To the 7:15 A.M. Session at Citi's 2023 Global Property CEO Conference. I'm Michael Griffin with Citi Research, we're pleased to have with us Easterly Government Properties and CEO, Bill Trimble. This session is for Citi clients only. If media or other individuals are on the line, please disconnect now. Disclosures are available on the webcast and in the AD deck. For those in the room or on the webcast, you can sign on to liveqa.com and enter code Citi 2023 to submit any questions if you do not want to raise your hand. Bill, I'll turn it over to you to introduce Easterly and members of management that are with you today, provide any opening remarks, we'll get into Q&A.
Thanks, Griff. I appreciate it. It's great to start off this wonderful conference at 7:15 A.M. It's a pleasure to be here. I'd like to introduce Meghan Baivier to my right, who's the CFO and COO of Easterly Government Properties. We have some other members of our team here as well, and we're really excited for the week ahead. Certainly, I guess, goes without saying, it has been a very interesting year in real estate. I think we're lucky that we are in a particular sector of the commercial real estate world that seemingly from an operations standpoint is not as affected as the rest of the industry. However, it doesn't mean that the tide hasn't been rushing out over the last year. There have been lots of interesting currents to navigate.
Having said that, I think we're in a terrific position, certainly from our personnel, certainly from our balance sheet, and absolutely from our portfolio, where we're positioned to help perform the missions, important missions of the U.S. Federal government. Nothing really has changed since we opened our first private equity fund back in 2011. We're very excited about the future ahead. With that.
Outstanding. Well, let's dive into it. Bill, I think you covered some of the topics there. We're starting off each of these sessions with the same opening question. What are the top three reasons investors should buy your stock?
Well, I think one of the reasons that we're so excited to be here is that we have 97% of our leases are paid by the full faith and credit of the U.S. Federal government, and that is unique. I think that puts us in a singular position to at least be able to calmly look out over the next few years knowing that we're going to have a business. I think that would certainly be number one. Two, I think our 7% yield is incredibly attractive, backed by those cash flows that are not in doubt. Three, if you look at our positioning, we are the only public REIT in the 100% government space.
Also, I think when you look at any competitors that we have that are in the private sector and those private funds, for the most part, are not adhering to the bull's-eye best of class properties that we make our homework.
Let's expand on that a bit because I know that there's been some, you know, comparisons with traditional office landlords. It doesn't really seem like a fair comparison, just given your underlying property types and drivers. You know, why do you think now is a good time to invest in these GSA lease properties? You know, are there any potential impacts of that hybrid or remote work could have on your core businesses?
Well, I really have to harken back when we started back in 2010 and came up with this idea. This wonderful gentleman, Jim Norbeck, who'd been Head of the Public Buildings Service for the GSA for a number of years. Look, you've really got to concentrate on a subset of buildings that are going to do you well in terms, upturns and downtimes. He's absolutely correct. Basically, when we went into the pandemic, for the most part, all of our facilities were being occupied and used during that whole period of time. If you look at drug labs, Federal courts, FBIs, they really were not affected by the pandemic. The workers had to get there. They couldn't close the meth lab from their basement office. They couldn't investigate from a living room.
We really understood what those build-to-suit properties would do in difficult times. You also introduced the sort of Level 4 Security necessary. I think you really got to step back and look at the Federal government mission, because even We have one of the largest IRS service centers in the country out in Fresno, California, and they handle compliance. This is the place that no one in this room ever wants to get a letter from.
Mm-hmm.
They can't remove the files from that office. We know one reason it's taking a long time to get your tax returns back, but the other is that there's a lot of security surrounding those. All those missions are going to continue no matter how much work from home we see in the future. I think another thing that has always been sort of interesting is where people put us. Not you, Griff, but everybody else. In that, where do we fit? Are we office? Are we net lease? Well, we're actually Easterly Government Properties, and we sort of have attributes of both.
I think, though, that if you're looking for an office investment, because I'd say that is the majority of the type of buildings that we have, I think that we would certainly be one of the best opportunities within that sector going forward. I think we do have a fair amount of certainty as to what our tenants are gonna be doing over the next five, 10, and 15 years.
Gotcha. Let's just talk about 2023 for a minute. You came out with guidance a couple weeks ago, implied, you know, a 10% decline in year-over-year FFO. You know, it seems like similar to other REITs, you've been affected by the rise in interest rates, but I guess how should investors weigh those near-term headwinds to earnings versus the longer-term value proposition that Easterly provides?
