To avoid near term chances of a government shutdown, last week the U.S. Senate and House passed a two-year spending plan, which the President signed. The new plan significantly boosts government spending over the next two years compared to the previously in effect sequestration plan. No matter what your thoughts are on the big vs. smaller government debate, the fact is that government spending and government buying is a growth industry. In the spirit of “if you can’t beat them, join them”, one way to participate in the growth of the federal government is to invest in properties leased to government agencies.
There are just two real estate investment trusts that focus on owning properties leased to government entities. Government Properties Income Trust (Nasdaq: GOV) sports a high yield, but is saddled with a poor, third-party management agreement. GOV is one of those REITs where the management team does a lot better than the stock investors. The other government agency focused REIT is Easterly Government Properties (NYSE: DEA). This is an income stock that deserves a closer look and probably some of your investment dollars.