition to acquisitions, we continue investing in our assets to further bolster our strong partnership with our important tenants.

Meghan G. Baivier: By leveraging this opportunity, we aim to strengthen our market position and deliver sustainable value to our shareholders. Since the time of our last call, we have capitalized on our growth strategy and acquired two additional assets, both in Orlando, Florida, and both critical to the safety, security, and infrastructure of our country. We have successfully transacted on three accretive deals in 2024, despite a backdrop of lower market volume, highlighting our ability to source and execute in challenging environments. In addition to acquisitions,

Meghan G. Baivier: Efficiencies.

Meghan G. Baivier: By leveraging this opportunity, we aimed to strengthen our market position and deliver sustainable value to our shareholders.

Meghan G. Baivier: Since the time of our last call we have capitalized on our growth strategy and acquired two additional assets both in Orlando, Florida, and both critical to the safety security and infrastructure of our country. We.

Meghan G. Baivier: In addition to acquisitions, we continue investing in our assets to further bolster our strong partnership with our important tenants. This is part of our competitive edge relative to other owners of mission critical government leased real estate and is an important component of our ability to consistently deliver stable cash flows to shareholders.

Meghan G. Baivier: We continue investing in our assets to further bolster our strong partnership with our important tenants. This is part of our competitive edge relative to other owners of mission-critical government leased real estate and is an important component of our ability to consistently deliver stable cash flows to shareholders. Looking forward, we see an outsized pipeline of opportunities that we believe will further our ability to meet our stated goal of delivering two to 3% core FFO per share growth year over year for years to come.

Meghan Baivier: This is part of our competitive edge relative to other owners of Mission Critical Government least real estate and is an important component of our ability to consistently deliver stable cash flows to shareholders. Looking forward, we see an outsized pipeline of opportunities that we believe will further our ability to meet our stated goal of delivering 2 to 3 percent core FFO per share growth year over year for years to come. We are making progress with an opportunity to serve as lender and then buyer of mission critical assets that we believe will further change the growth trajectory of this organization.

Meghan G. Baivier: Looking forward, we see an outsized pipeline of opportunities that we believe will further our ability to meet our stated goal of delivering 2% to 3% core <unk> per share growth year over year for years to come we.

Meghan G. Baivier: We are making progress with an opportunity to serve as lender and then buyer of mission-critical assets that we believe will further change the growth trajectory of this organization. We look forward to keeping you apprised as this develops. With that, thank you for your time this morning. I encourage attendees on this call to spend some time digging into the Easterly Model to understand our opportunity for getting on a path for outsized growth over the next several years. I will now hand the call over to Allison. Thanks, Meghan. Good morning, everyone.

Meghan G. Baivier: We are making progress with an opportunity to serve as lender and then buyer of mission critical assets that we believe will further change the growth trajectory of this organization. We look forward to keeping you apprised as this develops with that thank you for your time. This morning I encourage attendees on this call to spend some time digging into the easterly model to.

Meghan Baivier: We look forward to keeping you apprised as this develops. With that, thank you for your time this morning.

Meghan Baivier: I encourage attendees on this call to spend some time digging into the easterly model to understand our opportunity for getting on a path for outsized growth over the next several years.

Meghan G. Baivier: To understand our opportunity for getting on a path for outsized growth over the next several years I will now hand, the call over to Alison.

Allison Marino: I will now hand the call over to Allison. Thanks, Meghan. Good morning, everyone.

Allison E. Marino: I'm pleased to report the financial results for the second quarter. Both on a fully diluted basis, net income per share was $0.04, and core FFO per share was $0.29. Our cash available for distribution was $24.8 million. We maintain our focus on growing the enterprise through the acquisition, development, and renewal of mission-critical assets leased primarily to the U.S. government, as well as its adjacent partners. While calm on the surface, behind the scenes, our team is working at a rapid pace to execute on the roughly $1.5 billion to $2 billion worth of pipeline opportunities we see today.

Allison: Meghan good morning, everyone.

