Analyst's Recommendation - EastGroup Properties Inc (NYSE: EGP) is rated as a Buy for long-term investors seeking income and capital appreciation through real estate income trusts (REITs) [1] Analyst's Background - The analyst, David A Johnson, is the founder and principal of Endurance Capital Management, a New Jersey Limited Liability Company [1] - David A Johnson has over 30 years of experience in investing and holds a Master of Science in Finance with a concentration in Investment Analysis from Boston University, a Certificate in Financial Planning, and an MBA from Fordham University [1] - The analyst invests in a wide range of assets including stocks, bonds, options, ETFs, REITs, real estate, closed-end funds, and alternative investment funds such as hedge funds and private credit [1]

Earnings Release and Conference Call - EastGroup plans to release its financial results for the quarter after the market closes on February 6, 2025 [1] - The earnings release and supplemental information will be available on the company's website at www.eastgroup.net [1] - The company will hold its Fourth Quarter Earnings Conference Call and Webcast on February 7, 2025, at 11:00 a.m. Eastern Time [5] - The conference call will be led by CEO Marshall Loeb and CFO Brent Wood, who will discuss the company's fourth quarter results, current operations, and earnings outlook for 2025 [5] - A live broadcast of the conference call is available by dialing 1-800-836-8184 or through a webcast link on the company's website [3] - A telephone and webcast replay will be available from February 7, 2025, through February 14, 2025 [3] Company Overview - EastGroup is a self-administered equity real estate investment trust (REIT) focused on industrial properties in major Sunbelt markets in the United States [2] - The company is a member of the S&P Mid-Cap 400 and Russell 2000 Indexes [2] - EastGroup's portfolio includes approximately 63.1 million square feet of industrial properties, including development projects and value-add acquisitions [2] - The company's strategy for growth is based on owning premier distribution facilities near major transportation features in supply-constrained submarkets [2] - EastGroup's primary markets include Texas, Florida, California, Arizona, and North Carolina [2] - The company aims to maximize shareholder value by providing functional, flexible, and quality business distribution space for location-sensitive customers, primarily in the 20,000 to 100,000 square foot range [2] Additional Information - EastGroup Properties, Inc. press releases are available on the company's website at www.eastgroup.net [4]

Acquisition Activity - EastGroup acquired DFW Global Logistics Centre 5-8, four multi-tenant business distribution buildings totaling 492,000 square feet, for approximately $76,000,000 in November [1] - The acquired buildings are 100% leased to 13 tenants and are located near the Dallas-Fort Worth Airport [1] - This acquisition increased the company's ownership in the DFW Airport submarket to approximately 2,679,000 square feet, which is currently 99.3% leased [1] - In December, the company acquired Akimel Gateway, which contains four industrial buildings totaling 519,000 square feet in Southeast Phoenix, for approximately $83,000,000 [9] - The Akimel Gateway property was developed in 2022 and is 100% leased to four tenants [9] - This acquisition increased the company's ownership of operating properties in Phoenix to approximately 3,518,000 square feet, which is currently 98.6% leased [9] Equity Transactions - During the fourth quarter of 2024, EastGroup entered into forward equity sale agreements for 690,953 shares of common stock with an initial weighted average forward price of $175.05 per share and approximate gross sales proceeds of $121,000,000 [5] - The company did not receive any proceeds from the sale of common shares by the forward purchasers at the time of entering into forward equity sale agreements [5] - EastGroup settled outstanding forward equity sale agreements by issuing 1,704,863 shares of common stock in exchange for net proceeds of approximately $305,517,000 [5] - The company sold 914,780 shares of common stock directly through its sales agents under its continuous common equity offering program at a weighted average price of $174.23 per share, providing aggregate net proceeds of approximately $158,000,000 [7] Company Overview - EastGroup is a self-administered equity real estate investment trust focused on the development, acquisition, and operation of industrial properties in major Sunbelt markets throughout the United States [10] - The company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 63.1 million square feet [10] - EastGroup's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets [10] Management Commentary - Marshall Loeb, CEO, commented on the company's activity, stating that the acquisition of newer, fully leased, state-of-the-art properties within existing submarkets allows for greater flexibility to accommodate tenants' growth needs long term [5]

