Easterly Government Properties, Inc.

For the second quarter of 2026, revenue was $92.4 million versus $84.2 million in Q2 2025, up 10% year over year. EBITDA was $58.4 million versus $54.3 million, up about 8%. Net income was $0.07 per share on a fully diluted basis. FFO per share was $0.78 versus $0.74 last year, and core FFO per share was also $0.78 versus $0.74, roughly 5% growth year over year; core FFO per share growth was described as 5.4%. Cash available for distribution was approximately $25.8 million. The company raised full-year core FFO per share guidance by $0.01 at the midpoint to $3.10, with a revised range of $3.07 to $3.13. At the midpoint, guidance assumes $50 million to $100 million of gross development-related investment and $50 million in wholly-owned acquisitions.

Darrell Crate emphasized that the business continues to perform steadily despite a tough interest-rate backdrop, with mission-critical government-leased assets and long-duration cash flows differentiating Easterly from traditional office REITs. He highlighted 98% occupancy, a 9.2-year weighted average lease term, a $1.5 billion pipeline, and improving stock performance as the key ingredients for future accretive growth. His tone was upbeat and confident, repeatedly framing the company as early in unlocking embedded value and saying the firm is positioned to keep compounding earnings and possibly step up growth if ratings improve.

Allison Marino focused on the financial bridge from revenue to earnings and the balance sheet. She cited Q2 revenue of $92.4 million, EBITDA of $58.4 million, net income of $0.07 per share, FFO per share and core FFO per share of $0.78, and cash available for distribution of about $25.8 million. She also said net debt to annualized quarterly EBITDA was 7.3x, down from Q1, and explained that the company closed a new $200 million 5-year term loan with a $50 million accordion and an initial spread of 130 basis points over SOFR, using proceeds to pay down the revolver and boost liquidity. She reiterated a full-year maintenance CapEx plan of $1.50 to $2 a square foot and said the raised guidance reflects confidence in the portfolio and capital markets execution.

Analysts focused on when Easterly can start converting its pipeline, what the mix will be between acquisitions, development, and mezzanine financing, and whether equity will be needed. Management said the company is approaching a point where deals can be done at roughly a 100 basis point premium to cost of capital, with the mezzanine program still targeted at $30 million to $50 million and additional activity expected as VA-related opportunities come through. They also said equity is mainly matched to acquisition capital, that development deliveries should help deleverage without needing more equity, and that refinancing the $127.5 million Loma Linda mortgage would ideally happen through an investment-grade issuance, though the revolver is available as a backstop. On lease risk, they said the FAA tenant will stay through at least the end of October and that no added revenue should be assumed yet.