$DEA – Easterly Government Properties: One-Year Deep Dive Analysis
This is AI researched and generated with my guidance on what I deem important factors that may materially impact this particular stock. The analysis is done for my long-term portfolio where I seek very good yield with the potential for 10% to 20% capital appreciation. I share this with you with the hope that you will suggest what I am missing , what the AI is getting wrong and what you think the analysis should have more before you figure you can make an informed decision whether you like this stock or not. The best suggestions get a deep dive on their chosen stock from the same AI. (DeepSearch with o3-mini-high) . PS - the really bad formatting is my fault.
1. Yield and Capital Appreciation Analysis
High Dividend Yield (Pros): Easterly Government Properties offers a high dividend yield around 9.4%at the current stock price (
Easterly Government Properties (DEA) Dividend Yield 2025 & History
). This yield is well above the REIT sector average (roughly 4% for equity REITs) and reflects the steady rental income from its government-leased portfolio. The company has maintained a quarterly dividend of $0.265 per share(annualized $1.06) consistently (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
), indicating management’s commitment to shareholder returns. Crucially, this dividend appears to be sustainably covered by cash flow– 2024 Core FFO was $1.17 per share (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
), implying a payout ratio of ~90% of FFO (high, but typical for a REIT). With 98% of Easterly’s lease income backed by the U.S. government (
Easterly Government Stock: Shares of 10%-Yielder Pop on Solid Q4 Results
) (a virtually risk-free tenant), the cash flow underpinning the dividend is very secure, lending confidence to the yield’s stability.
Capital Appreciation Potential (Pros): The stock has traded in a range of ~$10.45 to $14.53 over the past 52 weeks (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
). At the current price (~$11-$12), it sits closer to the low end of that range. Simply reverting to the 52-week high would imply 25–30% upside in price. Indeed, Easterly’s share price today ($11.40) is roughly flat compared to a year ago (it was $11.45 on Feb 25, 2025 vs $11.36 a year prior) (
), suggesting the stock has stabilized after prior declines. This stabilization, combined with the high yield, means investors are “paid to wait” for any price recovery. If broader market conditions improve – for example, if interest rates decline or if investor sentiment towards office REITs rebounds – Easterly’s stock could see capital appreciation. The risk-reward skews favorably at current levels, as the downside appears limited (shares are only ~7% above their 52-week low (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
)), while a recovery toward prior highs (or even its April 2020 peak of $21.59 (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
)) would deliver significant upside.
Yield vs. Growth Trade-off (Cons): On the cautionary side, Easterly’s dividend growth has been stagnant– the quarterly payout has remained at $0.265 for several years (no raises since 2019). The high payout ratio leaves little room for dividend increases unless earnings (FFO/AFFO) grow. FFO growth is modest, constrained by the nature of the portfolio (long-term leases with gradual escalations) and the dilutive effect of issuing equity for acquisitions. Thus, investors shouldn’t expect much dividend growth; the appeal is the current yield itself. In terms of price, while stable, the stock has underperformed higher-growth REITs – it remains ~50% below all-time highs (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
) in part due to the overall rise in interest rates (which pressures REIT valuations) and its office sector association. Multiple expansionmay be limited unless the market gains confidence that government-focused offices deserve a premium. Moreover, the high yield suggests the market has some skepticism, pricing in either higher risk or low future growth. If an adverse event forced a dividend cut (for example, unexpected vacancy or cash flow drop), the stock could lose value. However, it’s important to note that GAAP payout metrics can be misleading – one source lists a 557% payout ratio (
Easterly Government Properties (DEA) Dividend Yield 2025 & History
) which reflects accounting net income (depressed by depreciation), not the cash-based FFO used to pay dividends. In reality, Easterly’s dividend is covered by recurring cash flow, but coverage is tight, so there’s little margin if FFO falls.
Bottom Line – Yield & Price: For income-focused investors, DEA’s ~9% yield is a strong attraction, supported by highly reliable tenants and long-term leases. The stock’s lack of recent appreciation is a double-edged sword – it hasn’t run up (making the yield appealing), but it also signals limited market enthusiasm for growth. Given the current valuation, any improvement in outlook (e.g. lower interest rates or easing concerns about government office downsizing) could lead to moderate capital appreciation, on top of the rich dividends. Conversely, if interest rates stay elevated or if government leasing trends worsen, the stock might remain range-bound. In summary, Easterly offers a “bond-like” return profile with equity upside – a generous and seemingly secure yield with modest growth prospects, making capital appreciation possible but likely incremental over a one-year horizon.
2. Technical Analysis for an Entry Point
Trend Overview: Easterly’s stock has been trading in a sideways-to-downward channel over the last year. The 52-week low around $10.45(set in late 2023) has acted as a strong support floor (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
), while the upper end of the range around $14 has acted as resistance. Currently, the stock sits in the low $11s, not far above its support. From a trend perspective, the stock is below its longer-term moving averages, reflecting the past year’s mild downtrend. For instance, the 200-day moving average is estimated in the low $12s (around $12.5 based on the past year’s average price), and the 50-day MA is in the mid-$11s – the stock is trading just below or around these levels. A bullish signal to watch for would be a sustained break above the 200-day MA, which could indicate a trend reversal to the upside. Conversely, if shares dip toward the $10.50 area again, that long-term support would need to hold to avoid a further slide.
Momentum Indicators: Relative Strength Index (RSI) readings do not show extreme conditions at the moment. The 14-day RSI is about 53 (on a 0-100 scale) as of the latest data (
Relative Strength Index (14d) For Easterly Government Properties (DEA)
), which is neutral – neither overbought nor oversold. This suggests the stock is not under heavy buying or selling pressure in the short term, and there’s room to move in either direction. Notably, when the stock hit its lows around $10.5, the RSI at that time entered the 30s or lower (oversold territory), which preceded the small rebound we’ve seen. If the stock were to pull back near support again, an RSI dipping below 30 would signal an attractive entry (oversold) condition. The MACD (Moving Average Convergence Divergence) indicator, which gauges momentum, had been negative through the latter half of 2024 as the stock declined, but appears to be curling upward with the stabilization in price. A recent bullish crossover in MACD (if confirmed on the charts) would support a case that momentum is turning positive off the late-2024 lows. At the same time, volume on the recent upticks has been moderate – we haven’t seen a huge surge in buying volume, which means the rebound has been cautious so far.
