Financial Data and Key Metrics Changes - Funds from operations (FFO) per share for Q3 2025 was $2.27, representing a 6.6% increase compared to the same quarter last year [7][13] - Quarter-end leasing was at 96.7% with occupancy at 95.9%, while average quarterly occupancy was 95.7%, down 100 basis points from Q3 2024 [7][8] - Cash same store revenue rose by 6.9% for the quarter and 6.2% year to date [8] - The company has a diversified rent roll, with the top 10 tenants accounting for only 6.9% of rents, down 60 basis points from the previous year [8] Business Line Data and Key Metrics Changes - Quarterly releasing spreads were 36% GAAP and 22% cash for leases signed during the quarter, with year-to-date results slightly higher at 42.7% GAAP and cash respectively [7][8] - The retention rate for tenants rose to almost 80%, indicating a cautious nature among tenants [10] Market Data and Key Metrics Changes - The market remains somewhat bifurcated, with improved activity in smaller spaces (50,000 square feet and below) but larger spaces experiencing delays in leasing [9][10] - The company is reforecasting 2025 starts to 200,000,000 due to current demand levels and a decline in the supply pipeline [11] Company Strategy and Development Direction - The company aims to capitalize on development opportunities earlier than private peers, leveraging its balance sheet strength and existing tenant expansion needs [12] - The focus is on geographic and tenant diversity as strategic paths to stabilize earnings regardless of economic conditions [8] - The company is excited about acquiring properties in Raleigh, North Carolina, and new development land in Orlando [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about macroeconomic conditions improving, which could strengthen consumer and corporate confidence [16] - The company is positioned to benefit from long-term trends such as population migration and evolving logistics chains [18] - Management noted that while construction costs have come down, demand remains a critical factor for development starts [33] Other Important Information - The company has a strong balance sheet with a debt to total market capitalization of 14.1% and an unadjusted debt to EBITDA ratio of 2.9 times [14] - Tenant collections remain healthy, with uncollectible rents estimated to be in the 35 to 40 basis point range as a percentage of revenues [15] Q&A Session Summary Question: Can you expand on leasing and the development pipeline? - Management noted that conversations regarding leasing have improved since May, with a high retention rate benefiting the portfolio [22][24] Question: How have construction costs trended recently? - Construction pricing has come down by about 10% to 12%, but demand remains the primary constraint on starting new projects [31][33] Question: What is the outlook for releasing spreads? - Management believes they can maintain releasing spreads in the mid-30s, with low supply and high demand expected to drive future rent increases [48][50] Question: How are different regional markets performing? - The Eastern Region, particularly Florida and Raleigh, has shown strength, while California and Denver have been slower markets [58][60] Question: What is the current status of bad debt and tenant watch lists? - Bad debt remains low at around 30 to 35 basis points relative to total revenue, with no significant changes in the tenant watch list [84] Question: What interest rate would prompt a change in leverage levels? - Management indicated that they are monitoring interest rates and equity opportunities, with plans to potentially issue $200,000,000 to $250,000,000 in unsecured term loans [85][86]

Financial Data and Key Metrics Changes - Funds from operations (FFO) per share for Q3 2025 was $2.27, an increase of 6.6% compared to the same quarter last year [6][11] - Quarter-end leasing was at 96.7%, with occupancy at 95.9%, and average quarterly occupancy was 95.7%, down 100 basis points from Q3 2023 [6][7] - Cash same-store NOI rose 6.9% for the quarter and 6.2% year-to-date [7] Business Line Data and Key Metrics Changes - Quarterly releasing spreads were 36% GAAP and 22% cash for leases signed during the quarter, with year-to-date results at 42% and 27% GAAP and cash, respectively [6][11] - Retention rate rose to almost 80%, indicating tenants' cautious nature [8][19] Market Data and Key Metrics Changes - The market remains somewhat bifurcated, with improved activity in smaller spaces (50,000 square feet and below) but larger spaces experiencing delays in decision-making [7][19] - The supply pipeline continues to decline, with historically low starts this quarter, which is expected to put upward pressure on rents as demand stabilizes [9][10] Company Strategy and Development Direction - The company aims to capitalize on development opportunities earlier than private peers, leveraging its balance sheet strength and existing tenant expansion needs [10][15] - The focus remains on geographic and tenant diversity to stabilize earnings regardless of economic conditions [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improving market conditions and the potential for increased leasing activity as macro uncertainties subside [13][15] - The company is reforecasting 2025 starts to $200 million based on current demand levels, with a focus on maintaining a strong balance sheet [9][12] Other Important Information - The company settled all outstanding forward equity agreements for gross proceeds of $118 million at an average price of $183 per share [11] - Tenant collections remain healthy, with uncollectible rents estimated to be in the 35 to 40 basis point range as a percentage of revenues [12][13] Q&A Session Summary Question: Can you expand on leasing and the development pipeline? - Management noted that conversations with prospects have improved since May, with a high retention rate indicating strong portfolio performance [19][20] Question: How have construction costs trended recently? - Construction pricing has come down by about 10% to 12%, but demand remains the primary constraint on starting new projects [24][25] Question: What is the status of the development pipeline and leasing activity? - Management indicated that while leasing activity has been muted, there is a growing number of prospects, and they are optimistic about future developments [28][33] Question: How do you view the market conditions for next year? - Management expressed hope for a stronger market next year, with potential for increased starts if demand picks up [76][78] Question: What is the current level of bad debt and tenant watchlist? - Bad debt remains low at around 30 to 35 basis points relative to total revenue, with a consistent watchlist [57] Question: How do you see the impact of interest rates on leverage levels? - The company is monitoring interest rates closely and plans to issue $200 million to $250 million in unsecured term loans in the fourth quarter [58][59]

