EastGroup Properties (EGP) 29 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Marshall Loeb	President and CEO
Brent Wood	CFO
Keena Frazier	Director, Leasing Statistics
Elvis Rodriguez	Bank of America
Daniel Santos	Piper Sandler
Katy McConnell	Citigroup, Inc.
Michael Carroll	RBC Capital Markets
Bill Crow	Raymond James
Eric Frankel	Green Street Advisors
Craig Mailman	KeyBanc Capital
Venkat Kommineni	Mizuho Securities

Call transcript

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Marshall Loeb

Good morning, and thanks for calling in for our Second Quarter 2020 Conference Call.

As always, we appreciate your interest. Brent Wood, our CFO, is also participating on the call. And since we'll make forward-looking statements, we ask that you listen to the following disclaimer.

Keena Frazier

Please note that our conference call today will contain financial measures, such as PNOI and FFO that are non-GAAP measures as defined in Regulation G. our most both supplement page GAAP for available Web a and them our earnings to of of definitions to or reconciliation non-GAAP site release, furnished financial regarding results. press on to of and refer further recent the our our and financial our our filed information Please with reports use SEC, these periodic to the and Investor measures as this also XXXX, within defined of that of statements statements Private are Please Act the the of Litigation the Securities Act and during Safe Act call under note Exchange Harbor XXXX the and XXXX. Reform forward-looking some Securities Securities

and materially. We differ their factors morning, families so by harm's done Marshall quickly thank remain our while release well of Good involve They've way. result and statements events future to cause no related working these and remarks and with out known your start our doing thanking Thanks, refer unknown duty our Such risks, the as directly coronavirus our and of to or SEC that transitioning to results filings. them we otherwise. to Forward-looking strategy press of outbreak ongoing are actual and in as those Loeb for you and whether indirectly new hope factors, Keena. undertake the pandemic operating the update We or including in statements information, everyone other team. uncertainties I actual time. will certain a a job of remotely. along of earnings great made risk today, and may

above quarter the of a of per strong year long-term higher and X% and Our market. the such to funds came compared -- portfolio quarters second for last share is up truly trend. our as share FFO solid that year quarter, a marks The in quarter operations of FFO year. team from XX quarter prior demonstrate compared the of And X.X%. guidance industrial were resiliency had producing second the as This consecutive per results to

averaging was at high our occupancy quarter of XX.X% quarterly projections. leased Our XX% leaving XX.X%, end occupied and ahead us

Our from and high market XX.X% mile with XX%. leasing retention X.X% also Re-leasing rate Year-to-date benefiting last is trends delivery e-commerce, higher benefiting occupancy GAAP accelerating and occupancy our and cash. a at year-to-date for quarter strong XX.X% at spreads healthy GAAP XX.X% is a spreads are of the cash. were

team's environment, was for year-to-date, and of proud same-store our up some I’m X.X% quarter the results. X.X% extremely an and Finally, choppy NOI during

maintaining Our liquidity. with again strategy and strategy one later shift our flow XXXX remains of growth. occupancy focus cash an I'm to on in on will eye hopeful,

our Houston, being the level rate collection XX.X% Company X-month grateful roughly our full of terms our line rents XX.X% has this one market while a largest of rent in the at of decades. cost availability over on of year-end footage through leased, our liquidity, improves Brent resilient. XX% debt in team, of square will as the while length today. I'm collections further average at Brent percentages finance X% on line I'll In XX.X% we have ended on we lowering is generally you leased, lowest about rents upcoming the liquidity highest our placement, roll thank capital. color end, pandemic our commentary and of [indiscernible] and history quarter company's at drawn a the quarter and remain give our

a else there less even We XX% unknown in of rents. simply collected the and in normal remaining. any cities we expectations. that clarity pleased to into truly how have pre-pandemic shy July The assumptions, will quarter $X.XX far, original Brent is and thus with our only months our budget I'm results $X.XX reopens, everyone but per can of when plan, this. which economy reopen our fast are realistic are FFO it reach share we've For will and than speak several second shutdowns

we roll top XX past thankfully diversified down in also end, points most for with over XXX of have our sector rent Towards the our accounting X.X% almost basis have tenants that years. few rents, the only

