$
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-36834
EASTERLY GOVERNMENT PROPERTIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
47-2047728
(State of Incorporation)
(IRS Employer Identification No.)
2001 K Street NW, Suite 775 North, Washington, D.C.
20006
(Address of Principal Executive Offices)
(Zip Code)
(202) 595-9500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock
DEA
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 20, 2026, the registrant had 46,449,374 shares of common stock, $0.01 par value per share, outstanding.
INDEX TO FINANCIAL STATEMENTS
Page
Part I: Financial Information
Item 1: Financial Statements:
Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 (unaudited)
1
Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (unaudited)
2
Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2026 and 2025 (unaudited)
3
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (unaudited)
4
Notes to the Consolidated Financial Statements
6
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
24
Item 3: Quantitative and Qualitative Disclosures About Market Risk
39
Item 4: Controls and Procedures
40
Part II: Other Information
Item 1: Legal Proceedings
Item 1A: Risk Factors
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Item 3: Defaults Upon Senior Securities
Item 4: Mine Safety Disclosures
Item 5: Other Information
41
Item 6: Exhibits
42
Signatures
Easterly Government Properties, Inc.
Consolidated Balance Sheets (unaudited)
(Amounts in thousands, except share amounts)
March 31, 2026
December 31, 2025
Assets
Real estate properties, net
2,738,755
2,714,650
Cash and cash equivalents
2,017
23,374
Restricted cash
10,661
10,257
Tenant accounts receivable
73,041
51,493
Investment in unconsolidated real estate venture
304,070
304,721
Real estate loans receivable, net and investment in sales-type lease, net
44,462
34,286
Intangible assets, net
189,534
183,911
Prepaid expenses and other assets
57,520
57,078
Total assets
3,420,060
3,379,770
Liabilities
Revolving credit facility
245,050
199,050
Term loan facilities, net
297,479
297,200
Notes payable, net
1,019,132
1,018,884
Mortgage notes payable, net
150,054
151,191
Intangible liabilities, net
13,598
11,959
Deferred revenue
230,031
219,201
Interest rate swaps
1,010
3,034
Accounts payable, accrued expenses and other liabilities
108,203
109,686
Total liabilities
2,064,557
2,010,205
Equity
Common stock, par value $0.01, 80,000,000 shares authorized, 46,444,374 and 46,303,469 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively
464
463
Additional paid-in capital
1,961,587
1,958,412
Retained earnings
146,222
144,857
Cumulative dividends
(796,880
)
(776,022
Accumulated other comprehensive loss
(2,554
(4,578
Total stockholders’ equity
1,308,839
1,323,132
Non-controlling interest in Operating Partnership
46,664
46,433
Total equity
1,355,503
1,369,565
Total liabilities and equity
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Operations (unaudited)
(Amounts in thousands, except share and per share amounts)
For the three months ended March 31,
2026
2025
Revenues
Rental income
88,593
75,546
Tenant reimbursements
804
1,026
Asset management income
646
622
Other income
1,502
1,481
Total revenues
91,545
78,675
Expenses
Property operating
20,536
17,799
Real estate taxes
8,532
7,957
Depreciation and amortization
33,221
26,797
Acquisition costs
649
307
Corporate general and administrative
8,495
6,215
Provision for (recovery of) credit losses
196
(238
Total expenses
71,629
58,837
Other income (expense)
Income from unconsolidated real estate venture
1,664
1,822
Interest expense, net
(20,166
(18,377
Net income
1,414
3,283
(49
(156
Net income available to Easterly Government Properties, Inc.
1,365
3,127
Net income available to Easterly Government Properties, Inc. per share:
Basic
0.02
0.07
Diluted
Weighted-average common shares outstanding
46,260,517
43,224,145
46,453,599
43,372,207
Dividends declared per common share
0.45
0.66
Consolidated Statements of Comprehensive Income (Loss) (unaudited)
(Amounts in thousands)
Other comprehensive income (loss):
Unrealized gain (loss) on treasury locks and interest rate swaps, net
2,094
(3,832
Comprehensive income (loss)
3,508
(549
Other comprehensive (income) loss attributable to non-controlling interest
(70
178
Comprehensive income (loss) attributable to Easterly Government Properties, Inc.
3,389
(527
Consolidated Statements of Cash Flows (unaudited)
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Straight line rent
(2,007
251
(1,664
(1,822
Amortization of above- / below-market leases
(435
(518
Amortization of unearned revenue
(3,704
(1,762
Amortization of loan premium / discount
(4
(6
Amortization of deferred financing costs
943
757
Amortization of lease inducements
399
329
Amortization of real estate loans receivable origination fees
(36
Amortization of treasury lock settlement
69
8
Distributions from investment in unconsolidated real estate venture
2,315
3,795
Non-cash compensation
2,097
1,421
Net change in:
(19,272
617
(1,652
(3,312
Real estate loan interest receivable
(63
(931
Deferred revenue associated with operating leases
14,535
(875
Principal payments on operating lease obligations
(182
(172
Principal repayment of sales-type lease
64
—
1,101
(3,399
Net cash provided by operating activities
27,335
24,187
Cash flows from investing activities
Real estate acquisitions and deposits
(43,195
(7,307
Additions to operating properties
(5,538
(8,598
Additions to development properties
(17,770
(20,793
Investments in real estate loans receivable, net
(6,930
(8,541
Net cash used in investing activities
(73,433
(45,239
Cash flows from financing activities
Payment of deferred financing costs
(2,302
Issuance of common shares
2,167
41,270
Credit facility draws
99,250
55,500
Credit facility repayments
(53,250
(175,000
Issuance of notes payable
125,000
Treasury lock settlement
(1,945
Repayments of mortgage notes payable
(1,190
(1,127
Dividends and distributions paid
(21,810
(30,240
Payment of offering costs
(22
(419
Net cash provided by financing activities
25,145
10,737
Net decrease in Cash and cash equivalents and Restricted cash
(20,953
(10,315
Cash and cash equivalents and Restricted cash, beginning of period
33,631
27,804
Cash and cash equivalents and Restricted cash, end of period
12,678
17,489
Supplemental disclosure of cash flow information
Cash paid for interest (net of capitalized interest of $545 and $2,026 in 2026 and 2025, respectively)
18,522
15,640
Supplemental disclosure of non-cash information
Additions to operating properties accrued, not paid
4,884
5,075
Additions to development properties accrued, not paid
19,279
20,663
Deferred financing costs accrued, not paid
183
Offering costs accrued, not paid
14
Deferred asset acquisition costs accrued, not paid
104
Recognition of operating lease right-of-use assets
859
Recognition of liabilities related to operating lease right-of-use assets
1,321
Exchange of Common Units for Shares of Common Stock
(899
899
Total
5
Notes to the Consolidated Financial Statements (unaudited)
1. Organization and Basis of Presentation
The information contained in the following notes to the consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the consolidated financial statements included herein should be reviewed in conjunction with the consolidated financial statements for the fiscal year ended December 31, 2025, and related notes thereto, included in the Annual Report on Form 10-K of Easterly Government Properties, Inc. (the “Company”) for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 23, 2026.
The Company is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2015. The operations of the Company are carried out primarily through Easterly Government Properties LP (the “Operating Partnership”) and the wholly owned subsidiaries of the Operating Partnership. As used herein, the “Company,” “we,” “us,” or “our” refer to Easterly Government Properties, Inc. and its consolidated subsidiaries and partnerships, including the Operating Partnership, except where context otherwise requires.
We are an internally managed REIT, focused primarily on the acquisition, development and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate over 85% of our revenue by leasing our properties to such agencies, either directly or through the U.S. General Services Administration (“GSA”). Our objective is to generate attractive risk-adjusted returns for our stockholders over the long-term through dividends and capital appreciation.
We focus primarily on acquiring, developing and managing U.S. Government leased properties that are essential to supporting the mission of the tenant agency and strive to be a partner of choice for the U.S. Government, working closely with the tenant agency to meet its needs and objectives. We may also consider other potential opportunities to add properties to our portfolio, including acquiring properties leased to state and local governments with strong creditworthiness and other opportunities that directly or indirectly support the mission of select government agencies. As of March 31, 2026, we wholly owned 96 operating properties and ten operating properties through an unconsolidated joint venture (the “JV”) in the United States, encompassing approximately 10.7 million leased square feet, including 93 operating properties that were leased primarily to U.S. Government tenant agencies, eight operating properties leased to tenant agencies of a U.S. state or local government and five operating properties that were entirely leased to private tenants. As of March 31, 2026, our operating properties were 97% leased. For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned three properties under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
The Operating Partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of the Operating Partnership and owned approximately 96.6% of the aggregate limited partnership interests in the Operating Partnership (“common units”) as of March 31, 2026. We have elected to be taxed as a REIT and believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015.
