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Item 1B. Unresolved Staff Comments

2021-02-24 compared with 2020-02-25 · 70 added, 62 removed, 181 unchanged (42% of the section changed)

Unresolved Staff Comments

As of December 31, 2019, we wholly owned 70 operating properties, including 68 operating properties with approximately 6.3 million rentable square feet that were leased primarily to U.S.

Government tenants and two operating properties with approximately 0.2 million rentable square feet that were entirely leased to private tenants.

In addition, we wholly owned two properties under development that we expect to encompass approximately 0.2 million square feet upon completion.

As of December 31, 2020, we wholly owned 79 operating properties, including 77 operating properties with approximately 7.1 million leased square feet that were leased primarily to U.S.

Government tenants and two operating properties with approximately 0.2 million leased square feet that were entirely leased to private tenants.

In addition, we wholly owned one property under development that we expect to encompass approximately 0.2 million leased square feet upon completion.

As of December 31, 2020, our operating properties were 99% leased with a weighted average annualized lease income per leased square foot of $33.65 and a weighted average age of approximately 13.3 years based on the date the property was built or renovated-to-suit, where applicable.

For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition.

We calculate annualized lease income as annualized contractual base rent for the last month in a specified period, plus the annualized straight line rent adjustments for the last month in such period and the annualized net expense reimbursements earned by us for the last month in such period.

6 unchanged sentences

JSC - Suffolk

Various GSA - Portland (4)

FBI - Salt Lake

Salt Lake City, UT

PTO - Arlington

Arlington, VA

Various GSA - Chicago (5)

Des Plaines, IL

Various GSA - Portland (4)

PTO - Arlington

Arlington, VA

VA - San Jose

1 unchanged sentence

San Antonio, TX

FDA - Alameda

TREAS - Parkersburg

Parkersburg, WV

FDA - Alameda

EPA - Kansas City

Kansas City, KS

FBI / DEA - El Paso

VA - South Bend

Mishakawa, IN

Mishawaka, IN

ICE - Charleston (6)

North Charleston, SC

FBI - Pittsburgh

Pittsburgh, PA

USCIS - Lincoln

DOI - Billings

FBI - New Orleans

New Orleans, LA

DOT - Lakewood

USCIS - Lincoln

FBI - Birmingham

Birmingham, AL

FBI - Pittsburgh

Pittsburgh, PA

DOT - Lakewood

USFS II - Albuquerque

Albuquerque, NM

USCIS - Tustin

FDA - College Park

College Park, MD

USCIS - Tustin

USFS I - Albuquerque

Albuquerque, NM

SSA - Charleston

Charleston, WV

FBI - Richmond

2 unchanged sentences

JUD - Del Rio

VA - Northeast

VA - Orange (7)

DEA - Pleasanton

2 unchanged sentences

El Centro, CA

SSA - Charleston

Charleston, WV

DEA - Sterling

DEA - Dallas Lab

TREAS - Birmingham

Birmingham, AL

DEA - Dallas Lab

Property Name

Government Leased (Cont.)

JUD - Charleston

Charleston, SC

DEA - Upper Marlboro

6 unchanged sentences

DOE - Lakewood

JUD - Jackson

DEA - Santa Ana

Santa Ana, CA

JUD - Charleston

Charleston, SC

Property Name

Government Leased (Cont.)

San Diego, CA

DEA - Otay (7)

San Diego, CA

CBP - Sunburst

4 unchanged sentences

JUD - Aberdeen

DEA - North Highlands

Sacramento, CA

GSA - Clarksburg

Clarksburg, WV

DEA - North Highlands

Sacramento, CA

VA - Charleston

North Charleston, SC

DEA - Riverside

Riverside, CA

VA - Baton Rouge

HRSA - Baton Rouge

Baton Rouge, LA

1 unchanged sentence

Pittsburgh, PA

VA - Baton Rouge

Baton Rouge, LA

JUD - South Bend

20 unchanged sentences

The year of lease expiration does not include renewal options.

Private tenants occupy 15,374 rentable square feet.

Private tenants occupy 50,222 rentable square feet.

Private tenants occupy 2,987 rentable square feet.

A private tenant occupies 21,609 rentable square feet.

ICE occupies 5,813 rentable square feet.

The ATF occupies 8,680 rentable square feet.

A private tenant occupies 3,854 rentable square feet.

Private tenants occupy 15,374 leased square feet.

Private tenants occupy 42,025 leased square feet.

Private tenants occupy 1,835 leased square feet.

A private tenant occupies 21,609 leased square feet.

