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]

Financial Data and Key Metrics Changes - Core FFO for the second quarter was $0.59 per share, a $0.01 increase over the prior quarter when excluding one-time termination revenue [10] - The company reaffirmed its full-year 2025 core FFO outlook of $2.37 to $2.41 per share [10] - The balance sheet ended the quarter with over $1.8 billion of liquidity, including $560 million of cash, and a net debt to EBITDA ratio of four times [12] Business Line Data and Key Metrics Changes - Executed 1.7 million square feet of leases in the quarter, with net effective and cash leasing spreads for comparable leases at 218% [4] - Same property occupancy increased to 96.1%, up 40 basis points sequentially, with positive net absorption of 220,000 square feet [5] - Market rents across the portfolio declined approximately 3.5% sequentially and 12.8% year over year [7] Market Data and Key Metrics Changes - Leasing activity on approximately 80% of vacant spaces, up from 60% a year ago [8] - The company sold two properties totaling $82 million, bringing year-to-date dispositions to $134 million at a weighted average cap rate in the low 4% range [8] Company Strategy and Development Direction - The company remains focused on its value creation strategy through repositioning and redevelopment projects, with a total of over $195 million of incremental cash NOI representing growth of 28% [11] - The company is actively pursuing potential near-term opportunities to recycle disposition proceeds into accretive acquisitions [9] Management's Comments on Operating Environment and Future Outlook - Management noted that while leasing activity remains steady, macroeconomic and tariff uncertainties are impacting tenant decision-making, putting pressure on overall demand [6] - The company expressed confidence in its Southern California portfolio benefiting from persistent supply constraints and strong demand [9] Other Important Information - The company achieved a 7.4% unlevered stabilized yield on total investment from seven stabilized repositioning and redevelopment projects year to date [8] - The cash mark to market for the portfolio stands at 3%, contributing about $20 million of incremental NOI to the embedded growth profile [12] Q&A Session Summary Question: Future repositioning and redevelopment starts - Management indicated that the pipeline is somewhat fluid, with the Hertz asset being a significant driver for future NOI changes [18][20] Question: Cash mark to market trends - Management noted that the cash mark to market is currently at 3%, and future growth will depend on market rent growth and the mix of units rolling [24][28] Question: Capital allocation and acquisition opportunities - Management stated that they are evaluating acquisition opportunities that meet stringent underwriting criteria and are focused on capital allocation that drives cash flow accretion [30][32] Question: Delays in rent commencements - Management acknowledged that lease-up timing has been pushed out by about one month on average due to current market dynamics, but they remain confident in their projections [35][38] Question: Tenant behavior and lease terms - Management reported that lease terms have held steady, with strong renewal activity and an increase in early renewals, indicating tenant strength [42][44] Question: Market rent growth and trends - Management confirmed a decline in market rents due to tariff volatility impacting tenant decision-making, but noted continued leasing activity [48][50] Question: Cap rates and user purchases - Management highlighted that user sales have influenced cap rates, with current market cap rates in the low 5% range [55] Question: Occupancy outlook for the second half of the year - Management expects some deceleration in occupancy due to planned move-outs, with guidance set at 95.5% to 96% [58] Question: Activity on vacant properties - Management confirmed that the 80% leasing activity is unique and not double-counted, with strong demand for smaller spaces [76][78]

Financial Performance - The company maintained its 2025 outlook, with Q2 performance aligning with expectations[12] - Core FFO/Share for Q2 2025 was $0.59, reflecting a (1.7%) growth[18] - Year-to-date 2025 Core FFO/Share was $1.21, a 3.4% increase[18] - The company projects incremental NOI of $195 million, representing 28% growth[14] Portfolio Performance - Total Portfolio Cash NOI Growth for Q2 2025 was 5.7%[18] - Total Portfolio Net Effective NOI Growth for Q2 2025 was 2.9%[18] - Same Property Cash NOI Growth for Q2 2025 was 3.9%[18] - Same Property Net Effective NOI Growth for Q2 2025 was 1.1%[18] Strategic Capital Allocation - The company executed over 900,000 SF of leasing year-to-date and stabilized 7 projects year-to-date at a 7.4% unlevered yield[12] - The company completed dispositions of 209,000 SF in Q2 2025, generating $82 million in total sales price and an 12.8% unlevered IRR[24] Balance Sheet and Liquidity - The company has a strong balance sheet with 4.0x Net Debt/EBITDAre and $1.8 billion of liquidity[12]

