Easterly Government Properties, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management carried out an evaluation required by the Exchange Act, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a -15(e) and 15d-15(e) of the Exchange Act, as of December 31, 2023. Based on this evaluation our principal executive officer and principal financial officer concluded that, as of December 31, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our management has assessed the effectiveness of our internal control over financial reporting at December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013 Framework). Based on our assessment management concluded that, as of December 31, 2023, our internal control over financial reporting is effective based on those criteria. 52 The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears on page F-2 of this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information On September 14, 2023 , William C. Trimble, III , who served as our Chief Executive Officer and President through December 31, 2023, entered into a pre-arranged trading plan (the “ 10b5-1 plan ”) for the sale of up to 120,000 shares of our common stock between December 14, 2023 and December 14, 2024 that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. On December 8, 2023 , Mr. Trimble terminated the 10b5-1 plan in connection with his pending retirement. No shares were sold under the 10b5-1 plan prior to its termination. During the quarter ended December 31, 2023 , no other directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 53 PART III Item 10. Directors, Executive Off icers and Corporate Governance The information required by Item 10 will be set forth in our Definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which we anticipate will be filed no later than 120 days after the end of our fiscal year ended December 31, 2023, to be filed pursuant to Regulation 14A under the Securities and Exchange Act of 1934, as amended, or our Proxy Statement, and is incorporated herein by reference. Item 11. Executiv e Compensation The information required by Item 11 will be set forth in our Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Ow ners and Management and Related Stockholder Matters The following table summarizes certain information about our equity compensation plans as of December 31, 2023. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column of this table) (a) (b) (c) Equity compensation plans approved by stockholders (1)(2) $ 4,148,631 $ — $ 836,574 Equity compensation plans not approved by stockholders — — — Total $ 4,148,631 $ — $ 836,574 (1) The amount in column (a) includes 4,148,631 LTIP units issued under our 2015 Equity Incentive Plan that, upon the satisfaction of certain conditions, are convertible into common units, which may then be redeemed for cash, or, at our option, an equal number of shares of common stock, subject to certain restrictions. There is no exercise price associated with LTIP units. (2) The amount in column (c) excludes the number of LTIP units referenced in column (a) and 288,754 shares of restricted common stock issued under our 2015 Equity Incentive Plan. Additional information concerning security ownership of certain beneficial owners and management required by Item 12 will be set forth in our Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Relate d Transactions, and Director Independence The information required by Item 13 will be set forth in our Proxy Statement and is incorporated herein by reference. Item 14. Principal Accoun tant Fees and Services The information required by Item 14 will be set forth in our Proxy Statement and is incorporated herein by reference. 54 PART IV Item 15. Exhibits and Fina ncial Statement Schedules 1. Financial Statements The financial statements listed in the accompanying index to financial statements beginning on page F-1 are filed as a part of this report. 2. Financial Statement Schedule The financial statement schedule listed in the accompanying index to financial statements beginning on page S-1 are filed as a part of this report. All other schedules for which provision is made in Regulation S-X are either not required to be included herein under the related instructions or are inapplicable or the related information is included in the footnotes to the applicable financial statement and, therefore, have been omitted. 3. Exhibits The following documents are filed as exhibits to this report: Exhibit Exhibit Description 3.1 Amended and Restated Articles of Amendment and Restatement of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference) 3.2 Amended and Restated Bylaws of Easterly Government Properties, Inc. (previously filed as Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference) 3.3 First Amendment to Amended and Restated Bylaws of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on February 27, 2019 and incorporated herein by reference) 3.4 Second Amendment to Amended and Restated Bylaws of Easterly Government Properties, Inc. (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on May 20, 2021 and incorporated herein by reference) 4.1 Specimen Certificate of Common Stock of Easterly Government Properties, Inc. (previously filed as Exhibit 4.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference) 4.2 Description of Securities of Easterly Government Properties, Inc. (previously filed as Exhibit 4.2 to the Company’s Annual Report on Form 10-K on February 28, 2022 and incorporated herein by reference) 10.1 Amended and Restated Limited Partnership Agreement of Easterly Government Properties LP (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on February 11, 2015 and incorporated herein by reference) 10.2 First Amendment to the Amended and Restated Agreement of Limited Partnership of Easterly Government Properties LP, dated May 6, 2015 (previously filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q on August 6, 2015 and incorporated herein by reference) 10.3 Second Amendment to the Amended and Restated Agreement of Limited Partnership of Easterly Government Properties LP, dated February 26, 2016 (previously filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K on March 2, 2016 and incorporated herein by reference) 10.4 2015 Equity Incentive Plan (previously filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K on March 30, 2015 and incorporated herein by reference) 55 Exhibit Exhibit Description 10.5† Employment Agreement by and among Easterly Government Properties Services LLC, Easterly Government Properties, Inc., Easterly Government Properties LP and William C. Trimble, III, dated January 30, 2015 (previously filed as Exhibit 10.10 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference) 10.6† Employment Agreement, by and among Easterly Government Properties Services LLC, Easterly Government Properties LP, Easterly Government Properties, Inc., and Meghan G. Baivier, dated May 12, 2015 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on May 13, 2015 and incorporated herein by reference) 10.7† Form of Indemnification Agreement between Easterly Government Properties, Inc. and each of its Directors and Executive Officers (previously filed as Exhibit 10.4 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference) 10.8 Form of Tax Protection Agreement by and among Easterly Government Properties, Inc., Easterly Government Properties LP and Michael P. Ibe (previously filed as Exhibit 10.9 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 on January 30, 2015 and incorporated herein by reference) 10.9 Tax Protection Agreement among Easterly Government Properties LP, West Pleasanton Lab, LLC and Michael P. Ibe, dated October 21, 2015 (previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q on November 5, 2015 and incorporated herein by reference) 10.10 License Agreement between Easterly Government Properties, Inc. and Easterly Capital, LLC, dated January 26, 2015 (previously filed as Exhibit 10.11 to Amendment No. 3 to the Company’s Registration Statement on Form S-11 on February 4, 2015 and incorporated herein by reference) 10.11 Second Amended and Restated Credit Agreement dated as of July 23, 2021, by and among Easterly Government Properties Inc., Easterly Government Properties LP, the Guarantors, name therein, with Citibank, N.A., as administrative agent, PNC Bank, National Association and Wells Fargo Bank, N.A., as Co-Syndication agents, BMO Harris Bank, N.A., Raymond James Bank, N.A., Royal Bank of Canada and Truist Bank as Co-Documentation agents, and Citibank, N.A., PNC Capital Markets LLC and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Book Running Managers and the other financial institutions party thereto (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on July 29, 2021 and incorporated herein by reference) 10.12 First Amendment to Second Amended and Restated Credit Agreement, dated as of July 22, 2022, by and among Easterly Government Properties Inc., Easterly Government Properties LP, the Guarantors named therein, the Initial Lenders and Initial Issuing Banks named therein, and Citibank, N.A., as Administrative Agent, Wells Fargo Bank, N.A. and PNC Bank, National, as Co-Syndication Agents, BMO Harris Bank, N.A., Raymond James Bank, Royal Bank of Canada and Truist Bank, as Co-Documentation Agents, and Citibank, N.A., Wells Fargo Securities, LLC and PNC Capital Markets LLC, as Joint Lead Arrangers and Joint Book Running Managers (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on July 26, 2022 and incorporated herein by reference) 10.13 Second Amendment to Second Amended and Restated Credit Agreement, dated as of November 23, 2022, by and among Easterly Government Properties Inc., Easterly Government Properties LP, the Guarantors named therein, the Initial Lenders and Initial Issuing Banks named therein, and Citibank, N.A., as Administrative Agent, Wells Fargo Bank, N.A. and PNC Bank, National Association, as Co-Syndication Agents, BMO Harris Bank, N.A., Raymond James Bank, Royal Bank of Canada and Truist Bank, as Co-Documentation Agents, and Citibank, N.A., Wells Fargo Securities, LLC and PNC Capital Markets LLC, as Joint Lead Arrangers and Joint Book Running Managers (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on November 30, 2022 and incorporated herein by reference) 10.14 Third Amendment to Second Amended and Restated Credit Agreement, dated as of May 30, 2023, by and among the Easterly Government Properties Inc., Easterly Government Properties LP, the Guarantors named therein, the Initial Lenders and Initial Issuing Banks named therein, and Citibank, N.A., as Administrative Agent, Wells Fargo Bank, N.A. and PNC Bank, National Association, as Co-Syndication Agents, BMO Harris Bank, N.A., Raymond James Bank, Royal Bank of Canada and Truist Bank, as Co-Documentation Agents, and Citibank, N.A., Wells Fargo Securities, LLC and PNC Capital Markets LLC, as Joint Lead Arrangers and Joint Book Running Managers (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on June 2, 2023 and incorporated herein by reference) 56 Exhibit Exhibit Description 10.15 Term Loan Agreement, among Easterly Government Properties LP, as Borrower, Easterly Government Properties, Inc., as Parent Guarantor, and certain subsidiaries of Easterly Government Properties, Inc. from time to time party thereto, as Guarantors, PNC Bank, National Association, as Administrative Agent, U.S. Bank National Association and SunTrust Bank, as Syndication Agents, and PNC Capital Markets LLC, U.S. Bank National Association and SunTrust Robinson Humphrey, Inc., as Joint Lead Arrangers and Joint Bookrunners and the Initial Lenders named therein, dated September 29, 2016 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on October 5, 2016 and incorporated herein by reference) 10.16 Second Amendment to Term Loan Agreement by and among Easterly Government Properties, Inc., Easterly Government Properties LP, the Guarantors named therein, PNC Bank, National Association, as Administrative Agent and U.S. Bank National Association and SunTrust Bank, as Lenders, dated as of June 18, 2018 (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on June 21, 2018 and incorporated herein by reference) 10.17 Third Letter Amendment to Term Loan Agreement, dated as of October 3, 2018, by and among Easterly Government Properties, Inc., as Parent Guarantor, Easterly Government Properties LP, as Borrower, the Subsidiary Guarantors named therein, PNC Bank, National Association, as Administrative Agent and U.S. Bank National Association and SunTrust Bank, as Lenders (previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q on November 5, 2018 and incorporated herein by reference) 10.18 Fourth Amendment to Term Loan Agreement, dated as of July 23, 2021, by and among Easterly Government Properties, Inc., Easterly Government Properties LP, the Guarantors named therein, PNC Bank, National Association, as Administrative Agent and U.S. Bank National Association and Truist Bank, as Lenders (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on July 29, 2021 and incorporated herein by reference) 10.19 Fifth Amendment to Term Loan Agreement, dated as of November 29, 2022, by and among Easterly Government Properties, Inc., Easterly Government Properties LP, the Guarantors named therein, PNC Bank, National Association, as Administrative Agent and U.S. Bank National Association and Truist Bank, as Lenders (previously filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on November 30, 2022 and incorporated herein by reference) 10.20 Sixth Amendment to Term Loan Agreement, dated as of May 30, 2023, by and among Easterly Government Properties Inc., Easterly Government Properties LP, the Guarantors named therein, PNC Bank, National Association, as Administrative Agent and a Lender, and U.S. Bank National Association and Truist Bank, as Lenders (previously filed as Exhibit 10.2 to the Company's Current Report on Form 8-K on June 2, 2023 and incorporated herein by reference) 10.21 Seventh Amendment to Term Loan Agreement, dated as of January 23, 2024, by and among Easterly Government Properties Inc., Easterly Government Properties LP, the Guarantors named therein, PNC Bank, National Association, as Administrative Agent and a Lender, and U.S. Bank National Association and Truist Bank, as Lenders (previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K on January 25, 2024 and incorporated herein by reference) 10.22 Purchase and Sale Agreement, dated as of September 30, 2021, between the sellers identified therein and Easterly Government Properties LP (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on October 15, 2021 and incorporated herein by reference) 10.23 First Amendment to Purchase and Sale Agreement between the sellers identified therein and Easterly Government Properties LP dated as of October 12, 2021 (previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q on October 31, 2023 and incorporated herein by reference) 10.24 Second Amendment to Purchase and Sale Agreement between the sellers identified therein and Easterly Government Properties LP dated as of November 1, 2021 (previously filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q on October 31, 2023 and incorporated herein by reference) 10.25 Third Amendment to Purchase and Sale Agreement between the sellers identified therein and Easterly Government Properties LP dated as of December 21, 2021 (previously filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q on October 31, 2023 and incorporated herein by reference) 57 Exhibit Exhibit Description 10.26 Fourth Amendment to Purchase and Sale Agreement between the sellers identified therein and Easterly Government Properties LP dated as of December 21, 2021 (previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q on October 31, 2023 and incorporated herein by reference) 10.27 Fifth Amendment to Purchase and Sale Agreement between the sellers identified therein and Easterly Government Properties LP dated as of November 14, 2022 (previously filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q on October 31, 2023 and incorporated herein by reference) 10.28 Sixth Amendment to Purchase and Sale Agreement between the sellers identified therein and Easterly Government Properties LP dated as of April 10, 2023 (previously filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q on October 31, 2023 and incorporated herein by reference) 10.29 Seventh Amendment to Purchase and Sale Agreement between the sellers identified therein and Easterly Government Properties LP dated as of August 17, 2023 (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on August 23, 2023 and incorporated herein by reference) 10.30 Transition and Separation Agreement and Release, dated as of December 6, 2023, among William C. Trimble, III, Easterly Government Properties, Inc., Easterly Government Properties Services LLC, Easterly Government Properties LP (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on December 7, 2023 and incorporated herein by reference) 21.1* List of Subsidiaries of the Registrant 23.1* Consent of PricewaterhouseCoopers LLP 31.1* Certification of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended 31.2* Certification of Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended 32.1** Certification of Chief Executive Officer and Chief Financial Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended 97.1* Incentive-based Compensation Recovery Policy 101.SCH* Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104* Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) † Exhibit is a management contract or compensatory plan or arrangement. * Filed herewith ** Furnished herewith Ite m 16. Form 10-K Summary Not applicable. 