Principles of Consolidation
The accompanying consolidated financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company, Easterly Government Properties TRS, LLC, Easterly Government Services, LLC, the Operating Partnership and its other subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Basis of Presentation
The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to state fairly the consolidated financial position of the Company at March 31, 2026 and December 31, 2025, the consolidated results of operations for the three months ended March 31, 2026 and 2025, and the consolidated cash flows for the three months ended March 31, 2026 and 2025. The year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the balance sheet, and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, including the impact of extraordinary events, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
2. Summary of Significant Accounting Policies
During the three months ended March 31, 2026, we acquired a lease arrangement that qualifies for classification as a sales-type lease under Accounting Standards Codification Topic 842 Leases (“ASC 842”). Prior to the first quarter of 2026, all of our leases met the classification criteria of an operating lease in accordance with ASC 842. As a result, we updated our accounting policy to reflect the recognition and presentation of sales-type and direct financing leases as a lessor. There were no adjustments made retrospectively to the information in our consolidated financial statements as a result of the update in policy. See note 3, note 5 and note 12 for additional information on the impact of the adoption of sales-type lease accounting on our consolidated financial statements. All other significant accounting policies used in the preparation of our condensed consolidated financial statements are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Revenue Recognition
Rental income includes base rents paid by each tenant in accordance with its lease agreement conditions. Upon lease commencement, we evaluate leases to determine if they meet criteria set forth in lease accounting guidance for classification as sales-type leases or direct financing leases; if a lease meets none of these criteria, we classify the lease as an operating lease. Upon commencement of sales-type leases, we derecognize the underlying asset, recognizing in its place a net investment in the lease equal to the sum of the lease receivable and the present value of any unguaranteed residual asset and recognize any selling profit or loss created as a result of the difference between those two amounts, less any related deferred initial direct lease costs. Similarly, for direct financing leases, we would derecognize the underlying asset and recognize a net investment in the lease, but, unlike in a sales-type lease, would defer profit and amortize it as interest income over the lease term. Our leases of properties as lessor are predominantly classified as operating leases, for which the underlying asset remains on our balance sheet and is depreciated consistently with other owned assets. We recognize rental income for our operating leases on a straight-line basis over the lease term of each lease. For acquisitions of existing buildings, we recognize rental income from leases already in place coincident with the date of property closing. Lease incentives are recorded as a deferred asset and amortized as a reduction of revenue on a straight-line basis over the respective lease term. Above- and below-market leases are amortized into rental income over the terms of the respective leases. Further, Rental income includes certain tenant reimbursement income (real estate taxes, operating expenses, utility usage, and other reimbursements), which are accrued as variable lease payments in the same periods as the related expenses are incurred in accordance with ASC 842.
Tenant reimbursement income includes revenue from tenant construction projects. When revenue and costs for such projects can be estimated with reasonable accuracy, we recognize a percentage of the total estimated revenue on a project based on the cost of services provided on the project as of a point in time relative to the total estimated costs on the project (percentage of completion method). When these criteria do not apply to a project, we recognize revenue from that project using the completed contract method. Fully reimbursed income was included within Tenant reimbursements and associated expenses were included in Property operating expenses within the Consolidated Statements of Operations.
Other income includes income on the associated tenant reimbursement construction projects, parking income, interest income recognized from our real estate loans receivable and other miscellaneous income.
Asset management income includes revenue from asset and property management services to our unconsolidated real estate venture. The asset management fees are earned by us for managing properties owned by related parties. The asset management service fees are based upon contractual rates applied to actively invested capital, with fee income recognized on a monthly basis. The property management service and engineering fees are based on a contractual rate in accordance with the management agreement. If construction management services are provided, a construction management fee is charged to the tenant in accordance with the management agreement. The fees are recognized as a single performance obligation comprised of a series of distinct services related to property operations. We believe the overall services provided by asset management activities have the same pattern of performance over the term of the agreement. We account for this revenue gross of our ownership interest in the respective real estate venture and recognize such revenue as “Asset management income” in our Consolidated Statements of Operations when earned. Our proportionate share of related expense is recognized in “Income from unconsolidated real estate venture.”
7
Recent Accounting Pronouncements Not Yet Adopted
In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 adds interim and annual disclosure requirements to GAAP at the request of the Securities and Exchange Commission (the “SEC”). The guidance in ASU 2023-06 is required to be applied prospectively and the GAAP requirements will be effective when the removal of the related SEC disclosure requirements is effective. If the SEC does not act to remove its related requirement by June 30, 2027, any related FASB amendments will be removed from the ASC and will not be effective. We do not anticipate that the adoption of ASU 2023-06 will have a material impact on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires expanded interim and annual disclosures of certain expense information in the notes to the consolidated financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance can be applied on a prospective or retrospective basis. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statement disclosures.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. ASU 2025-09 amends certain aspects of the hedge accounting guidance in ASC 815, Derivatives and Hedging, to provide targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness and clarifications related to hedging non-financial items. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The guidance should be applied on a prospective basis. We are currently evaluating the impact of this standard, however, we do not expect the standard to have a material impact on our consolidated financial statements and related disclosures.
3. Real Estate and Intangibles
Acquisitions
During the three months ended March 31, 2026, we acquired three operating properties in asset acquisitions, a three building portfolio in Glen Allen, VA, for an aggregate purchase price of $44.6 million. We allocated the aggregate purchase price of these acquisitions based on the estimated fair values of the acquired assets and assumed liabilities as follows (amounts in thousands):
Real estate
Land
6,965
Building
17,580
Acquired tenant improvements
5,913
Total real estate
30,458
Investment in sales-type lease, net
Investment in sales-type lease, net (1)
3,408
Total other assets
Intangible assets
In-place leases
9,534
Acquired leasing commissions
3,112
Above-market leases
485
Total intangible assets
13,131
Intangible liabilities
Below-market leases
(2,374
Total intangible liabilities
Purchase price
44,623
(1) Both the investment in sales-type lease, net and credit loss allowance are recorded within Real estate loans receivable, net and investment in sales-type lease, net on our Consolidated Balance Sheet. No profit or loss was recognized upon commencement of the lease.
The intangible assets and liabilities of operating properties acquired during the three months ended March 31, 2026 have a weighted average amortization period of 7.6 years as of March 31, 2026. During the three months ended March 31, 2026, these acquisitions contributed $1.5 million of revenues and $0.3 million of net income in our Consolidated Statements of Operations related to the operating properties acquired.
During the three months ended March 31, 2026, we incurred $0.6 million of acquisition-related expenses, mainly consisting of internal costs associated with property acquisitions.
9
Consolidated Real Estate and Intangibles
Real estate and intangibles consisted of the following as of March 31, 2026 (amounts in thousands):
321,600
Building and improvements
2,824,477
118,029
Construction in progress
51,663
Accumulated depreciation
(577,014
Total Real estate properties, net
345,522
97,985
Above market leases
15,105
Payment in lieu of taxes
6,394
Accumulated amortization
(275,472
Total Intangible assets, net
Below market leases
(78,996
65,398
Total Intangible liabilities, net
(13,598
The following table summarizes the scheduled amortization of our acquired above- and below-market lease intangibles for each of the five succeeding years as of March 31, 2026 (amounts in thousands):
Acquired Above-Market Lease Intangibles
Acquired Below-Market Lease Intangibles
2026 (1)
919
(2,212
2027
1,216
(2,729
2028
841
(2,184
2029
309
(1,498
2030
203
(1,328
Above-market lease amortization reduces Rental income on our Consolidated Statements of Operations and below-market lease amortization increases Rental income on our Consolidated Statements of Operations.
10
4. Investment in Unconsolidated Real Estate Venture
The following is a summary of our investment in the JV (dollars in thousands):
As of March 31,
Joint Venture
Ownership Interest
MedBase Venture
53.0%
On October 13, 2021, we formed an unconsolidated real estate venture, which we refer to as the JV, with a global investor to fund the acquisition of a portfolio of ten properties that encompasses 1,214,165 leased square feet (the “VA Portfolio”). We own a 53.0% interest in the JV, subject to preferred allocations as provided in the JV agreement. We have joint approval rights with our JV partner on major decisions, including those regarding property operations. As such, we hold a non-controlling interest in the joint venture and account for the JV under the equity method of accounting.
5. Real Estate Loans Receivable
On August 6, 2024, we entered into a construction loan agreement (the “Construction Loan”) to lend up to $52.1 million to a developer (the “Borrower”). The construction loan will accrue interest monthly at a fixed market rate of 9.00% per annum. The construction loan shall be re-paid in full on or before August 31, 2027, the maturity date. Upon completion of the development, we had the option to purchase at fair value all of the issued and outstanding membership interest from the Borrower in a special purpose entity (“SPE”) which solely holds the developed property. We hold a variable interest in the SPE, but we do not consolidate the SPE as we are not the primary beneficiary due to the lack of power to direct significant activities performed by the SPE. The fair value of this real estate loan receivable was approximately $35.6 million as of March 31, 2026.
