Property Portfolio - As of June 30, 2025, EastGroup owned 539 industrial properties across 12 states, with a total portfolio of approximately 63.6 million square feet[112] - The operating portfolio was 97.1% leased and 96.0% occupied as of June 30, 2025, with a slight decrease in occupancy compared to 97.4% leased and 97.1% occupied a year earlier[122] - Total Development and value-add properties as of June 30, 2025, amounted to 14,065,000 square feet with cumulative costs of $678,013,000[150] Leasing Activity - During the six months ended June 30, 2025, EastGroup executed new and renewal leases on 4.5 million square feet, representing 7.6% of the operating portfolio, with average rental rates increasing by 45.8% compared to previous leases[119] - The Company entered into 74 leases with rent concessions totaling $4,796,000 over 2,087,000 square feet during the six months ended June 30, 2025[162] - Same property average occupancy was 96.3% for Q2 2025, down from 97.1% in Q2 2024[147] Financial Performance - Net Income Attributable to EastGroup Properties, Inc. Common Stockholders was $2.35 per diluted share for the six months ended June 30, 2025, a decrease of 0.8% from $2.37 in the same period of 2024[120] - Net Income attributable to EastGroup Properties, Inc. Common Stockholders for Q2 2025 was $63,299,000, an increase of 14.5% from $55,287,000 in Q2 2024[141] - FFO attributable to Common Stockholders for Q2 2025 was $116,341,000, up 15.2% from $100,980,000 in Q2 2024[139] - Net Income Attributable to EastGroup Properties, Inc. for the six months ended June 30, 2025, was $122,722,000, an increase from $113,931,000 for the same period in 2024, representing a growth of 6.9%[159] Property Operating Income - Property Net Operating Income (PNOI) from same properties increased by 5.9% for the six months ended June 30, 2025, compared to the same period in 2024[121] - PNOI for the six months ended June 30, 2025 increased by $30,224,000, or 13.4%, compared to the same period in 2024[140] - Same PNOI, excluding income from lease terminations, increased by 6.6% for Q2 2025 compared to Q2 2024[140] Development and Capital Expenditures - EastGroup acquired 94.5 acres of development land for $50.2 million and began construction on projects totaling 731,000 square feet during the six months ended June 30, 2025[124] - The projected total investment for EastGroup's development projects is $531.4 million, with $157.8 million remaining to be invested as of June 30, 2025[124] - The Company made capital improvements of $38,700,000 on existing properties during the six months ended June 30, 2025[145] - Total real estate improvements for the six months ended June 30, 2025, amounted to $38,700,000, compared to $29,634,000 for the same period in 2024, reflecting an increase of 30.6%[169] Financial Position - Total Assets as of June 30, 2025 were $5,189,608,000, an increase of $112,132,000 from December 31, 2024[142] - Total Liabilities decreased by $2,435,000 to $1,782,497,000, while Total Equity increased by $114,567,000 to $3,407,111,000 during the same period[142] - As of June 30, 2025, the Company had total immediate liquidity of approximately $823,832,000, comprised of $32,921,000 in cash and cash equivalents and $672,412,000 available on unsecured credit facilities[174] Debt and Financing - EastGroup's financing strategy includes utilizing $675 million in unsecured bank credit facilities and issuing equity or fixed-rate debt as market conditions permit[126] - Scheduled principal payments on long-term debt as of June 30, 2025, total $1,460,000,000 with a weighted average interest rate of 3.38%[177] - The total fixed-rate unsecured debt amounts to $1,460,000,000 with a weighted average interest rate of 3.38%[204] Interest Rates and Economic Conditions - The weighted average interest rate for the Company's variable rate unsecured bank credit facilities is 5.22% as of June 30, 2025[204] - The Company is exposed to interest rate changes primarily due to its unsecured bank credit facilities and long-term debt maturities, impacting liquidity and capital expenditures[202] - Economic conditions in the markets where the Company's properties are located could affect tenants' ability to make lease payments, potentially leading to uncollectible rent[206] Regulatory Environment - The enactment of H.R. 1 (One Big Beautiful Bill Act) includes provisions that relax the REIT asset test requirement and extend the section 199A pass-through deduction[201] Ratings and Compliance - Moody's Ratings affirmed EastGroup's issuer rating of Baa2 and changed its outlook from stable to positive in May 2025[126] - The Company was in compliance with all financial debt covenants at June 30, 2025[183]

