What happened
Easterly Government Properties, Inc. (NYSE: DEA) grew third-quarter revenue 8.7% to $93.61 million from $86.15 million a year earlier. The percentage is OptimistFi's calculation from the income statement in the supplemental package filed Oct. 26.
Net income available to the company rose to $5.50 million, or $0.11 a diluted share, from $1.21 million, or $0.02, in the third quarter of 2025. That earlier quarter included a $2.55 million impairment loss. The latest quarter had none.
Cash-flow measures rose too. Funds from operations (FFO) reached $38.48 million, up from $34.77 million. Core FFO, which leaves out items such as debt-extinguishment costs, reached $38.05 million, up from $35.62 million. Cash available for distribution reached $32.82 million, up from $29.30 million.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Total revenues, three months ended Sept. 30 | $93.61 million | from $86.15 million, +8.7% | Calculated from SEC 8-K |
| Core FFO per share, fully diluted basis | $0.78 | from $0.76, +2.6% | Calculated from SEC 8-K |
| Net income available to the company | $5.50 million | from $1.21 million, +353.4% | Calculated from SEC 8-K |
| Available under $400 million revolving credit facility | $383.83 million | SEC 8-K, Exhibit 99.2 | |
| Unhedged variable-rate debt | $216.05 million | SEC 8-K, Exhibit 99.2 | |
| Cash interest coverage ratio | 3.1x | SEC 8-K, Exhibit 99.2 |
Read more: Easterly Government Properties (DEA) stock analysis and investment case
Why it matters
OptimistFi has argued that Easterly can be a durable cash-flow REIT if it funds growth at a spread and higher capital costs do not turn that growth into per-share dilution. This quarter gives a mixed read on that second test.
Core FFO grew 6.8%, but the weighted-average fully diluted share count grew 3.7%, to 48.92 million from 47.17 million. So Core FFO per share rose only 2.6%, to $0.78 from $0.76. Each percentage is OptimistFi's calculation from the filing's figures.
Net interest expense rose 5.3% to $20.04 million from $19.04 million. That is slower than revenue. By OptimistFi's reading, the spread worked in the company's favor this quarter.
The filing also repeats that the company depends on the U.S. Government and its agencies for substantially all of its revenues. It lists the risk that the government cuts its spending on real estate, including through a government shutdown.
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Where the debt stands
Debt is the pressure point. Total debt was $1.68 billion at Sept. 30. That includes $216.05 million of unhedged variable-rate debt, or 12.8% of the total. Net debt was 7.1 times annualized quarterly EBITDA.
Cash interest coverage was 3.1x and cash fixed charge coverage was 3.0x. These ratios show how much quarterly earnings cushion the company has over interest and scheduled principal payments.
Three interest rate swaps with a $200.0 million notional value fix the rate on the 2018 term loan at 4.99%. The filing notes the swaps expire in April and July 2028, before the loan matures on Aug. 21, 2028. Two $50.0 million treasury lock agreements fix the Treasury rate on the 2025 series B senior notes, which carry a 6.33% rate.
The company had $383.83 million available under its $400 million revolving credit facility. An accordion can add up to $300 million, for a total of not more than $700 million. Revolver borrowings stood at $16.05 million, down from $199.05 million at Dec. 31, 2025. Net term loan balances rose to $496.22 million from $297.20 million.
What's next
The nearest dated debt test is the $95.0 million of 2017 Series A Senior Notes due May 25, 2027, which carry a 4.05% rate. A $127.5 million Loma Linda mortgage follows on July 6, 2027. Scheduled 2027 maturities total $230.73 million, or 13.7% of debt.
The company's 2024 and 2025 senior notes carry rates from 6.13% to 6.56%. Refinancing the May 2027 notes near the low end of that range would support the case. Terms near the high end would put more pressure on per-share cash flow.
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Sources
- Easterly Government Properties, Inc. supplemental information package (SEC 8-K, Exhibit 99.2) — Third-quarter 2026 income statement, FFO and CAD tables, balance sheet, debt schedules and liquidity summary dated Oct. 26, 2026.
- SEC filing
Read the full OptimistFi thesis on Easterly Government Properties, Inc.: https://optimistfi.com/stocks/DEA
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The full Easterly Government Properties, Inc. investment case, its status and the next test to watch live on the Easterly Government Properties, Inc. thesis page.
Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