Sure, Griff. Yeah, when you look at the year-over-year guidance and you look at the component pieces, really the biggest driver of that is what we think is temporary effect of the portfolio disposition that we undertook last year. You know, the upside of that is that we've really been able to position the balance sheet for 2024 and beyond. We've gotten our revolver down to a balance of roughly $65 million.
Our floating rate exposure is 6.5%. We're really sort of hunkered down, looking to ride through any volatility in the interest rate market and wait for the asset market to come back.
Mm-hmm.
Maybe just on that, on external growth assumptions going forward, just given where interest rates have moved, where cap rates have moved. I think, Bill, you talked on the call about, you know, acquisitions might look attractive around 7% or so. I guess, how are you positioning yourself should capital markets condition return so you can, you know, execute on potential strategic acquisitions?
Maybe I'll start and Meghan can fill in. I think that the one thing that we do have the luxury of in our space is knowing where every single building we're interested in purchasing resides and who owns it. Our acquisition team has been incredibly busy during this period of time, going out and visiting folks, calling those names, making sure that we're front and center. I think we're seeing a little bit right now, as you pointed out, of a gap between what sellers are expecting and what we're willing to pay, and I think we're probably willing to pay more than most. We are prepared.
I think that the fact is, in the end, it is real estate, and so people might be pretty proud of their properties, and they might think that there are cap rates that were 150 basis points ago, but they've got other things as well. We're ready to go there. We are paying attention, especially to any developers out there that might have something that might be compromised.
Oh, sorry, Meghan, go ahead.
No, in terms of ability to execute, we've got a revolver with $434 million available on it, excuse me, and just under 90 or right around $90 million of forward equity that we could settle. We've got that at our fingertips. We're obviously very cognizant of waiting for this bid-ask spread and ensuring that we have an ability to fund just in time. Both of those, access to both of those will certainly allow us to be a first mover.
Bill, do you have a sense, could you quantify kind of what that spread is? I know if Avery needs a number to write down in the note, you know, do you have a sense of what-
Yeah, I got it to within about 2 basis points. No, but I think that, I think that the actual pricing should be sort of 6.75-7 on the properties that we call our bread and butter. I think that, you know, we're probably the sellers are probably anywhere from 25-50 basis points below that. They were 150 basis points, so they are coming to the party. We are expending a lot of energy to make sure that we're giving them some good ideas as to where they should trade.
What kind of competitors or sellers or buyers are you seeing out there in the market? Is it private money? Is it, you know, kind of if you could expound on that.
Yeah, I think, you know, it's certainly, it's almost more fun talking about the potential buyers this time last year, where you had NBA basketball players getting into the government space. That's not really happening this year anymore. I'd say that the only folks that we're seeing right now are private equity players. One of them, I think is remunerated in a different way than we are. You're seeing a lot of acquisition, disposition fees, et cetera, and they need to just scale. Other than that, I'd say it is a very quiet market right now. Not much at all going on.
Maybe expanding on that a bit, just for potential build-to-suit opportunities and how they might look in today's environment. I know you recently closed some of the assets in the VA joint venture. How important is it having that high-quality portfolio with a generally younger vintage?
I think it's incredibly important. If you look at the VA, as you mentioned, you look at the VA area. This is an area that we had absolutely no interest in, a decade ago, and even about seven or eight years ago. The agency has never been famous for being run particularly well. However, their mission is probably considered in some ways the third rail of government. There's nothing more important to the American people, to Congress and the President than the Veterans Administration, because it does have a big mission. It is the largest healthcare system in the world, just to give you an idea.
When they switched over to the new PACT compliant VA facilities, that was something that we could sink our teeth in, knowing that that would be something that would be around us building for the next 40 or 50 years. That made a lot of sense. We're also looking, you know, as we're in the middle of an FDA redevelopment down in Atlanta, Georgia. The new laboratory to the FDA extremely important. The FDA is important, as we've seen over the last several years. Then, you know, if you look at another agency that we're looking at, we've been talking about for about eight years, another very poorly run agency, but incredibly important is the FAA. As they get into the NextGen with their air traffic control, that might perhaps be an interesting opportunity as well.
It's important they're young, it's important that mission is going to be set for the next half a century, and that's what we're looking for.
Can you just remind us, maybe for the uninitiated, what PACT compliance means?
