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1. Company Snapshot

1.a. Company Description

Easterly Government Properties, Inc.(NYSE:DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government.Easterly's experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).

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1.b. Last Insights on DEA

Easterly Government Properties' recent performance was negatively driven by lagging Q4 2024 earnings and revenue, missing estimates. The company reported FFO of $0.29 per share, compared to the consensus estimate of $0.30 per share. This marks a decline in investor confidence, despite the company's stable income streams from long-term government leases. The stock's 9% dividend yield appears sustainable, but concerns over government spending cuts and the company's business model have led to a decline in investor enthusiasm.

1.c. Company Highlights

2. Easterly Government Properties' Q3 2025 Earnings: Delivering on Growth and Leverage Targets

Easterly Government Properties reported a core FFO per share of $0.76 for Q3 2025, a 3% increase from the previous year, in line with expectations. The actual EPS came out at $0.76, matching estimates. The company's portfolio occupancy remains high at 97%, with a weighted average lease term of approximately ten years, providing a stable source of income. The company's financial performance was strong, with a robust pipeline of acquisitions and developments, allowing it to be selective in deploying capital.

Publication Date: Nov -24

📋 Highlights
  • Core FFO Growth: Core FFO per share increased 3% to $0.76, slightly exceeding expectations for Q3 2025.
  • Portfolio Stability: Achieved 97% occupancy with a 10-year weighted average lease term, reflecting strong tenant retention.
  • Leverage Reduction: Cash leverage improved from 7.9x to 7.6x QoQ due to a $102M progress payment on the FDA Atlanta project, targeting below 7.5x post-completion.
  • Capital Raise Progress: Upsized 2018 term loan to $200M from $174.5M and pursuing investment-grade ratings to access public bond markets.
  • 2026 Guidance: Full-year core FFO per share guidance set at $3.05–$3.12 (2–3% growth), with leverage goals aligning to 6x cash flow to boost stock price.

Leverage and Capital Allocation

Easterly is targeting a medium-term cash leverage goal of six times, a decline from its historical cash leverage results of seven to eight times. The company received a third progress payment of $102 million on the FDA Atlanta project, reducing cash leverage from 7.9 times to 7.6 for the quarter. Easterly is exploring various sources of funding for development, including partnerships with sovereign wealth funds and other investors, and is targeting a spread of 100 to 150 basis points on development projects over its cost of capital.

Development Pipeline and Growth Prospects

The company's development pipeline is active, with major projects progressing, including the FDA Atlanta project, which is nearing completion. Easterly has narrowed its full-year core FFO per share guidance range for 2025 to $2.98 to $3.20, consistent with its stated goal of 2% to 3% annual core FFO growth. For 2026, the company is issuing full-year core FFO per share guidance in a range of $3.05 to $3.12, implying a growth rate within its stated 2% to 3% range.

Valuation and Dividend Yield

With a P/E Ratio of 68.91 and a Dividend Yield of 9.45%, Easterly Government Properties' stock price of $22 may not fully reflect the company's true value. The company's guidance for 2026 includes a plan to reduce leverage and increase earnings, with a focus on delivering 2-3% growth per year. Analysts estimate next year's revenue growth at 6.1%, indicating a positive outlook for the company.

Risk Management and Government Shutdown

The company is not concerned about government shutdowns, as leases are funded for six months plus, and the US government is obligated to pay its bills. Easterly has enough funds to cover 30 days of a government shutdown and believes that the government will find a way to continue paying its bills, including rent.

3. NewsRoom

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Easterly Government Properties: Get Paid An 8% Yield While You Wait For The Stock To Rerate

Dec -03

Source: seekingalpha.com

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Red Light Holland's FDA-Compliant, DEA-Registered Partner Irvine Labs Receives Second, Larger 5kg Psilocybin Shipment via USA Controlled Substances Import Permit

Nov -19

Source: newsfilecorp.com

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Easterly Government Properties: Hidden Bargain Or Dividend Trap?