As we've before, our development pulled by demand. stated starts market are

quarter new at conversations at starts acquisitions we time. to the reduced and underway. We're this of we're some also in pre-leased add In same With starts forecasting light. as shutdown, other projected actual the level spec XXXX developments reflect as well words, looking value investments first not

foresee, tenants and our parcels when including next we until a meantime, distribution sites, And as trends economy key in guidance. stabilizes. land which several we market Given working we variety will we positive operations now view the view the the we're topics, the working maximizing And on development long-term phase. valuable reach goals financial liquidity our XXXX with Brent review is updated of the

Brent Wood

Good morning.

resiliency the per of represented our reflect results and of compared estimated and of to exceeded initial FFO primarily capital deferment rent comments my maintaining the increase better of per at operating driven was I in occupancy a and share strong our quarter FFO onset status, and $X.XX our amidst conditions. of center share April, The quarter the midpoint quarter second performance assumption request by overall and the than portfolio the unprecedented an outperformance portfolio, share second that which guidance pandemic. X%. had collections range estimate. our will for a per collections our around team second of $X.XX, our changes we was Our XXXX increase

private million. term to of million a two quarter, And average unsecured X.XX%. senior The totaling notes $XXX this a share. agreed we second price placement interest terms During an rate the $XXX month, note fixed million earlier $XX on with of has per we of a equity $XXX at raised XX-year

combined conservative position has of October. us strength, our is $XX XX-year rate sheet notes during on activity serving with in anticipate The us of strong with both term which fixed a That interest and We financial of note a on kept a time second million is X.XX%. well already closing in this balance uncertainty.

and Debt charge X.Xx. XX%. coverage market EBITDA our total to over X.Xx fixed is to ratio is are ratios and debt capitalization interest Our

rent been have strong. Our collections equally

We our into additional and quarter total deferral second bringing for XX% entered for and our revenue XX.X% an to second defer collected have X.X%, of agreements collected the quarter.

of is XX%. pace. months subsequent In reported risen Last month As that collected we tenants form for far, the rent of we has only of to of and XX.X% of rents deferred on three entered our That April, deferment. to agreements slightly collected deferral XX% the for thus some XX.X%. July, bringing have had requested an X.X%, ahead into total additional June's and that the have

We form consideration approximately have stages XX% are denied deferral have our and XX% of only into request. some million, in estimated request, the of which of The of with $X.X deferred represents agreement XXXX entered of X% revenues. this X.X% rent totaled the various far on

quarter, we stated the depth on As economy its undeterminable. duration and of last the the is and pandemic impact

immediacy potential we of in tenant April the degree had occur second loss and budgeted financial of occupancy, distress the However, quarter. and an did for not

the $X.XX guidance the by assumption we with potential the increase year debt the of and revised Other from in caused to general from our notable disruption Rather second succumb reserves increased midpoint there $X.X that were in per revisions in equity third $X.XX $X.X for that very a X% of attributable some $X.X it were X.X% share tenants. FFO or pleased XX.X% for million. the remainder an be decrease the is to Among of for of over economy million share, by our performance to on a XXXX. quarter for per a actual and increase from interest specific uncollectable Note result, companies increase our who a the and results. summary, earnings include assumptions million. fourth the a reserve quarter rate to not average and million rent debt lower the is occupancy bad will $XX In changes new XX% by issuances pandemic. average to As

portfolio team the navigate will year. of quality on experience strength, to We to through our us financial rely of the remainder continue of our and our the the

make Now, comments. Marshall will final some

Marshall Loeb

Brent. oversupply, wasn't few our Thanks, economic results. a Black Swan our closing, We’ve years, In said a as quarter fear proud much of second I'm as [indiscernible] event. the past

either, have just we You now don't that. but want

company worked and before and our different too. one through this have these team through Our while we're working

the stabilizes, that me economy excited the future it's most EastGroup. makes As for the

safety fast-growing come stock in users needing markets. that remain has will inventory, a and in strategy, new consumer Our these hearing traditional and last additional U.S habits butter few Mexico. which increased including pandemic to worked well we're Meanwhile, the out bread will our habits or of, of shopping in accelerating shoring continue shopping trends carrying and e-commerce, manufacturing companies distribution that the changed as have mile of space tenants with past industrial years near result this Sunbelt

combination our of questions our of team, All for markets optimistic Well me of any these, our with along and open-up properties our your about now future. have the