Well, that basically, it came as a manufacturing term out of Japan. Basically from where it fits into the VA space is that instead of just having everybody go down one hallway, where you'd have the doctors and you have the patients and visitors, you actually have separate access points like Federal courts do that are being built now. The doctors do not have to intermingle with the patients in order for visitors in different areas. If you can imagine, if you've got, in some cases, three different ways to access various rooms, there's absolutely no way that you can retrofit an old facility to be able to come into compliance with PACT.
That's why, and actually there's been a couple of trades lately, we've been asked, "Why didn't you buy these facilities in Florida?" Well, one of those two was not PACT compliant. Therefore, we felt it was a risk and would be obsolete here at some point.
Maybe just touching on, you know, the Federal agencies that you might view more favorably. I think you mentioned FBI, DEA, ICE. Like you said, you can't bring a meth lab home with you. Particular agencies that you would like to expand your presence with? On the flip side, are there any that maybe you'd look to lighten your exposure to?
Yeah. I think that we've always said, I don't know if it's the proper term, but gun-toting agencies or mission-critical agencies, whether we have a Democrat or Republican in office, that we all believe is a fundamental mission of the government. I'd just go back and say, yeah, FBI, absolutely, VA, FDA, you know, we don't have much in the way of United States Secret Service, but that would be something we'd be very interested in owning. What we're not interested in, and it doesn't mean we politically or feel that they're unimportant agencies, but ones that basically do not require build-to-suit space or could be the victim of a political hatchet job on either side.
We love Fish and Wildlife as a personally, but probably not the place that we're gonna be putting a lot of our buildings into. Department of Education can also have issues with either party. Just think of those gun-toting agencies for the most part, and that's where we're gonna stay.
Is there a worry that a split government or potential worries around the debt ceiling talk could negatively impact your industry and demand for your product?
I don't. I, you know, it is Kabuki theater. In the end, it is important when things get defunded. I think it's important to note that if you've got your calendar out and are looking for an exciting summer in Washington, we are funded right through the end of September in any case. No matter what they throw at us during that period of time, that will not be an issue. In the past, we have not seen anything we've been moved aside from those debates within government. It's obviously not healthy when you see a Federal government rolling back and forth. Don't forget, these are 20, 30-year missions, and they're not shutting FBIs and having them not come in. It's not happening.
We had a question come in from our live QA feed here. You've talked about your buy box of acquisitions meeting certain key criteria. Yet some might argue that, you know, the portfolio sale you announced at the end of last year, you probably wouldn't fit. You know, some of these might have been in that buy box strategy. Can you just expand on why the dispositions made sense at the time and, you know, expectation of allocating capital from that going forward?
Absolutely. I think it's important to note that we do have about three dozen agencies that we really like. It doesn't mean that there aren't buildings with a hierarchy of mission within those agencies that could be challenged at some point in the future. Even though we have the youngest portfolio out there at about 14 years, and the average stay in these buildings is well over 40 years, some of the buildings that we moved on would be sort of in the second half of their life. I think some of those buildings also were at what we consider remote locations. And just to give you an example, which they're gonna be there forever, but I don't know if you've ever been to Sunburst, Montana.
If you try to get there, you start at Salt Lake City from the East Coast, and then you fly one and a half hours up to Great Falls, and then you drive three hours on the road about 90 miles an hour. There's a speed trap about halfway up, and you get to the border. That's how far this facility is. From the standpoint of a company, a public company running it was just a challenge. I think you'll see that sort of overlay in the buildings that we moved on, there were an asset management issue in the end and something that maybe could be replaced sometime in the future or automated, and we just felt that we needed to move on.
I think also, Griff, with that portfolio, we're able to really, to your prior question, focus on those agencies, DEA, FBI, ICE, where we have a competitive advantage. We have a relationship within the agencies because we've got such a large portfolio.
Great. Maybe just switching to the operating the asset management platform. I know we haven't talked about that so far. You've noted that the market for GSA leased properties, it remains pretty fragmented, and you're one of the more notable players or the most notable player in the space. I guess, what differentiates the Easterly strategy, and how can you expect to gain market share in the coming years?
