EastGroup Properties Announces Recent Business Activity and Participation in Upcoming Conferences

Rhea-AI Summary

EastGroup Properties (NYSE: EGP) announced recent business activity, highlighting the resilience of the Sunbelt shallow bay industrial market. Key points include:

• Acquisition of Hays Commerce Center 3 & 4 in Austin for $36 million
• Portfolio 97.0% leased and 96.8% occupied as of September 4, 2024
• New and renewal leases signed with significant rental rate increases
• Construction of two development projects in Houston and Austin
• Sale of 162,100 shares of common stock for $30 million
• Forward equity sale agreements for 502,958 shares
• Settlement of previous forward equity sale agreements

CEO Marshall Loeb expressed optimism about market opportunities due to declining industrial construction and improving tenant demand. The company continues to strengthen its balance sheet and is scheduled to participate in upcoming real estate conferences.

JACKSON, Miss., Sept. 5, 2024 /PRNewswire/ -- EastGroup Properties, Inc. (NYSE: EGP) (the "Company", "we", "us" or "EastGroup") announced today its recent business activity.

Commenting on the Company's activity, Marshall Loeb, CEO, stated, "We continue to be pleased by the resiliency of the Sunbelt, shallow bay industrial market. Our year to date results remain in line to slightly ahead of our forecast. Looking ahead, we are excited to see the market opportunities that will be created given the rapid decline in the industrial construction pipeline along with slowly improving tenant demand. To take advantage of the potential opportunities, we continue to improve the strength and flexibility of our balance sheet."

In August, EastGroup acquired Hays Commerce Center 3 & 4, which contains two industrial buildings totaling 179,000 square feet in Austin, for approximately $36,000,000. This property, which was developed in 2022, is 100% leased to five tenants, increasing the Company's ownership in Austin to approximately 1,756,000 square feet.

As of September 4, 2024, EastGroup's portfolio was 97.0% leased and 96.8% occupied. During the third quarter of 2024 to date, 1,355,000 square feet of new and renewal leases were signed with rental rate increases averaging 51.2% on a straight-line basis and 35.8% on a cash basis.

During the third quarter of 2024 to date, EastGroup began construction of two development projects located in Houston and Austin which will contain approximately 310,000 square feet and have projected total costs of approximately $40,000,000.

Also, during the third quarter of 2024 to date, the Company executed five leases on development properties totaling approximately 250,000 square feet.

During the third quarter of 2024 to date, EastGroup sold 162,100 shares of common stock directly through its sales agents under its continuous common equity offering program at a weighted average price of $185.07 per share, providing aggregate gross proceeds to the Company of approximately $30,000,000.

In addition, during the third quarter of 2024 to date, EastGroup entered into forward equity sale agreements with respect to 502,958 shares of common stock with an initial weighted average forward price of $186.56 per share and approximate gross sales proceeds of $94,000,000, based on the initial forward price. The Company did not receive any proceeds from the sale of common shares by the forward purchasers at the time it entered into forward equity sale agreements. Also, during the third quarter of 2024 to date, the Company settled outstanding forward equity sale agreements that were previously entered into under its continuous common equity offering program by issuing 300,502 shares of common stock in exchange for net proceeds of approximately $49,000,000. As of September 4, 2024, EastGroup had 802,509 shares of common stock available for settlement prior to the expiration of the applicable settlement periods ranging from June 2025 to September 2025, for approximate net proceeds of $143,000,000, based on a weighted average forward price of $178.25 per share.

Management is scheduled to participate in two upcoming conferences: 

• The 16th Annual Evercore ISI Real Estate Conference on Friday, September 6, 2024
• Bank of America Securities 2024 Global Real Estate Conference scheduled for Tuesday, September 10, 2024 through Wednesday, September 11, 2024

During the conferences, EastGroup executives may discuss the Company's transaction activity, leasing environment, market trends and conditions, financial matters and other business that may be affecting the Company. Presentation materials that may be referenced during the EastGroup presentations are available on the "Investor Relations" page of the Company's website.

About EastGroup Properties, Inc.

EastGroup, a member of the S&P Mid-Cap 400 and Russell 1000 Indexes, 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 with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 60.3 million square feet. EastGroup Properties, Inc. press releases are available at www.eastgroup.net.

Forward-Looking Information

The statements and certain other information contained herein, which can be identified by the use of forward-looking terminology such as "may," "will," "seek," "expects," "anticipates," "believes," "targets," "intends," "should," "estimates," "could," "continue," "assume," "projects," "goals," "plans" and variations of such words and similar expressions or the negative of such words, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company's current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations, strategies or prospects will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to: international, national, regional and local economic conditions; the competitive environment in which the Company operates; fluctuations of occupancy or rental rates; potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants, or our ability to lease space at current or anticipated rents, particularly in light of the impacts of inflation; disruption in supply and delivery chains; construction costs could increase as a result of inflation impacting the costs to develop properties; acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with projections or to materialize at all; potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate laws or real estate investment trust ("REIT") or corporate income tax laws, potential changes in zoning laws, or increases in real property tax rates, and any related increased cost of compliance; our ability to maintain our qualification as a REIT; natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes; pandemics, epidemics or other public health emergencies, such as the coronavirus pandemic; availability of financing and capital, increase in interest rates, and ability to raise equity capital on attractive terms; financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest, and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all; our ability to retain our credit agency ratings; our ability to comply with applicable financial covenants; credit risk in the event of non-performance by the counterparties to our interest rate swaps; how and when pending forward equity sales may settle; lack of or insufficient amounts of insurance; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; our ability to attract and retain key personnel; risks related to the failure, inadequacy or interruption of our data security systems and processes, including security breaches through cyber attacks; potentially catastrophic events such as acts of war, civil unrest and terrorism; and environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us. All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within the Company's most recent Annual Report on Form 10-K, as such factors may be updated from time to time in the Company's periodic filings and current reports filed with the SEC. The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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SOURCE EastGroup Properties

FAQ

What was EastGroup Properties' (EGP) portfolio occupancy rate as of September 4, 2024?

As of September 4, 2024, EastGroup Properties' portfolio was 97.0% leased and 96.8% occupied.

How much did EastGroup Properties (EGP) pay for the Hays Commerce Center 3 & 4 acquisition in Austin?

EastGroup Properties acquired Hays Commerce Center 3 & 4 in Austin for approximately $36 million in August 2024.

What was the average rental rate increase for new and renewal leases signed by EastGroup Properties (EGP) in Q3 2024?

During the third quarter of 2024 to date, EastGroup Properties signed new and renewal leases with rental rate increases averaging 51.2% on a straight-line basis and 35.8% on a cash basis.

How many shares of common stock did EastGroup Properties (EGP) sell in Q3 2024 and at what price?

During the third quarter of 2024 to date, EastGroup Properties sold 162,100 shares of common stock at a weighted average price of $185.07 per share, generating approximately $30 million in gross proceeds.

What upcoming conferences is EastGroup Properties (EGP) scheduled to participate in during September 2024?

EastGroup Properties is scheduled to participate in the 16th Annual Evercore ISI Real Estate Conference on September 6, 2024, and the Bank of America Securities 2024 Global Real Estate Conference from September 10-11, 2024.