Easterly Government Properties, Inc. has closed a new $200 million senior unsecured term loan, strengthening its capital structure as the government-focused real estate investment trust positions itself to fund future acquisitions and development while managing its balance sheet.
The five-year facility matures in June 2031 and includes an accordion feature that allows borrowing capacity to increase by up to $50 million, subject to customary conditions, bringing the potential total facility size to $250 million.
The Washington, D.C.-based REIT said it will use the proceeds primarily to repay borrowings under its existing $400 million unsecured revolving credit facility, with remaining funds available for general corporate purposes.
The refinancing reflects a broader trend among publicly traded REITs seeking to extend debt maturities and diversify funding sources amid an elevated interest rate environment. Term loans have become an increasingly important financing tool for real estate companies looking to preserve liquidity while maintaining flexibility for future investments.
Allison E. Marino, chief financial officer of Easterly Government Properties, said the financing enhances the company’s liquidity and supports its long-term growth strategy.
“The transaction enhances our liquidity profile and supports our ability to efficiently fund future growth initiatives,” Marino said.
Borrowings under the facility will carry a floating interest rate based on SOFR plus a spread ranging from 1.20% to 1.70%, depending on the company’s leverage ratio. Based on Easterly’s current leverage, the initial spread has been set at 1.30% over SOFR.
The financing was arranged by a syndicate of major financial institutions. U.S. Bank National Association, PNC Capital Markets, and Truist Securities served as joint bookrunners, while PNC Bank acted as administrative agent. U.S. Bank and Truist Bank served as syndication agents, with Wells Fargo Bank acting as documentation agent.
Easterly specializes in acquiring, developing, and managing Class A office properties leased primarily to U.S. government agencies and related tenants. Its portfolio includes mission-critical facilities occupied by agencies either directly or through long-term leases with the U.S. General Services Administration (GSA).
Government-leased office properties have remained a niche but relatively stable segment of the commercial real estate market because of the federal government’s strong credit profile and typically long lease durations. While broader office markets continue to face pressure from changing workplace trends, government-tenanted assets have generally maintained stronger occupancy and income stability than many privately leased office properties.
The new financing gives Easterly Government Properties additional flexibility to pursue acquisitions and development opportunities while reducing reliance on its revolving credit facility. Extending debt maturities has become a priority for many REITs as they position balance sheets for a market environment where financing costs remain above the historically low levels seen earlier in the decade.
Founded as a specialized government-focused REIT, Easterly Government Properties owns and manages a portfolio of properties supporting federal agencies and adjacent government-related organizations across the United States.
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