Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 08, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | dea | |
Entity Registrant Name | Easterly Government Properties, Inc. | |
Entity Central Index Key | 1,622,194 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,062,243 |
Combined Consolidated Balance S
Combined Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Real estate properties, net | $ 808,177 | $ 772,007 |
Cash and cash equivalents | 3,704 | 8,176 |
Restricted cash | 1,557 | 1,736 |
Deposits on acquisitions | 77,796 | |
Rents receivable | 6,920 | 6,347 |
Accounts receivable | 3,709 | 2,920 |
Deferred financing, net | 2,296 | 2,726 |
Intangible assets, net | 111,728 | 116,585 |
Prepaid expenses and other assets | 1,958 | 1,509 |
Total assets | 1,017,845 | 912,006 |
Liabilities | ||
Revolving credit facility | 198,167 | 154,417 |
Mortgage notes payable, net | 82,289 | 83,744 |
Intangible liabilities, net | 42,119 | 44,605 |
Accounts payable and accrued liabilities | 9,949 | 9,346 |
Total liabilities | 332,524 | 292,112 |
Equity | ||
Common stock, par value $0.01, 200,000,000 shares authorized, 34,648,580 and 24,168,379 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively. | 346 | 241 |
Additional paid-in capital | 560,072 | 391,767 |
Retained (deficit) | (320) | (1,694) |
Cumulative dividends | (25,857) | (13,051) |
Total stockholders' equity | 534,241 | 377,263 |
Non-controlling interest in Operating Partnership | 151,080 | 242,631 |
Total equity | 685,321 | 619,894 |
Total liabilities and equity | $ 1,017,845 | $ 912,006 |
Combined Consolidated Balance 3
Combined Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 34,648,580 | 24,168,379 |
Common Stock, shares outstanding | 34,648,580 | 24,168,379 |
Combined Consolidated Statement
Combined Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues | ||||
Rental income | $ 22,291 | $ 17,626 | $ 44,027 | $ 26,930 |
Tenant reimbursements | 2,476 | 1,572 | 4,631 | 2,348 |
Other income | 154 | 58 | 234 | 69 |
Total revenues | 24,921 | 19,256 | 48,892 | 29,347 |
Operating expenses | ||||
Property operating | 5,085 | 3,558 | 9,418 | 5,288 |
Real estate taxes | 2,332 | 1,755 | 4,700 | 2,714 |
Depreciation and amortization | 11,074 | 9,151 | 21,937 | 14,051 |
Acquisition costs | 346 | 195 | 679 | 1,635 |
Formation expenses | 72 | 1,666 | ||
Corporate general and administrative | 3,052 | 2,239 | 6,088 | 3,811 |
Fund general and administrative | 75 | |||
Total expenses | 21,889 | 16,970 | 42,822 | 29,240 |
Operating income | 3,032 | 2,286 | 6,070 | 107 |
Other (expenses) / income | ||||
Interest expense, net | (1,995) | (1,321) | (3,924) | (2,021) |
Net unrealized (loss) on investments | (5,122) | |||
Net income (loss) | 1,037 | 965 | 2,146 | (7,036) |
Non-controlling interest in Operating Partnership | (338) | (377) | (772) | 4,739 |
Net income (loss) available to Easterly Government Properties, Inc. | $ 699 | $ 588 | $ 1,374 | $ (2,297) |
Net income (loss) available to Easterly Government Properties, Inc. per share: | ||||
Basic | $ 0.02 | $ 0.02 | $ 0.05 | $ (0.12) |
Diluted | $ 0.02 | $ 0.02 | $ 0.05 | $ (0.12) |
Weighted- average common shares outstanding | ||||
Basic | 27,484,075 | 24,141,712 | 25,812,893 | 18,673,374 |
Diluted | 29,267,258 | 25,435,010 | 27,538,423 | 18,673,374 |
Combined Consolidated Statemen5
Combined Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities | ||
Net income (loss) | $ 2,146 | $ (7,036) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 21,937 | 14,051 |
Straight line rent | 33 | (99) |
Amortization of above- / below-market leases | (3,409) | (1,976) |
Amortization of unearned revenue | (50) | |
Amortization of loan premium / discount | (43) | (38) |
Amortization of deferred financing costs | 432 | 329 |
Contributions to investments | (257) | |
Net unrealized loss on investments | 5,122 | |
Non-cash compensation | 1,422 | 512 |
Net change in: | ||
Rents receivable | (517) | (4,660) |
Accounts receivable | (789) | (176) |
Prepaid expenses and other assets | (449) | (377) |
Accounts payable and accrued liabilities | 329 | 1,618 |
Net cash provided by operating activities | 21,042 | 7,013 |
Cash flows from investing activities | ||
Real estate acquisitions and deposits | (129,796) | (34,325) |
Cash assumed in formation | 6,187 | |
Additions to real estate property | (266) | (132) |
Restricted cash | 179 | 109 |
Net cash (used in) investing activities | (129,883) | (28,161) |
Cash flows from financing activities | ||
Payment of deferred financing costs | (3,397) | |
Issuance of common shares | 84,943 | 193,545 |
Repurchase of initial shares | (1) | |
Proceeds from private placement | 75,638 | |
Credit facility draws, net | 43,750 | 33,417 |
Repayments of mortgage payable | (1,414) | (921) |
Debt payoff | (293,381) | |
Dividends and distributions paid | (19,001) | (4,377) |
Distributions | (5,441) | |
Payment of offering costs | (3,909) | (1,962) |
Net cash provided by (used in) financing activities | 104,369 | (6,880) |
Net (decrease) in cash and cash equivalents | (4,472) | (28,028) |
Cash and cash equivalents, beginning of period | 8,176 | 31,437 |
Cash and cash equivalents, end of period | 3,704 | 3,409 |
Supplemental disclosure of cash flow information is as follows (amounts in thousands): | ||
Cash paid for interest | 3,615 | 1,596 |
Additions to real estate property | 87 | |
Offering costs accrued, not paid | 174 | |
Contribution for shares and OPUs | 260,687 | |
Exchange of Common Units for Shares of Common Stock | ||
Non-controlling interest in Operating Partnership | (88,674) | |
Common stock | 58 | |
Additional paid-in capital | $ 88,616 | |
Western Devcon, Inc [Member] | ||
Supplemental disclosure of cash flow information is as follows (amounts in thousands): | ||
Contribution for shares and OPUs | $ 86,397 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation The information contained in the following notes to the consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the consolidated financial statements included herein should be reviewed in conjunction with the consolidated financial statements for the fiscal year ended December 31, 2015, and related notes thereto, included in the Annual Report on Form 10-K of Easterly Government Properties, Inc. (which may be referred to in these financial statements as the “Company,” “we,” “us,” or “our”) for the year ended December 31, 2015 filed with the U.S. Securities and Exchange Commission (the “ SEC”) on March 2, 2016. The Company is a Maryland corporation that has elected to be taxed as a real estate investment trust (a “REIT”) under the Internal Revenue Code (the “Code”) commencing with its taxable period ended December 31, 2015. The operations of the Company are carried on primarily through Easterly Government Properties LP (the “Operating Partnership”) and the wholly owned subsidiaries of the Operating Partnership. We are an internally managed REIT, focused primarily on the acquisition, development, and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate substantially all of our revenue by leasing our properties to such agencies through the U.S. General Services Administration (the “GSA”). Our objective is to generate attractive risk-adjusted returns for our stockholders over the long term through dividends and capital appreciation. As of June 30, 2016, we wholly owned 38 properties in the United States, including 35 properties that were leased primarily to U.S. Government tenant agencies and three properties that were entirely leased to private tenants, encompassing approximately 2.8 million square feet in the aggregate. We focus on acquiring, developing, and managing GSA-leased properties that are essential to supporting the mission of the tenant agency and strive to be a partner of choice for the U.S. Government, working closely with the GSA to meet the needs and objectives of the tenant agency. We were incorporated in Maryland as a corporation on October 9, 2014 and did not have any meaningful operations until the completion of the formation