Easterly lifts its 2026 core FFO floor to $3.08 a share as aggregate quarterly core FFO rises 6.8% from a year earlier

Easterly Government Properties reported third-quarter 2026 core FFO of $38.0 million, or $0.78 per fully diluted share, up 6.8% from $35.6 million a year earlier, and lifted the bottom of its 2026 core FFO guidance to $3.08 a share from $3.07 while leaving the top at $3.13 a share. The Washington, D.C. REIT, which leases Class A space mostly to U.S. Government agencies, also published a first 2027 range of $3.09 a share to $3.17 a share.

Rental growth outruns a 5.27% rise in interest cost

Easterly's core funds from operations, a non-GAAP measure that strips out liability-management costs, credit-loss provisions and depreciation of non-real-estate assets, reached $38.0 million in the three months ended September 30, 2026, against $35.6 million a year earlier. Per share the gain was smaller, 2.63% measured from the rounded per-share amounts, because the fully diluted count expanded to 48,922,458 shares from 47,169,281: $0.78 versus $0.76.

Rental income rose 9.52% from a year earlier to $90.04 million and total revenues 8.66% to $93.61 million, while net interest expense rose 5.27% to $20.04 million, so the operating line grew faster than the cost of the debt behind it. GAAP net income was $5.7 million, of which $5.5 million was attributable to Easterly, equal to $0.11 per diluted share, against $1.25 million, or $0.02, in a year-earlier quarter that booked a $2.55 million impairment loss; the $0.12 figure in the highlights is net income per share "on a fully diluted basis", which counts operating-partnership units and unvested equity awards that GAAP diluted EPS excludes. Nine-month core FFO was $112.5 million, or $2.33 a share, an 8.97% increase from $103.28 million, or $2.22.

Guidance moves at the bottom, and 2027 appears for the first time

The August 3 release had already raised 2026 core FFO guidance to a range of $3.07 - $3.13. The new range keeps the ceiling and moves the floor, and the reconciliation starts from net income per share of $0.24 to $0.29, adds real-estate depreciation and amortization of $2.82 and non-real-estate depreciation of $0.02 to arrive at $3.08 to $3.13.

The 2027 outlook starts from net income per share of $0.41 to $0.49, adds $2.66 of real-estate depreciation and $0.02 of non-real-estate depreciation for core FFO of $3.09 to $3.17. It assumes approximately $50 million of wholly owned acquisitions and $25 - $50 million of gross development-related investment, against $50 - $100 million of development investment assumed for 2026, and the company is guiding to a modest per-share step-up while it spends less on construction.

Seven-turn leverage on $1.7 billion of debt at a 4.6% average rate

Total indebtedness was approximately $1.7 billion at September 30: $16.1 million drawn on the revolving credit facility, $100.0 million on the 2016 term loan, $200.0 million each on the 2018 and 2026 term loans, $1.0 billion of senior unsecured notes and $142.3 million of mortgage debt. Weighted average maturity shortened to 3.8 years from 4.0 years at June 30 while the weighted average interest rate held at 4.6%. The secured mortgage debt matures in 1.0 years on a weighted basis, with $127.5 million of VA - Loma Linda debt due July 2027 accounting for most of that $142.3 million bucket. Net debt to total enterprise value was 59.6%, up from 58.4%, and net debt to annualized quarterly EBITDA was 7.1x, or 6.8x on the adjusted measure that nets out government cost-reimbursement claims on development projects.

The quarter also cut near-dated obligations and added rate hedges. Easterly used $6.4 million of cash to extinguish the USFS II - Albuquerque mortgage, collected full repayment of a $35.6 million Bedford construction loan in September ahead of its August 2027 maturity, and entered four interest rate swaps in October with an aggregate notional value of $200.0 million.

106 properties, 98% leased, and two leases re-cut

The portfolio held 106 operating properties at quarter end, about 10.7 million leased square feet, of which 93 were leased primarily to U.S. Government agencies, eight primarily to state or local government tenants and five entirely to private tenants. Occupancy was 98%, the weighted average remaining lease term 9.2 years and the weighted average age of the buildings 17.4 years, up from 17.1 years in June.

Development is converting. The Florida Department of Law Enforcement laboratory in Fort Myers was completed after quarter end under a 25-year lease, while the Flagstaff, Arizona and Medford, Oregon projects remain under construction with 20-year GSA leases expected to commence on completion. On leasing, Easterly renewed USCIS - Lincoln on a new 15-year lease with 10 years of firm term and extended Various GSA - Chicago (FAA) only through July 2027, with firm term through April 2027, which leaves a fresh decision at a building whose federal tenant has not committed long.

Government tenancy is both the revenue base and the concentration

Substantially all revenue comes from U.S. Government agencies, and the release's own risk list names the chance that the government cuts real-estate spending or moves away from leased space, "including as a result of or in connection with any shutdown of the U.S. Government". The supplemental package puts a number on one edge of that exposure: six government tenants occupying approximately 2.3% of leased square feet and contributing approximately 2.3% of annualized lease income hold early-termination rights the filing calls soft term.

Debt is the second constraint. The $1.7 billion of total indebtedness carried a weighted average interest rate of 4.6% and a weighted average maturity of 3.8 years at September 30, so maturities will be refinanced at whatever rate then prevails. The supplemental package's debt schedule, unaudited and stated in thousands, prices every note: coupons run from 2.62% on $50.0 million of 2021 Series A notes due October 2028 to 6.56% on the 2024 Series A and B notes due 2033, the nearest note maturity is $95 million of 2017 Series A notes at 4.05% due May 2027, and unsecured debt totals $1.54 billion at a 4.69% weighted average rate over a 4.0-year weighted average maturity. Neither document forecasts what refinancing will cost. The release discloses no same-store cash NOI growth and carries no consensus estimate, so the documents support a comparison with the year-earlier quarter but not a beat or a miss.

The next dated reference points

The board approved a $0.45 quarterly dividend on October 22, payable November 20 to holders of record November 5, which absorbs 57.69% of third-quarter core FFO per share. The supplemental package says the financial statements for the quarter "will be released" on or about October 26, 2026, and the Form 10-Q is where the notes to the financial statements, the cash-flow statement and any later subsequent events will appear. After it, the fourth quarter decides whether the $3.08 to $3.13 range holds.