Easterly Government Properties, Inc.

Greetings. Welcome to Easterly Government Properties' third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session between the company's research analyst and Easterly's management team. To ask a question during the session, analysts will need to press star 1-1 on their telephone. They will then hear an automated message advising their hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Allison Marino, Executive Vice President and Chief Financial Officer. Please go ahead.

Good morning. Before the call begins, please note that certain statements made during this conference call may include statements that are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes that its expectations as reflected in any forward-looking statements are reasonable, it can give no assurance that these expectations will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond the company's control, including without limitation those contained in the company's most recent Form 10-K filed with the SEC and in its other SEC filings. The company assumes no obligation to update publicly any forward-looking statements. Additionally, on this conference call, the company may refer to certain non-GAAP financial measures, such as funds from operations, core funds from operations, and cash available for distribution. You can find a tabular reconciliation of these non-GAAP financial measures to the most comparable current GAAP numbers in the company's earnings release and separate supplemental information package on the investor relations page of the company's website at ir.easterlyreit.com. I would now like to turn the conference call over to Darrell Crate, President and CEO of Easterly Government Properties.

Thanks, Allison, and good morning, everyone. As we report our third quarter results, it comes at a time when the federal government remains partially closed. For most companies, that kind of disruption would be concerning. For Easterly, history offers important perspective. What is important to understand is that a shutdown is part of the kabuki theater related to budget negotiations. Our investors should be comfortable that the government will not default on our leases because that would be tantamount to defaulting on a U.S. Treasury obligation. We are highly confident they will find a way to avoid that, as they did with each of the previous 21 shutdowns. As we enter the final stretch of 2025, I'm pleased to share that Easterly continues to execute against the growth strategy our leadership team embarked upon last year, a disciplined plan centered on three long-term priorities. One is growing core FFO by 2% to 3% annually. The second is increasing same store performance through thoughtful diversification into state and local and high credit government adjacent tenancy. And third, continued execution on value creating development opportunities where we can create portfolio enhancing improvements to weighted average lease terms and building age. This strategy is designed to balance growth and durability and to build a portfolio that performs consistently regardless of the economic or policy backdrop. The third quarter is another example of that approach in action. At the core of our business is a portfolio of essential facilities where government work truly happens. Immigration facilities, courthouses, public health laboratories, law enforcement offices, and secure administrative buildings. These are not speculative assets. They are long least purpose-built and vital to the functioning of our nation. Our tenants' missions endure across administrations and cycles. That endurance is the foundation of Easterly's ability to deliver consistent, compounding growth over time. As demand for secure, modernized government facilities continues to expand with population growth at federal, state, and municipal levels, we remain uniquely positioned to serve that need. Now, turning to the specifics of the quarter, We delivered strong operating performance, maintained high portfolio occupancy, strengthened relationships across agencies, and refined our balance sheet with a prudent and disciplined approach to capital deployment. We are pleased to deliver 3% core FFO growth from 2024 to the midpoint of our guidance range for 2025. That was driven by growth from acquisitions, strong renewal execution, and prudent portfolio management. Our portfolio occupancy remains near historical highs at 97% and a weighted average lease term of approximately 10 years, underscoring the durability of our tenancy and the strength of our mission critical focus. Our most recent acquisition of the York Space Systems headquarters in Colorado positions us nicely towards our stated goal of 15% government adjacent exposure and reflects the demand for specialized facilities supporting the U.S. defense and space partners. Our development pipeline remains very active with major projects progressing nicely. We continue to identify accretive opportunities that meet our standards for credit quality, mission alignment, and durable returns. The acquisition team has built one of the most robust pipelines in our company's history, allowing us to be highly selective with an eye to deploying capital in excess of 100 basis points to our weighted average cost. The team's leadership in sourcing, underwriting, and executing accretive opportunities has been exceptional. The work they're doing today will support growth well into the next decade. We are intently focused on improving our cost of capital. While we believe we will unlock further opportunities in our acquisition and development pipeline, One of the ways we seek to improve our cost of capital, both debt and equity, is leverage optimization. While Easterly's portfolio of long-term high credit leases is capable of sustaining higher leverage levels than other REIT peers, we recognize that comparability with that broader REIT universe matters. To that effect, we are targeting a medium-term cash leverage goal of six times. This is a decline, to our historical cash leverage results, which have been seven to eight times. This shift to a more conventional leverage target enhances investor comparability, and together with improved funding access, sets Easterly on a clear path towards structurally lower capital costs. We believe we can deliver this expectation while also meeting our attractive growth objectives. As Alison will detail, we have already made progress on this front this quarter. As we close the third quarter, I want to recognize the collective effort of everyone at Easterly. We're thankful for the trust and partnership of our tenants, our employees, and our shareholders, and we're confident in our strategy, encouraged by the progress we've made and energized by the opportunities ahead. As we enter the final quarter of 2025, our priorities remain very clear. continue executing on our development and acquisition pipeline, advance our cost of capital and leverage initiatives, and deepen our relationships across the federal, state, and local agencies we serve. Easterly's mission remains simple, to deliver essential real estate that keeps government moving and our nation secure. And with that, I'll turn our call over to Allison Marino, our Chief Financial Officer.