Operator

go Instructions] take Bank from [Operator Please Jamie our ahead. We'll America. Feldman first of with question

Elvis Rodriguez

on guys. Elvis morning, is Good This Jamie. for

just of be your question. on and stronger two, supply Houston can that your your That sort demand, into then outlook rest rest Just portfolio? the relative helpful. any a to number seeing changes markets you're quick can market? would sub And If drill in of makes the rent of relative we share there what to collections rent you the

Marshall Loeb

has about got every in of worked at really start In couple but Elvis. Houston that's together hard Houston, good quantify morning, that. time a Good the experience. experienced outside, team things. [indiscernible] so from and have downturn Houston of for take few a to long -- and three a we've Marshall. a It's and lot years, them. One, a it's always well probably I'll they've we

good a is maybe to And comparing in tenants rights things more don't and country job have it Texas tenants, to so pay terms out other the of very West been they of down market when about parts that. really probably and focusing landlord chasing some favorable like done probably diligent

what So the a kind someone when investment we've buildings and size, standalone marks. Houston. that sometimes really kind of what buildings gets lock our -- below or dropping low XX% that of that kind that we our shrunk ability in overview hone down the Houston kind and market probably older the high level XX% third I then a are thing in developed helps over of EastGroup to we in with are collections push really were think that legitimately out negotiation the kept sold to in lost of to our still from today, has And little

of So this years I high what the we in couple of XXs, of old age I as what's years. by of what what is average the was we selling XX the statistic had like were a now, was in remember still X is age selling but left were quality and the we remember average years,

-- developed it's new it's functional, what So a located highly we've got well left. a fairly, EastGroup of parks type

And must of few that of, is, that are need so And national that there lost pop last or if a I painting spaces, even mile spaces EastGroup things the okay, capitalized on public well mean it's smaller of a mom tenants I kind and think kind the companies and of credit that general has lot attracts smaller last of tenants. think one gotten private us quality months there's space.

we'll to you're surprises just and admit XX%, seeing after X well and collections Houston I'll past after it the crossed great it our been done over that job me we've company a team and fingers how so that. done then And in months. our keep has be

little In submarkets, there's as tenants that doing. supply. much Houston, of broad it's It's pretty seen terms the markets not concern trouble size because been our we've what by within bit. any so space the to specific a they're of brush, Certainly us of it's

get some that us I which million Although bay. And leased, much comfort the in statistic, people then most box, XX.X% think is, lost the construction, roughly of not XX.X of that it's CBRE. is big square how feet other per in shallow XX% of under Houston gives leased

even feet, in X is year-to-date that over million over feet, the a million Houston. been accounted for leaves So most but little that of absorption during X square has pandemic square space

been to a a then And helps any that, So to need to but think concern Las tourist through hung hopefully our has a Studios -- a for a same because with majority our with of the reopened me that stable the large example, Vegas, have there of The very it by but be just be we'll far and Universal trying example. those we've are certainly little Dallas than more markets as And thankfully, markets. market like the with strong guess releasing In to a harder Disney's not of slowing had is and things Orlando, Disney been open. or market. in I'm like are specific markets need there, Orlando, bit, a coming convention Orlando, We've I economy stable shallow great open, for some a and not or that. hit way work for down our strip tenants some Charlotte be but the in and to little Tampa market. little markets we way lot now, spreads the tourists we've town. bay. It's said that, us, Austin, -- that like that

Elvis Rodriguez

Is then Marshall did increasing question when That's one were you just you. very or with guidance release obviously it survive On the now? -- and those thought Thank that would What thinking, either thriving? of actually are that versus lowered some seeing more now, industries in for then that's you guidance Brent. different you helpful. it reopened? tenants what what from And that then have XQ see exactly are not Is quarter-over-quarter? markets you you

