REIT’s Actions Aim to Right-size Payout Ratio and to Provide Capital for Robust Opportunity Set
Easterly Government Properties, Inc. (NYSE: DEA) (the “Company” or “Easterly”), a fully integrated real estate investment trust focused primarily on the acquisition, development and management of Class A commercial properties leased to U.S. Government agencies, today announced that its Board of Directors has approved a reduction of $0.085, or approximately 32.0%, from the Company’s prior quarter dividend of $0.265 per share.
The Company is changing its dividend philosophy and aligning itself with the best practices of other net lease REITs. The Company is targeting a Core Funds from Operation (Core FFO) payout ratio in the range of 55 – 65% and a CAD payout ratio in a range of 65 – 75%, and as its Core FFO and CAD grow, it would be the Company’s intent to continue to maintain these ranges.
“We have positioned the dividend yield relative to peers to be attractive to the capital markets,” said Darrell Crate, Easterly’s President and Chief Executive Officer. “We have reset the payout ratios so that the cashflow from our business is expected to provide a meaningful amount of capital for us to harvest our growing pipeline.”
The dividend will be payable on May 17, 2025 to shareholders of record on May 5, 2025.
Easterly also announced that its Board of Directors approved a 1-for-2.5 Reverse Stock Split of the Company’s issued and outstanding shares of common stock (the “Common Stock”). The Reverse Stock Split is expected to take effect on April 28, 2025, whereby every one share will be issued for every two and a half outstanding shares of Common Stock. Once the Reverse Stock Split goes into effect, the announced dividend of $0.18 will become $0.45 ($1.80 per share per year).
As of the date of this release, after giving effect to the Reverse Stock Split and the payment of the Company’s quarterly cash dividend, the Company reaffirms its 2025 earnings outlook. This guidance is forward-looking and reflects management’s view of current and future market conditions. The Company’s actual results may differ materially from this guidance. Outlook is based on fourth quarter 2024 earnings and will be updated to reflect first quarter 2025 earnings on or about April 29, 2025.
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