Easterly Government Properties, Inc. (DEA) | Investment Case

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

Last Price	23.41
Change Percentage	1.04%
Open	23.2
Previous Close	23.17
Market Cap ( Millions)	1087
Volume	180577
Year High	24.94
Year Low	19.82
M A 50	22.69
M A 200	22.45

FCF Yield	24.13%
Dividend Yield	7.69%
ROE	0.85%
Debt / Equity	89.33%
Net Debt / EBIDTA	564.99%
Price To Book	0.83
Price Earnings Ratio	96.34
Price To FCF	4.14
Price To sales	3.12
EV / EBITDA	10.91

2. Easterly Government Properties: Solid Cash Flow, Strategic Growth

In Q1 2026, Easterly posted a 16% revenue increase to $91.5 million, EBITDA rose 12% to $57.3 million, and net income per share settled at $0.03. FFO per share climbed 7% to $0.76, core FFO to $0.77, while cash available for distribution hit $32.2 million—a 15% jump year‑over‑year, underscoring robust cash generation.

Publication Date: Apr -28

                                    📋 Highlights
                                    Revenue Growth::
                                                Q1 2026 revenue rose 16% YoY to $91.5M, driven by acquisitions and contractual rent growth.
EBITDA Expansion::
                                                EBITDA increased 12% to $57.3M, reflecting operational efficiency and lease stability.
Mezzanine Investment Yield::
                                                $7M investment in a VA outpatient clinic offers a 12% yield, backed by federal tenant credit.
Development Pipeline::
                                                $1.5B in active projects, with $50M–$100M in development-related investments planned for 2026.

                                

Revenue and Earnings Growth

The 97% occupancy and 9.4‑year lease average anchor stability, enabling contract rent growth and tenant retention. A 12% EBITDA margin expansion reflects disciplined cost control amid market volatility, while free cash flow supports dividend sustainability despite modest EPS pressure.

Capital Allocation and Mezzanine Expansion

Management’s first mezzanine loan—$7 million for a VA outpatient clinic—delivers a 12% yield and a right of first refusal, expanding assets without equity dilution. The strategy targets a 100‑basis‑point spread over cost of capital, with the mezzanine portfolio projected to reach $30 million in 18 months.

Pipeline and Credit Strategy

With a $1.5 billion development pipeline split among federal, state/local, and government‑adjacent projects, Easterly plans $50 million in acquisitions and $50 million in development for 2026. A 2027 investment‑grade rating goal will lower financing costs and boost leverage, unlocking the $1 billion project pool.

Valuation Snapshot

Trading at a P/E of 73.45 and EV/EBITDA of 11.0, Easterly commands a sector premium, reflecting high‑quality, government‑backed assets and steady cash flow. The 7.71% dividend yield and 24.24% free‑cash‑flow yield highlight attractive income, while a 248.66% ROIC signals efficient capital use.

Outlook and Shareholder Value

Guidance for 2026 remains unchanged, yet management is bullish for 2027, leveraging a stable cash‑flow profile and an expanding mezzanine platform. By maintaining a 100‑basis‑point spread over cost of capital and pursuing investment‑grade credit, Easterly aims to generate accretion through joint ventures, development, and strategic acquisitions, enhancing shareholder value in the near term. (Staff, 2026 Q1 Earnings Call)

3. NewsRoom

Trulieve Announces Applications Filed for DEA Registration of State Licensed Medical Marijuana Businesses

Apr -29

Source: prnewswire.com

Easterly Government Properties, Inc. (DEA) Q1 2026 Earnings Call Transcript

Apr -27

Source: seekingalpha.com

Easterly Government Properties (NYSE:DEA) versus Orion Office REIT (NYSE:ONL) Head to Head Comparison

Apr -27

Source: defenseworld.net

HG (OTCMKTS:STLY) & Easterly Government Properties (NYSE:DEA) Head-To-Head Analysis

Apr -27

Source: defenseworld.net

Easterly Government Properties Schedules First Quarter 2026 Earnings Release and Conference Call

Apr -08

Source: businesswire.com

Easterly Government Properties: Long-Term Bull Case Appears To Be Strengthening

Mar -18

Source: seekingalpha.com

Easterly Government Properties: A Simple Case Of Valuation

Mar -03

Source: seekingalpha.com

Easterly Government Properties, Inc. (DEA) Presents at Citi's Miami Global Property CEO Conference 2026 Transcript

Mar -02

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

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

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

City Office REIT

A-Score: 6.7/10

Value: 8.9

Growth: 3.4

Quality: 4.5

Yield: 10.0

Momentum: 8.0

Volatility: 5.3

1-Year Total Return ->

Easterly Government Properties

A-Score: 6.1/10

Value: 5.9

Growth: 4.8

Quality: 5.6

Yield: 10.0

Momentum: 2.0

Volatility: 8.3

1-Year Total Return ->

JBG SMITH

A-Score: 5.6/10

Value: 6.2

Growth: 2.9

Quality: 2.5

Yield: 8.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

Orion Office REIT

A-Score: 5.4/10

Value: 9.6

Growth: 4.2

Quality: 2.9

Yield: 10.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

Franklin Street Properties

A-Score: 4.2/10

Value: 7.9

Growth: 0.6

Quality: 2.8

Yield: 8.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

Hudson Pacific Properties

A-Score: 3.1/10

Value: 6.7

Growth: 2.0

Quality: 2.1

Yield: 4.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-8.33%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.98%

Easterly Government Properties, Inc. - US27616P1030

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on DEA

1.c. Company Highlights

Average Yield

Stable Momentum

Medium Volatility

Revenues Miss

Earnings Miss

Fairly Valued

Higher Growth

Earnings Beats

Average Growth

Average Quality

Weak Momentum

2. Easterly Government Properties: Solid Cash Flow, Strategic Growth

Revenue and Earnings Growth

Capital Allocation and Mezzanine Expansion

Pipeline and Credit Strategy

Valuation Snapshot

Outlook and Shareholder Value

3. NewsRoom

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%

Tenant Reimbursements

Expected Growth: 5.8%

Other

Expected Growth: 5.2%

Asset Management

Expected Growth: 5.9%

7. Detailed Products

Class A Office Properties

Courthouse Properties

Customs and Border Protection Properties

Defense/Intelligence Properties

Federal Agency Properties

Health and Human Services Properties

Homeland Security Properties

Justice Properties

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

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.41$

Current Price

23.41$

Potential

-0.00%

12.e Scoring ^Insights

12.f DCF ^BETA