transactions (as defined below) and our initial public offering on February 11, 2015 (the “IPO”). On February 11, 2015, we completed an initial public offering of 13.8 million shares of our common stock at a price to the public of $15.00 per share, including 1.8 million shares sold in connection with the full exercise of the option to purchase additional shares granted to the underwriters, resulting in gross proceeds of $207.0 million. The aggregate net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses payable by the Company, was approximately $191.6 million. The Company contributed the net proceeds from the IPO to the Operating Partnership in exchange for common units representing limited partnership interests in the Operating Partnership (“common units”). In connection with the IPO, we engaged in certain formation transactions (the “formation transactions”) pursuant to which the Operating Partnership acquired (i) 15 properties previously owned by the Easterly Funds (as defined below) in exchange for 3,308,000 shares of common stock and 8,635,714 common units, (ii) 14 properties previously owned by Western Devcon, Inc., a private real estate company and a series of related entities beneficially owned by Michael P. Ibe (collectively, “Western Devcon”), in exchange for 5,759,819 common units and (iii) all of the ownership interests in the management entities (as defined below) in exchange for 1,135,406 common units. Concurrent with the IPO, the Company sold an aggregate of 7,033,712 shares of its common stock to the Easterly Funds in a private placement at a price per share of $15.00 without payment of any underwriting fees, discounts or commissions. Our Operating Partnership used the net proceeds received from the offering, private placement and a portion of the borrowings under a $400.0 million senior unsecured revolving credit facility, which we refer to as our senior unsecured revolving credit facility, to repay approximately $293.4 million in outstanding indebtedness including applicable repayment costs, defeasance costs, settlement of interest rate swap liabilities and other costs and fees associated with such repayments. Our predecessor (the “Predecessor”) means Easterly Partners, LLC and its consolidated subsidiaries prior to the IPO and the formation transactions, including (i) all entities or interests in U.S. Government Properties Income and Growth Fund L.P., U.S. Government Properties Income and Growth Fund REIT, Inc. and the related feeder and subsidiary entities (collectively, “Easterly Fund I,”) (ii) all entities or interests in U.S. Government Properties Income and Growth Fund II, LP, USGP II REIT LP, USGP II (Parallel) Fund, LP and their related feeders and subsidiary entities (collectively, “Easterly Fund II” and, together with Easterly Fund I, the “Easterly Funds”) and (iii) the entities that managed the Easterly Funds (the “management entities”). All of the Company’s assets and its operations are primarily conducted through the Operating Partnership. The Company is the sole general partner of the Operating Partnership. The Company owned 78.0% of the Operating Partnership’s common units at June 30, 2016. We believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S federal income tax purposes commencing with our taxable year ended December 31, 2015. Principle of Combination and Consolidation The accompanying consolidated financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company, including Easterly Government Properties TRS, LLC and Easterly Government Services, LLC, and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. Upon completion of the IPO and the formation transactions, the Company succeeded to the operations of the Predecessor. Prior to the IPO, the Predecessor was under the control of Darrell W. Crate, the Chairman of our board of directors. These financial statements reflect the consolidated equity ownership structure of the Company as if the IPO and the formation transactions related to the Easterly Funds and management entities had been completed as of January 1, 2014. The formation transactions related to the Easterly Funds and the management entities were accounted for at carryover basis due to the existence of common control. Prior to the IPO, the Easterly Funds, as controlled by the Predecessor, qualified as investment companies pursuant to ASC 946 Financial Services – Investment Companies Due to the timing of the IPO and the formation transactions, the Company’s financial condition as of December 31, 2015 and results of operations for the six months ended June 30, 2015 reflect the financial condition and results of operations of the Predecessor combined with the Company for the period prior to February 11, 2015, and the Company’s consolidated results for the period from February 11, 2015 through December 31, 2015. Basis of Presentation The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to state fairly the consolidated financial position of the Company at June 30, 2016, and the consolidated results of operations and the consolidated cash flows for the three and six months ended June 30, 2016 and 2015. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The significant accounting policies used in the preparation of the Company's condensed consolidated financial statements, both pre-IPO and post-IPO, are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Recently Adopted Accounting Pronouncements On January 1, 2016, the Company adopted accounting guidance under Accounting Standards Codification (ASC) Topic 810, "Consolidation,” modifying the analysis it must perform to determine whether it should consolidate certain types of legal entities. The guidance does not amend the existing disclosure requirements for variable interest entities (“VIEs”) or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, the Operating Partnership will be a variable interest entity of the Company. As the Operating Partnership is already consolidated in the balance sheets of the Company, the identification of this entity as a variable interest entity has no impact on the consolidated financial statements of the Company. There were no other legal entities qualifying under the scope of the revised guidance that were consolidated as a result of the adoption. In addition, there were no other voting interest entities under prior existing guidance determined to be variable interest entities under the revised guidance. On January 1, 2016, the Company adopted and retrospectively applied ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” As a result all debt issuance costs paid to third parties, other than the lender, incurred to issue mortgage debt are presented on the balance sheet as a direct deduction from the carrying value. Debt issuance costs related to a credit facility will continue to be presented as an asset on the balance sheet. On January 1, 2016, the Company adopted ASU 2015 – 16, Simplifying the Accounting for Measurement Period Adjustments (Topic 805), which addresses provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period. The implementation of this update did not have an impact in our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in the same manner as operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU No. 2016-02 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, which identifies areas for simplification involving several aspects of accounting for share-based payment transactions. The new guidance allows for entities to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, the guidance allows employers to withhold shares to satisfy minimum statutory tax withholding requirements up to the employees’ maximum individual tax rate without causing the award to be classified as a liability. The guidance also stipulates that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of this new guidance. |
Real Estate and Intangibles
Real Estate and Intangibles | 6 Months Ended |
Jun. 30, 2016 | |
Real Estate [Abstract] | |