Well, we're really the only aggregator of GSA-leased assets out there, I think, and, you know, for the most part. I think that if you look at the way we set up our company and the different verticals, we've purposely put government experts in, commercial real estate experts in, finance experts in, that all are familiar with the government space. I think that gives us a serious leg up when we go out and look for properties when we operate these properties. It sets us up, I think, over the long term for having a unique ability to basically understand what the government is gonna do for a long period of time going forward, and therefore, I think, give us a real leg up on the buy. You good?
Mm-hmm.
I guess, to that end, can you just remind us the structure of these leases with the Government tenants and how they might differentiate from your traditional kind of office lease insulated maybe from inflationary effects? You've got a good slide in your deck that kind of highlights the, you know, the structure of these. Can you give us typical, you know, remind us about the average lease terms, in terms of years, TIs, free rents, kind of how that procurement process works.
Yeah, sure. Our lease structure is what we call a modified gross lease structure. We have OpEx bases and real estate tax bases that get set within the lease. OpEx base accretes with urban CPI every year. It's uncapped. Real estate taxes above and beyond the base year are passed through to the government. What that does is really create sort of inflationary insurance around net operating income coming off of those assets. Out of the development box, typically assets are developed to 15-20-year leases. Assets such as ours, where mission is enduring. Nobody at the GSA is looking to pick up that lease again in five years and renegotiate it. We're renewing for 10-15-year terms.
When you look at our historical renewals, you can see we speak about assets as those which have renewed and the tenant improvement is already completed. The tenant improvement package, if you will, is selected by the government. It is not, there's not a market convention for what an FBI may need. It's whatever the FBI in that location has decided to request, and GSA is procuring for them. We then look at the other bucket, which is assets which have renewed, but for which the TI is not complete. You might imagine that if it renews and the TI is complete, either there was little or it was a quick two-by project. Those 11 assets in our portfolio have renewed up 8% with TI packages right around $18.
The 11 assets which are still in our bull's eye and have yet to have the TI complete, we're expecting renewals up 26% with TI packages right around $35 a foot.
Is there anything different working with the different regions? You know, the highlight on that one slide in your deck, region one versus region nine. You know, I know I'm from Georgia, and people from Georgia are different from people from New York, different from D.C., but it's probably a little more complicated than that.
Yeah, the regions definitely have their own personalities. You know, back to Bill's point, we've put together a team that has grown relationships across the country in each of those regions where we ensure that internally we have consistency across our portfolio, but most importantly, across the region. You know, some regions are ahead of the game. You'll see a procurement come out two years in advance. Some regions are under the hand, and you get right down to expiration and go into, you know, they need an extension to be able to prepare for a renewal process. We see it all. The National Capital Region is generally the most sophisticated. We don't have many assets in that region. It's the beauty of what we do is they see it across those regions.
Maybe just, expanding on leasing there for a bit. Meghan, you touched on it a bit, but you've got about 300,000 sq ft of leases expiring this year. Can you talk about expectations for renewals in those and maybe more broadly, what your expectations for leasing in general are for 2023?
Sure. 2023 is really the concentration of three assets. What we call various GSA in Chicago, our DEA regional office in Birmingham, and we have a courthouse in Jackson. Those are the three biggies next year. We feel very good about Birmingham and Jackson. Those should look like bull's eye assets when they're done. Chicago, as you know, we bought that as part of the Saban portfolio. It's the gift that keeps giving. It's a wonderful purchase. We expect the FAA to be in there for the medium term, you know, certainly in the two to four year range.
Maybe, just switching over to ESG initiatives, we're asking the same question to every company at these panels. Just can you highlight any important ESG initiatives that Easterly is currently undertaking?
Yeah. At Easterly, we've really legged into our approach with ESG. In fact, our director of ESG has joined us at the conference this year. Today, almost half of the Easterly portfolio has at least one green certification. Last year we were very proud to have released our first ESG report. In that report you'll see we set medium term goals. First, we've committed to reduce energy use intensity 10% by 2030. We've committed to reduce water use intensity 5% by 2030. On the social side, we've set goals to increase DE&I in our hiring practices and implement DE&I training across the company. We also have a goal to achieve 90% participation in employee charitable giving or volunteerism by 2025.
While we recently implemented our first employee engagement survey, at the beginning of this year, rather, it is our goal to achieve 90% participation in that survey by 2025.
Very nice. Maybe just switching over to the balance sheet for a bit there, Meghan. With leverage currently sitting at about seven times net debt to EBITDA after the portfolio sale at the end of last year, I guess, what are your expectations about where this could trend? You know, should opportunities arise, could you look to take leverage up higher?