On April 1, 2025, the Borrower repaid $15.0 million of the construction loan outstanding upon substantial completion of the development and receipt of the lump sum reimbursement from the government. On April 15, 2025, we declined the option to purchase, at the stated price, all of the issued and outstanding membership interest from the Borrower.
On March 5, 2026, we entered into a mezzanine construction loan agreement (the “Mezzanine Construction Loan”) to lend $7.0 million to a developer (the “Mezzanine Borrower”). The mezzanine construction loan will accrue interest monthly at a fixed market rate of 12.00% per annum. The mezzanine construction loan shall be re-paid in full on or before March 5, 2030, the maturity date, however, the Mezzanine Borrower has the option to extend the maturity date by an additional twelve months through March 5, 2031. We hold a variable interest in the Mezzanine Borrower entity, but we do not consolidate the entity as we are not the primary beneficiary due to the lack of power to direct significant activities performed by the Mezzanine Borrower. The fair value of this real estate loan receivable was approximately $7.8 million as of March 31, 2026.
A summary of our real estate loans receivable consisted of the following (dollars in thousands):
Real estate loans receivable
45,729
35,357
Allowance for credit losses
(1,267
(1,071
Real estate loans receivable, net
11
The table below sets forth the activity for our allowance for credit losses for the three months ended March 31, 2026 and 2025 (dollars in thousands):
Real Estate Loans Receivable (1)
Real Estate Loan Unfunded Commitments (2)
Balance as of December 31, 2024
1,436
92
(171
(67
Balance as of March 31, 2025
1,265
25
Balance as of December 31, 2025
1,071
Balance as of March 31, 2026
1,267
During the three months ended March 31, 2026 and 2025, we recognized interest income from our real estate loans receivable of $0.9 million and $0.9 million, respectively. Interest income from our real estate loans receivable is included within Other income on our Consolidated Statements of Operations.
12
6. Debt
At March 31, 2026, our consolidated borrowings consisted of the following (amounts in thousands):
Principal Outstanding
Interest
Current
Loan
Rate (1)(2)
Maturity
Revolving credit facility:
2024 revolving credit facility (3)
SOFR + 145 bps
June 2028 (4)
Total revolving credit facility
Term loan facilities:
2016 term loan facility
100,000
5.31% (5)
January 2028 (6)
2018 term loan facility
200,000
5.09% (7)
August 2028 (8)
Total term loan facilities
300,000
Less: Total unamortized deferred financing fees
(2,521
Total term loan facilities, net
Notes payable:
2017 series A senior notes
95,000
4.05%
May 2027
2017 series B senior notes
50,000
4.15%
May 2029
2017 series C senior notes
30,000
4.30%
May 2032
2019 series A senior notes
85,000
3.73%
September 2029
2019 series B senior notes
3.83%
September 2031
2019 series C senior notes
90,000
3.98%
September 2034
2021 series A senior notes
2.62%
October 2028
2021 series B senior notes
2.89%
October 2030
2024 series A senior notes
150,000
6.56%
May 2033
2024 series B senior notes
August 2033
2025 series A senior notes
25,000
6.13%
March 2030
2025 series B senior notes
6.33% (9)
March 2032
Total notes payable
1,025,000
(5,868
Total notes payable, net
Mortgage notes payable:
USFS II – Albuquerque
6,932
4.46%
July 2026
ICE – Charleston
8,517
4.21%
January 2027
VA – Loma Linda
127,500
3.59%
July 2027
CBP – Savannah
7,561
3.40%
July 2033
Total mortgage notes payable
150,510
(298
Less: Total unamortized premium/discount
(158
Total mortgage notes payable, net
Total debt
1,711,715
13
As of March 31, 2026, the net carrying value of real estate collateralizing our mortgages payable totaled $208.4 million. See Note 8 for the fair value of our debt instruments.
Financial Covenant Considerations
As of March 31, 2026, we were in compliance with all financial and other covenants related to our debt.
7. Derivatives and Hedging Activities
The following table sets forth the key terms and fair values of our interest rate swap derivatives, each of which was designated as a cash flow hedge as of March 31, 2026. We entered into these interest rate swap derivatives to reduce our exposure to the variability in future cash flows attributable to changes in our floating rate debt (amounts in thousands):
Notional Amount
Fixed Rate
Floating Rate Index
Effective Date
Expiration Date
Fair Value
40,000
3.85
%
USD-SOFR with -5 Day Lookback
December 23, 2024
December 23, 2027
(180
3.86
(139
(141
3.72
March 24, 2025
April 1, 2028
(299
3.66
June 30, 2025
July 1, 2028
(124
3.67
(127
The table below sets forth the fair value of our interest rate derivatives as well as their classification on our Consolidated Balance Sheets (amounts in thousands):
Balance Sheet Line Item
As of March 31, 2026
Interest rate swaps - Asset
Interest rate swaps - Liability
(1,010
Cash Flow Hedges of Interest Rate Risk
The gains or losses on derivatives designated and that qualify as cash flow hedges are recorded in Accumulated other comprehensive income (“AOCI”) and will be reclassified to interest expense in the period that the hedged forecasted transactions affect earnings on our variable rate debt.
We estimate that $0.6 million will be reclassified from AOCI as a net increase to interest expense over the next 12 months.
The table below presents the effects of our interest rate derivatives on our Consolidated Statements of Operations and Comprehensive Income (Loss) (amounts in thousands):
Unrealized gain (loss) recognized in AOCI
1,963
(3,447
Gain (loss) reclassified from AOCI into interest expense
(131
385
Credit-Risk-Related Contingent Features
We have agreements with each of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on such indebtedness. As of March 31, 2026, the net fair value of derivatives in a liability position, which includes accrued interest, related to agreements with our derivative counterparties was $1.0 million. As of March 31, 2026, the Company had not breached any provisions of these agreements and had not posted any collateral related to these agreements. If the Company were to breach any such provisions of these agreements, it would be required to settle its obligations under the agreements at their termination value of $1.1 million.
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8. Fair Value Measurements
Accounting standards define fair value as the exit price, or the amount that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standards also establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy of these inputs is broken down into three levels: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Categorization within the valuation hierarchy is based upon the lowest level of input that is most significant to the fair value measurement.
Recurring fair value measurements
The fair values of our interest rate swaps are determined using widely accepted valuation techniques, including discounted cash flow analysis, on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities in such interest rates. While we determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of our derivatives held as of March 31, 2026 were classified as Level 2 of the fair value hierarchy.
The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets (excluding our real estate loans receivable) and accounts payable and accrued expenses are reasonable estimates of fair values because of the short maturities of these instruments. The fair value of our real estate loans receivable, as disclosed in Note 5, is based on the discounted estimated future cash flows of the loan (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans with similar maturities and credit quality, and the estimated cash payments include scheduled principal and interest payments. The table below presents our assets measured at fair value on a recurring basis as of March 31, 2026, aggregated by the level in the fair value hierarchy within which those measurements fall (amounts in thousands):
Level 1
Level 2
Level 3
For our disclosure of debt fair values, we estimated the fair value of our 2016 term loan facility, our 2018 term loan facility and our 2024 revolving credit facility based on the variable interest rate and credit spreads (categorized within Level 3 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments included scheduled principal and interest payments. Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement at such fair value amounts may not be possible and may not be a prudent management decision.
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Financial assets and liabilities not measured at fair value
The following table summarizes the aggregate principal outstanding under the Company’s indebtedness and the corresponding estimate of fair value as of March 31, 2026:
Financial liabilities
Carrying Amount (1)
Fair Value (2)
2024 revolving credit facility
Notes payable
988,269
Mortgages payable
146,836
9. Equity Incentive Plan
The following is a summary of our stock-based compensation expense, net for the three months ended March 31, 2026 and 2025:
Stock-based compensation expense, net
Stock-based compensation expense, net is included within corporate general and administrative expenses on our Consolidated Statements of Operations.
On January 5, 2026, we granted an aggregate of 268,766 performance-based LTIP units to members of management pursuant to the Easterly Government Properties, Inc. 2024 Equity Incentive Plan (as amended, the “2024 Plan”), consisting of:
Pursuant to the 2024 Plan, the significant assumptions used to value the performance-based LTIP units using a Monte Carlo Simulation (risk-neutral approach) include expected volatility (26.0% - 27.0%), dividend yield (6.6% - 8.3%), risk-free interest rate (3.5% - 4.0%) and expected life (3 - 8 years).
On January 5, 2026, we also granted an aggregate of 136,314 service-based LTIP units to members of management pursuant to the 2024 Plan, which will vest on December 31, 2028. The LTIP units are subject to the grantee’s continued employment and the other terms of the awards.
