FBI and Vet Center
Office | 7.50% CAP | 9,899 SqFt
Marketing description
Newmark's Government Capital Markets team is pleased to present for sale 2208 21st Avenue South, Great Falls, Montana (the "Property") - a 9,899 square foot, two-tenant, 100% government-leased office building occupied by the Federal Bureau of Investigation (FBI) and the United States Department of Veterans Affairs (Vet Center). The Property sits on a 1.31-acre site in a mixed-use corridor with strong visibility, ample parking, and direct proximity to Malmstrom Air Force Base - the region's dominant economic engine. Originally constructed in 2008 as a build-to-suit for the U.S. Department of Homeland Security (Customs and Border Protection), the facility was vacated by CBP in approximately 2018. A portion of the building was subsequently leased by the FBI under a 15-year (13 firm) lease commencing November 6, 2021. The remaining space has been fully renovated (2026) and leased to the Department of Veterans Affairs under a new 20-year (8 firm) firm lease for use as a Vet Center - a community-based counseling facility providing professional mental health and readjustment services to eligible veterans and their families.
Investment highlights
- Both leases backed by the full faith and credit of the United States government (AA+, S&P), with both tenants representing no-fail federal missions. The FBI is the nation's lead agency for counterterrorism, counterintelligence, and cybercrime, with a FY2027 budget request of $12.5 billion — a ~24% increase over FY2026. The VA's Vet Center program, established by Congress in 1979, operates through 300+ community-based locations nationwide and is funded via advance appropriations one full year ahead, ensuring uninterrupted lease payments even during government shutdowns.
- Both leases provide structured income growth and meaningful inflation protection. The Vet Center features biennial shell rent escalations of ~3% and operating cost reimbursement increases of ~6% every two years (~3% annualized). The FBI lease includes a ~22% shell rent step-up in Year 14 and annual CPI adjustment to opex reimbursement. Both tenants pay an established real estate tax base with full reimbursement of overages, insulating Landlord from property tax inflation throughout the term.
- Great Falls is Montana's third-largest city and the regional hub for a 15-county, 42,000+ square mile trade area. The market is anchored by Malmstrom Air Force Base — one of only three U.S. ICBM bases — generating ~$435.8 million in annual regional economic impact and benefiting from ~$1.2 billion in planned Sentinel modernization construction through the 2030s. Benefis Health System (3,000+ employees, 530+ beds) and Great Falls College MSU (~1,900 students, 59% five-year enrollment growth) reinforce a stable institutional employment base.
- The Property was purpose-built to FBI and VA specifications, with security-grade improvements that satisfy both tenants' specialized operational requirements. The Property features three secured rear carports, perimeter security fencing, and controlled access points — buildout that is functionally irreplaceable in this market. The Vet Center suite is configured to the VA's community-based counseling standards, providing the confidential, neighborhood-accessible environment the VA strategically prefers over co-location on medical campuses.
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