Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
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 | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 45,695,511 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Real estate properties, net | $ 1,232,211 | $ 1,230,162 |
Cash and cash equivalents | 9,591 | 12,682 |
Restricted cash | 4,389 | 3,519 |
Deposits on acquisitions | 1,050 | 750 |
Rents receivable | 13,565 | 12,751 |
Accounts receivable | 9,911 | 9,347 |
Deferred financing, net | 733 | 945 |
Intangible assets, net | 136,651 | 143,063 |
Interest rate swaps | 5,890 | 4,031 |
Prepaid expenses and other assets | 10,710 | 8,088 |
Total assets | 1,424,701 | 1,425,338 |
Liabilities | ||
Revolving credit facility | 98,750 | 99,750 |
Term loan facility, net | 99,236 | 99,202 |
Notes payable, net | 173,702 | 173,692 |
Mortgage notes payable, net | 202,495 | 203,250 |
Intangible liabilities, net | 36,093 | 38,569 |
Accounts payable and accrued liabilities | 19,733 | 19,786 |
Total liabilities | 630,009 | 634,249 |
Equity | ||
Common stock, par value $0.01, 200,000,000 shares authorized, 45,458,706 and 44,787,040 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 455 | 448 |
Additional paid-in capital | 741,089 | 740,546 |
Retained earnings | 8,646 | 7,127 |
Cumulative dividends | (95,447) | (83,718) |
Accumulated other comprehensive income | 4,889 | 3,403 |
Total stockholders’ equity | 659,632 | 667,806 |
Non-controlling interest in Operating Partnership | 135,060 | 123,283 |
Total equity | 794,692 | 791,089 |
Total liabilities and equity | $ 1,424,701 | $ 1,425,338 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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 | 45,458,706 | 44,787,040 |
Common Stock, shares outstanding | 45,458,706 | 44,787,040 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Rental income | $ 32,289 | $ 26,020 |
Tenant reimbursements | 3,483 | 3,628 |
Other income | 202 | 239 |
Total revenues | 35,974 | 29,887 |
Operating expenses | ||
Property operating | 6,560 | 6,349 |
Real estate taxes | 3,700 | 2,735 |
Depreciation and amortization | 14,634 | 12,869 |
Acquisition costs | 224 | 532 |
Corporate general and administrative | 3,459 | 3,444 |
Total expenses | 28,577 | 25,929 |
Operating income | 7,397 | 3,958 |
Other expenses | ||
Interest expense, net | (5,582) | (2,417) |
Net income | 1,815 | 1,541 |
Non-controlling interest in Operating Partnership | (296) | (304) |
Net income available to Easterly Government Properties, Inc. | $ 1,519 | $ 1,237 |
Net income available to Easterly Government Properties, Inc. per share: | ||
Basic | $ 0.03 | $ 0.03 |
Diluted | $ 0.03 | $ 0.03 |
Weighted-average common shares outstanding | ||
Basic | 45,008,062 | 36,891,595 |
Diluted | 46,018,040 | 39,143,887 |
Dividends declared per common share | $ 0.26 | $ 0.24 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 1,815 | $ 1,541 |
Other comprehensive income: | ||
Unrealized gain on interest rate swaps, net | 1,859 | 108 |
Other comprehensive income | 1,859 | 108 |
Comprehensive income | 3,674 | 1,649 |
Non-controlling interest in Operating Partnership | (296) | (304) |
Other comprehensive income attributable to non-controlling interest | (373) | (12) |
Comprehensive income attributable to Easterly Government Properties, Inc. | $ 3,005 | $ 1,333 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | |
Cash flows from operating activities | ||||
Net income | $ 1,815 | $ 1,541 | ||
Adjustments to reconcile net income to net cash provided by operating activities | ||||
Depreciation and amortization | 14,634 | 12,869 | ||
Straight line rent | (1,807) | (143) | ||
Amortization of above- / below-market leases | (2,279) | (2,112) | ||
Amortization of unearned revenue | (26) | (27) | ||
Amortization of loan premium / discount | (21) | (21) | ||
Amortization of deferred financing costs | 285 | 251 | ||
Non-cash compensation | 864 | 727 | ||
Net change in: | ||||
Rents receivable | 991 | 775 | ||
Accounts receivable | (564) | 83 | ||
Prepaid expenses and other assets | (2,613) | (1,905) | ||
Accounts payable and accrued liabilities | 834 | (1,313) | ||
Net cash provided by operating activities | 12,113 | 10,725 | ||
Cash flows from investing activities | ||||
Real estate acquisitions and deposits | (326) | (43,968) | ||
Additions to operating properties | (890) | (124) | ||
Additions to development properties | (10,410) | (79) | ||
Net cash (used in) investing activities | (11,626) | (44,171) | ||
Cash flows from financing activities | ||||
Payment of deferred financing costs | (18) | |||
Issuance of common shares | 13,669 | |||
Credit facility draws | 4,000 | 65,750 | ||
Credit facility repayments | (5,000) | (119,750) | ||
Term loan draws | 100,000 | |||
Repayments of mortgage notes payable | (763) | (732) | ||
Dividends and distributions paid | (14,424) | (11,049) | ||
Payment of offering costs | (190) | |||
Net cash provided by (used in) financing activities | (2,708) | 34,201 | ||
Net increase (decrease) in Cash and cash equivalents and Restricted cash | (2,221) | 755 | ||
Cash and cash equivalents and Restricted cash, beginning of period | 16,201 | 6,491 | $ 6,491 | $ 6,491 |
Cash and cash equivalents and Restricted cash, end of period | 13,980 | 7,246 | $ 16,201 | $ 13,980 |
Supplemental disclosure of cash flow information is as follows (amounts in thousands): | ||||
Cash paid for interest, net of capitalized interest | 3,497 | 2,190 | ||
Offering costs accrued, not paid | 17 | |||
Deferred asset acquisition costs accrued, not paid | 8 | |||
Unrealized loss on interest rate swaps, net | 1,859 | 108 | ||
Exchange of Common Units for Shares of Common Stock | ||||
Non-controlling interest in Operating Partnership | (1,727) | |||
Common stock | 1 | |||
Additional paid-in capital | 1,726 | |||
Operating Properties [Member] | ||||
Supplemental disclosure of cash flow information is as follows (amounts in thousands): | ||||
Additions to properties accrued, not paid | 183 | 102 | ||
Development Properties [Member] | ||||
Supplemental disclosure of cash flow information is as follows (amounts in thousands): | ||||
Additions to properties accrued, not paid | $ 2,532 | $ 92 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017, 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, 2017 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 1, 2018. The Company is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code, as amended (the “Code”) commencing with its taxable year 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, either directly or through the U.S. General Services Administration (“GSA”). Our objective is to generate attractive risk-adjusted returns for our stockholders over the long term through dividends and capital appreciation. As of March 31, 2018, we wholly owned 46 operating properties in the United States, including 44 operating properties that were leased primarily to U.S. Government tenant agencies and two operating properties that were entirely leased to private tenants, encompassing approximately 3.7 million square feet in the aggregate. In addition, we wholly owned three properties under development that we expect will encompass approximately 0.3 million square feet upon completion. We focus on acquiring, developing, and managing U.S. Government 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 with the tenant agency to meet its needs and objectives. The Operating Partnership holds substantially all of our assets and conducts substantially all our business. The Company is the sole general partner of the Operating Partnership. The Company owned approximately 83.0% of the aggregate limited partnership interests in the Operating Partnership (“common units”) at March 31, 2018. 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. Principles of 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, Easterly Government Properties TRS, LLC, Easterly Government Services, LLC, the Operating Partnership and its other subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 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 March 31, 2018, and the consolidated results of operations for the three months ended March 31, 2018 and 2017 and the consolidated cash flows for the three months ended March 31, 2018 and 2017. Certain prior year amounts have been reclassified to conform to the current year presentation. 