[Overview and Highlights](index=1&type=section&id=Overview%20and%20Highlights) EastGroup Properties reported strong Q2 2025 results, driven by FFO and NOI growth, maintaining a positive long-term outlook [CEO Commentary and Quarter Highlights](index=1&type=section&id=CEO%20Commentary%20and%20Quarter%20Highlights) EastGroup Properties reported strong Q2 2025 results, with significant FFO and NOI growth, driven by robust rental rate increases - The CEO highlighted the company's resilience in the face of economic uncertainty, emphasizing a **strong balance sheet** and a **diversified portfolio** as key strengths for navigating market challenges. The long-term outlook is considered bullish due to favorable secular trends in the industrial real estate sector[3](index=3&type=chunk) Q2 2025 Key Performance Indicators | Metric | Q2 2025 Result | | :--- | :--- | | **Diluted EPS** | $1.20 (vs. $1.14 in Q2 2024) | | **FFO per Share (Excluding items)** | $2.21 (vs. $2.05 in Q2 2024, an increase of 7.8%) | | **Same Property NOI Growth (Straight-Line)** | +6.6% YoY | | **Operating Portfolio Leased** | 97.1% as of June 30, 2025 | | **Rental Rate Increase (New/Renewal)** | +44.4% on a straight-line basis | | **Development Starts** | 2 projects totaling 469,000 sq. ft. | | **Acquisitions (Subsequent to quarter-end)** | 2 properties in Raleigh for ~$61 million | [Financial Performance](index=1&type=section&id=Financial%20Performance) The company demonstrated robust financial performance in Q2 2025, marked by increased EPS, strong FFO, PNOI, and rental rate growth [Earnings Per Share (EPS)](index=1&type=section&id=Earnings%20Per%20Share%20(EPS)) Q2 2025 diluted EPS increased to $1.20, driven by higher PNOI and lower interest expense, despite a slight H1 decrease EPS Performance: Three Months Ended June 30 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Diluted EPS** | $1.20 | $1.14 | | **PNOI per Share** | $2.46 | $2.35 | | **Interest Expense per Share** | ($0.15) | ($0.20) | | **Depreciation & Amortization per Share** | ($1.01) | ($0.94) | EPS Performance: Six Months Ended June 30 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Diluted EPS** | $2.35 | $2.37 | | **PNOI per Share** | $4.88 | $4.68 | | **Interest Expense per Share** | ($0.30) | ($0.41) | | **Gains on Sales per Share** | $0.00 | $0.18 | [Funds from Operations (FFO) and Property Net Operating Income (PNOI)](index=3&type=section&id=Funds%20from%20Operations%20(FFO)%20and%20Property%20Net%20Operating%20Income%20(PNOI)) Strong Q2 2025 FFO per share grew 7.8%, fueled by 13.5% PNOI increase and 44.4% rental rate growth FFO & PNOI Growth: Three Months Ended June 30, 2025 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **FFO per Share (Excl. items)** | $2.21 | $2.05 | +7.8% | | **Total PNOI** | $129.2 million | $113.8 million | +13.5% | | **Same PNOI Growth (Straight-Line)** | N/A | N/A | +6.6% | | **Same PNOI Growth (Cash Basis)** | N/A | N/A | +6.4% | FFO & PNOI Growth: Six Months Ended June 30, 2025 | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | **FFO per Share (Excl. items)** | $4.33 | $4.03 | +7.4% | | **Total PNOI** | $255.4 million | $225.1 million | +13.4% | | **Same PNOI Growth (Straight-Line)** | N/A | N/A | +5.9% | | **Same PNOI Growth (Cash Basis)** | N/A | N/A | +5.8% | - Rental rates on new and renewal leases increased significantly, rising by an average of **44.4% in Q2 2025** and **45.8% for the first six months of 2025**, indicating strong demand and pricing power[9](index=9&type=chunk)[14](index=14&type=chunk) [Portfolio Activity](index=4&type=section&id=Portfolio%20Activity) EastGroup actively expanded its portfolio through strategic acquisitions and a robust development program, adding new projects and transferring completed ones [Acquisitions](index=4&type=section&id=Acquisitions) EastGroup actively acquired development land and fully leased properties in key growth markets, expanding its footprint and future pipeline - During Q2 2025, the company acquired significant land parcels for future development: - **Tampa, FL:** 65.9 acres for a planned 550,000 sq. ft. logistics center for **~$32.4 million**[17](index=17&type=chunk) - **Dallas, TX:** 28.6 acres for a planned 350,000 sq. ft. development for **~$17.8 million**[18](index=18&type=chunk) - Subsequent to June 30, 2025, EastGroup expanded its presence in the Raleigh-Durham market by acquiring two 100% leased industrial buildings totaling **318,000 sq. ft.