58 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Washington, District of Columbia, on February 27, 2024. EASTERLY GOVERNMENT PROPERTIES, INC. By: /s/ Darrell W. Crate Name: Darrell W. Crate Title: Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Darrell W. Crate Chief Executive Officer and Director (Principal Executive Officer) February 27, 2024 Darrel W. Crate /s/ Allison E. Marino Executive Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer) February 27, 2024 Allison E. Marino /s/ William H. Binnie Chairman of the Board of Directors February 27, 2024 William H. Binnie /s/ Michael P. Ibe Director, Vice Chairman of the Board of Directors and Executive Vice President—Development and Acquisitions February 27, 2024 Michael P. Ibe /s/ Cynthia A. Fisher Director February 27, 2024 Cynthia A. Fisher /s/ Scott D. Freeman Director February 27, 2024 Scott D. Freeman /s/ Emil W. Henry, Jr. Director February 27, 2024 Emil W. Henry, Jr. /s/ Tara S. Innes Director February 27, 2024 Tara S. Innes 59 INDEX TO FINANCIAL STATEMENTS Page Easterly Government Properties, Inc. Report of Independent Registered Public Accounting Firm (PCAOB ID: 238 ) F- 2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F- 4 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 F- 5 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021 F- 6 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021 F- 7 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 F- 8 Notes to the Consolidated Financial Statements F- 10 Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2023 S-1 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Easterly Government Properties, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Easterly Government Properties, Inc. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. F- 2 Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Purchase Price Accounting As described in Notes 2 and 3 to the consolidated financial statements, during the year ended December 31, 2023, the Company acquired three operating properties in asset acquisitions for an aggregate purchase price of $63.1 million. When the Company acquires properties, management allocates the purchase price to numerous tangible and intangible components. Management allocates the purchase price of properties based on the estimated fair value of the assets acquired and liabilities assumed, which generally consists of land, building, tenant improvements, and intangible assets and liabilities, which include in-place leases, leasing commissions and above and below market leases. Management’s process for determining the allocation requires many estimates and assumptions, including (i) market land, rental, discount and capitalization rates; (ii) leasing and tenant improvement costs associated with the remaining term of acquired leases; (iii) assumptions used in determining the in-place lease and if-vacant value including the rental rates, period of time that it would take to lease vacant space and estimated tenant improvement and leasing costs; and (iv) allocation of the if-vacant value between land and building. The principal considerations for our determination that performing procedures relating to purchase price accounting is a critical audit matter are (i) the significant judgment and estimation by management when developing the purchase price allocation, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures to evaluate management’s estimates and significant assumptions, (ii) significant audit effort was necessary in evaluating significant assumptions related to discount rates, capitalization rates, market rental rates, market land rates, leasing costs, tenant improvement costs, and the period of time that it would take to lease vacant space, (iii) significant auditor judgment was necessary in evaluating audit evidence related to such assumptions, and (iv) the audit effort included the involvement of professionals with specialized skill and knowledge to assist in evaluating the audit evidence obtained from these procedures. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to purchase price accounting, including controls over the assumptions used related to discount rates, capitalization rates, market rental rates, market land rates, leasing costs, tenant improvement costs, and the period of time that it would take to lease vacant space to determine the fair value of the assets acquired and liabilities assumed and allocate the purchase price to the tangible and intangible components. These procedures also included, among others, reading the purchase agreements for all acquisitions and testing management’s process by evaluating the appropriateness of methods used to determine fair value of assets acquired and liabilities assumed, testing the significant inputs and evaluating the reasonableness of the significant assumptions utilized by management in developing the purchase price allocation, related to discount rates, capitalization rates, market rental rates, market land rates, leasing costs, tenant improvement costs, and the period of time that it would take to lease vacant space. Assessing the assumptions involved evaluating the consistency of the assumptions used with external market data and with evidence obtained in other areas of the audit. In conjunction with certain purchase price allocations, professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of certain significant assumptions utilized by management, as appropriate. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts February 27, 2024 We have served as the Company’s or its predecessor’s auditor since 2014. F- 3 Easterly Government Properties, Inc. Consolidated B alance Sheets (Amounts in thousands, except share amounts) December 31, 2023 December 31, 2022 Assets Real estate properties, net $ 2,319,143 $ 2,285,308 Cash and cash equivalents 9,381 7,578 Restricted cash 12,558 9,696 Tenant accounts receivable 66,274 58,835 Investment in unconsolidated real estate venture 284,544 271,644 Intangible assets, net 148,453 157,282 Interest rate swaps 1,994 4,020 Prepaid expenses and other assets 37,405 35,022 Total assets $ 2,879,752 $ 2,829,385 Liabilities Revolving credit facility 79,000 65,500 Term loan facilities, net 299,108 248,972 Notes payable, net 696,532 696,052 Mortgage notes payable, net 220,195 240,847 Intangible liabilities, net 12,480 16,387 Deferred revenue 82,712 83,309 Accounts payable, accrued expenses and other liabilities 80,209 67,336 Total liabilities 1,470,236 1,418,403 Commitments and contingencies (Note 13) Equity Common stock, par value $ 0.01 , 200,000,000 shares authorized, 100,973,247 and 90,814,021 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 1,010 908 Additional paid-in capital 1,783,338 1,622,913 Retained earnings 112,301 93,497 Cumulative dividends ( 576,319 ) ( 475,983 ) Accumulated other comprehensive income 1,871 3,546 Total stockholders’ equity 1,322,201 1,244,881 Non-controlling interest in Operating Partnership 87,315 166,101 Total equity 1,409,516 1,410,982 Total liabilities and equity $ 2,879,752 $ 2,829,385 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Easterly Government Properties, Inc. Consolidated Statem ents of Operations (Amounts in thousands, except share and per share amounts) For the years ended December 31, 2023 2022 2021 Revenues Rental income $ 273,906 $ 284,488 $ 267,389 Tenant reimbursements 8,908 5,920 5,187 Asset management income 2,110 1,409 136 Other income 2,303 1,789 2,148 Total revenues 287,227 293,606 274,860 Expenses Property operating 71,964 66,781 56,693 Real estate taxes 30,461 30,900 30,429 Depreciation and amortization 91,292 98,254 91,266 Acquisition costs 1,661 1,370 1,939 Corporate general and administrative 27,118 24,785 23,522 Total expenses 222,496 222,090 203,849 Other income (expense) Income from unconsolidated real estate venture 5,498 3,374 271 Interest expense, net ( 49,169 ) ( 47,378 ) ( 38,632 ) Gain on the sale of operating properties — 13,590 1,307 Impairment loss — ( 5,540 ) — Net income 21,060 35,562 33,957 Non-controlling interest in Operating Partnership ( 2,256 ) ( 4,088 ) ( 3,899 ) Net income available to Easterly Government Properties, Inc. $ 18,804 $ 31,474 $ 30,058 Net income available to Easterly Government Properties, Inc. per share: Basic $ 0.19 $ 0.34 $ 0.35 Diluted $ 0.19 $ 0.34 $ 0.35 Weighted-average common shares outstanding Basic 94,264,166 90,613,966 84,043,012 Diluted 94,556,055 90,948,701 84,619,390 Dividends declared per common share $ 1.06 $ 1.06 $ 1.05 The accompanying notes are an integral part of these consolidated financial statements. F- 5 Easterly Government Properties, Inc. Consolidated Stateme nts of Comprehensive Income (Loss) (Amounts in thousands) For the years ended December 31, 2023 2022 2021 Net income $ 21,060 $ 35,562 $ 33,957 Other comprehensive gain (loss): Unrealized gain (loss) on interest rate swaps, net ( 2,025 ) 9,719 7,080 Other comprehensive gain (loss): ( 2,025 ) 9,719 7,080 Comprehensive income 19,035 45,281 41,037 Non-controlling interest in Operating Partnership ( 2,256 ) ( 4,088 ) ( 3,899 ) Other comprehensive (gain) loss attributable to non-controlling interest 350 ( 1,101 ) ( 801 ) Comprehensive income attributable to Easterly Government Properties, Inc. $ 17,129 $ 40,092 $ 36,337 The accompanying notes are an integral part of these consolidated financial statements. F- 6 Easterly Government Properties, Inc. Consolidated Statements of Stockholders’ Equity (Amounts in thousands, except share amounts) Shares Common Stock Par Value Additional Paid-in Capital Retained Earnings (Deficit) Cumulative Dividends Accumulated Other Comprehensive Income (Loss) Non- controlling Interest in Operating Partnership Total Equity Balance at December 31, 2020 82,106,256 $ 821 $ 1,424,787 $ 31,965 $ ( 291,652 ) $ ( 11,351 ) $ 145,400 $ 1,299,970 Stock based compensation — — 833 — — — 4,217 5,050 Grant of unvested restricted stock 35,865 — — — — — — — Dividends and distributions paid ($ 1.05 per share) — — — — ( 88,243 ) — ( 11,751 ) ( 99,994 ) Redemption of common units to common stock 343,515 3 4,827 — — — ( 4,830 ) — Contribution of property for common units — — — — — — 20,791 20,791 Issuance of common stock, net 7,662,232 77 174,650 — — — — 174,727 Unrealized gain on interest rate swaps — — — — — 6,279 801 7,080 Net income — — — 30,058 — — 3,899 33,957 Allocation of non-controlling interest in Operating Partnership — — ( 385 ) — — — 385 — Balance at December 31, 2021 90,147,868 901 1,604,712 62,023 ( 379,895 ) ( 5,072 ) 158,912 1,441,581 Stock based compensation — — 625 — — — 5,911 6,536 Grant of unvested restricted stock 26,477 — — — — — — — Dividends and distributions paid ($ 1.06 per share) — — — — ( 96,088 ) — ( 13,088 ) ( 109,176 ) Redemption of common units to common stock 204,751 2 2,909 — — — ( 2,911 ) — Contribution of property for common units — — — — — — 17,361 17,361 Issuance of common stock, net 434,925 5 9,394 — — — — 9,399 Unrealized gain on interest rate swaps — — — — — 8,618 1,101 9,719 Net income — — — 31,474 — — 4,088 35,562 Allocation of non-controlling interest in Operating Partnership — — 5,273 — — — ( 5,273 ) — Balance at December 31, 2022 90,814,021 $ 908 $ 1,622,913 $ 93,497 $ ( 475,983 ) $ 3,546 $ 166,101 $ 1,410,982 Stock based compensation — — 553 — — — 5,194 5,747 Grant of unvested restricted stock 32,486 — — — — — — — Dividends and distributions paid ($ 1.06 per share) — — — — ( 100,336 ) — ( 12,043 ) ( 112,379 ) Redemption of common units to common stock 5,867,740 59 78,341 — — — ( 78,400 ) — Contribution of property for common units — — — — — — 219 219 Issuance of common stock, net 4,259,000 43 85,869 — — — — 85,912 Unrealized loss on interest rate swaps — — — — — ( 1,675 ) ( 350 ) ( 2,025 ) Net income — — — 18,804 — — 2,256 21,060 Allocation of non-controlling interest in Operating Partnership — — ( 4,338 ) — — — 4,338 — Balance at December 31, 2023 100,973,247 $ 1,010 $ 1,783,338 $ 112,301 $ ( 576,319 ) $ 1,871 $ 87,315 $ 1,409,516 The accompanying notes are an integral part of these consolidated financial statements. F- 7 Easterly Government Properties, Inc. Consolidated Statem ents of Cash Flows (Amounts in thousands) For the years ended December 31, 2023 2022 2021 Cash flows from operating activities Net income $ 21,060 $ 35,562 $ 33,957 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 91,292 98,254 91,266 Straight line rent ( 3,897 ) ( 410 ) ( 4,417 ) Income from unconsolidated real estate venture ( 5,498 ) ( 3,374 ) ( 271 ) Amortization of above- / below-market leases ( 2,730 ) ( 3,105 ) ( 4,589 ) Amortization of unearned revenue ( 6,249 ) ( 5,797 ) ( 5,616 ) Amortization of loan premium / discount ( 1,098 ) ( 1,122 ) ( 290 ) Amortization of deferred financing costs 2,122 2,056 1,659 Amortization of lease inducements 942 856 864 Gain on the sale of operating properties — ( 13,590 ) ( 1,307 ) Impairment loss — 5,540 — Distributions from investment in unconsolidated real estate venture 10,232 6,434 — Non-cash compensation 5,747 6,536 5,050 Other — — 74 Net change in: Tenant accounts receivable ( 3,173 ) ( 126 ) ( 8,675 ) Prepaid expenses and other assets ( 5,562 ) ( 2,829 ) ( 3,123 ) Deferred revenue associated with operating leases 5,652 1,973 557 Principal payments on operating lease obligations ( 497 ) ( 599 ) ( 352 ) Accounts payable, accrued expenses and other liabilities 6,136 ( 318 ) 13,557 Net cash provided by operating activities 114,479 125,941 118,344 Cash flows from investing activities Real estate acquisitions and deposits ( 63,412 ) ( 93,737 ) ( 214,674 ) Additions to operating properties ( 28,143 ) ( 22,568 ) ( 17,919 ) Additions to development properties ( 17,820 ) ( 12,350 ) ( 6,217 ) Proceeds from sale of operating properties, net — 202,416 7,336 Distributions from investment in unconsolidated real estate venture 103 983 — Investment in unconsolidated real estate venture ( 17,736 ) ( 143,847 ) ( 131,568 ) Net cash used in investing activities ( 127,008 ) ( 69,103 ) ( 363,042 ) Cash flows from financing activities Payment of deferred financing costs — — ( 5,306 ) Issuance of common shares 86,472 9,504 175,929 Credit facility draws 198,250 230,750 466,250 Credit facility repayments ( 184,750 ) ( 179,750 ) ( 531,000 ) Term loan draws 50,000 — — Issuance of notes payable — — 250,000 Repayments of mortgage notes payable ( 20,002 ) ( 10,899 ) ( 4,233 ) Dividends and distributions paid ( 112,379 ) ( 109,176 ) ( 99,994 ) Payment of offering costs ( 397 ) ( 136 ) ( 1,474 ) Net cash provided by (used in) financing activities 17,194 ( 59,707 ) 250,172 Net increase (decrease) in Cash