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Revision of Previously Reported Consolidated Financial Statements In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2017, the Company identified an error in the estimated useful life utilized to amortize certain assets associated with three properties contributed at the time of the Company’s initial public offering in the first quarter of 2015. As a result of the error, Depreciation and amortization expense had been overstated and thereby Real estate properties, net, Intangible assets, net and Equity were understated. The Company concluded that the amounts are not material to any of its previously issued consolidated financial statements. However, to maintain proper comparability between our financial statements we have elected to revise prior periods. Accordingly, the Company revised these balances in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The effects of this revision to the consolidated financial statements are as follows (in thousands, except for per share data). Effect of Revision For the Three Months Ended March 31, 2017 As Previously Reported Adjustment As Revised Total revenues $ 29,887 $ — $ 29,887 Depreciation and amortization 13,060 (191 ) 12,869 Total expenses 26,120 (191 ) 25,929 Net income 1,350 191 1,541 Net income available to Easterly Government Properties, Inc. 1,084 153 1,237 Net income available to Easterly Government Properties, Inc. per share (basic and diluted) 0.03 — 0.03 Comprehensive income 1,458 191 1,649 Recently Adopted Accounting Pronouncements On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Please refer to Note 10 for more information pertaining to our adoption of this guidance. On January 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230), which provides classification guidance for certain cash receipts and cash payments including payment of debt extinguishment costs, settlement of zero-coupon debt instruments, insurance claim payments and distributions from equity method investees. The guidance should be applied retrospectively, however the implementation of this update did not have a material impact on our consolidated financial statements. On January 1, 2018, the Company adopted and retrospectively applied ASU No. 2016-18, Statement of Cash Flows (Topic 230), which requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company now reconciles both cash and cash equivalents and restricted cash in the accompanying Statements of Cash Flows for all periods, whereas under the prior guidance the Company explained the changes during the period for cash and cash equivalents only. On January 1, 2018, the Company adopted ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU clarifies the scope and accounting of a financial asset that meets the definition of an “in-substance nonfinancial asset” and defines the term “in-substance nonfinancial asset.” This ASU also adds guidance for partial sales of nonfinancial assets. The Company adopted this ASU using the modified retrospective method and the implementation of this update did not have a material impact on our consolidated financial statements. On January 1, 2018, the Company adopted ASU 2017-09, Stock Compensation (Topic 718): Scope of Modification Accounting, which provides updated guidance about which changes to the terms or conditions of a share-based payment award would require an entity to apply modification accounting under the topic. The guidance should be applied prospectively to an award modified on or after the adoption date, however, implementation of this update did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the 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. As of March 31, 2018, the Company had a sublease for office space in Washington D.C. expiring in June 2021 and a lease for office space in San Diego, CA expiring in April 2022. The remaining contractual payments under the Company’s lease and sublease for office space aggregate $1.7 million. 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. In connection with the new revenue guidance, we believe that the new revenue standard may apply to executory costs and other components of revenue deemed to be non-lease components, even when the revenue for such activities is not separately stipulated in the lease. In that case, we would need to separate the lease components of revenue due under leases from the non-lease components. Under the new guidance, we would continue to recognize the lease components of lease revenue on a straight-line basis over our respective lease terms as we do under prior guidance. However, we would recognize the non-lease components under the new revenue guidance as the related services are delivered. As a result, while the total revenue recognized over time would not differ under the new guidance, the recognition pattern could be different. The Company is currently in the process of evaluating the significance of the difference in the recognition pattern that would result from this change. Additionally, ASU 2016-02 will require that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under ASU 2016-02, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. ASU No. 2016-02 is effective for reporting periods beginning January 1, 2019, with modified retrospective application for each reporting period presented at the time of adoption. Early adoption is also permitted for this guidance. The Company is in the process of evaluating the impact of this new guidance. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of either adopting the new standard early using a modified retrospective transition method in any interim period after issuance of the update, or alternatively adopting the new standard for fiscal years beginning after December 15, 2018. This adoption method may require the Company to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update. While the Company continues to assess all potential impacts of the standard, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Real Estate and Intangibles
Real Estate and Intangibles | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Real Estate and Intangibles | 3. Real Estate and Intangibles During the three months ended March 31, 2018, we incurred $0.2 million of acquisition-related expenses including $0.2 million of internal costs associated with property acquisitions. Consolidated Real Estate and Intangibles Real estate and intangibles consisted of the following as of March 31, 2018 (dollars in thousands): Total Real estate properties, net Land $ 134,163 Building 1,099,949 Acquired tenant improvements 47,503 Construction in progress 27,395 Accumulated amortization (76,799 ) Total Real estate properties, net $ 1,232,211 Intangible assets, net In-place leases $ 160,119 Acquired leasing commissions 38,464 Above market leases 9,455 Accumulated amortization (71,387 ) Total Intangible assets, net $ 136,651 Intangible liabilities, net Below market leases $ (62,856 ) Accumulated amortization 26,763 Total Intangible liabilities, net $ (36,093 ) |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt At March 31, 2018, our consolidated borrowings consisted of the following (dollars in thousands): Principal Outstanding Interest Current Loan March 31, 2018 Rate (1) Maturity Revolving credit facility: Senior unsecured revolving credit facility (2) $ 98,750 L + 150bps February 2019 (3) Total revolving credit facility 98,750 Term loan facility: Senior unsecured term loan facility 100,000 3.17% (4) September 2023 Total term loan facility 100,000 Less: Total unamortized deferred financing fees (764 ) Total term loan facility, net 99,236 Notes payable: Senior unsecured notes payable, series A 95,000 4.05% May 2027 Senior unsecured notes payable, series B 50,000 4.15% May 2029 Senior unsecured notes payable, series C 30,000 4.30% May 2032 Total notes payable 175,000 Less: Total unamortized deferred financing fees (1,298 ) Total notes payable, net 173,702 Mortgage notes payable: CBP - Savannah 14,035 3.40% (5) July 2033 ICE - Charleston 19,517 4.21% (5) January 2027 MEPCOM - Jacksonville 10,574 4.41% (5) October 2025 USFS II - Albuquerque 16,816 4.46% (5) July 2026 DEA - Pleasanton 15,700 L + 150bps (5) October 2023 VA - Loma Linda 127,500 3.59% (5) July 2027 Total mortgage notes payable 204,142 Less: Total unamortized deferred financing fees (2,002 ) Less: Total unamortized premium/discount 355 Total mortgage notes payable, net 202,495 Total debt $ 574,183 (1) At March 31, 2018, the one-month LIBOR (“L”) was 1.88%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums. The spread over the applicable rate for the Company’s senior unsecured revolving credit facility and senior unsecured term loan facility is based on the Company’s consolidated leverage ratio, as defined in the respective loan agreements. (2) Available capacity of $301.2 million at March 31, 2018 with an accordion feature that provides additional capacity of up to $250.0 million, for a total facility size of not more than $650.0 million. (3) Our senior unsecured revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee. (4) The interest rate is calculated based on two interest rate swaps with an effective date of March 29, 2017 with an aggregate notional value of $100.0 million, which effectively fix the interest rate at 3.17% annually, based on the Company’s consolidated leverage ratio, as defined in the senior unsecured term loan facility agreement. (5) Effective interest rates are as follows: CBP - Savannah 4.12%, ICE - Charleston 3.93%, MEPCOM - Jacksonville 3.89%, USFS II - Albuquerque 3.92%, DEA - Pleasanton 1.8%, VA – Loma Linda 3.78%. Financial Covenant Considerations The Company was in compliance with all financial and other covenants as of March 31, 2018 related to its senior unsecured revolving credit facility, senior unsecured term loan facility, senior unsecured notes payable and secured mortgage notes payable. Fair Value of Debt As of March 31, 2018, the carrying value of our senior unsecured revolving credit facility approximated fair value. In determining the fair value we considered the short term maturity, variable interest rate and credit spreads. We deem the fair value of our senior unsecured revolving credit facility as a Level 3 measurement. As of March 31, 2018, the carrying value of our senior unsecured term loan facility approximated fair value. In determining the fair value we considered the variable interest rate and credit spreads. We deem the fair value of our senior unsecured term loan facility as a Level 3 measurement. At March 31, 2018, the fair value of our notes payable was determined by discounting future contractual principal and interest payments using prevailing market rates. We deem the fair value measurement of our notes payable instruments as a Level 3 measurement. At March 31, 2018, the fair value of our notes payable was $172.9 million. At March 31, 2018, 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 mortgage debt instruments as a Level 3 measurement. At March 31, 2018, the fair value of our mortgage debt was $198.2 million. