EGP

EastGroup Properties stock slipped about 2% to US$199.09 by the close on Friday, even though its Q3 2026 release delivered another clean beat in the areas that are typically most important for a real estate investment trust. Funds From Operations per share came in at US$2.45 and management lifted full year FFO guidance to a midpoint of US$9.65. Short term traders focused on the red on the screen. Longer term investors will likely care more that cash same store net operating income and already high occupancy continue to reinforce the multi year income story behind this industrial warehouse portfolio. Love EastGroup Properties' clean FFO beat and steady warehouse income story but want more options with similar cash flow resilience and balance sheet strength? Compare EastGroup with peers in our list of solid balance sheet and fundamentals stocks (26 results). - Revenue (Q3 2026 vs. Q3 2025): US$199.44m vs. US$182.14m (up 9.5%) - Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025): US$78.38m vs. US$66.94m (up 17.1%) - Basic EPS (Q3 2026 vs. Q3 2025): US$1.46 vs. US$1.26 (up 16.0%) - Funds From Operations (FFO, Q3 2026 vs. Q3 2025): US$131.91m vs. US$121.10m (up 8.9%) Re-leasing spreads hit 36% GAAP and 21% cash this quarter. Ask Charlie what makes EastGroup's record re-leasing spreads stick. The upbeat narrative hinges on EastGroup Properties proving that infill demand plus disciplined building can steadily turn projects into cash flow. "The main factor that needs to go right is that EastGroup Properties continues to execute on its development-led growth plan, including expanding its 2026 development and acquisition programs while keeping the balance sheet conservative and leasing velocity healthy across its markets." Q3 shows that playbook working. Development starts guidance moved to US$390m, with US$285m already started. Record 2.9m sq ft of second generation leasing, 500k sq ft of development leasing, 97% same store occupancy, and 7.1% cash same store NOI growth all support that execution. Debt to EBITDA near 3.2x and high coverage ratios keep the capital structure aligned with the thesis. The key concern is that EastGroup ramps projects into soft demand and eroding pricing power. "If higher construction and financing costs lead EastGroup Properties to commit to a larger development and acquisition pipeline than tenant demand ultimately supports, including the increased 2026 development and acquisition targets, future properties could be delivered into less favorable conditions and weigh on occupancy, rental rates, and FFO growth." Construction and financing costs are rising and management acknowledges cap rate pressure. Even so, Q3 metrics do not yet show this risk having a material impact. Portfolio occupancy is 96.5%, re-leasing spreads are 36% GAAP and 21% cash, and cash same store NOI growth tracks above updated guidance. The share price slipped 1.8% after results, which hints at caution, but the reported numbers still align with healthy tenant demand. The price and this Narrative do not agree. → Uncover what this Narrative says EastGroup Properties is actually worth. EastGroup Properties shows that strong operating results can still face volatile share price reactions. The real opportunity lies in identifying stocks that may be undervalued before the market reassesses them. - Company 1 - 41% below our estimate - targets device trade ins where policy changes and consumer behavior support higher quality used inventory. - Company 2 - 23% below our estimate - focuses on AI data center demand as customers shift key programs into expanded manufacturing capacity. - Company 3 - 33% below our estimate - connects its outlook to accelerating demand for AI chips and supporting software relied on by large buyers. Three companies from the same screener. Open the full list of 29 companies trading below our fair value estimates → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EGP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - FFO per Share (Q3): $2.45, $0.40 above guidance midpoint, up 7.9% YoY - FFO per Share (YTD): Up 7.7% YoY - FFO Guidance (Q4): $2.47$2.53 range, $2.50 midpoint, $0.02 above prior projections - FFO Guidance (FY2026): Midpoint raised $0.06 to $9.65 per share, up 7.5% over 2025 - Same-Store NOI Growth (Cash, Q3): 7.1%, 170 bps above projections - Same-Store NOI Growth (Cash, YTD): 8.2%; FY guidance midpoint raised 70 bps to 7.5% - Leasing: 97.3% leased at quarter end - Occupancy: 96.5% portfolio; 97% same-store at quarter end - Average Month-End Occupancy: 96.9% same property and 96.1% portfolio, each 50 bps above projections - Re-Leasing Spreads (Q3): 36% GAAP, 21% cash; YTD 36% GAAP, 20% cash - Second-Gen Leasing: Record 2.9 million sq ft of deals completed - Top 10 Tenant Concentration: 6.5% of rents, down 40 bps YoY - Development Starts: 2026 projection raised $65 million to $390 million (record); $285 million started YTD, $105 million planned in Q4 - Acquisitions: Five projects for $320 million in Q3 through October; FY guidance raised $145 million to $360 million - Forward Equity: $485 million in new agreements in Q3; $695 million outstanding at ~$202 weighted average price - Credit Facility: $675 million unsecured facility with $195 million outstanding at quarter end - Debt to Total Market Cap: 14.6% at quarter end - Debt to EBITDA (Annualized): 3.2x - Interest and Fixed Charge Coverage: 14.7x - Gross Capital Proceeds Guidance: Raised from $300 million to $625 million - Q4 Debt Maturities: $140 million unsecured - Warning! GuruFocus has detected 6 Warning Sign with EGP. - Is EGP fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - FFO per share of $2.45 exceeded guidance midpoint by $0.40 and rose 7.9% year-over-year, marking over a decade of consecutive quarterly FFO growth. - Portfolio occupancy remained strong at 96.5% (97.3% leased), with same-store occupancy at 97%, reflecting resilient demand. - Re-leasing spreads were robust at 36% GAAP and 21% cash, with cash same-store NOI growth of 7.1% in Q3 and 8.2% year-to-date. - Development starts guidance increased to a record $390 million, driven by strong leasing momentum (2 million SF year-to-date vs. 1.3 million SF for all of last year). - Balance sheet is exceptionally strong with debt-to-market-cap of 14.6%, debt-to-EBITDA of 3.2x, and interest coverage of 14.7x, providing flexibility for growth. - Construction costs are rising 5-10%, which could pressure development yields and require higher rents to maintain feasibility. - California markets (14% of NOI) remain weak with flat to negative absorption, limiting rent growth opportunities in that region. - Same-store NOI growth is projected to decelerate in Q4 due to difficult comparisons with a strong prior-year period (97.2% occupancy). - Acquisition cap rates have risen 20-30 basis points, and the window for accretive acquisitions may close quickly as interest rates fluctuate. - Data center-related demand (15% of leasing) could be volatile; while currently a tailwind, a slowdown could impact future leasing activity. Q: You raised 2026 development starts again to $390 million. What's driving the increase demand pulled forward or true speculative projects and are you running into competition from data center developers or cost/entitlement delays? A: CEO Marshall Loeb said the increase is largely market pull, including a pre-lease that made one building 100% leased, plus steady progress in lease-up (e.g., Mesa Gateway in Phoenix pushed above 70% with prospect activity). On data centers, he said EastGroup hasn't lost sites to data center developers because their power requirements are so specific; the impact is more of a ripple effect through rising steel and construction costs. President Reid Dunbar added that 500,000 square feet of development leases were signed in the quarter, bringing year-to-date to about 2 million square feet versus roughly 1.3 million for all of last year. Q: With accelerating capital deployment, where are replacement-cost rents trending, what yields should we expect on incremental starts, and how do you view the mix of acquisitions versus development over the next 12 months? A: Loeb said an unexpected acquisition window opened in Q3 as the 10-year rose and cap rates moved, and the company match-funded with equity raised. Construction costs are up roughly 5% to 10% and still rising, which he expects rents to follow. He noted the merchant developer model is getting harder given rising costs and exit cap rates, which should constrain supply. Acquisitions have been immediately accretive, in the top quartile of the portfolio, with rents typically slightly below market. Q: Re-leasing spreads accelerated in the quarter. How much is embedded mark-to-market versus market rent growth, and what are you seeing in major Sunbelt markets and into next year? A: Loeb said results are uneven by market but the Carolinas, Georgia, Texas and Arizona are seeing mid-single-digit rent growth year to date. With tightening markets and rising construction costs, he expects higher rent growth next year and believes re-leasing spreads which have drifted down from their peak will re-inflate. California is stabilizing and recovering modestly, better than a year or two ago. Q: You beat expectations on NOI and occupancy. What drove the outperformance faster openings, fewer fallouts, or bad debt? A: CFO Staci Tyler attributed most of the 50-basis-point occupancy beat to a company-record 2.9 million square feet of second-generation leases signed in Q3, with earlier signings having more impact as tenants occupied. Holdovers added about 10 to 15 basis points, and a few early move-ins helped incrementally. She said the outperformance was broad-based across markets, with retention running higher than projected, and raised the Q4 occupancy guide by 40 basis points. Q: Acquisition guidance was raised to $360 million. What does the pipeline look like heading into 2027, and can you quantify the cap rate increase you're seeing? A: Loeb estimated cap rates have moved about 20 to 30 basis points, call it 25 basis points, to date, and described pricing as fluid. He said it's atypical to have both development and acquisition opportunities, and the team is reviewing awarded deals coming back to market and sellers not getting their pricing. Reid Dunbar added there appear to be pent-up sellers who bet on lower rates earlier in the year, but EastGroup won't lower its bar and will stay disciplined on opportunistic, strategic deals. Q: Retention has run unusually high all year. Where can you push rents, and where are you prioritizing occupancy? A: Loeb said EastGroup typically prioritizes occupancy and takes a dollar-cost-average approach to leasing at market. Retention has been about 79% year to date versus a typical 70% to 75%, which he called surprisingly high for a good economy. Rents are growing fastest in markets with data center and advanced manufacturing demand Texas, Atlanta, the Carolinas and Phoenix while California (14% of NOI) remains the weakest, with Oakland and Otay Mesa still seeing flat to negative absorption. Q: What percentage of the portfolio can push rents, and how wide will the gap be between your best and worst markets over the next 12 months? A: Loeb estimated about 90% of the portfolio can push rents, excluding much of California. He expects the worst markets to be roughly flat next year and the best to see low-double-digit growth. COO Brent Wood added that rent growth is broad-based across Texas, Florida and the Carolinas, with California lagging after its hot run but improving LA has had four consecutive quarters of positive net absorption. He sees more upside than downside pressure on the current ~20% cash and mid-30% GAAP spreads. Q: You bought a ground lease at DFW. How do you underwrite ground leases and their resets? A: Loeb said the portfolio is 95%-plus fee simple and ground leases are used only strategically where locations are irreplaceable. The DFW airport leases are 40-year terms where the ground rent substitutes for taxes and is currently lower than the tax rate, though resets exist and are underwritten over the full lease term. The other example is a tribal lease in Arizona where no fee-simple land is available. He noted the DFW asset is a secured yard with a brand-new warehouse leased to a large public logistics company, priced to reflect the ground lease. Q: How much of development leasing came from data center suppliers this quarter, and what's your view on Amazon's Project Mercury? A: Reid Dunbar said about 135,000 square feet of data center-related leases were signed in the quarter, and roughly 15% of year-to-date new leasing activity has been data center related. On Project Mercury, he said it's still early stages, but the described need for 100,000 to 200,000 square foot facilities in infill locations fits EastGroup's portfolio and strategy well. He cited data centers, e-commerce, advanced manufacturing and local-economy demand as tailwinds. Q: Bad debt sounds stable. Given higher rates, are there tenant types or geographies you're watching more closely? A: Tyler said bad debt is steady at roughly 30 to 35 basis points of revenue, in line with historical averages, and the tenant watch list is normal with tenants rolling on and off. She noted a spike in California 3PL bad debt a couple of years ago but For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Performance outperformance was primarily driven by record-setting leasing activity, with 2.9 million square feet of second-generation deals signed in the quarter. - Management attributes the portfolio's resiliency to a highly diversified rent roll, with the top 10 tenants representing only 6.5% of total rents. - Strategic positioning is benefiting from long-term secular trends including population migration to the Sun Belt, e-commerce growth, and advanced manufacturing. - The operating environment remains healthy with broad-based demand, particularly for modern, functional buildings located near end consumers. - A significant new demand driver has emerged from data center suppliers, which accounted for approximately 15% of new leasing activity year-to-date. - Management noted that rising construction costs and tighter liquidity for regional competitors are constraining new supply, increasing the value of EastGroup's entitled land and development platform. - Guidance for 2026 FFO was increased to a midpoint of $9.65 per share, reflecting a 7.5% increase over 2025 results based on sustained occupancy and rental growth. - Development starts guidance was raised to a record $390 million, driven by strong market pull and specific pre-leasing opportunities within the pipeline. - Management expects rent growth to potentially accelerate in 2027 as rising construction costs and limited supply force market rates higher. - The company plans to settle $695 million in forward equity share agreements to fund near-term investment activity and address $140 million in Q4 debt maturities. - Acquisition strategy remains opportunistic, focusing on assets that are immediately accretive and fit the top quartile of the existing portfolio's growth profile. - Construction costs are estimated to be up 5%-10% due to rising prices for steel, diesel, and labor competition from large-scale data center and manufacturing projects. - The company successfully utilized a 'certain closer' reputation to secure acquisitions at higher yields as the buyer pool thinned due to capital market volatility. - California remains the most 'choppy' market, representing 14% of NOI, though management noted recent stabilization and four consecutive quarters of positive net absorption in L.A. - Ground lease acquisitions, such as a recent DFW airport site, are used selectively for irreplaceable locations where the lease payment serves as a tax substitute. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Growth is driven by 'market pull' rather than speculative builds, highlighted by a 500,000 square foot development leasing quarter. - Management noted that they are effectively 'running out of inventory' in high-demand markets like Phoenix. - Management observed cap rates moving up by approximately 20-30 basis points, creating a window for disciplined acquisitions. - The company is targeting stabilized straight-line yields around 6.5% for recent acquisitions, often involving assets with slight vacancy to capture upside. - Data center demand is primarily coming from the 'supplier network' (HVAC, electrical) rather than the data centers themselves. - Management views this as a material tailwind that could potentially double or triple as planned data center capacity in the Sun Belt is built out. - Management anticipates 'low double digit' rent growth in the best markets and 'flat' performance in the weakest (primarily parts of California) for the coming year. - The company maintains a 20% cash and mid-30% GAAP re-leasing spread, with pressure currently skewed to the upside.