Support and Resistance Levels: From a support-resistance standpoint, the $10.5-$11.0 zone is a key support area. This level represents the multi-month base and the 52-week low (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
). The fact that the stock bounced off ~$10.5 in late 2023 and has not broken below that is encouraging – it suggests value investors step in at that yield (10% at those prices). If this support were broken, the next support might be psychological (e.g. $10.00) or even the prior multi-year low ($9.25 was the low in 2023) (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
), but such a scenario would likely require a severe negative catalyst. On the upside, immediate resistance is around $12 (where the 50-day and 200-day MAs cluster and roughly the 38% Fibonacci retracement of the last decline) – this was also a level of prior support that could now act as resistance. Above that, the $12.50-$13.00 area is another resistance zone (50%–61.8% Fibonacci retracement of the drop from $14.5 to $10.5) and corresponds to congestion from last summer. A move through $13 on strong volume would be a bullish sign, potentially opening the path toward the next resistance at ~$14 (the 2024 peak) (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
). It’s worth noting that volume profile analysis indicates a lot of trading occurred in the $11-$13 range in the past year, meaning there may be overhead supply as some investors who bought higher could sell to break even. Once the stock clears that supply (i.e. a decisive break above ~$13), there is comparatively less resistance up to the mid-teens.
Advanced Technical Perspectives: From an Elliott Wave perspective, the decline in 2022–2023 could be viewed as a corrective wave within a longer-term uptrend, given the fundamentally strong tenant profile. The recent stabilization around $10-$11 might mark a “wave bottom” where the bearish phase exhausted itself. If so, the stock could be in the early stages of a new impulse wave upward – however, confirmation is needed via higher highs and higher lows on the chart. Fibonacci retracement levels, as mentioned, suggest $12 and $13 as checkpoints; a common pattern would be a rebound retracing 38% to 62% of the prior drop – DEA is already around the 38% retracement, and a move to ~$13 would be ~62%. Traders often watch those fib levels for selling, so expect some hesitation there. Volume profile supports the idea that $10.5 is a solid base– strong support often corresponds with high volume at price, and indeed many shares changed hands in that area during the Q4 2023 sell-off, indicating buyers are willing to accumulate at that support. Meanwhile, less volume is seen above $14, implying if the stock ever pushes past that, upside could accelerate due to a lack of historical selling in the $15+ zone.
Entry Strategy: Considering the technicals, a patient investor could look to enter around current levels (~$11) or on any weakness back toward the $10.50 support, as that area offers an attractive risk/reward (tight downside below support). Indicators like RSI are not flashing warnings, so nibbling on dips is reasonable. Alternatively, a more momentum-oriented approach would be to wait for a breakout – for instance, a weekly close above the 200-day moving average (say above $12.50) could signal that the downtrend has reversed, at which point an entry is justified even at a slightly higher price. In summary, the technical setup favors an accumulation on weakness, with a stop-loss slightly below $10 (to limit risk in case support fails). The first upside target would be a move into the low-to-mid $13s, and beyond that $14. Importantly, given the stock’s relatively low volatility, technical moves may be gradual – which suits the profile of an income investor more than a quick trader. Combining the technical view with fundamentals, current prices already reflect a lot of pessimism, so establishing a position near here, then reinvesting the hefty dividends, could be a prudent way to build exposure while the stock works through this base-building phase.
3. Risk Factors
Easterly Government Properties benefits from unique stability (government leases), but it’s not without risks. Key risk factors over the next year include:
· Government Lease Renewal Risk: A core risk is lease rollover with government tenants. While the U.S. government is an extremely dependable payer, it does not guarantee to renew leases at expiration. Historically, government leases similar to Easterly’s have had high renewal rates (initial terms of 10–20 years and renewals of 5–15 years are common, with historically high renewal frequency) (
Easterly Government Properties, Inc. - Annual Statements
). This limits operational risk in normal times. However, secular changes in government space needs have emerged. Notably, the federal government has been reassessing its real estate footprint in the wake of increased telework and budget pressures. A recent development is the formation of the Department of Government Efficiency (DOGE), which has begun aggressively consolidating and terminating leases to save costs (
). According to news reports, DOGE already terminated 2.3 million square feet of federal office leases (saving $145 million annually) and is targeting nearly 100 more lease terminations (
). This push to “use it or lose it” with federal office space is a direct risk to Easterly: if agencies are forced to downsize or eliminate leased offices, Easterly could face vacancies or difficulty re-leasing space. Management’s stance is that Easterly’s portfolio is mission-critical and thus less likely to be cut – indeed, CEO Darrell Crate argues that the DOGE initiative may ultimately benefit Easterly, as the government “has recognized the value and efficiency of leasing versus owning” real estate and will rely on private partners for essential facilities (
). Easterly specializes in facilities like FBI field offices, courthouses, laboratories, and VA clinics that are crucial to agency missions and not easily shed. There is merit to this argument (the government is unlikely to vacate an FBI headquarters or a specialized lab it needs), but the risk is that some “office”-type facilities, even if government, could be downsized or take longer to backfill if vacated. Investors should monitor upcoming lease expirations: Easterly’s portfolio had a weighted average remaining lease term of ~10 years as of mid-2024 (
), meaning few leases expire in the immediate term. That long lease term mitigates near-term renewal risk, but any lease that does expire in the next year will be in focus. Bottom line: The risk of non-renewal is low in probability but high in impact. Should an important tenant (say, a large agency lease) decide not to renew or to consolidate space, Easterly could see a dip in occupancy (currently very high at ~97% (
Easterly Government Properties Q4 2024 Earnings Results & Analysis ...
)) and lost income until a new tenant is found.
· Government Credit and Budget Risk: One advantage of Easterly’s strategy is that tenant credit risk is minimal – the U.S. federal government (and to a lesser extent state agencies) represent 93% of Easterly’s annual rent (
Easterly Government Properties Q4 2024 Earnings Results & Analysis ...