Financial Data and Key Metrics Changes - Funds from operations (FFO) for Q2 2025 were $0.76 per fully diluted share, an increase from $0.66 per share in Q2 2024, reflecting strong performance [16] - Cash same store net operating income (NOI) growth for the quarter was 8.7%, driven by increases in rental rates and new and renewal leasing [16] - In-service occupancy at the end of the quarter was 94.2%, down 110 basis points from the previous quarter [17] Business Line Data and Key Metrics Changes - Overall cash rental rate increase for new and renewal leasing was 33%, with a 38% increase when excluding a large fixed-rate renewal in Central Pennsylvania [11] - Approximately 2,500,000 square feet of leases commenced during the quarter, with 400,000 being new leases and 2,100,000 being renewals [17] Market Data and Key Metrics Changes - Vacancy in Tier one U.S. markets was 6.3% at the end of Q2, up 30 basis points compared to the prior quarter [10] - Nationally, net absorption year-to-date totaled 16,000,000 square feet, with 5,000,000 square feet in target markets [10] - New construction start volume was 62,000,000 square feet in Q2, down from 66,000,000 in Q1 2025 and 72% lower than the peak in Q3 2022 [10] Company Strategy and Development Direction - The company remains focused on securing and serving existing and new customers to drive long-term cash flow growth [23] - The company is executing new starts in markets with good fundamentals and unmet demand [26] - The company plans to maximize value from its Camelback project and is considering various strategies for its remaining land [40] Management's Comments on Operating Environment and Future Outlook - Management noted that uncertainty around tariffs continues to dampen decision-making momentum [7] - There is a positive outlook for improved confidence and investment in new growth initiatives once the tariff situation becomes clearer [23] - Management expressed that the demand side is a key issue, with tenants needing the right fit at the right time [53] Other Important Information - The company was upgraded by Fitch to BBB+ and launched a $450,000,000 public bond offering at a coupon rate of 5.25% [14] - Guidance for NAREIT FFO for the year remains at $2.92 per share at the midpoint, with a range narrowed to $2.88 to $2.96 per share [19] Q&A Session Summary Question: How attractive are incremental development starts today compared to three or six months ago? - Management indicated that more consistent development lease signings are needed to deepen new starts, with strong gross leasing activity in the first half of the year [25] Question: Any abnormal or non-recurring items in the second quarter FFO? - Management noted that higher interest expense in the second half of the year would slightly drag down FFO due to funding the development pipeline and the recent bond offering [30] Question: Can you clarify the new lease that was not in the $1,600,000 target? - Management confirmed that the new lease announced has positively impacted the guidance, and the $0.02 per share impact is now $0.00 [36] Question: What is the plan for the Camelback lease? - The plan is to maximize value, with various options being considered for the remaining land [40] Question: How are private industrial developers behaving in the current environment? - Developers are cautious, with some offering elevated concession packages due to increased tenant choices [71] Question: What is the outlook for specific markets? - Nashville is performing strongly, with good demand and little new supply, while certain submarkets in Dallas and Houston are also doing well [106][107]

Financial Data and Key Metrics Changes - Funds from operations (FFO) for Q2 2025 were $0.76 per fully diluted share, an increase from $0.66 per share in Q2 2024 [12] - Cash same store net operating income (NOI) growth for the quarter was 8.7%, driven by rental rate increases and new and renewal leasing [12][13] - In-service occupancy at the end of the quarter was 94.2%, down 110 basis points from the previous quarter [13] Business Line Data and Key Metrics Changes - Overall cash rental rate increase for new and renewal leasing was 33%, and 38% when excluding a large fixed-rate renewal in Central Pennsylvania [8] - Approximately 2,500,000 square feet of leases commenced during the quarter, with 400,000 being new leases and 2,100,000 being renewals [13] Market Data and Key Metrics Changes - Vacancy in Tier one U.S. markets was 6.3% at the end of Q2, up 30 basis points from the prior quarter [6] - Year-to-date net absorption nationally totaled 16,000,000 square feet, with 5,000,000 square feet in target markets [7] - New construction start volume was 62,000,000 square feet in Q2, down from 66,000,000 square feet in Q1 2025 and 72% lower than the peak in Q3 2022 [7] Company Strategy and Development Direction - The company is focused on securing and serving existing and new customers to drive long-term cash flow growth [17] - The company plans to continue executing new starts in markets with good fundamentals and unmet demand [21] - The company remains cautious about new development starts due to the need for more consistent development lease signings [21] Management's Comments on Operating Environment and Future Outlook - Management noted that uncertainty around tariffs continues to dampen decision-making momentum [5] - There is an expectation for improved confidence and timely decision-making once the tariff situation becomes clearer [17] - The company anticipates a higher interest expense in the second half of the year due to funding its development pipeline and the recent bond offering [24] Other Important Information - The company was upgraded by Fitch to BBB+ in early May, which facilitated a public bond offering of $450,000,000 at a coupon rate of 5.25% [11] - The guidance range for NAREIT FFO for the year remains at $2.92 per share at the midpoint, with a narrowed range of $2.88 to $2.96 per share [14] Q&A Session Summary Question: How attractive are incremental development starts today compared to three or six months ago? - Management indicated that they would like to see more consistent development lease signings before increasing new starts [20] Question: Is there anything abnormal in the second quarter FFO? - Management noted that higher interest expense in the second half is expected due to funding the development pipeline and the recent bond offering being slightly dilutive [24] Question: Can you clarify the new lease that was not in the $1,600,000 target? - Management confirmed that the new lease announced has positively impacted their guidance, reducing the expected drag on FFO [31] Question: What is the current demand for build-to-suit projects? - Management stated that while they do execute on build-to-suit projects, their platform is more targeted towards speculative development [51] Question: How are private industrial developers behaving in the current environment? - Management observed that where there are more choices, concessions have increased, but there is no material difference across the landscape for developers [67] Question: What is the outlook for specific markets? - Nashville and certain submarkets in Dallas and Houston are performing well, while Southern California saw a 5% decline in market rents from Q1 to Q2 [99][103]

