Government-Backed Commercial REITs Outperform Broad Market by 9% as Housing Stalls

Commercial REITs have outperformed the broader market by roughly 9% this year. This performance occurs as residential housing faces challenges from rising mortgage rates. Easterly's portfolio concentrates on federal agency field offices leased to the FBI, Drug Enforcement Administration, and Veterans Administration. These assets are less affected by remote work trends than Washington D.C. headquarters properties. Leases are backed by the United States of the United States of America. No Easterly lease was cancelled during the DOGE review period. The portfolio averages 16 years in age building age against a typical 40-year government building lifespan. These factors provide a consistent cash flow backed by an 8% dividend yield. A small decline in interest rates would drive a rotation into long-lease, government-backed assets with high credit tenancy.