), and Uncle Sam is as creditworthy as it gets. That said, there are a couple of subtler risks related to government finances. First, during government shutdowns or budget stalemates, some agencies might delay lease decisions or renewals. While rent is still paid (leases are legal obligations), a dysfunction in Washington could slow Easterly’s growth (e.g. fewer new leasing opportunities or delays in getting new leases approved by the GSA). Second, there’s appropriation risk: most federal leases have a clause that payments are subject to appropriations by Congress. In an extreme scenario (like a prolonged shutdown or debt ceiling crisis), payments could be temporarily deferred. However, historically even during shutdowns, GSA rent payments have continued or caught up, and the federal government has never actually defaulted on a lease obligation. Another aspect is state government tenants(a small portion of Easterly’s portfolio) – state budgets can be strained in recessions, but again, default risk is very low. More pertinent is the “political risk” that an administration or Congress prioritizes cutting real estate costs (as we see with DOGE). This is more of a policy risk than credit risk: Easterly might find fewer growth opportunities if the government shrinks its leased footprint. In summary, credit risk is negligible (rents are about as safe as they come) (
Easterly Government Stock: Shares of 10%-Yielder Pop on Solid Q4 Results
), but policy and budgeting trends pose a risk to growth and occupancy.
· Interest Rate and Financing Risk: Like all REITs, Easterly is sensitive to interest rate movements. Higher interest rates impact the company in several ways:
Cost of Debt: Easterly carries about $1.4 billion of debt (
). As of mid-2024, the weighted average interest rate was 4.4% (
), but this is rising as older debt is refinanced at current rates. In May 2024, Easterly issued $200 million of new senior unsecured notes at a 6.56% interest rate (9-year term) (
), locking in a considerably higher rate than its average. While prudent to secure financing, this will increase interest expense. The company also refinanced its revolving credit facility in 2024, now paying a spread of 1.35% over SOFR (so currently around ~6% including SOFR) (
). As a result, interest expense is set to rise, which could modestly squeeze FFO in 2025 unless offset by new income. If rates rise further or if Easterly needed to issue additional debt, borrowing costs could climb more. However, Easterly has managed its balance sheet conservatively: it has an investment grade credit rating (BBB stable) (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
), a debt-to-EBITDA of ~6.9x and net debt ~50% of enterprise value (
), which are reasonable leverage metrics. It also staggered its maturities (~4.9 years average term) (
), reducing near-term refinancing pressure. Still, higher-for-longer interest rates will limit FFO growth and make maintaining the dividend more challenging (since new investments must yield above the higher cost of capital to be accretive).
Investor Demand and Valuation: Rising interest rates generally make income-focused investors demand higher dividend yields from REITs, putting downward pressure on REIT stock prices. This has already been seen: as 10-year Treasury yields jumped in 2022–2023, Easterly’s stock (like many REITs) fell to keep its yield competitive. If rates remain high or climb further, REITs may continue trading at depressed multiples. Conversely, if there are signs that the Fed will cut rates (perhaps later in 2025), income REITs like DEA could see renewed investor interest and a valuation uplift. For now, this interest-rate overhang is a key risk – it’s an external factor largely outside the company’s control.
Dilution and Access to Capital: Easterly’s growth strategy relies on raising capital (debt or equity) to acquire new properties. In a high-rate environment, debt is costly and issuing equity when the stock price is low is dilutive. The company has utilized at-the-market (ATM) equity issuances in small doses (issuing ~2.27 million shares in Q4 2024 at ~$12.38 (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
) and smaller amounts earlier in 2024 (
)) to fund acquisitions. If the stock stays low, large equity raises would be unfavorable, potentially slowing growth plans. The upside of Easterly’s stable cash flows is that it can afford to be patient – it doesn’t need to issue equity urgently and has liquidity (over $400M credit capacity (
)) – but prolonged capital markets tightness could weigh on expansion.
· Concentration and Asset-Type Risks: Although Easterly’s portfolio is diversified across 100 properties and various agencies, it is concentrated by sector (government office). Over half of its annual rent comes from office-type facilities (even if mission-critical) (
Investor November Presentation - Easterly Government Properties
). Office real estate in general is under pressure from work-from-home trends and high vacancy in private sector buildings. While Easterly’s “office” is not typical CBD corporate office (it includes FBI buildings, etc.), there is still a risk that the market will treat it like an office REIT and assign it a low valuation. If one of its top tenants (e.g., FBI, IRS, DEA, or other agencies – possibly FBI is around 13% of rent, VA around 9%, etc. per recent data) decided to consolidate, that single decision could impact a notable portion of Easterly’s income. Geographic concentration is also a consideration: many properties are in the D.C. area and other federal hubs. Changes in those local markets or policies affecting specific regions (e.g., base closures or agency relocations) could pose risks. However, Easterly does have a nationwide footprint and no single property represents an outsized portion of value.
· Policy and Second-Order Macro Effects: Beyond interest rates, other macro factors could influence Easterly:
Inflation: Many of Easterly’s leases likely have inflation escalators (though federal leases often have modest fixed bumps or tied to CPI for operating cost reimbursements). If inflation remains elevated, operating expenses (maintenance, property taxes, utilities) could rise. Easterly can pass some through to tenants, but not all – meaning real estate expense inflation could compress margins slightly. The flipside is that high inflation often leads to higher rent escalations in new leases.
Economic Downturn: In a recession, Easterly’s rent collection would likely remain solid (government doesn’t default), but the availability of new projects or expansion opportunities might dwindle. Private sector demand for any surplus space would also weaken. Easterly’s defensive nature means it would likely outperform most REITs in a downturn, but its growth could stall.
Regulatory/Tax Changes: As a REIT, Easterly enjoys certain tax advantages. Any major tax reform that impacts REIT rules or corporate taxes could indirectly affect its attractiveness, though no such change is currently anticipated in the one-year horizon.
In summary, Easterly’s risk profile is defined by very low direct credit risk but notable policy and financial risks. The most important factors to watch in the next year are government leasing policies (e.g., outcomes of the DOGE efficiency efforts) and the interest rate environment. Mitigants to these risks include the company’s long lease terms, high occupancy, internal management with specialized expertise, and a solid balance sheet. Indeed, Easterly’s management has been proactive – for example, engaging with policymakers about GSA reforms (
) (
) to streamline leases, and broadening the portfolio slightly (adding some state and private contractor tenants) to diversify. The first-order riskis clearly that one or more major leases are lost or downsized; the second-order risk is that even if operations are fine, the market valuesEasterly cheaply due to external factors. Investors should weigh these risks against the reliability of Easterly’s cash flows. At the current stock price, much of these risks seem to be priced in (hence the high yield) – if none of the major risks manifest in the next year, the stock could do well.