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | 5. Derivatives and Hedging Activities As of March 31, 2018, the Company had two outstanding interest rate swaps with an aggregate notional value of $100.0 million that were designated as cash flow hedges. The swaps had an effective date of March 29, 2017 and extend until the maturity of our senior unsecured term loan facility on September 29, 2023. The swaps effectively fix the interest rate under our senior unsecured term loan facility at 3.17% annually based on the Company’s current consolidated leverage ratio and a variable interest rate of one-month LIBOR. Cash Flow Hedges of Interest Rate Risk As of March 31, 2018 our swaps were classified as an asset on our consolidated balance sheet at $5.9 million. The effective portion of changes in the fair value of derivatives designated and qualified as cash flow hedges is recorded in accumulated other comprehensive income and will be reclassified to interest expense in the period that the hedged forecasted transactions affect earnings on the Company’s variable rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings into interest expense. For the three months ended March 31, 2018 and March 31, 2017 the amount of unrealized gains recognized in accumulated other comprehensive income on interest rate swaps was $1.9 million and $0.1 million, respectively. For the three months ended March 31, 2018 the amount of gain reclassified from accumulated other comprehensive income into interest expense was less than $0.1 million. For the three months ended March 31, 2017 the amount of loss reclassified from accumulated other comprehensive income into interest expense was less than $0.1 million. Additionally, during the three months ended March 31, 2018 and March 31, 2017, there Company did not record any hedge ineffectiveness. The Company estimates that $0.7 million will be reclassified from accumulated other comprehensive income as a decrease to interest expense over the next 12 months. Credit-Risk-Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on such indebtedness. As of March 31, 2018, the Company did not have any derivatives in a net liability position. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements Accounting standards define fair value as the exit price, or the amount that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standards also establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy of these inputs is broken down into three levels: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Categorization within the valuation hierarchy is based upon the lowest level of input that is most significant to the fair value measurement. Recurring fair value measurements The fair values of our interest rate swaps are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities in such interest rates. While the Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of the Company’s derivatives held as of March 31, 2018 were classified as Level 2 of the fair value hierarchy. The carrying values of cash and cash equivalents, restricted cash, accounts receivable, other assets and accounts payable and accrued expenses are reasonable estimates of fair values because of the short maturities of these instruments. For our disclosure of debt fair values in Note 4, we estimated the fair value of our unsecured senior revolving credit facility based on the short term maturity, variable interest rates and credit spreads (categorized within Level 3 of the fair value hierarchy), estimated the fair value of our senior unsecured term loan facility based on the variable interest rate and credit spreads (categorized within Level 3 of the fair value hierarchy) and estimated the fair value of our other debt based on the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximate current market rates for loans, or groups of loans, with similar maturities and credit quality, and the estimated future payments included scheduled principal and interest payments. Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement at such fair value amounts may not be possible and may not be prudent management decision. The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall. As of March 31, 2018 Balance Sheet Line Item Level 1 Level 2 Level 3 Interest rate swaps - Asset $ — $ 5,890 $ — |
Equity
Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Equity | 7. Equity The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2018 and 2017 (dollars in thousands): Shares Common Stock Par Value Additional Paid-in Capital Retained Earnings (Deficit) Cumulative Dividends Accumulated Other Comprehensive Income Non- controlling Interest in Operating Partnership Total Equity Three months ended March 31, 2018 Balance at December 31, 2017 44,787,040 $ 448 $ 740,546 $ 7,127 $ (83,718 ) $ 3,403 $ 123,283 $ 791,089 Stock based compensation — 81 — — — 783 864 Dividends and distributions paid — — — (11,729 ) — (2,695 ) (14,424 ) Issuance of common stock 671,666 7 13,482 — — — — 13,489 Unrealized gain (loss) on interest rate swaps — — — — 1,486 373 1,859 Net income — — 1,519 — — 296 1,815 Allocation of non-controlling interest in Operating Partnership — (13,020 ) — — — 13,020 — Balance at March 31, 2018 45,458,706 $ 455 $ 741,089 $ 8,646 $ (95,447 ) $ 4,889 $ 135,060 $ 794,692 Three months ended March 31, 2017 Balance at December 31, 2016 36,874,810 $ 369 $ 597,164 $ 2,679 $ (42,794 ) $ 3,038 $ 137,844 $ 698,300 Stock based compensation — 74 — — — 653 727 Dividends and distributions paid — — — (8,877 ) — (2,172 ) (11,049 ) Grant of unvested restricted stock 2,692 — — — — — — — Redemption of common units for shares of common stock 113,928 1 1,726 — — — (1,727 ) — Unrealized gain on interest rate swaps — — — — 96 12 108 Net income — — 1,237 — — 304 1,541 Allocation of non-controlling interest in Operating Partnership — 466 — — — (466 ) — Balance at March 31, 2017 36,991,430 $ 370 $ 599,430 $ 3,916 $ (51,671 ) $ 3,134 $ 134,448 $ 689,627 The Company granted 891,000 long term incentive plan units in our operating partnership (“LTIP units”) On January 4, 2018, the Company granted an aggregate of 173,381 performance-based LTIP units to members of management, subject to the Company achieving certain absolute and relative total shareholder returns through the performance period. The awards consist of three separate tranches of 32,448 LTIP units, 55,463 LTIP units and 85,470 LTIP units with performance periods ending on December 31, 2018, December 31, 2019 and December 31, 2020, respectively. The performance criteria for each tranche is based 75% on the Company’s absolute total shareholder return performance and 25% on the Company’s relative total shareholder return performance during the relevant performance period, with 50% of the LTIP Units vesting when earned following the end of the applicable performance period and 50% of the earned award subject to an additional one year of vesting. A summary of our shares of restricted common stock and LTIP unit awards at March 31, 2018 is as follows: Restricted Shares Restricted Shares Weighted Average Grant Date Fair Value Per Share LTIP Units LTIP Units Weighted Average Grant Date Fair Value Per Share Outstanding, December 31, 2017 17,912 $ 19.72 926,000 $ 8.91 Granted — — 173,381 $ 18.31 Vested — — (463,000 ) $ 8.91 Forfeited — — — — Outstanding, March 31, 2018 17,912 $ 19.72 636,381 $ 11.47 We recognized $0.9 million in compensation expense related to our shares of restricted common stock and the LTIP unit awards for the three months ended March 31, 2018. As of March 31, 2018, unrecognized compensation expense for both sets of awards was $3.9 million, which will be amortized over the vesting period. A summary of dividends declared by the board of directors per share of common stock and per common unit at the date of record is as follows: Quarter Declaration Date Record Date Pay Date Dividend (1) Q1 2018 May 3, 2018 June 11, 2018 June 28, 2018 $ 0.26 (1) Prior to the end of the performance period as set forth in the applicable LTIP unit award, holders of LTIP units are entitled to receive dividends per LTIP unit equal to 10% of the dividend paid per common unit. After the end of the performance period, the number of LTIP units, both vested and unvested, that LTIP award recipients have earned, if any, are entitled to receive dividends in an amount per LTIP unit equal to dividends, both regular and special, payable per common unit. On March 3, 2017, we entered into separate equity distribution agreements with each of Citigroup Global Markets Inc., BTIG, LLC, Jefferies LLC, Raymond James & Associates, Inc., RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc. (collectively, the “managers”), pursuant to which we may issue and sell the shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through the managers, acting as sales agents and/or principals (the “ATM Program”). The sales of shares of our common stock under the equity distribution agreements may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act. The following table sets forth certain information with respect to the ATM program as of March 31, 2018: Number of Shares Sold Net Proceeds For the year ended December 31, 2017 1,569,514 $ 33,263 For the three months ended March 31, 2018 671,666 13,532 2,241,180 $ 46,795 We have used the proceeds from such sales for general corporate purposes. As of March 31, 2018, we had approximately $52.7 million of gross sales of our common stock available under our ATM program. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. Earnings Per Share Basic earnings or loss per share of common stock (“EPS”) is calculated by dividing net income 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 unvested 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 months ended March 31, 2018 and 2017 (amounts in thousands, except per share amounts): For the three months ended March 31, 2018 2017 Numerator Net income $ 1,815 $ 1,541 Less: Non-controlling interest in Operating Partnership (296 ) (304 ) Net income available to Easterly Government Properties, Inc. 1,519 1,237 Less: Dividends on participating securities (279 ) (26 ) Net income available to common stockholders $ 1,240 $ 1,211 Denominator for basic EPS 45,008,062 36,891,595 Dilutive effect of share-based compensation awards 12,803 11,815 Dilutive effect of LTIP units 997,175 1,818,392 Dilutive effect of shares issuable under forward sales agreements — 422,085 Denominator for diluted EPS 46,018,040 39,143,887 Basic EPS $ 0.03 $ 0.03 Diluted EPS $ 0.03 $ 0.03 |
Operating Leases
Operating Leases | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Operating Leases | 9. Operating Leases Our rental properties are subject to generally non-cancelable operating leases generating future minimum contractual rent payments due from tenants. As of March 31, 2018, future non-cancelable minimum contractual rent payments are as follows (dollars in thousands): Payments due by period Total 2018 2019 2020 2021 2022 Thereafter Operating Leases Minimum lease payments $ 850,806 76,506 96,333 90,704 79,985 68,225 439,053 The Company’s consolidated operating properties were 100% occupied by 24 tenants at March 31, 2018. For the three months ended March 31, 2018 we recognized $28.2 million in rental income attributable to base rent, $2.3 million in rental income attributable to the amortization of our above- and below-market leases and a straight-line adjustment of $1.8 million. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 10. Revenue On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) using the modified retrospective method and applied it to all contracts that were not completed as of January 1, 2018. The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaced the existing revenue recognition guidance. The adoption of Topic 606 did not have an impact on the Company’s historical financial statements as the revenue that falls under the scope of this guidance is limited to tenant construction projects and the associated management fee, the recognition of which did not change from how the Company has historically accounted for these projects upon adoption of the new guidance. Tenant construction project reimbursements consist primarily of subcontracted costs that are reimbursed to the Company by the tenant. Historically, the Company has accounted for tenant construction project reimbursement arrangements using the percentage of completion method and will continue to recognize revenue from tenant construction projects using the percentage of completion method when the revenue and costs for such projects can be estimated with reasonable accuracy; when these criteria do not apply to a project, the Company recognizes revenue from that project using the completed contract method. Under the percentage of completion method, the Company recognizes a percentage of the total revenue on a project based on the cost of services provided on the project as of a point in time relative to the total costs on the project. The duration of the majority of tenant construction project reimbursement arrangements are less than a year and payment is typically due once a project is complete and work has been accepted by the tenant. For those projects ongoing as of March 31, 2018 and with a duration of greater than one year, the aggregate amount of transaction price allocated to remaining performance obligations at the end of the reporting period was $0.2 million, which will be recognized as revenue prior to the end of 2018 using the percentage of completion method as discussed above. The table below sets forth revenue from tenant construction projects disaggregated by tenant agency for the three months ended March 31, 2018 (in thousands). Tenant Tenant Construction Project Income Administrative Office of the U.S. Courts (“AOC”) $ 100 Drug Enforcement Administration (“DEA”) 23 Federal Bureau of Investigation (“FBI”) 58 Immigration and Customs Enforcement (“ICE”) 9 National Park Service (“NPS”) 31 U.S. Coast Guard (“USCG”) 6 U.S. Forest Service (“USFS”) 29 Department of Veteran Affairs (“VA”) 787 $ 1,043 The balance in Accounts receivable related to tenant construction projects was $3.5 million as of March 31, 2018 and $3.0 million as of December 31, 2017. There were no contract assets or liabilities as of March 31, 2018. |
Concentrations Risk
Concentrations Risk | 3 Months Ended |
Mar. 31, 2018 | |
Risks And Uncertainties [Abstract] | |
Concentrations Risk | 11. 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 or nongovernmental tenants. At March 31, 2018, the U.S Government accounted for approximately 99.2% of rental income and non-governmental tenants accounted for the remaining approximately 0.8%. Fourteen of our 46 operating properties are located in California, accounting for approximately 25.8% of our total rentable square feet and approximately 33.3% of our total annualized lease income as of March 31, 2018. In addition, we owned two properties under development located in California. 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 | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events For its consolidated financial statements as of March 31, 2018, the Company evaluated subsequent events and noted no significant events. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Revision of Previously Reported Consolidated Financial Statements | Revision of Previously Reported Consolidated Financial Statements In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2017, the Company identified an error in the estimated useful life utilized to amortize certain assets associated with three properties contributed at the time of the Company’s initial public offering in the first quarter of 2015. As a result of the error, Depreciation and amortization expense had been overstated and thereby Real estate properties, net, Intangible assets, net and Equity were understated. The Company concluded that the amounts are not material to any of its previously issued consolidated financial statements. However, to maintain proper comparability between our financial statements we have elected to revise prior periods. Accordingly, the Company revised these balances in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The effects of this revision to the consolidated financial statements are as follows (in thousands, except for per share data). Effect of Revision For the Three Months Ended March 31, 2017 As Previously Reported Adjustment As Revised Total revenues $ 29,887 $ — $ 29,887 Depreciation and amortization 13,060 (191 ) 12,869 Total expenses 26,120 (191 ) 25,929 Net income 1,350 191 1,541 Net income available to Easterly Government Properties, Inc. 1,084 153 1,237 Net income available to Easterly Government Properties, Inc. per share (basic and diluted) 0.03 — 0.03 Comprehensive income 1,458 191 1,649 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Please refer to Note 10 for more information pertaining to our adoption of this guidance. On January 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230), which provides classification guidance for certain cash receipts and cash payments including payment of debt extinguishment costs, settlement of zero-coupon debt instruments, insurance claim payments and distributions from equity method investees. The guidance should be applied retrospectively, however the implementation of this update did not have a material impact on our consolidated financial statements. On January 1, 2018, the Company adopted and retrospectively applied ASU No. 2016-18, Statement of Cash Flows (Topic 230), which requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company now reconciles both cash and cash equivalents and restricted cash in the accompanying Statements of Cash Flows for all periods, whereas under the prior guidance the Company explained the changes during the period for cash and cash equivalents only. On January 1, 2018, the Company adopted ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU clarifies the scope and accounting of a financial asset that meets the definition of an “in-substance nonfinancial asset” and defines the term “in-substance nonfinancial asset.” This ASU also adds guidance for partial sales of nonfinancial assets. The Company adopted this ASU using the modified retrospective method and the implementation of this update did not have a material impact on our consolidated financial statements. On January 1, 2018, the Company adopted ASU 2017-09, Stock Compensation (Topic 718): Scope of Modification Accounting, which provides updated guidance about which changes to the terms or conditions of a share-based payment award would require an entity to apply modification accounting under the topic. The guidance should be applied prospectively to an award modified on or after the adoption date, however, implementation of this update did not have a material impact on our consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In February 2016, the 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. As of March 31, 2018, the Company had a sublease for office space in Washington D.C. expiring in June 2021 and a lease for office space in San Diego, CA expiring in April 2022. The remaining contractual payments under the Company’s lease and sublease for office space aggregate $1.7 million. 