Question · Q3 2025
Seth Eugene Bergey inquired about the two-quarter delay in the Flagstaff Courthouse completion and sought clarification on Easterly Government Properties' capital allocation strategy, specifically regarding the targeted spread on development over the cost of capital and potential alternative funding sources given current equity valuation.
Answer
Allison Marino, EVP and CFO, explained that the Flagstaff Courthouse delay is due to the government balancing multiple agencies' design needs, with finalization expected in 2026. Darrell Crate, President and CEO, detailed the company's cost of equity considerations, aiming for a 100 basis point spread on development, and mentioned strong relationships with sovereign wealth funds as potential alternative funding partners during the interim period of stock price valuation.