and cash equivalents and Restricted cash 4,665 ( 2,869 ) 5,474 Cash and cash equivalents and Restricted cash, beginning of year 17,274 20,143 14,669 Cash and cash equivalents and Restricted cash, end of year $ 21,939 $ 17,274 $ 20,143 The accompanying notes are an integral part of these consolidated financial statements. F- 8 Easterly Government Properties, Inc. Consolidated Statements of Cash Flows (Amounts in thousands) Supplemental disclosure of cash flow information is as follows: For the years ended December 31, 2023 2022 2021 Cash paid for interest, net of capitalized interest $ 47,530 $ 40,207 $ 35,478 Capitalized interest $ 1,483 $ 1,220 $ 951 Non-cash investing and financing activities: Additions to operating properties $ 8,518 $ 4,859 $ 3,634 Additions to development properties 7,672 4,135 1,222 Offering costs, accrued not paid 16 — 29 Unrealized gain (loss) on interest rate swaps, net ( 2,025 ) 9,719 7,080 Mortgage notes assumed on acquisition of operating property — — 53,816 Properties acquired for common units 219 17,361 20,791 Contingent consideration accrued, not received 41 125 — Recognition of operating lease right-of-use assets — 2,445 1,677 Recognition of liabilities related to operating lease right-of-use assets — 2,445 1,677 Derecognition of operating lease right-of-use assets — 689 74 Derecognition of liabilities related to operating lease right-of-use assets — — 74 Exchange of Common Units for Shares of Common Stock Non-controlling interest in Operating Partnership $ ( 78,400 ) $ ( 2,911 ) $ ( 4,830 ) Common stock 59 2 3 Additional paid-in capital 78,341 2,909 4,827 Total $ — $ — $ — The accompanying notes are an integral part of these consolidated financial statements. F- 9 Easterly Government Properties, Inc. Notes to the Consolidat ed Financial Statements 1. Organization and Basis of Presentation Easterly Government Properties, Inc. (the “Company”) is a Maryland corporation that has elected to be taxed as a real estate investment trust (a “REIT”) under the Internal Revenue Code, as amended (the “Code”), commencing with its taxable year ended December 31, 2015. The operations of the Company are carried out primarily through Easterly Government Properties, LP (the “Operating Partnership”) and the wholly owned subsidiaries of the Operating Partnership. As used herein, the “Company,” “we,” “us,” or “our” refer to Easterly Government Properties, Inc. and its consolidated subsidiaries and partnerships, including the Operating Partnership, except where context otherwise requires. 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. 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 closely with the tenant agency to meet its needs and objectives. We may also consider other potential opportunities to add properties to our portfolio, including acquiring properties leased to state and local governments with strong creditworthiness and other opportunities that directly or indirectly support the mission of select government agencies. As of December 31, 2023, we wholly owned 81 operating properties and nine operating properties through an unconsolidated joint venture (the “JV”) in the United States encompassing approximately 8.8 million leased square feet, including 88 operating properties that were leased primarily to U.S. Government tenant agencies, one operating property entirely leased to tenant agencies of a U.S. state government and one operating property that was entirely leased to a private tenant. As of December 31, 2023 , our operating properties were 97 % leased. For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned one property under development that we expect will encompass approximately 0.2 million leased square feet upon completion. All references to square footage and asset age within the notes are unaudited. 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 and owned approximately 93.8 % of the aggregate limited partnership interests in the Operating Partnership, which we refer to herein as common units, as of December 31, 2023. We have elected to be taxed as a REIT and 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, including Easterly Government Properties TRS, LLC and Easterly Government Services, LLC, the Operating Partnership and its other subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 2. Summary of Significant Accounting Policies 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. Real Estate Properties Real estate properties comprise all tangible assets we hold for rent or development. Real property is recognized at cost less accumulated depreciation. Third party costs related to asset acquisitions are capitalized. Development, re-development and certain costs directly related to the improvement of real properties are capitalized. Maintenance and repair expenses are charged to expense as incurred. When we acquire properties, we allocate the purchase price to numerous tangible and intangible components. Our process for determining the allocation to these components requires many estimates and assumptions, including the following: (1) determination of market land, rental, discount and capitalization rates; (2) estimation of leasing and tenant improvement costs associated with the F- 10 remaining term of acquired leases; (3) assumptions used in determining the in-place lease and if-vacant value including the rental rates, period of time that it would take to lease vacant space and estimated tenant improvement and leasing costs; and (4) allocation of the if-vacant value between land and building. A change in any of the above key assumptions can materially change not only the presentation of acquired properties in our consolidated financial statements but also our reported results of operations. The allocation to different components affects the following: • the amount of the purchase price allocated among different categories of assets and liabilities on our consolidated balance sheets; and the amount of costs assigned to individual properties in multiple property acquisitions; • where the amortization of the components appear over time in our consolidated statements of operations. Allocations to above- and below-market leases are amortized into rental revenue, whereas allocations to most of the other tangible and intangible assets are amortized into depreciation and amortization expense. As a REIT, this is important to us since much of the investment community evaluates our operating performance using non-GAAP measures such as Funds From Operations, the computation of which includes rental revenue but does not include depreciation and amortization expense; and • the timing over which the items are recognized as revenue or expense in our consolidated statements of operations. For example, for allocations to the as-if vacant value, the land portion is not depreciated and the building portion is depreciated over a longer period of time than the other components (generally 40 years). Allocations to above- and below-market leases and in-place lease value are amortized over significantly shorter time frames, and if individual tenants’ leases are terminated early, any unamortized amounts remaining associated with those tenants are written off upon termination. These differences in timing can materially affect our reported results of operations. Tenant improvements are capitalized in real property when we own the improvement. When we are required to provide improvements under the terms of a lease, we determine whether the improvements constitute landlord assets or tenant assets. If the improvements are considered landlord assets, we capitalize the cost of the improvements and recognize depreciation expense associated with such improvements generally over the shorter of the useful life of the assets or the term of the lease and recognize any payments from the tenant as rental revenue over the term of the lease. If the improvements are considered tenant assets, we defer the cost of improvements funded by us as a lease incentive asset and amortize it as a reduction of rental revenue over the term of the lease. Our determination of whether improvements are landlord assets or tenant assets also may affect when we commence revenue recognition in connection with a lease. In determining whether improvements constitute landlord or tenant assets, we consider numerous factors including: whether the improvements are unique to the tenant or reusable by other tenants; whether the tenant is permitted to alter or remove the improvements without our consent or without compensating us for any lost fair value; whether the ownership of the improvements remains with us or remains with the tenant at the end of the lease term; and whether the economic substance of the lease terms is properly reflected. We capitalize pre-development costs incurred in pursuit of new development opportunities for which we currently believe future development is probable. Additionally, we capitalize interest expense, real estate taxes and direct and indirect project costs (including related compensation and other indirect costs) associated with properties, or portions thereof, undergoing construction, development and redevelopment activities. In capitalizing interest expense, if there is a specific borrowing for the property undergoing construction, development and redevelopment activities, we apply the interest rate of that borrowing to the average accumulated expenditures that do not exceed such borrowing; for the portion of expenditures exceeding any such specific borrowing, we apply our weighted average interest rate on unsecured borrowings to the expenditures. We continue to capitalize costs while construction, development or redevelopment activities are underway until the building is substantially complete and ready for its intended use, at which time rental income recognition can commence and rental operating costs, real estate taxes, insurance, and other subsequent carrying costs are expensed as incurred. Depreciation of an asset begins when it is available for use and is calculated using the straight-line method over the estimated useful lives. Each period, depreciation is charged to expense and credited to the related accumulated depreciation account. A used asset acquired is depreciated over its estimated remaining useful life, not to exceed the life of a new asset. Range of useful lives for depreciable assets are as follows: Category Term Buildings 40 years Building improvements 5 - 40 years Tenant improvements Generally shorter of the remaining life of the lease or useful life Furniture and equipment 3 - 7 years We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long-lived assets. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected F- 11 undiscounted cash flows to determine whether an asset may be impaired. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. Fair value estimates are made as of a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining lives of our long-lived assets. If we change our estimate of the remaining lives, we allocate the carrying value of the affected assets over their revised remaining lives. From time to time, natural disasters or other loss events may result in damage or destruction to our assets. In these instances, any loss on involuntary conversion is recognized as Depreciation and amortization in our Consolidated Statements of Operations in the period in which the damage occurred. Cash and Cash Equivalents Cash and cash equivalents on the accompanying Consolidated Balance Sheets include all cash and liquid investments that mature three months or less from when they were purchased. Cash equivalents are reported at cost, which approximates fair value. We maintain our cash in bank accounts in amounts that may exceed federally insured limits at times. We have not experienced any losses in these accounts and believe that we are not exposed to significant credit risk because our accounts are deposited with major financial institutions. Restricted Cash Restricted cash on the accompanying Consolidated Balance Sheets consists of amounts escrowed for future real estate taxes, insurance, capital expenditures and debt service, as required by certain of our mortgage debt agreements or lease agreements. Investment in Unconsolidated Real Estate Venture We analyze each real estate venture to determine whether the entity should be consolidated. If it is determined that an entity is a variable interest entity (“VIE”) in which we have a variable interest, we assess whether we are the primary beneficiary of the VIE to determine whether it should be consolidated. We are not the primary beneficiary of an entity when we do not have voting control, lack the power to direct the activities that most significantly impact the entity’s economic performance or other partners have substantive participatory rights, we do not have the obligation to absorb losses or we do not have the right to receive returns from the VIE that could potentially be significant. If we determine that the entity is not a VIE, then we base our consolidation assessment on whether we have a controlling financial interest in the entity. Management uses its judgment when determining if we are the primary beneficiary of, or have a controlling financial interest in, an entity in which we have a variable interest. Factors considered in determining whether we have the power to direct the activities that most significantly impact the entity’s economic performance include voting rights, involvement in day-to-day capital and operating decisions, and the extent of our involvement in the entity. We use the equity method of accounting for investments in unconsolidated real estate ventures when we have significant influence but do not control the entity. Under the equity method, we record our investment in "Investment in unconsolidated real estate venture" on our Consolidated Balance Sheets and our proportionate share of earnings or losses, pursuant to the terms of the joint venture agreement as these may change depending on returns, in "Income from unconsolidated real estate venture" in the accompanying Consolidated Statements of Operations. We classify distributions received from equity method investees within our Consolidated Statements of Cash Flows using the nature of distribution approach. Under this method, cash flows generated from the operations of an unconsolidated real estate venture are classified as a return on investment (cash inflow from operating activities) and cash flows from property sales, debt refinancing or sales of our investments are classified as a return of investment (cash inflow from investing activities). We earn revenue from asset management services to our unconsolidated real estate venture. These fees are determined following the terms specific to each arrangement. We account for this revenue gross of our ownership interest in the respective real estate venture and recognize such revenue as "Asset management income" in our Consolidated Statements of Operations when earned. Our proportionate share of related expense is recognized in "Income from unconsolidated real estate venture". We assess quarterly whether there are any indicators, including underlying property operating performance and general market conditions, that the value of our investment may be impaired. We consider an investment in a real estate venture impaired if we determine that its fair value is less than the net carrying value of the investment on an other-than-temporary basis. If our analysis indicates that there is an other-than-temporary impairment related to the investment in a particular real estate venture, the carrying value of the venture will be adjusted to an amount that reflects the estimated fair value of the investment. F- 12 Receivables and Credit Losses Tenant accounts receivable on the accompanying Consolidated Balance Sheets includes accrued rental income and other tenant accounts receivables. We accrue rental and other tenant income earned, but not yet received, in accordance with GAAP. Non-tenant receivables are included in Prepaid expenses and other assets on the accompanying Consolidated Balance Sheets. We calculate