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. In connection with the new revenue guidance, we believe that the new revenue standard may apply to executory costs and other components of revenue deemed to be non-lease components, even when the revenue for such activities is not separately stipulated in the lease. In that case, we would need to separate the lease components of revenue due under leases from the non-lease components. Under the new guidance, we would continue to recognize the lease components of lease revenue on a straight-line basis over our respective lease terms as we do under prior guidance. However, we would recognize the non-lease components under the new revenue guidance as the related services are delivered. As a result, while the total revenue recognized over time would not differ under the new guidance, the recognition pattern could be different. The Company is currently in the process of evaluating the significance of the difference in the recognition pattern that would result from this change. Additionally, ASU 2016-02 will require that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under ASU 2016-02, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. ASU No. 2016-02 is effective for reporting periods beginning January 1, 2019, with modified retrospective application for each reporting period presented at the time of adoption. Early adoption is also permitted for this guidance. The Company is in the process of evaluating the impact of this new guidance. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of either adopting the new standard early using a modified retrospective transition method in any interim period after issuance of the update, or alternatively adopting the new standard for fiscal years beginning after December 15, 2018. This adoption method may require the Company to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update. While the Company continues to assess all potential impacts of the standard, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Effect of Revision to Consolidated Financial Statements | The effects of this revision to the consolidated financial statements are as follows (in thousands, except for per share data). Effect of Revision For the Three Months Ended March 31, 2017 As Previously Reported Adjustment As Revised Total revenues $ 29,887 $ — $ 29,887 Depreciation and amortization 13,060 (191 ) 12,869 Total expenses 26,120 (191 ) 25,929 Net income 1,350 191 1,541 Net income available to Easterly Government Properties, Inc. 1,084 153 1,237 Net income available to Easterly Government Properties, Inc. per share (basic and diluted) 0.03 — 0.03 Comprehensive income 1,458 191 1,649 |
Real Estate and Intangibles (Ta
Real Estate and Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Schedule of Real Estate and Intangibles | Real estate and intangibles consisted of the following as of March 31, 2018 (dollars in thousands): Total Real estate properties, net Land $ 134,163 Building 1,099,949 Acquired tenant improvements 47,503 Construction in progress 27,395 Accumulated amortization (76,799 ) Total Real estate properties, net $ 1,232,211 Intangible assets, net In-place leases $ 160,119 Acquired leasing commissions 38,464 Above market leases 9,455 Accumulated amortization (71,387 ) Total Intangible assets, net $ 136,651 Intangible liabilities, net Below market leases $ (62,856 ) Accumulated amortization 26,763 Total Intangible liabilities, net $ (36,093 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Borrowings | At March 31, 2018, our consolidated borrowings consisted of the following (dollars in thousands): Principal Outstanding Interest Current Loan March 31, 2018 Rate (1) Maturity Revolving credit facility: Senior unsecured revolving credit facility (2) $ 98,750 L + 150bps February 2019 (3) Total revolving credit facility 98,750 Term loan facility: Senior unsecured term loan facility 100,000 3.17% (4) September 2023 Total term loan facility 100,000 Less: Total unamortized deferred financing fees (764 ) Total term loan facility, net 99,236 Notes payable: Senior unsecured notes payable, series A 95,000 4.05% May 2027 Senior unsecured notes payable, series B 50,000 4.15% May 2029 Senior unsecured notes payable, series C 30,000 4.30% May 2032 Total notes payable 175,000 Less: Total unamortized deferred financing fees (1,298 ) Total notes payable, net 173,702 Mortgage notes payable: CBP - Savannah 14,035 3.40% (5) July 2033 ICE - Charleston 19,517 4.21% (5) January 2027 MEPCOM - Jacksonville 10,574 4.41% (5) October 2025 USFS II - Albuquerque 16,816 4.46% (5) July 2026 DEA - Pleasanton 15,700 L + 150bps (5) October 2023 VA - Loma Linda 127,500 3.59% (5) July 2027 Total mortgage notes payable 204,142 Less: Total unamortized deferred financing fees (2,002 ) Less: Total unamortized premium/discount 355 Total mortgage notes payable, net 202,495 Total debt $ 574,183 (1) At March 31, 2018, the one-month LIBOR (“L”) was 1.88%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums. The spread over the applicable rate for the Company’s senior unsecured revolving credit facility and senior unsecured term loan facility is based on the Company’s consolidated leverage ratio, as defined in the respective loan agreements. (2) Available capacity of $301.2 million at March 31, 2018 with an accordion feature that provides additional capacity of up to $250.0 million, for a total facility size of not more than $650.0 million. (3) Our senior unsecured revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee. (4) The interest rate is calculated based on two interest rate swaps with an effective date of March 29, 2017 with an aggregate notional value of $100.0 million, which effectively fix the interest rate at 3.17% annually, based on the Company’s consolidated leverage ratio, as defined in the senior unsecured term loan facility agreement. (5) Effective interest rates are as follows: CBP - Savannah 4.12%, ICE - Charleston 3.93%, MEPCOM - Jacksonville 3.89%, USFS II - Albuquerque 3.92%, DEA - Pleasanton 1.8%, VA – Loma Linda 3.78%. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall. As of March 31, 2018 Balance Sheet Line Item Level 1 Level 2 Level 3 Interest rate swaps - Asset $ — $ 5,890 $ — |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of Changes In Stockholders' Equity | The following table summarizes the changes in our stockholders’ equity for the three months ended March 31, 2018 and 2017 (dollars in thousands): Shares Common Stock Par Value Additional Paid-in Capital Retained Earnings (Deficit) Cumulative Dividends Accumulated Other Comprehensive Income Non- controlling Interest in Operating Partnership Total Equity Three months ended March 31, 2018 Balance at December 31, 2017 44,787,040 $ 448 $ 740,546 $ 7,127 $ (83,718 ) $ 3,403 $ 123,283 $ 791,089 Stock based compensation — 81 — — — 783 864 Dividends and distributions paid — — — (11,729 ) — (2,695 ) (14,424 ) Issuance of common stock 671,666 7 13,482 — — — — 13,489 Unrealized gain (loss) on interest rate swaps — — — — 1,486 373 1,859 Net income — — 1,519 — — 296 1,815 Allocation of non-controlling interest in Operating Partnership — (13,020 ) — — — 13,020 — Balance at March 31, 2018 45,458,706 $ 455 $ 741,089 $ 8,646 $ (95,447 ) $ 4,889 $ 135,060 $ 794,692 Three months ended March 31, 2017 Balance at December 31, 2016 36,874,810 $ 369 $ 597,164 $ 2,679 $ (42,794 ) $ 3,038 $ 137,844 $ 698,300 Stock based compensation — 74 — — — 653 727 Dividends and distributions paid — — — (8,877 ) — (2,172 ) (11,049 ) Grant of unvested restricted stock 2,692 — — — — — — — Redemption of common units for shares of common stock 113,928 1 1,726 — — — (1,727 ) — Unrealized gain on interest rate swaps — — — — 96 12 108 Net income — — 1,237 — — 304 1,541 Allocation of non-controlling interest in Operating Partnership — 466 — — — (466 ) — Balance at March 31, 2017 36,991,430 $ 370 $ 599,430 $ 3,916 $ (51,671 ) $ 3,134 $ 134,448 $ 689,627 |
Summary of Shares of Restricted Common Stock and Long-term Incentive Plan Units in Operating Partnership Awards | A summary of our shares of restricted common stock and LTIP unit awards at March 31, 2018 is as follows: Restricted Shares Restricted Shares Weighted Average Grant Date Fair Value Per Share LTIP Units LTIP Units Weighted Average Grant Date Fair Value Per Share Outstanding, December 31, 2017 17,912 $ 19.72 926,000 $ 8.91 Granted — — 173,381 $ 18.31 Vested — — (463,000 ) $ 8.91 Forfeited — — — — Outstanding, March 31, 2018 17,912 $ 19.72 636,381 $ 11.47 |