Allison Marino: I'm pleased to report the financial results for the second quarter. Both on a fully diluted basis, net income per share was 4 cents and core FFO per share was 29 cents. Our cash available for distribution was 24.8 million dollars. We maintain our focus on growing the enterprise through the acquisition, development, and renewal of mission critical assets, at least primarily to the US government, as well as its adjacent partners. While calm on the surface, behind the scenes, our team is working at a rapid pace to execute on the roughly billion and a half to two billion dollars' worth of pipeline opportunities we see today.

Allison: I am pleased to report the financial results for the second quarter, both on a fully diluted basis net income per share was <unk> <unk> and core <unk> per share was 29.

Allison E. Marino: Our cash available for distribution was $24 8 million.

Allison E. Marino: We maintain our focus on growing the enterprise through the acquisition development and renewal of mission critical assets leased primarily to the U S government as well as its adjacent partners.

Allison E. Marino: On the surface behind the scenes our team is working at a rapid pace to execute on the roughly 1 billion and a half to $2 billion worth of pipeline opportunities we see today.

Allison Marino: As a company with a 1.4 billion dollar market cap, this outsized growth opportunity is extremely exciting for the company and hopefully our prospective shareholders. The easterly team has done a great job of getting the balance sheet poised and ready to absorb the anticipated capital needs to fund this unique opportunity.

Allison E. Marino: As a company with a $1.4 billion market cap, this outsized growth opportunity is extremely exciting for the company and, hopefully, our prospective shareholders. The Easterly team has done a great job of getting the balance sheet poised and ready to absorb the anticipated capital needs to fund this unique opportunity. First, we were once again met with great success in the private placement market with the execution of $200 million of fixed-rate senior unsecured notes with nine-year maturities.

Allison E. Marino: As a company with a $1 $4 billion market cap. This outsized growth opportunity is extremely exciting for the company and hopefully our prospective shareholders.

Allison E. Marino: The easterly team has done a great job of getting the balance sheet poised and ready to absorb the anticipated capital needs to fund this unique opportunity.

Allison Marino: First, we are once again met with great success in the private placement market with the execution of 200 million dollars of fixed rate senior unsecured nodes with nine year opportunities. This is our fourth entry into the market, and we were pleased with the over-subscribed interest from new and existing investors alike. We believe the credit quality of our underlying US government tenant is a significant draw on this market, and our trip will be stable. Rating from CROLE provides third-party validation of that. As of today, we have closed the first $150 million dollar tranche of Series A notes and we remain on track to close the second $50 million tranche of Series B notes on August 14th, subject to customary closing conditions.

Allison E. Marino: First we are once again met with great success in the private placement market with the execution of $200 million of fixed rate senior unsecured notes with nine year maturities. This is our first entry into this market and we were pleased with the oversubscribed interest from new and existing investors alike.

Allison E. Marino: This is our fourth entry into this market, and we were pleased with the oversubscribed interest from new and existing investors alike. We believe the credit quality of our underlying US government tenant is a significant draw in this market, and our triple B stable rating from Kroll provides third-party validation of that. As of today, we have closed the first $150 million tranche of Series A notes, and we remain on track to close the second $50 million tranche of Series B notes on August 14, subject to customary closing conditions.

Allison E. Marino: We believe the credit quality of our underlying U S. Government tenant is a significant draw in this market and our triple will be stable rating from Kroll provides third party validation of that.

Allison E. Marino: As of today, we have closed the first $150 million tranche of series a notes and we remain on track to close the second $50 million tranche of series B notes on August 14th subject to customary closing conditions.

Allison Marino: Second, we were pleased to partner with our premier syndicate of banks and execute a new $400 million dollar revolving credit facility with an accordion feature that allows for total borrowing capacity of up to $700 million dollars. With an initial maturity date of June 2028 and two six months as of right extension options, we are pleased to extend the term of under commitments and secure the liquidity necessary to pursue creative capital deployment opportunities. I would like to thank our capital partners and the successful execution of both transactions, and a special thanks to City, PNC, Truist, and Wells Fargo for serving as joint lead arrangers on our revolver.