Financial Performance - For the three months ended June 30, 2025, lease revenue was $177468 thousand, compared to $162075 thousand for the same period in 2024[14] - Net income available to common stockholders for the three months ended June 30, 2025, was $55185 thousand, compared to $51318 thousand for the same period in 2024[14] - Funds From Operations (FFO) allocable to common stockholders and unitholders for the three months ended June 30, 2025, was $102800 thousand, compared to $89647 thousand for the same period in 2024[15] - Adjusted Funds From Operations (AFFO) for the three months ended June 30, 2025, was $84160 thousand, compared to $74139 thousand for the same period in 2024[15] Portfolio Composition - As of June 30, 2025, the total number of in-service properties was 414, with a gross leasable area of 68044707 square feet and an occupancy rate of 942%[33] - Same Store NOI Cash Basis (Less Termination Fees) increased by 87% for the three months ended June 30, 2025, compared to the same period in 2024, reaching $121947 thousand[34] Debt Analysis - The total weighted average interest rate on debt outstanding was 410% as of June 30, 2025, compared to 416% as of June 30, 2024[21] - Fixed-rate debt accounted for $2379774 thousand of the total debt outstanding as of June 30, 2025[21] Leasing Activity - For the three months ended June 30, 2025, new leases commenced totaled 411 thousand square feet with a cash basis rent growth of 405%[36] - Tenant retention by square feet was 710% for the three months ended June 30, 2025[36] Outlook - The company estimates Funds From Operations - FFO (NAREIT) to be between $288 and $296 per share/unit for 2025[68]

Core Insights - Rexford Industrial (REXR) reported revenue of $249.51 million for the quarter ended June 2025, reflecting a 5% increase year-over-year and a surprise of +1.96% over the Zacks Consensus Estimate of $244.72 million [1] - The earnings per share (EPS) for the quarter was $0.59, compared to $0.37 in the same quarter last year, resulting in an EPS surprise of +1.72% against the consensus estimate of $0.58 [1] Revenue Breakdown - Rental revenues amounted to $241.57 million, exceeding the three-analyst average estimate of $239.56 million, with a year-over-year change of +3.7% [4] - Management and leasing services generated $0.13 million, slightly below the three-analyst average estimate of $0.14 million, showing a year-over-year decline of -15.4% [4] - Interest income reached $7.81 million, surpassing the average estimate of $5.32 million from three analysts, marking a significant year-over-year increase of +75.7% [4] Stock Performance - Over the past month, shares of Rexford Industrial have returned -0.4%, in contrast to the Zacks S&P 500 composite's +4.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Rexford Industrial Realty, Inc. reported strong financial and operational performance in Q2 2025, highlighting the resilience of its business model in a dynamic market environment, driven by favorable supply and demand dynamics in infill Southern California [3][4]. Financial Results - The company reported net income attributable to common stockholders of $113.4 million, or $0.48 per diluted share, compared to $79.8 million, or $0.37 per diluted share, for the same quarter last year [4][9]. - For the first half of 2025, net income attributable to common stockholders was $181.8 million, or $0.78 per diluted share, up from $138.4 million, or $0.64 per diluted share, in the prior year [4][9]. - Core FFO for Q2 2025 was $139.7 million, a 7.8% increase from $129.6 million in the prior year quarter, while Core FFO per diluted share decreased by 1.7% to $0.59 [5][9]. - Total portfolio NOI increased by 2.9% to $186.3 million, and Same Property Portfolio NOI increased by 1.1% [6][9]. Operational Highlights - The company executed 99 leases totaling 1.7 million rentable square feet in Q2 2025, with new leases showing a net effective cash releasing spread of 20.9% [8][9]. - The Same Property Portfolio occupancy rate was 96.1%, reflecting a 0.4% increase from the previous quarter [9][10]. Transaction Activity - In Q2 2025, the company sold two properties for a total of $81.6 million, generating a 12.8% unlevered IRR [14][15]. - Year-to-date, the company has disposed of three properties totaling 336,385 square feet for $134.0 million, achieving an 11.9% unlevered IRR [15]. Balance Sheet - As of June 30, 2025, the company had total liquidity of $1.8 billion, including $431.1 million in unrestricted cash [17]. - The company ended the quarter with a low-leverage balance sheet, with a Net Debt to Enterprise Value ratio of 25.0% and Net Debt to Adjusted EBITDAre of 4.0x [9][21]. Dividends - The Board of Directors authorized a dividend of $0.43 per share for Q3 2025, payable on October 15, 2025 [23]. Guidance - The company updated its full-year 2025 guidance, projecting net income attributable to common stockholders per diluted share between $1.38 and $1.42, and Core FFO per diluted share between $2.37 and $2.41 [26].

