Easterly Government Properties, Inc.

Greetings. Welcome to Easterly Government Properties' fourth quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session between the company's research analysts and Easterly's management team. To ask a question during the session, analysts will need to press star 1 1 on their telephone. They will then hear an odd message advising their hand is raised. 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. Please go ahead.

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 are as reflected in any forward-looking statements are reasonable, they 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. 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 information package on the investor relations page of the company's website at ir.easterlyrete.com. I'd now like to turn the conference call over to Darrell Crate, President and CEO of Easterly Government Properties.

Thank you, Lindsay. Good morning, everyone, and thanks for joining us for this fourth quarter 2024 conference call. We are in the midst of a shift in how government will function. Some of the headlines are dramatic. The actions we see show us that the change is real. And we're pleased to say that we have been underwriting to Doge before Doge, you know, since we founded the company. What I mean is that we have been focused on truly mission critical facilities in agencies that align with what the American people would imagine their government does well. Law enforcement, care for veterans, protecting the food and legal drug supply, just to name a few. We're pleased to share the progress we've made in strengthening our partnerships with the government's mission critical agencies. The Department of Government Efficiency, or DOGE, has made speedy progress in cutting wasteful spending across federal agencies and optimizing expenditures on its real estate portfolio. DOGE's message to the American people is clear. Taxpayer funds must be utilized on government functions critical to the safety and well-being of the country. Its real estate portfolio is no exception. As a private sector specialist, we have a long time proven track record of delivering cost efficiencies to the agencies that we serve. Through the GSA, the federal government owns over 1,500 buildings. The average age of its owned facilities is over 50 years, and it holds over $80 billion in deferred maintenance and repair liabilities as of fiscal year 2022. This is a remarkable 57% increase from just five years earlier. This exists in stark contrast to our portfolio of state-of-the-art Class A assets which hold a weighted average age of 15.7 years. These figures underscore the importance of the GSA's outlook as published on February 12th of this year. The GSA states in its press release, Optimizing the GSA's real estate portfolio prioritizes reducing our deferred maintenance liabilities, supporting the return to office of federal employees, and taking advantage of a stronger private government partnership in managing the workforce in the future. As a private sector partner to the GSA, we have championed government efficiency long before DOGE was created. Take our development projects at the FDA, for example. We estimate we can deliver a laboratory to the government three times cheaper and notably faster than it would cost for the government to develop and own it itself. The GSA and DOGE have recognized the value in federally leased real estate as a source of cost efficiency for taxpayers, and we are uniquely positioned to help them deliver quickly. Thomas Shedd, the GSA's Deputy Federal Acquisition Service Commissioner and Director of Technology Transformation Services, recently echoed this sentiment directly to his staffers, stating the intention of the GSA and the whole federal government is to reduce the number of old buildings that are owned with high liabilities in favor of newer leased buildings, which can be more flexible and are more modern. While we see Doge in the headlines, as we've said, we believe mission critical properties will continue to be an important and ongoing component of the government real estate portfolio. As evidenced by that, just last week, we renewed a 33,000 square foot firm term non-cancellable lease for the U.S. Army Corps of Engineers in Portland, Oregon. While typically immaterial to our investors, We believe this execution is significant given the renewed emphasis on government efficiency. Allison will go into this later on our call, but 95% of our portfolio today is comprised of firm term leases, and we look forward to strengthening its weighted average lease term under this new administration. A second emerging theme with DOGE is the redistribution of government spending away from Washington. Recently, confirmed FBI Director Kash Patel stated that he will relocate 1,500 agents from the DC headquarters to field offices like ours across the country. This should help the FBI fulfill its essential role in tackling high-profile crime from homicides to terror threats, drug enforcement, gang violence, and more. From Salt Lake City, Utah to Albany, New York, our FBI field offices have been housing these operations all along. And we look forward to supporting the agency as it increases its footprint across the country. As DOGE addresses the inefficiencies that exist in the thicket of the federal bureaucracy, we've continued to execute accretive acquisitions with a renewed emphasis on the cost-saving value proposition we deliver to our government agency partner. We closed 10 new assets, either wholly owned or through our joint venture in 2024. We also materially expanded our total addressable market through leasing to investment grade government adjacent tenants like Northrop Grumman. And we expect our exposure in the sector to expand as defense focused corporations demonstrate a consistent demand for secure facilities to fulfill their government contracts. We remain focused on growing the portfolio, executing accretive lease renewals, and acquiring buildings that add value to our shareholders. We believe we're well positioned to execute these stated priorities. Thank you again for taking the time to join us this morning. And with that, I'll turn the call over to Allison Marino, our Chief Financial and Chief Accounting Officer.