Easterly Government Properties: A Disappointment, But Too Cheap To Downgrade Now

Easterly Government Properties remains a ‘buy’ despite a 29.3% share price decline versus the S&P 500’s 89.5% gain. DEA’s operational performance is strong, with expanding revenue, increased property count, and adjusted FFO per share in line with expectations. Asset quality concerns persist as property age rises and average lease terms shorten, but over half of base rent extends beyond 2036. Management targets lower leverage, pursues acquisitions and developments, and expects government asset-light trends to support long-term growth.