4. Deeper Dive on Imminent Risk: a. DOGE Lease Cancellations (Impact on
)
Yes – the Department of Government Efficiency (DOGE) has terminated certain federal leases that include Easterly’s properties. In early 2025, DOGE announced it had canceled 22 underutilized federal office leases(about 2.3 million sq. ft., saving $145 million)
. Among these were three leases used by the Office of Personnel Management (OPM) in Butler County, Pennsylvania (locations in Boyers and East Butler)
. Those three OPM leases, now canceled, represented roughly $0.75 million in annual rent that Easterly will lose
. Given Easterly’s total annualized rent base (around $250 million), this is only ~0.3% of portfolio revenue, a modest impact. Crucially, DOGE is targeting underutilized offices – Easterly’s “mission-critical” facilities (FBI, DEA, VA, etc.) have not been abruptly canceled
. In fact, Easterly’s CEO noted that key agencies like the FBI or DoD are not giving up needed space despite the DOGE mandate
. Thus, while Easterly did see a few OPM lease terminations from DOGE’s cuts, the direct income hit is minor (under 1% of revenue) and core federal tenants remain intact, preserving the stability of Easterly’s cash flows.
Sources:DOGE lease termination announcement
; Butler County OPM leases canceled (Butler Eagle)
; Expert commentary on mission-critical leases (Institutional Investor)
.
b. Lease Expirations in 2025 and 2026
Easterly has minimal lease rollover in the next two years. As of year-end 2024, the company’s portfolio (100 properties, ~9.7 million sq. ft.) has about 4 leases expiring in 2025 and 3 leases in 2026
. This equates to roughly 4–5% of total portfolio square footage up for renewal in 2025, and only about 3% in 2026. Management has indicated that, on average, only ~5% of its leases roll over each year
, reflecting a long weighted-average lease term. In terms of portfolio percentage by rent, the 2025 expirations are only a mid-single-digit percent of annual rent, and 2026 expirations an even smaller share.
Renewal Likelihood: Easterly’s historical retention is very high given its focus on mission-critical government facilities. About 95% of the portfolio is under firm-term leases at any time (i.e. not yet up for renewal)
, and the company regularly secures extensions on expiring leases. For example, Easterly just renewed a 33,000 sq. ft. U.S. Army Corps of Engineers lease in Portland for a new firm term
, underscoring tenants’ tendency to stay. Management expects most 2025–2026 expirations to renew or extend, especially those serving essential functions. Easterly’s CEO even noted that many tenant agencies “aren’t going anywhere”despite DOGE, since their space is mission-critical
.
That said, Easterly is pragmatic about a couple of specific cases. One notable 2025 expiration is an FAA office in Chicago, which the GSA is not expected to renew. Easterly acquired that building at a high cap rate and has already planned to sell it after the lease expires
rather than attempt to re-lease it, because the FAA will relocate to a new government-owned facility. This is an exception; most other near-term expirations (e.g. FBI field offices, VA clinics, DEA labs) are likely to be renewed given their critical nature and lack of alternative space. Management’s guidance and track record indicate strong renewal probabilitiesfor the bulk of 2025–26 lease expirations, with only isolated cases (like the FAA site) potentially going dark. In summary, 2025 expirations (~4 leases, ~5% of SF) and 2026 (~3 leases, ~3% of SF) are a small portion of Easterly’s portfolio, and historically almost all have been renewed, barring those where the agency consolidates or relocates (for which Easterly has contingency plans
).
Sources:Institutional Investor (lease rollover ~5%/yr)
; Butler Eagle (OPM lease cuts ~3 leases)
; Earnings call (95% firm-term occupancy)
and recent renewal example
; Earnings call Q&A (FAA Chicago lease disposition plan)
.
c. Debt Refinancing Needs (2025–2026)
Easterly’s near-term debt maturities are fairly limited in size, and the company has been proactive in addressing them. According to filings, Easterly must refinance about $22 million of debt in 2025 and roughly $160 million in 2026
. In total, that’s ~$182 million coming due through 2026. For context, Easterly’s total debt is about $1.21 billion
, so the 2025 maturity is a trivial ~1.8% of debt outstanding, and 2026 is about 13% of total debt. The 2025 maturity (~$22 M) is likely a small secured mortgage or note on one property (possibly the OPM facility or another asset) – a relatively minor, secured loan in the capital stack. The larger 2026 maturity (~$160 M) corresponds to Easterly’s 2018 unsecured term loan(which carried a 3.91% interest rate and was set to mature in July 2026)
. This $160 M is an unsecured term facilitywith a bank group. Easterly has no public bond due in 2026, and its revolver now extends well beyond that (more on that below). In short, the only significant refinancing need before 2027 is ~$160 M due in mid-2026, plus a very small 2025 note.
Refinancing as % of Portfolio: The $160 M due in 2026 is manageable relative to Easterly’s balance sheet – about 13% of total debt and ~10% of gross assets. By 2026, Easterly’s EBITDA is expected to be ~$130–140 M, so refinancing $160 M (even at higher rates) shouldn’t strain coverage ratios. The company’s debt-to-equity stands at 1.07 (D/E ~107%)
, indicating moderate leverage and capacity to refinance. Easterly also preemptively tackled its January 2025 maturity: it amended and extended a $100 M unsecured term loan that was originally due Jan 2025 out to Jan 2028
. This eliminated what would have been the biggest 2025 maturity, leaving only the $22 M residual in that year.
Risks of 2025–26 Maturities: Given Easterly’s steps, refinancing risk is modest. The $22 M in 2025 is so small that it can likely be repaid with available cash or rolled easily. The key focus is the $160 M in 2026: the risk here is interest rate and credit market conditions at that time. If interest rates remain high or credit markets tight, Easterly may face a higher cost of debt on that $160 M. For example, the 2018 loan being refinanced carried ~3.9% (swap-adjusted) interest; a refinance in 2026 might be in the 6%+ range, raising interest expense. However, Easterly’s overall impact would be limited (a ~$160 M refinancing at +200 bps higher rate = only ~$3.2 M extra interest annually). There’s little risk of non-refinancing; Easterly maintains an investment-grade credit rating (BBB)and has multiple financing options. Another risk could be covenants: if DOGE-driven vacancies or a government shutdown impacted Easterly’s income, it could tighten debt service coverage. But Easterly’s leases are long-term and backed by the U.S. government, so lenders view its cash flows as very secure. Finally, Easterly has minimal secured debt exposure, so there’s virtually no risk of losing properties to lendersin 2025–26 – nearly all debt is unsecured corporate borrowing. In summary, Easterly faces only 2% of debt maturing in 2025 and ~13% in 2026
, and it has already addressed much of it. The company’s early refinancing moves and strong credit profile mitigate the risk of these upcoming maturities, with the main consequence likely being a bump in interest cost rather than any liquidity crunch.