** for approximately **$61.4 million**[19](index=19&type=chunk) - The company also acquired **37 acres of development land in Orlando for $8.5 million** and is under contract to purchase another **40 acres in Dallas for $25 million**, further bolstering its future development pipeline[20](index=20&type=chunk)[21](index=21&type=chunk) [Development and Value-Add Properties](index=5&type=section&id=Development%20and%20Value-Add%20Properties) The company's robust development program started two new projects, transferred four to operations, and maintained a large active pipeline - In Q2 2025, EastGroup started construction on two new development projects in Atlanta and Nashville, totaling **469,000 square feet** with projected costs of **$69.9 million**[22](index=22&type=chunk) - As of June 30, 2025, the company's development and value-add program comprised **18 projects**, totaling **3,714,000 square feet**. These projects were **16% leased** with a total projected cost of **$531.4 million**[23](index=23&type=chunk) - During Q2 2025, four projects totaling **785,000 square feet** in Orlando, Tampa, Fort Worth, and San Antonio were transferred to the operating portfolio. For the first six months of 2025, a total of **1,160,000 square feet** were transferred[24](index=24&type=chunk) [Capital Allocation and Financial Position](index=5&type=section&id=Capital%20Allocation%20and%20Financial%20Position) The company maintained a strong balance sheet with low leverage, declared consistent dividends, and enhanced financial flexibility [Dividends](index=5&type=section&id=Dividends) EastGroup declared a Q2 2025 dividend of $1.40 per share, continuing its 32-year streak of maintaining or increasing distributions - The company declared a Q2 2025 dividend of **$1.40 per share**, its **182nd consecutive quarterly cash distribution**[25](index=25&type=chunk) - EastGroup has a **32-year history of maintaining or increasing its dividend**, with increases in each of the last **13 years**[25](index=25&type=chunk) [Financial Strength and Flexibility](index=7&type=section&id=Financial%20Strength%20and%20Flexibility) The company maintained a strong balance sheet with low leverage (14.2% debt-to-market cap) and high coverage ratios Key Financial Ratios (as of Q2 2025) | Metric | Value | | :--- | :--- | | **Debt-to-Total Market Capitalization** | 14.2% | | **Interest and Fixed Charge Coverage Ratio** | 16.1x | | **Debt to EBITDAre Ratio** | 2.9x | - During Q2 2025, the company settled forward equity sale agreements, issuing **416,067 shares** for net proceeds of approximately **$74.1 million**[28](index=28&type=chunk) - Subsequent to quarter-end, an additional **647,758 shares** were issued from settled forward equity agreements, raising approximately **$117.1 million** in net proceeds[28](index=28&type=chunk) [Outlook for 2025](index=7&type=section&id=Outlook%20for%202025) EastGroup updated its full-year 2025 guidance, raising FFO per share forecasts to $8.89-$9.03, reflecting continued growth [2025 Guidance](index=7&type=section&id=2025%20Guidance) EastGroup updated its full-year 2025 guidance, raising FFO per share forecasts to $8.89-$9.03, reflecting continued growth Full Year 2025 Guidance | Metric (per diluted share) | Low Range | High Range | | :--- | :--- | :--- | | **Net Income (EPS)** | $4.76 | $4.90 | | **Funds from Operations (FFO)** | $8.89 | $9.03 | Revised 2025 Midpoint Guidance Assumptions | Metric | Revised 2025 Guidance | April 2025 Guidance | | :--- | :--- | :--- | | **FFO per share** | $8.96 | $8.94 | | **FFO per share growth (YoY)** | 7.3% | 7.1% | | **Same PNOI growth (cash basis)** | 6.5% | 6.3% | | **Average month-end occupancy** | 96.0% | 96.1% | | **Development starts** | $215 million | $250 million | | **Operating property acquisitions** | $160 million | $150 million | [Appendix](index=8&type=section&id=Appendix) This section provides essential unaudited financial statements and detailed reconciliations of GAAP to non-GAAP measures for performance evaluation [Financial Statements and Non-GAAP