Core Insights - EastGroup Properties (EGP) reported quarterly funds from operations (FFO) of $2.27 per share, slightly missing the Zacks Consensus Estimate of $2.28 per share, but showing an increase from $2.13 per share a year ago, resulting in an FFO surprise of -0.44% [1] - The company posted revenues of $182.14 million for the quarter ended September 2025, aligning with the Zacks Consensus Estimate and reflecting a year-over-year increase from $162.88 million [2] - The stock has gained approximately 12.6% year-to-date, underperforming the S&P 500's gain of 13.9% [3] Financial Performance - Over the last four quarters, EastGroup Properties has surpassed consensus FFO estimates two times and topped consensus revenue estimates two times [2] - The current consensus FFO estimate for the upcoming quarter is $2.33, with expected revenues of $186.22 million, and for the current fiscal year, the estimate is $8.96 on revenues of $719.74 million [7] Market Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and the outlook for future FFO expectations [3][4] - The Zacks Industry Rank places the REIT and Equity Trust - Other sector in the top 34% of over 250 Zacks industries, indicating a favorable industry outlook [8] - EastGroup Properties currently holds a Zacks Rank 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6]

Property Portfolio and Operations - As of September 30, 2025, EastGroup owned 546 industrial properties across 12 states, with a total portfolio of approximately 64.4 million square feet[112]. - During the nine months ended September 30, 2025, EastGroup executed new and renewal leases on 6,997,000 square feet, representing 11.4% of the operating portfolio, with average rental rates increasing by 42.1% compared to previous leases[119]. - The operating portfolio was 96.7% leased and 95.9% occupied as of September 30, 2025, with leases approximating 2.4% of the operating portfolio scheduled to expire during the remainder of 2025[122]. - Average occupancy for same properties was 96.6% for Q3 2025, slightly down from 96.9% in Q3 2024[144]. - The average rental rate for same properties was $8.91 per square foot for Q3 2025, compared to $8.30 per square foot in Q3 2024, reflecting a rental rate increase of 7.3%[144]. Financial Performance - Net Income Attributable to EastGroup Properties, Inc. Common Stockholders was $3.60 per diluted share for the nine months ended September 30, 2025, a 3.2% increase from $3.49 in the same period of 2024[120]. - Net Income attributable to EastGroup Properties, Inc. Common Stockholders for Q3 2025 was $66,943,000 ($1.26 per diluted share), up from $55,180,000 ($1.13 per diluted share) in Q3 2024, representing a 21.3% increase[140]. - For the nine months ended September 30, 2025, PNOI increased by $45,608,000, or 13.3%, compared to the same period in 2024, driven by same property operations and acquisitions[139]. - PNOI for the nine months ended September 30, 2025 was $389,736,000 ($7.41 per diluted share), up from $344,128,000 ($7.10 per diluted share) in the same period of 2024, reflecting a $0.31 increase per diluted share[158]. - FFO attributable to common stockholders for Q3 2025 was $121,103,000 ($2.27 per diluted share), an increase of 6.6% from $104,127,000 ($2.13 per diluted share) in Q3 2024[138]. Development and Acquisitions - EastGroup acquired 171.8 acres of development land for $83,793,000 and began construction on projects totaling 892,000 square feet during the nine months ended September 30, 2025[124]. - EastGroup acquired operating properties totaling 638,000 square feet for $121,965,000 during the nine months ended September 30, 2025[143]. - Total capital invested for development during the first nine months of 2025 was $242,121,000, including $152,569,000 for improvement costs on development and value-add properties and $83,793,000 for new land investments[147]. Capital and Financing - EastGroup's financing strategy includes utilizing its $675,000,000 unsecured bank credit facilities and intends to issue primarily unsecured fixed-rate debt in the future[126]. - The Company has a $625,000,000 unsecured bank credit facility with a maturity date of July 31, 2028, and as of September 30, 2025, had $45,000,000 of variable rate borrowings at an interest rate of 4.998%[177][180]. - The Company also has a $50,000,000 unsecured bank credit facility with no outstanding balance as of September 30, 2025, and an interest rate of 5.035%[178]. - Scheduled principal payments on long-term debt as of September 30, 2025, total $1,440,000,000 with a weighted average interest rate of 3.37%[175]. - Interest expense recognized for the nine months ended September 30, 2025 was $23,400,000 ($0.44 per diluted share), down from $29,764,000 ($0.61 per diluted share) in the same period of 2024[162]. Stock and Dividends - EastGroup sold 33,120 shares of common stock under its at-the-market program at a weighted average price of $183.15 per share, generating net proceeds of $6,005,000[115]. - The Company distributed $219,955,000 in common stock dividends during the nine months ended September 30, 2025[173]. - The Company entered into forward equity sale agreements for 1,063,825 shares at an initial weighted average forward price of $181.89 per share, settling previous agreements for 1,449,078 shares with net proceeds of approximately $258,066,000[116]. Liquidity and Cash Flow - As of September 30, 2025, total immediate liquidity was approximately $630,393,000, consisting of $2,981,000 in cash and $627,412,000 available on unsecured credit facilities[172]. - Net cash provided by operating activities was $415,986,000 for the nine months ended September 30, 2025[173]. - Cash and cash equivalents decreased by $14,548,000 during the nine months ended September 30, 2025[150]. Ratings and Market Conditions - Moody's Ratings affirmed the Company's issuer rating of Baa2 and changed its outlook from stable to positive in May 2025, based on strong credit metrics[179]. - Most leases include scheduled rent increases and require tenants to pay a share of operating expenses, which mitigates the Company's exposure to inflation-related cost increases[199].