Image source: The Motley Fool. Thu, Oct. 22, 2026 - Investor Relations - Casey Edgecombe - Chief Executive Officer - Marshall Loeb - President - Reid Dunbar - Chief Financial Officer - Staci Tyler - Chief Operating Officer - Brent Wood Operator: Good morning, ladies and gentlemen, and welcome to EastGroup Properties' third quarter 2026 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, October 22nd, 2026. I would now like to turn the conference over to Casey Edgecombe, Investor Relations. Please go ahead. Casey Edgecombe: Good morning, and welcome to EastGroup Properties' third quarter 2026 earnings conference call. Today's call will be led by Marshall Loeb, CEO, Reid Dunbar, President, Staci Tyler, CFO, and Brent Wood, COO. Before we begin, I'd like to remind everyone today that our conference call will contain financial measures such as PNOI and FFO that are non-GAAP measures as defined in Regulation G. Please refer to our most recent financial supplement and our earnings press release, both available on the investor page of our website, and to our periodic reports furnished or filed with the SEC for definitions and further information regarding our use of these non-GAAP financial measures and a reconciliation of them to our GAAP results. Please also note that some statements during this call are forward-looking statements as defined in and within the safe harbors under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements in the earnings press release, along with our remarks, are made as of today and reflect our current views of the company's plans, intentions, expectations, strategies, and prospects based on the information currently available to the company and on assumptions it has made. We undertake no duty to update such statements or remarks, whether as a result of new information, future or actual events, or otherwise. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Please see our SEC filings, including our most recent annual report on Form 10-K, for more details about these risks. Now I will hand the call over to Marshall. Marshall Loeb: Thanks, Casey. Good morning. I want to start by thanking our team. We added a strong quarter to what's been a solid year so far. I'm proud of the results achieved, and our quarterly results demonstrate the portfolio's quality and the resiliency within the industrial market. Some of our quarterly stats were funds from operations for $2.45 per share, $0.04 above our guidance midpoint, and up 7.9% from third quarter 2025. Year-to-date, FFO per share is up 7.7%. For over a decade now, our quarterly FFO per share has exceeded the FFO per share reported in the same quarter prior year. Truly a long-term growth trend. Quarter end leasing was 97.3%, with occupancy at 96.5%. Also notable was quarter end same-store occupancy at 97%. Our quarterly re-leasing spreads were 36% GAAP, 21% cash for leases signed during the quarter. Year-to-date results were similar at 36% and 20% GAAP and cash, respectively. Cash same store NOI exceeded our expectations for the quarter at 7.1% and stand at 8.2% year-to-date. Finally, we have the most diversified rent roll in our sector, with our top 10 tenants falling to 6.5% of rents, down 40 basis points from third quarter last year. We target geographic and tenant diversity as strategic paths to stabilize earnings regardless of the economic environment. In summary, we're pleased with our results, which again allow us to raise earnings guidance. We remain excited about the quantity of the leases we signed during the quarter, along with the ongoing continued prospect activity. Reid will now walk you through more of our quarterly summary. Reid Dunbar: Thank you, Marshall, and good morning. We delivered strong Q3 results, setting numerous company records across all three pillars of our business: operations, development, and investments. Industrial demand has remained steady, and the operating environment continues to be healthy. The demand we're seeing for our properties is diverse and broad-based. That demand is supported by multiple tailwinds, including e-commerce, advanced manufacturing, and data center related uses. Tenants increasingly want to be near the end consumer in modern, functional buildings, which aligns well with EastGroup's portfolio. The end result, we completed 2.9 million square feet of second gen deals, setting a new record for EastGroup. In development, the supply environment for shallow bay industrial remains favorable. The economics of new development are becoming more challenging for many regional competitors, which should constrain new supply. As a result, the value of our entitled land, local market expertise, and proven development platform keeps rising. Leasing momentum with the development pipeline gave us the confidence to increase our projected development starts to $390 million, which would be a new record for EastGroup. We also added to our land position this quarter, acquiring three sites. Two sites will expand our development in existing parks, and the third will support a new development in South Florida, which is one of our key growth markets. Lastly, on the investment side, during the third quarter and through October, we acquired five projects for a total investment of $320 million. Our strong financial position allowed us to take advantage of tighter liquidity in the capital markets. Each of these projects deepens our presence in existing markets, strengthening our platform over the long term. Staci will now speak to several topics, including assumptions within our updated 2026 guidance. Staci Tyler: Thanks, Reid, and good morning, everyone. We are proud of our strong third quarter results, reflecting excellent execution by our team, the quality of our portfolio, and the strength of the markets in which we operate. As Marshall noted, third quarter FFO exceeded our guidance midpoint, primarily due to higher than projected same property net operating income. On a cash basis, we exceeded our same PNOI projections by 170 basis points, achieving 7.1% growth compared to third quarter last year. Average month-end same property occupancy of 96.9% exceeded projections by 50 basis points, and our average month-end portfolio occupancy of 96.1% also exceeded projections by 50 basis points. Our occupancy outperformance was complemented by continued strength in new and renewal re-leasing spreads. In addition to a strong quarter of operations, we were also active in deploying capital into both development projects and accretive acquisition opportunities. In order to fund these and our planned fourth quarter investments, we entered into forward equity share agreements totaling $485 million during third quarter. Combined with forward agreements already outstanding from activity earlier this year, we now have $695 million in forward equity share agreements outstanding at a weighted average price of approximately $202 per share. Our financing plans for fourth quarter include continuing to utilize our $675 million unsecured bank credit facilities, which had a balance of $195 million outstanding as of quarter end. As fourth quarter progresses, we plan to settle forward equity share agreements in order to make repayments on our unsecured bank credit facility, all to fund our near-term investment activity, including $325 million in recent property acquisitions, along with land acquisitions and spending related to increased development starts, in addition to $140 million in fourth quarter unsecured debt maturities. Our balance sheet remains strong and flexible, with debt to total market capitalization of 14.6% at quarter end, third quarter annualized debt to EBITDA ratio of 3.2x, and interest and fixed charge coverage of 14.7x. This financial strength allows us to pursue attractive development and acquisition opportunities in this ever-changing investment environment. Looking ahead to fourth quarter, FFO is estimated to be in the range of $2.47-$2.53, with a midpoint of $2.50 per share, which is $0.02 ahead of our previous fourth quarter projections. For the year, we increased the midpoint of our 2026 FFO guidance by $0.06 to $9.65 per share, which represents a 7.5% increase over 2025 actual results. We are projecting strong cash same property net operating income results to continue, and we raised the midpoint of our guidance assumption by 70 basis points to 7.5% for the year. These strong projections are driven by rental rate increases on in-place and budgeted leases and expected same property occupancy of 97%, which is 30 basis points ahead of our prior guidance. Projected average month-end occupancy for our operating portfolio is now 95.9%, a 20 basis point increase over prior guidance. As Reid mentioned, we are pleased to increase our projected 2026 development starts by $65 million to $390 million. Year-to-date, we have started construction of $285 million of development projects, and we are planning for $105 million of starts in the fourth quarter. The overall increase in development starts reflects the strength of both development leasing we have accomplished year-to-date and the current leasing environment. The projects already underway, together with those expected to begin in the fourth quarter, provide a meaningful runway for future earnings growth as these investments lease and stabilize. We also increased our acquisitions guidance by $145 million to $360 million for the year. To support our increased investment activity, we raised our 2026 gross capital proceeds guidance from $300 million to $625 million. We will continue to monitor the capital markets and remain flexible as the year progresses. Our rent collections currently remain healthy, and our tenant watch list is steady. Now, Marshall will make some final comments. Marshall Loeb: Thanks, Staci. In closing, we are excited about our performance year-to-date and the momentum it is carrying us towards 2027. Market demand has been steady for several consecutive quarters, and regardless of the environment, our goals are to drive FFO per share growth while raising portfolio quality. If we can do those, we will continue creating NAV growth for our shareholders. Stepping back from the near term, I like our positioning as our portfolio is benefiting from several long-term positive secular trends, such as population migration, e-commerce growth, advanced manufacturing, and more recently, data center suppliers in certain markets. We also have a proven management team with a long-term public track record. Our portfolio quality in terms of buildings and markets is continually improving. Our balance sheet is stronger than ever, and we are upgrading our diversity in both our tenant base as well as our geography. With that, we would like to open up the call for any questions. Operator: Thank you. Ladies and gentlemen, we now begin the question-and-answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. We ask analysts to limit themselves to one question. If your question has been answered and you would like to withdraw from the queue, please press star followed by the number two. If you are using a speakerphone, please lift your hands before pressing any keys. One moment please, while we compile the roster. Your first question comes from Blaine Heck with Wells Fargo. Please go ahead. Blaine Heck: Great. Thanks. Good morning. You took development starts up again to $390 million. Can you just talk about the drivers behind that increase? How much of it is demand pulled versus true speculative projects that you are comfortable launching at current economics? Kind of tied to that, are there any markets where you are running into competition from data center developers or where construction costs or entitlement timelines are keeping you or competitors on the sidelines, even with the demand that you are seeing? Marshall Loeb: Hey, Blaine, good morning. It is Marshall. Maybe I will take the second one first. With data centers, usually their requirements are so specific with power and things, so we really haven't lost out on sites to data center development that I am aware of. What we do see, though, with some with the data centers and the advanced manufacturing is just steel, rising construction costs, and things like that. So it is more of a ripple effect from them. That is where we are feeling their presence. I would say the good news is our developments, we raised best $65 million, as Reid mentioned, hopefully it is a record. It is really market pull. We got a pre-lease opportunity signed within our pipeline, so that building is 100% leased, and that was one of the bigger jumps. Just kind of steady progress within what we had, kind of what is in lease up, several new starts. So it was really the team running out of inventory in our Mesa Gateway in Phoenix, for example. They signed a good three, four, five leases during the last quarter. So that pushed us up over 70% with prospect activity. So it was a little bit of a mix of a pre-lease, and then just a lot of 20,000, 50,000, 60,000 ft leases that kind of pulled that ticket for the next. Look, I am hopeful we have got some other opportunities we are working on that are pre-lease that, whether it is late this year or early next year, that we can kind of keep that momentum moving forward. Reid Dunbar: Yeah, Blaine, this is Reid, and I would just add as far as being pulled, we signed 500,000 sq ft of development leases in the quarter, which takes us to right at 2 million square feet for the year. To put that in perspective, year-to-date, 2 million square feet compares to a full year of last year, right at 1.3 million square feet. It is higher than 2024, higher than 2023. We are seeing a resurgence in development leasing, and the key to our strategy is being able to continue to feed that. With the teams in the field, putting us in a position with the right land sites, we can continue to pull these projects out as demand dictates that. Operator: Thank you. Your next question comes from Craig Mailman with Citi. Please go ahead. Craig Mailman: Hey, good morning. Just on the accelerating capital deployment piece here, I mean, the development sounds like there is good demand there. It looks like yields are rising on new starts. Maybe talk a little bit about where replacement cost rents are trending in your market. I know you talked about construction costs going higher, but where we should expect kind of that traditional 7%, 8% yield kind of trending on incremental starts that pass investment committee. Then just how you view the balance of acquisitions, and given sort of the uncertainty there on where cap rates are going, what that mix could look like over the next 12 months, particularly given your capital availability. Marshall Loeb: Hey, Craig, good morning. It is Marshall. Catch me if I miss something in your comments. Maybe I will start on the acquisitions a little bit, and that is a window we did not expect. Earlier in the year, if we met at, say, Nareit in June, we told people we thought we may miss our acquisition goals rather than exceed it. That the market had been tighter than we expected it in terms of kind of where borrowing costs were and equity pricing. Then it really felt like in third quarter, and it always seems to go this way, when the window opens, it gets flung open, and then it slams shut. We got an acquisition or two, and we kind of internally said it feels like with the rise in the 10-year, cap rates are moving. Staci and her team did a nice job of match funding it with all the equity we raised, which kind of has we've placed it between acquisitions, developments, and then some debt maturities coming up this quarter. We've continued to see cap rates rise, not on every transaction. There's a few I can think of, Florida, Arizona, where the market didn't seem to really blink, and I think it's still playing out. Then there's one or two, our later acquisitions were at higher yields where we bid, but usually the brokers will give you guidance as you go through the rounds, and we didn't move our pricing up, really kind of saying, "This price works for us. We think cap rates are moving," and we still got the opportunity as we like to say you may not like our price, but we're a certain closer. That buyer pool seems thinner than it was. You're right. Then on the development side, construction costs are up probably 5%-10% and continue to move up. I don't think between diesel cost and steel that I mentioned, and then just labor being more in demand with all the data center, advanced manufacturing, everything else we're seeing in some of our markets, that construction costs will rise. I think rents have to follow that, or they will, with the demand and just rising construction costs. The other complicating factor, and I'm thankful we've been able to raise the equity. When we raise it, we always make sure we have the uses. What we're buying, we've stayed disciplined on. It's immediately accretive. It fits the top third, top quartile of our portfolio, and we've bought with rents typically slightly below market, in a market where we feel like rents are going to rise because of construction costs over the next few years, faster than they have the last two years. So we feel good about that. Then I think if you're a merchant developer, I don't really know what'll slow down supply somewhat, although it's picked up a little bit, is I don't know how to solve with all those rising costs and rising treasuries for your exit cap rate. It's just a harder model for them to make work. They've got to really push rents and then hope they don't lose it on their exit