In This Article:
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Net Income Per Share: $0.07 on a fully diluted basis.
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Core FFO Per Share: $0.73 on a fully diluted basis.
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Cash Available for Distribution: $31.1 million.
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Dividend Yield: Approximately 8% after recent adjustments.
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Weighted Average Remaining Lease Term: 9.8 years.
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Lease Income in Firm Term: Over 95%.
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Debt Capacity Increase: Additional $125 million raised in the private placement market.
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Full Year Core FFO Per Share Guidance for 2025: Raised to a range of $2.98 to $3.03.
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Expected Core FFO Per Share Growth for 2025: Estimated 2% to 3%.
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Recent Acquisitions: $120 million closed with an additional $20 million expected.
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Development Investment for 2025: $25 million to $75 million projected.
Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Easterly Government Properties Inc (NYSE:DEA) implemented key changes to its capital allocation strategy, including a reduction of the quarterly dividend and a reverse stock split, to create more flexibility for growth.
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The company announced two highly accretive additions to its portfolio: a federal courthouse facility in Medford, Oregon, and a facility leased to the District of Columbia government, both under long-term leases.
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Easterly is well-positioned to benefit from the DOGE initiative, which is shifting the government's real estate strategy towards more flexible leased models.
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The company reported strong financial results for the first quarter of 2025, with net income per share of $0.07 and core FFO per share of $0.73, meeting consensus expectations.
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Easterly has a robust pipeline of opportunities, with $1.5 million in potential projects, and is focused on long-term growth and value creation for shareholders.
Negative Points
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Easterly Government Properties Inc (NYSE:DEA) reduced its quarterly dividend, which may not be well-received by income-focused investors.
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The company faces challenges in the capital markets, as its dividend was not being valued at a premium, leading to a reset of its dividend policy.
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There is ongoing uncertainty related to the DOGE initiative, which could impact the company's leasing strategy and government relationships.
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Easterly's cost of equity is not as favorable as its cost of debt, which may affect its ability to fund future acquisitions and developments.
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The company is navigating a complex market environment, with potential risks related to government lease renewals and the broader economic landscape.
Q & A Highlights
Q: Can you discuss the economics of the recent acquisition and development projects, specifically the cap rate or unlevered IRR? A: Allison Marino, CFO: The DC acquisition cost approximately $120 million, acquired at a high 9% cap rate, providing a 100 basis point premium to our cost of capital. For the Medford development, we're in early design stages, but we aim for a 150 basis point spread to our cost of capital on a yield basis.