On January 5, 2026, we granted an aggregate of 15,247 shares of restricted common stock to members of management pursuant to the 2024 Plan. The shares will vest on January 5, 2028, subject to the grantee’s continued employment and the other terms of the awards.
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10. Equity
The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2026 and 2025 (amounts in thousands, except share amounts):
Shares
Common Stock Par Value
Additional Paid-in Capital
RetainedEarnings
CumulativeDividends
AccumulatedOtherComprehensiveIncome (Loss)
Non-controlling Interest in Operating Partnership
Total Equity
Three months ended March 31, 2026
Balance at December 31, 2025
46,303,469
Stock based compensation, net
282
1,815
Dividends and distributions paid ($0.45 per share)
(20,858
(952
Grant of unvested restricted stock
15,247
Redemption of common units for shares of common stock
31,488
Issuance of common stock, net
94,170
2,142
2,143
Unrealized gain on treasury locks and interest rate swaps, net
2,024
70
49
Allocation of non-controlling interest in Operating Partnership
(148
148
Balance at March 31, 2026
46,444,374
Three months ended March 31, 2025
Balance at December 31, 2024 (1)
43,188,224
432
1,874,193
131,854
(686,044
683
65,999
1,387,117
Stock based compensation
177
1,244
Dividends and distributions paid ($0.66 per share)
(28,613
(1,627
1,514,266
40,794
40,809
Unrealized loss on interest rate swaps
(3,654
(178
156
727
(727
Balance at March 31, 2025
44,702,490
447
1,915,891
134,981
(714,657
(2,971
64,867
1,398,558
(1) As of December 31, 2024, the Company reclassified $0.6 million from Common Stock to Additional Paid-in-Capital due to the reduction in shares outstanding in connection with the 1-for-2.5 reverse stock split of the Company’s issued and outstanding Common Stock, effective April 28, 2025 (the “Reverse Stock Split”). Concurrently with the Reverse Stock Split, our operating partnership completed a corresponding 1-for-2.5 reverse unit split of outstanding common units and LTIP units (the “Reverse Unit Split”).
A summary of dividends declared by our Board of Directors per share of common stock and per common unit (as adjusted to reflect the Reverse Stock Split and Reverse Unit Split) at the date of record is as follows:
Quarter
Declaration Date
Record Date
Payment Date
Dividend (1)
Q1 2026
April 22, 2026
May 7, 2026
May 21, 2026
(1) Prior to the end of the performance period as set forth in the applicable LTIP unit award, holders of performance-based LTIP units are entitled to receive dividends per LTIP unit equal to 10% of the dividend paid per common unit. After the end of the performance period, the number of LTIP units, both vested and unvested, that LTIP award recipients have earned, if any, are entitled to receive dividends in an amount per LTIP unit equal to dividends, both regular and special, payable per common unit. Holders of LTIP units that are not subject to the attainment of performance goals are entitled to receive dividends per LTIP unit equal to 100% of the dividend paid per common unit beginning on the grant date.
ATM Programs
We entered into an equity distribution agreement on June 22, 2021 (the “2021 ATM Program”) with various financial institutions. Pursuant to the 2021 ATM Program, we may issue and sell shares of our common stock having an aggregate offering price of up to $300.0 million from time to time in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. Under the 2021 ATM Program, we may enter into one or more forward transactions (each, a “forward sale transaction”) under separate master forward sale confirmations and related supplemental confirmations with each of the various financial institutions party to the 2021 ATM Program for the sale of shares of our common stock on a forward basis.
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The following table sets forth certain information with respect to issuances under the 2021 ATM Program during the three months ended March 31, 2026 (amounts in thousands except share amounts):
2021 ATM Program
For the quarter ended
Number of Shares Issued (1)
Net Proceeds
2,146
(1) Shares issued by us, which were all issued in settlement of forward sale transactions. As of March 31, 2026, we had settled all of our outstanding forward sale transactions under the 2021 ATM Program. We accounted for the forward sale transactions as equity.
As of March 31, 2026, we had approximately $234.0 million of gross sales of our common stock available under the 2021 ATM Program.
Share Repurchase Program
On April 28, 2022, our Board of Directors authorized a share repurchase program whereby we may repurchase up to 1,815,597 shares of our common stock (adjusted for the Reverse Stock Split), or approximately 5% of our outstanding shares as of the original authorization date. We are not required to purchase shares under the share repurchase program, but may choose to do so in the open market or through privately negotiated transactions at times and amounts based on our evaluation of market conditions and other factors.
No repurchases of shares of our common stock were made under the share repurchase program during the three months ended March 31, 2026.
11. Earnings Per Share
Basic earnings or loss per share of common stock (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted average shares of common stock outstanding for the periods presented. Diluted EPS is computed after adjusting the basic EPS computation for the effect of dilutive common equivalent shares outstanding during the periods presented. Unvested restricted shares of common stock and unvested LTIP units are considered participating securities, which require the use of the two-class method for the computation of basic and diluted earnings per share.
The following table sets forth the computation of our basic and diluted earnings per share of common stock for the three months ended March 31, 2026 and 2025 (amounts in thousands, except per share amounts):
Numerator
Less: Non-controlling interest in Operating Partnership
Less: Dividends on participating securities
(240
(207
Net income available to common stockholders
1,125
2,920
Denominator for basic EPS
Dilutive effect of share-based compensation awards
34,197
12,978
Dilutive effect of LTIP units (1)
158,885
129,373
Dilutive effect of shares issuable under forward sale agreements (2)
5,711
Denominator for diluted EPS
Basic EPS
Diluted EPS
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12. Leases
Lessor
We lease commercial space to the U.S. Government through the GSA or other federal agencies or nongovernmental tenants. These leases may contain extension options that are predominately at the sole discretion of the tenant. Certain of our leases contain a “soft-term” period of the lease, meaning that the U.S. Government tenant agency has the right to terminate the lease prior to its stated lease end date. While certain of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the weighted average age of these properties based on the date the property was built or renovated-to-suit, where applicable (approximately 20.7 years as of March 31, 2026), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties. Certain lease agreements include variable lease payments that, in the future, will vary based on changes in inflationary measures, real estate tax rates, usage, or share of expenditures of the leased premises.
On February 22, 2026, we received a lump sum reimbursement for FDA Atlanta relating to the landlord improvements in excess of the U.S. Government’s tenant improvement allowance of $12.6 million. Total reimbursements received for the project as of March 31, 2026 are $150.7 million. We recorded the payments as Deferred revenue on our Consolidated Balance Sheet and began amortizing over the life of the lease through Rental income.
The table below sets forth our composition of lease revenue recognized between fixed and variable components (amounts in thousands):
Fixed
82,818
70,773
Variable
5,775
4,773
Lessee
We lease corporate office space under operating lease arrangements in Washington, D.C., San Diego, CA and West Palm Beach, FL. The leases include variable lease payments that, in the future, will vary based on changes in real estate tax rates, usage, or share of expenditures of the leased premises. We have elected not to separate lease and non-lease components for our corporate office leases.
As of March 31, 2026, the unamortized balances associated with our right-of-use operating lease asset and operating lease liability were $4.1 million and $4.6 million, respectively. We used our incremental borrowing rate, which was arrived at utilizing prevailing market rates and the spread on our revolving credit facility, in order to determine the net present value of the minimum lease payments.
The following table provides quantitative information for our commenced operating leases for the three months ended March 31, 2026 (amounts in thousands):
Cash flows from operating lease costs
224
197
20
In addition, the maturity of fixed lease payments under our commenced corporate office leases as of March 31, 2026 is summarized in the table below (amounts in thousands):
Corporate office leases
Payments due by period
591
671
1,081
1,046
731
Thereafter
1,212
Total future minimum lease payments
5,332
Imputed interest
(718
4,614
13. Revenue
The table below sets forth revenue from tenant construction projects and the associated project management income disaggregated by tenant agency for the three months ended March 31, 2026 (amounts in thousands):
Tenant
Food and Drug Administration (“FDA”)
471
55
Department of Veteran Affairs (“VA”)
252
146
U.S. Joint Staff Command (“JSC”)
68
314
Internal Revenue Service (“IRS”)
31
50
Federal Bureau of Investigation (“FBI”)
207
Department of Treasury (“TREAS”)
The Judiciary of the U.S. Government (“JUD”)
38
U.S. Citizenship and Immigration Services (“USCIS”)
28
U.S. Coast Guard (“USCG”)
Department of Transportation (“DOT”)
51
General Services Administration - Other
State of California (“CA”)
851
1,179
As of both March 31, 2026 and December 31, 2025, the balance in Accounts receivable related to tenant construction projects and the associated project management income was $2.5 million, which is inclusive of contract assets or liabilities.