Reconciliations](index=12&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliations) This section includes unaudited financial statements and detailed reconciliations of GAAP to non-GAAP measures like FFO and PNOI Consolidated Statements of Income (In Thousands) | Line Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **Total Revenues** | $177,286 | $351,735 | | **Total Expenses** | $106,836 | $214,333 | | **Net Income** | $63,313 | $122,750 | | **Net Income Attributable to Common Stockholders** | $63,299 | $122,722 | FFO Reconciliation (In Thousands) | Line Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **Net Income Attributable to Common Stockholders** | $63,299 | $122,722 | | **Depreciation and Amortization** | $53,012 | $105,532 | | **FFO Attributable to Common Stockholders** | $116,341 | $228,314 | PNOI Reconciliation (In Thousands) | Line Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **Net Income** | $63,313 | $122,750 | | **Adjustments (Depreciation, Interest, G&A, etc.)** | $65,871 | $132,612 | | **Property Net Operating Income (PNOI)** | $129,184 | $255,362 | [Definitions of Non-GAAP Measures](index=8&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines key non-GAAP financial measures like FFO, PNOI, and EBITDAre, explaining their calculation and purpose - **Funds from Operations (FFO):** Calculated per Nareit standards, it starts with GAAP net income and excludes gains/losses from property sales and real estate depreciation. It is a primary measure of a REIT's operating performance[35](index=35&type=chunk) - **Property Net Operating Income (PNOI):** Defined as income from real estate operations less operating expenses. It is used to evaluate the performance of the company's property portfolio at the property level, separate from corporate-level expenses[37](index=37&type=chunk) - **EBITDA for Real Estate (EBITDAre):** Computed per Nareit standards, it adjusts Net Income for interest, taxes, depreciation, amortization, and gains/losses on property sales. It is used to measure operating performance and the ability to service debt[39](index=39&type=chunk)

Core Viewpoint - EastGroup Properties, Inc. reported strong quarterly results despite economic uncertainty, highlighting the resilience of its team, properties, and markets, while maintaining a focus on a strong balance sheet and tenant diversity for long-term growth [3]. Financial Performance - Earnings per share (EPS) for Q2 2025 were $1.20, up from $1.14 in Q2 2024, while EPS for the first half of 2025 was $2.35, slightly down from $2.37 in the same period of 2024 [4][7]. - Funds from operations (FFO) for Q2 2025 were $2.21 per diluted share, an increase of 5.7% from $2.09 in Q2 2024 [5][6]. - Property net operating income (PNOI) for Q2 2025 was $129.2 million, up from $113.8 million in Q2 2024, reflecting a $0.11 increase per diluted share [8]. Operational Highlights - Same property net operating income increased by 6.6% on a straight-line basis and 6.4% on a cash basis for Q2 2025 compared to Q2 2024 [10]. - The operating portfolio was 97.1% leased and 96.0% occupied as of June 30, 2025, with an average occupancy of 95.9% for Q2 2025 [7]. - Rental rates on new and renewal leases increased by an average of 44.4% on a straight-line basis during Q2 2025 [10]. Development and Acquisitions - The company started construction on two development projects totaling 469,000 square feet in Nashville and Atlanta, with projected costs of approximately $70 million [7][21]. - Subsequent to Q2 2025, EastGroup acquired two operating properties in Raleigh for approximately $61 million, expanding its portfolio in the area [7][18]. Dividend and Shareholder Returns - EastGroup declared a cash dividend of $1.40 per share in Q2 2025, marking the 182nd consecutive quarterly cash distribution to shareholders [25]. - The annualized dividend rate of $5.60 per share represents a dividend yield of 3.3% based on the closing stock price of $167.78 on July 22, 2025 [25]. Financial Strength - The company's debt-to-total market capitalization was 14.2% as of June 30, 2025, with an interest coverage ratio of 16.1x for Q2 2025 [26]. - The ratio of debt to earnings before interest, taxes, depreciation, and amortization for real estate (EBITDAre) was 2.9x for Q2 2025 [26]. Outlook - The company estimates EPS for 2025 to be in the range of $4.76 to $4.90 and FFO per share to be in the range of $8.89 to $9.03 [29][31].

