Easterly Government Properties, Inc. Fair Value Disclosure
8. 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, 2025 and 2024, aggregated by the level in the fair value hierarchy within which those measurements fall (amounts in thousands):
|
|
As of December 31, 2025 |
|
|||||||||
Balance Sheet Line Item |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
Interest rate swaps - Liability |
|
$ |
— |
|
|
$ |
(3,034 |
) |
|
$ |
— |
|
|
|
As of December 31, 2024 |
|
|||||||||
Balance Sheet Line Item |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||
Interest rate swaps - Asset |
|
$ |
— |
|
|
$ |
717 |
|
|
$ |
— |
|
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.
Financial assets and liabilities not measured at fair value
The following table summarizes the aggregate principal outstanding under the Company's indebtedness and the corresponding estimate of fair value as of December 31, 2025 and 2024:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||||||||||
Financial liabilities |
|
Carrying Amount (1) |
|
|
Fair Value (2) |
|
|
Carrying Amount (1) |
|
|
Fair Value (2) |
|
||||
Revolving credit facility |
|
$ |
199,050 |
|
|
$ |
199,050 |
|
|
$ |
274,550 |
|
|
$ |
274,550 |
|
2016 Term loan facility |
|
$ |
100,000 |
|
|
$ |
100,000 |
|
|
$ |
100,000 |
|
|
$ |
100,000 |
|
2018 Term loan facility |
|
$ |
200,000 |
|
|
$ |
200,000 |
|
|
$ |
174,500 |
|
|
$ |
174,500 |
|
Notes payable |
|
$ |
1,025,000 |
|
|
$ |
997,184 |
|
|
$ |
900,000 |
|
|
$ |
825,395 |
|
Mortgages payable |
|
$ |
151,700 |
|
|
$ |
148,212 |
|
|
$ |
156,298 |
|
|
$ |
147,634 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 2, 2017 | |
| 2015 | Mar 2, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.