Easterly Government Properties is working to shift its portfolio away from its heavy reliance on the federal government — but not because of President Donald Trump.

The company, which owns 9.7M SF of properties, first told investors in early 2024it intends to diversify its portfolio away from the federal tenants that have filled its buildings since its 2009 founding. It is looking to reduce its federal exposure from 95% to 70% of its portfolio while increasing the share of state and local government tenants to 15% and private-sector tenants to 15%.

“Today, we are aggressively looking for government-adjacent buildings that look like the federal buildings that we already own,” Easterly Government Properties CEO Darrell Crate told Bisnow in an interview

The diversification is an attempt to accelerate income growth and make the REIT’s portfolio more attractive to stock market investors, Crate said.

“By adding state and local as well as these government-adjacent firms, you can get leases that are more traditionally structured, that have [rent] bumps that happen either every year or every five years, which provides better clarity on portfolio growth to our equity investors,” Crate said.

Easterly’s stock price, trading under the ticker DEA, has fallen 28% over the last six months compared to a 1.3% drop in the S&P 500 and a 6.6% decline in Nareit’s REIT index.

Crate attributes this drop to “confusion in the market on what DOGE means for federal leases.”

Easterly has yet to report any impact from the Trump administration’s Department of Government Efficiency to its portfolio. It owns what it calls “mission-critical” facilities for the federal government — single-tenant facilities for agencies like the Federal Bureau of Investigation, Department of Veterans Affairs, Immigration and Customs Enforcement, the Food and Drug Administration and the Drug Enforcement Administration.

And these facilities are typically field offices in markets outside of the nation’s capital.

“We own no federal office space in D.C.,” Crate said.

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