The duration of the majority of tenant construction project reimbursement arrangements is less than a year and payment is typically due once a project is complete and work has been accepted by the tenant. There were no projects on-going as of March 31, 2026 with a duration of greater than one year.
During the three months ended March 31, 2026 and 2025, we recognized $0.4 million and $0.2 million, respectively, in parking garage income. The monthly and transient daily parking revenue falls within the scope of Revenue from Contracts with Customers (“ASC 606”) and is accounted for at the point in time when control of the goods or services transfers to the customer and our
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performance obligation is satisfied. As of March 31, 2026 and December 31, 2025, the balance in Accounts receivable related to parking garage income was $0.1 million and $0.2 million, respectively.
14. Concentrations Risk
Concentrations of credit risk arise for us when multiple of our tenants are engaged in similar business activities, are located in the same geographic region or have similar economic features that impact in a similar manner their ability to meet contractual obligations, including obligations owed to us. We regularly monitor our tenant base to assess potential concentrations of credit risk.
As stated in Note 1 above, we lease commercial space to the U.S. Government or non-governmental tenants. At March 31, 2026, the U.S. Government accounted for approximately 86.2% of our total annualized lease income, state and local government tenants accounted for approximately 8.4% of our annualized lease income and non-governmental tenants accounted for the remaining approximately 5.4%.
Seventeen of our 106 wholly-owned and unconsolidated operating properties are located in California, accounting for approximately 12.9% of our total leased square feet and approximately 16.7% of our total annualized lease income as of March 31, 2026. To the extent that weak economic or real estate conditions or natural disasters affect California more severely than other areas of the country, our business, financial condition and results of operations could be significantly impacted.
15. Segment Information
During the three months ended March 31, 2026 and 2025, our operations are reported within one reportable and operating segment in the consolidated financial statements and all of our properties are included within this single reportable and operating segment (the “segment”).
Our chief operating decision makers (“CODMs”) include our Chief Executive Officer and Chief Financial Officer as they are responsible for allocating resources, assessing performance and determining appropriate operating segments.
The CODMs assess performance for the segment and decide how to allocate resources based on net income, which is reported on our Consolidated Statements of Operations as Net Income. The Consolidated Statements of Operations, inclusive of significant expenses, are provided to the CODMs for performance assessment. The CODMs use net income to evaluate income generated from our properties when deciding whether to reinvest profits into our assets or into other parts of the entity, such as for acquisitions or dividend payments. Net income is also used to monitor budgeted versus actual results. The CODMs also use net income in competitive analysis by benchmarking to our competitors. The competitive analysis, along with the monitoring of budgeted versus actual results, is used to assess the segment performance and to establish employee and management compensation.
The measure of segment assets is reported on our Consolidated Balance Sheets as Total Assets. The accounting policies of the segment are the same as those described in our Summary of Significant Accounting Policies.
16. Related Parties
We have reimbursement arrangements with entities controlled by our Chief Executive Officer and Vice Chairman, which provide for reimbursement of costs paid on our behalf, or those we pay on their behalf. During the three months ended March 31, 2026, we were responsible for reimbursing costs of $0.1 million and received reimbursement for costs of less than $0.1 million. During the three months ended March 31, 2025, we were responsible for reimbursing costs of $0.1 million and received reimbursement for costs of less than $0.1 million.
We provide asset management services to properties owned by the JV. For the three months ended March 31, 2026, we recognized Asset management income of $0.6 million and reimbursement for certain costs that we paid on their behalf of $0.7 million. For the three months ended March 31, 2025, we recognized Asset management income of $0.6 million and reimbursement for certain costs that we paid on their behalf of $0.6 million.
As of March 31, 2026, receivables from related parties were $0.5 million which was included within prepaid expenses and other assets on our balance sheet. As of March 31, 2026, there were no Accounts payable, accrued expenses and other liabilities owed to related parties.
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17. Subsequent Events
For our consolidated financial statements as of March 31, 2026, we evaluated subsequent events and noted the following significant events.
Subsequent to March 31, 2026, on April 22, 2026, the Company’s stockholders approved an amendment to the 2024 Plan to increase the aggregate number of shares authorized for issuance from 1,440,000 shares (as adjusted for the Reverse Stock Split) to 4,315,000 shares of common stock, reflecting an increase of 2,875,000 shares. The amendment had been previously approved by the Company’s Board of Directors on March 20, 2026, subject to stockholder approval, and became effective upon such approval.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We caution investors that forward-looking statements are based on management’s beliefs and on assumptions made by, and information currently available to, management. When used, the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “might”, “plan”, “potential”, “project”, “result”, “seek”, “should”, “target”, “will”, and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.
Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:
For a further discussion of these and other factors that could affect us and the statements contained herein, see the section entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as may be supplemented or amended from time to time.
Overview
References to “we,” “our,” “us” and “the Company” refer to Easterly Government Properties, Inc., a Maryland corporation, together with our consolidated subsidiaries, including Easterly Government Properties LP, a Delaware limited partnership, which we refer to herein as the “Operating Partnership.” We present certain financial information and metrics “at Easterly Share,” which is calculated on an entity-by-entity basis. “At Easterly Share” information, which we also refer to as being “at share,” “pro rata,” “our pro rata share” or “our share” is not, and is not intended to be, a presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
We are an internally managed real estate investment trust (“REIT”), focused primarily on the acquisition, development and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate over 85% of our revenue by leasing our properties to such agencies, either directly or through the U.S. General Services Administration (“GSA”). Our objective is to generate attractive risk-adjusted returns for our stockholders over the long term through dividends and capital appreciation.
We focus primarily on acquiring, developing and managing U.S. Government-leased properties that are essential to supporting the mission of the tenant agency and strive to be a partner of choice for the U.S. Government, working closely with the tenant agency to meet its needs and objectives. We continue to pursue opportunities to add properties to our portfolio, including acquiring properties leased to state and local governments with strong creditworthiness and other opportunities that directly or indirectly support the mission of select government agencies. As of March 31, 2026, we wholly owned 96 operating properties and ten operating properties through an unconsolidated joint venture (the “JV”) in the United States, encompassing approximately 10.7 million leased square feet (10.1 million pro rata), including 93 operating properties that were leased primarily to U.S. Government tenant agencies, eight operating properties leased to tenant agencies of a U.S. state or local government and five operating properties that were entirely leased to private tenants. As of March 31, 2026, our operating properties were 97% leased. For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned three properties under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
The Operating Partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of the Operating Partnership and owned approximately 96.6% of the aggregate limited partnership interests in the Operating Partnership, which we refer to herein as common units, as of March 31, 2026. We have elected to be taxed as a REIT and believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015.
2026 Activity
On January 16, 2026, we acquired a 297,713 leased square foot campus consisting of three real estate operating properties near Richmond, Virginia. The assets are leased primarily to the Commonwealth of Virginia and have lease expirations ranging from 2027 to 2036.
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Operating Properties
As of March 31, 2026, our operating properties were 97% leased with a weighted average annualized lease income per leased square foot of $36.82 ($36.54 pro rata) and a weighted average age of approximately 16.9 years based on the date the property was built or renovated-to-suit, where applicable. We calculate annualized lease income as annualized contractual base rent for the last month in a specified period, plus the annualized straight line rent adjustments for the last month in such period and the annualized net expense reimbursements earned by us for the last month in such period.