an estimate of our expected credit losses on financial assets at their inception. The allowance represents the portion of the amortized cost basis that we do not expect to collect, or loss we expect to incur in the case of off-balance sheet credit exposures. Quarterly, the expected losses are re-estimated, considering any changes in risks or assumptions. Deferred Costs Deferred financing fees and debt issuance costs include costs incurred in obtaining debt that are capitalized and are presented as a direct deduction from the carrying amount of the associated debt liability that is not a line-of-credit arrangement on the accompanying Consolidated Balance Sheets. Deferred financing fees and debt issuance costs related to line-of-credit arrangements are presented as an asset in Prepaid expenses and other assets on the accompanying Consolidated Balance Sheets. The deferred financing fees and debt issuance costs are amortized through interest expense over the life of the respective loans on a basis which approximates the effective interest method. Any unamortized amounts upon early repayment of debt are written off in the period of repayment as a loss on extinguishment of debt. Fully amortized deferred financing fees and debt issuance costs are removed from the books upon maturity of the underlying debt. Deferred offering costs include certain legal, accounting and other third-party fees that are directly associated with in-process equity financings until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to capital. Should the equity no longer be considered probable of being consummated, the deferred offering costs would be expensed immediately as a charge to Corporate general and administrative expenses in the accompanying Consolidated Statement of Operations. Deferred leasing commissions include commissions, compensation costs of leasing personnel for those leases which commenced prior to the adoption of Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”) on January 1, 2019, and other direct and incremental costs incurred to obtain new tenant leases as well as to renew existing tenant leases and are presented in Prepaid expenses and other assets on the accompanying Consolidated Balance Sheets. Leasing commissions are capitalized and amortized over the terms of the related leases upon lease commencement using the straight-line method. If a lease terminates prior to the expiration of its initial term, any unamortized costs related to the lease are accelerated into amortization expense. Changes in leasing commissions are presented in the cash flows from operating activities section of the accompanying Consolidated Statements of Cash Flows. Interest Rate Swaps Our primary objective in using interest rate derivatives is to add stability to interest expense and to manage exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable- rate amounts from a counterparty in exchange for our making fixed- rate payments over the life of the agreements without exchange of the underlying notional amount. Derivatives are used to hedge the cash flows associated with interest rates on existing debt as well as future debt. We recognize derivatives as assets or liabilities on the balance sheet at fair value. We defer the effective portion of changes in fair value of the designated cash flow hedges to accumulated other comprehensive income (“AOCI”) or loss (“AOCL”) and reclassify such deferrals to interest expense as interest expense is recognized on the hedged forecasted transitions. We recognize the ineffective portion of the change in fair value of interest rate derivatives directly in interest expense. When an interest rate swap designated as a cash flow hedge no longer qualifies for hedge accounting, we recognize changes in fair value of the hedge previously deferred to AOCI or AOCL, along with any changes in fair value occurring thereafter, through earnings. We do not use interest rate derivatives for trading or speculative purposes. We manage counterparty risk by only entering into contracts with major financial institutions based upon their credit ratings and other risk factors. We use standard market conventions and techniques such as discounted cash flow analysis, option pricing models, replacement cost and termination cost in computing the fair value of derivatives at each balance sheet date. We made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a gross basis by counterparty portfolio. Please refer to Note 6 for more information pertaining to interest rate derivatives. F- 13 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 we 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 us and our counterparties. We have 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 our derivatives held as of December 31, 2023 and 2022 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. Please refer to Note 7 for more information pertaining to fair value measurements. Deferred Revenue Deferred revenue consists primarily of lump sum reimbursements made by tenants to us for landlord improvements in excess of a tenant improvement allowance. Lump sum reimbursements are recorded as Deferred revenue on the Consolidated Balance Sheets and are amortized over the life of the lease through Rental income. Deferred revenue also includes rent received in advance, which is recognized within Rental income once earned. Non-Controlling Interests Non-controlling interests relate to the common units of the Operating Partnership not owned by us. Unitholders receive a distribution per unit equivalent to the dividend per share of our common stock. Pursuant to ASC 810 with respect to the accounting and reporting for non-controlling interest changes and changes in ownership interest of a subsidiary, changes in parent’s ownership interest when the parent retains controlling interest in the subsidiary should be accounted for as equity transactions. The carrying amount of the non-controlling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to us. F- 14 Revenue Recognition Rental income includes base rents paid by each tenant in accordance with its lease agreement conditions. We recognize rental income on a straight-line basis over the lease term of each lease. For acquisitions of existing buildings, we recognize rental income from leases already in place coincident with the date of property closing. Lease incentives are recorded as a deferred asset and amortized as a reduction of revenue on a straight-line basis over the respective lease term. Above- and below-market leases are amortized into rental income over the terms of the respective leases. Further, Rental income includes certain tenant reimbursement income (real estate taxes, operating expenses, utility usage, and other reimbursements), which are accrued as variable lease payments in the same periods as the related expenses are incurred in accordance with ASC 842. Tenant reimbursement income includes revenue from tenant construction projects. When revenue and costs for such projects can be estimated with reasonable accuracy, we recognize a percentage of the total estimated revenue on a project based on the cost of services provided on the project as of a point in time relative to the total estimated costs on the project (percentage of completion method). When these criteria do not apply to a project, we recognize revenue from that project using the completed contract method. Fully reimbursed income was included within Tenant reimbursements and associated expenses were included in Property operating expenses within the Consolidated Statements of Operations. Other income includes income on the associated tenant reimbursement construction projects, parking income and other miscellaneous income. Asset management income includes revenue from asset management services to our unconsolidated real estate venture. The asset management fees are earned by us for managing properties owned by related parties. The asset management fees are based upon contractual rates applied to actively invested capital, with fee income recognized on a monthly basis. The fees are recognized as a single performance obligation comprised of a series of distinct services related to property operations. We believe the overall services provided by asset management activities have the same pattern of performance over the term of the agreement. We account for this revenue gross of our ownership interest in the respective real estate venture and recognize such revenue as "Asset management income" in our Consolidated Statements of Operations when earned. Our proportionate share of related expense is recognized in "Income from unconsolidated real estate venture." Sales of Properties We recognize gains from sales of consolidated interests in properties to non-customer third parties when we have transferred control of such interests. Income Taxes 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. So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on our net income that we distribute to our stockholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90 % of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our stockholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we will be subject to certain U.S. federal, state and local taxes on our income and property, and on taxable income that we do not distribute to our stockholders. In addition, we may provide services that are not customarily provided by a landlord, hold properties for sale and engage in other activities (such as a management business) through Taxable REIT Subsidiaries (“TRSs”) and the income of those subsidiaries will be subject to U.S. federal income tax at regular corporate rates. For the years ended December 31, 2023, 2022 and 2021, we did not incur any material tax liability associated with any of the above. We do not anticipate any potential expense related to uncertain tax positions as we closely monitor our REIT compliance, do not have any prohibited transactions related to property sales, and the states in which we operate do not subject us to withholding tax requirements. F- 15 For federal income tax purposes, dividends to shareholders may be characterized as ordinary income, capital gains or return of capital. The characterization of dividends paid on our common shares during each of the last three years was as follows: For the years ended December 31, 2023 2022 2021 Ordinary income 40.31 % 47.48 % 54.43 % Long-term capital gain 0.00 % 0.00 % 0.00 % Return of capital 59.69 % 52.52 % 45.57 % The dividends allocated to each of the above years for federal income tax purposes included dividends paid on our common shares during each of those years. We distributed all of our REIT taxable income in 2023, 2022, and 2021 and, as a result, did no t incur federal income tax in those years. Stock Based Compensation We grant equity-based compensation awards to its officers, employees and non-employee directors in the form of restricted shares of common stock and long-term incentive plan units in the Operating Partnership (“LTIP units”). See Note 8 for further discussion of restricted shares of common stock and LTIP units. The restricted shares of common stock and LTIP units issued to officers, employees, and non-employee directors vest over a period of time as determined by our board of directors at the date of grant. We recognize compensation expense for non-vested restricted shares of common stock and LTIP units granted to officers, employees and non-employee directors on a straight-line basis over the requisite service and/or performance period based upon the fair market value of the shares on the date of grant, as adjusted for forfeitures. Earnings Per Share of Common Stock Amount Basic earnings per share is calculated by dividing net income available to Easterly Government Properties, Inc. by the weighted-average number of shares of common stock outstanding during the period, excluding the weighted average number of unvested restricted shares. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities such as unvested restricted shares, LTIP units, and shares issuable under forward sales agreements. Unvested restricted shares and LTIP units are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share. Segments We manage our operations as a single segment for the purposes of assessing performance and making operating decisions. All revenue has been generated and all tangible assets are held in the United States. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Recent Accounting Pronouncements Not Yet Adopted In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). ASU 2023-06 adds interim and annual disclosure requirements to GAAP at the request of the Securities and Exchange Commission (the “SEC”). The guidance in ASU 2023-06 is required to be applied prospectively and the GAAP requirements will be effective when the removal of the related SEC disclosure requirements is effective. If the SEC does not act to remove its related requirement by June 30, 2027, any related FASB amendments will be removed from the ASC and will not be effective. We do not anticipate that the adoption of ASU 2023-06 will have a material impact on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard is intended to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. The new standard is effective for annual periods beginning after December 15, 2024. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. F- 16 3. Real Estate and Intangibles Acquisitions During the year ended December 31, 2023 , we acquired three operating properties in asset acquisitions, CA – Anaheim, DHS – Atlanta and JUD – Newport News, for an aggregate purchase price of $ 63.1 million. During the year ended December 31, 2022 , we acquired three operating properties in asset acquisitions, FBI – Tampa, NARA – Broomfield and JUD – Council Bluffs, for an aggregate purchase price of $ 108.1 million. We allocated the aggregate purchase price of these acquisitions based on the estimated fair values of the acquired assets and assumed liabilities as follows (amounts in thousands): December 31, 2023 December 31, 2022 Real estate Land $ 8,407 $ 9,795 Building 37,328 83,403 Acquired tenant improvements 4,283 5,386 Total real estate 50,018 98,584 Intangible assets In-place leases 9,538 7,927 Acquired leasing commissions 3,919 4,453 Total intangible assets 13,457 12,380 Intangible liabilities Below-market leases — ( 2,858 ) Total intangible liabilities — ( 2,858 ) Prepaid expenses and other assets Contingent consideration 41 — Accounts payable, accrued expenses and other liabilities Contingent consideration ( 388 ) — Purchase price 63,128 108,106 No debt was assumed on acquisitions made during the years ended December 31, 2023 and 2022 . The intangible assets and liabilities of the acquired operating properties have an aggregate weighted average amortization period of 10.46 years and 15.29 as of December 31, 2023 and 2022, respectively. During the year ended December 31, 2023 , we included $ 1.5 million of revenues and $ 0.4 million of net income in our Consolidated Statement of Operations related to the operating properties acquired. Additionally, we incurred $ 1.7 million of acquisition-related costs primarily consisting of internal costs associated with the property acquisitions. During the year ended December 31, 2022 , we included $ 5.3 million of revenues and $ 1.8 million of net income in our Consolidated Statement of Operations related to the operating properties acquired. Additionally, we incurred $ 1.4 million of acquisition-related costs primarily consisting of internal costs associated with the property acquisitions. Dispositions No operating properties were disposed of during the year ended December 31, 2023. On October 12, 2022, we entered into a second amended purchase and sale agreement with a third party to dispose of a portfolio of ten properties totaling approximately 668,000 leased square feet (the “Disposition Portfolio Properties”). We completed the sale of nine of the Disposition Portfolio Properties on October 27, 2022, including: DHA – Aurora, HRSA – Baton Rouge, VA – Baton Rouge, FDA – College Park, MEPCOM – Jacksonville, DOE – Lakewood, ICE – Pittsburgh, OSHA – Sandy, and CBP – Sunburst. On December 28, 2022 we closed on DOI – Billings, the last of the Disposition Portfolio Properties. Net proceeds from the sale of the Disposition Portfolio Properties were approximately $ 202.4 million and we recognized a gain on the sale of the Disposition Portfolio Properties of approximately $ 13.6 million for the year ended December 31, 2022. F- 17 Consolidated Real Estate and Intangibles Real estate and intangibles on our consolidated balance sheets consisted of the following (amounts in thousands): December 31, 2023 December 31, 2022 Real estate properties, net Land $ 221,999 $ 213,592 Building 2,349,846 2,266,674 Acquired tenant improvements 85,949 81,872 Construction in progress 52,426 44,452 Accumulated depreciation ( 391,077 ) ( 321,282 ) Total Real estate properties, net $ 2,319,143 $ 2,285,308 Intangible assets, net In-place leases 280,604 273,077 Acquired leasing commissions 72,560 68,756 Above market leases 14,620 14,620 Payment in lieu of taxes 6,394 6,394 Accumulated amortization ( 225,725 ) ( 205,565 ) Total Intangible assets, net $ 148,453 $ 157,282 Intangible liabilities, net Below market leases ( 72,037 ) ( 72,088 ) Accumulated amortization 59,557 55,701 Total Intangible liabilities, net $ ( 12,480 ) $ ( 16,387 ) During the third quarter of 2022, we recognized an impairment loss totaling approximately $ 5.5 million for its ICE – Otay property and reduced its carrying value to its estimated fair value, which declined due to changes in expected cash flows related to the tenant’s lease expiration in 2022. ICE – Otay is a 47,919 rentable square foot office building located in San Diego, California. See Note 7 for additional information. Amortization of intangible assets within Depreciation and amortization expense was $ 21.1 million, $ 25.7 million and $ 25.