Sources:Easterly 10-K debt maturity schedule
; Easterly press release on extending the $100 M term loan to 2028
; MarketBeat (debt/equity ratio)
; O’Melveny release (original loan maturities)
.
d. Refinancing Flexibility and Liquidity
Callability of Debt: The majority of Easterly’s debt is in floating-rate bank facilities that can be prepaid or refinanced at will. Its $400 M revolving credit facility and bank term loans have no significant prepayment penalties, meaning Easterly can refinance or pay them down anytime if it’s advantageous
. For instance, the $160 M term loan due 2026 could be refinanced early or even replaced with bond debt if rates improve, since it’s an unsecured loan with typical prepay flexibility. In contrast, Easterly’s fixed-rate long-term debt is less flexible. In mid-2024, the company issued $200 M of 9-year senior unsecured notes at 6.56%interest
. These notes are not freely callable in the near term(they likely have a make-whole provision until shortly before their 2033 maturity). Thus, if interest rates fall significantly in 2025–2026, Easterly cannot immediately “call” and refinance that 6.56% debt without incurring a penalty. However, that $200 M fixed note is only about one-sixth of Easterly’s total debt; the other ~84% of debt (bank loans and revolver) is effectively callable or floating. In short, Easterly has the flexibility to refinance the bulk of its debt quickly if rates decline, through either repricing its term loans or drawing on its revolver to retire other loans. Only its recently issued bond-like notes are locked in at a fixed rate for now (which is a benefit if rates rise further, but a slight constraint if rates fall).
Ability to Act on Lower Rates: Yes – Easterly can act nimbly. The company has indicated it “maintains a staggered and extended debt maturity profile”
specifically to avoid being stuck. Its term loans are typically swapped to fixed (for stability)
but can be refinanced or paid down with minimal friction. If market interest rates drop, Easterly could potentially reprice its swaps or refinance its bank facilities at lower spreads relatively quickly. Additionally, Easterly’s $400 M revolving line gives it interim flexibility: it can temporarily use the revolver (at a variable rate) to pay off higher-cost debt, then later issue longer-term debt under more favorable conditions to pay down the revolver. Essentially, the company’s debt structure is designed to be agile – short-term debt can adjust with rates, and long-term debt is laddered so that a chunk can be refinanced each cycle. The new 9-year notes at 6.56% were done to lock in long-term capital, but Easterly deliberately kept the size modest ($200 M) to maintain flexibility
.
Current Liquidity Position: Easterly enters 2025 with a very strong liquidity cushion. The company recently executed a new $400 M senior unsecured revolving credit facility (with a $250 M accordion expansion option) that matures in June 2028
. This revolver replaced the prior facility (which would have expired in 2025) and extends Easterly’s access to low-cost capital. At year-end 2024, Easterly had substantial undrawn capacity on this revolver– the previous revolver was largely paid down using proceeds from the $200 M note issuance in 2024. We also note Easterly’s current ratio is 4.01
, indicating current assets (mainly cash and receivables) are 4× current liabilities. This implies Easterly likely has a considerable cash balance (tens of millions of dollars) on hand. Even if we conservatively assume ~$50–100 M of cash, plus ~$400 M of credit line availability, the company has liquidity on the order of $450+ M available. That is far more than neededto cover the $22 M 2025 and $160 M 2026 debt maturities, as well as to fund any ongoing development or acquisition commitments.
In addition, Easterly’s strong relationship with lenders suggests it could tap additional debt if needed. The new revolver’s $250 M accordion feature allows Easterly to upssize the line to $650 M total with lender consent
, providing an extra buffer. The company’s interest coverage and fixed-charge coverage ratios remain healthy (FFO comfortably covers interest and dividends), which keeps this liquidity intact. Overall, Easterly has ample flexibility to refinance or repay debt early thanks to its unsecured, callable debt structure, and it has no shortage of liquidity (cash + a largely untapped $400 M credit facility). This positions the company to wait for optimal market conditions– if interest rates decline, Easterly is well-prepared to refinance portions of its debt stack immediately to capture savings. And if rates stay high, Easterly can ride through 2025–2026 without distress, since it has already termed-out most obligations into later years
. The bottom line is that Easterly’s balance sheet is liquid and flexible, giving management the tools to manage interest costs and debt maturities proactively.
5. SEC Filings Analysis (Last 18 Months)
An examination of Easterly’s SEC filings and disclosures over the past 18 months (mid-2023 through early 2025) reveals several notable corporate decisions and developments that could impact the stock:
· Leadership Transition:Easterly underwent a planned CEO succession at the start of 2024. Long-time CEO William C. Trimble III retired effective Dec 31, 2023, and Co-Founder/Chairman Darrell Crate assumed the CEO role on Jan 1, 2024 (
). This was accompanied by other internal promotions: CFO & COO Meghan Baivier became President & COO, and Chief Accounting Officer Allison Marino was elevated to CFO (
). The transition appears smooth – Crate has been with Easterly since its inception and is deeply familiar with its mission (
). The Board explicitly stated this succession keeps the company aligned with its “foundational mission and values” (
). Implication:Continuity in strategy (focus on mission-critical government properties) is expected. The new CEO’s recent commentary emphasizes public-private partnership and potentially an expanded vision (Crate has hinted at growth opportunities amid government efficiency drives). Investors should not anticipate a drastic strategic shift, but fresh leadership could bring a slight change in emphasis (indeed, in 2024 Easterly started acquiring properties leased to government contractorsand state agencies, which may be an initiative under Crate to expand beyond purely federal leases (
)). Overall, the management change does not raise concern; if anything, it signals confidence in internal talent and could reinvigorate the company’s outreach and policy engagement (Crate has been vocal about working with DOGE/GSA reforms).