as a cap rate. Well, we're not looking for that exit a year, a year and a half from now. That's a long answer, but I hope I hit everything. Operator: Thank you. Ladies and gentlemen, as a reminder, we ask analysts to limit themselves strictly to one question. Thank you. Your next question comes from Samir Khanal with Bank of America. Please go ahead. Samir Khanal: Thank you, everybody, and good morning. Marshall, your spreads accelerated in the quarter. I guess, how much of that is coming from, as you think about embedded mark-to-market versus actual market rent growth? I guess, just to expand a little more, what are you seeing in terms of market rent growth in some of your major markets, especially on the Sun Belt side? I guess what is your view into next year? Thanks. Marshall Loeb: Good morning, Samir. Good question, and as you would expect, a little uneven across our markets, but probably Carolinas, Georgia, Texas, Arizona. Not that Florida is bad. We are seeing pretty good rent growth, kind of year-to-date, maybe mid-single digits. I think with demand, we are full. Our markets are tightening up, and the rising construction costs that I mentioned, we would expect higher rent growth next year. I am not sure you are seeing it in our releasing spreads. It certainly helps. I think that ramp up is still more to come in terms of our releasing spreads. It has drifted down over the last couple of years. Still healthy numbers, but down from its peak, but I think we will re-inflate given where the environment is today. We are happy to see those rising rents, and even California stabilizing and recovering a little bit, certainly sub-market by sub-market there, but it is better than it was two years ago or a year ago for sure. Operator: Thank you. Your next question comes from Michael Mueller with JPMorgan. Please go ahead. Michael, your line is open. Michael Mueller: Sorry about that. Had a phone issue here. Staci, you talked about beating your expectations on NOI and occupancy. Can you drill down a little bit more on that? Would you chalk it up, is it faster openings, less planned fallouts, or just something tied to bad debts? Staci Tyler: Sure. In terms of our actual third quarter occupancy outperformance? Yes. We signed a company record of 2.9 million square feet of second generation leases during third quarter. That certainly helped drive most of the outperformance. I would say the large majority of that 50 basis point occupancy outperformance is attributable to the new and renewal leases that we signed. Obviously, those that were signed earlier in the quarter had more of an impact as those tenants occupied as the quarter progressed. We did have a few tenants, a couple I can think of, that held over by a few weeks or maybe a month past their lease maturity date. That accounts for about 10-15 basis points of our outperformance. The large majority was lease signings, and then we had a couple instances also where we were able to get a tenant in a space a few weeks early or a month early, and that helped incrementally as well. I would say overall, it's really just due to the core strength of the operating environment and the continued demand that we're seeing from a broad range of tenants and across a broad range of markets. You can't really point to two or three markets that drove that outperformance. It was broad-based. If I were to list the markets, it would take me a minute to list all of the markets where we saw some outperformance. We're pleased with that, pleased with our tenant retention being higher than we had projected. Signing those renewal leases and keeping tenants in the space certainly helps continue to drive that outperformance in occupancy as well. It seems every quarter that has gone by this year thus far, we have outperformed our projections, and we continue to do the best we can as we project. We do, when we look to fourth quarter, we do know that, call it 10-15 basis points of that occupancy that was holdover occupancy, but that is not as long-term as the rest of our outperformance. We have increased our occupancy guide for fourth quarter by 40 basis points, and that is really due to those leases that we signed during third quarter now being occupied. Very pleased with the strength of the demand that we are seeing across a variety of our markets. Operator: Your next question comes from Todd Thomas with KeyBanc. Please go ahead. Todd Thomas: Yeah. Hi. Thanks. Good morning. I just wanted to go back to acquisitions, and the increased guidance there, which I think accounts for all of your year-to-date acquisition activity at this point. What is the pipeline like today as you begin to shift focus to 2027? Do you see the pace of acquisitions sort of maintaining or picking up from here? Then with regard to the increase in cap rates that you mentioned, Marshall, can you just quantify that a little bit, what you are seeing in instances where you are seeing higher yield opportunities? Marshall Loeb: Sure. Hey, Todd. Good morning. I would say on cap rates, it is fluid, and that it is still a moving target a little bit, but probably 20-30 basis points, call it 25 basis points is what we have seen to date. You are right. Everything we have in our guidance, we have closed on, and Staci and team have thankfully funded. Look, if we bought something between now and year-end, it will move our numbers in 2027, but not 2026 as much, just given where we are in the year. I would say, and it is atypical that we can, usually there is developments a good opportunity or acquisitions. It is atypical to have both opportunities. We've certainly spent more time in the last two to three weeks, Reid, Brent, and I, with the teams in the field looking at acquisitions, some things that have been awarded that have come back to market, some things that people aren't getting the pricing and opportunities. I think the key for us is, one, to make sure we don't want to run up our line or do things to get ourselves in a tricky financial position. We want to make sure our stock price supports if we fund it via equity. We can via debt now, but we'll look at both avenues, and make sure mainly we just stay disciplined. If it's something that improves the growth profile, meaning top quartile of our portfolio and is accretive. What we've bought also has had a little bit of vacancy, a few of them have, kind of call it 90%. So that's helped us get a little bit better premium yields. It feels like that window's still open based on all the calls we're seeing from the field, and then it always feels like it'll close quickly. So you're right. Cap rates are moving higher, but it's given us an opportunity on the flip side to really play offense and raise our growth profile as well. Because usually, we get outbid on things and we're better off building them. But right now we're able to kind of accretively buy some great projects and continue building as well because the demand's been steady for several quarters now. Reid Dunbar: Yeah, Todd, this is Reid. I would add, we're raising the bar. We're seeing more opportunities, and it feels like there's some pent-up sellers where they were hoping maybe earlier in the year that they would bet on lower interest rates and it obviously did not go their way. So we're seeing more activity, more deals, but we're only going to place bets on acquisitions that are opportunistic and strategic for us. So we're not going to lower our bar and make sure we have good liquidity to access to our capital. So between those, we'll be disciplined, as Marshall said, and find the right opportunities if they present themselves. Operator: Thank you. Your next question comes from Tom Carter-Wood with U.S. Bancorp. Please go ahead. Tom Carter-Wood: Excellent. Thank you, and good morning, everybody. Marshall, I wanted to go back to some of your earlier comments about leasing spreads, that tenant retention, Staci mentioned it kind of running higher this quarter, and it has been running higher all year, which is a bit surprising. I know that can fluctuate. Maybe where are you able in your portfolio to push rents right now? Where are you still prioritizing occupancy? Marshall Loeb: Yeah. Good morning, Tom. I do not know that look, we probably typically always prioritize our occupancy. It is hard to know. Look, there are always things rolling, more of a dollar cost average of let us get spaces leased at market and make the best deal we can and move on. You are right, our retention rate, look, if someone were just picking up coverage of EastGroup, I would say, and really probably any REIT, 70%-75% retention, and we have been running almost 79% year-to-date. So it is great in terms of re-leasing costs and keeping the portfolio full, but it has been surprisingly higher for a longer period of time than I would have guessed in a good economic environment. Usually, it is higher in a bad environment. Our rents are probably growing fastest, it is those markets that have the data center development and the advanced manufacturing. It seems like it is the same ones, meaning the Texas markets, Atlanta, a little bit in the Carolinas, and in Arizona, specifically Phoenix. We are 100% leased now, thankfully, in Phoenix and things like that. It is not that Florida is bad, it is just maybe not quite, and probably the market where thankfully, demand has turned positive, but rents are not there yet, are still the California markets. It really depends on some areas of markets in California. If it is Class A and it is near Defense or advanced manufacturing, those rents are good or near the Silicon Valley. But by and large, Oakland and South San Diego, Otay Mesa, some of those markets are still flat to negative absorption, unfortunately. So those are probably our weakest markets, and those are California's 14% of our total NOI. We are 99% leased in L.A. Thankfully, we do not have a lot of vacancy. But those markets are choppy. Our traditional Sun Belt markets, which is kind of the bread and butter, are doing pretty well, and we are able to push rents there and stay full. Operator: Thank you. Your next question comes from Nick Thillman with Baird. Please go ahead. Nick Thillman: Hey, good morning. Maybe following off that comment you just made, Marshall, what percentage of the portfolio do you think you have the ability to push rents? Then as we look at your best performing market rent growth over the next 12 months versus your worst performing, what do you think that gap will be between those market performance? Marshall Loeb: I think our best opportunity, it's probably not fair, but I'd say 90% we can push rents. I'm calling California 14% and probably not all of that. There's probably pending. Some buildings we'll be able We'll have embedded rent growth, but really margin. Then I would, with the preface that I'm not great at predictions. Someone said, if I were, you're welcome to take my yacht to my island with me anytime. But I would say maybe the worst markets will be pretty flat next year, and the best will be low double digits. Brent Wood: Yeah, I think This is Brent, and good morning, Nick. I think the exciting thing, and you see it on our schedules, is that I don't think there's one or two markets that stand out as being the only ones that we can push rents. Going back a few years ago, where L.A. and some of the California markets ran so hot and pushed so far above the other markets. But it's very broad-based. You see our Texas, Florida, Carolina region numbers being very consistent in terms of rent growth. As Marshall alluded to, the California markets have lagged after their hot run. But it's broad-based, really. I think we're going to be in a position to push in most all of our markets, save and except maybe that 14% in California. By and large, those are improving. L.A.'s had four consecutive quarters of positive net absorption. Really, South Bay, San Gabriel Valley, Inland Empire West, all with very strong results in vacancy. Inland Empire East, still a little flattish and about a double the vacancy rate than the rest of that. I think that's the exciting part, it's broad-based. In terms of the percentage and what I, like Marshall said it, we've been very consistent with our portfolio with that 20%-ish cash increase and that mid-30% gap. That's been sticking. Feels like there's more pressure to the upside with that, considering rise in cost and the markets are still healthy. So it feels like there's more wind at our backs to push that versus not. Of course, that can change based on conditions. But we feel good all across the portfolio about our ability to modestly push. Operator: Thank you. Your next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead. Alexander Goldfarb: Hey, morning. Morning down there. Question actually on specific deal that you guys did. At DFW, you bought a ground lease, and I think you have a few other ground leases in the portfolio. Just given that's caused some angst with other REITs, especially here in New York, just want to get a better sense of how you look at ground leases, what the reset structures are, if they're deals. Basically, it's the resets that seem to create the issue with these. So I'm just sort of curious what the reset is here and how you underwrite them so that it's truly an investment asset versus a defined holding period asset. Marshall Loeb: Hey, Alex, it's Marshall. Good morning. On the ground leases, look, we're 95%+ fee simple. So yeah, you're right, we prefer to own it. Where we do have ground leases, we've tried to be extremely strategic about them. We've sold some, and really, I can kind of think of two places where we've picked up ground leases. It would be, you're right, at the DFW Airport. Those are 40-year leases. The ground lease payment is a substitute for your taxes, and those are often lower than the tax rate. So you actually have a cost advantage currently, and then they do reset, though. You're right, there is a reset, but we look at that over a longer period of time over the term of the lease. And the tenants like it because they can fix their cost up until whenever the reset hits. The other place, it makes sense when you think about it, is we have a tribal lease in Arizona where there's literally no land because anything that's fee simple has been built 20 mi in either direction, and we picked up a tribal lease there. It's really land that can't be replaced. I've made several trips to the Pima Indian Reservation in Scottsdale and things like that. Unsuccessfully, I'll add as well. We've tried to be very strategic where these are irreplaceable locations, but they just happen to be on a ground lease. Even that said, if it's a great location, we've sold some to manage that number down and keep it a very minimal part of the portfolio. In one where, if we have one, we better have a really good reason, is kind of how we've looked at it. Being near the cargo terminal and one of the top 5-10 airports in the country, or being on tribal land in a city that's sprawled way out beyond that tribal land today and continuing on. That's how we think about it. You're right, it's not our typical business, but this was one that was a secured lot, yard bonded, brand new warehouse leased to a large public logistics company. We felt like we got the pricing that reflected the ground lease as well on it. Operator: Thank you. Your next question comes from John Kim with BMO Capital Markets. Please go ahead. John Kim: Thank you. I wanted to ask on some of the demand drivers that you're seeing today. If you could provide an update on how much the data center suppliers were part of your development leasing this quarter versus the 20% last quarter. On e-commerce, just wanted to see if you could provide any views on Amazon Project Mercury, in terms of what you're expecting in terms of impact to your markets overall or to your portfolio specifically. Reid Dunbar: Yeah. Morning, this is Reid. As far as data center related uses, we signed about 135,000 sq ft in the quarter. Year-to-date, that's about 15% of our overall activity on new leases has been data center related as we defined it. That continues to be one of the tailwinds of the many. I am glad you brought up the e-commerce, because it does feel like e-commerce will see some acceleration. The Amazon Project Mercury, we have read about it. It feels like it is still early stages, but the way it is described between the need for 100,000-200,000 sq ft facilities and infill locations, feels like that would fit our portfolio and our strategy really well. I think between the data center, the e-commerce, the advanced manufacturing, plus just our stable overall business of servicing the local economies that we are in, it feels like we have got some great tailwinds to continue to drive demand into the future. Operator: Thank you. Your next question comes from David Rodgers with Raymond James. Please go ahead. David Rodgers: Oh, hey, good morning, everybody. You covered a lot already. Maybe go back to both Marshall and Staci. I think you both addressed bad debt at different points in time in the call, and it sounds very stable today. I guess historically with higher rates, are there any particular parts of the portfolio that you would watch more closely, whether that is tenant-based or location-wise, just given the higher rates? Staci Tyler: Sure, Dave. Good morning. Yes. So you are correct that our bad debt has been very steady and in line with our historical average of around 30-35 basis points of revenue. So we have not seen any deterioration there, have not seen much of a change. The tenant watch list remains steady. Every quarter, we have a few new tenants roll on the watch list and a few tenants roll off. So no concerns, I would say, noted there. In terms of the impact of the overall economy and interest rates on certain tenant types or geographies. There are times, a couple of years ago, we did see a spike in bad debt in the state of California, specifically with 3PLs in California. We have not seen that since. So we are not detecting anything going on right now with any particular segment of our tenant industries or any geography. 