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. The projected amortization of total intangible assets and intangible liabilities as of December 31, 2023 are as follows (amounts in thousands): Total Intangible assets 2024 $ 20,088 2025 17,712 2026 16,593 2027 14,666 2028 12,248 Thereafter 67,146 $ 148,453 Intangible liabilities 2024 $ ( 2,938 ) 2025 ( 2,246 ) 2026 ( 2,008 ) 2027 ( 1,783 ) 2028 ( 1,238 ) Thereafter ( 2,267 ) $ ( 12,480 ) F- 18 The following table summarizes the scheduled amortization of our acquired above- and below-market lease intangibles for each of the five succeeding years as of December 31, 2023 (amounts in thousands): Acquired Above-Market Lease Intangibles Acquired Below-Market Lease Intangibles 2024 $ 1,129 $ ( 2,938 ) 2025 1,097 ( 2,246 ) 2026 1,096 ( 2,008 ) 2027 1,096 ( 1,783 ) 2028 725 ( 1,238 ) Above-market lease amortization reduces Rental income on our Consolidated Statements of Operations and below-market lease amortization increases Rental income on our Consolidated Statements of Operations. Amortization of above- and below-market lease intangibles increased Rental income by $ 2.7 million, $ 3.1 million and $ 4.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. 4. Investment in Unconsolidated Real Estate Venture The following is a summary of our investment in our unconsolidated real estate venture (dollars in thousands): As of December 31, Joint Venture Ownership Interest 2023 2022 MedBase Venture 53.0 % $ 284,544 $ 271,644 On October 13, 2021, we formed the JV, with a global investor to fund the acquisition of a portfolio of ten properties anticipated to encompass 1,214,165 leased square feet (the “VA Portfolio”). We own a 53.0 % interest in the JV, subject to preferred allocations as provided in the JV agreement. During the year ended December 31, 2023 , the JV acquired VA – Corpus Christi for a purchase price of $ 34.5 million. During the year ended December 31, 2022, the JV acquired four properties, consisting of VA – Birmingham, VA – Marietta, VA – Columbus and VA – Phoenix, for an aggregate purchase price of $ 273.2 million. As of December 31, 2023, nine of the ten properties in the VA Portfolio had been acquired by the JV. We provide asset management services to our unconsolidated real estate venture. We recognized asset management service revenue of $ 2.1 million, $ 1.4 million and $ 0.1 million for the year ended December 31, 2023, 2022 and 2021, respectively. The following is a summary of financial information for our unconsolidated real estate venture: As of December 31, Balance sheet information: 2023 2022 Real estate, net $ 449,956 $ 430,823 Other assets, net (1) 97,190 90,100 Total assets $ 547,146 $ 520,923 Total liabilities (2) $ 10,854 $ 9,026 Total equity 536,292 511,897 Total liabilities and equity $ 547,146 $ 520,923 Company’s share of equity $ 284,169 $ 271,269 Basis differential (3) 375 375 Carrying value of the Company’s investment in the unconsolidated venture $ 284,544 $ 271,644 (1) At December 31, 2023 and 2022, this amount included right-of-use assets - finance leases totaling approximately $ 4.8 million and $ 4.9 million, respectively, representing a ground lease at VA – Lubbock. (2) At December 31, 2023 and 2022, this amount included lease liabilities - finance leases totaling approximately $ 5.0 million and $ 5.0 million, respectively, representing a ground lease at VA – Lubbock . (3) This amount represents the aggregate difference between our historical cost basis and the basis reflected at the joint venture level . F- 19 For the year ended December 31, Income statement information: 2023 2022 2021 Total revenue $ 40,693 $ 25,898 $ 1,864 Operating income 10,567 6,530 548 Net income 10,402 6,366 512 Company’s share of net income $ 5,498 $ 3,374 $ 271 5. Debt At December 31, 2023 and December 31, 2022 (dollars in thousands): Principal Outstanding Interest Current Loan December 31, 2023 December 31, 2022 Rate (1) Maturity Revolving credit facility: Revolving credit facility (2) $ 79,000 $ 65,500 S + 135bps July 2025 (3) Total revolving credit facility 79,000 65,500 Term loan facilities: 2016 term loan facility 100,000 100,000 5.05 % (4) March 2024 (5) 2018 term loan facility 200,000 150,000 5.39 % (6) July 2026 Total term loan facilities 300,000 250,000 Less: Total unamortized deferred financing fees ( 892 ) ( 1,028 ) Total term loan facilities, net 299,108 248,972 Notes payable: 2017 series A senior notes 95,000 95,000 4.05 % May 2027 2017 series B senior notes 50,000 50,000 4.15 % May 2029 2017 series C senior notes 30,000 30,000 4.30 % May 2032 2019 series A senior notes 85,000 85,000 3.73 % September 2029 2019 series B senior notes 100,000 100,000 3.83 % September 2031 2019 series C senior notes 90,000 90,000 3.98 % September 2034 2021 series A senior notes 50,000 50,000 2.62 % October 2028 2021 series B senior notes 200,000 200,000 2.89 % October 2030 Total notes payable 700,000 700,000 Less: Total unamortized deferred financing fees ( 3,468 ) ( 3,948 ) Total notes payable, net 696,532 696,052 Mortgage notes payable: DEA – Pleasanton — 15,700 L + 150bps (7) (7) VA – Golden 8,447 8,644 5.00 % (8) April 2024 USFS II – Albuquerque 11,603 13,438 4.46 % (8) July 2026 ICE – Charleston 11,998 13,441 4.21 % (8) January 2027 VA – Loma Linda 127,500 127,500 3.59 % (8) July 2027 CBP – Savannah 9,549 10,389 3.40 % (8) July 2033 USCIS - Kansas City 51,500 51,500 3.68 % (8) August 2024 Total mortgage notes payable 220,597 240,612 Less: Total unamortized deferred financing fees ( 944 ) ( 1,405 ) Less: Total unamortized premium/discount 542 1,640 Total mortgage notes payable, net 220,195 240,847 Total debt $ 1,294,835 $ 1,251,371 F- 20 (1) At December 31, 2023 , the USD SOFR with a five day lookback (“S”) was 5.31 %. At December 31, 2022, the one-moth LIBOR ("L") was 4.39 %. 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 each of our $ 450.0 million senior unsecured revolving credit facility (our “revolving credit facility”), our $ 200.0 million senior unsecured term loan facility (as amended, our “2018 term loan facility”) and our $ 100.0 million senior unsecured term loan facility (our “2016 term loan facility”) is based on our consolidated leverage ratio, as set forth in the respective loan agreements. (2) Our revolving credit facility had available capacity of $ 370.9 million at December 31, 2023 , with an accordion feature that permits us to request additional lender commitments for up to $ 250.0 million of additional capacity, subject to the satisfaction of customary terms and conditions. (3) Our revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee. (4) Entered into one interest rate swap with an effective date of September 29, 2023 with a notional value of $ 100.0 million to effectively fix the interest rate at 5.05 % annually, based on our consolidated leverage ratio, as defined in our 2016 term loan facility agreement. (5) On January 23, 2024, we entered into the seventh amendment to the 2016 term loan facility to extend the maturity date of the loan agreement to January 30, 2025 . (6) Entered into two interest rate swaps with an effective date of June 23, 2023 with an aggregate notional value of $ 200.0 million to effectively fix the interest rate at 5.39 % annually, based on our consolidated leverage ratio, as defined in our 2018 term loan facility agreement. (7) On January 26, 2023, we used $ 15.7 million of available cash to extinguish the $ 15.7 million mortgage note obligation on DEA – Pleasanton. (8) Effective interest rates are as follows: VA – Golden 5.03 %, USFS II – Albuquerque 3.92 %, ICE – Charleston 3.93 %, VA – Loma Linda 3.78 %, CBP – Savannah 4.12 %, USCIS – Kansas City 2.05 %. As of December 31, 2023 and 2022, the net carrying value of real estate collateralizing our mortgages payable totaled $ 325.9 million and $ 356.8 million, respectively. We were not in default under any mortgage loan as of December 31, 2023. See Note 7 for the fair value of our debt instruments. Senior Unsecured Credit Facility and 2016 Term Loan Facility We are party to a second amended and restated senior unsecured credit agreement (the “second amended senior unsecured credit agreement”) governing our senior unsecured credit facility. The second amended senior unsecured credit agreement increased the borrowing capacity under our prior senior unsecured credit facility by $ 50.0 million for a total credit facility size of $ 650.0 million, consisting of: (i) our $ 450.0 million revolving credit facility, and (ii) our $ 200.0 million 2018 term loan facility, up to $ 50.0 million of which was available for a delayed draw period. Our revolving credit facility also includes an accordion feature that will provide us with additional capacity, subject to the satisfaction of customary terms and conditions, of up to $ 250.0 million. We are also a party to a senior unsecured term loan agreement governing our $ 100.0 million 2016 term loan facility. The Operating Partnership is the borrower, and certain of our subsidiaries that directly own certain of our properties are guarantors under our senior unsecured credit facility. Our revolving credit facility has an initial four-year term and will mature in July 2025 , with two six-month as-of-right extension options, subject to certain conditions and the payment of an extension fee. Our 2018 term loan facility has a five-year term and will mature in July 2026 . In addition, our 2018 term loan facility is prepayable without penalty for the entire term of the loan. Borrowings under our senior unsecured credit facility bear interest, at our option, at floating rates equal to either: • a Eurodollar rate equal to a periodic fixed rate equal to SOFR plus, a margin ranging from 1.20 % to 1.80 % for advances under our revolving credit facility and a margin ranging from 1.20 % to 1.70 % for advances under our 2018 term loan facility; or • a fluctuating rate equal to the sum of (a) the highest of (x) Citibank, N.A.’s base rate, (y) the federal funds effective rate plus 0.50 % and (z) the one-month Eurodollar rate plus 1.00 % plus (b) a margin ranging from 0.20 % to 0.80 % for advances under our revolving credit facility and a margin ranging from 0.20 % to 0.70 % for advances under our 2018 term loan facility, in each case with a margin based on our leverage ratio. F- 21 If the Operating Partnership achieves certain sustainability targets as defined in the second amended senior unsecured credit agreement, the applicable margin will decrease by 0.01 %. 2024 Activity On January 2, 2024, the margin spreads under the second amended senior unsecured credit agreement were reduced by 1 basis point as a result of achieving our sustainability metric percentage. On January 23, 2024, we entered into the seventh amendment to our senior unsecured term loan agreement, dated as of September 29, 2016, to extend the maturity date of our 2016 term loan facility from March 29, 2024 to January 30, 2025 . 2023 Activity On February 3, 2023, we entered into three SOFR-based interest rate swaps each with a notional value of $ 100.0 million that were designated as cash flow hedges of interest rate risk. Two of the interest rate swaps, with an aggregate notional value of $ 200.0 million, became effective in June 2023 . The third swap, with a notional value of $100.0 million, became effective in September 2023. For more information on our interest rate swaps, see Note 6 to the Consolidated Financial Statements. On May 30, 2023, we entered into the third amendment to our second amended and restated credit agreement, dated as of July 23, 2021 and into the sixth amendment to our senior unsecured term loan agreement, dated as of September 29, 2016. These amendments added a daily simple SOFR-based option to the term SOFR-based floating interest rate option as a benchmark rate for borrowings denominated in U.S. dollars for all purposes under the credit and term loan agreements, including, in each case, a credit spread adjustment of 0.10 %. On July 20, 2023, we exercised in full the $ 50.0 million delayed draw option on our 2018 term loan facility, increasing our 2018 term loan facility commitments from $ 150.0 million to $ 200.0 million, and transferred $ 50.0 million of our interest rate swap with a notional value of $ 100.0 million, from our revolving credit facility to the $ 50.0 million delayed draw. 2022 Activity On July 22, 2022, we entered into the first amendment to the second amended and restated senior credit agreement, pursuant to which we extended the deadline for the $ 50.0 million delayed draw portion of the 2018 term loan facility to July 24, 2023 (from July 22, 2022 ). On November 23, 2022, we entered into a second amendment to our second amended and restated senior credit agreement, pursuant to which we replaced the LIBOR-based floating interest rate option with a term SOFR-based floating interest rate option as a benchmark rate for borrowings denominated in U.S. dollars for all purposes under our senior unsecured credit facility, including a credit spread adjustment of 0.10 %. On July 23, 2021, we entered into a fourth amendment to the loan agreement governing our 2016 term loan facility in order to conform provisions for certain changes made to corresponding provisions in our second amended senior unsecured credit agreement governing our revolving credit facility and 2018 term loan facility. On November 29, 2022, we entered into a fifth amendment to the loan agreement governing our 2016 term loan facility to replace the LIBOR-based floating interest rate option with a term SOFR-based floating interest rate option as a benchmark rate for borrowings denominated in U.S. dollars for all purposes under our 2016 term loan facility, including a credit spread adjustment of 0.10 %. The LIBOR transition amendments to our senior unsecured credit facility and our 2016 term loan facility relate to the replacement of the reference rate only in accordance with Accounting Codifications Standard 848 - Reference Rate Reform. There were no other changes to the swaps or hedged interest payments including no change to principal/notional, maturity date, floor, prepayment feature, or any other change that impacts the timing or amount of cash flows. F- 22 Mortgage Note Payoff On October 27, 2022, we used $ 5.8 million of proceeds from