Covered on Core FFO — thin on cash after capex, heavy debt. A quarterly payer at $0.45 a share, $1.80 annualized, re-declared October 22, 2026. On Core FFO the payout looks comfortable: $0.78 a share in the second quarter of 2026, up from $0.74 a year earlier, puts the $0.45 dividend at about 58% of Core FFO, and $1.55 for the first half against $0.90 declared. The cash line is thinner: cash available for distribution — Easterly's AFFO-equivalent after maintenance capital and tenant improvements — was $25.8 million in the quarter, about $0.54 a share, so the dividend took about 84% of it, after maintenance capital spending nearly doubled year over year to $7.0 million. The first-half CAD payout of about 75% is the fairer read, but either way the cushion is slimmer than the Core FFO headline. Adjusted net debt to annualized quarterly EBITDA was 7.1×. The tenant base is the offset: 98% leased at June 30, 2026, 93 of 106 operating properties leased primarily to U.S. Government agencies, and a 9.2-year weighted-average remaining lease term.
Key risk: Federal-tenant concentration plus heavy debt — the government tenant base is the moat and the single point of failure at once: a federal leasing freeze or agency consolidation would hit a 7.1×-levered balance sheet with only a thin CAD cushion behind the dividend.
Changes if: The CAD payout stays above about 84% for a second quarter, adjusted net debt to EBITDA rises past 7.1×, or leased occupancy slips below 98%. The cash cushion, not the Core FFO headline, is the verdict.
- !AFFO coverage check: About 84% of cash available for distribution paid out in the second quarter — $0.45 against about $0.54 a share — after maintenance capital spending rose to $7.0 million from $3.7 million a year earlier. The first-half CAD payout of about 75% is healthier, but the quarterly cushion is thin. Easterly reports CAD, not AFFO; CAD is the same cash line after capital and leasing costs.
- ✓Yield check: 7.94% rests on a genuinely defensive tenant base: 98% leased at June 30, 2026, 93 of 106 operating properties leased primarily to U.S. Government agencies, and a 9.2-year weighted-average remaining lease term — long leases behind a high yield, not short ones.
- !Leverage check: 7.1× adjusted net debt to annualized quarterly EBITDA at June 30, 2026, on about $1.7 billion of total indebtedness, is heavy for a slow-growth government landlord — it leaves the dividend exposed if federal leasing pauses.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.