• Funds From Operations (FFO): Increased by 9.2% excluding involuntary conversions; FFO per share for the quarter was $2.13.

• Leasing: Quarter-end leasing was 96.9% with occupancy at 96.5%; average quarterly occupancy was 96.7%.

• Releasing Spreads: Quarterly releasing spreads were 51% GAAP and 35% cash; year-to-date results were 56% GAAP and 38% cash.

• Cash Same Store PNOI: Increased by 5.9% for the quarter and 6.3% year-to-date.

• Top 10 Tenants: Account for 7.5% of rents, down 70 basis points from third-quarter 2023.

• Equity Market Access: Issued common shares for gross proceeds of $30 million; settled forward share agreements for gross proceeds of $50 million.

• Debt Metrics: Unadjusted debt EBITDA ratio decreased to 3.6 times; interest and fixed charge coverage increased to 11.6 times.

• FFO Guidance: Fourth-quarter FFO guidance range is $2.13 to $2.17 per share; full-year guidance is $8.33 to $8.37 per share.

• Capital Proceeds Forecast: $780 million forecasted for the year, with over $500 million already executed.

• Warning! GuruFocus has detected 7 Warning Sign with EGP.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EastGroup Properties Inc (NYSE:EGP) reported a 9.2% increase in funds from operations (FFO) per share, demonstrating strong financial performance.

• The company achieved a high leasing rate of 96.9% with occupancy at 96.5%, indicating robust demand for its properties.

• EastGroup Properties Inc (NYSE:EGP) has a diversified rent roll, with the top 10 tenants accounting for only 7.5% of rents, reducing risk exposure.

• The company successfully negotiated lease terminations, resulting in financial gains and opportunities for re-leasing at higher rates.

• EastGroup Properties Inc (NYSE:EGP) is strategically positioned to benefit from long-term trends such as population migration, near-shoring, and evolving logistics chains.

Negative Points

• The average quarterly occupancy, although historically strong, has decreased from the previous year, indicating potential challenges in maintaining tenant retention.

• Development leasing activity has slowed, with tenants being more deliberate in their decision-making, impacting the pace of new project starts.

• The company faces challenges with bad debt, particularly in California, which has affected financial performance.

• There is uncertainty in the market due to macroeconomic factors such as interest rates and political events, impacting tenant confidence and expansion plans.

• EastGroup Properties Inc (NYSE:EGP) has adjusted its development starts forecast downward, reflecting a cautious approach in response to market conditions.