the sale of the Disposition Portfolio Properties to extinguish the $ 5.8 million mortgage note obligation on MEPCOM – Jacksonville. Financial Covenant Considerations As of December 31, 2023, we were in compliance with all financial and other covenants related to our revolving credit facility, 2016 term loan facility, 2018 term loan facility, notes payable and mortgage notes payable. Aggregate Debt Maturities We aggregate debt maturities based on outstanding principal as of December 31, 2023 are as follows (dollars in thousands): Total 2024 $ 164,298 2025 83,598 2026 210,054 2027 230,733 2028 50,983 Thereafter 559,931 1,299,597 Unamortized premium/discount & deferred financing ( 4,762 ) $ 1,294,835 6. Derivatives and Hedging Activities The following table sets forth the key terms and fair values of our interest rate swap derivatives, each of which was designated as a cash flow hedge (dollars in thousands): Fair Value at December 31, Notional Amount Fixed Rate Floating Rate Index (1) Effective Date Expiration Date 2023 2022 $ 100,000 4.01 % USD-SOFR with -5 Day Lookback June 23, 2023 March 23, 2025 $ 599 $ — $ 100,000 4.18 % USD-SOFR with -5 Day Lookback June 23, 2023 December 23, 2024 $ 501 $ — $ 100,000 3.70 % USD-SOFR with -5 Day Lookback September 29, 2023 June 29, 2025 $ 894 $ — $ 100,000 1.37 % One-Month SOFR November 29, 2022 September 29, 2023 $ — $ 2,530 $ 150,000 2.58 % One-Month SOFR December 23, 2022 June 19, 2023 $ — $ 1,490 (1) In December 2022, we entered into bilateral agreements with our swap counterparties to transition our interest rate swap agreements from LIBOR to SOFR. We made various ASC 848 elections related to changes in critical terms of the hedging relationships due to reference rate reform to not result in a dedesignation of these hedging relationships. The table below sets forth the fair value of our interest rate derivatives as well as their classification on our Consolidated Balance Sheets (dollars in thousands): Fair Value at December 31, Balance Sheet Line Item 2023 2022 Interest rate swaps-Asset $ 1,994 $ 4,020 Cash Flow Hedges of Interest Rate Risk The gains or losses on derivatives designated and that qualify as cash flow hedges is recorded in AOCI and will be reclassified to interest expense in the period that the hedged forecasted transactions affect earnings on our variable rate debt. F- 23 Amounts reported in AOCI related to derivatives designated as qualifying cash flow hedges will be reclassified to interest expense as interest payments are made on our variable rate debt. We estimate that $ 2.1 million will be reclassified from AOCI as a decrease to interest expense over the next 12 months. The table below presents the effects of our interest rate derivatives on our Consolidated Statements of Operations and Comprehensive Income (Loss) (dollars in thousands): For the years ended December 31, 2023 2022 2021 Unrealized gain recognized in AOCI $ 3,811 $ 8,427 $ 1,787 Gain (loss) reclassified from AOCI into interest expense 5,836 ( 1,292 ) ( 5,293 ) Credit-Risk Related Contingent Features We have agreements with each of its derivative counterparties that contain a provision where we could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on such indebtedness. As of December 31, 2023 , we were no t in a net liability position with any derivative counterparty. As of December 31, 2023 , we were in compliance with these agreements and had not posted any collateral related to these agreements. 7. Fair Value Measurements 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. The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022, aggregated by the level in the fair value hierarchy within which those measurements fall (amounts in thousands): As of December 31, 2023 Balance Sheet Line Item Level 1 Level 2 Level 3 Interest rate swaps - Asset $ — $ 1,994 $ — As of December 31, 2022 Balance Sheet Line Item Level 1 Level 2 Level 3 Interest rate swaps - Asset $ — $ 4,020 $ — For our disclosure of debt fair values, we estimated the fair value of our 2016 term loan facility and our 2018 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 a prudent management decision. Nonrecurring fair value measurements On a quarterly basis we assess the recoverability of the carrying amount of our real estate and related intangibles. In the third quarter of 2022, our assessment resulted in the remeasurement of ICE – Otay, which was written down to its estimated fair value and was classified as Level 3 in the fair value hierarchy. Our estimate of the fair value was based on a combination of a pending offer from a third party to acquire the property and a discounted cash flow analysis. We used two significant unobservable inputs in the various scenarios, which were the cash flow discount rate (ranging from 6.25 %- 9.00 %) and average price per square foot of comparable sales in the market ($ 109.08 -$ 185.90 ). There is no assurance that we will sell ICE – Otay on the terms proposed or at all. The remeasurement resulted in an impairment loss of $ 5.5 million during the year ended December 31, 2022, which is included in "Impairment loss" in our Consolidated Statements of Operations. No impairment charges were incurred during the year ended December 31, 2023. F- 24 Financial assets and liabilities not measured at fair value As of December 31, 2023 and 2022, all financial instruments and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following: December 31, 2023 December 31, 2022 Financial liabilities Carrying Amount (1) Fair Value (2) Carrying Amount (1) Fair Value (2) Revolving credit facility $ 79,000 $ 79,000 $ 65,500 $ 65,500 2016 Term loan facility $ 100,000 $ 100,000 $ 100,000 $ 100,000 2018 Term loan facility $ 200,000 $ 200,000 $ 150,000 $ 150,000 Notes payable $ 700,000 $ 607,046 $ 700,000 $ 594,019 Mortgages payable $ 220,597 $ 208,743 $ 240,612 $ 224,462 (1) The carrying amount consists of principal only. (2) We deem the fair value measurement of the financial liability instrument a Level 3 measurement. 8. Equity Incentive Plan Our board of directors adopted, and our sole stockholder approved, our 2015 Equity Incentive Plan, as amended (the “2015 Equity Incentive Plan”) under which we may grant cash and equity incentive awards to our executive officers, non-employee directors and employees. The 2015 Equity Incentive Plan is administered by the compensation committee of our board of directors (the “Compensation Committee”) and permits us to make grants of options, stock appreciation rights, restricted stock units, restricted stock, dividend equivalent rights, cash-based awards, performance-based awards and other equity-based awards, including LTIP units, or any combination of the foregoing. There are an aggregate 5,273,959 shares of our common stock authorized for issuance under the 2015 Equity Incentive Plan. The shares of our common stock underlying any awards that are forfeited, cancelled, or are otherwise terminated (other than by exercise) under the 2015 Equity Incentive Plan are added back to the shares available for issuance. As of December 31, 2023 , 836,574 shares were available for issuance under the 2015 Equity Incentive Plan. On December 6, 2023, we entered into a Transition and Separation Agreement with William C. Trimble III (the “Separation Agreement”), pursuant to which Mr. Trimble retired from his positions as Chief Executive Officer and President of the Company and as a member of the Company’s board of directors effective December 31, 2023. Pursuant to the terms of the Separation Agreement, Mr. Trimble received a lump sum severance payment of $ 0.4 million and his annual cash bonus for 2023 of $ 1.3 million which was included in compensation expense for the year ended December 31, 2023. In addition, Mr. Trimble’s LTIP Units were treated as follows: (i) all of the LTIP Units subject to only time-based vesting conditions vested as of December 31, 2023; and (ii) all of the LTIP Units subject to both time- and performance-based vesting conditions will remain eligible to be earned and will continue to vest following December 31, 2023, with the number of LTIP Units earned under each award agreement to be calculated as of the end of the applicable performance period set forth in the corresponding award agreement in the same manner as if his retirement had not occurred. On December 6, 2023, we revalued Mr. Trimble’s unvested LTIP units and recognized the fair value of the modified award less compensation cost previously recognized over his remaining requisite service period. We recognized $ 0.4 million and less than $ 0.1 million in compensation expense related to the modification of Mr. Trimble’s service and operational LTIP Unit awards, respectively, for the year ended December 31, 2023. Additionally, we recaptured $ 0.8 million in compensation expense related to the modification of Mr. Trimble’s performance LTIP Unit awards for the year ended December 31, 2023. Restricted Shares We award restricted stock to certain members of management and non‑employee directors. Management awards generally vest over a range of two to four years. Non‑employee director shares vest upon the earlier of the anniversary of the date of the grant or the next annual stockholder meeting, as long as the grantee remains a director or employee on such date. Restricted stock awards issued under the 2015 Equity Incentive Plan may not be sold or otherwise transferred until restrictions have lapsed, as established by the Compensation Committee. We value our non-vested restricted share awards at the grant date fair value, which was the market price of our common stock as of the applicable grant date. We recognized $ 0.6 million, $ 0.6 million and $ 0.8 million in compensation expense, related to restricted common stock awards, for the years ended December 31, 2023, 2022 and 2021, respectively. The fair value of restricted stock that vested was $ 0.4 million during 2023 , $ 1.3 million during 2022 , and $ 0.9 million during 2021, based on the market price at the vesting date. The balance of unamortized restricted stock expense as of December 31, 2023 , was $ 0.2 million, which is expected to be recognized over a weighted‑average period of 0.8 years. F- 25 A summary of the status of our restricted shares as of December 31, 2023, 2022 and 2021 and changes during the years then ended are presented below: Restricted Shares Restricted Shares Weighted average grant date fair value Outstanding, December 31, 2020 89,891 $ 19.36 Vested ( 39,750 ) 21.50 Granted 38,288 21.08 Forfeited ( 2,423 ) 18.36 Outstanding, December 31, 2021 86,006 $ 19.16 Vested ( 71,168 ) $ 18.49 Granted 29,078 18.81 Forfeited ( 2,601 ) 21.16 Outstanding, December 31, 2022 41,315 $ 19.94 Vested ( 30,987 ) $ 19.43 Granted 32,486 14.18 Forfeited — — Outstanding, December 31, 2023 42,814 $ 15.94 LTIP Units We grant LTIP units to certain members of management and non‑employee directors. Management awards generally vest immediately or over a range of two to four years. Non‑employee director shares vest upon the earlier of the anniversary of the date of the grant or the next annual stockholder meeting, as long as the grantee remains a director or employee on such date. Performance-based LTIP units are earned subject to us achieving certain thresholds, including absolute total shareholder returns, relative total shareholder returns, or operational hurdles through the performance period. Service-based LTIP units are earned over time, subject to continued employment and other terms of the awards. The following is a summary of our granted LTIP unit awards: Award Type Grant Date Performance Period End Date Vest Date Units Granted Units Vested Service January 4, 2021 — December 31, 2023 113,703 106,963 Operational Performance January 4, 2021 December 31, 2023 1 82,108 1 TSR Performance January 4, 2021 December 31, 2023 2 82,070 2 Service May 19, 2021 — May 3, 2022 6,647 6,647 2021 LTIP Grant 284,528 Service January 3, 2022 — December 31, 2024 110,906 3 Operational Performance January 3, 2022 December 31, 2024 4 80,160 4 TSR Performance January 3, 2022 December 31, 2024 4 158,535 4 Service May 11, 2022 — May 2, 2023 11,238 11,238 2022 LTIP Grant 360,839 Service January 3, 2023 — December 31, 2025 219,859 3 Operational Performance January 3, 2023 December 31, 2025 4 127,291 4 TSR Performance January 3, 2023 December 31, 2025 4 148,633 4 Service March 2, 2023 — March 2, 2026 3,438 — Service May 9, 2023 — 5 16,244 5 2023 LTIP Grant 515,465 (1) An aggregate of 91,384 Operational Performance LTIP units were earned as of December 31, 2023 and vested on January 17, 2024 . (2) Based on the Company's performance through the performance period ending December 31, 2023, no TSR Performance LTIP units were earned. (3) 37,392 service-based LTIP units granted on January 3, 2022 and 75,044 service-based LTIP units granted on January 3, 2023 to William C. Trimble, III, our former Chief Executive Officer and President, vested on December 31, 2023 in accordance with the terms of Mr. Trimble's Transition and Separation Agreement with the Company, dated December 6, 2023 . F- 26 (4) Operational and TSR performance LTIP units may be earned based on the Company's performance through the performance period ending December 31, 2024 or December 31, 2025, as applicable. Subject to the grantee's continued employment, earned awards will vest upon the determination of the number of earned LTIP units following the end of the applicable performance period. (5) Represents LTIP units granted to our independent directors that will vest on the earlier of the anniversary of the grant date or the 2024 annual meeting of stockholders. We value our LTIP unit awards that are subject to us achieving certain operational performance conditions at the grant date fair value, which is the market price of our common stock as of the applicable grant date. We value our service-based LTIP unit awards at the grant date fair value, which is the market price of our common stock as of the applicable grant date, discounted by the risk related to the timing of book-up events. For the LTIP unit awards granted that are subject to us achieving certain total shareholder return performance thresholds we used a Monte Carlo Simulation (risk-neutral approach) to determine the number of shares that may be issued pursuant to the award. The following is a summary of the significant assumptions used to value the total shareholder return performance-based LTIP units: Year Ended December 31, 2023 2022 2021 Expected volatility 26.0 % - 39.0 % 27.0 % 28.0 % Dividend yield 5.6 % - 8.5 % 4.8 % 4.9 % Risk-free interest rate 4.2 % - 5.2 % 1.0 % 0.2 % Expected life 3 years 3 years 3 years The fair value of LTIP units that vested were $ 6.9 million during 2023 , $ 5.5 million during 2022 , and $ 4.5 million during 2021, based on the market price at the vesting date. We recognized $ 5.2 million, $ 5.9 million and $ 4.2 million in compensation expense related to LTIP unit awards, for the years ended December 31, 2023, 2022 and 2021, respectively. The balance of unamortized LTIP expense as of December 31, 2023 was $ 4.8 million, which is expected to be recognized over a weighted‑average period of 1.5 years. As of December 31, 2023, management considers it probable that the operational performance conditions on four of our five unvested grants will be achieved. A summary of the status of our LTIP units as of December 31, 2023, 2022 and 2021 and changes during the years then ended are presented below: LTIP Units (1) LTIP Units Weighted average grant date fair value Outstanding, December 31, 2020 492,180 $ 19.88 Vested ( 93,085 ) 18.55 Granted 284,528 22.18 Forfeited ( 32,385 ) 21.03 Outstanding, December 31, 2021 651,238 $ 21.02 Vested ( 115,412 ) $ 18.66 Granted 360,839 17.48 Forfeited — — Outstanding, December 31, 2022 896,665 $ 19.90 Vested ( 423,969 ) $ 18.73 Granted (2) 857,228 10.54 Forfeited (2) ( 427,115 ) 16.23 Outstanding, December 31, 2023 902,809 $ 13.30 (1) Reflects the number LTIP units issued to the grantee on the grant date which may be different from the number of LTIP units actually earned in the case of performance-based LTIP units . (2) Modified LTIP Units are treated as forfeited and re-granted at their new fair value. 