Allison E. Marino: Second, we were pleased to partner with our premier syndicate of banks and execute a new $400 million revolving credit facility with an accordion feature that allows for total borrowing capacity of up to $700 million. With an initial maturity date of June 2028 and two six-month as of right extension options, we are pleased to extend the term of lender commitments and secure the liquidity necessary to pursue a creative capital deployment opportunity. I would like to thank our capital partners for the successful execution of both transactions and a special thanks to Citi, PNC, Truist, and Wells Fargo for serving as joint lead arrangers on our revolver. In total, we believe this success highlights our unique strategy, superior credit quality, and attractive platform relative to other REITs. Turning to guidance,

Allison E. Marino: Second we were pleased to partner with our Premier syndicate of banks and execute a new $400 million revolving credit facility with an accordion feature that allows for a total borrowing capacity of up to $700 million.

Allison E. Marino: Thank you all for joining us this month as of right extension options. We are pleased to extend the term of lender commitments and secure the liquidity necessary to pursue a creative capital deployment opportunities.

Allison E. Marino: I would like to thank our capital partners on the successful execution of both transactions, and a special thanks to Citi, PNC, Truist, and Wells Fargo for serving as joint lead arrangers on our revolver.

Allison Marino: In total, we believe a success highlights our unique strategy, superior credit quality, and attractive platform relative to other reasons.

Allison E. Marino: In total, we believe this success highlights our unique strategy, superior credit quality, and attractive platform relative to other REITs.

Allison Marino: Turning to guidance. After a recent raise subsequent to last quarter's call, I am happy to share that we are maintaining our full year core FFO per share guidance for 2024 in a range of $1.15 to $1.17 on a fully diluted basis. This guidance assumes the closing of VA Jacksonville through the company's joint venture at a pro-reddit acquisition price at $41 million, approximately $50 million, and wholly owned acquisitions throughout 2020. At its midpoint, this sets a path for Easterly to deliver strong core FFO per share earnings growth to shareholders this year. And as we start to execute on the outsize pipeline of opportunities that we have identified, we expect an outsized growth opportunity for our shareholders will then follow.

Allison E. Marino: Turning to guidance.

Allison E. Marino: This guidance assumes the closing of VA Jacksonville through the company's joint venture at a pro rata acquisition price of $41 million, approximately $50 million in wholly owned acquisitions throughout 2024, and $100 to $110 million of growth development related investment during the year.

Allison E. Marino: And as we start to execute on the outsized pipeline of opportunities that we have identified, we expect an outsized growth opportunity for our shareholders will then follow. With that, I thank you for your time this morning and appreciate your partnership. I will now turn the call back to Tawanda.

Allison Marino: With that, we thank you for your time this morning and appreciate your partnership.

Unknown Attendee: I will now turn the call back to Twanda. Thank you.

Operator: Thank you. As a reminder to the analysts to ask a question, you will need to press star 11 on your telephone. Please stand by while we compile the Q&A box.

Unknown Attendee: As a reminder to the analysts to ask the question, you will need to press star 1-1 on your telephone. Please stand by while we compile the Q&A roster.

Michael Griffin: Our first question comes from the line of Michael Griffin with City. Your line is open. Great. Thanks. I'm appreciated the color in the opening remarks.

Michael Anderson Griffin: Our first question comes from the line of Michael Griffin with Citi. Your line is open. Great, thanks. I appreciated the color in your opening remarks.

Michael Anderson Griffin: Just wondering if you could expand a bit kind of on the acquisition opportunities you're seeing. You know, I think we've seen the transaction market thaw somewhat, so maybe an expectation about when they could pick up, and then if you could give us a sense of where investment spreads are relative to your current cost of capital. Yeah, maybe maybe just, you know, to start at the top, we, you know, as we talked to Len last quarter, the bid-ask spread was wide. And we obviously, you know, see that it is shrinking.

Darrell Crate: Just wondering if you could expand a bit kind of on the acquisition opportunities you're seeing. You know, I think we've seen the transaction market saw somewhat some maybe an expectation about when they could pick up and then if you give us a sense on where investments spreads are relative to your current cost capital. Yeah, maybe just to start at the top. We, you know, as we talked about in the last quarter, you know, the bid aspect was wide and we obviously, you know, see that, see that shrinking. We are in a place today where, you know, especially buildings where folks have debt that's maturing.

