Easterly Government Properties Reports Mixed Q3 Results, Revenue Growth and Increased Assets

Easterly Government Properties, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period. The company, which focuses on acquiring and managing properties leased to U.S. government agencies, saw total revenues increase to $74.8 million for the third quarter, up from $72.0 million in the same period of 2023. For the nine months, total revenues reached $223.8 million, a rise from $214.6 million year-over-year.

Rental income was a significant contributor to this growth, totaling $72.5 million for the third quarter, compared to $68.2 million in 2023, primarily driven by the acquisition of seven operating properties since September 30, 2023. However, net income for the third quarter decreased to $5.1 million from $6.1 million in the prior year, reflecting increased interest expenses and provisions for credit losses. For the nine-month period, net income also fell to $14.8 million from $16.3 million in 2023.

The company’s total assets increased to $3.1 billion as of September 30, 2024, up from $2.9 billion at the end of 2023, largely due to acquisitions. Notably, Easterly acquired four operating properties for $70.3 million during the nine months, contributing $3.2 million in revenues and $1.3 million in net income from these assets. The company also invested $315.9 million in an unconsolidated real estate venture, with a recent acquisition of a VA outpatient facility in Jacksonville, Florida.

Easterly's total debt as of September 30, 2024, stood at $1.5 billion, with a significant portion at fixed interest rates. The company has been proactive in managing its debt, including the issuance of $200 million in senior unsecured notes and the establishment of a new revolving credit facility with an available capacity of $250.3 million.

Cash and cash equivalents increased to $31.2 million from $9.4 million at the end of 2023, reflecting improved liquidity. The company reported net cash provided by operating activities of $138.1 million for the nine months, a substantial increase from $96.9 million in the prior year.

Despite the challenges in net income, Easterly Government Properties continues to expand its portfolio and maintain a high occupancy rate of 97% across its properties, with a focus on long-term leases primarily with U.S. government agencies.