Real Estate and Intangibles | 3. Real Estate and Intangibles During the six months ended June 30, 2016, we acquired two properties, ICE – Albuquerque and NPS – Omaha for an aggregate purchase price of $52.0 million. We allocated the purchase price of these acquisitions based on the estimated fair values of the acquired assets and assumed liabilities as follows (dollars in thousands): Total Real estate Land $ 4,579 Building 38,615 Acquired tenant improvements 3,742 Total real estate 46,936 Intangible assets In-place leases 5,352 Acquired leasing commissions 1,339 Total intangible assets 6,691 Intangible liabilities Below-market leases (1,627 ) Total intangible liabilities (1,627 ) Purchase price $ 52,000 We did not assume any debt upon acquisition of the two properties. The fair value of the assets acquired and liabilities assumed in 2016 are preliminary as we continue to finalize their acquisition date fair value determination. The intangible assets and liabilities have an aggregate weighted average amortization period of 9.78 years as of June 30, 2016. During the six months ended June 30, 2016, we included $1.3 million of revenues and $0.5 million of net income in our consolidated statement of operations related to the properties acquired. During the six months ended June 30, 2016, we incurred $0.7 million of acquisition-related costs associated with the property acquisitions. Pro Forma Financial Information The unaudited pro forma financial information set forth below presents results for the six months ended June 30, 2016 and 2015 as if the formation transactions and the acquisitions of DOE – Lakewood, AOC – Aberdeen, ICE – Otay, DEA – Pleasanton, USCIS – Lincoln, DEA – Dallas Lab and FBI – Richmond had occurred on January 1, 2014 and the ICE – Albuquerque and NPS – Omaha acquisition had occurred on January 1, 2015. The pro forma information is not necessarily indicative of the results that actually would have occurred nor does it intend to indicate future operating results (dollars in thousands): For the six months ended June 30, Proforma (unaudited) 2016 2015 Total rental revenue $ 49,940 $ 48,585 Net income (loss) (1) 2,996 3,546 (1) The net income for the six months ended June 30, 2016 excludes $0.7 million of property acquisition costs. Additionally, the net income for the six months ended June 30, 2015 was adjusted to include these acquisition costs and exclude the $3.3 million of property acquisition and formation costs incurred during the six months ended June 30, 2015. Real estate and intangibles consisted of the following as of June 30, 2016 (dollars in thousands): Total Real estate Land $ 102,478 Building 694,774 Acquired tenant improvements 38,608 Accumulated amortization (27,683 ) Total Real Estate $ 808,177 Intangible assets In-place leases $ 109,271 Acquired leasing commissions 21,574 Above market leases 10,631 Accumulated amortization (29,748 ) Total Intangible assets $ 111,728 Intangible liabilities Below market leases $ (52,328 ) Accumulated amortization 10,209 Total Intangible liabilities $ (42,119 ) |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt At June 30, 2016, our borrowings consisted of the following (dollars in thousands): Total Revolving credit facility $ 198,167 Mortgage notes payable, net 82,289 Total $ 280,456 a. Revolving Credit Facility We have a $400.0 million senior unsecured revolving credit facility with an accordion feature that provides us with additional capacity, subject to the satisfaction of customary terms and conditions, of up to $250.0 million, for a total facility size of not more than $650.0 million. As of June 30, 2016, the interest rate payable on borrowings under our senior unsecured revolving credit facility was 1.85%. For the six months ended June 30, 2016 the weighted average annual interest rate for borrowings under our senior unsecured revolving credit facility was 1.84% . As of June 30, 2016, we had $198.2 million outstanding and $201.8 million available under our revolving credit facility and recognized $0.4 million in accumulated amortization of deferred financing costs. As of June 30, 2016, the fair value of our revolving credit facility approximated carrying value. b. Mortgage Notes Payable, Net The table below provides a summary of our mortgage debt which is collateralized by the underlying real estate at June 30, 2016 (dollars in thousands): Property Fixed/ Floating Contractual Interest Rate Effective Interest Rate Maturity Date Principal Balance Premium/ Discount Deferred Financing Carrying Value CBP - Savannah Fixed 3.40 % 4.12 % July 2033 $ 15,246 $ (814 ) $ — $ 14,432 ICE - Charleston Fixed 4.21 % 3.93 % January 2027 21,463 380 — 21,843 MEPCOM - Jacksonville Fixed 4.41 % 3.89 % October 12,080 298 — 12,378 USFS II - Albuquerque Fixed 4.46 % 3.92 % July 2026 17,336 639 — 17,975 DEA - Pleasanton Floating LIBOR + 150bps 1.80 % October 2023 15,700 — (39 ) 15,661 Total $ 81,825 $ 503 $ (39 ) $ 82,289 At June 30, 2016, the fair value of our mortgage debt was determined by discounting future contractual principal and interest payments using prevailing market rates. We deem the fair value measurement of our debt instruments as a Level 3 measurement. At June 30, 2016 the fair value of our mortgage debt was $84.6 million. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Equity | 5. Equity The following table summarizes the changes in our stockholders’ equity for the six months ended June 30, 2016 and 2015 (dollars in thousands): Shares Common Stock Par Value Additional Paid-in Capital Retained (Deficit) Distributions in Excess of Earnings Non- controlling Interest in Operating Partnership Member Capital/ (Deficit) Non- controlling Interests Total Equity Six months ended June 30, 2016 Balance at December 31, 2015 24,168,379 $ 241 $ 391,767 $ (1,694 ) $ (13,051 ) $ 242,631 $ — $ — $ 619,894 Stock based compensation — 145 — — 1,277 — — 1,422 Dividends and distributions paid — — — (12,806 ) (6,195 ) — — (19,001 ) Grant of unvested restricted stock 16,128 — — — — — — — — Redemption of common units for common shares 5,745,028 58 88,616 — — (88,674 ) — — — Public offering 4,719,045 47 80,813 — — — 80,860 Net income — — 1,374 — 772 — — 2,146 Allocation of non-controlling interest in Operating Partnership — (1,269 ) — — 1,269 — — — Balance at June 30, 2016 34,648,580 $ 346 $ 560,072 $ (320 ) $ (25,857 ) $ 151,080 $ — $ — $ 685,321 Six months ended June 30, 2015 Balance at December 31, 2014 1,000 $ — $ 1 $ — $ — $ — $ 13,336 $ 283,847 $ 297,184 Distributions — — — — — (9 ) (5,432 ) (5,441 ) Exchange of members’ capital and non-controlling interests for common units and shares 3,308,000 33 67,312 — — 194,530 (12,738 ) (249,137 ) — Public offering 13,800,000 138 191,445 — — — — — 191,583 Proceeds of private placement 7,033,712 70 105,435 — — — (589 ) (29,278 ) 75,638 Contribution of Western Devcon properties for common units — — — — 86,397 — — 86,397 Stock based compensation — 155 — — 357 — — 512 Grant of unvested restricted stock 26,667 — — — — — — — — Buyback of common stock (1,000 ) — (1 ) — — — — — (1 ) Dividends and distributions paid — — — (2,659 ) (1,718 ) (4,377 ) Net loss — — (2,297 ) — (4,739 ) — — (7,036 ) Allocation of non-controlling interest in Operating Partnership — 27,575 — — (27,575 ) — — — Balance at June 30, 2015 24,168,379 $ 241 $ 391,922 $ (2,297 ) $ (2,659 ) $ 247,252 $ — $ — $ 634,459 Our board of directors approved the issuance of 891,000 long-term incentive plan units in the Operating Partnership (“LTIP units”) on May 6, 2015 and 40,000 LTIP units on February 26, 2016 to members of management under a long-term incentive plan. Earned awards (if any) will vest 50% on February 15, 2018 and 50% on February 6, 2019, subject to the Company achieving certain absolute and relative total shareholder returns and management’s continued employment. Vesting will be accelerated in the event of a change in control, termination of employment by the Company without cause, or termination of employment by the award recipient for good reason, death, disability or retirement. If there is a change of control prior to