Easterly Government Properties, Inc. (DEA) Stock Analysis

Easterly Government Properties is an internally managed REIT focused on Class A properties leased primarily to the U.S. Government. Its revenue is unusually defensive for real estate because 86.3% of annualized lease income comes from federal agencies, 95% of the federal portfolio is under firm terms, and tenants perform mission-critical functions that are difficult to relocate or automate. **Q2 2026 demonstrated solid operating momentum:** revenue rose 9.7% to $92.4 million, Core FFO per diluted share increased 5.4% to $0.78, and first-half operating cash flow reached $71.9 million versus $62.3 million a year earlier. Management raised 2026 Core FFO guidance to $3.07–$3.13 per share, with a $3.10 midpoint. The investment case is constrained by 7.1x adjusted net debt/EBITDA, a 0.34x current ratio, and 1.14x interest coverage, although 88.1% of debt is fixed or hedged and leverage is improving toward 6.0x–6.75x. DEA trades at approximately 7.9x–8.0x forward P/FFO and offers a 7.3%–7.4% forward yield. Near-term catalysts include the FAA lease outcome in October 2026, pipeline execution, deleveraging, and a potential second investment-grade rating by 2027. **The report’s probability-weighted five-year target is $31.27, supporting a stable-income Hold rather than an aggressive Buy.**