Company Overview - EastGroup Properties focuses on industrial properties in high-growth US markets, particularly Florida, Texas, Arizona, California, and North Carolina[8] - The company targets functional, flexible business distribution space, primarily in the 20,000 to 100,000 square foot range[8] - EastGroup's portfolio includes approximately 63.9 million square feet, including development projects and value-add acquisitions[8] Market and Property Focus - EastGroup's markets are growing faster than the US average, with a 5-year GDP growth rate 58% greater than the US average from 2020-2024[18] - The company emphasizes multi-tenant, infill sites in supply-constrained submarkets, focusing on last-mile e-commerce locations and shallow bay industrial properties[23] - 75% of revenue is generated from tenants that lease under 100,000 square feet[36] Geographic Allocation - Texas accounts for 35% of the company's annualized base rent[20] - Florida accounts for 25% of the company's annualized base rent[20] - California accounts for 16% of the company's annualized base rent[20] - Arizona accounts for 8% of the company's annualized base rent[20] - North Carolina accounts for 5% of the company's annualized base rent[20] Financial Performance - As of June 30, 2025, the company's capitalization includes $8.82 billion in shareholders' market equity, representing 86% of the total[62] - Fixed-rate debt is $1.5 billion with an average rate of 3.38%, representing 14% of the total capitalization[62] - Leased percentage at June 30, 2025 was 97.1%[60]

Company Profile & Strategy - EastGroup Properties focuses on multi-tenant urban distribution properties in major Sunbelt markets[8, 12] - The company employs a three-pronged growth strategy: targeted development/redevelopment, recycling of capital, and internal growth[8, 24] - The company targets location-sensitive customers, competing on location rather than rent, primarily serving users requiring 15,000 to 50,000 square feet[20] Property Portfolio - As of December 31, 2018, the company owned 42 million square feet of industrial space[16] - Business distribution properties account for 88% of the portfolio, with bulk distribution at 9% and business service at 3%[23] - Development History: Since 1996, the company has developed 199 properties comprising 192 million square feet, representing a $15 billion investment, which accounts for 46% of the portfolio[35] Financial Performance & Capitalization - For the year ended December 31, 2018, same-property net operating income increased by 38%[44] - FFO per share increased by 96% for the year ended December 31, 2018[44] - As of December 31, 2018, shareholders' market equity was $335 billion, representing 75% of the capitalization, with variable-rate debt at $196 million (4%) and fixed-rate debt at $914 million (21%), with an average rate of 37%[46] Dividend & Returns - The company has declared 156 consecutive quarterly cash dividends, currently at $072 per share[47] - The company has increased or maintained its dividend for 26 consecutive years, increasing it in 23 of the past 26 years[47] - The dividend FFO payout ratio for 2018 was 65%[49]

Table of Contents Conference Call 800-836-8184 | ID – EastGroup July 24, 2024 11:00 a.m. Eastern Time webcast available at EastGroup.net 400 West Parkway Place, Suite 100 Ridgeland, MS 39157 TEL: 601-354-3555 | FAX: 601-352-1441 Page 1 of 24 Financial Information: Development and Value-Add Properties Transferred to Real Estate Properties ..... 12 Real Estate Improvements and Leasing Costs ........................................................ 14 | --- | --- | |--------------------------------------------- ...

Core Viewpoint - EastGroup Properties, Inc. is set to hold its Second Quarter 2025 Earnings Conference Call on July 24, 2025, to discuss its financial results and outlook for the year [1][2]. Company Overview - EastGroup Properties, Inc. is a self-administered equity real estate investment trust (REIT) focused on the development, acquisition, and operation of industrial properties in high-growth markets across the United States, particularly in Texas, Florida, California, Arizona, and North Carolina [4]. - 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 [4]. - EastGroup's growth strategy is centered on owning premier distribution facilities located near major transportation features in supply-constrained submarkets [4]. - The company's portfolio, including development projects and value-add acquisitions, currently encompasses approximately 63.6 million square feet [4].

