East Properties(EGP) - 2025 Q3 - Quarterly Results

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]