Easterly Government Properties, Inc.

What they do

Easterly acquires, develops and manages Class A commercial properties leased mainly to U.S. Government agencies that serve essential functions. It generates roughly 90% of revenue by leasing to those agencies directly or through the U.S. General Services Administration. As of December 31, 2025, it wholly owned 93 operating properties and held ten more through an unconsolidated joint venture, totaling about 10.4 million leased square feet (9.8 million pro rata), with the portfolio 97% leased.

Revenue drivers

• U.S. Government leases — Roughly 90% of revenue comes from leasing properties to U.S. Government agencies directly or via the GSA, whose leases are backed by the full faith and credit of the U.S. Government; as of December 31, 2025, 93 operating properties were leased primarily to U.S. Government tenant agencies.
• State and local government leases — The portfolio included six operating properties leased to U.S. state or local government agencies as of December 31, 2025; the company targets state and local governments with strong creditworthiness.
• Private tenant leases — Four operating properties were entirely leased to private tenants as of December 31, 2025, a small part of a portfolio otherwise focused on government tenants.
• Unconsolidated joint venture — Ten operating properties are held through an unconsolidated joint venture; the investment in the unconsolidated real estate venture was $300.0 million on the June 30, 2026 balance sheet.

Recent performance

For the quarter ended June 30, 2026, Easterly reported net income of $3.2 million, or $0.07 per diluted share, and Core FFO of $37.4 million, or $0.78 per diluted share. For the six months ended June 30, 2026, net income was $4.6 million, or $0.10 per diluted share, and Core FFO was $74.5 million, or $1.55 per diluted share. Quarterly revenue rose to $92.4 million from $91.5 million in the prior quarter and $86.2 million a year earlier. The operating portfolio was 98% leased as of June 30, 2026, up from 97% at December 31, 2025, and spanned 106 operating properties totaling about 10.7 million leased square feet.

Strategy

Management continues to acquire, develop and manage government-leased properties, and is adding state and local government and other mission-supporting assets alongside its federal portfolio. Three wholly owned development projects are under construction: a Fort Myers, Florida project with a 25-year Florida Department of Law Enforcement lease, and Flagstaff, Arizona and Medford, Oregon projects each with 20-year GSA leases for the United States Judiciary. In the second quarter of 2026 the company closed a new five-year $200.0 million senior unsecured term loan maturing June 2031 with a $50.0 million accordion, and settled forward sales of 796,943 common shares under its 2021 ATM Program at a weighted average price of $23.86, raising about $18.8 million net. A 1-for-2.5 reverse stock split was effected on April 28, 2025, concurrently with a corresponding reverse unit split.

Risks

• Government tenant concentration — About 90% of revenue depends on U.S. Government agencies, and GSA rents are paid from the Federal Buildings Fund, so federal leasing and budget decisions directly affect results.
• Lease renewal and expiration — The portfolio had a weighted average remaining lease term of approximately 9.5 years at December 31, 2025 and 9.2 years at June 30, 2026, exposing the company to re-leasing risk as leases roll.
• Leverage — Total indebtedness was approximately $1.7 billion at June 30, 2026, with Adjusted Net Debt to annualized quarterly EBITDA of 7.1x and Net Debt to total enterprise value of 58.4%.
• Interest rate and refinancing exposure — Outstanding debt had a weighted average interest rate of 4.6% and a weighted average maturity of 4.0 years as of June 30, 2026, and the company held $43.1 million drawn on its unsecured revolving credit facility.

Outlook

CEO Darrell Crate said the second quarter showed continued progress on strategic priorities and that strong execution and portfolio durability support the decision to raise 2026 guidance. The company reported quarterly dividend approval of $0.45 per common share, payable August 20, 2026 to shareholders of record on August 10, 2026. Three development projects under construction are expected to add about 0.2 million leased square feet upon completion.