3PLs, as you know, can come more quickly and leave more quickly than some other tenant types. They can ramp up or contract pretty quickly compared to other tenants that are stickier. We are not seeing that right now, and as long as the consumer spending and consumer consumption remains strong, then we do not anticipate issues there. So, we are not detecting in any near or medium term or expecting any issues other than when you have 1,700 leases, you are always going to have a tenant's business that goes wrong for one reason or another. But we are not anticipating any certain geography or tenant type to cause issues for us. Operator: Thank you. Your next question comes from Rich Anderson with Cantor Fitzgerald. Please go ahead. Rich Anderson: All right. Thanks. Good morning. So I want to talk a little bit more on the data center side of demand. Particularly given the political and social pushback, so on and so forth. If it is a here to stay long-term demand factor, I do not know what to say about the fate of humanity, but I think the industrial REITs will be good. But you are saying 15% of your leasing has been tied to data centers. If in its absence, for whatever reason, that slows down or plateaus, what does the industrial space fundamentally look like without this data center sort of new demand driver? Was there a plan B for this space that another form of demand would have taken it? Or could there have been just a less effervescent type of fundamental picture for industrial in the absence of this data center component? Thanks. Marshall Loeb: Hey, Rich. Good morning. It's Marshall. You're right. I would say, look, I'd love to say we saw this all coming, and we built buildings to accommodate this data center kind of wave of new demand. The reality is they found us more than we found them. The land we acquired, our intentions were our traditional users, and in large cases they are. It's an HVAC contractor whose business has grown. It's an electrical company, and their business is growing because they're serving the data center. Our plan B is really what was our plan A, so the tenant improvements and the leases don't look any different, or the buildings any different than the traditional EastGroup buildings. Thankfully, all but one of the data center leases that I can think of in Atlanta were related to ongoing service to a data center rather than construction. If it all went away, obviously we'd get the vacancy. There are different lease expirations over time, things like that. We'll backfill them with our traditional users or whatever the new It seems like for us, thankfully, every few years, whether it was e-commerce and then green energy or online pharmaceutical fulfillment to a little bit of a degree, and now data centers and advanced manufacturing. There's a new user type that finds flexible last mile distribution buildings. We'll latch on to whatever the next wave is. It's been a nice shot in the arm this year. As long as we don't make our buildings too wonky or try to be next to a data center that might close down the road or take over humanity, as you said, our hope is we'll kind of manage our way through it. To date, it's about 1.5% of our revenue. We aspire to have a concentration issue or a problem there. You're right, we're monitoring it, and we're not doing anything differently than you've seen us do for the last five years. Reid Dunbar: Yeah, Rich, I would just add, as I mentioned, only 135,000 sq ft of data center related leases this quarter, and we still had a record quarter that would have been close to a record even without that. Our diversification in geography, product, location, will service all types of uses, not just data center. As Marshall mentioned, we haven't been specifically targeting those. They've found us. If it does slow or go away, I think we still have plenty of growth drivers behind us that will provide good opportunities for the years to come. Operator: Thank you. Your next question comes from Jon Petersen with Jefferies. Please go ahead. Jon Petersen: Oh, great. Thank you. I wanted to ask a question on same-store NOI. I realize you're starting from a very high number and you raised guidance, but it does imply a deceleration into the fourth quarter. Maybe if you could talk us through the puts and takes on stepping from 3Q to 4Q on same-store NOI. Then probably maybe related, same-store expenses were up a little over 4%. Just curious how much of that is one time and how much of that is just higher inflation in the economy showing up in that number. Thank you. Staci Tyler: Sure, Jon. Yes. I'll agree with your comment. We're very pleased that our same store has been so strong thus far this year, and we're pleased that we've been able to increase our annual cash same store PNOI guidance by 70 basis points to 7.5%. That's really due to continued strong outperformance each quarter of the year thus far. We're projecting additional outperformance in fourth quarter compared to our prior projections. Our projections, as we noted earlier in the year, when we looked at the first half of 2026 versus the second half of 2026, compared to occupancy in 2025. The second half of this year, the second half of 2026, had very strong comps in terms of occupancy from the back half of last year. So, we feel very good about our same store occupancy in third quarter and projected for fourth. We're just comparing to a very strong back half of 2025. So we're not projecting a deterioration in terms of our 2026 performance so much as the comps just get more difficult as the year progresses. When we compare fourth quarter same store occupancy projections this year to last year, we're comparing against a 97.2% average same store occupancy last year. So that's just a difficult comp. We've increased our projection for same store growth in fourth quarter by 100 basis points over our prior guidance. So we feel better about it. All four quarters together, at 7.5% is a very strong year. We hope we keep giving ourselves and you guys tough comps for next year because that's just part of strong performances. You have to compare yourself against it the following year. But we feel good about where we are and definitely not a signal or a sign of things slowing down in fourth quarter. It is really more of just a difficult comparative period when comparing to fourth quarter last year. Operator: Thank you. Your next question comes from Michael Griffin with Evercore. Please go ahead. Michael Griffin: Great. Thank you. I wanted to ask on the leasing pipeline and tenant demand. Curious if you have seen any change in customer decision-making time frames. Is the leasing pipeline maybe geared toward folks that were a little bit reticent to sign a lease that are finally willing to commit? Or is it more sort of organic, broad-based demand? I realize it is a little early, but as the calendar turns next year, do you expect that demand to accelerate or sort of hold steady at these healthy levels? Brent Wood: Hey. Yeah. Good morning, Michael, it is Brent. I think the latter part of what you said probably hits on it to steady. We did have a strong quarter where some leases that had been worked for some period of time. We did have a strong quarter in Phoenix. Four of our, I think, 11 development leases, in fact, were signed in Phoenix. Those were a few deals where we had some spec-ready spaces and the deals made rather quickly, which was nice to see because we had not been seeing much of that quicker decision-making. We've seen that increase some in terms of decision-making. We've seen competition on a few spaces that have helped, and obviously once you have that enter the market, we'd like to see that more pervasive, but just seeing that some has certainly helped, I think. I think as it feels right now and heading to next year, I think your comment of steady feels more in line. As mentioned earlier in the call, the high retention that we've got in our portfolio, which has been great and hitting almost 80%. One of the things that puts a little bit of challenge on the development lease-up side of that is that, the tenants, if they're staying in place, they're not expanding as much and moving into space. I think so far this year, only about 16%-20% of our development leasing has been from expansions. In other years, that's been a little higher. So that could be another possible tailwind if that could pick up with some decision-making. I think steady is a better word. It's just been consistent. It was broad across the markets in terms of rental rate growth. It was broad across markets in terms of where the leases were executed. Talking to the teams in the field, it feels like it's going to continue to be broad-based. It was probably stronger in the eastern markets and in Phoenix, and then maybe to just a slightly lesser extent, maybe in Texas and in California. We like our footprint. We like where we are. We're in high-growth markets. Never hurts to have job growth and population growth, kind of underlying all of this. You look at markets like Houston, Dallas, even Atlanta, Phoenix or Orlando, the growth in those markets just in general. When you go around those markets, you can tell that they're just different than other parts of the country that you go to. So I think steady is a good term, and the team's real focused, and hopefully we can continue a steady momentum into next year. If it swings more positively, we're ready to play into that as well. Operator: Thank you. Your next question comes from Ronald Kamdem with Morgan Stanley. Please go ahead. Ronald Kamdem: Hey, just a quick two-parter. Back to the data center question. I think you did a great job addressing what would happen if it slowed, but if I could ask the other side of that question, is it possible for that to double or triple next year? I would be interested to hear your comments. The second part of the question is, as you take a step back and you look at the portfolio, I think you made some comments about rent growth potentially accelerating this year. My question would be, how much sort of commence occupancy upside and potential, cash leasing spreads upside could we see? Thanks. Reid Dunbar: Hey, Ron, it's Reid. Good morning. On the data center-related question, yeah, you read the news, it feels like it could increase substantially from what people are saying. I think from an EastGroup standpoint, we're well-positioned if that occurs, being that a lot of these areas, where you're seeing the data center growth are in our markets, being Dallas and Houston, Atlanta, Phoenix, Charlotte, Carolinas area. So, fingers crossed that happens. But as we stated earlier, even if it does maintain its current pace or slows, we still feel very confident in the way our portfolio is structured and the other demand drivers that we're seeing and feeling today, and what we think could happen in the years to come as well. As far as the other question, I'll let Staci jump in on that one. Staci Tyler: Sure. In terms of the rent growth projections for fourth quarter, our projections are generally in line with what we've accomplished thus far this year. We're not expecting as market rent growth continues to remain steady and tick up, we're not expecting a dramatic change with our re-leasing spreads, and we're not in a position to speak to next year yet in terms of specifics. But I think you are on track in thinking that if we continue to see, to experience rent growth in our markets, say if they're in the mid-single digits now, if that were to accelerate, then that would certainly impact our re-leasing spreads as well. Marshall Loeb: Ron, I'll pile on this question. When you say in terms of data center suppliers, what makes us optimistic about this tailwind, again, we're not building specifically for it, which is a great way to be able to catch it, but based on what's existing today, when you look at the main markets Reid mentioned, the Texas, Arizona, Atlanta, Carolinas, what's planned and permitted, it's typically about 4x, if I picked a number, versus what exists today. Those supplier networks are still being built out, maybe unlike, say, in Northern Virginia, which is the largest today for data centers. Dallas is forecast to overcome Northern Virginia, and that supplier network has not been settled out. It could be a pretty material. It is a material tailwind already at 20%+ more than I would have expected earlier in the year, and with the potential to really drive demand for us. We will just try to manage it as I hope it is a problem we are dealing with, managing all that demand and how we do not get over-concentrated with it. If what is planned and permitted actually happens, which it sounds like it is from what we read, there is a lot of growth within our data center suppliers. One of the leases Brent mentioned in Arizona, the reason they picked us is because we have extra land for buildings and capacity as they plan their growth. Operator: Thank you. Your next question comes from Michael Lewis with Truist. Please go ahead. Michael Lewis: Great. Thank you. I guess a lot of us are on the same page, because I was going to ask if data centers slowed, if that would hurt industrial. Now that you have answered that a couple of times, maybe I will ask more broadly. This was a very positive release and outlook and conference call, all the guidance changes for occupancy, NOI, acquisition, all moving in the same positive direction. Maybe I will ask if there are risks you considered when you raised the guidance, or I know you expect rent to grow next year too. Any risks to keep an eye on headed into next year, whether fundamental or lagging markets or capital markets, or anything besides data centers that you think could spoil the party? Marshall Loeb: At least data centers. Hey, good morning, Michael. It is Marshall. I think, unlike, say, the green energy kind of wave we had, those were startups, and we knew there were going to be winners and losers. The good thing with the data center suppliers, they are existing companies. Again, maybe they get themselves over-levered, but I feel better about these tenants than I did the kind of the green energy wave, and that they had already been in business and have customers that are not that. I would say things that keep us up at night or keep me up at night, it is always, look, we have got a great team, and a lot of other people know we have a great team, so we have got to keep our team. Then we say we worry much more about demand than we do supply. Does the consumer get overstretched? What does rising interest rates do to credit card debt and things like that? There will be new supply, but especially for what we build, that is usually pretty moderate because we know how hard it is for us to find good sites and how long that takes today to put those into production. It is kind of that black swan economy that is where we try to have the balance sheet and the team and be as best prepared we can for whatever the next inflection point is. It is really the consumer and the economy and keeping the team would be the two things that would worry me in 2027. Operator: Thank you. Your next question comes from Vince Tibone with Green Street. Please go ahead. Vince Tibone: Hi. Good morning. Are you able to share the cap rates on the acquisitions that both closed in 3Q and subsequent to quarter end? Then just curious if you think, the stuff that closed most recently, if that pricing is reflective of the new bid for industrial post the rate move. Reid Dunbar: Yeah, Vince. Good morning. It is Reid. I would say for the assets that we have purchased really year-to-date, because majority of it has been over this last couple months, our stabilized straight line yield is going to pencil out right around a 6.5%, mid 6% number. We feel good about that. Some of that has some vacancy in it, like we mentioned, but we are adding value. The team will add value by finding some tenants to occupy that space and knowing that some market experts in the area, that feels like a good bet for these assets. As far as cap rates movement, we have not been the most aggressive bidder, but we have been the bidder that probably has the most likelihood to close. We've seen opportunities where we weren't the highest bidder, and we thought we lost the deal, and then the sellers or the brokers came back to us and said, "Hey, is your numbers still good? Can you perform at this number?" We like that type of environment. We've been able to exploit it and take advantage of it and buy some really high-quality assets that are accretive day one, have additional upside. Most importantly, in these environments, we look at things on a per square foot basis and a replacement value. Being the developers that we are, we can quickly ascertain if it's a good buy or not, just from a per square foot basis. As all those items come in line, we're really excited about the window that's opened, and we'll see how much longer it stays open. We've got the balance sheet strength and the flexibility to take advantage of it in these environments like we've seen here lately. Operator: Thank you, Vince. There are no further questions on the phone line. I will turn it back to Marshall Loeb for some closing remarks. Marshall Loeb: Thanks everyone for your time this morning and your interest in EastGroup. If there's any questions, follow-up questions, or anything we didn't get a chance to speak to, please feel free to reach out, and we'll see many of you in a couple of weeks in Atlanta at Nareit. Thanks, everyone. Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends EastGroup Properties. The Motley Fool has a disclosure policy. EastGroup (EGP) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

