Easterly projects 2027 core FFO per share of $3.09 to $3.17 while targeting an additional investment-grade rating

Easterly Government Properties (NYSE:DEA) unveiled its Q3 2026 supplemental financial results on October 26, 2026, surpassing analyst projections with strong performance across key metrics. Diluted earnings per share rose to $0.11, exceeding the $0.07 forecast, while revenue climbed to $93.6 million, outpacing the $91.7 million estimate.

Shares jumped 2.38% to $23.21, reflecting investor trust in the company's execution and steady income from government assets. The stock remains within its 52-week trading range of $20.56 to $25.96 and offers a dividend yield of 7.94%, appealing to income-focused investors. Core Funds From Operations (Core FFO) per share climbed 2.6% to $0.78, aligning with the company's long-term growth objective of 2% to 3%.

Standard FFO per share increased 6.8% to $0.79, bolstered by a positive adjustment in credit loss allowance following the Bedford loan repayment. Revenue growth of 8.7% year-over-year was fueled by acquisitions, completed developments, lease renewals, and new tenant income. The quarter generated $32.8 million in Cash Available for Distribution (CAD), representing a payout ratio of around 67%, a marked improvement from 117% in Q3 2023, showcasing enhanced dividend coverage.

Rental income grew to $90.0 million from $82.2 million, while property operating expenses rose slightly to $22.9 million from $20.7 million. Net income available to Easterly Government Properties, Inc. soared to $5.5 million from $1.2 million, resulting in diluted EPS of $0.11 versus $0.02. The company's operational stability is evident, with Net Operating Income (NOI) increasing to $60.1 million from $57.9 million, adjusted for straight-line rent and non-cash items.

EBITDA expanded by 8.9% to $59.0 million, bolstering leverage metrics with net debt to quarterly EBITDA at 7.1x and adjusted net debt ratio at 6.8x. The financial breakdown reveals $3.37 billion in total assets, with $2.75 billion from real estate properties after depreciation. The company maintains $5.9 million in cash and $383.8 million under its $400 million revolving credit facility, which has an accordion feature for potential expansion to $700 million.

The debt structure includes 91.5% unsecured debt and 8.5% secured mortgage debt, with 87.2% of the unsecured debt carrying fixed interest rates, offering protection against rising rates. The weighted average interest rate is 4.6%, and the weighted average maturity stands at 3.8 years, with a notable concentration due in 2028. Management anticipates refinancing challenges from the Loma Linda loan maturity in 2027, potentially seeking an investment-grade issuance if a rating upgrade occurs.