February 15, 2018, earned awards will be calculated based on total shareholder return performance up to the date of the change of control. The LTIP unit awards (i) are subject to forfeiture to the extent awards are not earned and (ii) prior to the performance measurement date are only entitled to one-tenth (10%) of the regular quarterly distributions payable on common units. The Company measures the LTIP unit awards at the fair value on date of grant. In connection with our 2016 annual meeting of stockholders, we issued an aggregate of 16,128 shares of restricted common stock to our non-employee directors pursuant to our 2015 Equity Incentive Plan. The restricted common stock grants will vest upon the earlier of the anniversary of the date of grant or the next annual stockholder meeting. A summary of our non-vested common stock and LTIP units awards at June 30, 2016 is as follows: Restricted Shares Restricted Shares Weighted Average Grant Date Fair Value LTIP Units LTIP Units Weighted Average Grant Date Fair Value Outstanding, December 31, 2015 26,667 $ 15.00 891,000 $ 8.67 Vested (26,667 ) 15.00 — — Granted 16,128 18.60 40,000 14.15 Forfeited — — (5,000 ) 8.67 Outstanding, June 30, 2016 16,128 $ 18.60 926,000 $ 8.91 We recognized $1.4 million in compensation expense related to the restricted common stock and the LTIP unit awards for the six months ended June 30, 2016. As of June 30, 2016 unrecognized compensation expense for both awards was $5.7 million, which will be amortized over the vesting period. We valued our non-vested restricted share award issued in 2016 at the grant date fair value, which was the market price of our shares of common stock. For the LTIP unit awards issued in 2016, we used a Monte Carlo Simulation (risk-neutral approach) to determine the number of shares that may be issued pursuant to the award. We utilized a risk-free rate of 0.7%, derived from the Treasury note yield as of the grant date. Since the Company has a limited amount of operating history, the expected volatility assumption of 20.0% was derived from the observed historical volatility of the common stock prices of a select group of peer companies within the REIT industry. Based on the selected dividend yields of guideline companies and expected dividend levels, we utilized an expected dividend yield of 5.5%. No additional shares of common stock or options were issued under the 2015 Equity Incentive Plan as of June 30, 2016. On June 7, 2016, we completed an underwritten public offering of an aggregate of 6,219,045 shares of common stock, consisting of 4,719,045 shares sold by us to the underwriters and 1,500,000 shares offered on a forward basis in connection with certain forward sales agreements. The gross proceeds from the offering of 4,719,045 shares sold by us to the underwriters was $84.9 million before deducting underwriting discounts, commissions and estimated offering expenses. The forward sales agreements entered into with respect to 1,500,000 of the Company's common shares are at an initial price to the Company of $17.235 per share. Subject to the Company's right to elect cash or net share settlement, the Company expects to physically settle the forward sales agreements no later than December 7, 2016. The Company will account for the forward share agreements as equity. In connection with the liquidation of the Easterly Funds, an aggregate of 5,745,028 shares of common stock were issued between May 11, 2016 and June 30, 2016 upon the redemption of an aggregate of 5,745,028 common units in accordance with the terms of the partnership agreement of the Operating Partnership. On May 4, 2016, our board of directors declared a dividend for the first quarter of 2016 in the amount of $0.23 per share of common stock and per common unit, outstanding to stockholders and common unit holders of record as of the close of business on June 8, 2016. Our board of directors also declared a dividend for the first quarter of 2016 for each LTIP unit in an amount equal to 10% of the dividend paid per common unit. Such dividends were paid on June 23, 2016. On August 3, 2016, our board of directors declared a dividend for the second quarter of 2016 in the amount of $0.23 per share of common stock and per common unit, outstanding to stockholders and common unit holders of record as of the close of business on August 26, 2016. Our board of directors also declared a dividend for the second quarter of 2016 for each LTIP unit in an amount equal to 10% of the dividend paid per common unit. Such dividends are to be paid on September 13, 2016. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 6. Earnings Per Share Basic earnings or loss per share of common stock (“EPS”) is calculated by dividing net income or loss attributable to common stockholders by the weighted average shares of common stock outstanding for the periods presented. Diluted EPS is computed after adjusting the basic EPS computation for the effect of dilutive common equivalent shares outstanding during the periods presented. Unvested restricted shares and LTIP units are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share. The following table sets forth the computation of the Company’s basic and diluted earnings per share of common stock for the three and six months ended June 30, 2016 and 2015 (amounts in thousands, except per share amounts): For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 Numerator Net income (loss) $ 1,037 $ 965 $ 2,146 $ (7,036 ) Less: Non-controlling interest in Operating Partnership (338 ) (377 ) (772 ) 4,739 Net income (loss) available to Easterly Government Properties, Inc. 699 588 1,374 (2,297 ) Less: Dividends on participating securities (25 ) (13 ) (51 ) (13 ) Net income (loss) available to common stockholders $ 674 $ 575 $ 1,323 $ (2,310 ) Denominator for basic EPS 27,484,075 24,141,712 25,812,893 18,673,374 Dilutive effect of share-based compensation awards 11,629 8,272 12,753 — Dilutive effect of LTIP units 1,638,738 1,285,026 1,625,785 — Dilutive effect of forward shares 132,816 — 86,992 — Denominator for diluted EPS 29,267,258 25,435,010 27,538,423 18,673,374 Basic EPS $ 0.02 $ 0.02 $ 0.05 $ (0.12 ) Diluted EPS $ 0.02 $ 0.02 $ 0.05 $ (0.12 ) |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2016 | |
Leases [Abstract] | |
Operating Leases | 7. Operating Leases Our rental properties are subject to generally non-cancelable operating leases generating future minimum contractual rent payments due from tenants. As of June 30, 2016, future non-cancelable minimum contractual rent payments are as follows (dollars in thousands): Payments due by period Total 2016 2017 2018 2019 2020 Thereafter Operating Leases Minimum lease payments $ 469,766 32,895 64,679 62,154 56,316 50,579 203,143 The Company’s consolidated properties were 100% occupied by 20 tenants at June 30, 2016. On June 18, 2016, the Company was awarded a lease for a 65,810 square foot Drug Administration (FDA) laboratory in Alameda, CA. The FDA - Alameda laboratory will be leased to the General Services Administration (GSA) for a 20-year term, beginning upon completion of development of the property. For the six months ended June 30, 2016 we recognized $40.5 million in rental income attributable to base rent, $3.5 million in rental income attributable to the amortization of our above- and below-market leases and a straight-line adjustment of less than $0.1 million. |
Concentrations Risk
Concentrations Risk | 6 Months Ended |
Jun. 30, 2016 | |
Risks And Uncertainties [Abstract] | |