The table set forth below shows information relating to the properties we owned, or in which we had an ownership interest, at March 31, 2026, and it includes properties held by the JV:
Property Name
Location
PropertyType (1)
Tenant LeaseExpiration Year (2)
Leased SquareFeet
Annualized Lease Income
Percentage of Total AnnualizedLeaseIncome
Annualized LeaseIncome perLeased SquareFoot
Wholly Owned U.S. Government Leased Properties
VA - Loma Linda
Loma Linda, CA
OC
2036
327,614
16,873,821
4.2
51.51
USCIS - Kansas City (3)
Lee's Summit, MO
O
2027 - 2042
417,945
10,396,754
2.5
24.88
JSC - Suffolk
Suffolk, VA
SF
403,737
8,556,069
2.1
21.19
Various GSA - Chicago
Des Plaines, IL
188,768
7,925,559
2.0
41.99
FDA - Atlanta
Atlanta, GA
L
2045
162,000
7,064,454
1.8
43.61
IRS - Fresno
Fresno, CA
2033
180,481
7,019,201
38.89
FBI - Salt Lake
Salt Lake City, UT
2032
169,542
6,849,033
1.7
40.40
Various GSA - Portland (4)
Portland, OR
2027-2039
175,214
5,933,752
1.5
33.87
VA - San Jose
San Jose, CA
2038
90,085
5,822,259
64.63
Various GSA - Buffalo (5)
Buffalo, NY
2026-2039
251,236
5,790,098
23.05
EPA - Lenexa
Lenexa, KS
169,585
5,777,792
34.07
PTO - Arlington
Arlington, VA
2035
190,546
5,393,537
1.4
28.31
FBI - Tampa
Tampa, FL
2040
138,000
5,385,768
39.03
FDA - Alameda
Alameda, CA
2039
69,624
5,025,603
1.3
72.18
FBI - San Antonio
San Antonio, TX
148,584
4,865,679
1.2
32.75
USCIS - Lincoln
Lincoln, NE
137,671
4,855,909
35.27
FBI / DEA - El Paso
El Paso, TX
203,683
4,818,384
23.66
FEMA - Tracy
Tracy, CA
W
210,373
4,668,336
22.19
TREAS - Parkersburg
Parkersburg, WV
2041
182,500
4,428,100
1.1
24.26
FBI - Mobile
Mobile, AL
76,112
4,350,464
57.16
FDA - Lenexa
59,690
4,286,244
71.81
ICE - Dallas (6)
Irving, TX
2032 / 2040
135,200
4,236,638
31.34
FBI - Pittsburgh
Pittsburgh, PA
100,054
4,214,053
42.12
FBI - Knoxville
Knoxville, TN
99,130
4,208,887
42.46
VA - South Bend
Mishawaka, IN
86,363
4,145,662
48.00
FBI - Omaha
Omaha, NE
2044
112,196
3,981,453
1.0
35.49
VA - Mobile
79,212
3,927,189
49.58
FBI - New Orleans
New Orleans, LA
137,679
3,861,871
28.05
FBI - Albany
Albany, NY
69,476
3,597,252
0.9
51.78
FBI - Birmingham
Birmingham, AL
2042
96,278
3,596,878
37.36
DOT - Lakewood
Lakewood, CO
116,046
3,585,870
30.90
EPA - Kansas City
Kansas City, KS
2043
55,833
3,578,199
64.09
USFS II - Albuquerque
Albuquerque, NM
2031
98,720
3,578,032
36.24
FBI - Richmond
Richmond, VA
96,607
3,383,207
35.02
27
LeasedSquareFeet
Wholly Owned U.S. Government Leased Properties (Cont.)
VA - Chico
Chico, CA
2034
51,647
3,370,428
65.26
ICE - Charleston
North Charleston, SC
65,124
3,262,630
0.8
50.10
FBI - Little Rock
Little Rock, AR
102,377
3,262,033
31.86
DEA - Sterling
Sterling, VA
57,692
3,238,115
56.13
JUD - Del Rio
Del Rio, TX
C
89,880
3,216,180
35.78
USCIS - Tustin
Tustin, CA
66,818
3,176,673
47.54
DEA - Vista
Vista, CA
52,293
3,175,630
60.73
VA - Orange
Orange, CT
56,330
2,978,003
52.87
VA - Indianapolis
Brownsburg, IN
80,000
2,973,092
37.16
SSA - Charleston
Charleston, WV
110,000
2,910,184
0.7
26.46
ICE - Albuquerque
71,100
2,886,242
40.59
JUD - El Centro
El Centro, CA
43,345
2,843,404
65.60
DEA - Dallas Lab
Dallas, TX
49,723
2,840,436
57.13
DEA - Pleasanton
Pleasanton, CA
42,480
2,803,294
65.99
DEA - Upper Marlboro
Upper Marlboro, MD
2037
50,978
2,777,450
54.48
DEA - Dallas
71,827
2,742,744
38.19
DHS - Burlington
Williston, VT
74,549
2,738,630
36.74
NARA - Broomfield
Broomfield, CO
161,730
2,697,002
16.68
JUD - Jackson
Jackson, TN
75,043
2,654,729
35.38
TREAS - Birmingham
83,676
2,647,284
31.64
DHS - Atlanta (7)
2031 - 2038
91,185
2,602,112
28.54
USAO - Louisville
Louisville, KY
60,000
2,566,248
42.77
JUD - Charleston
Charleston, SC
52,339
2,491,927
0.6
47.61
IRS - Ogden
Ogden, UT
2,394,006
23.94
CBP - Savannah
Savannah, GA
35,000
2,306,216
65.89
Various GSA - Cleveland (8)
Brooklyn Heights, OH
2028 - 2040
61,384
2,248,708
36.63
NWS - Kansas City
Kansas City, MO
94,378
2,180,188
23.10
DEA - Santa Ana
Santa Ana, CA
39,905
2,036,945
0.5
51.04
GSA - Clarksburg
Clarksburg, WV
70,495
1,958,510
27.78
DEA - North Highlands
Sacramento, CA
37,975
1,891,896
49.82
JUD - Aberdeen
Aberdeen, MS
45,194
1,890,909
41.84
DEA - Riverside
Riverside, CA
34,354
1,889,092
54.99
NPS - Omaha
62,772
1,873,659
29.85
ICE - Orlando
Orlando, FL
49,420
1,796,130
36.34
VA - Golden
Golden, CO
56,753
1,793,899
31.61
JUD - Newport News
Newport News, VA
35,005
1,693,655
0.4
48.38
USCG - Martinsburg
Martinsburg, WV
59,547
1,646,454
27.65
VA - Charleston
97,718
1,519,642
15.55
USAO - Springfield
Springfield, IL
43,600
1,399,201
32.09
JUD - Council Bluffs
Council Bluffs, IA
28,900
1,369,479
0.3
47.39
DEA - Birmingham
35,616
1,270,359
35.67
DEA - Albany
31,976
1,193,758
37.33
HSI - Orlando
27,840
1,119,208
40.20
SSA - Dallas
27,200
1,073,581
39.47
JUD - South Bend
South Bend, IN
30,119
831,012
0.2
27.59
ICE - Louisville
17,420
772,144
44.33
DEA - San Diego
San Diego, CA
16,100
565,018
0.1
35.09
DEA - Bakersfield
Bakersfield, CA
9,800
497,530
50.77
SSA - San Diego
10,059
458,846
45.62
Subtotal
8,054,450
292,506,522
74.3
36.32
Wholly Owned State and Local Government Property
DC - Capitol Plaza (9)
Washington, DC
2026 - 2038
284,688
18,123,285
4.5
63.66
Wake County III - Cary (10)
Cary, NC
2027 / 2034
113,722
3,500,694
30.78
CA - Anaheim
Anaheim, CA
2033 / 2034
95,273
3,364,379
35.31
SVA - Glen Allen I
Glen Allen, VA
3,113,404
24.42
Wake County II - Cary
98,340
2,967,871
30.18
NM - Albuquerque
32,534
2,344,699
72.07
Wake County I - Cary
75,401
2,226,569
29.53
SVA - Glen Allen II
46,147
1,089,563
23.61
873,605
36,730,464
9.4
42.04
Wholly Owned Privately Leased Property
York Space Systems - Greenwood Village
Greenwood Village, CO
138,125
5,012,522
36.29
SVA - Glen Allen III (11)
2027 - 2031
124,066
2,774,090
22.36
Northrop Grumman - Dayton
Beavercreek, OH
99,246
2,629,161
26.49
Northrop Grumman - Aurora
Aurora, CO
104,136
2,368,386
22.74
501 East Hunter Street - Lummus Corporation
Lubbock, TX
70,078
411,207
5.87
535,651
13,195,366
3.4
24.63
Wholly Owned Properties Total / Weighted Average
9,463,706
342,432,352
87.1
36.18
29
Unconsolidated Real Estate Venture U.S. Government Leased Properties
VA - Phoenix (12)
Phoenix, AZ
257,294
10,919,455
2.8
42.44
VA - San Antonio (12)
226,148
9,233,382
2.3
40.83
VA - Jacksonville (12)
Jacksonville, FL
193,100
7,634,166
1.9
39.53
VA - Chattanooga (12)
Chattanooga, TN
94,566
4,311,698
45.59
VA - Lubbock (12) (13)
120,916
4,272,006
35.33
VA - Marietta (12)
Marietta, GA
76,882
3,864,206
50.26
VA - Birmingham (12)
Irondale, AL
77,128
3,212,592
41.65
VA - Corpus Christi (12)
Corpus Christi, TX
69,276
2,994,312
43.22
VA - Columbus (12)
Columbus, GA
67,793
2,954,810
43.59
VA - Lenexa (12)
31,062
1,336,514
43.03
1,214,165
50,733,141
12.9
41.78
Total / Weighted Average
10,677,871
393,165,493
100.0
36.82
Total / Weighted Average at Easterly's Share
10,107,212
369,320,915
36.54
30
Certain of our leases are currently in the “soft-term” period of the lease, meaning that the U.S. Government tenant agency has the right to terminate the lease prior to its stated lease end date. We believe that, from the U.S. Government’s perspective, leases with such provisions are helpful for budgetary purposes. While some of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the weighted average age of these properties based on the date the property was built or renovated-to-suit, where applicable (approximately 20.7 years as of March 31, 2026), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties.