Marshall Loeb

and take of I'll then try in we'll Brent and kind to both answer. jump

just us, kind as said, came as that then we've started pulling and their our remotely, of with were together, that's all watching were in this our we guidance, I going as a to curtain we watching and working coming just a just and -- dramatic, together, tenants like shutdown, we it's things down shocking like economy the really was pulled shutdown instant, And the XXth, later, kind it leaving it's year pulling news, stop. said of together this we people think, as an really impact March a month of kind aren't one as Friday, -- to to all homes. this

to in is trouble, surprised me bring it's working try our So us things of that. space to we're to ability they're their to those get just going out why that or our tenants, with bad investor board how very still on our an space, to difficult. the some stay be do like good been to is debt, tenants in the backfill critical figure and or to those trying space What even have

down, pleasantly it so been then I've So surprised. read And as accelerated shutting e-commerce when is much. people things

demand. So to social and with companies there's more that distancing led more that has incremental

market that, grown year building, this tenants the as have up Amazon, as and our know, the picked share the we've you As home rapidly e-commerce of really pretty and that. continue probably

So seeing that quickly that probably happen me. surprised

it that just And as last occupancy think happen we XX.X% to last same expect quarter record average is the our You as as was sense a it, did. the fast makes really year I that it's -- probably year. at it as going for and surprised to happen. it year didn't I'm

there. a been any thankfully Brent, odds had asked same, you bet in around in would've April, it if I the occupancy hung our commentary around down you would So I this? have me staying or and lot it going but wrong, was that color

Brent Wood

April, in like we very just reality with But it we bit any mean, like happen. guidance something was of a soon, you to just do in I think say adjust now there's what the right We've any so it, would I early still uncertainty a pleased the got didn't everything into we're you little dialed knowledge said, hopefully the and for I No, held of that. and adjust you yes, things to have needed into of for few -- lack to April And felt Marshall end -- know know. some might up is just on. the so even didn't toward with maybe data of we year. and how that's

again, we pleased Elvis. where with are, we're very So

Elvis Rodriguez

Great. quarter, Congrats on the guys.

Marshall Loeb

you. Thank

Operator

is Santos The from with go next Please question Piper Daniel Sandler. ahead.

Daniel Santos

has on given kind half been you just Hey, that color trend, my XXXX, morning. would helpful. for would be I color than first that that first in if conservative One would half good could just question. on of continue Thanks one the more you're second back why give expected. the for in occupancy guess taking baking the the of is half expect some wondering such better guidance some

Marshall Loeb

places gyms hope that Yes, to and -- think time into end I maybe that month -- stress We at has we since tenants on again, is I right. kind don't economies the different mean, heard I shutting speaking over know our down to has at at just this, of X,XXX the quarter the one end of July, stress different things our we've -- it sheets but -- least time. hope this, I down get you've exactly we you're thankfully of here thoughts shut reopen, States, tenants down over date, that more with hung there. in at thought not are restaurants cities XX%. won't different that shutting different where to bars, things balance reopened,

thought hope the drag you're I it's hope tenants. each a being other, I yet. is got right. month it upon on but So to conservative, that our build not out this we're And of of we're we some be

So as -- really we not specific, specific, more market, anything of that or two any three drive It any any there's just one it's large is ones not a it. -- tenants kicked I'm we're this. end off get a sure, And of or the economy. time tenants by over I more our not weak almost through have of believe to kind don't of

Daniel Santos

on then from on And the helpful. second would distribution question how That's the and appreciate e-commerce. say I incremental you it. comment demand is much my Got --

mile and between a when COVID something change unquote to how go versus normal? and now permanent would you distribution say has just things way temporary So much really in quote changed last back

