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Government Properties Income Trust (NYSE:GOV) kicks off June's IPO calendar with a public offering scheduled for this week. The REIT is a subsidiary of HRPT Properties Trust (HRP) and invests in 29 state and federal government properties across the U.S.

Business Overview (from prospectus)

We are a newly organized real estate company formed to invest in properties that are majority leased to government tenants. We intend to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2009. We own 29 properties, 25 of which are leased primarily to the U.S. Government and four of which are leased to the States of California, Maryland, Minnesota and South Carolina, respectively. Our properties contain approximately 3.3 million rentable square feet and are located in 14 states and the District of Columbia. Most of our properties have been continuously occupied by government tenants since the properties were first acquired, developed or redeveloped.

Offering: 10 million shares at $20 - $22 per share. Net proceeds are estimated to be approximately $192 million. According to the company:

We are obligated under our credit facility to use the net proceeds from this offering to repay amounts outstanding under such facility until all amounts outstanding thereunder at the time of this offering are repaid, except, at our election, up to $13.3 million. Promptly following completion of this offering and the use of the net proceeds therefrom to repay amounts outstanding under our credit facility, we will borrow approximately $9 million under our credit facility. We will use approximately $6 million of such amount to satisfy our obligation to reimburse HRPT for the funds previously advanced to us by HRPT and will retain approximately $3 million of such amount for working capital purposes. Accordingly, the use of proceeds from this offering to repay amounts outstanding under our credit facility and the subsequent borrowing under such credit facility will result in a "net" reduction in the amount outstanding under our credit facility of approximately $183 million. If the underwriters fully exercise their over allotment option at the initial closing, the "net" reduction in the amount outstanding under our credit facility will be approximately $213 million.

Lead Underwriters: Merrill Lynch, Wachovia Securities, Morgan Stanley

Financial Highlights:

Rental income for the three month period ending March 31 2009 was $19.2 million as compared to $18.6 million for the same period in 2008, an increase of 3.1%. Expenses, including real estate taxes, utility expenses and general and administrative expenses, totaled $10.7 million for this period in 2009, as compared to $10.6 million in 2008, an increase of 1.3%. Operating income for the three month period ending March 31 2009 was $8.5 million compared to $8.065 million for the same period in 2008, an increase of 5.5%

Competitors:

We compete against other REITs, numerous financial institutions, individuals and public and private companies who are actively engaged in this business. We do not believe we have a dominant position in any of the geographic markets in which we operate, but some of our competitors are dominant in selected markets. Many of our competitors have greater financial and management resources than we have. As a result of the transaction agreement with HRPT and the management agreements with RMR that we will enter into upon completion of this offering, so long as HRPT owns in excess of 10% of our outstanding Shares, we and HRPT engage the same manager or we and HRPT have any common managing trustees, we will have limited ability to invest in properties that are within the investment focus of another business managed by RMR or properties that are not, at the time of investment, majority leased to government tenants.

Additional Resources:

Source: IPO Overview: Government Properties Income Trust