- Interested in EastGroup Properties, Inc.? Here are five stocks we like better. - EastGroup raised its 2026 outlook after third-quarter FFO of $2.45 per share exceeded guidance, lifting the full-year FFO midpoint to $9.65 per share and cash same-property NOI growth guidance to 7.5%. - Operating performance remained strong, with 97.3% quarter-end leasing, 7.1% cash same-property NOI growth and record second-generation leasing of 2.9 million square feet. Re-leasing spreads reached 36% on a GAAP basis and 21% on a cash basis. - Management is expanding investment, raising 2026 development-start plans to $390 million and acquisition guidance to $360 million. Data center suppliers, e-commerce and advanced manufacturing are supporting demand, while higher construction costs and uneven California markets remain challenges. - REITs Set for a 2026 Rebound? 7 Top Picks as Rate Cuts Approach EastGroup Properties (NYSE:EGP) raised its full-year funds-from-operations guidance after reporting third-quarter results that exceeded its prior outlook, supported by stronger same-property net operating income, occupancy and leasing activity. CEO Marshall Loeb said third-quarter FFO was $2.45 per share, $0.04 above the midpoint of the company's guidance and 7.9% higher than the third quarter of 2025. Year-to-date FFO per share increased 7.7%, he said. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - After Earnings Results, Markets Love Prologis Stock "Our quarterly results demonstrate the portfolio's quality and the resiliency within the industrial market," Loeb said, citing continued tenant demand across the company's markets and property types. Quarter-end leasing stood at 97.3%, while physical occupancy was 96.5%. Same-store occupancy ended the quarter at 97%. The company completed 2.9 million square feet of second-generation leasing during the quarter, a company record, according to President Reid Dunbar. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? Leases signed in the third quarter produced re-leasing spreads of 36% on a GAAP basis and 21% on a cash basis. Through the first nine months of the year, re-leasing spreads were also 36% GAAP and 20% cash. Cash same-property net operating income rose 7.1% from a year earlier, above the company's expectations. CFO Staci Tyler said the result beat EastGroup's internal projection by 170 basis points, while average same-property occupancy of 96.9% exceeded projections by 50 basis points. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Tyler attributed the occupancy outperformance primarily to leasing volume, including new and renewal leases signed during the quarter. Some tenants also remained in place briefly after their lease expiration dates, contributing roughly 10 to 15 basis points of the occupancy outperformance, she said. Tenant retention has remained elevated, reaching nearly 79% year-to-date, according to Loeb. He said EastGroup generally prioritizes keeping occupancy high while seeking market rents across its portfolio. Management said rental growth has been strongest in markets including the Carolinas, Georgia, Texas and Arizona. California has improved from prior periods but remains uneven, with certain markets still experiencing flat to negative absorption. Loeb said California represents about 14% of EastGroup's net operating income. EastGroup increased its 2026 FFO guidance midpoint by $0.06 to $9.65 per share, representing projected growth of 7.5% from 2025 actual results. Fourth-quarter FFO is projected at $2.47 to $2.53 per share, with a midpoint of $2.50, $0.02 above the company's prior projection. The company raised the midpoint of its full-year cash same-property NOI growth outlook by 70 basis points to 7.5%. It now expects same-property occupancy of 97% for the year, 30 basis points higher than its previous forecast, and average month-end occupancy for the operating portfolio of 95.9%, up 20 basis points. EastGroup also increased planned development starts by $65 million to $390 million for 2026. The company had started $285 million of projects through the first nine months and expects to begin another $105 million during the fourth quarter. Dunbar said development leasing totaled 500,000 square feet in the third quarter and approximately 2 million square feet year-to-date, exceeding the company's full-year development leasing totals in each of the prior three years. Management described the increase in starts as largely demand-driven, including one pre-leased building and continued leasing progress at existing developments. Loeb said rising construction costs, including costs for steel, diesel and labor, are affecting the development environment. He added that those higher costs should support future rental growth, while making it more difficult for merchant developers to underwrite speculative projects and eventual asset sales. The company acquired five projects during the third quarter and through October, representing total investment of $320 million. EastGroup raised its full-year acquisitions guidance by $145 million to $360 million. Management said the acquisitions deepen EastGroup's presence in existing markets and generally fit within the top tier of its portfolio. Reid said assets acquired year-to-date are expected to generate stabilized straight-line yields in the mid-6% range, with some properties offering upside from leasing vacant space. Loeb said the company has observed cap rates increase by approximately 20 to 30 basis points in some transactions, although conditions vary by market. He said the company has benefited from situations where other potential buyers did not complete transactions, allowing EastGroup to purchase assets while maintaining underwriting discipline. To fund investment activity, EastGroup entered into $485 million of forward equity share agreements during the third quarter. Including agreements from earlier in the year, the company had $695 million of forward equity agreements outstanding at a weighted average price of approximately $202 per share. At quarter-end, EastGroup had $195 million outstanding under its $675 million unsecured bank credit facilities. Tyler said the company plans to settle forward equity agreements and repay borrowings as it funds recent acquisitions, land purchases, expanded development activity and $140 million of fourth-quarter unsecured debt maturities. Debt to total market capitalization was 14.6% at quarter-end, while annualized debt-to-EBITDA was 3.2 times and interest and fixed-charge coverage was 14.7 times. Management said data center-related tenants accounted for about 135,000 square feet of leasing in the quarter and about 15% of new leasing activity year-to-date. Those tenants are generally suppliers and service providers rather than data center operators themselves. Loeb said EastGroup is not constructing specialized buildings specifically for data center demand. Instead, the company's traditional shallow-bay industrial properties have attracted businesses such as HVAC contractors and electrical firms serving the sector. Dunbar said data center demand is one of several demand drivers, alongside e-commerce, advanced manufacturing and the company's core customer base serving local economies. He added that Amazon's reported Project Mercury initiative, which has been described as requiring facilities in the 100,000- to 200,000-square-foot range in infill locations, could align with EastGroup's portfolio strategy. Loeb said management's principal concerns heading toward 2027 include broader consumer and economic conditions, as well as retaining the company's operating team. He said EastGroup remains focused on FFO-per-share growth, portfolio quality and maintaining a strong balance sheet through changing market conditions. EastGroup Properties, Inc (NYSE: EGP) is a self-administered and self-managed real estate investment trust that owns, develops, acquires and operates industrial properties. The company primarily focuses on functional, flexible warehouse and distribution facilities designed to serve local and regional businesses, including light manufacturing, service and last-mile distribution users. Founded in 1969 and headquartered in Jackson, Mississippi, EastGroup concentrates its portfolio in major Sun Belt markets. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What EastGroup Properties (EGP) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Quarter Highlights - Net Income Attributable to Common Stockholders of $1.46 Per Diluted Share for Third Quarter 2026 Compared to $1.26 Per Diluted Share for Third Quarter 2025 - Funds from Operations ("FFO"), Excluding Gain on Involuntary Conversion and Business Interruption Claims, of $2.45 Per Diluted Share for Third Quarter 2026 Compared to $2.27 Per Diluted Share for Third Quarter 2025, an Increase of 7.9% - Same Property Net Operating Income for the Same Property Pool, Excluding Income From Lease Terminations, Increased 5.3% on a Straight-Line Basis and 7.1% on a Cash Basis for Third Quarter 2026 Compared to the Same Period in 2025 - Operating Portfolio was 97.3% Leased and 96.5% Occupied as of September 30, 2026; Average Month-End Occupancy of Operating Portfolio was 96.1% for Third Quarter 2026 as Compared to 95.7% for Third Quarter 2025 - Rental Rates on New and Renewal Leases Increased an Average of 36.3% on a Straight-Line Basis - Entered into Forward Equity Sale Agreements for Approximately $486 Million at an Initial Weighted Average Forward Price of $202.06 Per Share - Transferred a 100% Leased Development Project in Orlando Containing 113,000 Square Feet to the Operating Portfolio - Started Construction of Four Development Projects and One Redevelopment Project Totaling 998,000 Square Feet with Projected Total Costs of Approximately $162 Million - Signed 11 Leases on Active Development and First Generation Development Properties From July 1, 2026 through October 20, 2026, Totaling Approximately 503,000 Square Feet - Acquired Two Operating Properties Containing 531,000 Square Feet and 107 Acres of Development Land for Approximately $164 Million - Subsequent to Quarter-End, Acquired Three Operating Properties Containing 1,031,000 Square Feet and 25 Acres of Development Land for Approximately $262 Million - Declared 187th Consecutive Quarterly Cash Dividend: Increased the Dividend by $0.20 Per Share (12.9%) to $1.75 Per Share JACKSON, Miss., Oct. 21, 2026 /PRNewswire/ -- EastGroup Properties, Inc. (NYSE: EGP) (the "Company", "we", "us", "our" or "EastGroup") announced today the results of its operations for the three and nine months ended September 30, 2026. Commenting on EastGroup's performance, Marshall Loeb, CEO, stated, "The team and the portfolio performed ahead of expectations this quarter and so far this year. The leasing environment has been much more stable than headlines would lead one to expect. This activity is exciting as we begin to turn the page into 2027. Looking beyond the current environment, I remain bullish on the continuing external trends benefitting our shallow bay, last mile, high-growth market portfolio." Reid Dunbar, President, added, "Continued leasing momentum gave us the confidence to raise our development starts again, to $390 million for the year, and attractive opportunities allowed us to increase our acquisition guidance to $360 million. Supported by our strong balance sheet, we remain focused on deploying capital with discipline and creating long-term value for our shareholders." EARNINGS PER SHARE Three Months Ended September 30, 2026 On a diluted per share basis, earnings per common share ("EPS") were $1.46 for the three months ended September 30, 2026, compared to $1.26 for the same period of 2025. The increase in EPS was primarily due to the following: - The Company's property net operating income ("PNOI") was $147,890,000 ($2.75 per diluted share) for the three months ended September 30, 2026, as compared to $134,374,000 ($2.52 per diluted share) for the same period of 2025, which was an increase of $0.23 per diluted share. - EastGroup recognized gains on sales of non-operating real estate of $4,709,000 ($0.09 per diluted share) during the three months ended September 30, 2026. There were no land sales during the three months ended September 30, 2025. The increase in EPS was partially offset by the following: - Depreciation and amortization expense was $58,206,000 ($1.08 per diluted share) for the three months ended September 30, 2026, as compared to $54,131,000 ($1.02 per diluted share) for the same period of 2025, which was an increase of $0.06 per diluted share. - Interest expense was $9,617,000 ($0.18 per diluted share) for the three months ended September 30, 2026, as compared to $7,685,000 ($0.14 per diluted share) for the same period of 2025, which was an increase of $0.04 per diluted share. - Weighted average shares outstanding increased by 580,000 shares on a diluted basis for the three months ended September 30, 2026, as compared to the same period of 2025. Nine Months Ended September 30, 2026 EPS for the nine months ended September 30, 2026 were $4.63 per diluted share, as compared to $3.60 per diluted share for the same period of 2025. The increase in EPS was primarily due to the following: - PNOI was $430,826,000 ($8.02 per diluted share) for the nine months ended September 30, 2026, as compared to $389,736,000 ($7.41 per diluted share) for the same period of 2025, which was an increase of $0.61 per diluted share. - EastGroup recognized gains on sales of real estate investments of $30,074,000 ($0.56 per diluted share) during the nine months ended September 30, 2026. There were no sales during the nine months ended September 30, 2025. - EastGroup recognized gains on sales of non-operating real estate of $4,709,000 ($0.09 per diluted share) during the nine months ended September 30, 2026. There were no land sales during the nine months ended September 30, 2025. The increase in EPS was partially offset by the following: - Depreciation and amortization expense was $170,109,000 ($3.17 per diluted share) for the nine months ended September 30, 2026, as compared to $159,663,000 ($3.03 per diluted share) for the same period of 2025, which was an increase of $0.14 per diluted share. - Interest expense was $27,686,000 ($0.52 per diluted share) for the nine months ended September 30, 2026, as compared to $23,400,000 ($0.44 per diluted share) for the same period of 2025, which was an increase of $0.08 per diluted share. - Weighted average shares outstanding increased by 1,100,000 shares on a diluted basis for the nine months ended September 30, 2026, as compared to the same period of 2025. FUNDS FROM OPERATIONS AND PROPERTY NET OPERATING INCOME Three Months Ended September 30, 2026 For the three months ended September 30, 2026, both funds from operations attributable to common stockholders ("FFO") and FFO, Excluding Gain on Involuntary Conversion and Business Interruption Claims, were $2.45 per diluted share compared to $2.27 per diluted share during the same period of 2025, an increase of 7.9%. PNOI increased by $13,516,000, or 10.1%, during the three months ended September 30, 2026, compared to the same period of 2025. PNOI increased $6,809,000 due to same property operations (based on the same property pool), $4,156,000 due to newly developed and value-add properties, and $3,213,000 due to 2025 and 2026 acquisitions. PNOI decreased $634,000 due to operating properties sold in 2025 and 2026. Same PNOI, Excluding Income from Lease Terminations, increased 5.3% on a straight-line basis for the three months ended September 30, 2026, compared to the same period of 2025; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), Same PNOI increased 7.1%. Same property average occupancy was 96.9% for the three months ended September 30, 2026, compared to 96.7% for the same period of 2025. The same property average rental rate was $9.46 for the three months ended September 30, 2026, compared to $8.99 per square foot for the same period of 2025. On a straight-line basis, rental rates on new and renewal leases signed during the three months ended September 30, 2026 (representing 4.6% of the operating portfolio's square footage) increased an average of 36.3%. Nine Months Ended September 30, 2026 FFO for the nine months ended September 30, 2026, were $7.15 per diluted share compared to $6.64 per diluted share during the same period of 2025, an increase of 7.7%. FFO, Excluding Gain on Involuntary Conversion and Business Interruption Claims, were $7.11 per diluted share for the nine months ended September 30, 2026, compared to $6.61 per diluted share for the same period of 2025, an increase of 7.6%. PNOI increased by $41,090,000, or 10.5%, during the nine months ended September 30, 2026, compared to the same period of 2025. PNOI increased $23,236,000 due to same property operations (based on the same property pool), $10,426,000 due to newly developed