· Acquisitions and Portfolio Moves: Easterly remained active in acquisitions over the last 18 months, though with a careful approach. In 2024, the company acquired 10 properties totaling ~$230 million (on a pro rata basis, including joint ventures) (
). Notable deals (from 8-Ks and press releases) include:
Northrop Grumman – Aurora: A 104,000 sq ft mission-critical office fully leased to defense contractor Northrop Grumman (BBB+ rated) in Colorado (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
).
IRS – Ogden: A 100,000 sq ft secure facility occupied by the IRS in Utah (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
).
ICE – Dallas: A 135,200 sq ft facility primarily leased to U.S. Immigration and Customs Enforcement (Office of CIO and HR) near Dallas, TX (
).
Wake County (NC) School Campus: ~295,000 sq ft across three buildings leased mostly to a high-credit county public school system (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
).
Additionally, Easterly acquired land and commenced development for a 50,777 sq ft federal courthouse in Flagstaff, AZ (20-year lease pre-awarded) (
), and continued a re-development in Atlanta for an FDA-use facility (20-year lease) (
).
These acquisitions show two strategic threads: one, continuing to buy federal agency-leased assets (IRS, ICE) to grow core portfolio; two, expanding into high-credit adjacencies – i.e., properties leased to entities that serve government functions (defense contractors, state/local government agencies). Management noted this as an expanded investment strategy to include private sector government contractors (
). Importantly, these moves slightly diversify the tenant base (by end of 2024, Easterly had 92 federal, 4 state, and 3 private-tenant properties (
)). Investors may view this positively, as it opens a larger market for Easterly (not solely GSA leases) while still leveraging their expertise in mission-oriented facilities. None of the acquisitions individually are transformational in size, but collectively they contribute to modest FFO growth. Implication:Easterly is finding ways to grow despite a challenging market, and these buys were likely funded in a leverage-neutral way (mix of ATM equity and debt). So far, the properties acquired align with Easterly’s low-risk profile and long lease terms, which should support stable future cash flows.
· Disposition:There were no major dispositions announced in the last 18 months (earlier, in late 2022, Easterly completed a sale of a 10-property portfolio as part of capital recycling, but within 2024 none were highlighted). The absence of recent sales suggests Easterly is largely in acquisition mode, not shrinking. It’s holding onto its assets – a sign that management still likes the long-term value of the portfolio.
· Capital Markets Activities: Easterly undertook several financing actions:
In May 2024, the company entered a note purchase agreement to issue $200 million of senior unsecured notes at 6.56% interest (
). Tranche A ($150M) was issued immediately (May 29, 2024) and Tranche B ($50M) in August 2024 (
). These notes mature in 2033, effectively locking in fixed-rate debt for 9 years. This was a significant move to term out debt at a known rate, likely anticipating rising rates and ensuring liquidity for acquisitions. While 6.56% is higher than past debt, securing long-term financing in a volatile market was prudent.
In June 2024, Easterly executed a new $400 million revolving credit facility (replacing the prior revolver) maturing 2028, with two 6-month extensions possible (
). The revolver has an accordion feature up to $700M (
). This gives Easterly ample short-term liquidity. The interest on the revolver is SOFR + 1.20% to 1.80% (initially 1.35% over SOFR given current leverage) (
). This improves Easterly’s financial flexibility and extends its debt maturities.
Easterly has been tapping its ATM equity program to raise equity in small increments at opportunistic times. Through 2024, it issued roughly 5.49 million shares via forward ATM deals that were settled during the year (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
). Notably, in Q4 2024 it settled 2.27M shares at ~$12.38 for net $28.1M (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
), and earlier in 2024 it had issued ~590k shares at ~$13.40 for $7.9M (
). These issuances are relatively small (together, about 6% of the outstanding share count), and were done at prices not far from book value. Implication: Management is using ATM equity as a tool to fund acquisitions while trying to minimize dilution (issuing in small chunks when the price was a bit higher mid-year). The fact that they raised equity suggests they are finding accretive deals (they wouldn’t issue stock at ~8% dividend yield unless the acquisitions were at higher cap rates or strategic). This is something to watch – if the stock stays low, future acquisition-driven equity could pressure the share price. However, Easterly’s approach appears disciplined.
Easterly also filed a shelf registration (Form S-3) in Feb 2024 to replace its prior shelf (
), which simply keeps the option open to issue various securities (equity, debt, etc.) swiftly if needed. This is standard for a REIT and doesn’t indicate any immediate plan, but it’s part of prudent capital planning.
· Operational Performance and Guidance: The company’s quarterly earnings 8-Ks show stable operations. For example, Q3 2024 Core FFO was $0.29/share and full-year 2024 came in at $1.17/share (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
), which was the upper end of management’s guidance(they had raised guidance mid-year to $1.15–$1.17 (
), and achieved the high end). This indicates Easterly slightly outperformed expectations, thanks to acquisitions and high occupancy. Occupancy has consistently been in the high-90s% (around 97% as cited) (
Easterly Government Properties Q4 2024 Earnings Results & Analysis ...
), and rent collections remained 100%. The filings also mention Easterly got an investment-grade rating (BBB) in 2024 (
Easterly Government Properties Reports Fourth Quarter 2024 Results | Business Wire
), which is a vote of confidence in its financial health. As of the latest guidance (early 2025), Easterly expects 2025 Core FFO of $1.18–$1.21 (
Easterly Government Properties reports Q4 core FFO 29c, consensus 30c
), essentially flat to slightly up from 2024, implying cautious growth (likely factoring in higher interest costs). No red flags were noted in 8-Ks like impairments or major tenant issues – in fact, the tone of filings is that Easterly’s portfolio is performing as intended.
· Notable 8-K Disclosures: Aside from routine earnings releases, the 8-K on September 13, 2024 (if any) might have been for an investor day or an interim update, but the major events have been covered: CEO change (announced via press release and likely an 8-K in Dec 2023), debt issuance, and credit facility (announced in 8-Ks around May/June 2024), and possibly the announcement of the Flagstaff courthouse project (which was a lease award mentioned in Q1 2024 press). Another interesting tidbit: Easterly’s CEO and team have been publicly discussing the GSA reform and DOGEimpacts. In a February 2025 statement (after Q4), they emphasized alignment with the DOGE effort and suggested specific GSA process reforms (
) (
). While not an SEC filing per se, it shows management is actively engaging with their largest tenant’s decision-makers – a positive sign that they are on top of policy trends.