Marshall Loeb

read much of terms that out, than of Amazon e-commerce the that teens. we that spike it retailer almost about people percent the moderate things how things shutdown think into the demystified growth in a And for where expecting had I go as and XXs pick we've any don't segment that back in retail mean, but jumped less seeing the sales, I what actually to it a it was and numbers of I -- that And population. some to back. high in question. much the good Okay, terms of XXs, were e-commerce has low read the the the they or way think seen things this were large growth maybe will up and

too, but work, live the help all were way have growing of pushed fire Sunbelt way, I But side, live it and this, was -- out will euthanasia the really will that. happening. dying, add this this years. it or for see this is relocating malls trends Sunbelt last the the Company I those it, think this I two will three fast markets shop think mile -- over and maybe were started think So I -- they coming e-commerce markets ahead people them. to time dying, think is relocations, said, way think our this almost some they the and other way. which shopping they of accelerate If I was somebody you people coming accelerated as us and all fuel is and coming It's

Daniel Santos

it. you. Got Thank

Marshall Loeb

Sure.

You're welcome.

Brent Wood

Dan. Thanks,

Operator

with go Korchman will Manny ahead. Citi. next to We go Please

Katy McConnell

rolling tenant for impact is and the into PPP collections This be the rent balance factoring Manny. McConnell estimates increased year? of Can or base on you your for Katy discuss program you the might the morning. that deferrals of Good potential with your off for the

Brent Wood

up. from some some Yes. money morning. then tenants feedback got feedback that put got initially PPP hey, had later, request, Obviously, direct is and and have received this in had Hey, we caught we we Brent. Good

helped. companies a our tell the hard we've that. as of to extent tenant benefit so PPP We have did minimum. It's money. do exactly customers used of our public sort X,XXX of seen of what to cross-reference to list received from And that some We base X,XXX a XXX,XXX certainly that's tenants to out

or the XX% -- make sense base form that So it did to received at tenant to expected. we form of appears PPP that, of XX% requested were our some And we've, mentioned, most occurred seems what back of some. as around some April looking XXX money, we which only XX% we receive our mean, Marshall in at people somewhere relief. tenants I have of that greater. of And XX% had

they that'd extend program, terms In whether helpful. be the of

that you people's anytime put think I money pockets, beneficial. be into would certainly

tenants that. our I think, shown resiliency without XX% a plus have of good

continue really better, we if expect that. to longtime a Certainly tenant -- the base does hard happen. don't it them, customers that with it's been whether but will but it our can might be part program, or of to what So doesn't we would in ours not and incrementally tell we that have, of would lot -- it's impact would if control they work

Katy McConnell

leases as following index, expectation on well Okay. Thanks. you for Houston And up demand about there, as the expiring have CR you the your then backfill talk for maybe can retention there?

Marshall Loeb

news of is good the between X%. kind what environment, now think got choppy probably about we've only rolling [ph] that's the I and given Sure. year-end

growth about, more in talking there they've at led cases. not a here think working those So to has on understandably, at a you're people uncertainty the put solid. the company off new level time this Usually feels on and pushed economy -- kicking I -- we and retention And renew. until our those our put little -- and today were hold tenants -- certain buildings

year-to-date. is company your most as EastGroup else's XX% were model a scratch, retention So everybody if would tell I our is you and XX% long-term usually retention about our building on from -- rate. XX% is And tenant you long-term

Houston led other have markets. in and has in is higher guess the in stabilizes a rolling uncertainty as to hopefully. My XXXX retention we rate economy So more

anything -- anywhere I you years, to from coming to or -- three going rents years. to way in be expiring XX% that those that have two good that Houston, X our that market. and to The are a through X may down come news approximately we'll are have probably as think be probably X% had work keep up is

of would the with the a industrial will those. think pick as supply probably little that, still think the most back more hopefully there's I year, XX% up retention to work our half half in is and things So -- down. I we'll but like rent held to way nothing part, but really it'll because the I plus up, alarming embedded back there, in of supplying start date. Houston growth probably normalize across think probably the And for I stopping country, maybe expect And through things and XXXX rate it's

Katy McConnell

great. Okay, Thank you.

Marshall Loeb

Okay.