Concentrations Risk | 8. Concentrations Risk Concentrations of credit risk arise for the Company when multiple tenants of the Company are engaged in similar business activities, are located in the same geographic region or have similar economic features that impact in a similar manner their ability to meet contractual obligations, including those to the Company. The Company regularly monitors its tenant base to assess potential concentrations of credit risk. As stated in Note 1 above, the Company leases commercial space to the U.S. Government through the GSA or other federal agencies or nongovernmental tenants. At June 30, 2016, the GSA and other federal agency accounted for approximately 96.4% of rental income and non-governmental tenants accounted for the remaining approximately 3.6%. Thirteen of our 38 properties are located in California, accounting for approximately 22.5% of our total rentable square feet and approximately 30.3% of our total annualized lease income as of June 30, 2016. To the extent that weak economic or real estate conditions or natural disasters affect California more severely than other areas of the country, our business, financial condition and results of operations could be significantly impacted. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events For its consolidated financial statements as of June 30, 2016, the Company evaluated subsequent events and the following significant events in addition to the dividends declared by the board of directors for the second quarter of 2016 (see Note 5). On July 1, 2016, the Company acquired a 96,278 square foot property located in Birmingham, Alabama. The building was constructed in 2005 and is 100% leased to the GSA and occupied by the Federal Bureau of Investigation under a 15-year lease that expires in 2020. On July 1, 2016, the Company acquired a 35,616 square foot property located in Birmingham, Alabama. The building was constructed in 2005 and is 100% leased to the GSA and occupied by the Drug Enforcement Agency under a 15-year lease that expires in 2020. On July 1, 2016, the Company acquired a 71,979 square foot laboratory located in Kansas City, Kansas. The building was constructed in 2003 and is 100% leased to the GSA and occupied by the Environmental Protection Agency under a 20-year lease that expires in 2023. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2016, the Company adopted accounting guidance under Accounting Standards Codification (ASC) Topic 810, "Consolidation,” modifying the analysis it must perform to determine whether it should consolidate certain types of legal entities. The guidance does not amend the existing disclosure requirements for variable interest entities (“VIEs”) or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, the Operating Partnership will be a variable interest entity of the Company. As the Operating Partnership is already consolidated in the balance sheets of the Company, the identification of this entity as a variable interest entity has no impact on the consolidated financial statements of the Company. There were no other legal entities qualifying under the scope of the revised guidance that were consolidated as a result of the adoption. In addition, there were no other voting interest entities under prior existing guidance determined to be variable interest entities under the revised guidance. On January 1, 2016, the Company adopted and retrospectively applied ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” As a result all debt issuance costs paid to third parties, other than the lender, incurred to issue mortgage debt are presented on the balance sheet as a direct deduction from the carrying value. Debt issuance costs related to a credit facility will continue to be presented as an asset on the balance sheet. On January 1, 2016, the Company adopted ASU 2015 – 16, Simplifying the Accounting for Measurement Period Adjustments (Topic 805), which addresses provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period. The implementation of this update did not have an impact in our condensed consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in the same manner as operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU No. 2016-02 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, which identifies areas for simplification involving several aspects of accounting for share-based payment transactions. The new guidance allows for entities to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. In addition, the guidance allows employers to withhold shares to satisfy minimum statutory tax withholding requirements up to the employees’ maximum individual tax rate without causing the award to be classified as a liability. The guidance also stipulates that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of this new guidance. |
Real Estate and Intangibles (Ta
Real Estate and Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Real Estate [Abstract] | |
Fair Values of Assets Acquired and Liabilities Assumed | During the six months ended June 30, 2016, we acquired two properties, ICE – Albuquerque and NPS – Omaha for an aggregate purchase price of $52.0 million. We allocated the purchase price of these acquisitions based on the estimated fair values of the acquired assets and assumed liabilities as follows (dollars in thousands): Total Real estate Land $ 4,579 Building 38,615 Acquired tenant improvements 3,742 Total real estate 46,936 Intangible assets In-place leases 5,352 Acquired leasing commissions 1,339 Total intangible assets 6,691 Intangible liabilities Below-market leases (1,627 ) Total intangible liabilities (1,627 ) Purchase price $ 52,000 |
Proforma Financial Information of Future Operating Results | The pro forma information is not necessarily indicative of the results that actually would have occurred nor does it intend to indicate future operating results (dollars in thousands): For the six months ended June 30, Proforma (unaudited) 2016 2015 Total rental revenue $ 49,940 $ 48,585 Net income (loss) (1) 2,996 3,546 |
Schedule of Real Estate and Intangibles | Real estate and intangibles consisted of the following as of June 30, 2016 (dollars in thousands): Total Real estate Land $ 102,478 Building 694,774 Acquired tenant improvements 38,608 Accumulated amortization (27,683 ) Total Real Estate $ 808,177 Intangible assets In-place leases $ 109,271 Acquired leasing commissions 21,574 Above market leases 10,631 Accumulated amortization (29,748 ) Total Intangible assets $ 111,728 Intangible liabilities Below market leases $ (52,328 ) Accumulated amortization 10,209 Total Intangible liabilities $ (42,119 ) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Summary of Borrowings | At June 30, 2016, our borrowings consisted of the following (dollars in thousands): Total Revolving credit facility $ 198,167 Mortgage notes payable, net 82,289 Total $ 280,456 |
Mortgage Notes Payable, Net [Member] | |
Summary of Mortgage Debt Collateralized By Underlying Real Estate | The table below provides a summary of our mortgage debt which is collateralized by the underlying real estate at June 30, 2016 (dollars in thousands): Property Fixed/ Floating Contractual Interest Rate Effective Interest Rate Maturity Date Principal Balance Premium/ Discount Deferred Financing Carrying Value CBP - Savannah Fixed 3.40 % 4.12 % July 2033 $ 15,246 $ (814 ) $ — $ 14,432 ICE - Charleston Fixed 4.21 % 3.93 % January 2027 21,463 380 — 21,843 MEPCOM - Jacksonville Fixed 4.41 % 3.89 % October 12,080 298 — 12,378 USFS II - Albuquerque Fixed 4.46 % 3.92 % July 2026 17,336 639 — 17,975 DEA - Pleasanton Floating LIBOR + 150bps 1.80 % October 2023 15,700 — (39 ) 15,661 Total $ 81,825 $ 503 $ (39 ) $ 82,289 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Summary of Changes In Stockholders' Equity | The following table summarizes the changes in our stockholders’ equity for the six months ended June 30, 2016 and 2015 (dollars in thousands): Shares Common Stock Par Value Additional Paid-in Capital Retained (Deficit) Distributions in Excess of Earnings Non- controlling Interest in Operating Partnership Member Capital/ (Deficit) Non- controlling Interests Total Equity Six months ended June 30, 2016 Balance at December 31, 2015 24,168,379 $ 241 $ 391,767 $ (1,694 ) $ (13,051 ) $ 242,631 $ — $ — $ 619,894 Stock based compensation — 145 — — 1,277 — — 1,422 Dividends and distributions paid — — — (12,806 ) (6,195 ) — — (19,001 ) Grant of unvested restricted stock 16,128 — — — — — — — — Redemption of common units for common shares 5,745,028 58 