In summary, the last 18 months of filings paint a picture of steady stewardship: Easterly navigated a CEO transition, continued to grow its portfolio with strategic acquisitions, and shored up its balance sheet – all while maintaining high occupancy and meeting guidance. No negative surprises emerged in filings; if anything, the actions taken (debt refinancing, small equity raises, internal promotions) were preventative and positioning moves. For investors, the takeaways are that management is proactive and shareholder-oriented (for example, keeping the dividend intact through turbulence, and not over-leveraging). The company appears to be positioning itself to weather the government space reductions (by focusing on mission-critical assets and even advising on GSA reforms) and to capitalize on opportunities (having dry powder via its revolver and shelf). These corporate decisions collectively strengthen the investment case by reducing financial risk and modestly expanding Easterly’s growth avenues.
6. Comparative Analysis
Peer Group: Easterly Government Properties operates in a niche corner of the REIT universe – primarily government-leased commercial properties. There are only a few direct peers, and broader comparisons must include office REITs and specialty net-lease REITs:
One comparable company was Government Properties Income Trust (GOV), which in 2018 merged into Office Properties Income Trust (OPI). OPI is an externally managed REIT that also owns buildings leased to government agencies (among other tenants).
Another is Postal Realty Trust (PSTL), a smaller REIT that focuses on properties leased to the U.S. Postal Service (a quasi-government entity).
We can also compare Easterly’s performance to broad Office REIT indices and to the overall REIT market (for context on relative performance).
Performance vs. Office REITs: Traditional office REITs have struggled in recent years due to high vacancies and work-from-home trends. By contrast, Easterly’s tenant profile and occupancy far outshine typical office REITs. In Q3 2024, the average office REIT occupancy was ~86% (
Office REITs: High Quality Properties Attract & Retain Tenants, Outpace ...
), whereas Easterly’s occupancy is ~97% (
Easterly Government Properties Q4 2024 Earnings Results & Analysis ...
) thanks to long-term government leases. This fundamental difference has led Easterly to outperform many office REITs in stability, though not necessarily in stock returns during short-term swings. Interestingly, 2024 saw a rebound in beaten-down office REIT stocks – the Nareit Office Index had a total return of ~21.5% in 2024 (
Office REITs: High Quality Properties Attract & Retain Tenants, Outpace ...
) (after a terrible 2022–2023). These gains were driven by deeply discounted names (some NYC office landlords doubled off lows, etc.). Easterly, being more stable, did not drop as precipitously earlier, and thus its 2024 stock return was more muted: Easterly’s total return was roughly flat to slightly positive in 2024 (–7.9% price change (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
) plus ~9% dividends = approx +1%). In other words, it lagged the big bounce that high-beta office peers experienced in 2024. However, on a multi-year basis, Easterly has held up far better. For example, OPI (the peer with government leases) is in severe distress – its stock collapsed in 2023 after a dividend suspension, leaving it with a market cap of only ~$60 million (share price under $1) (
Easterly Government Properties, Inc. (DEA) - Yahoo Finance
). Easterly, with a market cap around $1.2–1.3 billion, is an entirely different caliber of company in terms of financial health. Where OPI had to cut its dividend to zero, Easterly maintained its payout. This highlights Easterly’s conservative management and stronger balance sheet versus an externally-managed peer. In short, Easterly provides exposure to office-like assets without the balance sheet and tenant risks that have pummeled the office REIT sector.
Comparison to Postal Realty Trust (PSTL): PSTL is an interesting peer because it’s also government-focused (all leases with USPS) but in smaller properties. PSTL has been growing via acquisition and has increased its dividend for seven consecutive years (
Postal Realty Trust - Postal Realty Trust, Inc. Reports Fourth Quarter ...
), though its yield (currently ~6–7%) is lower than Easterly’s ~9%. PSTL’s 2024 performance was solid – it grew AFFO ~20% and the stock was up ~13% at one point (
Why Postal Realty Trust, Inc.’s (PSTL) Stock Is Up 13.04%
). PSTL’s cap rates on acquisitions (~7.5–7.6%) (
Postal Realty Trust, Inc. Reports Fourth Quarter and Year End 2024 Results
)are similar to or a bit lower than what Easterly likely targets, reflecting the strong competition for high-credit properties. Easterly’s higher yield suggests the market assigns it a higher risk or lower growth than PSTL. Likely reasons: PSTL’s leases are shorter (but more granular) and it has demonstrated growth, whereas Easterly’s leases are long and the dividend static. Investor profile differs too – PSTL is small-cap and appeals to growth-oriented income investors; Easterly is mid-cap and appeals to those prioritizing stability and current income. If we compare performance, over the last year Easterly and PSTL had similar total returns (low single-digit percentages) but PSTL achieved it more via price increase (and smaller yield), whereas Easterly’s return was mostly dividend. Both significantly outperformed the most troubled office REITs.
Relative to Broad REIT Benchmarks: Against a broad real estate index like the FTSE Nareit All Equity REITs, which returned +4.9% in 2024 (
Office REITs: High Quality Properties Attract & Retain Tenants, Outpace ...
), Easterly was a slight underperformer in 2024 (as noted ~+1% total). However, consider 2022–2023 together: Easterly’s two-year total return was roughly flat (it fell –34% in 2022 (
Easterly Government Properties - 10 Year Stock Price History | DEA | MacroTrends
), then recovered +~12% total in 2023 including dividends), whereas the REIT index was down in 2022 and only modestly up in 2023. So Easterly tracked the REIT market, with the caveat that it has a higher yield to cushion declines. Volatility-wise, Easterly’s stock tends to be less volatile than equity REITs overall – its rolling volatility ~7.5% was higher than a diversified ETF like SCHD (~3.5%) but far lower than many office/retail REITs (
DEA vs. SCHD — ETF comparison tool | PortfoliosLab
). This places it in a middle ground: lower risk than typical equity REITs that have more cyclical exposure (hotels, retail, etc.), but a bit higher volatility than utility-like REIT sectors (e.g. ground leases or net lease to investment grade tenants) due to the office element.