Operator

Our question go Vikram Stanley. from ahead. next is Morgan Malhotra with Please

Unidentified Analyst

[indiscernible] Hi. on Vikram. on quarter. This Congrats the is for

bit Just, curious, spec but you're could for -- on you you a on development that development going provide the starts, outlook, know not color little why just I your bit said more expectations starts? your confidence not future to the why have development a any more? -- given little push

Marshall Loeb

divide had we half, question quarter, our think starts the was probably we things. so [indiscernible], and honestly, year the quarters the in we the into because second better good A we uncertain feeling another you if economy and about are it, about really of stopped half as spec second

roll fourth probably in we in not Although have tenant between there quarter. it's we're And would into a get we out. fourth building as any we number tenant -- we -- starts we conversations lease if here third some we and proposals of for a build would July and third we'll quarter, where -- late build quarter, will pre-leased are There sign, have a then cautious having a still some that are

in because million bit that's year part little probably we spec are markets differently like us own probably put thankfully, existing market. think not these giving started this it about building, there slow the next of really peers also hotels, with a sure you next said but within development buildings prices We've And of but we've economic an thinking is end, we XX% Charlotte, where Dallas, your but plus hold. but also difference already and we has down XX entertainment on really couple slow times, starts thought the Phoenix, biggest now where lease, those So only watching are are pause, watching and several retail, about of But portfolio, between the industrial dropping what if that full. markets is office, delivering to are of what's has not construction type development, and Northeast stopped. probably down, our that make the have normal park, pretty space a would really there's I want little next which really

are submarket, see submarket little And then waiting how can our much may just we went So our within or those but today. of what terms pricing which see seen knocked bit. in rates, benefit wanted of portfolio, they tenants, of not by own we the of woods, to vacancy of construction get seeing we've also kind that what the a thankfully on we

Unidentified Analyst

property And was follow-up on statistics just last operating same there talk kind was at to that just a quarter? it going Can weaker, about market bit NOI the what a you in from bit on core some market. least like looks through markets, little run of little weaker the California

Marshall Loeb

was -- well, good a and they're there. example, quarter, can a Francisco weaker is Last property I vacancy one and San that we've Hayward, for got at

quarter was -- and has full. it was last been it So the entire year vacant it

markets agreement a property But So is have just review and prospect owned a XXX,XXX looking since but then in or still when type, and signed, It's we'll and spreads The quarter of San comes a but vacancy just bit thing we an say bit East our a Francisco, shut there. mid and those is Francisco the agreement as San you some down then look longer a strongly in probably California have there. area kind spaces it's vacancy, back we occupancy. drop should it released. lease the really -- if one we being hopefully XX% good an we've news and the Georgia leasing X% been with of get see out space, a Oakland a really signature sub for have of Bay get, large little it X%, feet bit or -- It's just at and I be and it's pickup Fresno the biggest taken Fresno in of we towards little one, in that had one there. kind year-to-date, say is a through of probably the Carolinas. would Hayward late XXs, that park of longer. a kind markets that's not that'll little the same tight we've And

it's little second hit longer quarter vacancy us in a And drugged that bit that so and there. out

Unidentified Analyst

Thanks Great. much. so

Marshall Loeb

welcome. You’re

Operator

Next check RBC mute with phone. your Markets. Carol question ahead. Capital please is go Please on from Mike, function Michael the

Michael Carroll

Marshall, going know that There increasing the couple chain tenants sorry. they voiced can now I these on plan provide your hold indicated for past of to you around that's comments mean, yet? quarters. color I shocks? plan of company's Have we inventory on or stock? go. they to you that's been that safety been directly some conversation some have to the sustain your supply potential that need more a

Marshall Loeb

it's I and more probably but at And and direct. through for directly in than to through with inventory us may -- then typical, from not certainly need and -- because just hearing and -- they're a and given they're less little when using I hearing rooftops the typically to and doorstep, oriented. say, reading front between it said more once click been to of more more time and about end, brokers guess hearing gets and that's tenants other certainly, it's better to would it we and inventory people more It's more close to part a less we've you now, are traveling that us inventory -- conferences kind world's up, where it of hits any going to as conversations going. where April higher rooftops, spaces we and kind then how us it, tenants that higher brokers got sourcing the get walking what people had is have through carry properties another bit phone than things, someone you're but educated you probably at sense speeds calls were that delivered our from and excites of tricky brokers how type that carry to when e-commerce China your and hearing