Core Insights - Investors are considering Alpine Income (PINE) and EastGroup Properties (EGP) for potential value opportunities in the REIT and Equity Trust - Other sector [1] Valuation Metrics - Alpine Income has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while EastGroup Properties has a Zacks Rank of 3 (Hold) [3] - PINE has a forward P/E ratio of 8.47, significantly lower than EGP's forward P/E of 18.81 [5] - The PEG ratio for PINE is 1.41, while EGP's PEG ratio is 3.70, suggesting PINE is more favorably valued in terms of expected EPS growth [5] - PINE's P/B ratio is 0.8, compared to EGP's P/B of 2.63, indicating PINE is undervalued relative to its book value [6] - Based on these metrics, PINE has a Value grade of B, while EGP has a Value grade of F, highlighting PINE's superior valuation [6] Conclusion - PINE is positioned as the better value option due to its solid earnings outlook and favorable valuation metrics compared to EGP [7]

Core Viewpoint - Many companies pay dividends, but not all are suitable for generating reliable passive income due to volatile cash flows and weaker financial profiles [1] - Some companies, however, have demonstrated the ability to pay stable and growing dividends for over 100 consecutive quarters, indicating potential for future stability [2] Group 1: EastGroup Properties - EastGroup Properties has declared its 182nd consecutive quarterly dividend payment and has maintained or increased its dividend for 32 years, raising it in 29 of those years [4][5] - The company employs a four-pronged growth strategy focused on high-growth markets, including targeted development, acquisitions, capital recycling, and internal growth [7] - EastGroup's dividend yield is over 3%, more than double that of the S&P 500 [5] Group 2: Realty Income - Realty Income has declared its 659th consecutive monthly dividend and has increased its dividend for 110 straight quarters, raising it at least once every year for three decades [8][9] - The REIT focuses on net lease real estate, requiring tenants to cover all operating costs, which supports its financial flexibility and low dividend payout ratio [9] - Realty Income's dividend yield is nearly 6%, supported by one of the best balance sheets in the REIT sector [9] Group 3: Mid-America Apartment Communities - Mid-America Apartment Communities has declared its 126th consecutive quarterly dividend and has never suspended or reduced its dividend in 30 years as a public company [10][12] - The company owns apartments in high-growth markets across the Sun Belt region, benefiting from rising rental income and expansion opportunities [11] - With a strong balance sheet, Mid-America has the financial flexibility to support its nearly 4%-yielding dividend [12] Group 4: Summary of Bankable Dividend Stocks - EastGroup Properties, Realty Income, and Mid-America Apartment Communities have consistently paid dividends at or above prior levels for over 100 quarters, showcasing the durability of their dividends [13] - These REITs are well-positioned to continue providing resilient dividends, making them ideal for investors seeking sustainable income streams [13]

Summary of EastGroup Properties (EGP) 2025 Conference Call Company Overview - EastGroup Properties is identified as an industrial Real Estate Investment Trust (REIT) focusing on last mile delivery logistics, primarily in Sunbelt markets such as California, Texas, Florida, and the Carolinas [4][5][6] - The average building size is 95,000 square feet, with an average tenant size of 35,000 square feet [4][5] Core Business Strategy - The company targets last mile delivery, which is increasingly important as urban areas grow and industrial land becomes scarce [5][6] - EastGroup operates as a developer and is indifferent to whether it buys, builds, or acquires vacant properties based on market conditions [7][8] - The company has experienced record leasing activity, with a 97% occupancy rate, indicating strong demand despite macroeconomic uncertainties [10][12][16] Market Dynamics - The macro environment has shown fluctuations, with a recent slowdown in tenant activity, particularly for larger spaces [14][15] - Supply of industrial properties is at a record low, with construction in markets like Atlanta at its lowest since 2014 [18] - The company has a competitive advantage due to its existing land holdings that are zoned and permitted, allowing for quicker development compared to peers [20] Financial Performance - EastGroup has maintained a strong balance sheet, with a debt to EBITDA ratio trending below three and a fixed charge coverage ratio above 15 [42][43] - The company has seen organic growth in rents, with net effective rent increases of over 50% in the last two years [37][62] - The average Funds From Operations (FFO) multiple is currently below 19, compared to a five-year average of around 25, suggesting potential undervaluation [66][67] Regional Insights - The company has a diversified portfolio, with approximately 5% of its Net Operating Income (NOI) coming from Los Angeles, which has faced challenges with negative absorption rates [49][50][57] - Despite challenges in certain markets, EastGroup remains optimistic about long-term demand, particularly in areas with strong population growth [56][66] Future Outlook - The management expresses confidence in the company's positioning and anticipates a potential inflection point in the market as business confidence returns [66][67] - The company plans to remain patient and strategic in its development and acquisition activities, leveraging its strong balance sheet to capitalize on future opportunities [46][66] Key Takeaways - EastGroup Properties is well-positioned in the industrial REIT sector, focusing on last mile delivery in high-growth markets - The company has a strong financial foundation and is poised to take advantage of market opportunities as they arise - Management remains optimistic about future growth, despite current macroeconomic uncertainties and regional challenges