Government Properties Trust acquires and manages recently built or renovated office properties primarily leased to the federal government under long-term leases. Its tenants include the Department of Justice, the Drug Enforcement Administration, the Federal Bureau of Investigation and the Social Security Administration.

The company's existing portfolio includes five properties totaling 248,000 sf with an average remaining lease term of about 12.5 years. In its regulatory filing with the SEC, the company says about $129 million of the estimated $159 million in net proceeds will be used to acquire eight GSA-leased properties totaling approximately 487,000 sf that have an average remaining lease term of 14 years. The new acquisitions will have a 75% loan-to-cost ratio, according to the company.

The company, which intends to be taxed as a REIT, says in its regulatory filings with the SEC that there is substantial demand for new office space from the federal government. The US government now owns 77% of its space, but it's new properties are more often being leased. Backing that up, the company says that between 2000 and 2002, commercial square footage owned by the government grew by only 0.2%, while square footage under lease agreements grew by 7.8%.