Chicago more in those Atlanta, companies and or now when -- was South Prime logistics they're on or it to and South but now. So rooftops get Amazon need delivering still to coming to Amazon that of carry Prime the edge in center you from go are I through town, they'll days Dallas, inventory before Amazon think more three near and two have a and

inventory to in leading -- markets. China from that think, one is company think did where and [indiscernible], tools I to itself and read -- I'm to trying which more already of is craftsman relocating I I our we’re which is of So think

manufacture they'll So there.

on, seeing green it we’re of that, long-term trends come continues shoots maybe I'm pretty think [indiscernible] early hopefully of some it's these way. that you're I but our but to using -- So

Michael Carroll

going that the inventory, it they you or you of [indiscernible], are do outskirts then some in I do inventory, at? to hold ones guess is -- think broad smaller higher is how so, need to will cities? mean, out bay And do the more I to do I will the tenants shallow driving in mostly larger or this these space be guess the where mean, going I too? going it base it tenants? And tenants more major be into they among will be think be the if of hold to

Marshall Loeb

open It's some as a kind little be stays of tenants the us in start the nice in Wayfair, probably bit of Home probably on early been I -- still active. little Lowe's, local being saw of those conversations, It's think economy we more mean, see Probably. the Tesla, Depot, to downturn, ones, -- national XX of our and this active those and names being to it's regional of kind type regional we certain, the most last tenants the local a more been this XX, in get days. tenants kind the both. I

it it that. to I than that inventory keep the national we'll think in about And think think all so probably a their about or than -- I Home cheaper center probably in in your that's more a as not guess, keep I home and that. think, their only their that else center from washer And Lowe's then picking dryer bulky an you're keeping because and Miami. us regency inventory it them they're They warehouse warehouse, large type I on Florida to would something them that say like Atlanta where items order strip is regional, local, depending or do the companies. or inventory a talk or on you Tampa a like Depot with with, how EastGroup need much gets property, it's a delivered somewhere cheaper leaving that's have in we it's Florida for

quarter think what gross retail on our strip center trend rent to third that are will would a I So rents because our basis a a a coming probably way typical be. keep

in We've and buildings to And out, backup think use and that's outlet service to supply figure and with, conversations and the they've and the Hurley of our us. work because and growing having and type cost concepts our where as don't us buildings. Nike to hourly van way I'm -- their continue different for it's more group another Nike So chipping just back for forth inventory and as people all about it pushes given space way. Orlando, with their chain some brands all -- our away Florida, and we're I store, on seen tourists malls it's -- it cheaper using their and thinking our and Nike, and will but what coming that they more got run

Michael Carroll

Okay, great. Thanks.

Marshall Loeb

Sure.

Operator

from go question is next Our with James. Crow Raymond Please Bill ahead.

Bill Crow

update get number declines we often. couple any to material to telling one, Hey, seeing labor? good what pretty coming an two actually is you. that Number about in been just tenants of We are down. Marshall morning. wanted construction? guys. color the And had seem their ability just growth on Are to Congratulations, a construction you I source topics your surface know costs. from

Marshall Loeb

our down guess that costs that square Bill. seen Good costs per a seeing good we've down we Are $X come backing come foot. up shell question. I or $X buildings morning, our on shell

things as rents of the given rent be back that pick flat times, think at thought nationally be people half and location, of it -- talk used and Labor to source as am in big meaningful while like tight in of certainly I the starts -- in the type that, of if said a reports this conversations and it back the different pickup come peers growth has tenants, to think and I rent have We up labor would workers with to during to half strong markets and they to fenced year, the kind a couple where we It -- of will cut is growth has their starting cases, have buildings rents to it'll workers some would construction number. be So, for I'm XXXX. read had such so the going of our where maybe to we with picked how and the competition up especially markets part of a the where the general up show they lock away. breaks, were that could site hire contractor try where basically would lock the in because they building our to -- unemployment. year.