88,616 — — (88,674 ) — — — Public offering 4,719,045 47 80,813 — — — 80,860 Net income — — 1,374 — 772 — — 2,146 Allocation of non-controlling interest in Operating Partnership — (1,269 ) — — 1,269 — — — Balance at June 30, 2016 34,648,580 $ 346 $ 560,072 $ (320 ) $ (25,857 ) $ 151,080 $ — $ — $ 685,321 Six months ended June 30, 2015 Balance at December 31, 2014 1,000 $ — $ 1 $ — $ — $ — $ 13,336 $ 283,847 $ 297,184 Distributions — — — — — (9 ) (5,432 ) (5,441 ) Exchange of members’ capital and non-controlling interests for common units and shares 3,308,000 33 67,312 — — 194,530 (12,738 ) (249,137 ) — Public offering 13,800,000 138 191,445 — — — — — 191,583 Proceeds of private placement 7,033,712 70 105,435 — — — (589 ) (29,278 ) 75,638 Contribution of Western Devcon properties for common units — — — — 86,397 — — 86,397 Stock based compensation — 155 — — 357 — — 512 Grant of unvested restricted stock 26,667 — — — — — — — — Buyback of common stock (1,000 ) — (1 ) — — — — — (1 ) Dividends and distributions paid — — — (2,659 ) (1,718 ) (4,377 ) Net loss — — (2,297 ) — (4,739 ) — — (7,036 ) Allocation of non-controlling interest in Operating Partnership — 27,575 — — (27,575 ) — — — Balance at June 30, 2015 24,168,379 $ 241 $ 391,922 $ (2,297 ) $ (2,659 ) $ 247,252 $ — $ — $ 634,459 |
Summary of Non-vested Common Stock and LTIP Units Awards | A summary of our non-vested common stock and LTIP units awards at June 30, 2016 is as follows: Restricted Shares Restricted Shares Weighted Average Grant Date Fair Value LTIP Units LTIP Units Weighted Average Grant Date Fair Value Outstanding, December 31, 2015 26,667 $ 15.00 891,000 $ 8.67 Vested (26,667 ) 15.00 — — Granted 16,128 18.60 40,000 14.15 Forfeited — — (5,000 ) 8.67 Outstanding, June 30, 2016 16,128 $ 18.60 926,000 $ 8.91 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of the Company’s basic and diluted earnings per share of common stock for the three and six months ended June 30, 2016 and 2015 (amounts in thousands, except per share amounts): For the three months ended June 30, For the six months ended June 30, 2016 2015 2016 2015 Numerator Net income (loss) $ 1,037 $ 965 $ 2,146 $ (7,036 ) Less: Non-controlling interest in Operating Partnership (338 ) (377 ) (772 ) 4,739 Net income (loss) available to Easterly Government Properties, Inc. 699 588 1,374 (2,297 ) Less: Dividends on participating securities (25 ) (13 ) (51 ) (13 ) Net income (loss) available to common stockholders $ 674 $ 575 $ 1,323 $ (2,310 ) Denominator for basic EPS 27,484,075 24,141,712 25,812,893 18,673,374 Dilutive effect of share-based compensation awards 11,629 8,272 12,753 — Dilutive effect of LTIP units 1,638,738 1,285,026 1,625,785 — Dilutive effect of forward shares 132,816 — 86,992 — Denominator for diluted EPS 29,267,258 25,435,010 27,538,423 18,673,374 Basic EPS $ 0.02 $ 0.02 $ 0.05 $ (0.12 ) Diluted EPS $ 0.02 $ 0.02 $ 0.05 $ (0.12 ) |
Operating Leases (Tables)
Operating Leases (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Leases [Abstract] | |
Summary of Future Non Cancellable Minimum Contractual Rent Payments | Our rental properties are subject to generally non-cancelable operating leases generating future minimum contractual rent payments due from tenants. As of June 30, 2016, future non-cancelable minimum contractual rent payments are as follows (dollars in thousands): Payments due by period Total 2016 2017 2018 2019 2020 Thereafter Operating Leases Minimum lease payments $ 469,766 32,895 64,679 62,154 56,316 50,579 203,143 |
Organization and Basis of Pre21
Organization and Basis of Presentation - Additional Information (Detail) $ / shares in Units, ft² in Millions | Feb. 11, 2015USD ($)Property$ / sharesshares | Jun. 30, 2016ft²Property | Jun. 30, 2015USD ($) |
Organization And Significant Accounting Policies [Line Items] | |||
Gross proceeds from initial public offering | $ | $ 207,000,000 | ||
Debt payoff | $ | 293,381,000 | $ 293,381,000 | |
Outstanding common units of partnership interest owned percentage | 78.00% | ||
Senior Unsecured Revolving Credit Facility [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Credit facility current borrowing capacity | $ | $ 400,000,000 | ||
Western Devcon, Inc [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | Property | 14 | ||
Number of stock units exchanged | 5,759,819 | ||
Management Entities [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of stock units exchanged | 1,135,406 | ||
Easterly Funds [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | Property | 15 | ||
Common stock shares exchanged | 3,308,000 | ||
Number of stock units exchanged | 8,635,714 | ||
IPO [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Shares issued, number of shares | 13,800,000 | ||
Par value per share | $ / shares | $ 15 | ||
Net proceeds from initial public offering | $ | $ 191,600,000 | ||
Over-Allotment Option [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Shares issued, number of shares | 1,800,000 | ||
Private Placement [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Shares issued, number of shares | 7,033,712 | ||
Shares issued, price per share | $ / shares | $ 15 | ||
Wholly Owned Properties [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | Property | 38 | ||
Aggregate area of land | ft² | 2.8 | ||
Wholly Owned Properties [Member] | Government [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | Property | 35 | ||
Wholly Owned Properties [Member] | Private Tenants [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | Property | 3 |
Real Estate and Intangibles - A
Real Estate and Intangibles - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($)Property | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)Property | Jun. 30, 2015USD ($) | |
Real Estate Properties [Line Items] | ||||
Net loss/income | $ 699 | $ 588 | $ 1,374 | $ (2,297) |
Acquisition-related costs | $ 346 | $ 195 | 679 | $ 1,635 |
Consolidated Properties [Member] | ||||
Real Estate Properties [Line Items] | ||||
Revenues | 1,300 | |||
Net loss/income | $ 500 | |||
ICE – Albuquerque and NPS – Omaha [Member] | ||||
Real Estate Properties [Line Items] | ||||
Number of properties | Property | 2 | 2 | ||
Purchase price | $ 52,000 | $ 52,000 | ||
Weighted average amortization period | 9 years 9 months 11 days | |||
Acquisition-related costs | $ 700 |
Real Estate and Intangibles - F
Real Estate and Intangibles - Fair Values of Assets Acquired and Liabilities Assumed (Detail) - ICE – Albuquerque and NPS – Omaha [Member] $ in Thousands | Jun. 30, 2016USD ($) |
Business Acquisition [Line Items] | |
Total real estate | $ 46,936 |
Total Intangibles | 6,691 |
Total intangible liabilities | (1,627) |
Purchase price | 52,000 |
Real Estate Investment [Member] | |
Business Acquisition [Line Items] | |
Land | 4,579 |
Building | 38,615 |
Acquired tenant improvements | 3,742 |
In-place leases [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 5,352 |
Acquired Leasing Commissions [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 1,339 |
Below Market Leases [Member] | |
Business Acquisition [Line Items] | |
Total intangible liabilities | $ (1,627) |
Real Estate and Intangibles - P
Real Estate and Intangibles - Proforma Financial Information of Future Operating Results (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | ||
Real Estate [Abstract] | |||
Total rental revenue | $ 49,940 | $ 48,585 | |
Net income (loss) | [1] | $ 2,996 | $ 3,546 |
[1] | The net income for the six months ended June 30, 2016 excludes $0.7 million of property acquisition costs. Additionally, the net income for the six months ended June 30, 2015 was adjusted to include these acquisition costs and exclude the $3.3 million of property acquisition and formation costs incurred during the six months ended June 30, 2015. |
Real Estate and Intangibles -25
Real Estate and Intangibles - Proforma Financial Information of Future Operating Results (Detail Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
ICE – Albuquerque and NPS – Omaha [Member] | ||
Real Estate Properties [Line Items] | ||