and value-add properties, and $8,836,000 due to 2025 and 2026 acquisitions. PNOI decreased $1,677,000 due to operating properties sold in 2025 and 2026. Same PNOI, Excluding Income from Lease Terminations, increased 6.3% on a straight-line basis for the nine months ended September 30, 2026, compared to the same period of 2025; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), Same PNOI increased 8.2%. Same property average occupancy was 97.0% for the nine months ended September 30, 2026, compared to 96.4% for the same period of 2025. The same property average rental rate was $9.36 per square foot for the nine months ended September 30, 2026, compared to $8.81 per square foot for the same period of 2025. On a straight-line basis, rental rates on new and renewal leases signed during the nine months ended September 30, 2026 (representing 12.3% of the operating portfolio's square footage) increased an average of 35.6%. The same property pool for the three and nine months ended September 30, 2026 includes properties which were included in the operating portfolio for the entire period from January 1, 2025 through September 30, 2026; this pool is comprised of properties containing 58,047,000 square feet. Same property average occupancy represents the average month-end percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2025 through September 30, 2026). The same property average rental rate calculated on a straight-line basis represents the average annual rental rates of leases in place for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2025 through September 30, 2026). FFO, FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims, PNOI, and Same PNOI are non-GAAP financial measures, which are defined under Definitions later in this release. Reconciliations of Net Income to PNOI and Same PNOI, and Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO and FFO, Excluding Gain on Involuntary Conversion and Business Interruption Claims, are presented in the attached schedule "Reconciliations of GAAP to Non-GAAP Measures." ACQUISITIONS AND DISPOSITIONS As previously announced, in July 2026, EastGroup acquired Airgate Mesa Corporate Center in Phoenix for $27,688,000. The 143,000 square foot industrial building was developed in 2022 and is 100% leased to a single tenant. Also in July 2026, as previously announced, the Company acquired Harris Ridge Business Center in Austin for $82,268,000. The property is comprised of 5 buildings containing 388,000 square feet and is currently 95% leased to 10 tenants. In August 2026, as previously announced, the Company acquired 69.5 acres of development land in the Northeast Dallas submarket for $38,049,000. The land, known as Frisco Park 121 Phase 2 Land, is adjacent to the Company's previously acquired Frisco Park 121 Land and expands the existing development plan from 4 buildings totaling approximately 350,000 square feet to 11 buildings totaling approximately 1,000,000 square feet. Also as previously announced, in September 2026, EastGroup acquired 30.3 acres of development land, known as Crossroads Logistics Park Phase 2 Land, for $13,266,000. This land acquisition expands EastGroup's existing park located in the East Tampa submarket, increasing the existing development plan from three buildings totaling approximately 500,000 square feet to five buildings totaling approximately 850,000 square feet. Also, in September 2026, the Company acquired 7.5 acres of development land in the space coast market in Melbourne, FL, known as Crane Creek Commerce Center Land, for $2,781,000. This site is expected to accommodate the future development of a 69,000 square foot building. Subsequent to September 30, 2026, EastGroup closed on the acquisition of a property in the Northeast submarket of Dallas for approximately $89,000,000. The property, which was constructed in 2025, includes three business distribution buildings containing 375,000 square feet, which are currently 91% leased to three tenants. Also in October 2026, the Company closed on the acquisition of a business distribution building containing 202,000 square feet in the Dallas-Fort Worth International Airport submarket for approximately $30,000,000. The building, subject to a ground lease, was built in 2023 and is 100% leased to a single tenant. Also subsequent to September 30, 2026, EastGroup closed on the acquisition of three business distribution buildings in the North Denver submarket for approximately $95,000,000. The buildings, which contain 454,000 square feet, were constructed in 2025 and are 100% leased to four tenants. Also in October 2026, the Company acquired 24.9 acres of development land in Miami for approximately $48,000,000. This site is expected to accommodate the future development of two buildings containing approximately 371,000 square feet. As previously announced, in July 2026, the Company sold a 6.9 acre parcel of land in Miami for $14,250,000. A gain of $4,709,000 was recognized during the three months ended September 30, 2026; this gain is excluded from FFO. DEVELOPMENT AND VALUE-ADD PROPERTIES During the third quarter of 2026, EastGroup began construction of four development projects and one redevelopment project totaling 998,000 square feet, with projected total costs of $162,200,000. The development and redevelopment projects started during the nine months ended September 30, 2026 are detailed in the table below: Development and Redevelopment Projects Started During the Nine Months Ended September 30, 2026 | | Location | | Size | | Anticipated Transfer Date | | Projected Total Costs | | | | (Square feet) | | | | (In thousands) Country Club 5 Expansion (1) | | Tucson, AZ | | 101,000 | | | 05/2027 | | $ | 9,800 | Crossroads 3 | | Tampa, FL | | 156,000 | | | 10/2027 | | 26,900 | Oak Creek 1 (2) | | Tampa, FL | | 222,000 | | | 10/2027 | | 4,200 | Grand West Crossing 3 & 4 | | Houston, TX | | 128,000 | | | 02/2028 | | 18,900 | World Houston 48 | | Houston, TX | | 191,000 | | | 03/2028 | | 18,800 | Skyway 3 | | Charlotte, NC | | 156,000 | | | 04/2028 | | 20,400 | Brightstar 100 | | Atlanta, GA | | 196,000 | | | 05/2028 | | 21,700 | Miramar Business Center | | San Diego, CA | | 60,000 | | | 05/2028 | | 53,100 | Schertz Summit Park 1 & 2 | | San Antonio, TX | | 202,000 | | | 07/2028 | | 27,700 | Basswood 6 & 7 | | Fort Worth, TX | | 294,000 | | | 09/2028 | | 40,600 | Bell Creek 1 & 2 | | Tampa, FL | | 226,000 | | | 10/2028 | | 42,600 | Total Development Projects Started | | | | 1,932,000 | | | | | $ | 284,700 | (1) 100% pre-leased expansion of an existing building that currently contains 305,000 square feet. (2) Represents a redevelopment project. Subsequent to September 30, 2026, the Company began construction of Gateway Interchange C, D & E in Phoenix, which is anticipated to accommodate the future development of three buildings containing approximately 295,000 square feet, with projected total costs of $54,300,000. At September 30, 2026, EastGroup's development and value-add program consisted of 21 projects (4,061,000 square feet) in 14 markets. The projects, which were collectively 25% leased as of October 20, 2026, have a projected total cost of $636,700,000, of which $251,460,000 remained to be invested as of September 30, 2026. During the third quarter of 2026, EastGroup transferred one project in Orlando to the operating portfolio. The Company transfers projects to the operating portfolio at the earlier of 90% occupancy or one year after completion. The project contains 113,000 square feet and was 100% leased as of October 20, 2026. The development projects transferred to the operating portfolio during the nine months ended September 30, 2026 are detailed in the table below: Development, Redevelopment and Value- Add Properties Transferred to the Operating Portfolio During the Nine Months Ended September 30, 2026 | | Location | | Size | | Transfer Date | | Cumulative Cost as of 9/30/26 | | Percent Leased as of 10/20/26 | | | | (Square feet) | | | | (In thousands) | | | | | | | | | | | | Denton 35 Exchange 1 & 2 | | Dallas, TX | | 244,000 | | | 02/2026 | | $ | 33,604 | | | 100 | % Skyway 1 & 2 | | Charlotte, NC | | 318,000 | | | 03/2026 | | 38,781 | | | 79 | % Grand West Crossing 2 | | Houston, TX | | 97,000 | | | 04/2026 | | 11,854 | | | 100 | % Texas Avenue 1 & 2 | | Austin, TX | | 129,000 | | | 04/2026 | | 21,772 | | | 83 | % World Houston 46 | | Houston, TX | | 181,000 | | | 04/2026 | | 17,047 | | | 100 | % Dominguez (1) | | Los Angeles, CA | | 262,000 | | | 06/2026 | | 7,867 | | | 100 | % Horizon West 9 | | Orlando, FL | | 113,000 | | | 08/2026 | | 14,819 | | | 100 | % Total Projects Transferred | | | | 1,344,000 | | | | | $ | 145,744 | | | 94 | % | | | | | | | | | | Projected Stabilized Yield (2) | | 9.4 % | | | | | | | | (1) Represents a redevelopment project. (2) Weighted average yield based on projected stabilized annual property net operating income on a straight-line basis at 100% occupancy divided by projected total costs. The projected stabilized yield excluding the redevelopment project is 7.7%. DIVIDENDS EastGroup declared a cash dividend of $1.75 per share of common stock in the third quarter of 2026, which represented a 12.9% increase over the previous quarter's dividend. The third quarter dividend, which was paid on October 15, 2026, was the Company's 187th consecutive quarterly cash distribution to shareholders. The Company has increased or maintained its dividend for 34 consecutive years and has increased it 31 years over that period, including increases in each of the last 15 years. The annualized dividend rate of $7.00 per share represents a dividend yield of 3.5% based on the closing stock price of $201.25 on October 20, 2026. FINANCIAL STRENGTH AND FLEXIBILITY EastGroup continues to maintain a strong and flexible balance sheet. Debt-to-total market capitalization was 14.6% at September 30, 2026. The Company's interest and fixed charge coverage ratio was 14.7x and 14.9x for the three and nine months ended September 30, 2026, respectively. The Company's annualized ratio of debt to earnings before interest, taxes, depreciation and amortization for real estate ("EBITDAre") was 3.2x and 3.3x for the three and nine months ended September 30, 2026, respectively. EBITDAre and the Company's interest and fixed charge coverage ratio are non-GAAP financial measures defined under Definitions later in this release. Refer to the schedule "Reconciliations of GAAP to Non-GAAP Measures" attached for the calculation of the Company's interest and fixed charge coverage ratio, the debt to EBITDAre ratio, and the reconciliation of Net Income to EBITDAre. During the three months ended September 30, 2026, the Company entered into forward equity sale agreements with respect to 2,402,931 shares of common stock with an initial weighted average forward price of $202.06 per share totaling approximately $485,531,000 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. As of October 20, 2026, EastGroup had 3,443,388 shares of common stock available for settlement prior to the expiration of the applicable settlement periods ranging from February 2027 to February 2028, for anticipated net sales of approximately $685,234,000, based on a weighted average forward price of $199.00 per share. Subsequent to September 30, 2026, EastGroup repaid a $100,000,000 senior unsecured term loan at maturity with an effectively fixed interest rate of 1.98%. OUTLOOK FOR 2026 We now estimate EPS for 2026 to be in the range of $5.99 to $6.05 and FFO per share attributable to common stockholders for 2026 to be in the range of $9.62 to $9.68. The table below reconciles projected net income attributable to common stockholders to projected FFO. The Company is providing a projection of estimated net income attributable to common stockholders in order to meet the disclosure requirements of the U.S. Securities and Exchange Commission. EastGroup's projections are based on management's current beliefs and assumptions about our business, the industry and the markets in which we operate; there are known and unknown risks and uncertainties associated with these projections. We assume no obligation to update publicly any forward-looking statements, including our Outlook for 2026, whether as a result of new information, future events or otherwise. Please refer to the "Forward-Looking Statements" disclosures included in this earnings release and "Risk Factors" disclosed in our annual and quarterly reports filed with the Securities and Exchange Commission for more information. The following table presents the guidance range for 2026: | | Low Range | | High Range | | Q4 2026 | | Y/E 2026 | | Q4 2026 | | Y/E 2026 | | (In thousands, except per share data) | | | | | | | | Net income attributable to common stockholders | | $ | 74,230 | | | 322,757 | | | 77,464 | | | 325,991 | Depreciation and amortization | | 60,019 | | | 230,220 | | | 60,019 | | | 230,220 | Gain on sales of real estate investments and non-operatingreal estate | | — | | | (34,783) | | | — | | | (34,783) | Funds from operations attributable to common stockholders* | | $ | 134,249 | | | 518,194 | | | 137,483 | | | 521,428 | | | | | | | | | Weighted average shares outstanding — Diluted | | 54,394 | | | 53,892 | | | 54,394 | | | 53,892 | Per share data (diluted): | | | | | | | | Net income attributable to common stockholders | | $ | 1.36 | | | 5.99 | | | 1.42 | | | 6.05 | Funds from operations attributable to common stockholders* | | 2.47 | | | 9.62 | | | 2.53 | | | 9.68 | *This is a non-GAAP financial measure. Please refer to Definitions. The following assumptions were used for the mid-point: Metrics | | Revised Guidance for Year 2026 | | July Earnings Release Guidance for Year 2026 | | Actual for Year 2025 FFO per share for the year(see Q4 projections in the table above) | | $9.62 - $9.68 | | $9.52 - $9.66 | | $8.98 FFO per share increase over prior year | | 7.5 % | | 6.8 % | | 7.5 % FFO per share, excluding gain on involuntary conversion and business interruption claims | | $9.58 - $9.64 | | $9.48 - $9.62 | | $8.95 FFO per share increase over prior year, excluding gain on involuntary conversion and business interruption claims | | 7.4 % | | 6.7 % | | 7.7 % Same PNOI growth: cash basis (1) | | 7.2% - 7.8% (2) | | 6.3% - 7.3% (2) | | 6.7 % Average month-end occupancy — Operating portfolio | | 95.6% - 96.2% (3) | | 95.3% - 96.1% | | 95.9 % Average month-end occupancy — Same property pool | | 96.7% - 97.3% (2) | | 96.3% - 97.1% (2) | | 96.5 % Development starts: | | | | | | Square feet | | 2.5 million | | 2.2 million | | 1.4 million Projected total investment | | $390 million | | $325 million | | $179 million Operating property acquisitions | | $360 million | | $215 million | | $143 million Operating property dispositions(Potential gains or losses on dispositions are not included in the projections) | | $44 million | | $75 million | | $4 million Gross capital proceeds (4) | | $625 million (5) | | $300 million | | $517 million General and administrative expense | | $26.8 million | | $26.7 million | | $24.0 million (1) Excludes straight-line rent adjustments, amortization of market rent intangibles for acquired leases, and income from lease terminations. (2) Includes properties which have been in the operating portfolio since 1/1/25 and are projected to be in the operating portfolio through 12/31/26; includes 58,047,000 square feet. (3) Represents estimated average month-end operating portfolio occupancy from January-December 2026. (4) Gross capital proceeds includes proceeds raised from external sources, such as new long-term debt or equity issuances; excludes borrowings on unsecured bank credit facilities. (5) Assumes issuance of approximately 3,000,000 shares under the continuous common equity program, including direct common stock issuance and settlement of outstanding forward equity agreements, during the three months ended December 31, 2026. DEFINITIONS Net income is used by the Company's management as the primary measure of operating results in making decisions. Investor and industry analysts primarily utilize two supplemental operating performance measures in analyzing operating results, which include: (1) funds from operations attributable to common stockholders ("FFO"), including FFO as adjusted as described below, and (2) property net operating income ("PNOI"), as defined below. FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc. ("Nareit"). Nareit's guidance allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges, on real estate assets incidental to a real estate investment trust's ("REIT's") business are excluded from the calculation of FFO. EastGroup has made the election to exclude activity related to such assets that are incidental to our business. FFO is calculated as net income (loss) attributable to common stockholders computed in accordance with U.S. generally accepted accounting principles ("GAAP"), excluding gains and losses from sales of real estate property (including other assets incidental to the Company's business) and impairment losses, adjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO, Excluding Gain on Involuntary Conversion and Business Interruption Claims, is calculated as FFO (as defined above), adjusted to exclude gains on involuntary conversion and business interruption claims. The Company believes that this exclusion presents a more meaningful comparison of operating performance across periods. PNOI is defined as Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company's share of income and property operating expenses from its less-than-wholly-owned real estate