Yeah. We're, you know, we're committed to maintaining a strong BBB balance sheet. Given U.S. credit, we're very comfortable. In U.S. government credit, we're very comfortable in that 6.5x- 7.5 x leverage range. We're obviously right in the middle of that. That would be our working expectation going forward. As we look to the, you know, again, going back, we look at the capital stack. We've got access to equity and debt today and the combination of factors that we should be able to maintain that leverage going forward into the year and into next as well.
Just kind of on that, you highlighted the forward equity proceeds that you might have to be able to deploy. Shares are trading currently at a slight discount to NAV relative to a historical premium. I guess, how does this factor into your capital allocation decisions for the year ahead?
Yeah. Obviously I think NAV is a fluid concept today, given what we've talked about in the bid-ask spread in the market. Sort of intrinsic private values. You know, we're committed to doing accretive deals at Easterly. Always have been, always will. There are times when we certainly could buy assets to hit acquisition goals or drive accretion. We're committed to staying in that bull's-eye, sticking to the assets that are, you know, within our addressable market and always doing accretive deals.
In y'all's general opinions.
Yep. Instantly accretive. Nope, that's a great question. Yeah, our leases don't have escalators necessarily. It's not the typical GSA lease, it's instant or it's not.
I guess to that end, I'd be curious to get y'all's thoughts. You know, how should we and investors and, in your opinion, view NAV as a valuation metric? I feel like particularly maybe for the traditional office landlords, there's such a big disconnect on a premium or, you know, notable discount basis. Like, how useful and, in your opinion, do you think it is for valuing some of these companies?
You know, I think it's a time right now where our choices and the disposition were very much about ensuring that we are doing, making NAV accretive moves. That was obviously cash flow on a temporary basis dilutive, but we think very NAV accretive. You know, as we see interest rates in this sort of new world that we're in settle out, I think cap rates will settle out in the private market as well. We're still, you know, in the middle of that today in the market.
Do you have a sense for kind of what your underwriting and expectations are for this year from a macro perspective? Are you know, is your thought that higher for longer or that the Fed's going to end up cutting rates in the back half of the year? I guess any macro commentary would be helpful.
Yeah. I think we should look at what we've done. Back in February, on February 3rd, we put forward starting swaps on our two term loans, which in total by June of this year should be roughly $300 million on our balance sheet. Those swaps will start $200 million of them in June and $100 million in September and endure for 18-21 months. Obviously, that was we feel a very fortuitous move, and we really wanted to kind of lock and load over that next 18-24-month period.
Can you remind us what the cost of those swaps were?
Sure. The rates are just under 4%. They're swaps.
I know you touched on it a little bit earlier, Bill, but I'm just curious, you know, why you think Easterly necessarily shouldn't be categorized as either an office REIT or a net lease REIT. I mean, it seems like it's kind of its hybrid, its own animal, so to speak. Can you maybe just expand on that and maybe the differentiation there?
Thanks, Griff. I know you and I have actually chatted about this for the last several months. I think we're definitely a hybrid. If you look at our sort of characteristics that would go with net lease, you've got the credit quality, obviously. You've got renewal probability, which is extremely strong, you know, 95%-100%. You've got long lease terms for the most part within our area. You've got incredible stability of cash flows. I think that fits into the net lease category. You do have some big differences, which is we're operating under a modified gross lease, so that's different than you're gonna see there. You know, we're paying for the things that need to be done to the roof, the HVAC and so forth over the long term. Our office type is predominantly...
Excuse me, our type is predominantly office. However, we certainly have a unique spin to that. I think that with the missions that can't be done from home, you've got some other attributes that would sort of fit in more with, I'd say, a mandatory office environment. I think we're somewhere in between. That, I think sometimes it's difficult, but I think right now that might be a good place to be.
Oh, sorry, go ahead, sir.
I'll touch on process second, but in terms of economic outcomes, what you have is this grand moment, right? The lease has generally been flat for 15- 20 years. We really are engaging in a replacement cost conversation. The FBI cannot move across the street. The courthouse cannot move into that vacant office building down the road, right? They would have to have a new asset constructed for them. We are essentially able at Easterly to slide in short of replacement costs, but look to get those spreads kind of in the high teens to low 20s on those mission-critical assets as we have a cumulative inflation right over the period of the lease.