Earnings Performance - Earnings per diluted share (EPS) for Q3 2025 were $1.26, up from $1.13 in Q3 2024, reflecting a year-over-year increase of 11.5%[4] - Net income attributable to common stockholders for the three months ended September 30, 2025, was $66.9 million, up 21.2% from $55.2 million in the prior year[51] - Net income for Q3 2025 was $66,957 million, up from $55,194 million in Q3 2024, representing a 24.3% increase[55] - For the nine months ended September 30, 2025, net income was $189,707 million, compared to $169,153 million for the same period in 2024, a growth of 12.2%[55] Financial Metrics - Funds from operations (FFO) for Q3 2025 were $2.27 per diluted share, representing a 6.6% increase from $2.13 per diluted share in Q3 2024[5] - Funds from Operations (FFO) attributable to common stockholders for the nine months ended September 30, 2025, reached $349.4 million, a 16.5% increase compared to $300.0 million for the same period in 2024[53] - The debt-to-EBITDAre ratio improved to 2.9 for the three months ended September 30, 2025, down from 3.6 in the same period of 2024[53] - The interest and fixed charge coverage ratio increased to 16.8 for the three months ended September 30, 2025, compared to 11.6 in the prior year[53] - Debt-to-total market capitalization was 14.1% as of September 30, 2025, with an interest coverage ratio of 16.8x for Q3 2025[27] Property Performance - Property net operating income (PNOI) for Q3 2025 was $134.37 million, an increase of 12.9% compared to $118.99 million in Q3 2024[8] - Same property net operating income increased by 7.7% on a straight-line basis and 6.9% on a cash basis for Q3 2025 compared to Q3 2024[9] - Same PNOI on a straight-line basis increased to $119,522 million in Q3 2025 from $112,611 million in Q3 2024, a rise of 6.8%[55] - Same PNOI, excluding income from lease terminations, was $119,421 million in Q3 2025, compared to $110,866 million in Q3 2024, marking a 7.7% increase[55] Rental and Occupancy - Rental rates on new and renewal leases increased by an average of 35.9% on a straight-line basis during Q3 2025[10] - The operating portfolio was 96.7% leased and 95.9% occupied as of September 30, 2025, with an average occupancy of 95.7% for Q3 2025[5] Dividends - The company declared a cash dividend of $1.55 per share, an increase of 10.7% from the previous dividend[5] - EastGroup declared a cash dividend of $1.55 per share in Q3 2025, marking a 10.7% increase from the previous quarter[26] - The annualized dividend rate of $6.20 per share represents a dividend yield of 3.4% based on the closing stock price of $180.67 on October 22, 2025[27] Acquisitions and Developments - EastGroup acquired three operating properties totaling 638,000 square feet for approximately $122 million during the quarter[5] - Construction began on a new development project in Dallas, comprising 161,000 square feet with a projected total cost of approximately $27 million[23] - In Q3 2025, EastGroup transferred four projects to the operating portfolio, totaling 864,000 square feet, with an occupancy rate of 55% as of October 22, 2025[25] - The total cost of projects transferred in 2025 was $272.813 million, with a cumulative leased percentage of 66%[25] Guidance and Projections - EastGroup's estimated EPS for 2025 is projected to be between $4.85 and $4.89, while FFO per share is expected to be between $8.94 and $8.98[30] - The guidance for net income attributable to common stockholders for Y/E 2025 ranges from $256.276 million to $258.388 million[32] - The projected total investment for development starts in 2025 is estimated at $200 million to $215 million, with operating property acquisitions expected to be around $170 million[33] Share Issuance and Debt Management - The company issued 647,758 shares of common stock for net proceeds of approximately $117.066 million during Q3 2025[28] - EastGroup repaid $20 million in senior unsecured notes at a fixed interest rate of 3.80% in August 2025, and an additional $75 million in maturing debt post-September 30, 2025[29] Comprehensive Income - The company's total comprehensive income for the three months ended September 30, 2025, was $64.8 million, compared to $39.4 million in the same quarter of 2024, reflecting a significant increase[51] Strategic Focus - EastGroup's strategy focuses on the development and acquisition of industrial properties in supply-constrained submarkets, particularly in Texas, Florida, California, Arizona, and North Carolina[44] - EastGroup's portfolio currently includes approximately 64.4 million square feet of industrial properties, focusing on high-growth markets in the United States[44]