The following table sets forth a schedule of lease expirations for leases in place (including for wholly owned properties and properties held by the JV) as of March 31, 2026:
Year of Lease Expiration (1)
Number of Leases Expiring
Leased Square Footage Expiring
Percentage of Portfolio Leased Square Footage Expiring
Annualized Lease IncomeExpiring
Percentage of Total Annualized Lease IncomeExpiring
AnnualizedLease Incomeper LeasedSquare FootExpiring
344,916
3.2
13,729,244
3.5
39.80
572,603
5.4
20,791,493
5.3
36.31
906,740
8.5
22,256,040
5.7
24.55
757,363
7.1
24,853,554
6.3
32.82
95,888
2,610,150
27.22
533,104
5.0
18,472,816
4.7
34.65
712,188
6.7
22,295,921
31.31
566,197
22,427,093
39.61
635,293
5.9
24,461,298
6.2
38.50
440,450
4.1
17,598,695
39.96
56
5,113,129
47.9
203,669,189
51.7
39.83
Information about our development properties as of March 31, 2026 is set forth in the table below:
Lease Term
Estimated Leased SquareFeet
JUD - Flagstaff
Flagstaff, AZ
Judiciary of the U.S. Government
20-year
50,777
JUD - Medford
Medford, OR
40,035
FL - Fort Myers
Fort Myers, FL
Florida Department of Law Enforcement
25-year
64,000
154,812
Results of Operations
Comparison of Results of Operations for the three months ended March 31, 2026 and 2025
The financial information presented below summarizes our results of operations for the three months ended March 31, 2026 and 2025 (amounts in thousands).
Change
13,047
(222
12,870
2,737
575
6,424
342
2,280
434
12,792
(1,789
(1,869
Total revenues increased $12.9 million to $91.5 million for the three months ended March 31, 2026 compared to $78.7 million for the three months ended March 31, 2025.
The $13.0 million increase in Rental income is primarily attributable to the six operating properties acquired since March 31, 2025 and one development property placed into service since March 31, 2025.
The $0.2 million decrease in tenant reimbursements is primarily attributable to a decrease in tenant project reimbursement.
The less than $0.1 million increase in Asset management income is primarily attributable to the fee earned by us for asset management of the JV.
The less than $0.1 million increase in Other income is primarily attributable to an increase in interest income.
32
Total expenses increased $12.8 million to $71.6 million for the three months ended March 31, 2026 compared to $58.8 million for the three months ended March 31, 2025.
The $2.7 million increase in Property operating expenses is primarily attributable to the six operating properties acquired since March 31, 2025 and one development property placed into service since March 31, 2025.
The $0.6 million increase in Real estate taxes is primarily attributable to the six operating properties acquired since March 31, 2025 and one development property placed into service since March 31, 2025.
The $6.4 million increase in Depreciation and amortization is primarily attributable to the six operating properties acquired since March 31, 2025 and one development property placed into service since March 31, 2025.
The $2.3 million increase in Corporate general and administrative is primarily due to an increase in employee costs and non-cash compensation.
The $0.4 million increase in Provision for (recovery of) credit losses is primarily due to the mezzanine loan entered into in March 2026.
The $0.2 million decrease in Income from unconsolidated real estate venture is primarily attributable to higher operating expenses during the quarter ended March 31, 2026.
The $1.8 million increase in Interest expense, net is primarily attributable to the fixed rate senior unsecured notes issued in March 2025.
Liquidity and Capital Resources
We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months for all anticipated uses, including all scheduled principal and interest payments on our outstanding indebtedness, current and anticipated tenant improvements, development activities at JUD – Flagstaff, JUD – Medford and FL - Ft. Myers, planned and possible acquisitions of properties, stockholder distributions to maintain our qualification as a REIT, potential repurchases of common stock under our share repurchase program and other capital obligations associated with conducting our business. At March 31, 2026, we had approximately $2.0 million available in cash and cash equivalents, $10.7 million of restricted cash and there was approximately $154.8 million available under our 2024 revolving credit facility.
Our primary expected sources of capital are as follows:
Our short-term liquidity requirements consist primarily of funds to pay for the following:
33
Our long-term liquidity needs, in addition to recurring short-term liquidity needs as discussed above, consist primarily of funds necessary to pay for acquisitions, non-recurring capital expenditures, and scheduled debt maturities. Although we may be able to anticipate and plan for certain of our liquidity needs, unexpected increases in uses of cash that are beyond our control and which affect our financial condition and results of operations may arise, or our sources of liquidity may be fewer than, and the funds available from such sources may be less than, anticipated or required. As of the date of this filing, there were no known commitments or events that would have a material impact on our liquidity.
The following table sets forth certain information with respect to issuances under the 2021 ATM Program during the three months ended March 31, 2026 (amounts in thousands, except share amounts):
On April 28, 2022, our Board of Directors authorized a share repurchase program whereby we may repurchase up to 1,815,597 shares of our common stock (adjusted for the 1-for-2.5 reverse stock split of the Company’s issued and outstanding Common Stock), or approximately 5% of our outstanding shares as of the original authorization date. We are not required to purchase shares under the share repurchase program but may choose to do so in the open market or through privately negotiated transactions at times and amounts based on our evaluation of market conditions and other factors.
34
Debt
Indebtedness Outstanding
The following table sets forth certain information with respect to our outstanding indebtedness as of March 31, 2026 (amounts in thousands):
35
Our 2024 revolving credit facility, term loan facilities, notes payable, and mortgage notes payable are subject to ongoing compliance with a number of financial and other covenants. As of March 31, 2026, we were in compliance with all applicable financial covenants.
The chart below details our debt capital structure as of March 31, 2026 (dollar amounts in thousands):
Debt Capital Structure
Total principal outstanding
1,720,560
Weighted average maturity
3.9 years
Weighted average interest rate
4.6
% Variable debt
14.2
% Fixed debt (1)
85.8
% Secured debt
8.9
Material Cash Commitments
As of both March 31, 2026 and the date of this filing, the outstanding balance of the Construction Loan receivable was $35.6 million and our remaining obligation to fund was $0.4 million. We expect to fund the remaining commitment through the anticipated maturity of the Construction Loan on August 31, 2027, dependent on the borrower’s election to use the commitments. For a more complete description of the Construction Loan, see Note 5 to the Consolidated Financial Statements.
Other than as described above, during the three months ended March 31, 2026, there were no material changes to the cash commitment information presented in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2025.
36
Unconsolidated Real Estate Venture
We consolidate entities in which we have a controlling interest or are the primary beneficiary in a variable interest entity. From time to time, we may have off-balance sheet unconsolidated real estate ventures and other unconsolidated arrangements with varying structures.
As of March 31, 2026, we had invested $304.1 million in the JV. As of March 31, 2026, we had committed capital, net of return of over committed capital, to the JV totaling $332.9 million and had a remaining commitment of $8.5 million available. None of the properties owned by the JV are encumbered by mortgage indebtedness.
For a more complete description of the JV, see Note 4 to the Consolidated Financial Statements.
Dividend Policy
In order to qualify as a REIT, we are required to distribute to our stockholders, on an annual basis, at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. We anticipate distributing all of our taxable income. We expect to make quarterly distributions to our stockholders in a manner intended to satisfy this requirement. Prior to making any distributions for U.S. federal tax purposes or otherwise, we must first satisfy our operating and debt service obligations. It is possible that it would be necessary to utilize cash reserves, liquidate assets at unfavorable prices or incur additional indebtedness in order to make required distributions. It is also possible that our Board of Directors could decide to make required distributions in part by using shares of our common stock.
A summary of dividends declared by the Board of Directors per share of common stock and per common unit at the date of record is as follows:
Inflation
Substantially all of our leases provide for operating expense escalations. We believe inflationary increases in expenses may be at least partially offset by the operating expenses that are passed through to our tenants and by contractual rent increases. We do not believe inflation has had a material impact on our historical financial position or results of operations.
Cash Flows
The following table sets forth a summary of cash flows for the three months ended March 31, 2026 and 2025 (amounts in thousands):
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Operating Activities
We generated $27.3 million and $24.2 million of cash from operating activities during the three months ended March 31, 2026 and 2025, respectively. Net cash provided by operating activities for the three months ended March 31, 2026 includes $30.5 million in net cash from rental activities net of expenses and $2.3 million related to distributions from investment in unconsolidated real estate venture offset by $5.5 million related to the change in tenant accounts receivable, prepaid expenses and other assets, real estate loan
37
interest receivable, deferred revenue associated with operating leases, principal payments on operating lease obligations, principal repayment of sales-type lease, and accounts payable, accrued expenses and other liabilities. Net cash provided by operating activities for the three months ended March 31, 2025 includes $28.5 million in net cash from rental activities net of expenses and $3.8 million related to distributions from investment in unconsolidated real estate venture, offset by $8.1 million related to the change in tenant accounts receivable, prepaid expenses and other assets, real estate loan interest receivable, deferred revenue associated with operating leases, principal payments on operating lease obligations, and accounts payable, accrued expenses and other liabilities.