Previously named VA – Northeast.

The ATF occupies 8,680 leased square feet.

A private tenant occupies 3,854 leased square feet.

Our assets are located throughout the United States .

2 unchanged sentences

Number of Leases

Rentable Square Feet

Percentage of Total Rentable Square Feet

Leased Square Feet

Percentage of Total Leased Square Feet

Percent Leased

1 unchanged sentence

Greater Southwest

Southeast Sunbelt

The Heartland

Northeast & Caribbean

West Virginia

Rocky Mountain

The Heartland

Greater Southwest

Rocky Mountain

Southeast Sunbelt

Northwest Arctic

Rocky Mountain

Greater Southwest

South Carolina

Southeast Sunbelt

National Capital

Northwest Arctic

Rocky Mountain

Greater Southwest

National Capital

Southeast Sunbelt

1 unchanged sentence

Southeast Sunbelt

Rocky Mountain

Southeast Sunbelt

Total / Weighted Average

Greater Southwest (1)

National Capital

The Heartland

Southeast Sunbelt (1)

National Capital

Rocky Mountain

The Heartland

Northeast & Caribbean

6 unchanged sentences

Government’s largest and most essential agencie s.

As of December 31, 2019 our operating properties were 100% occupied by 53 tenants.

The following table provides information about the tenants that occupied our properties as of December 31, 2019 :

Federal Bureau of Investigation ("FBI")

As of December 31, 2020 our operating properties were 99 % leased by 44 tenants.

The following table provides information about the tenants that leased our properties as of December 31, 2020 :

Department of Veteran Affairs ("VA")

Federal Bureau of Investigation ("FBI")

Drug Enforcement Administration ("DEA")

Environmental Protection Agency ("EPA")

Judiciary of the U.S.

Food and Drug Administration ("FDA")

Environmental Protection Agency ("EPA")

Internal Revenue Service ("IRS")

1 unchanged sentence

Immigration and Customs Enforcement ("ICE")

Food and Drug Administration ("FDA")

Bureau of the Fiscal Service ("BFS")

Patent and Trademark Office ("PTO")

Citizenship and Immigration Services ("USCIS")

Federal Aviation Administration ("FAA")

Patent and Trademark Office ("PTO")

Forest Service ("USFS")

4 unchanged sentences

Occupational Safety and Health Administration ("OSHA")

Military Entrance Processing Command ("MEPCOM")

Defense Health Agency ("DHA")

Department of Energy ("DOE")

Military Entrance Processing Command ("MEPCOM")

Department of Agriculture ("USDA")

Bureau of Indian Affairs ("BIA")

National Park Service ("NPS")

Bureau of Reclamation ("BOR")

General Services Administration - Other

Coast Guard ("USCG")

Army Corps of Engineers ("ACOE")

Small Business Administration ("SBA")

National Labor Relations Board ("NLRB")

Army Corps of Engineers ("ACOE")

Health Resources and Services Administration ("HRSA")

National Oceanic and Atmospheric Administration ("NOAA")

Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF")

General Services Administration - Other

Bureau of Indian Affairs ("BIA")

Attorney Office ("USAO")

Office of the Field Solicitor ("OFC")

Office of the Special Trustee for American Indians ("OST")

Marshals Service ("USMS")

14 unchanged sentences

Government ’s perspective, leases with such provisions are helpful for budgetary purposes.

(approximately 15.5 years), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties.

While some of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the average age of these properties based on the date the property was built or renovated -to-suit , where applicable (approximately 15.6 years), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties.

The following table sets forth a schedule of lease expirations for leases in place as of December 31, 2020 .

11 unchanged sentences

Some tenants have the right to vacate their space during a specified period, or “soft term,” before the stated terms of their leases expire.

As of December 31, 2019, 17 leases occupying approximately 5.8% of our rentable square feet and contributing approximately 4.8% of our annualized lease income have exercisable rights to terminate their leases before the stated term of their lease expires.

Information about our development properties as of December 31, 2019 is set forth in the table below:

As of December 31, 2020, 17 leases occupying approximately 4.3% of our leased square feet and contributing approximately 4.0% of our annualized lease income have exercisable rights to terminate their leases before the stated term of their lease expires.

Information about our development property as of December 31, 2020 is set forth in the table below:

Property Name

Estimated Rentable

Estimated Leased

FDA - Atlanta

Food and Drug Administration

L=Laboratory.

The 20-year lease term includes a firm term of 15 years and a soft term of five years.

Legal Proceedings

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1B. Unresolved Staff Comments