Darrell William Crate: We are, you know, in a place today where, especially, you know, buildings where folks have debt that's maturing, you know, time is, is a little bit on our side, you know, as we move forward. And, you know, that's having a powerful impact again, taking that bid-ask spread and shrinking it a bit. For us, you know, our cost of capital today is just about seven and a quarter.

Darrell Crate: You know, time is a little bit on our side, you know, as we, as we move forward and, you know, that's having a powerful impact on, again, taking that bid aspect and shrink into the bit. You know, for us, you know, our cost to capital today is just about seven and a quarter, and, you know, stepping back when we, you know, talked about our growth strategy and sort of, you know, two to three percent growth, you know, going forward. And how we were, you know, continuing to, you know, build out our growth strategy, you know, the stock was at $12.

Darrell William Crate: And, you know, stepping back, when we talked about our growth strategy and sort of, you know, two to 3% growth going forward and how we were, you know, continuing to, you know, build out our, you know, our growth strategy, you know, the stock was at $12, so, as we've seen this stock appreciate almost 10%. A little bit more since then, you know, that only means, you know, more accretion, a better cost of capital, and, you know, all those things that make REITs go around.

Darrell William Crate: You know, for us, you know, our cost of capital today is just about seven and a quarter. And you know, stepping back.

Darrell Crate: You know, so that as we've seen this stock appreciate almost 10 percent a little bit more since then, you know, that only means, you know, more creation, better cost to capital, and, you know, all those things that make reats go around.

Darrell William Crate: We have a robust pipeline, you know, as I said, we're working not only with US government agencies, as well as state and local, but also, you know, those high-credit, government-adjacent tenants. And, and we feel very excited about the growth prospects as we go forward. And then maybe just kind of one, you know, broad comments around the upcoming election and whether there's any chance that a potential change in administration could impact various aspects of your business.

Darrell Crate: We have a robust pipeline, you know. As I said, we're working not only on US government agencies, as well as state and local, but also, you know, those high credits, you know, government-adjacent tenants. And we feel very excited about the growth prospects as we go forward.

Darrell Crate: Appreciate that, Darryl, and then maybe just kind of one, you know, broad comment around the upcoming election, and if there's any chance of potential change in administration could impact various aspects of your business. Yeah, I mean, you know, we are in our core strategy of, you know, US government assets. We've always picked agencies that really aren't swayed by, you know, the political winds. So, you know, VA, FBI, you know, DEA. I think both parties agree, you know, that each of those, you know, serve a very important, critical mission. You know, we're not a Department of Education is not on our list.

Darrell William Crate: I mean, you know, in our core strategy of, you know, U.S. government assets, we've always picked agencies that really aren't swayed by, you know, the political winds. So, you know, VA, FBI, you know, DEA, I think both parties agree that each of those serves a very important, critical mission. You know, we're not a, the Department of Education is not on our list, and so most of the folks who you hear are vulnerable to, you know, one party's preference over the other are not our major tenants.

Darrell Crate: And so most of the folks who you hear, you know, are vulnerable to, you know, when one party's preference over the other are not our major tenants.

Michael Griffin: Great, that's it for me. Thanks for the time. Thanks a lot. Thank you.

Michael Anderson Griffin: Great, that's it for me. Thanks for the time. Hey, thanks a lot.

Unknown Attendee: Please stand by for our next question.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Michael Carroll with RBC. Your line is open.

Michael Carroll: Next question comes from the line of Michael Carroll with RBC. Yeah, line is open. Yeah, thank you.

Speaker Change: Our next question comes from the line of Michael Carroll with RBC. Your line is open.

Michael Albert Carroll: Yep, thank you. I guess Megan, can you give us an update on your leasing activity? I know it looks like the lease expiration schedule hasn't really changed much. So I'm assuming nothing was really signed this quarter.

Meghan Baivier: I guess, Meghan, can you give us an update on your leasing activity? I know it looks like the lease expiration schedule hasn't really changed much. I'm assuming nothing really signed this quarter. And I know last quarter, you're pretty optimistic by some of those progress.

