The REIT Rebound: How Government-Backed Real Estate Is Evolving in 2025

🏛️ Easterly’s Strategy Shift: Moving Beyond Federal Tenants

Since its founding in 2009, Easterly Government Properties has built a 9.7 million square foot portfolio primarily leased to federal government agencies. While that model has historically offered investors stability and low default risk, the firm is now evolving its approach to capture a broader tenant mix.

In early 2024, Easterly announced plans to reduce its reliance on federal tenants from 95% of its portfolio to 70%, while increasing exposure to state and local governments and creditworthy private-sector tenants. This represents a major strategic pivot for a REIT that has long been known as a pure-play federal landlord.

To help lead this transition, Easterly brought on Christopher Wang as Executive Vice President of Acquisitions. Wang has expressed an opportunistic view of the current market and is focused on diversifying the firm’s portfolio by identifying value in non-federal opportunities. His role is central to Easterly’s push to rebalance its tenant mix—not for political reasons, but to enhance flexibility and long-term growth.

Notably, the firm is now looking at public safety, municipal, and education-related facilities as part of its expansion beyond traditional GSA-backed leases. These moves could better position Easterly in a higher-rate environment where yield, tenant durability, and long-term growth potential are under more scrutiny.

 
🛡️ Defense-Focused Stability with COPT

Meanwhile, COPT Defense Properties continues to solidify its niche in mission-critical real estate for defense and intelligence tenants. With assets near military bases, cybersecurity hubs, and key federal agencies, COPT represents another angle of the REIT rebound—high-credit tenants with specialized needs.

The firm has consistently focused on national security and defense infrastructure, which has proven to be one of the more resilient sectors of the office market. As private office demand fluctuates, defense-related tenancy remains steady, giving COPT a strategic advantage.

 
💡 Final Thought

In a market where commercial real estate valuations are being questioned and office assets are under pressure, government-backed REITs offer a refreshing mix of stability and strategic upside. Investors are revisiting these names as the dust settles from the rate hikes and the need for long-term income takes center stage again.

With leaders like Easterly shifting into broader tenant bases and firms like COPT doubling down on specialized government real estate, the REIT rebound is well underway—just in a more focused, tactical form than before.