From a process perspective, I would say there's a variety, but the typical is that it is a public process where the lease requirement is published by the government and respondents are allowed to make their asset available. They put out square footage requirements, delineated area requirements, and so forth. Occasionally the GSA will get approval to negotiate with us one-on-one to asset. It looks a bit like an open, a public process, but it's not. It is a fairly open market competitive outcome.
I'd say that's a great question because I think we've only had one since 2010, and that was a property down on the border in south of San Diego. Basically, they decided that they wanted to have more space, which is, by the way, the area that we always look at the most. The building was part of a portfolio that we bought. We never liked that. I never liked that building, but in any case, it became evident that they needed more mission space than they had. Interestingly, you know, I think the building, the location we still have it is in such a good spot, I wouldn't be surprised to see some other government agency take it over. It's very rare that those things happen.
Just a reminder for those asking questions alongside, there's a little button you need to press on the mic, so if we have any going forward. I think we got one right here. Oh, you don't have one. Oh, I thought you had one. Sorry.
This session.
Oh, never mind. Go ahead.
We've got 12. 12 of the 56. Yeah. They're pretty amazing facilities. You're safe when you're in one.
Yes. Very safe. Yes. I guess shifting back to maybe kind of broader thoughts, Bill, on what you're doing, you know, with your day-to-day. Can you give me the one thing that you're spending sort of most of your time on these days?
Absolutely. I think we're talking to, as I mentioned, to the owners of these buildings, but specifically the developers out there right now that have projects underway that they got going in a very, very different world and environment several years ago. As I said, I think, at the Nareit in November, we are seriously focused at looking at helping some of these people out that might be adrift, unable to complete the projects, surprised at how much TIs cost today, and timelines that are difficult. They have leases with the U.S. Federal government and may not be able to perform. I think we're a wonderful avenue for at least getting them to the next stage of their life.
Have these typically been, you know, cost overruns? The developers kinda got over their skis initially in a, in a lower interest rate environment, now it can't get financed?
Absolutely. Some of these folks were bidding things at the time at six caps or just slightly over a six cap and thinking they had a profit in there as well with where we are today. They still got to perform for the Government. It's there's an opportunity there.
I'd be curious just to get your thoughts on maybe the broader office market in general. I know it's not really necessarily in your wheelhouse, but I think there's some worry that, you know, if these office valuations decline markedly, there could be knock-on effects for municipalities, public services. I think we've seen it in New York and D.C., where groups of landlords have come together and, you know, just worried about the implications for office valuation on kind of the broader ecosystem. Be curious if you have any thoughts there.
Meghan and I sit looking right in Washington and West End, right next to Central Business District. I can see a lot of see-throughs all around us. I think, not being an expert in that particular space, I think we're seeing productivity not as good as we all thought it was gonna be. I think certainly in the sense that we're getting and from the Federal Government who is finally getting people back to work, maybe it is not gonna be as bad as we all thought at some point. You're seeing employers at some point having more power, certainly if we head toward a recession.
I think while work from home, we all love it, but I don't think any of us in this room believe, certainly, in some of the missions that are being conducted, that things can't actually get done more efficiently from a collaborative office space.
Amen to that.
Bill, just one more. Just back to the ESG thing for a second. You have one tenant, in essence. Is it possible, or could you see a risk that some sweeping agenda comes over some administration that says, "Every building we lease going forward has to have X in it," and you have to retrofit or you have to, you know, make more green, or you have to do something that adds to the cost structure of the business in a way that makes this less attractive.
I knew you were here for a purpose, Andrew, and I appreciate it, which is guess who pays for that in the world. The U.S. Federal government will pay for those TIs if they put a sweeping mandate in. From their standpoint, it's actually an opportunity for us.
Having said that, you know, they are constrained, they're very quick to tell you what they're gonna do and what they would like to have in a cheery, wonderful world where things are gonna be wonderful for everyone. They really are trying to watch their bottom line these days. The good news is, our portfolio is the best one out there in the Government space. We're very attentive to it. I think we're in a great position. I think we've got it covered under either base.
Real quick to end the session, got my three rapid-fire questions. Best real estate decision today: buy, sell, develop, redevelop, or pause?
I'll say just briefly here is to pause. I think we see light at the end of the tunnel.
Same-store growth expectations for 2024.
1%-2%.
More, fewer, or the same government net lease, office, whatever we call it.
Easier for us.
There we go. Thank you so much.