9. Equity Offering of Common Stock on a Forward Basis On August 11, 2021, we completed an underwritten public offering of 6,300,000 shares of common stock offered on a forward basis. In connection with the offering, we also entered into separate forward sale agreements with each of the forward purchasers (the F- 27 “Forward Sales Agreements”), pursuant to which the forward purchasers borrowed and sold to the underwriters an aggregate of 6,300,000 shares of our common stock. On December 28, 2021, we issued 3,991,000 shares of our common stock for net proceeds of $ 85.0 million, which shares were issued in partial settlement of the Forward Sales Agreements entered into in connection with the underwritten public offering. During the year ended December 31, 2023, we issued 2,309,000 shares of common stock under the Forward Sale Agreements and received net cash proceeds of approximately $ 46.8 million. As of December 31, 2023, all shares of common stock under the Forward Sales Agreements had been issued and settled. Redemption of Common Units to Common Stock During the year ended December 31, 2021, we issued 343,515 shares of our common stock upon the redemption of 343,515 common units in accordance with the terms of the partnership agreement of the Operating Partnership. During the year ended December 31, 2022 , we issued 204,751 shares of our common stock upon the redemption of 204,751 common units in accordance with the terms of the partnership agreement of the Operating Partnership. During the year ended December 31, 2023 , we issued 5,867,740 shares of our common stock upon the redemption of 5,867,740 common units in accordance with the terms of the partnership agreement of the Operating Partnership. Dividends and Distributions Paid A summary of dividends declared by the board of directors per share of common stock and per common unit of our operating partnership at the date of record is as follows: Quarter Declaration Date Record Date Pay Date Dividend Q1 2021 April 29, 2021 May 14, 2021 May 26, 2021 0.260 Q2 2021 July 27, 2021 August 12, 2021 August 24, 2021 0.265 Q3 2021 October 28, 2021 November 12, 2021 November 24, 2021 0.265 Q4 2021 February 22, 2022 March 10, 2022 March 22, 2022 0.265 Q1 2022 April 27, 2022 May 13, 2022 May 25, 2022 0.265 Q2 2022 July 27, 2022 August 11, 2022 August 23, 2022 0.265 Q3 2022 October 26, 2022 November 11, 2022 November 23, 2022 0.265 Q4 2022 February 22, 2023 March 9, 2023 March 21, 2023 0.265 Q1 2023 April 26, 2023 May 11, 2023 May 23, 2023 0.265 Q2 2023 August 2, 2023 August 17, 2023 August 29, 2023 0.265 Q3 2023 October 26, 2023 November 9, 2023 November 21, 2023 0.265 Q4 2023 February 21, 2024 March 6, 2024 March 18, 2024 0.265 Prior to the end of the performance period as set forth in the applicable LTIP unit award, holders of performance-based LTIP units are entitled to receive dividends per LTIP unit equal to 10 % of the dividend paid per common unit of our operating partnership. 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 of our operating partnership. Holders of LTIP units that are not subject to the attainment of performance goals are entitled to receive dividends per LTIP unit equal to 100 % of the dividend paid per common unit beginning on the grant date. ATM Programs We entered into separate equity distribution agreements on each of December 20, 2019 (the “2019 ATM Program”) and June 22, 2021 (the “2021 ATM Program” and, together with the 2019 ATM Program, the “ATM Programs”) with various financial institutions pursuant to which it may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million under each ATM Program from time to time in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). Under each of the ATM Programs, we may enter into one or more forward transactions (each, a “forward sale transaction”) under separate master forward sale confirmations and related supplemental confirmations with each of the various financial institutions party to the respective ATM Program for the sale of shares of its common stock on a forward basis. F- 28 The following table sets forth certain information with respect to issuances, made under the 2019 ATM Program in each fiscal year for the year ended December 31, 2023 (amounts in thousands except share amounts): 2019 ATM Program For the Year Ended: Number of Shares Issued (1) Net Proceeds (1) December 31, 2021 3,671,232 $ 90,005 December 31, 2022 434,925 $ 9,409 December 31, 2023 1,950,000 $ 39,279 (1) Shares issued by us, which were all issued in settlement of forward sales transactions. Additionally, as of December 31, 2023 we had entered into a forward sales transaction under the 2019 ATM Program for the sale of an additional 500,000 shares of our common stock that have not yet been settled. Subject to our right to elect net share settlement, we expect to physically settle the forward sales transaction by December 2024, the maturity date, as set forth in the applicable forward sale transaction placement notice. Assuming the forward sales transaction is physically settled in full utilizing a net weighted average initial forward sales price of $ 13.52 per share, we expect to receive net proceeds of approximately $ 6.8 million, after deducting offering costs, subject to adjustments in accordance with the applicable forward sale transaction. We accounted for the forward sale transactions as equity. No sales of shares of our common stock were made under the 2021 ATM Program during the year ended December 31, 2023. We used the net proceeds received from such sales for general corporate purposes. As of December 31, 2023 , we had $ 300.0 million of gross sales of its common stock available under the 2021 ATM Program and $ 80.6 million of gross sales of its common stock available under the 2019 ATM Program. Share Repurchase Program On April 28, 2022, our board of directors authorized a share repurchase program whereby we may repurchase up to 4,538,994 shares of its common stock, or approximately 5 % of its outstanding shares as of the authorization date. We are not required to purchase shares under the share repurchase program, but may choose to do so in the open market or through privately negotiated transactions at times and amounts based on our evaluation of market conditions and other factors. No repurchases of shares of our common stock were made under the share repurchase program during the year ended December 31, 2023. Contribution of Property for Common Units On January 25, 2023, the Operating Partnership issued 12,391 common units and fully settled a contingent earn-out liability in connection with our acquisition of FBI / DEA - El Paso on May 26, 2020. The issuance of the common units was effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act. On May 10, 2022, we acquired NARA – Broomfield for which it issued, as partial consideration, 827,791 common units. The issuance of common units was effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act. F- 29 10. Earnings Per Share Basic earnings or loss per share of common stock (“EPS”) is calculated by dividing net income or loss attributable to common stockholders by the weighted average shares of common stock outstanding for the periods presented. Diluted EPS is computed after adjusting the basic EPS computation for the effect of dilutive common equivalent shares outstanding during the periods presented. Unvested restricted shares of common stock 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 our basic and diluted earnings per share of common stock for the years ended December 31, 2023, 2022 and 2021 (dollars in thousands, except per share amounts): For the years ended December 31, 2023 2022 2021 Numerator Net income $ 21,060 $ 35,562 $ 33,957 Less: Non-controlling interest in Operating Partnership ( 2,256 ) ( 4,088 ) ( 3,899 ) Net income available to Easterly Government Properties, Inc. 18,804 31,474 30,058 Less: Dividends on participating securities ( 599 ) ( 546 ) ( 470 ) Net income available to common stockholders $ 18,205 $ 30,928 $ 29,588 Denominator for basic EPS 94,264,166 90,613,966 84,043,012 Dilutive effect of share-based compensation awards 18,128 19,336 52,500 Dilutive effect of LTIP units (1) 269,685 315,399 434,631 Dilutive effect of shares issuable under forward sales agreements (2) 4,076 — 89,247 Denominator for diluted EPS 94,556,055 90,948,701 84,619,390 Basic EPS $ 0.19 $ 0.34 $ 0.35 Diluted EPS $ 0.19 $ 0.34 $ 0.35 (1) During the years ended December 31, 2023, 2022 and 2021, there were approximately 387,010 , 314,529 and 116,595 unvested performance-based LTIP units, respectively, that were not included in the computation of diluted earnings per share because to do so would have been antidilutive for the period. (2) During the year ended December 31, 2023 , there were no shares of underlying unsettled forward sales transactions that were included in the computation of diluted earnings per share because to do so would have been antidilutive for the period. During the years ended December 31, 2022 and 2021, there were approximately 4,259,000 and 326,000 shares, respectively, of underlying unsettled forward sales transactions that were not included in the computation of diluted earnings per share because to do so would have been antidilutive for the period. 11. Leases Lessor We lease commercial space to the U.S. Government through the GSA or other federal agencies or nongovernmental tenants. These leases may contain extension options that are predominately at the sole discretion of the tenant. Certain of our leases contain a “soft-term” period of the lease, meaning that the U.S. Government tenant agency has the right to terminate the lease prior to its stated lease end date. While certain of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the weighted average age of these properties based on the date the property was built or renovated-to-suit, where applicable (approximately 19.0 years as of December 31, 2023), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties. Certain lease agreements include variable lease payments that, in the future, will vary based on changes in inflationary measures, real estate tax rates, usage, or share of expenditures of the leased premises. The following table summarizes the maturity of fixed lease payments under our leases as of December 31, 2023 (amounts in thousands): Payments due by period Total 2024 2025 2026 2027 2028 Thereafter Fixed lease payments $ 2,113,973 231,160 225,140 211,886 199,504 180,211 1,066,072 F- 30 The table below sets forth our composition of lease revenue recognized between fixed and variable components (amounts in thousands): Years Ended December 31, 2023 2022 2021 Fixed $ 254,017 $ 265,126 $ 248,399 Variable 19,889 19,362 18,990 Property rental revenue 273,906 284,488 267,389 Information about our leases for our development property as of December 31, 2023 is set forth in the table below: Property Name Location Tenant Property Type (1) Lease Term Estimated Leased Square Feet FDA - Atlanta Atlanta, GA Food and Drug Administration L 20 -year 162,000 Total 162,000 (1) L=Laboratory Lessee We lease corporate office space under operating lease arrangements in Washington, D.C. and San Diego, CA. The leases include variable lease payments that, in the future, will vary based on changes in real estate tax rates, usage, or share of expenditures of the leased premises. We have elected not to separate lease and non-lease components for our corporate office leases. As of December 31, 2023 , the unamortized balances associated with our right-of-use operating lease asset and operating lease liability were $ 3.0 million and $ 3.0 million, respectively. As of December 31, 2022 , the unamortized balance associated with our right-of-use operating lease asset and operating lease liability for our two commenced office leases was $ 3.5 million and $ 3.5 million, respectively. Our right-of-use operating lease asset and operating lease liability were included in “ Prepaid expenses and other assets ” and “Accounts payable, accrued expenses and other liabilities” on the Consolidated Balance Sheets, respectively as of December 31, 2023, and 2022. We used our incremental borrowing rate, which was arrived at utilizing prevailing market rates and the spread on our revolving credit facility, in order to determine the net present value of the minimum lease payments. The following table provides quantitative information for our commenced operating leases for the year ended December 31, 2023, 2022 and 2021 (amounts in thousands): Years Ended December 31, 2023 2022 2021 Cash flows from operating lease costs $ 620 $ 624 $ 421 Other Information Weighted average remaining lease term (in years) 4.67 5.62 4.51 Weighted average discount rate 3.19 % 3.15 % 2.36 % In addition, the maturity of future minimum lease payments under our commenced corporate office leases as of December 31, 2023 is summarized in the table below (amounts in thousands): Year ending December 31, Payments due by period 2024 768 2025 793 2026 661 2027 368 2028 385 Thereafter 333 Total future minimum lease payments $ 3,308 Imputed interest ( 330 ) Total $ 2,978 F- 31 12. Revenue The table below sets forth revenue from tenant construction projects disaggregated by tenant agency for the years ended December 31, 2023, 2022, and 2021 (amounts in thousands). For the year ended December 31, For the year ended December 31, For the year ended December 31, Tenant 2023 2022 2021 Department of Veteran Affairs (“VA”) $ 5,702 $ 2,373 $ 1,660 U.S. Joint Staff Command (“JSC”) 2,132 948 520 Federal Bureau of Investigation (“FBI”) 792 1,307 2,384 U.S. Coast Guard (“USCG”) 346 182 98 Customs and Border Protection (“CBP”) 293 157 — The Judiciary of the U.S. Government (“JUD”) 163 391 11 Department of Transportation (“DOT”) 142 — 49 Immigration and Customs Enforcement (“ICE”) 111 7 57 Federal Emergency Management Agency (“FEMA”) 89 318 15 U.S. Citizenship and Immigration Services (“USCIS”) 56 250 91 Food and Drug Administration (“FDA”) 45 346 93 General Services Administration - Other 39 42 25 Internal Revenue Service (“IRS”) 20 37 207 Bonneville Power Administration (“BPA”) 16 — — National Archives and Records Administration (“NARA”) 13 — — Department of Labor (“DOL”) 3 — — Occupational Safety and Health Administration (“OSHA”) — 116 1 National Park Service (“NPS”) — 110 41 Drug Enforcement Administration (“DEA”) — 40 40 Federal Aviation Administration (“FAA”) — 29 — Patent and Trademark Office (“PTO”) — 14 — Health Resources and Services Administration (“HRSA”) — 4 3 National Weather Service (“NWS”) — 2 — Bureau of the Fiscal Service (“BFS”) — — 59 Department of Energy (“DOE”) — — 95 Environmental Protection Agency (“EPA”) — — 204 Military Entrance Processing Command (“MEPCOM”) — — 18 $ 9,962 $ 6,673 $ 5,671 The balance in Accounts receivable related to tenant construction projects and the associated project management income was $ 9.6 million and $ 6.8 million, as of December 31, 2023 and 2022, respectively. 