Easterly Government Properties’ Strategic Expansion into the U.S. Space and Defense Real Estate Sector

The U.S. space economy is undergoing a seismic shift, driven by a confluence of technological innovation, defense modernization, and commercial ambition. At the heart of this transformation lies mission-critical real estate—facilities that underpin satellite production, space exploration, and national security operations. Easterly Government Properties (DEA), a REIT specializing in government-adjacent real estate, has positioned itself at the forefront of this sector through strategic acquisitions and a focus on infrastructure aligned with U.S. defense and space priorities. As the global space economy surges toward a projected $1.8 trillion by 2035 [5], Easterly’s expansion into space and defense real estate raises critical questions about the long-term value of these assets and their role in shaping the next frontier of economic growth.

The Booming U.S. Space Economy: A Catalyst for Real Estate Demand

The U.S. space economy is no longer a niche sector but a cornerstone of national strategy. According to a report by McKinsey, the global space economy could grow to $1.8 trillion by 2035, fueled by advancements in satellite communications, Earth observation, and in-space manufacturing [5]. Within this, the U.S. space technology market alone is expected to expand from $466.1 billion in 2024 to $769.7 billion by 2030, growing at a compound annual growth rate (CAGR) of 9.3% [3]. This growth is driven by government investments—such as NASA’s $25 billion 2024 budget and the Pentagon’s $30+ billion annual space budget—as well as private-sector innovations like reusable rockets and satellite-as-a-service models [1].

For real estate, the implications are clear: infrastructure that supports satellite production, launch operations, and space-based defense systems is becoming mission-critical. Easterly’s recent acquisition of a 138,125-square-foot facility in Greenwood Village, Colorado, leased to York Space Systems, exemplifies this trend. York, a key partner of the U.S. Space Development Agency (SDA), produces standardized small satellite platforms essential for national security and commercial applications [1]. The facility, leased under a triple-net structure with annual escalations, is fully occupied until 2031, providing Easterly with stable cash flow while aligning with the SDA’s push for rapid satellite deployment [4].

Strategic Acquisitions and the Defense-Industrial Base

Easterly’s strategy extends beyond space infrastructure. In 2025, the company also acquired a 104,136-square-foot facility in Aurora, Colorado, leased to Northrop Grumman, and a secure 100,000-square-foot facility in Ogden, Utah, leased to the IRS [6]. These acquisitions reflect a broader focus on government-adjacent real estate that supports defense, intelligence, and space operations. The U.S. Department of Defense’s $849.8 billion fiscal 2025 budget request underscores the urgency of such investments, with priorities including AI-driven logistics, hypersonic systems, and space-based surveillance [1].

The valuation of these assets is increasingly tied to their strategic importance. For instance, KBR’s $737 million acquisition of LinQuest—a provider of command and control systems for the U.S. government—highlighted the premium placed on mission-critical capabilities, with the deal valuing LinQuest at 11.0x FY2025E adjusted EBITDA [3]. Similarly, Redwire’s acquisition of Hera, a space domain awareness firm, underscores the demand for infrastructure that enhances situational awareness in orbit [3]. These transactions suggest that real estate serving defense and space functions is being valued not just for its physical attributes but for its role in enabling national security and technological dominance.

Valuation Dynamics: Technology, Resilience, and Geopolitical Risk

The valuation of mission-critical space and defense real estate is influenced by a unique set of factors. Unlike traditional commercial real estate, these assets are evaluated based on their integration with advanced technologies, supply chain resilience, and alignment with national priorities. For example, facilities equipped with AI-enabled logistics systems or high-capacity energy infrastructure command higher valuations due to their operational efficiency [2]. Additionally, geopolitical tensions—such as the U.S.-China space rivalry—have intensified demand for secure, domestically located infrastructure, further boosting the value of properties in strategic locations [1].

Easterly’s portfolio exemplifies this trend. Its Colorado facilities, located near major aerospace hubs like Denver and Boulder, benefit from proximity to innovation clusters and a skilled workforce. The company’s Ogden, Utah, facility, meanwhile, serves the IRS, a tenant with stringent security requirements that align with the growing emphasis on cyber-resilient infrastructure [6]. These properties are not just real estate; they are nodes in a network of capabilities that underpin U.S. space and defense operations.

Future Outlook: A High-Growth, Low-Volatility Sector

Looking ahead, the U.S. space and defense real estate sector is poised for sustained growth. The global space economy’s projected $1.8 trillion valuation by 2035 [5] will drive demand for infrastructure supporting satellite constellations, lunar exploration, and in-space manufacturing. Meanwhile, the U.S. aerospace market is expected to grow at a CAGR of 2.40% through 2034, fueled by urban air mobility, defense modernization, and space tourism [4]. For REITs like Easterly, this environment offers a compelling value proposition: stable, long-term leases with government and defense tenants, coupled with the potential for appreciation as the sector matures.

However, risks remain. Regulatory uncertainty, particularly around space traffic management and orbital debris, could impact long-term valuations. Additionally, the sector’s reliance on government budgets makes it vulnerable to fiscal shifts. Yet, given the bipartisan consensus on space as a strategic asset and the Pentagon’s multi-year investments in space-based capabilities [1], these risks appear manageable.

Conclusion

Easterly Government Properties’ expansion into the U.S. space and defense real estate sector is a masterclass in aligning with macroeconomic and technological megatrends. By acquiring assets that directly support national security and space exploration, the company is positioning itself to benefit from the sector’s explosive growth. As the U.S. space economy transitions from a niche industry to a trillion-dollar juggernaut, mission-critical real estate will become an indispensable asset class—one that Easterly is well-positioned to dominate.

Source:
[1] U.S. Space Industry Blast-Off: Inside America's $600B [https://ts2.tech/en/u-s-space-industry-blast-off-inside-americas-600b-space-boom-and-the-race-to-a-1-trillion-future/]
[2] Emerging Trends in Real Estate® 2025 [https://www.pwc.com/us/en/industries/financial-services/asset-wealth-management/real-estate/emerging-trends-in-real-estate.html]
[3] Space & Satellite M&A Transactions - 2024 - 2H [https://blog.janescapital.com/segment-reports/space-satellite-ma-transactions-2024-2h]
[4] Space Technology Market Size, Share | Industry Report [https://www.grandviewresearch.com/industry-analysis/space-technology-market-report]
[5] Space: The $1.8 trillion opportunity for global economic growth [https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/space-the-1-point-8-trillion-dollar-opportunity-for-global-economic-growth]
[6] Easterly Government Properties Reports Fourth Quarter [https://ir.easterlyreit.com/news-releases/news-release-details/easterly-government-properties-reports-fourth-quarter-2024/]