Investing Activities
We used $73.4 million and $45.2 million in cash for investing activities during the three months ended March 31, 2026 and 2025, respectively. Net cash used in investing activities for the three months ended March 31, 2026 includes $43.2 million in real estate acquisitions and deposits, $17.8 million in additions to development properties, $6.9 million in investments in real estate loans receivable, net and $5.5 million in additions to operating properties. Net cash used in investing activities for the three months ended March 31, 2025 includes $20.8 million in additions to development properties, $8.6 million in additions to operating properties, $8.5 million in investment in real estate loan receivable, net and $7.3 million in real estate acquisitions and deposits.
Financing Activities
We generated $25.1 million and $10.7 million in cash from financing activities during the three months ended March 31, 2026 and 2025, respectively. Net cash generated in financing activities for the three months ended March 31, 2026 includes $46.0 million in net draws under our 2024 revolving credit facility and $2.2 million in gross proceeds from issuance of shares of our common stock offset by $21.8 million in dividend payments, $1.2 million in mortgage notes payable repayment and less than $0.1 million in the payment of offering costs. Net cash generated by financing activities for the three months ended March 31, 2025 includes $125.0 million in note payable issuances and $41.3 million in gross proceeds from issuance of shares of our common stock, offset by $119.5 million in net paydowns under our 2024 revolving credit facility, $30.2 million in dividend payments, $2.3 million in deferred financing costs, $1.9 million in treasury lock settlement, $1.1 million in mortgage notes payable repayment and $0.4 million in the payment of offering costs.
Non-GAAP Financial Measures
We use and present Funds From Operations (“FFO”) and Core FFO as supplemental measures of our performance. The summary below describes our use of FFO and Core FFO and provides information regarding why we believe these measures are meaningful supplemental measures of our performance and reconciles these measures from net income, presented in accordance with GAAP.
Funds From Operations and Core Funds From Operations
FFO is a supplemental measure of our performance. We present FFO calculated in accordance with the current National Association of Real Estate Investment Trusts (“Nareit”) definition set forth in the Nareit FFO White Paper – Restatement 2018. FFO includes the REIT’s share of FFO generated by unconsolidated affiliates. In addition, we present Core FFO for certain other adjustments that we believe enhance the comparability of our FFO across periods and to the FFO reported by other publicly traded REITs. FFO is a supplemental performance measure that is commonly used in the real estate industry to assist investors and analysts in comparing results of REITs.
FFO is defined by Nareit as net income (calculated in accordance with GAAP), excluding:
We present FFO because we consider it an important supplemental measure of our operating performance, and we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting results.
We adjust FFO to present Core FFO as an alternative measure of our operating performance, which, when applicable, excludes items which we believe are not representative of ongoing operating results, such as liability management related costs (including losses on extinguishment of debt and modification costs), catastrophic event charges, depreciation of non-real estate assets, recovery of credit losses and the unconsolidated real estate venture’s allocated share of these adjustments. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results. We believe Core FFO more accurately reflects the ongoing operational and financial performance of our core business.
FFO and Core FFO are presented as supplemental financial measures and do not fully represent our operating performance. Other REITs may use different methodologies for calculating FFO and Core FFO or use other definitions of FFO and Core FFO and, accordingly, our presentation of these measures may not be comparable to other REITs. Neither FFO nor Core FFO is intended to be a measure of cash flow or liquidity. Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations and cash flows.
The following table sets forth a reconciliation of our net income to FFO and Core FFO for the three months ended March 31, 2026 and 2025 (amounts in thousands):
Depreciation of real estate assets
32,955
26,546
Unconsolidated real estate venture allocated share of above adjustments
2,281
2,279
FFO
36,650
32,108
Adjustments to FFO:
Loss on extinguishment of debt and modification costs
900
Natural disaster event expense, net of recovery
Depreciation of non-real estate assets
267
Core FFO
37,145
33,061
Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base these estimates, judgments, and assumptions on historical experience, current trends, and various other factors that we believe to be reasonable under the circumstances. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or a different presentation of our financial statements.
Our Annual Report on Form 10-K for the year ended December 31, 2025 contains a discussion of our significant accounting policies, which utilize relevant critical accounting estimates. During the three months ended March 31, 2026, there were no material changes to the discussion of our significant accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss from adverse changes in market prices and interest rates. Our future earnings, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Our primary market risk results from our indebtedness, which bears interest at both fixed and variable rates. We manage and may continue to manage our market risk on variable rate debt by entering into swap arrangements to, in effect, fix the rate on all or a portion of the debt for varying periods up to maturity. This in turn, reduces the risks of variability of cash flows created by variable rate debt and mitigates the risk of increases in interest rates. Our objective when undertaking such arrangements is to reduce our floating rate exposure and we do not intend to enter into hedging arrangements for speculative purposes. For more information on our interest rate swaps, see Note 7 to the Consolidated Financial Statements.
As of March 31, 2026, $1.5 billion, or 85.8% of our debt, excluding unamortized premiums and discounts, had fixed interest rates and $245.1 million, or 14.2%, had variable interest rates based on SOFR. If market interest rates on our variable rate debt fluctuate by 25 basis points, our interest expense would increase or decrease, depending on rate movement, by $0.6 million annually.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation required by the Exchange Act, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a -15(e) and Rule 15d-15 of the Exchange Act, as of March 31, 2026. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II
Item 1. Legal Proceedings
We are not currently involved in any material litigation nor, to our knowledge, is any material litigation currently threatened against us.
Item 1A. Risk Factors
Except to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there were no material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Item 5. Other Information
(a) On April 22, 2026, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) approved the adoption of an Amended and Restated Executive Cash Severance Plan (the “Amended and Restated Executive Severance Plan”) under which Darrell W. Crate, our Chief Executive Officer and President and other named executive officers, namely Michael P. Ibe, our Executive Vice President, Development and Acquisitions and Vice Chairman of the Board of Directors, Allison E. Marino, our Executive Vice President, Chief Financial Officer, and Franklin V. Logan, our Executive Vice President, General Counsel and Secretary, are eligible to receive severance cash payments in the event of a qualifying termination of employment with the Company. The Amended and Restated Executive Severance Plan was adopted to update the definition of “Cause” and to make other clarifying changes. The terms of the Amended and Restated Executive Severance Plan are otherwise identical to the Executive Cash Severance Plan approved by the Compensation Committee on February 18, 2026, as summarized in Part II, “Item 9B. Other Information” of our Annual Report on Form 10-K for the year ended December 31, 2025, and incorporated herein by reference.
The foregoing description of the Amended and Restated Executive Severance Plan does not purport to be complete and is subject to, and qualified in its entirety by, the full text of such plan, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference.
(b) During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
Item 6. Exhibits
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q:
Exhibit
Exhibit Description
3.1
Amended and Restated Articles of Amendment and Restatement of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference)
Articles of Amendment to the Amended and Restated Articles of Amendment and Restatement of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on April 28, 2025 and incorporated herein by reference)
3.3
Articles of Amendment to the Amended and Restated Articles of Amendment and Restatement of Easterly Government Properties, Inc. (previously filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K on April 28, 2025 and incorporated herein by reference)
Articles of Amendment to the Amended and Restated Articles of Amendment and Restatement of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on May 8, 2025 and incorporated herein by reference)
Amended and Restated Bylaws of Easterly Government Properties, Inc. (previously filed as Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference)
3.6
First Amendment to Amended and Restated Bylaws of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on February 27, 2019 and incorporated herein by reference)
3.7
Second Amendment to Amended and Restated Bylaws of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on May 20, 2021 and incorporated herein by reference)
Specimen Certificate of Common Stock of Easterly Government Properties, Inc. (previously filed as Exhibit 4.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference)
10.1†
Amendment No. 1 to the Easterly Government Properties, Inc. 2024 Equity Incentive Plan (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on April 24, 2026 and incorporated herein by reference)
10.2*†
Easterly Government Properties, Inc. Amended and Restated Executive Cash Severance Plan
31.1*
Certification of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
31.2*
Certification of Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended
32.1**
Certification of Chief Executive Officer and Chief Financial Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended
101.INS*
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104*
Cover Page Interactive Data File (embedded within the Inline XBRL document)
† Exhibit is a management contract or compensatory plan or arrangement.
* Filed herewith
** Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 27, 2026
/s/ Darrell W. Crate
Darrell W. Crate
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Allison E. Marino
Allison E. Marino
Executive Vice President, Chief Financial Officer
(Principal Financial Officer)