Easterly Government Properties: Collect A Riskier 7%+ Yield While Growth Accelerates

Easterly Government Properties reported solid Q2 results, raising full-year core FFO guidance and maintaining momentum in revenue and earnings growth. DEA trades at less than 8x forward FFO and offers a well-covered 7%+ dividend yield, appealing to income-focused investors with higher risk tolerance. Balance sheet deleveraging toward a 6.0x–6.75x leverage target and successful execution of the $1.5 billion acquisition pipeline are key to future price appreciation. I maintain a hold rating due to elevated leverage and macro risks but would consider upgrading if DEA sustains FFO growth and reduces leverage over the next 2–4 quarters.