Michael Albert Carroll: Yep, thank you. I guess, Meghan, can you give us an update on your leasing activity? I know it looks like the lease expiration schedule hasn't really changed much, so I'm assuming nothing was really signed this quarter, and I know last quarter you're pretty optimistic by some of those progresses, so maybe can you give us an idea of the timing of when you can satisfy the 2024 leases and what's the outlook for the 2025 expirations?

Meghan G. Baivier: And I know last quarter you were pretty optimistic about some of those progresses. So maybe you could give us an idea of the timing of when you can satisfy the 2024 leases? And what's the outlook for the 2025 expirations?

Meghan Baivier: So maybe can you give us an idea of the timing of when you can satisfy the 2024 leases and what's the outlook for the 2025 expiration? Yeah, happy to do that. As we look at the remainder of 2024, right? The two largest, well, one is outside. It's our FBI and Omaha. And then we have an FBI tendency in our Portland asset, as well as two other small tendencies. And I would say, you know, certainly the FBI Omaha. I wish I could have had positive commentary for you today. But we feel very good about that, as we do about the others.

Meghan G. Baivier: Yeah, happy to do that. As we look at the remainder of 2024, the two largest, well, one is outside, it's our FBI in Omaha, and then we have an FBI tenancy in our Portland asset, as well as two other small tenancies. And I would say, you know, certainly the FBI in Omaha. I wish I could have had positive commentary for you today. But we feel very good about that, as we do about the others. Looking to 2025, you know, as those become more firmly in view, we've got a handful of FBIs.

Meghan G. Baivier: Yeah, happy to do that. As we look at the remainder of 2024, right, the two largest

Meghan G. Baivier: Well, one is outside, it's our FBI in Omaha, and then we have an FBI tenancy in our Portland asset, as well as two other small tenancies. And I would say, you know, certainly the FBI in Omaha.

Meghan G. Baivier: I wish I could have had positive commentary for you today, but we feel very good about that as we do about the others.

Meghan Baivier: Looking to 2025, you know, as those become more firmly in view, we've got a handful of FBI and a courthouse in Aberdeen. I'd say the same sentiment applies there for positive news on the horizon; those procurements being in being at stages and in a position where we, you know, appreciate the progress and look to see a positive outcome.

Meghan G. Baivier: Looking to 2025, you know, as those become more firmly in view, we've got a handful of FBIs and a courthouse in Aberdeen. I'd say the same sentiment applies there for

Meghan G. Baivier: Courthouse in Aberdeen, I'd say the same sentiment applies there, positive news on the horizon, those procurements being in, being in stages, and in a position where we, you know, we appreciate the progress and look to see a positive outcome. Okay, and then with these being the, I guess a lot of the expirations being kind of in the center of your bullseye that you're typically targeting, can we assume cash lease spreads? Are these in the 15 to 20% range?

Meghan G. Baivier: Positive news on the horizon, those procurements being in, being at stages and in a position where we, you know, we appreciate the progress and look to see a positive outcome.

Meghan Baivier: Okay, and then with these being the, I guess a lot of the expiration being kind of in the center of your bull die that you're typically targeting, can we assume cash leaf spreads are these in the 15 to 20% range, or is there something unique that we should be thinking about? Yeah, FBI Omaha is subject to a perspective. We've known that, so that renewal likely looks more like a flat renewal. But as we look to the two FBI's in the courthouse in 2025, yes, Mike, I would tell you those are our expectations are squarely in that high teens, a high teens range from a net effective spread.

Meghan G. Baivier: Okay, and then with these being the, I guess a lot of the expirations being kind of in the center of your bullseye that you're typically targeting, can we assume cash lease spreads are these in the 15 to 20% range, or is there something unique that we should be thinking about?

Meghan G. Baivier: Or is there something unique that we should be thinking about? Yeah. FBI Omaha is subject to a prospectus. We've known that.

Meghan G. Baivier: So, you know, that renewal likely looks more like a flat renewal. But as we look to the two FBIs in the courthouse in 2025, yes, Mike, I would tell you those are our expectations are squarely in that high teens range and Net Effective Spread. Okay, great. And then just two, I guess, kind of modeling-type questions on the JV deal, like what's the timing of completing that JV acquisition, the last acquisition from that transaction?