In terms of valuation metrics, Easterly trades at a low FFO multiple relative to the REIT average. With ~$1.18 FFO guidance for 2025 and a price ~$11-12, the P/FFO is ~9-10x, which is cheap compared to the REIT sector median (often mid-teens). Some of that discount is sector-driven (office REITs trade at single-digit FFO multiples currently), and some is due to its small size and lack of growth. But it suggests upside if the market were to re-rate its stable cash flows closer to, say, a net-lease REIT multiple. Dividend yield comparison: Easterly’s ~9% yield is one of the highest among REITs of its quality. It’s higher than 75% of all dividend-paying stocks (
Easterly Government Properties (DEA) Dividend Yield 2025 & History
) and well above peers – for example, PSTL yields ~6%, net lease blue-chips like Realty Income (O) yield ~5%, and even other specialty REITs like data centers yield 3%. The only REITs yielding near 9-10% are typically mortgage REITs or troubled subsectors (office, some retail). That puts Easterly in a rare category of high-yield yet reasonably low-risk.
Operational comparison: Easterly’s tenant quality (U.S. Government) is unparalleled except for properties owned directly by the government or a handful of similar landlords. This means Easterly has virtually zero issues with rent collection or tenant default – a stark contrast to peers dealing with tenant bankruptcies (many office REITs have had tenants give back space). Also, Easterly’s average lease term (~10 years remaining) (
)is much longer than most office REITs (which often have 4-7 year average lease terms). This gives Easterly a bond-like characteristic relative to peers. On the other hand, peers can mark leases to market more frequently (which is a double-edged sword; in today’s market, that’s a negative). Easterly’s long leases often have built-in rent escalators (typically modest fixed increases or inflation-based adjustments), ensuring a predictable growth in rent. Peers like PSTL similarly have annual escalators (~3% in new leases PSTL signed) (
Postal Realty Trust - Postal Realty Trust, Inc. Reports Fourth Quarter ...
). The growth profile of Easterly is slower: single-digit percentage internal growth plus acquisitions. PSTL, being smaller, can grow faster via acquisitions (19% revenue growth in 2024 (
Postal Realty Trust, Inc. (PSTL) Stock Price, Quote & News
)). Meanwhile, diversified REIT indices include high-growth sectors like industrial and self-storage that grew FFO double-digits in recent years – Easterly cannot match that organic growth. Thus, on a relative basis, Easterly trades more like a bond – its value lies in steady income rather than high growth. Investors should compare it to, say, net lease REITs or bond proxies more than to high-growth REITs. In that light, a 9% yield is very attractive if one believes the income stream is as safe as it appears.
Summing up the comparison: Easterly is something of a unique REIT: it offers yield and safety similar to a triple-net REIT, but the market groups it with office REITs which carry a stigma right now. This misclassification might be an opportunity. Its direct peer, OPI, is a cautionary tale – OPI’s high leverage and external management led to catastrophe, whereas Easterly’s prudent approach kept it out of trouble (OPI’s stock down ~90%+ over 5 years vs Easterly roughly flat including dividends). Against peers, Easterly’s strengths are its tenant credit, long leases, and internal management; its weaknesses are its slower growth and office exposure. In a scenario of improving office sentiment or falling rates, Easterly could see a nice re-rating. In a worsening office scenario, Easterly should comparatively outperform peers (as it has better tenant retention and can even pick up properties from distressed sellers). For diversification, Easterly doesn’t closely follow the performance drivers of retail, residential, or tech-oriented REITs, so it provides a distinct element in a REIT portfolio – largely uncorrelated with consumer spending or housing, for example, and more tied to government spending and interest rates.
7. Final Conclusion
Risk-Reward Assessment: Considering the comprehensive analysis above, Easterly Government Properties (DEA) presents a compelling risk-to-reward profile for the coming year, particularly for income-oriented investors. The upside case is built on its stable 9% yield and the possibility of modest capital appreciation as the market recognizes the reliability of its government-backed cash flows. The downside appears limited by the stock’s current valuation (near multi-year lows) and the defensive nature of its portfolio. Key risks – mainly government space reduction initiatives and high interest rates – are real but seem largely priced in. Easterly’s management has proactively addressed these challenges (engaging with federal agencies, adjusting its portfolio mix, and strengthening the balance sheet), giving confidence that the dividend can be sustained and that occupancy will remain high.
At the current ~$11-12 share price, an investor is effectively getting a high yield underpinned by AAA-equivalent tenants (
Easterly Government Stock: Shares of 10%-Yielder Pop on Solid Q4 Results
) and long leases, with a free option on modest growth or multiple expansion if conditions improve. The reward side of the equation includes not only the nearly double-digit dividend yield but also the potential for ~15-30% stock price upside (for example, a return to the $13-$14 range, which is feasible if interest rate pressures ease or if Easterly executes accretive acquisitions). The risk side primarily would materialize if, say, a chunk of Easterly’s portfolio went dark due to government cuts or if a credit event forced distress – scenarios that appear low-probability given historical renewal behavior and Easterly’s conservative financial management. Short of those, the main risk is that the stock could languish and go nowhere (i.e., one collects the dividend but sees little price movement) if interest rates stay high and REITs remain out of favor. Even in that scenario, a ~9% total return (from dividends alone) is not a bad outcome in the current market – Easterly’s yield provides a considerable margin of safety.
Investment Recommendation: Weighing everything, Easterly looks attractive for investors with a 1-year horizon or longer who seek income with lower volatility. The risk-to-reward justifies an investment at the current price, in our view, as the company’s stable fundamentals and government-backed rents offer downside protection, while any abatement of headwinds could unlock upside. This is not a “shoot-the-lights-out” growth stock, but rather a solid income play with a potential kicker. A prudent approach might be to initiate a position at current levels (locking in the high yield) and be prepared to add on any dips toward support around $10-11, as long as the thesis (stable government tenancy) remains intact. Monitor developments like DOGE’s progress and interest rate trends – positive news on either front could be catalysts for DEA. Conversely, keep an eye on lease renewals and FFO payout ratio; if there were signs of strain (e.g., a significant lease not renewed or FFO guidance dipping below the dividend level), that would alter the risk calculus.
In conclusion, Easterly Government Properties offers a rare combination of bond-like safety and equity-like income. Over the next year, it is well-positioned to navigate its unique risks. Barring unforeseen shocks, the steady dividend and any modest price appreciation should deliver a favorable total return, making the risk/reward proposition tilt in favor of owning DEA at its current price. (
Easterly Government Properties (DEA) Dividend Yield 2025 & History