Dividend Announcement - EastGroup Properties declared a quarterly cash dividend of $1.40 per share, payable on January 15, 2025, to shareholders of record on December 31, 2024 [1] - This marks the 180th consecutive quarterly dividend distribution by the company [1] - The annualized dividend rate is $5.60 per share [1] - The company has increased or maintained its dividend for 32 consecutive years, with 29 years of increases, including 13 consecutive years of increases [1] Company Overview - EastGroup Properties is a self-administered equity real estate investment trust (REIT) focused on industrial properties in major Sunbelt markets [2] - The company is a member of the S&P Mid-Cap 400 and Russell 2000 Indexes [2] - Primary markets include Florida, Texas, Arizona, California, and North Carolina [2] - The company's portfolio, including development projects and value-add acquisitions, totals approximately 61.8 million square feet [2] Business Strategy - The company aims to maximize shareholder value by providing functional, flexible, and quality business distribution space [2] - Target customers are location-sensitive businesses requiring spaces between 20,000 to 100,000 square feet [2] - Growth strategy focuses on owning premier distribution facilities near major transportation features in supply-constrained submarkets [2] Media and Communication - EastGroup Properties' press releases are available on the company's website at www.eastgroup.net [3]

Dividend Stocks Overview - Dividend stocks are affordable and suitable for beginners, allowing for steady growth of dividend income through additional share purchases [1] - Several dividend stocks cost less than $175 per share, including EastGroup Properties, Mid-America Apartment Communities, and Extra Space Storage, offering growing passive income streams [2] EastGroup Properties (EGP) - EastGroup Properties has paid 179 consecutive quarterly dividends and increased its payout for 29 out of 32 years, with a recent 10.2% increase to $1.40 per share quarterly ($5.60 annually) [3] - The stock price is around $172 per share, yielding a 3.3% dividend, more than double the S&P 500's 1.2% yield [4] - The company has invested $3 billion to develop 263 properties, focusing on business park settings and value-add opportunities in Sun Belt cities, driving portfolio and rental income growth [5] Mid-America Apartment Communities (MAA) - MAA has paid 123 consecutive quarterly dividends, raising its payout for 14 consecutive years, including a 5% increase to $1.47 per share quarterly ($5.88 annually) in December [6] - The stock price is around $161 per share, yielding a 3.7% dividend [7] - MAA focuses on Sunbelt metro areas with strong employment growth and is investing over $450 million in five properties and nearly $1 billion in eight development projects to expand its portfolio and rental income [8] Extra Space Storage (EXR) - Extra Space Storage has increased its dividend by nearly 250% over the past decade, with an 8% raise in February 2023 [9] - The stock price is under $169 per share, yielding a 3.9% dividend [10] - The company leads the U.S. self-storage sector with a 14% market share, growing through acquisitions, including a $15 billion merger with Life Storage, and investments in third-party management and bridge loans [11] Conclusion - EastGroup Properties, MAA, and Extra Space Storage have strong dividend payment records and relatively affordable stock prices, making them attractive for building stable and rising dividend income streams [12]

Acquisition and Expansion - EastGroup Properties acquired Riverpoint Industrial Park in Atlanta for approximately $88 million, adding 779,000 square feet of fully leased industrial space to its portfolio [1] - The company's total ownership in Atlanta now stands at 2,246,000 square feet with a 98.1% lease rate [1] - EastGroup is set to close on a property in Dallas consisting of four fully leased industrial buildings for around $77 million [2] - The company purchased 26 acres of development land in Nashville for $10.1 million, planned for future construction of four buildings totaling 350,000 square feet [2] Portfolio Performance - EastGroup's portfolio shows a 96.3% lease rate and 95.7% occupancy rate as of November 13, 2024 [3] - The company signed 1.21 million square feet of new and renewal leases in Q4 2024, with average rental rate growth of 53.1% on a straight-line basis and 30.9% on a cash basis [3] Market Strategy and Outlook - EastGroup focuses on industrial properties in major Sunbelt markets, particularly Florida, Texas, Arizona, California, and North Carolina [5] - The company targets functional, flexible, and quality business distribution spaces in the 20,000-100,000 square foot range [5] - EastGroup's strategy emphasizes owning high-quality distribution facilities near major transportation features [6] Industry Context - The industrial real estate market faces challenges with choppy demand and high supply [6] - EastGroup's stock has declined 0.2% in the month, outperforming the industry's 2.4% decline [6] Peer Comparison - Iron Mountain Incorporated and Cousins Properties are better-ranked REITs, each carrying a Zacks Rank 2 (Buy) [6] - The Zacks Consensus Estimate for Iron Mountain's 2024 FFO per share has been raised to $4.49 [7] - The Zacks Consensus Estimate for Cousins Properties' 2024 FFO per share has increased to $2.68 [7]

Company Overview - EastGroup Properties (EGP) is highlighted as a company with strong strengths, management, and financials [1] - The company's stock price as of October 16, 2024, is referenced [1] Industry Insights - The video provides insights into market trends and potential investment opportunities related to EastGroup Properties [1] - The video was published on November 14, 2024, offering timely analysis [1]