Summary of Dividends Declared | A summary of dividends declared by the board of directors per share of common stock and per common unit at the date of record is as follows: Quarter Declaration Date Record Date Pay Date Dividend (1) Q1 2018 May 3, 2018 June 11, 2018 June 28, 2018 $ 0.26 (1) Prior to the end of the performance period as set forth in the applicable LTIP unit award, holders of LTIP units are entitled to receive dividends per LTIP unit equal to 10% of the dividend paid per common unit. After the end of the performance period, the number of LTIP units, both vested and unvested, that LTIP award recipients have earned, if any, are entitled to receive dividends in an amount per LTIP unit equal to dividends, both regular and special, payable per common unit. |
Schedule of Information with Respect to ATM Program | The following table sets forth certain information with respect to the ATM program as of March 31, 2018: Number of Shares Sold Net Proceeds For the year ended December 31, 2017 1,569,514 $ 33,263 For the three months ended March 31, 2018 671,666 13,532 2,241,180 $ 46,795 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 months ended March 31, 2018 and 2017 (amounts in thousands, except per share amounts): For the three months ended March 31, 2018 2017 Numerator Net income $ 1,815 $ 1,541 Less: Non-controlling interest in Operating Partnership (296 ) (304 ) Net income available to Easterly Government Properties, Inc. 1,519 1,237 Less: Dividends on participating securities (279 ) (26 ) Net income available to common stockholders $ 1,240 $ 1,211 Denominator for basic EPS 45,008,062 36,891,595 Dilutive effect of share-based compensation awards 12,803 11,815 Dilutive effect of LTIP units 997,175 1,818,392 Dilutive effect of shares issuable under forward sales agreements — 422,085 Denominator for diluted EPS 46,018,040 39,143,887 Basic EPS $ 0.03 $ 0.03 Diluted EPS $ 0.03 $ 0.03 |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018, future non-cancelable minimum contractual rent payments are as follows (dollars in thousands): Payments due by period Total 2018 2019 2020 2021 2022 Thereafter Operating Leases Minimum lease payments $ 850,806 76,506 96,333 90,704 79,985 68,225 439,053 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenue from Tenant Construction Projects Disaggregated by Tenant Agency | The table below sets forth revenue from tenant construction projects disaggregated by tenant agency for the three months ended March 31, 2018 (in thousands). Tenant Tenant Construction Project Income Administrative Office of the U.S. Courts (“AOC”) $ 100 Drug Enforcement Administration (“DEA”) 23 Federal Bureau of Investigation (“FBI”) 58 Immigration and Customs Enforcement (“ICE”) 9 National Park Service (“NPS”) 31 U.S. Coast Guard (“USCG”) 6 U.S. Forest Service (“USFS”) 29 Department of Veteran Affairs (“VA”) 787 $ 1,043 |
Organization and Basis of Pre28
Organization and Basis of Presentation - Additional Information (Detail) ft² in Millions | 3 Months Ended |
Mar. 31, 2018ft²Property | |
Organization And Significant Accounting Policies [Line Items] | |
Outstanding common units of aggregate limited partnership interest owned percentage | 83.00% |
Wholly Owned Operating Properties [Member] | |
Organization And Significant Accounting Policies [Line Items] | |
Number of properties | 46 |
Aggregate area of land | ft² | 3.7 |
Wholly Owned Operating Properties [Member] | Government [Member] | |
Organization And Significant Accounting Policies [Line Items] | |
Number of properties | 44 |
Wholly Owned Operating Properties [Member] | Private Tenants [Member] | |
Organization And Significant Accounting Policies [Line Items] | |
Number of properties | 2 |
Wholly Owned Properties Under Development [Member] | |
Organization And Significant Accounting Policies [Line Items] | |
Number of properties | 3 |
Aggregate area of land | ft² | 0.3 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)Property | Mar. 31, 2015Property | |
Accounting Policies [Line Items] | ||
Remaining contractual payments under lease and sublease for office space | $ | $ 850,806 | |
Corporate Office Leases [Member] | ||
Accounting Policies [Line Items] | ||
Remaining contractual payments under lease and sublease for office space | $ | $ 1,700 | |
DISTRICT OF COLUMBIA | Sublease [Member] | ||
Accounting Policies [Line Items] | ||
Operating lease agreement expire date | Jun. 30, 2021 | |
California [Member] | ||
Accounting Policies [Line Items] | ||
Number of properties | Property | 14 | |
California [Member] | San Diego [Member] | ||
Accounting Policies [Line Items] | ||
Operating lease agreement expire date | Apr. 30, 2022 | |
Error in Estimated Useful Life Utilized to Amortize Properties [Member] | ||
Accounting Policies [Line Items] | ||
Number of properties | Property | 3 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Summary of Effect of Revision to Consolidated Financial Statements (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||
Total revenues | $ 35,974 | $ 29,887 |
Depreciation and amortization | 14,634 | 12,869 |
Total expenses | 28,577 | 25,929 |
Net income | 1,815 | 1,541 |
Net income available to Easterly Government Properties, Inc. | 1,519 | $ 1,237 |
Net income available to Easterly Government Properties, Inc. per share (basic and diluted) | $ 0.03 | |
Comprehensive income | $ 3,674 | $ 1,649 |
As Previously Reported [Member] | ||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||
Total revenues | 29,887 | |
Depreciation and amortization | 13,060 | |
Total expenses | 26,120 | |
Net income | 1,350 | |
Net income available to Easterly Government Properties, Inc. | $ 1,084 | |
Net income available to Easterly Government Properties, Inc. per share (basic and diluted) | $ 0.03 | |
Comprehensive income | $ 1,458 | |
Adjustment [Member] | ||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | ||
Depreciation and amortization | (191) | |
Total expenses | (191) | |
Net income | 191 | |
Net income available to Easterly Government Properties, Inc. | 153 | |
Comprehensive income | $ 191 |
Real Estate and Intangibles - A
Real Estate and Intangibles - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Real Estate Properties [Line Items] | ||
Acquisition-related expenses | $ 224 | $ 532 |
Operating Properties Acquired [Member] | ||
Real Estate Properties [Line Items] | ||
Acquisition-related expenses | 200 | |
Internal costs related to acquisitions | $ 200 |
Real Estate and Intangibles - S
Real Estate and Intangibles - Schedule of Real Estate and Intangibles (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Real estate properties, net | ||
Land | $ 134,163 | |
Building | 1,099,949 | |
Acquired tenant improvements | 47,503 | |
Construction in progress | 27,395 | |
Accumulated amortization | (76,799) | |
Total Real estate properties, net | 1,232,211 | $ 1,230,162 |
Intangible assets, net | ||
Accumulated amortization | (71,387) | |
Total Intangible assets, net | 136,651 | |
Intangible liabilities, net | ||
Intangible Liabilities, Below market leases | (62,856) | |
Intangible Liabilities, Accumulated amortization | 26,763 | |
Total Intangible liabilities, net | (36,093) | |
In-place leases [Member] | ||
Intangible assets, net | ||
Above market leases | 160,119 | |
Acquired Leasing Commissions [Member] | ||
Intangible assets, net | ||
Above market leases | 38,464 | |
Above Market Leases [Member] | ||
Intangible assets, net | ||
Above market leases | $ 9,455 |
Debt - Summary of Borrowings (D
Debt - Summary of Borrowings (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | ||
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 98,750 | $ 99,750 | |
Less: Total unamortized deferred financing fees | (733) | (945) | |
Total term loan facility, net, Principal Outstanding | 99,236 | 99,202 | |
Total notes payable, net, Principal Outstanding | 173,702 | 173,692 | |
Total mortgage notes payable, net, Principal Outstanding | 202,495 | $ 203,250 | |
Total debt, Principal Outstanding | 574,183 | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 98,750 | ||
Term Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | 100,000 | ||
Less: Total unamortized deferred financing fees | (764) | ||
Total term loan facility, net, Principal Outstanding | 99,236 | ||
Senior Unsecured Debt [Member] | Term Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 100,000 | ||
Loan, Interest Rate | [1],[2] | 3.17% | |
Loan, Current Maturity | 2023-09 | ||
Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 175,000 | ||
Less: Total unamortized deferred financing fees | (1,298) | ||
Mortgage Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | 204,142 | ||
Less: Total unamortized deferred financing fees | (2,002) | ||
Less: Total unamortized premium/discount | 355 | ||
Mortgage Notes Payable [Member] | CBP Savannah [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 14,035 | ||
Loan, Interest Rate | [1],[3] | 3.40% | |
Loan, Current Maturity | 2033-07 | ||
Mortgage Notes Payable [Member] | ICE Charleston [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 19,517 | ||
Loan, Interest Rate | [1],[3] | 4.21% | |
Loan, Current Maturity | 2027-01 | ||