Property acquisition costs | $ 0.7 | |
DOE - Lakewood and AOC - Aberdeen and ICE - Otay and DEA - Pleasanton and USCIS - Lincoln and DEA - Dallas Lab and FBI - Richmond [Member] | ||
Real Estate Properties [Line Items] | ||
Property acquisition and formation costs | $ 3.3 |
Real Estate and Intangibles - S
Real Estate and Intangibles - Schedule of Real Estate and Intangibles (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Real estate | ||
Land | $ 102,478 | |
Building | 694,774 | |
Acquired tenant improvements | 38,608 | |
Accumulated amortization | (27,683) | |
Total Real Estate | 808,177 | $ 772,007 |
Intangible assets | ||
Above market leases | 38,608 | |
Accumulated amortization | (29,748) | |
Total Intangible assets | 111,728 | |
Intangible liabilities | ||
Intangible Liabilities, Below market leases | (52,328) | |
Intangible Liabilities, Accumulated amortization | 10,209 | |
Total Intangible liabilities | 42,119 | |
In-place leases [Member] | ||
Real estate | ||
Acquired tenant improvements | 109,271 | |
Intangible assets | ||
Above market leases | 109,271 | |
Acquired Leasing Commissions [Member] | ||
Real estate | ||
Acquired tenant improvements | 21,574 | |
Intangible assets | ||
Above market leases | 21,574 | |
Above Market Leases [Member] | ||
Real estate | ||
Acquired tenant improvements | 10,631 | |
Intangible assets | ||
Above market leases | $ 10,631 |
Debt - Summary of Borrowings (D
Debt - Summary of Borrowings (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 198,167 | $ 154,417 |
Mortgage notes payable, net | 82,289 | $ 83,744 |
Long term debt, Total | 280,456 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 198,167 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Feb. 11, 2015 | |
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 198,167,000 | $ 154,417,000 | ||
Amortization of deferred financing costs | 432,000 | $ 329,000 | ||
Mortgage Notes Payable, Net [Member] | ||||
Debt Instrument [Line Items] | ||||
Fair value of debt | $ 84,600,000 | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility current borrowing capacity | $ 400,000,000 | |||
Credit facility additional maximum borrowing capacity | 250,000,000 | |||
Credit facility maximum borrowing capacity | $ 650,000,000 | |||
Interest rate payable on borrowings | 1.85% | |||
Weighted average annual interest rate | 1.84% | |||
Outstanding borrowings | $ 198,167,000 | |||
Amount available under revolving credit facility | 201,800,000 | |||
Amortization of deferred financing costs | $ 400,000 |
Debt - Summary of Mortgage Debt
Debt - Summary of Mortgage Debt Collateralized By Underlying Real Estate (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Deferred Financing | $ (2,296) | $ (2,726) |
Carrying Value | 280,456 | |
Mortgage Notes Payable, Net [Member] | ||
Debt Instrument [Line Items] | ||
Principal Balance | 81,825 | |
Premium/ Discount | 503 | |
Deferred Financing | (39) | |
Carrying Value | $ 82,289 | |
Mortgage Notes Payable, Net [Member] | CBP Savannah [Member] | ||
Debt Instrument [Line Items] | ||
Fixed/ Floating | Fixed | |
Interest rate payable on borrowings | 3.40% | |
Effective Interest Rate | 4.12% | |
Maturity Date | Jul. 31, 2033 | |
Principal Balance | $ 15,246 | |
Premium/ Discount | (814) | |
Carrying Value | $ 14,432 | |
Mortgage Notes Payable, Net [Member] | ICE Charleston [Member] | ||
Debt Instrument [Line Items] | ||
Fixed/ Floating | Fixed | |
Interest rate payable on borrowings | 4.21% | |
Effective Interest Rate | 3.93% | |
Maturity Date | Jan. 31, 2027 | |
Principal Balance | $ 21,463 | |
Premium/ Discount | 380 | |
Carrying Value | $ 21,843 | |
Mortgage Notes Payable, Net [Member] | MEPCOM Jacksonville [Member] | ||
Debt Instrument [Line Items] | ||
Fixed/ Floating | Fixed | |
Interest rate payable on borrowings | 4.41% | |
Effective Interest Rate | 3.89% | |
Maturity Date | Oct. 31, 2025 | |
Principal Balance | $ 12,080 | |
Premium/ Discount | 298 | |
Carrying Value | $ 12,378 | |
Mortgage Notes Payable, Net [Member] | USFS II Albuquerque [Member] | ||
Debt Instrument [Line Items] | ||
Fixed/ Floating | Fixed | |
Interest rate payable on borrowings | 4.46% | |
Effective Interest Rate | 3.92% | |
Maturity Date | Jul. 31, 2026 | |
Principal Balance | $ 17,336 | |
Premium/ Discount | 639 | |
Carrying Value | $ 17,975 | |
Mortgage Notes Payable, Net [Member] | DEA Pleasanton [Member] | ||
Debt Instrument [Line Items] | ||
Fixed/ Floating | Floating | |
Interest rate payable on borrowings | LIBOR + 150bps | |
Effective Interest Rate | 1.80% | |
Maturity Date | Oct. 31, 2023 | |
Principal Balance | $ 15,700 | |
Deferred Financing | (39) | |
Carrying Value | $ 15,661 |
Equity - Summary of Changes In
Equity - Summary of Changes In Stockholders' Equity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Shareholders Equity [Line Items] | ||||
Balance | $ 619,894 | $ 297,184 | ||
Balance (in shares) | 24,168,379 | 1,000 | ||
Distributions | $ (5,441) | |||
Exchange of members' capital and non-controlling interests for common units and shares (in shares) | 3,308,000 | |||
Public Offering | $ 80,860 | $ 191,583 | ||
Public Offering (in share) | 4,719,045 | 13,800,000 | ||
Proceeds of private placement | $ 75,638 | |||
Proceeds of private placement (in share) | 7,033,712 | |||
Contribution of Western Devcon properties for common units | $ 86,397 | |||
Stock based compensation | $ 1,422 | 512 | ||
Dividends and distributions paid | $ (19,001) | $ (4,377) | ||
Grant of unvested restricted stock (in share) | 16,128 | 26,667 | ||
Buyback of common stock | $ (1) | |||
Buyback of common stock (in shares) | (1,000) | |||
Redemption of common units for common shares (in share) | 5,745,028 | |||
Net income (loss) | $ 1,037 | $ 965 | $ 2,146 | $ (7,036) |
Balance | $ 685,321 | $ 634,459 | $ 685,321 | $ 634,459 |
Balance (in shares) | 34,648,580 | 24,168,379 | 34,648,580 | 24,168,379 |
Common Stock Par Value [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance (in per share) | $ 241 | |||
Exchange of members' capital and non-controlling interests for common units and shares (Par value) | $ 33 | |||
Public Offering Per Share | 47 | 138 | ||
Proceeds Of Private Placement Per Share | 70 | |||
Redemption of common units for common shares Per Share | 58 | |||
Balance (in per share) | $ 346 | $ 241 | $ 346 | $ 241 |
Additional Paid-in Capital [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | $ 391,767 | $ 1 | ||
Exchange of members’ capital and non-controlling interests for common units and shares | 67,312 | |||
Public Offering | 80,813 | 191,445 | ||
Proceeds of private placement | 105,435 | |||
Stock based compensation | 145 | 155 | ||
Buyback of common stock | (1) | |||
Redemption of common units for common shares | 88,616 | |||
Allocation of non-controlling interest in Operating Partnership | (1,269) | 27,575 | ||
Balance | $ 560,072 | $ 391,922 | 560,072 | 391,922 |
Retained (Deficit) [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | (1,694) | |||
Net income (loss) | 1,374 | (2,297) | ||
Balance | (320) | (2,297) | (320) | (2,297) |
Distributions in Excess of Earnings [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | (13,051) | |||
Dividends and distributions paid | (12,806) | (2,659) | ||
Balance | (25,857) | (2,659) | (25,857) | (2,659) |
Non-controlling Interest in Operating Partnership [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | 242,631 | |||
Exchange of members’ capital and non-controlling interests for common units and shares | 194,530 | |||
Contribution of Western Devcon properties for common units | 86,397 | |||
Stock based compensation | 1,277 | 357 | ||
Dividends and distributions paid | (6,195) | (1,718) | ||
Redemption of common units for common shares | (88,674) | |||
Net income (loss) | 772 | (4,739) | ||
Allocation of non-controlling interest in Operating Partnership | 1,269 | (27,575) | ||
Balance | $ 151,080 | $ 247,252 | $ 151,080 | 247,252 |
Member Capital / (Deficit) [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | 13,336 | |||
Distributions | (9) | |||