Nov -17

Source: seekingalpha.com

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The Dark Side Of REIT Investing

Nov -15

Source: seekingalpha.com

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Y Intercept Hong Kong Ltd Takes Position in Easterly Government Properties, Inc. $DEA

Nov -04

Source: defenseworld.net

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Cwm LLC Acquires 5,802 Shares of Easterly Government Properties, Inc. $DEA

Oct -29

Source: defenseworld.net

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Easterly Government Properties: Strong Fundamentals And 8% Dividend Yield

Oct -29

Source: seekingalpha.com

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Easterly Government Properties: Solid Q3, FY26 Guidance Issued, Bullish Case Intact

Oct -28

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.51%)

6. Segments

Rental

Expected Growth: 5.5%

Easterly Government Properties, Inc.'s 5.5% rental growth is driven by increasing demand for government-leased properties, expansion of existing leases, and strategic acquisitions. Additionally, the company's focus on high-quality, mission-critical properties and long-term contracts with the US government provides a stable source of revenue, contributing to its growth.

Tenant Reimbursements

Expected Growth: 5.8%

Easterly Government Properties' 5.8% growth in Tenant Reimbursements is driven by increasing demand for government-leased properties, expansion of existing leases, and rising reimbursement rates. Additionally, the company's strategic acquisitions and strong relationships with government agencies contribute to the growth.

Other

Expected Growth: 5.2%

Easterly Government Properties, Inc.'s 5.2% growth is driven by increasing demand for government-leased properties, strategic acquisitions, and a strong balance sheet. Additionally, the company's focus on high-quality, mission-critical properties and its ability to maintain a high occupancy rate also contribute to its growth.

Asset Management

Expected Growth: 5.9%

Easterly Government Properties' 5.9% asset management growth is driven by increasing demand for government-leased properties, strategic acquisitions, and a strong pipeline of new investments. Additionally, the company's focus on high-quality, mission-critical assets and its ability to provide value-added services to its government tenants contribute to its growth momentum.

7. Detailed Products

Class A Office Properties

High-quality office buildings that serve as headquarters or regional offices for government agencies, such as the FBI, DEA, and ICE.

Courthouse Properties

Federal and state courthouses that serve as venues for judicial proceedings and other government activities.

Customs and Border Protection Properties

Facilities that serve as ports of entry, border patrol stations, and other critical infrastructure for customs and border protection activities.

Defense/Intelligence Properties

High-security facilities that support the operations of defense and intelligence agencies, such as the NSA and CIA.

Federal Agency Properties

Office buildings and other facilities that serve as headquarters or regional offices for various federal agencies, such as the IRS and SSA.

Health and Human Services Properties

Facilities that support the operations of health and human services agencies, such as the CDC and NIH.

Homeland Security Properties

Facilities that support the operations of the Department of Homeland Security, including the TSA and FEMA.

Justice Properties

Facilities that support the operations of the Department of Justice, including the FBI and DEA.

8. Easterly Government Properties, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Easterly Government Properties, Inc. is medium due to the availability of alternative investment options in the real estate industry.

Bargaining Power Of Customers

The bargaining power of customers for Easterly Government Properties, Inc. is low due to the company's strong brand reputation and limited alternatives for government-leased properties.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Easterly Government Properties, Inc. is medium due to the company's dependence on a few large contractors and suppliers for property maintenance and development.

Threat Of New Entrants

The threat of new entrants for Easterly Government Properties, Inc. is low due to the high barriers to entry in the government-leased properties market, including regulatory hurdles and high capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Easterly Government Properties, Inc. is high due to the competitive nature of the real estate investment trust (REIT) industry, with many established players vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 49.48%
Debt Cost 4.86%
Equity Weight 50.52%
Equity Cost 7.08%
WACC 5.98%
Leverage 97.93%

11. Quality Control: Easterly Government Properties, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
City Office REIT

A-Score: 6.3/10

Value: 8.7

Growth: 3.4

Quality: 4.2

Yield: 9.0

Momentum: 7.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Easterly Government Properties

A-Score: 5.8/10

Value: 5.5

Growth: 4.8

Quality: 5.4

Yield: 10.0

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
JBG SMITH

A-Score: 5.4/10

Value: 5.3

Growth: 2.9

Quality: 2.3

Yield: 8.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Orion Office REIT

A-Score: 5.0/10

Value: 7.8

Growth: 4.2

Quality: 3.6

Yield: 10.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Franklin Street Properties

A-Score: 4.8/10

Value: 8.2

Growth: 0.6

Quality: 3.1

Yield: 7.0

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Hudson Pacific Properties

A-Score: 3.2/10

Value: 6.6

Growth: 2.0

Quality: 2.2

Yield: 4.0

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.44$

Current Price

21.44$

Potential

-0.00%

Expected Cash-Flows