Mortgage Notes Payable [Member] | MEPCOM Jacksonville [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 10,574 | ||
Loan, Interest Rate | [1],[3] | 4.41% | |
Loan, Current Maturity | 2025-10 | ||
Mortgage Notes Payable [Member] | USFS II Albuquerque [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 16,816 | ||
Loan, Interest Rate | [1],[3] | 4.46% | |
Loan, Current Maturity | 2026-07 | ||
Mortgage Notes Payable [Member] | DEA Pleasanton [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 15,700 | ||
Loan, Interest Rate | [1],[3] | L + 150bps | |
Loan, Current Maturity | 2023-10 | ||
Mortgage Notes Payable [Member] | VA Loma Linda [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 127,500 | ||
Loan, Interest Rate | [1],[3] | 3.59% | |
Loan, Current Maturity | 2027-07 | ||
Senior Unsecured Debt [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | [4] | $ 98,750 | |
Loan, Interest Rate | [1],[4] | L + 150bps | |
Loan, Current Maturity | [4],[5] | 2019-02 | |
Senior Unsecured Notes Payable [Member] | 4.05% Senior Notes, Series A, due May 25, 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 95,000 | ||
Loan, Interest Rate | [1] | 4.05% | |
Loan, Current Maturity | 2027-05 | ||
Senior Unsecured Notes Payable [Member] | 4.15% Senior Notes, Series B, due May 25, 2029 [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 50,000 | ||
Loan, Interest Rate | [1] | 4.15% | |
Loan, Current Maturity | 2029-05 | ||
Senior Unsecured Notes Payable [Member] | 4.30% Senior Notes, Series C, due May 25, 2032 [Member] | |||
Debt Instrument [Line Items] | |||
Loan, Principal Outstanding | $ 30,000 | ||
Loan, Interest Rate | [1] | 4.30% | |
Loan, Current Maturity | 2032-05 | ||
[1] | At March 31, 2018, the one-month LIBOR (“L”) was 1.88%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums. The spread over the applicable rate for the Company’s senior unsecured revolving credit facility and senior unsecured term loan facility is based on the Company’s consolidated leverage ratio, as defined in the respective loan agreements. | ||
[2] | The interest rate is calculated based on two interest rate swaps with an effective date of March 29, 2017 with an aggregate notional value of $100.0 million, which effectively fix the interest rate at 3.17% annually, based on the Company’s consolidated leverage ratio, as defined in the senior unsecured term loan facility agreement. | ||
[3] | Effective interest rates are as follows: CBP - Savannah 4.12%, ICE - Charleston 3.93%, MEPCOM - Jacksonville 3.89%, USFS II - Albuquerque 3.92%, DEA - Pleasanton 1.8%, VA – Loma Linda 3.78%. | ||
[4] | Available capacity of $301.2 million at March 31, 2018 with an accordion feature that provides additional capacity of up to $250.0 million, for a total facility size of not more than $650.0 million. | ||
[5] | Our senior unsecured revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee. |
Debt - Summary of Borrowings (P
Debt - Summary of Borrowings (Parenthetical) (Detail) | Mar. 31, 2018USD ($)Swap | Mar. 29, 2017USD ($)Swap | Mar. 31, 2018USD ($)Swap |
Mortgage Notes Payable [Member] | CBP Savannah [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 4.12% | 4.12% | |
Mortgage Notes Payable [Member] | ICE Charleston [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 3.93% | 3.93% | |
Mortgage Notes Payable [Member] | MEPCOM Jacksonville [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 3.89% | 3.89% | |
Mortgage Notes Payable [Member] | USFS II Albuquerque [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 3.92% | 3.92% | |
Mortgage Notes Payable [Member] | DEA Pleasanton [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 1.80% | 1.80% | |
Mortgage Notes Payable [Member] | VA Loma Linda [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 3.78% | 3.78% | |
Revolving Credit Facility [Member] | Senior Unsecured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Amount available under revolving credit facility | $ 301,200,000 | $ 301,200,000 | |
Credit facility additional maximum borrowing capacity | 250,000,000 | 250,000,000 | |
Credit facility maximum borrowing capacity | $ 650,000,000 | $ 650,000,000 | |
Line of Credit Facility, Description | Our senior unsecured revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee. | ||
Senior Unsecured Term Loan Facility [Member] | Interest Rate Swaps [Member] | |||
Debt Instrument [Line Items] | |||
Number of forward interest rate swaps | Swap | 2 | 2 | 2 |
Forward swaps effective date | Mar. 29, 2017 | Mar. 29, 2017 | |
Aggregate notional value of interest rate swaps | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 |
Forward swaps interest rate | 3.17% | 3.17% | 3.17% |
LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Loan, interest rate | 1.88% |
Debt - Additional Information (
Debt - Additional Information (Detail) $ in Millions | Mar. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Fair value of notes payable | $ 172.9 |
Mortgage Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Fair value of debt | $ 198.2 |
Derivative and Hedging Activiti
Derivative and Hedging Activities - Additional Information (Detail) | Mar. 29, 2017USD ($)Swap | Mar. 31, 2018USD ($)Swap | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Derivative [Line Items] | ||||
Interest rate swaps | $ 5,890,000 | $ 4,031,000 | ||
Unrealized gain recognized in accumulated other comprehensive income on interest rate swaps | 1,900,000 | $ 100,000 | ||
Gain (loss) on interest rate cash flow hedge ineffectiveness | 0 | 0 | ||
Estimates reclassified from accumulated other comprehensive income decrease to interest expense over the next 12 months | 700,000 | |||
Credit risk related contingent features derivatives in a net liability position | 0 | |||
Maximum [Member] | ||||
Derivative [Line Items] | ||||
Gain (loss) reclassified from accumulated other comprehensive income into interest expense | $ 100,000 | $ (100,000) | ||
Interest Rate Swaps [Member] | Senior Unsecured Term Loan Facility [Member] | ||||
Derivative [Line Items] | ||||
Number of forward interest rate swaps | Swap | 2 | 2 | ||
Aggregate notional value of interest rate swaps | $ 100,000,000 | $ 100,000,000 | ||
Forward swaps effective date | Mar. 29, 2017 | Mar. 29, 2017 | ||
Maturity of senior unsecured term loan facility | Sep. 29, 2023 | |||
Forward swaps interest rate | 3.17% | 3.17% | ||
Interest rate swap description | The swaps effectively fix the interest rate under our senior unsecured term loan facility at 3.17% annually based on the Company’s current consolidated leverage ratio and a variable interest rate of one-month LIBOR. | |||
Variable interest rate receive on interest rate swaps | one-month LIBOR |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swaps - Asset | $ 5,890 | $ 4,031 |
Fair Value Measured on Recurring Basis [Member] | Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swaps - Asset | $ 5,890 |
Equity - Summary of Changes In
Equity - Summary of Changes In Stockholders' Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | |
Shareholders Equity [Line Items] | ||||
Balance | $ 791,089 | $ 698,300 | $ 698,300 | $ 698,300 |
Stock based compensation | 864 | 727 | ||
Dividends and distributions paid | (14,424) | (11,049) | ||
Issuance of common stock | 13,489 | |||
Unrealized gain (loss) on interest rate swaps | 1,859 | 108 | ||
Net income | 1,815 | 1,541 | ||
Balance | $ 794,692 | 689,627 | $ 791,089 | $ 794,692 |
Balance (in shares) | 45,458,706 | 44,787,040 | 45,458,706 | |
Common Stock Par Value [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | $ 448 | $ 369 | $ 369 | $ 369 |
Balance (in shares) | 44,787,040 | 36,874,810 | 36,874,810 | 36,874,810 |
Grant of unvested restricted stock (in shares) | 2,692 | |||
Redemption of common units for shares of common stock | $ 1 | |||
Redemption of common units for shares of common stock (in shares) | 113,928 | |||
Issuance of common stock | $ 7 | |||
Issuance of common stock (in share) | 671,666 | |||
Balance | $ 455 | $ 370 | $ 448 | $ 455 |
Balance (in shares) | 45,458,706 | 36,991,430 | 45,458,706 | |
Additional Paid-in Capital [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | $ 740,546 | $ 597,164 | 597,164 | $ 597,164 |
Stock based compensation | 81 | 74 | ||
Redemption of common units for shares of common stock | 1,726 | |||
Issuance of common stock | 13,482 | |||
Allocation of non-controlling interest in Operating Partnership | (13,020) | 466 | ||
Balance | 741,089 | 599,430 | 740,546 | 741,089 |
Retained Earnings (Deficit) [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | 7,127 | 2,679 | 2,679 | 2,679 |
Net income | 1,519 | 1,237 | ||
Balance | 8,646 | 3,916 | 7,127 | 8,646 |
Cumulative Dividends [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | (83,718) | (42,794) | (42,794) | (42,794) |
Dividends and distributions paid | (11,729) | (8,877) | ||
Balance | (95,447) | (51,671) | (83,718) | (95,447) |
Accumulated Other Comprehensive Income [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | 3,403 | 3,038 | 3,038 | 3,038 |
Unrealized gain (loss) on interest rate swaps | 1,486 | 96 | ||
Balance | 4,889 | 3,134 | 3,403 | 4,889 |
Non-controlling Interest in Operating Partnership [Member] | ||||
Shareholders Equity [Line Items] | ||||
Balance | 123,283 | 137,844 | 137,844 | 137,844 |
Stock based compensation | 783 | 653 | ||
Dividends and distributions paid | (2,695) | (2,172) | ||
