EastGroup Properties Announces Recent Business Activity and Presentation at Nareit's REITweek
EastGroup Properties (NYSE: EGP) has reported significant recent business activities.
In May, they acquired a 275,000 sq ft industrial property in Raleigh for $54M, marking their entry into this growing market.
Their portfolio is 97.7% leased and 97.0% occupied as of May 30, 2024.
EastGroup signed 1,232,000 sq ft of new and renewal leases in Q2 2024 with rental increases averaging 69.6% on a straight-line basis and 49.0% on a cash basis.
They issued 420,370 shares of common stock, raising approximately $76M and entered into forward equity agreements for 135,662 shares, potentially raising $23M.
EastGroup's management will present at Nareit's REITweek on June 5, 2024.
- Acquisition of a 275,000 sq ft industrial property in Raleigh for $54M, entering a new growth market.
- High portfolio occupancy rates with 97.7% leased and 97.0% occupied as of May 30, 2024.
- Leased 1,232,000 sq ft with rental rate increases averaging 69.6% on a straight-line basis and 49.0% on a cash basis.
- Raised approximately $76M by issuing 420,370 shares of common stock.
- Forward equity agreements for 135,662 shares, potentially raising $23M.
- Presentation at Nareit's REITweek, showcasing business activities and market trends.
- Volatility and uncertainty in the capital markets.
- Issuance of 420,370 shares may lead to shareholder dilution.
- Forward equity agreements indicate potential future shareholder dilution.
Insights
EastGroup Properties' recent business activities offer a compelling snapshot of their strategic directions and the state of their operations. The acquisition of a new industrial property in Raleigh for approximately
Another notable point is the company's portfolio metrics. With a 97.7% leasing rate and 97.0% occupancy rate, EastGroup demonstrates operational efficiency and strong tenant retention, critical in the real estate sector. Additionally, the new and renewal leases covering 1,232,000 square feet with rental increases averaging
The settled forward equity sale agreements yielding net proceeds of approximately
The acquisition of the industrial property in Raleigh by EastGroup Properties is a strategic move into a burgeoning market. Raleigh-Durham, known for its population growth, diversified economic base and prominent universities, is a lucrative region for industrial real estate. Such an acquisition aligns with trends where commercial real estate investors target high-growth areas to maximize returns.
The leasing statistics, with a 97.7% leasing rate and 97.0% occupancy rate, indicate a well-managed portfolio. This level of occupancy is impressive and suggests strong demand for their properties. Moreover, the significant rental rate increases of
This strategic positioning in high-demand markets, coupled with strong leasing performance and effective rent increases, is an encouraging signal for investors. It underscores EastGroup's adeptness at navigating market dynamics and capitalizing on growth opportunities.
EastGroup Properties' recent acquisition in Raleigh signifies a calculated expansion into a thriving market. The Raleigh-Durham area, with its substantial population growth and economic diversity, presents a fertile ground for industrial real estate investments. The fact that the newly acquired property is 100% leased points to immediate revenue streams and minimal initial leasing risk.
The leasing performance of EastGroup’s portfolio is noteworthy. Maintaining a leasing rate of 97.7% and occupancy rate of 97.0% illustrates robust property management and tenant satisfaction. The new and renewal leases covering 1,232,000 square feet with considerable rental rate hikes highlight their competitive positioning in the market.
Furthermore, the issuance of 420,370 shares of common stock, resulting in net proceeds of approximately
Overall, EastGroup's proactive market entry, effective portfolio management and strong financial strategies suggest a positive trajectory, providing a favorable environment for sustained growth and investor confidence.
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. The trends we saw during the first quarter are carrying over to date. Meanwhile, given the volatility and uncertainty in the capital markets, we continue to opportunistically improve the strength and flexibility of our balance sheet, which allows us to take advantage of any market opportunities that arise."
In May, EastGroup acquired a 275,000 square foot newly constructed industrial property in
As of May 30, 2024, EastGroup's portfolio was
During the second 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 420,370 shares of common stock in exchange for net proceeds of approximately
In addition, during the second quarter of 2024 to date, EastGroup entered into forward equity sale agreements with respect to 135,662 shares of common stock with an approximate gross total of
Management is scheduled to present at Nareit's REITweek: 2024 Investor Conference on Wednesday, June 5, 2024, at 2:00 p.m. Eastern Time. The presentation will be broadcast live and is accessible through the registration link on the Company's website at www.eastgroup.net. An online replay of the webcast will be available at the same location. During the conference, 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 presentation 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
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; disruption in supply and delivery chains; construction costs could increase as a result of inflation impacting the costs to develop properties; 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; 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; acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with projections; 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; 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
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