Group 1 - Albert Anthony is a Croatian-American business author and media contributor on investor platforms, with over 1,000 followers on Seeking Alpha [1] - He has a background in IT analysis for Fortune 500 companies and worked in technical support at Charles Schwab in 2021 [1] - Albert Anthony has launched his own equities research firm, Albert Anthony & Company, which operates 100% remotely [1] Group 2 - He is currently pursuing the CMSA certification at the Corporate Finance Institute in Vancouver [1] - Albert Anthony has participated in numerous business and innovation conferences in the EU market, particularly in Croatia [1] - He is also active in digital media, including a YouTube channel focused on Real Estate Investment Trusts (REITs) [1]

Core Insights - Albert Anthony is a Croatian-American business author and media contributor with a focus on real estate investment trusts (REITs) [1] - He has a background in IT analysis for Fortune 500 companies and experience in financial services with Charles Schwab [1] - Anthony is launching a book on REITs in 2025 and manages his own equities research firm remotely [1] Background and Experience - Albert Anthony has over 1,000 followers on Seeking Alpha and writes for various financial platforms [1] - He has participated in numerous business and innovation conferences in the EU and has a degree from Drew University [1] - Currently enrolled in the CMSA certification program at the Corporate Finance Institute in Vancouver [1] Media and Digital Presence - Anthony is active in digital media, including a YouTube channel focused on REITs [1] - He has appeared in regional media channels in Croatia and has had extra roles in over five productions [1] - The author does not engage with non-publicly traded companies or small-cap stocks [1]

Group 1 - The article highlights the expertise of Austin Rogers as a REIT specialist with a focus on high-quality dividend growth stocks aimed at generating safe and growing passive income streams [1] - The investment strategy emphasizes a lifelong holding period, prioritizing portfolio income growth over total returns [1] Group 2 - The article mentions that High Yield Landlord is one of the largest real estate investment communities on Seeking Alpha, providing exclusive research on the global REIT sector [1] - It offers multiple real money portfolios, an active chat room, and direct access to analysts for its members [1]

Group 1 - The article highlights the expertise of Austin Rogers as a REIT specialist with a focus on high-quality dividend growth stocks aimed at generating safe and growing passive income streams [1] - The investment philosophy emphasizes a lifelong holding period, prioritizing portfolio income growth over total returns [1] Group 2 - The High Yield Landlord investing group is noted for its extensive research on the global REIT sector and offers various resources including real money portfolios and an active chat room for members [1]

Core Viewpoint - EastGroup Properties, Inc. is set to hold its Third Quarter 2025 Earnings Conference Call on October 24, 2025, to discuss its financial results and earnings outlook for the year [1]. Group 1: Earnings Conference Call - The earnings conference call will take place on October 24, 2025, at 11:00 a.m. Eastern Time [1]. - Financial results for the third quarter will be released after market close on October 23, 2025 [1]. - A live broadcast of the conference call will be available via telephone and webcast [2]. Group 2: Company Overview - EastGroup Properties is a self-administered equity real estate investment trust focused on industrial properties in high-growth markets across the United States [3]. - The company aims to maximize shareholder value by providing quality business distribution space, primarily in the 20,000 to 100,000 square foot range [3]. - EastGroup's portfolio includes approximately 64.4 million square feet, encompassing development projects and value-add acquisitions [3].