Exchange of members’ capital and non-controlling interests for common units and shares | (12,738) | |||
Proceeds of private placement | (589) | |||
Non-controlling Interests [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | 283,847 | |||
Distributions | (5,432) | |||
Exchange of members’ capital and non-controlling interests for common units and shares | (249,137) | |||
Proceeds of private placement | $ (29,278) |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Aug. 03, 2016 | Jun. 07, 2016 | May 04, 2016 | Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Feb. 26, 2016 | Dec. 31, 2015 | May 06, 2015 |
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Common stock issued to non-employee directors | 16,128 | 26,667 | |||||||
Unrecognized compensation expense | $ 5.7 | $ 5.7 | |||||||
Common Stock, shares issued | 34,648,580 | 34,648,580 | 24,168,379 | ||||||
Shares offered directly by the company | 4,719,045 | 13,800,000 | |||||||
Redemption of common units to common stock (in share) | 5,745,028 | ||||||||
Dividends per share | $ 0.23 | ||||||||
Dividends payable, date of record | Jun. 8, 2016 | ||||||||
Dividends payable, date to be paid | Jun. 23, 2016 | ||||||||
Dividend rate percentage | 10.00% | ||||||||
Subsequent Event [Member] | |||||||||
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Dividends per share | $ 0.23 | ||||||||
Dividends payable, date of record | Aug. 26, 2016 | ||||||||
Dividends payable, date to be paid | Sep. 13, 2016 | ||||||||
Dividend rate percentage | 10.00% | ||||||||
Easterly Funds [Member] | |||||||||
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Redemption of common units to common stock (in share) | 5,745,028 | ||||||||
Underwritten Public Offering [Member] | |||||||||
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Common Stock, shares issued | 6,219,045 | ||||||||
Shares offered directly by the company | 4,719,045 | ||||||||
Shares offered on forward basis | 1,500,000 | ||||||||
Gross proceeds from shares sold to underwriters | $ 84.9 | ||||||||
Forward contract initial price per share | $ 17.235 | ||||||||
Expected settlement date of the forward contract | Dec. 7, 2016 | ||||||||
2015 Equity Incentive Plan [Member] | |||||||||
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Common stock issued to non-employee directors | 16,128 | ||||||||
Compensation expense recognized | $ 1.4 | ||||||||
Common Stock, shares issued | 0 | 0 | |||||||
Long Term Incentive Plan [Member] | |||||||||
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Issuing of LTIP units of limited partnership interest | 40,000 | 891,000 | |||||||
Tranche One [Member] | Long Term Incentive Plan [Member] | |||||||||
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Percentage of shares vest under long term incentive plan | 50.00% | ||||||||
Tranche Two [Member] | Long Term Incentive Plan [Member] | |||||||||
Stockholders Equity Note Disclosure [Line Items] | |||||||||
Percentage of shares vest under long term incentive plan | 50.00% |
Equity - Summary of Non-vested
Equity - Summary of Non-vested Common Stock and LTIP Units Awards (Detail) | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Restricted Shares [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares/Units, Outstanding beginning balance | shares | 26,667 |
Shares/Units, Vested | shares | (26,667) |
Shares/Units, Granted | shares | 16,128 |
Shares/Units, Outstanding ending balance | shares | 16,128 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ / shares | $ 15 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 15 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 18.60 |
Weighted Average Grant Date Fair Value, Outstanding ending balance | $ / shares | $ 18.60 |
Long Term Incentive Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares/Units, Outstanding beginning balance | shares | 891,000 |
Shares/Units, Granted | shares | 40,000 |
Shares/Units, Forfeited | shares | (5,000) |
Shares/Units, Outstanding ending balance | shares | 926,000 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ / shares | $ 8.67 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 14.15 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 8.67 |
Weighted Average Grant Date Fair Value, Outstanding ending balance | $ / shares | $ 8.91 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share Basic And Diluted [Line Items] | ||||
Net income (loss) | $ 1,037 | $ 965 | $ 2,146 | $ (7,036) |
Less: Non-controlling interest in Operating Partnership | (338) | (377) | (772) | 4,739 |
Net income (loss) available to Easterly Government Properties, Inc. | 699 | 588 | 1,374 | (2,297) |
Less: Dividends on participating securities | (25) | (13) | (51) | (13) |
Net income (loss) available to common stockholders | $ 674 | $ 575 | $ 1,323 | $ (2,310) |
Denominator for basic EPS | 27,484,075 | 24,141,712 | 25,812,893 | 18,673,374 |
Denominator for diluted EPS | 29,267,258 | 25,435,010 | 27,538,423 | 18,673,374 |
Basic EPS | $ 0.02 | $ 0.02 | $ 0.05 | $ (0.12) |
Diluted EPS | $ 0.02 | $ 0.02 | $ 0.05 | $ (0.12) |
Stock Compensation Plan | ||||
Earnings Per Share Basic And Diluted [Line Items] | ||||
Dilutive effect | 11,629 | 8,272 | 12,753 | |
Long Term Incentive Plan [Member] | ||||
Earnings Per Share Basic And Diluted [Line Items] | ||||
Dilutive effect | 1,638,738 | 1,285,026 | 1,625,785 | |
Forward Shares [Member] | ||||
Earnings Per Share Basic And Diluted [Line Items] | ||||
Dilutive effect | 132,816 | 86,992 |
Operating Leases - Summary of F
Operating Leases - Summary of Future Minimum Rental Payments (Detail) $ in Thousands | Jun. 30, 2016USD ($) |
Leases [Abstract] | |
Minimum lease payments, Total | $ 469,766 |
Minimum lease payments, 2016 | 32,895 |
Minimum lease payments, 2017 | 64,679 |
Minimum lease payments, 2018 | 62,154 |
Minimum lease payments, 2019 | 56,316 |
Minimum lease payments, 2020 | 50,579 |
Minimum lease payments, Thereafter | $ 203,143 |
Operating Leases - Additional I
Operating Leases - Additional Information (Detail) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016USD ($)Tenants | Jun. 30, 2015USD ($) | Jun. 18, 2016ft² | |
Leases [Abstract] | |||
Number of consolidated properties | 100.00% | ||
Rental income attributable to base rent | $ 40,500 | ||
Number of tenants | Tenants | 20 | ||
Straight-line rent adjustments | $ 100 | ||
Amortization of above and below market leases | $ 3,409 | $ 1,976 | |
Area of leased laboratory premises | ft² | 65,810 | ||
Lease term | 20 years |
Concentrations Risk - Additiona
Concentrations Risk - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2016Property | |
Wholly Owned Properties [Member] | |
Concentration Risk [Line Items] | |
Number of properties | 38 |
California [Member] | |
Concentration Risk [Line Items] | |
Number of properties | 13 |
Lease Income [Member] | Credit Concentration Risk [Member] | California [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 30.30% |
Rentable Square Feet [Member] | Credit Concentration Risk [Member] | California [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 22.50% |
General Services Administration And Other Federal Agencies [Member] | Lease Income [Member] | Credit Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 96.40% |
Non Governmental Tenants [Member] | Lease Income [Member] | Credit Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 3.60% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - ft² | Jul. 01, 2016 | Jun. 30, 2016 |
Subsequent Event [Line Items] | ||
Lease term | 20 years | |
Subsequent Event [Member] | Federal Bureau of Investigation [Member] | ||
Subsequent Event [Line Items] | ||
Acquisition of lease property | 96,278 | |
Lease term | 15 years | |
Subsequent Event [Member] | Drug Enforcement Agency [Member] | ||
Subsequent Event [Line Items] | ||
Acquisition of lease property | 35,616 | |
Lease term | 15 years | |
Subsequent Event [Member] | Environmental Protection Agency [Member] | ||
Subsequent Event [Line Items] | ||
Acquisition of lease property | 71,979 | |
Lease term | 20 years |