Redemption of common units for shares of common stock | (1,727) | |||
Unrealized gain (loss) on interest rate swaps | 373 | 12 | ||
Net income | 296 | 304 | ||
Allocation of non-controlling interest in Operating Partnership | 13,020 | (466) | ||
Balance | $ 135,060 | $ 134,448 | $ 123,283 | $ 135,060 |
Equity - Additional Information
Equity - Additional Information (Detail) | Jan. 04, 2018Trancheshares | Mar. 03, 2017USD ($) | Feb. 26, 2016shares | May 06, 2015shares | Mar. 31, 2018USD ($)shares | Dec. 31, 2017shares |
Stockholders Equity Note Disclosure [Line Items] | ||||||
Unrecognized compensation expense | $ | $ 3,900,000 | |||||
Aggregate offering price of shares of common stock that the Company may issue and sell | $ | $ 100,000,000 | |||||
2015 Equity Incentive Plan [Member] | ||||||
Stockholders Equity Note Disclosure [Line Items] | ||||||
Compensation expense recognized | $ | 900,000 | |||||
ATM Program | ||||||
Stockholders Equity Note Disclosure [Line Items] | ||||||
Gross sale of common stock available for grant | $ | $ 52,700,000 | |||||
Long Term Incentive Plan [Member] | ||||||
Stockholders Equity Note Disclosure [Line Items] | ||||||
LTIP units of limited partnership interest, granted | 173,381 | |||||
Aggregate LTIP units earned, during the period | 2,079,297 | |||||
Aggregate performance-based units granted | 173,381 | |||||
Number of tranches | Tranche | 3 | |||||
Percentage of awards based on absolute shareholder return performance | 75.00% | |||||
Percentage of awards based on relative shareholder return performance | 25.00% | |||||
Percentage of awards vesting when earned following completion of applicable performance period | 50.00% | |||||
Percentage of awards earned subject to additional year of vesting | 50.00% | |||||
Additional vesting year of awards | 1 year | |||||
Long Term Incentive Plan [Member] | 2015 Equity Incentive Plan [Member] | ||||||
Stockholders Equity Note Disclosure [Line Items] | ||||||
LTIP units of limited partnership interest, granted | 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% | |||||
Aggregate performance-based units granted | 32,448 | |||||
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% | |||||
Aggregate performance-based units granted | 55,463 | |||||
Tranche Three [Member] | Long Term Incentive Plan [Member] | ||||||
Stockholders Equity Note Disclosure [Line Items] | ||||||
Aggregate performance-based units granted | 85,470 |
Equity - Summary of Shares of R
Equity - Summary of Shares of Restricted Common Stock and Long-term Incentive Plan Units in Operating Partnership Awards (Detail) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Restricted Shares [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares/Units, Outstanding beginning balance | shares | 17,912 |
Shares/Units, Outstanding ending balance | shares | 17,912 |
Weighted Average Grant Date Fair Value Per Share, Outstanding beginning balance | $ / shares | $ 19.72 |
Weighted Average Grant Date Fair Value Per Share, Outstanding ending balance | $ / shares | $ 19.72 |
Long Term Incentive Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares/Units, Outstanding beginning balance | shares | 926,000 |
Shares/Units, Granted | shares | 173,381 |
Shares/Units, Vested | shares | (463,000) |
Shares/Units, Outstanding ending balance | shares | 636,381 |
Weighted Average Grant Date Fair Value Per Share, Outstanding beginning balance | $ / shares | $ 8.91 |
Weighted Average Grant Date Fair Value Per Share, Granted | $ / shares | 18.31 |
Weighted Average Grant Date Fair Value Per Share, Vested | $ / shares | 8.91 |
Weighted Average Grant Date Fair Value Per Share, Outstanding ending balance | $ / shares | $ 11.47 |
Equity - Summary of Dividends D
Equity - Summary of Dividends Declared (Detail) - $ / shares | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Dividends Payable [Line Items] | |||
Dividend | $ 0.26 | $ 0.24 | |
Q1 2018 | |||
Dividends Payable [Line Items] | |||
Declaration Date | May 3, 2018 | ||
Record Date | Jun. 11, 2018 | ||
Pay Date | Jun. 28, 2018 | ||
Dividend | [1] | $ 0.26 | |
[1] | Prior to the end of the performance period as set forth in the applicable LTIP unit award, holders of LTIP units are entitled to receive dividends per LTIP unit equal to 10% of the dividend paid per common unit. After the end of the performance period, the number of LTIP units, both vested and unvested, that LTIP award recipients have earned, if any, are entitled to receive dividends in an amount per LTIP unit equal to dividends, both regular and special, payable per common unit. |
Equity - Summary of Dividends42
Equity - Summary of Dividends Declared (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Operating partnership dividend rate percentage | 10.00% |
Equity - Schedule of Informatio
Equity - Schedule of Information with Respect to ATM Program (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Subsidiary Sale Of Stock [Line Items] | |||
Net Proceeds | $ 13,669 | ||
ATM Program | |||
Subsidiary Sale Of Stock [Line Items] | |||
Number of Shares Sold | 671,666 | 1,569,514 | 2,241,180 |
Net Proceeds | $ 13,532 | $ 33,263 | $ 46,795 |
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 | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share Basic And Diluted [Line Items] | ||
Net income | $ 1,815 | $ 1,541 |
Less: Non-controlling interest in Operating Partnership | (296) | (304) |
Net income available to Easterly Government Properties, Inc. | 1,519 | 1,237 |
Less: Dividends on participating securities | (279) | (26) |
Net income available to common stockholders | $ 1,240 | $ 1,211 |
Denominator for basic EPS | 45,008,062 | 36,891,595 |
Denominator for diluted EPS | 46,018,040 | 39,143,887 |
Basic EPS | $ 0.03 | $ 0.03 |
Diluted EPS | $ 0.03 | $ 0.03 |
Stock Compensation Plan [Member] | ||
Earnings Per Share Basic And Diluted [Line Items] | ||
Dilutive effect | 12,803 | 11,815 |
Long Term Incentive Plan [Member] | ||
Earnings Per Share Basic And Diluted [Line Items] | ||
Dilutive effect | 997,175 | 1,818,392 |
Forward Sales Agreements [Member] | ||
Earnings Per Share Basic And Diluted [Line Items] | ||
Dilutive effect | 422,085 |
Operating Leases - Summary of F
Operating Leases - Summary of Future Non Cancellable Minimum Contractual Rent Payments (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Leases [Abstract] | |
Minimum lease payments, Total | $ 850,806 |
Minimum lease payments, 2018 | 76,506 |
Minimum lease payments, 2019 | 96,333 |
Minimum lease payments, 2020 | 90,704 |
Minimum lease payments, 2021 | 79,985 |
Minimum lease payments, 2022 | 68,225 |
Minimum lease payments, Thereafter | $ 439,053 |
Operating Leases - Additional I
Operating Leases - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)Tenants | Mar. 31, 2017USD ($) | |
Leases [Abstract] | ||
Number of consolidated operating properties | 100.00% | |
Number of tenants | Tenants | 24 | |
Rental income attributable to base rent | $ 28,200 | |
Amortization of above and below market leases | 2,279 | $ 2,112 |
Straight-line rent adjustments | $ 1,800 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - ASU 2014-09 [Member] - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Aggregate amount of transaction price allocted to remaining performance obligations | $ 200,000 | |
Accounts receivable related to tenant construction projects | 3,500,000 | $ 3,000,000 |
Contract assets | 0 | |
Contract liabilities | $ 0 |
Revenue - Summary of Revenue fr
Revenue - Summary of Revenue from Tenant Construction Projects Disaggregated by Tenant Agency (Detail) - ASU 2014-09 [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | $ 1,043 |
Administrative Office of the U.S. Courts ("AOC") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | 100 |
Drug Enforcement Administration ("DEA") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | 23 |
Federal Bureau of Investigation ("FBI") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | 58 |
Immigration and Customs Enforcement ("ICE") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | 9 |
National Park Service ("NPS") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | 31 |
U.S. Coast Guard ("USCG") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | 6 |
U.S. Forest Service ("USFS") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | 29 |
Department of Veteran Affairs ("VA") [Member] | |
Disaggregation Of Revenue [Line Items] | |
Tenant Construction Project Income | $ 787 |
Concentrations Risk - Additiona
Concentrations Risk - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2018Property | |
Wholly Owned Properties [Member] | |
Concentration Risk [Line Items] | |
Number of properties | 46 |
California [Member] | |
Concentration Risk [Line Items] | |
Number of properties | 14 |
California [Member] | Properties Under Development [Member] | |
Concentration Risk [Line Items] | |
Number of properties | 2 |
Lease Income [Member] | Credit Concentration Risk [Member] | California [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 33.30% |
Rentable Square Feet [Member] | Credit Concentration Risk [Member] | California [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 25.80% |
U.S. Government [Member] | Lease Income [Member] | Credit Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 99.20% |
Non Governmental Tenants [Member] | Lease Income [Member] | Credit Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 0.80% |