Meghan G. Baivier: FBI Omaha is subject to a prospectus. We've known that. So, you know, that renewal likely looks more like a flat renewal. But as we look to the two FBI's in the courthouse in 2025, yes, Mike, I would tell you those are our expectations are squarely in that high teens.

Michael Carroll: Okay, great.

Meghan G. Baivier: a high change range from a net effective spread.

Meghan Baivier: And then just to, I guess, kind of modeling type questions that on the JV deal, like what's the timing of completing that JV acquisition, the last acquisition from that transaction? Yep, that last, the Jacksonville, excuse me, the Jacksonville VA, we, it is our expectation that that is teed up to close in the quarter, and that would be the last transaction.

Speaker Change: Okay, great. And then just two, I guess, kind of modeling type questions that on the JV deal, like what's the timing of completing that JV acquisition, the last acquisition from that transaction?

Meghan G. Baivier: Yep, that last one, the Jacksonville VA, it is our expectation that that is teed up to close in the quarter, and and and that would be the last. Okay, and then final one for me, I know there was a small, and I don't really want to talk about it because it's so small, I'm not sure it's worth talking about, but there is a loan provision for credit losses that was added back to F Can you kind of explain what that is?

Meghan G. Baivier: Yep, that last, the Jacksonville VA, it is our expectation that that is teed up to close in the quarter, and that would be the

Meghan Baivier: Okay, and then final one for me, I know there was a small, I don't really really want, it's so small, I'm not sure what we're talking about, but there is a load provision for credit losses that was added back to FFO. Can you kind of explain what that is, and should we expect any additional credit loss provisions to be recorded over the next few quarters? Sure, I can take that one. So, as we've shared, there's an opportunity in the market for us to partner with developers on projects and act in a lender position. We have a small pre-least a word loan out to a developer, and while that loan is not experiencing actual loss through default, accounting rules require us to estimate a credit loss probability for this asset for the tournament's outstanding.

Speaker Change: did the last transaction.

Meghan G. Baivier: Okay, and then final one for me, I know there was a small, and I don't want to, it's so small, I'm not sure it's worth talking about, but there is a loan provision for credit losses that was added back to FFO. Can you kind of explain what that is? And should we expect any additional credit loss provisions to be recorded over the next few quarters?

Meghan G. Baivier: Sure, I can take that one. So as we've shared, there's an opportunity in the market for us to partner with developers on projects and act in a lender position.

Meghan G. Baivier: We have a small pre-lease award loan out to a developer, and while that loan is not experiencing actual loss or default,

Meghan G. Baivier: Accounting rules require us to estimate a credit loss probability for this asset, for the term it's outstanding, so that will continue to get tweaked through its maturity date.

Meghan Baivier: So that will continue to get tweaked through its maturity days. Okay, great. Thank you. As a reminder, that start 1-1 to ask the question. Will you stand by for our next question?

Meghan G. Baivier: Okay, great. Thank you. Thank you. As a reminder, that's star 11 to ask a question. Please stand by for our next question. Our next question comes from the line of Christopher Skrakovich with Jeffries. The line is open.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thank you. As a reminder, that's star 11 to ask the question.

Speaker Change: Please stand by for our next question.

Christopher Sreckovich: Our next question comes from the line of Christopher Sreckovich with Jeffries. The line is open.

Speaker Change: Our next question comes from the line of Christopher Skrekovic with Jeffrey's. Your line is open.

Christopher Sreckovich: Hey guys, Kevin here for Peter. I just wanted to touch on Maintenance CapEx; was a little bit higher this quarter. When you talk about expected run rate going forward and any items we should look out for for the rest of the year from the AFFO perspective. Thanks. As you can probably expect, there's always timing as projects kick off and complete throughout the year. So I would say there's not change changes to our run rate expectations on that line. Okay, great. Thanks.

Christopher Skrakovic: Hey guys, Seb again here for Peter. I just wanted to touch on maintenance CapEx. It was a little bit higher this quarter. Can you talk about the expected run rate going forward and any items we should look out for the rest of the year from an AFFO perspective? As you can probably expect, there's always timing as projects kick off and complete throughout the year. So I would say there are no changes to our run rate expectations on that line.