investments. EastGroup may refer to PNOI from Same Properties as "Same PNOI" in this press release and the accompanying reconciliation; the Company also presents Same PNOI Excluding Income from Lease Terminations. The Company presents Same PNOI and Same PNOI, Excluding Income from Lease Terminations, as a property-level supplemental measure of performance used to evaluate the performance of the Company's investments in real estate assets and its operating results on a same property basis. The Company believes it is useful to evaluate Same PNOI, Excluding Income from Lease Terminations, on both a straight-line and cash basis. The straight-line basis is calculated by averaging the customers' rent payments over the lives of the leases; GAAP requires the recognition of rental income on a straight-line basis. The cash basis excludes adjustments for straight-line rent and amortization of market rent intangibles for acquired leases; cash basis is an indicator of the rents charged to customers by the Company during the periods presented and is useful in analyzing the embedded rent growth in the Company's portfolio. "Same Properties" is defined as operating properties owned during the entire current period and prior year reporting period. Operating properties are stabilized real estate properties (land, buildings and improvements) that make up the Company's operating portfolio. Properties developed or acquired are excluded from the same property pool until held in the operating portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods are also excluded. A key component of the change in PNOI is the rental rate change on new and renewal leases. The Company calculates rental rate changes on new and renewal leases on a cash basis and straight-line basis. The cash basis rental changes are calculated as the difference, weighted by square feet, of the annualized base rent due the first month of the new lease's term and the annualized base rent of the rent due the last month of the former lease's term, for leases signed during the reporting period. If free rent, discounts, or premiums are in the lease terms, then the first full rent value is used. The straight-line basis rental changes are calculated as the difference, weighted by square feet, of the average rent over the life of the new lease and the average rent over the life of the former lease, for leases signed during the reporting period. Rent amounts exclude amortization of market rent intangibles for acquired leases, additional rent charged when a tenant remains in occupancy after lease expiration, and amounts paid by tenants for operating expenses above the levels established in their leases. These calculations exclude leases with terms of less than 12 months and leases for first generation space on properties acquired or developed by EastGroup. FFO and PNOI are supplemental industry reporting measurements used to evaluate the performance of the Company's investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry's calculations of PNOI and FFO provides supplemental indicators of the properties' performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other REITs. Investors should be aware that items excluded from or included in FFO are significant components in understanding and assessing the Company's financial performance. Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre") is also used by the Company's management as a key performance measure. EBITDAre is computed in accordance with standards established by Nareit and defined as Net Income, adjusted for gains and losses from sales of real estate investments, non-operating real estate and other assets incidental to the Company's business, interest expense, income tax expense, depreciation and amortization. EBITDAre is a non-GAAP financial measure used by the Company's management to measure the Company's operating performance and its ability to meet interest payment obligations and pay quarterly stock dividends on an unleveraged basis. Debt-to-EBITDAre ratio is a non-GAAP financial measure calculated by dividing the Company's debt by its annualized EBITDAre, and is used by the Company's management in analyzing the financial condition and operating performance of the Company relative to its leverage. The Company's interest and fixed charge coverage ratio is a non-GAAP financial measure calculated by dividing the Company's EBITDAre by its interest expense. The Company believes this ratio is useful to investors because it provides a basis for analysis of the Company's leverage, operating performance and its ability to service the interest payments due on its debt. CONFERENCE CALL EastGroup will host a conference call and webcast to discuss the results of its third quarter, review the Company's current operations, and present its earnings outlook for 2026 on Thursday, October 22, 2026, at 10:00 a.m. Eastern Time. A live broadcast of the conference call is available by dialing 1-800-836-8184 (conference ID EastGroup) or by webcast through a link on the Company's website at www.eastgroup.net. If you are unable to listen to the live conference call, a telephone and webcast replay will be available on Thursday, October 22, 2026. The telephone replay will be available through Thursday, October 29, 2026, and can be accessed by dialing 1-888-660-6345 (access code 87577#). The webcast replay can be accessed through a link on the Company's website at www.eastgroup.net. SUPPLEMENTAL INFORMATION Supplemental financial information is available under Quarterly Results in the Investor Relations section of the Company's website at www.eastgroup.net. COMPANY INFORMATION EastGroup Properties, Inc. (NYSE: EGP), a member of the S&P Mid-Cap 400 and Russell 2000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in high-growth markets throughout the United States with an emphasis in the states of Texas, Florida, California, Arizona 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. The Company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 68.3 million square feet. EastGroup Properties, Inc. press releases are available at www.eastgroup.net. The Company announces information about the Company and its business to investors and the public using the Company's website (eastgroup.net), including the investor relations website (investor.eastgroup.net), filings with the Securities and Exchange Commission, press releases, public conference calls, and webcasts. The Company also uses social media to communicate with its investors and the public. While not all the information that the Company posts to the Company's website or on the Company's social media channels is of a material nature, some information could be deemed to be material. Therefore, the Company encourages investors, the media, and others interested in the Company to review the information that it posts on the social media channels, including Facebook (facebook.com/eastgroupproperties), LinkedIn (linkedin.com/company/eastgroup-properties-inc), and X (X.com/eastgroupprop). The list of social media channels that the Company uses may be updated on its investor relations website from time to time. The information contained on, or that may be accessed through, our website or any of our social media channels is not incorporated by reference into, and is not a part of, this document. FORWARD-LOOKING STATEMENTS The statements and certain other information contained in this press release, 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" or 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. For instance, the amount, timing and frequency of future dividends are subject to authorization by the Company's Board of Directors and will be based upon a variety of factors. 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 or strategies 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 and conflicts; - 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 ongoing uncertainty around interest rates, tariffs and general economic conditions; - disruption in supply and delivery chains; - increased construction and development costs, including as a result of tariffs or an inflationary environment; - acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with our 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, 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, earthquakes or other extreme weather events, which may or may not be directly caused by longer-term shifts in climate patterns, could destroy buildings and damage regional economies; - the availability of financing and capital, increases in or long-term elevated interest rates, and our 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 or lack of adequate succession planning; - risks related to the failure, inadequacy or interruption of our data security systems and processes, including security breaches through cyber attacks; - pandemics, epidemics or other public health emergencies, such as the coronavirus pandemic; - potentially catastrophic events, such as acts of war, civil unrest and terrorism, including escalation or expansion of armed conflicts in the Middle East; 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, including its Outlook for 2026, whether as a result of new information, future events or otherwise. CONTACT [email protected] EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | | 2026 | | 2025 | | 2026 | | 2025 REVENUES | | | | | | | | Income from real estate operations | | $ | 199,400 | | | 182,089 | | | 582,926 | | | 531,989 | Other revenue | | 37 | | | 47 | | | 98 | | | 1,882 | | | 199,437 | | | 182,136 | | | 583,024 | | | 533,871 | EXPENSES | | | | | | | | Expenses from real estate operations | | 51,818 | | | 48,004 | | | 153,025 | | | 143,127 | Depreciation and amortization | | 58,206 | | | 54,131 | | | 170,109 | | | 159,663 | General and administrative | | 6,251 | | | 5,607 | | | 21,074 | | | 18,851 | Indirect leasing costs | | 251 | | | 199 | | | 707 | | | 633 | | | 116,526 | | | 107,941 | | | 344,915 | | | 322,274 | OTHER INCOME (EXPENSE) | | | | | | | | Interest expense | | (9,617) | | | (7,685) | | | (27,686) | | | (23,400) | Gain on sales of real estate investments | | — | | | — | | | 30,074 | | | — | Other income | | 5,086 | | | 447 | | | 8,030 | | | 1,510 | NET INCOME | | 78,380 | | | 66,957 | | | 248,527 | | | 189,707 | Net income attributable to noncontrolling interest in joint ventures | | — | | | (14) | | | — | | | (42) | NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | | 78,380 | | | 66,943 | | | 248,527 | | | 189,665 | Other comprehensive income (loss) — Interest rate swaps | | 9,527 | | | (2,139) | | | 14,932 | | | (13,202) | TOTAL COMPREHENSIVE INCOME | | $ | 87,907 | | | 64,804 | | | 263,459 | | | 176,463 | | | | | | | | | BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | | | | | | | | Net income attributable to common stockholders | | $ | 1.46 | | | 1.26 | | | 4.64 | | | 3.61 | Weighted average shares outstanding — Basic | | 53,675 | | | 53,159 | | | 53,599 | | | 52,544 | DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | | | | | | | | Net income attributable to common stockholders | | $ | 1.46 | | | 1.26 | | | 4.63 | | | 3.60 | Weighted average shares outstanding — Diluted | | 53,844 | | | 53,264 | | | 53,724 | | | 52,624 | EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | | $ | 78,380 | | | 66,943 | | | 248,527 | | | 189,665 | Depreciation and amortization | | 58,206 | | | 54,131 | | | 170,109 | | | 159,663 | Company's share of depreciation from unconsolidated investment | | 31 | | | 31 | | | 93 | | | 93 | Depreciation and amortization attributable to noncontrolling interest | | — | | | (2) | | | (1) | | | (4) | Gain on sales of real estate investments | | — | | | — | | | (30,074) | | | — | Gain on sales of non-operating real estate | | (4,709) | | | — | | | (4,709) | | | — | FUNDS FROM OPERATIONS ("FFO") ATTRIBUTABLE TO COMMON STOCKHOLDERS* | | 131,908 | | | 121,103 | | | 383,945 | | | 349,417 | Gain on involuntary conversion and business interruption claims | | — | | | — | | | (1,950) | | | (1,763) | FFO ATTRIBUTABLE TO COMMON STOCKHOLDERS, EXCLUDING GAIN ON INVOLUNTARY CONVERSION AND BUSINESS INTERRUPTION CLAIMS* | | $ | 131,908 | | | 121,103 | | | 381,995 | | | 347,654 | | | | | | | | | NET INCOME | | $ | 78,380 | | | 66,957 | | | 248,527 | | | 189,707 | Interest expense (1) | | 9,617 | | | 7,685 | | | 27,686 | | | 23,400 | Depreciation and amortization | | 58,206 | | | 54,131 | | | 170,109 | | | 159,663 | Company's share of depreciation from unconsolidated investment | | 31 | | | 31 | | | 93 | | | 93 | EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") | | 146,234 | | | 128,804 | | | 446,415 | | | 372,863 | Gain on sales of real estate investments | | — | | | — | | | (30,074) | | | — | Gain on sales of non-operating real estate | | (4,709) | | | — | | | (4,709) | | | — | EBITDA FOR REAL ESTATE ("EBITDAre")* | | $ | 141,525 | | | 128,804 | | | 411,632 | | | 372,863 | | | | | | | | | Debt | | $ | 1,806,556 | | | 1,479,819 | | | 1,806,556 | | | 1,479,819 | Debt-to-EBITDAre ratio* (Annualized) | | 3.2 | | | 2.9 | | | 3.3 | | | 3.0 | | | | | | | | | EBITDAre* | | $ | 141,525 | | | 128,804 | | | 411,632 | | | 372,863 | Interest expense (1) | | 9,617 | | | 7,685 | | | 27,686 | | | 23,400 | Interest and fixed charge coverage ratio* | | 14.7 | | | 16.8 | | | 14.9 | | | 15.9 | | | | | | | | | DILUTED PER COMMON SHARE DATA FOR EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | | | | | | | | Net income attributable to common stockholders | | $ | 1.46 | | | 1.26 | | | 4.63 | | | 3.60 | FFO attributable to common stockholders* | | $ | 2.45 | | | 2.27 | | | 7.15 | | | 6.64 | FFO attributable to common stockholders, excluding gain on involuntary conversion and business interruption claims* | | $ | 2.45 | | | 2.27 | | | 7.11 | | | 6.61 | Weighted average shares outstanding for EPS and FFO purposes — Diluted | | 53,844 | | | 53,264 | | | 53,724 | | | 52,624 | | | | | | | | | (1) Net of capitalized interest of $6,044 and $5,389 for the three months ended September 30, 2026 and 2025, respectively; and $17,616 and $15,889 for the nine months ended September 30, 2026 and 2025, respectively. *This is a non-GAAP financial measure. Please refer to Definitions. EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Continued) (IN THOUSANDS) (UNAUDITED) | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | NET INCOME | | $ | 78,380 | | | 66,957 | | | 248,527 | | | 189,707 | Gain on sales of real estate investments | | — | | | — | | | (30,074) | | | — | Gain on sales of non-operating real estate | | (4,709) | | | — | | | (4,709) | | | — | Gain on involuntary conversion and business interruption claims | | — | | | — | | | (1,950) | | | (1,763) | Interest income | | (100) | | | (174) | | | (539) | | | (683) | Other | | (37) | | | (47) | | | (98) | | | (119) | Indirect leasing costs | | 251 | | | 199 | | | 707 | | | 633 | Depreciation and amortization | | 58,206 | | | 54,131 | | | 170,109 | | | 159,663 | Company's share of depreciation from unconsolidated investment | | 31 | | | 31 | | | 93 | | | 93 | Interest expense (1) | | 9,617 | | | 7,685 | | | 27,686 | | | 23,400 | General and administrative expense (2) | | 6,251 | | | 5,607 | | | 21,074 | | | 18,851 | Noncontrolling interest in PNOI of consolidated joint ventures | | — | | | (15) | | | — | | | (46) | PROPERTY NET OPERATING INCOME ("PNOI")* | | 147,890 | | | 134,374 | | | 430,826 | | | 389,736 | PNOI from 2025 and 2026 acquisitions | | (4,253) | | | (1,040) | | | (9,876) | | | (1,040) | PNOI from 2025 and 2026 development and value-add properties | | (7,803) | | | (3,647) | | | (19,142) | | | (8,716) | PNOI from 2025 and 2026 operating property dispositions | | — | | | (634) | | | (363) | | | (2,040) | Other PNOI | | 244 | | | 216 | | | 660 | | | 929 | SAME PNOI (Straight-Line Basis)* | | 136,078 | | | 129,269 | | | 402,105 | | | 378,869 | Lease termination fee income from same properties | | (69) | | | (101) | | | (164) | | | (833) | SAME PNOI, EXCLUDING INCOME FROM LEASE TERMINATIONS (Straight-Line Basis)* | | 136,009 | | | 129,168 | | | 401,941 | | | 378,036 | Straight-line rent adjustments for same properties | | (1,702) | | | (3,489) | | | (4,537) | | | (9,875) | Acquired leases — Market rent adjustment amortization for same properties | | (1,287) | | | (1,466) | | | (3,979) | | | (4,553) | SAME PNOI, EXCLUDING INCOME FROM LEASE TERMINATIONS (Cash Basis)* | | $ | 133,020 | | | 124,213 | | | 393,425 | | | 363,608 | | | | | | | | | (1) Net of capitalized interest of $6,044 and $5,389 for the three months ended September 30, 2026 and 2025, respectively; and $17,616 and $15,889 for the nine months ended September 30, 2026 and 2025, respectively. (2) Net of capitalized development costs of $2,644 and $1,716 for the three months ended September 30, 2026 and 2025, respectively; and $6,768 and $5,387 for the nine months ended September 30, 2026 and 2025, respectively. *This is a non-GAAP financial measure. Please refer to Definitions. View original content to download multimedia:https://www.prnewswire.com/news-releases/eastgroup-properties-announces-third-quarter-2026-results-302915970.html