Core Insights - Prologis (PLD) is set to report its Q2 2025 results on July 16, with analysts and investors keen to evaluate its performance amid current economic conditions [1] Group 1: Prologis Performance - In the last reported quarter, Prologis achieved a surprise of 2.90% in core funds from operations (FFO) per share, driven by increased rental revenues and strong leasing activity, although high interest expenses posed challenges [2] - Over the past four quarters, Prologis consistently exceeded the Zacks Consensus Estimate for FFO per share, with an average beat of 4.18% [2] - Prologis is expected to report Q2 FFO per share of $1.41, reflecting a 5.2% year-over-year increase, while same-store net operating income is projected to grow by 3.3% despite a decrease in occupancy [10][11] Group 2: U.S. Industrial Real Estate Market - The U.S. industrial real estate sector showed resilience in Q2 2025, with net absorption of 29.6 million square feet, consistent with the previous quarter but below historical averages [3] - Vacancy rates increased by 20 basis points to 7.1%, marking the first rise above 7% since Q2 2014, yet remaining only 10 basis points above the 15-year pre-pandemic average [4] - Industrial asking rent growth slowed to 2.6% in Q2, the weakest since early 2020, due to softening demand and rising vacancies [4] Group 3: Leasing and Construction Activity - Leasing activity remained robust, totaling nearly 309 million square feet in the first half of the year, supported by large-scale deals and steady demand from third-party logistics (3PL) [5] - New construction activity saw a significant decline, with completions at 71.5 million square feet, the lowest since Q1 2019, and the under-construction pipeline fell to 268.6 million square feet, the lowest since 2017 [6] Group 4: Strategic Positioning of Prologis - Prologis is expected to leverage its premium asset base in high-demand locations, with targeted acquisitions and developments likely supporting its Q2 results [7] - The company maintains a strong financial position, with a resilient balance sheet and efficient capital access, although high interest rates remain a concern [8] - Interest expenses are anticipated to rise by 11.4% year-over-year in Q2, reflecting ongoing challenges in the economic environment [10][11]

Core Insights - Overton Moore Properties (OMP) has appointed Felix Vollrath as Senior Vice President of Acquisitions and Development to lead industrial investment and development in Southern California and Phoenix [1][2] Company Overview - OMP is a leading real estate investment and development firm in the western U.S., established in 1972, with a focus on delivering long-term value in key industrial markets [5] - The firm has a proven track record of creating value through disciplined execution and market insight [5] Leadership and Experience - Felix Vollrath has over eight years of experience in industrial real estate investment and development, previously serving as Vice President at Rexford Industrial Realty, where he led the acquisition of over $2 billion in industrial real estate in Los Angeles [3][4] - Vollrath holds a Master's degree in Real Estate Development from the University of Southern California and a Bachelor's degree in International Business from Copenhagen Business School [4] Strategic Focus - In his new role, Vollrath will be responsible for sourcing, structuring, and executing industrial investment and development opportunities for OMP's core-plus, value-add, and opportunistic clients and partners [2][3] - The appointment is part of OMP's strategy to grow its business in dynamic industrial markets in the Western U.S. [4]