Christopher Skrakovic: Hey guys, Sebigan here for Peter. Just wanted to touch on maintenance capex. It was a little bit higher this quarter. Can you talk about expected run rate going forward and any items we should look out for the rest of the year from a AFFO perspective? Thanks.

Christopher Skrakovic: As you can probably expect, there's always timing as projects kick off and complete throughout the year. So I would say there's not changes to our run rate expectations on that line.

Christopher Skrakovic: Okay, great. Thanks. And then, I guess we're generally on the acquisition front. We kind of touched on it a little bit. But you know, as rates come down, generally, you get a different pool of buyers looking at these assets. Do you think you'll see more competition for the assets you're targeting? And kind of how will that impact price?

Meghan Baivier: And then, I guess we're generally on the acquisition front. We kind of touched on it a little bit, but as rates come down generally, you get a different pool of buyers looking at these assets. Do you think you'll see more competition for the assets you're targeting, and kind of how will that impact pricing?

Christopher Skrakovic: Okay, great. Thanks. And then I guess more generally on the acquisition front, we kind of touched on it a little bit. But, you know, as rates come down, generally, you get a different pool of buyers looking at these assets. Do you think you'll see more competition for the assets you're targeting and kind of how will that impact pricing?

Meghan Baivier: I'll take that. I think we are excited for the cost of our cost of capital to be normalizing and really presenting increased opportunities to acquire at a healthy 50 to 100 basis point spread. That cost of capital is still leading in the industry, right? Our ability to access the private placement market in the way we did, the equity cost today of the stock rate. So our blended cost of capital is still a competitive advantage as we go into the marketplace. It's been it's really more about meeting sellers' expectations. Great. That's helpful. Thank you.

Meghan G. Baivier: I don't think that I mean, I think we are excited for the cost of our cost of capital to be normalizing and really presenting increased opportunities to acquire it at a healthy 50 to 100 basis point spread. You know, that cost of capital is still leading in the industry, right? Our ability to access the private placement market in the way we did the equity cost today of the stock, right? So our blended cost of capital is still a competitive advantage as we go into the marketplace. It's been It's really more about meeting sellers' expectations.

Speaker Change: I'll take that. I mean, I think we are excited for our cost of capital to be normalizing and really presenting increased opportunities to acquire it up.

Meghan G. Baivier: healthy 50 to 100 basis points spread, you know, that cost of capital is still leading in the industry, right, our ability to access

Meghan G. Baivier: the private placement market in the way we did the equity cost today of the stock, right? So our blended cost of capital is still a competitive advantage as we go into the marketplace. It's been, it's really more about meeting sellers' expectations.

Christopher Skrakovic: Great, that's helpful. Thank you. Thank you. I'm showing no further questions in the queue.

Speaker Change: Great, that's helpful. Thank you.

Unknown Attendee: I'm showing over the questions in the queue.

Darrell Crate: I will now like to turn the call back to Daryl Crate, Chairman of the Eastern Government Property, for closing remarks. Thank you, everyone. And thanks for joining the Eastern Government Property's second quarter 2024 conference call. We look forward to keeping you posted on the coming quarters and as we make progress on our pipeline of growth opportunities.

Darrell William Crate: I would now like to turn the call back to Darrell Crate, Chairman of Easterly Government Properties, for closing remarks. Thank you everyone, and thanks for joining the Easterly Government Properties second quarter 2024 conference call. We look forward to keeping you posted on the coming quarters and as we make progress on our pipeline of growth opportunities. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: Thank you.

Darrell William Crate: I am showing no further questions in the queue. I would now like to turn the call back to Darrell Crate, Chairman of Easterly Government Properties, for closing remarks.

Darrell William Crate: Thank you, everyone, and thanks for joining the Easterly Government Properties second quarter 2024 conference call. We look forward to keeping you posted on the coming quarters and as we make progress on our pipeline of growth opportunities.

Unknown Attendee: This concludes today's conference call. Thank you for participating. You may now disconnect.

Darrell William Crate: This concludes today's conference call. Thank you for participating. You may now disconnect.

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