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. There were no projects ongoing as of December 31, 2023 or as of December 31, 2022 with a duration of greater than one year. During the years ended December 31, 2023, 2022 , and 2021, we also recognized $ 0.5 million, $ 0.4 million, and $ 0.4 million, respectively, in parking garage income generated from the operations of parking garages situated on both the Various GSA – Buffalo property and on the Various GSA - Portland property. The monthly and transient daily parking revenue falls within the scope of ASC Topic 606 Revenue from Contracts with Customers and is accounted for at the point in time when control of the goods or services transfers to the customer and our performance obligation is satisfied. As of December 31, 2023 and 2022 , there was less than $ 0.1 million in Accounts receivable attributable to parking garage income. There were no contract assets or liabilities as of December 31, 2023 and 2022 . F- 32 1 3. Commitments and Contingencies a) Environmental As an owner of real estate, we are subject to various environmental laws of federal, state, and local governments. Our compliance with existing laws has not had a material adverse effect on its financial condition and results of operations, and we do not believe it will have a material adverse effect in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on its current properties or on properties that we may acquire. b) Tax Protection Agreements Concurrent with the completion of our initial public offering and the related formation transactions, we also entered into a tax protection agreement with Michael P. Ibe, a director and our Vice Chairman and Executive Vice President — Development and Acquisitions, under which we agreed to indemnify Mr. Ibe for any taxes incurred as a result of a taxable sale of the properties contributed by certain entities beneficially owned by Mr. Ibe in the formation transactions for a period of eight years after the closing of the initial public offering and the formation transactions. We also agreed in the tax protection agreement with Mr. Ibe to use the “traditional method” of making allocations under Section 704(c) of the Code for the eight-year period. In connection with our acquisitions of certain properties in 2021 and 2022 we entered into a tax protection agreement, under which we agreed to indemnify the contributor for any taxes incurred as a result of a taxable sale of such property for a period of four years . We also agreed in the tax protection agreement with the contributor to use the “traditional method” of making allocations under Section 704(c) of the Code for the four-year period. Letters of Credit As of each of December 31, 2023 and 2022 , we had $ 0.1 million of standby letters of credit. There were no draws against these letters of credit during the years ended December 31, 2023 or 2022 . 14. Concentration Risk Concentrations of credit risk arise for us 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 us. We regularly monitor our tenant base to assess potential concentrations of credit risk. As stated in Note 1 above, we lease commercial space to the U.S. Government or nongovernmental tenants. At December 31, 2023, the U.S. Government accounted for 96.0 % of our total leased square feet, state and local government tenants accounted for 1.2 % of our total leased square feet and non-governmental tenants accounted for the remaining 2.8 % of our total leased square feet. At December 31, 2022 , the U.S. Government accounted for 96.4 % of our leased square feet, state and local government tenants accounted for 0.2 % of our total leased square feet and non-governmental tenants accounted for the remaining 3.4 % of our total leased square feet. At December 31, 2023 , 18 of our 90 wholly-owned and unconsolidated operating properties were located in California, accounting for approximately 15.7 % of our total leased square feet. At December 31, 2022 , 17 of our 86 operating properties were located in California, accounting for approximately 14.8 % of our total leased square feet. To the extent that weak economic or real estate conditions or natural disasters affect California, our business, financial condition and results of operations could be negatively impacted. 15. Related Parties We have reimbursement arrangements with entities controlled by our former Chairman, who was appointed Chief Executive Officer effective January 1, 2024, and Vice Chairman, which provide for reimbursement of costs paid on our behalf, or those we pay on their behalf. For the years ended December 31, 2023, 2022 and 2021, we were responsible for reimbursing costs of $ 0.8 million, $ 0.4 million and $ 0.3 million, respectively, and received reimbursement for costs of less than $ 0.1 million, less than $ 0.1 million and $ 0.1 million, respectively. We provide asset management services to properties owned by the JV. For the years ended December 31, 2023, 2022 and 2021 we recognized Asset management fees of $ 2.1 million, $ 1.4 million and $ 0.1 million, respectively, and reimbursement for certain costs that we paid on their behalf of $ 0.3 million, $ 0.1 million and $ 0.5 million, respectively. F- 33 As of December 31, 2023, and 2022 , Accounts receivable from related parties was $ 0.2 million and $ 0.4 million, respectively. As of December 31, 2023, and 2022 , Accounts payable, accrued expenses and other liabilities included $ 0.4 million and less than $ 0.1 million, respectively, owed to related parties. 16. Subsequent Events For its consolidated financial statements as of December 31, 2023, we evaluated subsequent events as of the filing date of this Annual Report on Form 10-K and noted the following significant events: On January 2, 2024, we granted an aggregate of 193,993 performance-based LTIP units to members of management pursuant to the 2015 Equity Incentive Plan, consisting of (i) 77,256 LTIP units that are subject to us achieving certain total shareholder return performance thresholds (on both an absolute and relative basis) and (ii) 116,737 LTIP units that are subject to us achieving certain operational performance hurdles, in each case through a performance period ending on December 31, 2026. The performance-based LTIP units will vest to the extent earned following the end of the performance period on December 31, 2026. On January 2, 2024, we also granted an aggregate of 201,150 service-based LTIP units to members of management pursuant to the 2015 Equity Incentive Plan, which will vest on December 31, 2026. The LTIP units are subject to the grantee’s continued employment and the other terms of the awards. On January 19, 2024, we granted 69,419 performance-based LTIP units to members of management pursuant to the 2015 Equity Incentive Plan that are subject to us achieving certain total shareholder return performance thresholds (on a relative basis) through a performance period ending on December 31, 2026. The performance-based LTIP units will vest to the extent earned following the end of the performance period on December 31, 2026. On January 23, 2024, we entered into the seventh amendment to the 2016 term loan facility agreement to extend the maturity date of the loan to January 30, 2025. Subsequent to December 31, 2023, the Company entered into forward sales transactions under the December 2019 ATM Program for the sale of an additional 89,647 shares of its common stock that have not yet been settled. Subject to its right to elect net share settlement, the Company expects to physically settle the forward sales transactions no later than January 2025. Assuming the forward sales transactions are physically settled in full utilizing a net weighted average initial forward sales price of $ 13.39 per share, the Company expects to receive net proceeds of approximately $ 1.2 million, after deducting offering costs, subject to adjustments in accordance with the applicable forward sale transaction. F- 34 Easterly Government Properties, Inc. Schedu le III - Real Estate and Accumulated Depreciation December 31, 2023 (Amounts in thousands) Initial Cost to Company Cost amount carried at Close of Period Location Type (1) Encumbrances (2) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition (3) Land Buildings and Improvements Total (4) Accumulated Depreciation (3)(5) Original Construction Date(s) (Unaudited) Date Acquired Aberdeen, MS C/O $ — $ 1,147 $ 14,044 $ 274 $ 1,147 $ 14,318 $ 15,465 $ 3,191 2005 6/17/2015 Alameda, CA L — 5,438 4,312 70,372 5,438 74,684 80,122 8,120 2019 8/1/2016 Albany, NY O — 1,801 11,544 339 1,801 11,883 13,684 2,804 2004 2/11/2015 Albany, NY O — 1,412 17,128 7,778 1,412 24,906 26,318 3,517 1998 11/22/2016 Albuquerque, NM O — 3,062 28,201 171 3,062 28,372 31,434 7,149 2011 2/17/2016 Albuquerque, NM O — 2,905 23,804 888 2,905 24,692 27,597 6,524 2006 2/11/2015 Albuquerque, NM O 11,723 2,345 28,611 546 2,345 29,157 31,502 9,025 2011 2/11/2015 Anaheim, CA O — 7,081 16,346 31 7,081 16,377 23,458 122 1991 / 2020 10/3/2023 Arlington, VA O — 14,350 44,442 1,753 14,350 46,195 60,545 13,600 2009 2/11/2015 Atlanta, GA O — 1,074 10,788 6,807 1,074 17,595 18,669 145 2008 / 2023 10/3/2023 Bakersfield, CA O — 438 2,253 775 438 3,028 3,466 459 2000 10/16/2018 Birmingham, AL O — 408 10,853 174 408 11,027 11,435 2,347 2005 7/1/2016 Birmingham, AL O — 755 22,537 3,770 755 26,307 27,062 4,824 2005 7/1/2016 Birmingham, AL O — 1,410 17,276 120 1,410 17,396 18,806 2,926 2014 11/9/2018 Broomfield, CO O/W — 4,002 19,253 11 4,002 19,264 23,266 791 2012 5/10/2022 Brownsburg, IN OC — 1,774 26,300 24 1,774 26,324 28,098 1,425 2021 11/1/2021 Buffalo, NY O — 246 80,913 3,585 246 84,498 84,744 15,327 2004 9/13/2018 Charleston, SC C/O — 1,325 21,189 2,967 1,325 24,156 25,481 2,909 1999 10/16/2018 Charleston, WV O — 551 13,732 1,948 551 15,680 16,231 2,532 1959 / 2000 9/13/2018 Chico, CA OC — 5,183 24,405 56 5,183 24,461 29,644 2,249 2019 4/30/2020 Clarksburg, WV O — 108 13,421 1,234 108 14,655 14,763 2,183 1999 9/13/2018 Cleveland, OH O — 563 18,559 190 563 18,749 19,312 1,559 1981 / 2021 7/22/2021 Council Bluffs, IO C/O — 791 11,984 — 791 11,984 12,775 568 2021 8/23/2022 Dallas, TX O — 1,005 14,546 1,281 1,005 15,827 16,832 4,032 2001 2/11/2015 Dallas, TX L — 2,753 23,848 4,139 2,753 27,987 30,740 5,218 2001 12/1/2015 Dallas, TX O — 740 8,191 716 740 8,907 9,647 1,421 2005 9/13/2018 Del Rio, TX C/O — 210 30,676 1,512 210 32,188 32,398 8,236 1992 / 2004 2/11/2015 Des Plaines, IL O — 1,742 9,325 377 1,742 9,702 11,444 1,534 1971 / 1999 9/13/2018 El Centro, CA C/O — 1,084 20,765 1,506 1,084 22,271 23,355 5,656 2004 2/11/2015 El Paso, TX O — 2,430 33,649 4,742 2,430 38,391 40,821 4,135 1998 - 2005 3/26/2020 Fresno, CA O — 1,499 68,309 5,370 1,499 73,679 75,178 18,053 2003 2/11/2015 Golden, CO O/W 8,446 4,080 8,933 667 4,080 9,600 13,680 2,041 1996 / 2011 5/24/2018 Jackson, TN C/O — 332 24,324 465 332 24,789 25,121 1,896 1998 12/24/2020 Kansas City, KS L — 828 33,035 2,394 828 35,429 36,257 7,010 2003 7/1/2016 Kansas City, MO O — 645 24,431 105 645 24,536 25,181 2,146 1998 / 2020 5/20/2021 Knoxville, TN O — 2,840 25,775 499 2,840 26,274 29,114 3,089 2010 3/17/2021 S- 1 Easterly Government Properties, Inc. Schedule III - Real Estate and Accumulated Depreciation December 31, 2023 (Amounts in thousands) Initial Cost to Company Cost amount carried at Close of Period Location Type (1) Encumbrances (2) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition (3) Land Buildings and Improvements Total (4) Accumulated Depreciation (3)(5) Original Construction Date(s) (Unaudited) Date Acquired Lakewood, CO O — $ 1,521 $ 32,865 $ 932 $ 1,521 $ 33,797 $ 35,318 $ 9,669 6/26/1905 2/11/2015 Lees Summit, MO O 51,998 2,974 90,858 2,932 2,974 93,790 96,764 5,923 1969 / 1999 10/14/2021 Lenexa, KS O — 4,367 42,692 379 4,367 43,071 47,438 6,765 2007 / 2012 8/22/2019 Lenexa, KS L — 649 3,449 62,427 649 65,876 66,525 5,375 2020 5/27/2017 Lincoln, NE O — 2,310 26,328 1,281 2,310 27,609 29,919 7,273 2005 11/12/2015 Little Rock, AR O — 2,278 19,318 752 2,278 20,070 22,348 5,267 2001 2/11/2015 Loma Linda, CA OC 126,706 12,476 177,357 375 12,476 177,732 190,208 29,308 2016 6/1/2017 Louisville, KY O — 1,005 5,473 170 1,005 5,643 6,648 405 2011 3/17/2021 Louisville, KY O — 1,015 21,885 295 1,015 22,180 23,195 1,749 2011 3/17/2021 Lubbock, TX W/D — 541 972 — 541 972 1,513 295 2013 2/11/2015 Martinsburg, WV O — 1,700 13,294 258 1,700 13,552 15,252 3,586 2007 2/11/2015 Mobile, AL O — 2,045 20,400 4,017 2,045 24,417 26,462 1,716 2001 9/18/2020 Mobile, AL OC — 6,311 31,030 37 6,311 31,067 37,378 2,905 2018 4/30/2020 New Orleans, LA O — 664 24,471 718 664 25,189 25,853 2,932 1999 / 2006 5/9/2019 Newport News, VA C/O — 252 14,477 135 252 14,612 14,864 75 2008 10/19/2023 North Charleston, SC O 12,079 963 34,987 1,519 963 36,506 37,469 8,961 1994 / 2012 2/11/2015 North Charleston, SC W — 918 14,033 — 918 14,033 14,951 1,109 2020 11/3/2020 Omaha, NE O — 4,635 41,319 1,196 4,635 42,515 47,150 13,057 2009 2/11/2015 Omaha, NE O — 1,517 14,156 500 1,517 14,656 16,173 3,574 2004 5/19/2016 Orange, CT OC — 3,098 23,613 37 3,098 23,650 26,748 2,430 2019 11/21/2019 Parkersburg, WV O — 365 52,200 1,058 365 53,258 53,623 7,908 2004 / 2006 9/13/2018 Pittsburgh, PA O — 384 24,877 3,228 384 28,105 28,489 4,470 2001 9/13/2018 Pleasanton, CA L — 5,765 20,859 336 5,765 21,195 26,960 4,340 2015 10/21/2015 Portland, OR O — 4,913 75,794 2,725 4,913 78,519 83,432 11,188 2002 1/31/2019 Richmond, VA O — 3,041 23,931 1,902 3,041 25,833 28,874 6,019 2001 12/7/2015 Riverside, CA O — 1,983 6,755 1,732 1,983 8,487 10,470 1,848 1997 2/11/2015 Sacramento, CA O — 1,434 9,369 2,421 1,434 11,790 13,224 3,228 2002 2/11/2015 Salt Lake City, UT O — 2,049 79,955 979 2,049 80,934 82,983 14,406 2012 9/28/2017 San Antonio, TX O — 3,745 49,153 1,508 3,745 50,661 54,406 13,503 2007 2/11/2015 San Diego, CA W — 3,060 510 914 3,060 1,424 4,484 590 1999 2/11/2015 San Diego, CA O — 2,252 12,280 ( 7,841 ) 1,216 5,475 6,691 361 2001 9/11/2015 San Diego, CA O — 773 2,481 1,036 773 3,517 4,290 930 2003 2/11/2015 San Jose, CA OC — 10,419 52,750 58 10,419 52,808 63,227 7,220 2018 7/11/2018 Santa Ana, CA O — 6,413 8,635 827 6,413 9,462 15,875 2,861 2004 2/11/2015 Savannah, GA L 9,243 3,220 10,687 486 3,220 11,173 14,393 2,853 2013 2/11/2015 S- 2 Easterly Government Properties, Inc. Schedule III - Real Estate and Accumulated Depreciation December 31, 2023 (Amounts in thousands) Initial Cost to Company Cost amount carried at Close of Period Location Type (1) Encumbrances (2) Land Buildings and Improvements Costs Capitalized Subsequent to Acquisition (3) Land Buildings and Improvements Total (4) Accumulated Depreciation (3)(5) Original Construction Date(s) (Unaudited) Date Acquired South Bend, IN C/O — $ 514 $ 6,590 $ 481 $ 514 $ 7,071 $ 7,585 $ 1,392 1996 / 2011 12/23/2016 South Bend, IN OC — 3,954 38,503 241 3,954 38,744 42,698 5,926 2017 11/16/2017 Springfield, MO O — 118 16,629 41 118 16,670 16,788 1,123 2002 4/22/2021 Sterling, VA L — 2,556 21,817 13,648 2,556 35,465 38,021 3,593 2001 1/31/2019 Suffolk, VA O — 7,141 61,577 8,150 7,141 69,727 76,868 8,084 1993 / 2004 5/8/2019 Tampa, FL O — 5,002 57,553 110 5,002 57,663 62,665 2,374 2005 5/18/2022 Tracy, CA W — 2,678 548 29,739 2,678 30,287 32,965 3,941 2018 10/4/2017 Tustin, CA O — 8,532 24,279 342 8,532 24,621 33,153 3,323 1979 / 2019 10/22/2019 Upper Marlboro, MD L — 5,054 18,301 2,571 5,054 20,872 25,926 2,621 2002 11/15/2018 Vista, CA L — 3,998 24,053 1,748 3,998 25,808 29,806 5,838 2002 2/11/2015 Various Various — 4,076 15,691 36,736 4,076 52,427 56,503 — N/A Various $ 220,195 $ 223,035 $ 2,176,456 $ 310,722 $ 221,999 $ 2,488,221 $ 2,710,220 $ 391,077 (1) OC=Outpatient Clinic; O=Office; C=Courthouse; L=Laboratory; W=Warehouse; D=Distribution; M=Manufacturing. (2) Includes the unamortized balance of the fair value adjustments. (3) Includes asset impairments recognized, write-offs of involuntary conversions and write-offs of acquired tenant improvements upon the tenant vacating the space. (4) Excludes value of real estate intangibles. (5) Depreciation of real estate property is computed on a straight-line basis over the estimated useful lives of the assets. The estimated lives of our assets range from 5 to 40 years or to the term of the underlying lease . The aggregate cost and accumulated depreciation for tax purposes was approximately $ 2,648.9 million and $ 442.5 million, respectively. S- 3 Easterly Government Properties, Inc. Schedule III - Real Estate and Accumulated Depreciation December 31, 2023 (Amounts in thousands) Analysis of the carrying amount of real estate properties and accumulated depreciation: Real Estate Properties Accumulated Depreciation Balance at December 31, 2020 2,421,874 213,213 Additions 261,347 65,015 Dispositions ( 6,656 ) ( 851 ) Balance at December 31, 2021 2,676,565 277,377 Additions 135,914 69,999 Dispositions ( 198,214 ) ( 23,960 ) Real estate impaired (1) ( 7,675 ) ( 2,134 ) Balance at December 31, 2022 2,606,590 321,282 Additions 103,630 69,795 Dispositions — — Balance at December 31, 2023 2,710,220 391,077 (1) During the quarter ended September 30, 2022, we recognized an impairment loss totaling approximately $ 5.5 million for its ICE – Otay. See Note 3 and Note 7 for additional information. S- 4