Industrial REIT Sector Performance - The industrial REIT sector has faced challenges due to easing industrial demand, leading to lower occupancy ratings [1] - Despite these challenges, many companies in the sector have continued to grow their AFFO, FFO, and revenue, indicating strong fundamentals [1] Analyst Background and Investment Strategy - The contributing analyst is a Navy veteran with a focus on dividend investing in quality blue-chip stocks, BDCs, and REITs [2] - The analyst prefers a buy-and-hold strategy, emphasizing quality over quantity, and aims to supplement retirement income through dividends in the next 5-7 years [2] - The analyst aims to help lower and middle-class workers build high-quality, dividend-paying investment portfolios and achieve financial independence [2] Analyst's Position and Disclosure - The analyst holds a beneficial long position in shares of ADC and O through stock ownership, options, or other derivatives [3] - The article reflects the analyst's personal opinions and is not influenced by compensation or business relationships with the mentioned companies [3]

Stock Transactions and Equity Sales - EastGroup sold 458,679 shares of common stock at a weighted average price of $174.43 per share, generating net proceeds of $79,210,000[105] - The company entered into forward equity sale agreements for 1,986,336 shares of common stock with an initial weighted average forward price of $179.46 per share[106] - Under the Current 2023 ATM Program, the company sold 458,679 shares of common stock at a weighted average price of $174.43 per share, generating $79,210,000 in net proceeds[171] - The company entered into forward equity sale agreements for 1,986,336 shares of common stock at an initial weighted average forward price of $179.46 per share[172] - The company settled outstanding forward equity sale agreements by issuing 993,214 shares of common stock, generating net proceeds of approximately $175,146,000[173] - The company has $3,847,000 of common stock remaining available for sale under the Current 2023 ATM Program[174] Leasing and Rental Performance - EastGroup executed new and renewal leases on 6,617,000 square feet, representing 11.6% of the operating portfolio's total square footage of 56,840,000[107] - Average rental rates for new and renewal leases increased by 55.9% compared to former leases on the same spaces[107] - EastGroup's operating portfolio was 96.9% leased and 96.5% occupied as of September 30, 2024[109] - Rental rate increases on new and renewal leases averaged 50.9% for the three months ended September 30, 2024, covering 4.1% of the operating portfolio's total square footage[128] - The company's operating portfolio had a leased square footage percentage of 96.9% and an occupancy rate of 96.5% as of September 30, 2024[150] - EastGroup entered into 99 leases with rent concessions on 3.944 million square feet, totaling $8.919 million in concessions during the nine months ended September 30, 2024[150] Financial Performance and Net Income - Net Income Attributable to EastGroup Properties, Inc. Common Stockholders increased by 14.1% to $3.49 per diluted share for the nine months ended September 30, 2024[108] - Net income for the three months ended September 30, 2024, was $55.194 million, compared to $48.910 million for the same period in 2023, representing a 12.8% increase[119] - Net Income Attributable to EastGroup Properties, Inc. Common Stockholders was $169.111 million for the nine months ended September 30, 2024, compared to $137.036 million for the same period in 2023[145] Property Net Operating Income (PNOI) - Property Net Operating Income (PNOI) Excluding Income from Lease Terminations increased by 5.2% for the nine months ended September 30, 2024[108] - Property Net Operating Income (PNOI) for the three months ended September 30, 2024, increased by $15.029 million (14.5%) compared to the same period in 2023, driven by same property operations, newly developed properties, and acquisitions[124] - Same PNOI, excluding income from lease terminations, increased by 5.5% and 5.2% for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[125] - PNOI increased by $40.759 million (13.4%) for the nine months ended September 30, 2024, compared to the same period in 2023[146] Property Acquisitions and Development - The company acquired 34.3 acres of development land in Atlanta for $3,302,000 and began construction of five development projects totaling 783,000 square feet[110] - EastGroup acquired operating properties in Austin, Las Vegas, and Raleigh containing 684,000 square feet for $143,585,000[111] - EastGroup acquired operating properties totaling 684,000 square feet in 2024, with a total cost of $143.585 million[133] - The company made capital improvements of $47.183 million on existing properties and incurred $3.009 million in development costs during the nine months ended September 30, 2024[135] - EastGroup acquired 34.3 acres of development land in Atlanta for $3.302 million during the nine months ended September 30, 2024[137] - The company's total investment in Development and Value-Add properties was $654.092 million as of September 30, 2024, compared to $639.647 million at the end of 2023[136] Property