JACKSON, Miss., Sept. 25, 2026 /PRNewswire/ -- EastGroup Properties, Inc. (NYSE: EGP) (the "Company", "we", "our", "us", or "EastGroup") announced today that it will hold its Third Quarter 2026 Earnings Conference Call and Webcast on Thursday, October 22, 2026, at 10:00 a.m. Eastern Time. On the call, senior management will discuss the Company's third quarter results, current operations, and earnings outlook for 2026. EastGroup plans to release financial results for the quarter after the market closes on Wednesday, October 21, 2026. The earnings release and supplemental information package will be posted on the Company's website, www.eastgroup.net, at that time. A live broadcast of the conference call is available by dialing 1-800-836-8184 (conference ID EastGroup) or by webcast through a link on the Company's website at www.eastgroup.net. If you are unable to listen to the live conference call, a telephone and webcast replay will be available on Thursday, October 22, 2026. The telephone replay will be available through Thursday, October 29, 2026, and can be accessed by dialing 1-888-660-6345 (access code 87577#). The webcast replay can be accessed through a link on the Company's website at www.eastgroup.net. About EastGroup Properties, Inc. EastGroup, a member of the S&P Mid-Cap 400 and Russell 2000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in high-growth markets throughout the United States with an emphasis in the states of Texas, Florida, California, Arizona 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. The Company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 66.8 million square feet. EastGroup Properties, Inc. press releases are available at www.eastgroup.net. Contact: [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/eastgroup-properties-announces-third-quarter-2026-earnings-conference-call-and-webcast-302890429.html

Interested in EastGroup Properties, Inc.? Here are five stocks we like better. EastGroup Properties beat Q2 expectations with FFO of $2.36 per share, while year-to-date FFO per share rose 7.6% and management raised full-year 2026 FFO guidance to $9.59 per share. Executives said the results were driven by stronger-than-expected same-property NOI and higher occupancy. Leasing activity set records in the quarter, including 3.9 million square feet of signed leases and nearly 1.1 million square feet of development and first-generation leasing. The portfolio ended the quarter 96.8% leased and 95.6% occupied, with GAAP leasing spreads of 34% and cash spreads of 19%. Management turned more optimistic on growth, lifting guidance for same-property NOI, occupancy, development starts and acquisitions. EastGroup also highlighted a strong balance sheet, with no borrowings on its credit facility and $675 million of available capacity. REITs Set for a 2026 Rebound? 7 Top Picks as Rate Cuts Approach EastGroup Properties (NYSE:EGP) reported a stronger-than-expected second quarter, with executives pointing to record leasing activity, resilient occupancy and rising development demand across its industrial portfolio. Chief Executive Officer Marshall Loeb said the company’s second-quarter funds from operations were $2.36 per share, $0.02 above the midpoint of guidance and up 6.8% from the same quarter a year earlier. Year-to-date FFO per share increased 7.6%, continuing what Loeb described as a more than decade-long trend of quarterly FFO per share exceeding the prior-year quarter. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? After Earnings Results, Markets Love Prologis Stock “We had a strong quarter as well as first half of the year,” Loeb said, citing the quality of the company’s portfolio and strength in industrial markets. President Reid Dunbar said signed leases totaled 3.9 million square feet during the second quarter, a new quarterly record for EastGroup. Development and first-generation leasing also reached a record, at nearly 1.1 million square feet. → 3 Photonics Companies Making Quantum Tech Possible Dunbar said customers are increasingly looking past geopolitical and macroeconomic uncertainty and focusing on longer-term space requirements. He said demand remains positive across EastGroup’s markets and that the company’s “high-quality infill portfolio” is positioned to generate organic growth. At quarter-end, EastGroup’s portfolio was 96.8% leased and 95.6% occupied. Average quarterly occupancy was 95.6%, down 30 basis points from the second quarter of 2025. Same-store occupancy at quarter-end was 96.9%. → AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off The company reported leasing spreads of 34% on a GAAP basis and 19% on a cash basis for leases signed during the quarter. Year-to-date leasing spreads were similar, at 35% GAAP and 19% cash. Cash same-store net operating income increased 8.3% for the quarter and 8.8% year to date. Loeb also highlighted EastGroup’s tenant diversification, saying its top 10 tenants accounted for 6.6% of rents, down 30 basis points from last year. He said the company targets both geographic and tenant diversity as a way to stabilize earnings through different economic environments. Chief Financial Officer Staci Tyler said second-quarter FFO outperformance was primarily driven by higher-than-projected same-property net operating income, largely due to higher occupancy than expected. For the third quarter, EastGroup expects FFO of $2.37 to $2.45 per share, with a midpoint of $2.41. The company raised the midpoint of its full-year 2026 FFO guidance by $0.03 to $9.59 per share, representing a 6.8% increase over 2025 actual results. EastGroup also raised several operating and investment assumptions: Cash same-property NOI growth guidance was increased by 60 basis points to 6.8% for the year. Expected same-property occupancy was raised to 96.7%, 30 basis points above prior guidance. Average month-end portfolio occupancy guidance increased to 95.7%. Projected 2026 development starts were increased by $60 million to $325 million. Acquisition guidance was increased by $55 million to $215 million. Tyler said the company has started $123 million of development projects year to date and now assumes another $202 million of starts in the second half. She said the increase reflects strong development leasing year to date and the current leasing pipeline. On the balance sheet, Tyler said EastGroup ended the quarter with no balance drawn on its unsecured bank credit facility, leaving $675 million of available capacity. Debt to total market capitalization was 12.9%, the annualized debt-to-EBITDA ratio was 3 times, and interest and fixed charge coverage was 15.1 times. Dunbar said EastGroup transferred four development projects in Houston, Austin and Los Angeles to the operating portfolio during the quarter. The projects totaled 669,000 square feet and were 100% leased. Subsequent to quarter-end, EastGroup acquired a 143,000-square-foot building in the southeast Phoenix submarket. In Austin, the company is under contract to acquire a five-building portfolio in the northeast submarket totaling 388,000 square feet. Dunbar said development remains the company’s preferred external growth channel from a risk-adjusted return perspective. He said EastGroup has land holdings in more than 20 submarkets, giving it flexibility to pursue additional development if leasing activity continues. Loeb said the acquisition market remains competitive, with strong private buyer interest in high-quality industrial properties. He said EastGroup has been a “strategic” acquirer rather than an opportunistic one, given the market conditions. During the question-and-answer session, Loeb said data center-related tenants accounted for about 40% of first-quarter development leasing and 20% of second-quarter development leasing. He characterized the demand driver as early-stage and said EastGroup is leasing to suppliers serving data centers rather than building tenant-specific data center space. Loeb said markets including Dallas, Phoenix and Atlanta have substantial planned data center capacity relative to current capacity, adding that EastGroup has land presence in markets where that demand may grow. Executives also pointed to strength in Texas. Dunbar said Dallas and Houston were among EastGroup’s strongest markets at midyear. He said Texas demand is broader than energy and includes data center activity, population growth and corporate relocations. Loeb said higher diesel prices have not affected leasing decisions in the short term. However, he said sustained higher transportation costs could make last-mile industrial locations more valuable over time, particularly in markets with heavy traffic and growing populations. Asked where weakness could emerge, Loeb said the company is most focused on the consumer. He said higher interest rates and fuel costs could pressure businesses and ultimately affect tenant demand or credit quality. Chief Operating Officer Brent Wood said supply could typically be a concern in an improving market, but he said supply is currently “in check” across EastGroup’s markets, particularly in smaller, multi-tenant industrial buildings. He said the company has land, buildings and permits positioned to respond if demand continues to improve. Loeb closed by saying market demand has been gaining momentum for several consecutive quarters. He said EastGroup’s goals remain driving FFO per share growth while improving portfolio quality, which he said should continue to create net asset value growth for shareholders. EastGroup Properties, Inc (NYSE: EGP) is a real estate investment trust specializing in the ownership, development and management of industrial properties. Focused primarily on distribution-oriented facilities, the company's portfolio consists of modern warehouse and light manufacturing buildings located in high-growth Sunbelt markets. EastGroup concentrates on delivering strategic logistics solutions to customers requiring proximity to transportation hubs and major population centers across the southern United States. Since its founding in 1969, EastGroup has pursued a disciplined growth strategy that combines property development, targeted acquisitions and hands-on asset management. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "EastGroup Properties Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Funds From Operations (FFO): $2.36 per share, up 6.8% quarter-over-quarter and 7.6% year-to-date. Quarter-end Leasing: 96.8% with occupancy at 95.6%. Quarterly Releasing Spreads: 34% GAAP and 19% cash. Cash Same-Store NOI in Hawaii: Increased 8.3% for the quarter and 8.8% year-to-date. Debt-to-Total Market Capitalization: 12.9% at quarter end. Debt-to-EBITDA Ratio: 3 times. Interest and Fixed Charge Coverage: 15.1 times. Development Starts Guidance: Increased to $325 million for the year. Acquisitions Guidance: Increased by $55 million to $215 million. FFO Guidance for 2026: Midpoint increased by $0.03 to $9.59 per share. Same-Property Occupancy Guidance: 96.7%, 30 basis points ahead of prior guidance. Warning! GuruFocus has detected 8 Warning Sign with EGP. Is EGP fairly valued? Test your thesis with our free DCF calculator. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. EastGroup Properties Inc (NYSE:EGP) reported a strong quarter with funds from operations (FFO) of $2.36 per share, exceeding the guidance midpoint and showing a 6.8% increase quarter-over-quarter. Leasing momentum reached a new quarterly record with 3.9 million square feet of signed leases, indicating strong demand across markets. Development and first-generation leasing also hit a quarterly record with 1.1 million square feet signed, reflecting robust growth potential. The company increased its full-year guidance for development starts to $325 million, highlighting confidence in continued demand. EastGroup Properties Inc (NYSE:EGP) maintains a strong balance sheet with no balance drawn on its unsecured bank credit facility, providing flexibility for future growth opportunities. Average quarterly occupancy was 95.6%, down 30 basis points from the second quarter of 2025, indicating a slight decline in occupancy rates. Some development projects experienced delays due to longer permitting and construction timelines, impacting the timing of revenue recognition. The acquisition market remains competitive, with cap rates close to risk-free rates, making strategic acquisitions challenging. The San Francisco market showed weaker pricing power compared to other regions, with a notable drop in leasing spreads. Despite strong leasing activity, the timing of tenant occupancy delays the immediate impact on FFO, pushing some benefits into future quarters. Q: Can you quantify the impact of data center-related demand on your leasing activities? A: Marshall Loeb, CEO: Approximately 40% of our first-quarter development leasing was data center-related tenants, and 20% in the second quarter. This represents a new demand driver for us, particularly in markets like Dallas, Phoenix, and Atlanta, where data center capacity is expected to grow significantly. Q: There were some projects that got pushed out. Can you provide more details on the delays? A: Marshall Loeb, CEO: The process of getting sites planned and permitted has become more time-consuming post-COVID. Construction delays, particularly in obtaining steel and electrical equipment, have also contributed to the timeline extensions. Q: With the increase in development starts and acquisitions guidance, where do you see the best risk-reward profile between buying and developing? A: R. Reid Dunbar, President: Development typically adds the most value for us on a risk-adjusted return basis. Our development platform is robust, with diversified landholdings in over 20 submarkets, allowing us to lean into future development opportunities. Q: Are rising diesel costs impacting leasing, and is there increased demand in Texas due to energy production? A: Marshall Loeb, CEO: Diesel costs have not impacted leasing decisions. While Dallas and Houston are strong markets, the demand is driven more by advanced manufacturing and economic growth rather than energy production. Q: Can you expand on the normalized demand from customers and its impact on leasing? A: Marshall Loeb, CEO: Decision-making has become more time-frame normalized, with an increase in expansions and new leasing. This trend has contributed to our strong development starts and leasing activities. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a quarterly record of 3.9 million square feet in signed leases, signaling that customers are looking past macro uncertainty to secure long-term space. Attributed FFO outperformance to higher-than-projected same-property occupancy, which reached 96.9% at quarter-end. Identified data center suppliers as a significant new demand driver, accounting for approximately 40% of first-quarter and 20% of second-quarter development leasing. Maintained a highly diversified rent roll with the top 10 tenants representing only 6.6% of rents to stabilize earnings across economic cycles. Reported that the 'gestation period' for deal-making has normalized as prospects move past the 'analysis paralysis' observed in previous quarters. Benefited from long-term secular trends including population migration to the Sunbelt, near-shoring, and evolving last-mile logistics requirements. Noted that while the acquisition market remains competitive with tight cap rates, the company successfully expanded its footprint in Phoenix and Austin. Increased full-year development starts guidance to $325 million, reflecting consistent demand and a robust pipeline of 20 different submarkets. Raised 2026 FFO guidance midpoint to $9.59 per share, supported by higher same-property NOI and occupancy projections. Anticipates that record development leasing signed in Q2 will primarily impact 2027 earnings due to the 2-5 month lead time required for tenant build-outs. Assumes a more difficult year-over-year comparison in the second half of 2026 due to the exceptionally high 97% occupancy levels achieved in late 2025. Expects continued upward pressure on rents due to municipal pushback and zoning challenges that are slowing down new supply deliveries across the sector. Flagged extended lead times for critical electrical equipment like switchgear and transformers, which can delay project deliveries by several months. Cited the San Francisco Bay Area as a lagging market due to tech-sector slowness, contrasting with strength in Southern California and Texas. Identified consumer weakness and sustained high interest rates as the primary risks that could eventually impact tenant credit and demand. Noted that while cash re-leasing spreads have moderated from post-pandemic peaks, they remain healthy at 19% as the market enters a new phase of the cycle. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified they are leasing to the suppliers of data centers rather than the centers themselves, which avoids specialized, high-risk build-outs. The company believes it is in the 'early second inning' of this trend, with significant capacity growth planned in Dallas, Phoenix, and Atlanta. Development remains the preferred growth engine as it offers higher risk-adjusted returns compared to the current 'opportunistic' acquisition market. Management noted that private buyers are currently bidding cap rates into the high 4% range, suggesting aggressive assumptions for future rental growth. The process of permitting and planning sites is described as 'much longer and more arduous' than pre-COVID levels due to community pushback against industrial projects. These supply-side constraints are expected to act as a natural governor on overbuilding in the current cycle. Texas markets (Dallas and Houston) are outperforming due to diverse drivers including advanced manufacturing and corporate relocations. Southern California is showing signs of bottoming with record leasing activity in June, though EastGroup maintains limited exposure (5-6%) to mitigate regional volatility.