In This Article:
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Net Income Per Share (Q4 2024): $0.05 on a fully diluted basis.
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Core FFO Per Share (Q4 2024): $0.29, a 3% year-over-year growth.
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Cash Available for Distribution (Q4 2024): $25.1 million.
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Net Income Per Share (Full Year 2024): $0.19 on a fully diluted basis.
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Core FFO (Full Year 2024): $1.17, meeting the upper end of raised guidance.
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Cash Available for Distribution (Full Year 2024): $100.9 million.
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Weighted Average Remaining Lease Term: 10 years, with 8.6 years excluding soft term leases.
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Lease Renewal Rent Spread: Anticipated 16% increase, with $41.55 per square foot of TI utilized.
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Core FFO Guidance for 2025: Raised to $1.18 to $1.21 on a fully diluted basis.
Release Date: February 25, 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) reported a 3% year-over-year growth in core funds from operations (FFO) per share, reaching $0.29 for the fourth quarter.
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The company successfully closed 10 new assets in 2024, expanding its portfolio and total addressable market.
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Easterly Government Properties Inc (NYSE:DEA) has a strong pipeline of acquisition and development opportunities, positioning it well for future growth.
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The company has extended the maturity date of its $100 million senior unsecured term loan to 2028, with options to extend further, enhancing financial flexibility.
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Easterly Government Properties Inc (NYSE:DEA) has a high tenant retention rate, with 95% of its portfolio comprised of firm term leases, ensuring stable income streams.
Negative Points
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The company faces potential challenges from higher interest rates, which could impact the accretion of new deals.
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There is uncertainty regarding the impact of government austerity measures on external growth opportunities, particularly in defense-related projects.
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Easterly Government Properties Inc (NYSE:DEA) has a portion of its portfolio in soft term leases, which could pose a risk if the government decides to terminate these leases.
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The company's stock price at $11 limits its ability to pursue more aggressive acquisition strategies due to cost of capital considerations.
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Higher capital expenditures and tenant improvements in government-adjacent leases could impact cash available for distribution growth.
Q & A Highlights
Q: How are you viewing the accretion of acquisition deals given the expectation of higher interest rates for longer? A: Darrell Crate, CEO, explained that Easterly Government Properties has a strong pipeline for acquisitions and development opportunities. Despite higher interest rates, the company is in a strong position due to limited bank lending to developers. They are targeting a 2.5% growth rate and have $100 million of acquisitions in their guidance range. CFO Allison Marino added that they aim for a 50 to 100 basis points spread on new deals to achieve growth goals.