Sales and Dispositions - The company sold a group of operating properties in Jackson, Mississippi, and land in San Francisco, generating gross sales proceeds of $18,050,000[111] - EastGroup sold operating properties in Jackson, Mississippi, generating $14.05 million in gross sales proceeds and recognized $8.751 million in gains[135] - The company sold 3.9 acres of land in San Francisco, generating $4 million in gross sales proceeds and recognizing $222,000 in gains[138] Funds from Operations (FFO) and Dividends - Funds from Operations (FFO) per diluted share for the three months ended September 30, 2024, was $2.13, a 6.5% increase compared to $2.00 for the same period in 2023[123] - The company declared a dividend of $70,275,000 in August 2024, which was paid in October 2024, including $1,511,000 for unvested restricted stock[164] - Net cash provided by operating activities was $362,693,000 for the nine months ended September 30, 2024, with $184,030,000 distributed in common stock dividends during the same period[163] Interest Expense and Debt Management - Variable rate interest expense decreased by $109,000 (16.4%) for the three months and $2,130,000 (56.6%) for the nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to a decrease in average borrowings[151] - Fixed rate interest expense decreased by $652,000 (4.4%) for the three months and $2,061,000 (4.6%) for the nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to unsecured debt repayments[153] - Capitalized interest increased by $656,000 (15.4%) for the three months and $2,933,000 (24.7%) for the nine months ended September 30, 2024, compared to the same periods in 2023, due to changes in development activity and spending[155] - EastGroup repaid a $50,000,000 senior unsecured term loan at maturity in August 2024 with an effectively fixed interest rate of 4.08%[162] - The company refinanced a $100,000,000 senior unsecured term loan in September 2023, reducing the effectively fixed interest rate by approximately 45 basis points[154] - Average borrowings on unsecured bank credit facilities decreased by $7,901,000 (78.4%) for the three months and $52,176,000 (96.1%) for the nine months ended September 30, 2024, compared to the same periods in 2023[152] - Scheduled principal payments on long-term debt total $1,630,000, with maturities ranging from 2024 to 2029 and beyond, and a weighted average interest rate of 3.35%[164] - The company extended the maturity dates of its $625,000,000 and $50,000,000 unsecured bank credit facilities from July 30, 2025, to July 31, 2028[165] - The $625,000,000 unsecured bank credit facility has an interest rate of SOFR plus 76.5 basis points, with an annual facility fee of 15 basis points, and no variable rate borrowings as of September 30, 2024[166] - The $50,000,000 unsecured bank credit facility has an interest rate of SOFR plus 77.5 basis points, with an annual facility fee of 15 basis points, and no outstanding balance as of September 30, 2024[167] - The company achieved sustainability performance targets for 2022 and 2023, resulting in a one basis point reduction in the interest margin on the $625,000,000 facility[168] Capital Expenditures and Liquidity - Total real estate improvements increased to $17,549,000 (24.2%) for the three months and $47,183,000 (9.6%) for the nine months ended September 30, 2024, compared to the same periods in 2023[157] - Total capitalized leasing costs increased to $8,238,000 (10.8%) for the three months and $25,728,000 (7.9%) for the nine months ended September 30, 2024, compared to the same periods in 2023[159] - EastGroup had total immediate liquidity of approximately $943,608,000 as of September 30, 2024, including $16,957,000 in cash and cash equivalents, $672,345,000 in availability on unsecured credit facilities, and $254,306,000 in gross proceeds from forward equity sale agreements[163] Occupancy and Rental Rates - Same property average occupancy was 96.7% for the three months ended September 30, 2024, compared to 97.9% for the same period in 2023[126] - The same property average rental rate was $8.28 per square foot for the three months ended September 30, 2024, compared to $7.79 per square foot for the same period in 2023[127] - Lease termination fee income for the three months ended September 30, 2024, was $1.745 million, compared to $221,000 for the same period in 2023[128] Total Assets and Real Estate Investments - Total assets increased by $234.852 million to $4.754 billion at September 30, 2024, compared to December 31, 2023[130] - Real estate properties increased by $330.509 million during the nine months ended September 30, 2024, primarily due to property transfers, acquisitions, and capital improvements[131]

EastGroup Properties, Inc. (NYSE:EGP) Q3 2024 Earnings Call Transcript October 24, 2024 11:00 AM ET Company Participants Marshall Loeb - President & Chief Executive Officer Keena Frazier - Director-Leasing Statistics Brent Wood - Chief Financial Officer Conference Call Participants Craig Mailman - Citigroup Rich Anderson - Wedbush Andrew Berger - Bank of America Samir Khanal - Evercore ISI Todd Thomas - KeyBanc Capital Markets Blaine Heck - Wells Fargo Michael Carroll - RBC Capital Markets Alexander Goldfar ...