Easterly Government Properties Reports 8.1% Revenue Growth in Q1 2025

Easterly Government Properties, Inc. reported its financial results for the first quarter of 2025, revealing total revenues of $78.7 million, a 8.1% increase from $72.8 million in the same period last year. The growth in revenue was primarily driven by a $4.8 million rise in rental income, attributed to the addition of nine operating properties acquired since March 31, 2024. Other income also saw a significant increase, rising by $1 million, largely due to higher interest income. However, net income available to Easterly Government Properties, Inc. decreased to $3.1 million, or $0.07 per share, compared to $4.6 million, or $0.11 per share, in the prior year.

The company's total expenses for the quarter increased to $58.8 million from $55.5 million, reflecting a $1.2 million rise in property operating expenses and a $3 million increase in depreciation and amortization, both linked to the newly acquired properties. Interest expense also rose significantly, increasing by $4.5 million, primarily due to new fixed-rate senior unsecured notes issued since March 31, 2024. Despite the increase in expenses, the company maintained a strong operational performance, with its properties remaining 97% leased as of March 31, 2025.

In terms of strategic developments, Easterly Government Properties executed a 1-for-2.5 reverse stock split on April 28, 2025, which reduced the number of shares outstanding from approximately 111.8 million to 44.7 million. This move was part of a broader strategy to enhance shareholder value and improve the company's stock price. Additionally, the company acquired a 289,873 square foot facility leased primarily to the District of Columbia Government on April 3, 2025, further expanding its portfolio of properties leased to government agencies.

Operationally, the company reported a total of 90 wholly owned operating properties and ten properties through an unconsolidated joint venture, encompassing approximately 9.7 million leased square feet. The weighted average age of these properties is approximately 15.9 years, and the average annualized lease income per leased square foot is $35.59. The company continues to focus on acquiring and managing Class A commercial properties leased to U.S. Government agencies, which account for over 90% of its revenue.

Looking ahead, Easterly Government Properties anticipates that its cash flows from operations, along with available borrowings under its revolving credit facility, will provide adequate capital for its anticipated uses over the next 12 months. The company plans to continue pursuing opportunities for property acquisitions and development projects while maintaining its commitment to distribute dividends to shareholders in compliance with REIT regulations.