efficient things that that's labor. available, would So what know but stopped, less but safety, so construction, that labor rightly -- like and distancing completely last of tight and a requirements unemployment on. was, labor I don't of we're idea And that bit an how that. little think and certainly on but more because is gives hearing is I is you was were going

on kind of our we've development So buildings. continued construction

were little we think bounce We rents bit. will and a our back drag little down a coming have underway heels bit because prices

you're it like how and time, do to about about start that you trying developing you depends it on can and real get going shutdown. So kids really just think early school that's about another -- thinking in you part to it's when of back and again things that nervous

about a So little we're being bit that. cautious

Bill Crow

the is little for land, land are looking the that owners more on the maybe a given to for way liquidate any competition other development land easy order or investments economic is on bit, this to Marshall, indication in pay that environment? it

Marshall Loeb

Yes, -- question. good we

have of been assets, there's On anything, it would November, concern land last markets, find not part is however, land long-term in been it's thinking a competition [indiscernible] seeing for -- good picked We we’ve have industrial made picked a And growing land, we our land. less seem have if does our has so -- are has sticky. sites distress may demand priced industrial. land over gets and of hard for out said seems been there it's been industrial awfully less in when The it up. little prices is that range terms fast like of like to

Steele that tie it some the risk could and of as to Charlotte in up our has would go been Creek, where some press tie as as long then at us if to the and in funds in then up successful a as our been been we up Antonio. San So seller happy land but land able, very let possible, good have developing late Northeast nearest development, like some trying it's contiguous we've a we park continue which tie there, Dallas are

makes thing the we're it I -- waiting eight the of of land really would and thinking you're that really because through next and able and your just land I'm were once park and some out one have is tenants last building kind number our and building get where of portfolio we of lower we've so XX,XXX, some I like land in that another they source a than XX,XXX raise what Fort hand you there, and contiguous so feet. felt -- as to be And park risks. say, the to square existing our much maybe to we're do Myers many of for our building need again, tenants and their as development a adjacent peers,

space higher you a and move your rent. building at into we'll X or So XX backfill

or that, safety can only and near earlier, kind dear. we more a it's markets that for more whether mass to manufacturing or pickup, reasons think you pick or the use out little and to parts, become going whether there, be we of talked just the trying or because relocation Sunbelt Northeast, about we're here stock, e-commerce places or some to to as Myers in of Northeast transit those our bolt-on or Charlotte markets existing opportunity land Fort this -- like Dallas out land bit or coming of So this to up or of it is

the stuck gets for So of little people I'll and talk add to And of if because put so want carrying that we but a to slowly it brokers kid we're distress a too the and how want land say, get a names right that buy about to they'll when reasonable distressed now. downtime again, we industrial it. I've got EEs of Rolodex sell, into [ph] this here about we unfortunately, of can use long, don't to and kind if land scary thinking you amount that’s yes, EastGroup

Bill Crow

it, Well, color. I it. I guys. appreciate Sure. right. All thanks the for get

Marshall Loeb

Thanks, Bill. Sure.

Operator

Go Street Eric Please ahead. next Advisors. with Frankel go Green to

Eric Frankel

[indiscernible] you thank And my issues. phone with you. on me Thank

question. basis? accounting Can you you cash for -- an the what on assumptions is the to debt express -- a that year, half Just second your be going a can bad of

Brent Wood

to morning. Eric, two X quarters. It's probably We until Hey, line good X.X It's know probably first straight what's wouldn't occurs, it running been through Brent. happening versus been cash. the

so year been or date XXX,XXX million $X.X the of that, over of just to out far XXX,XXX, the so So, has cash. that about for

where broken debt Xx We we would versus a overall things, occurred, percent The like, X.X the line that whatever down. line. proves But just Xx do comes So allowance, it have greater we in, it straight I bad necessarily conservative. to really it, just would $X.X it'll And be side anticipate be it's not would say to be say we expect whatever have hope as don't smaller it but I mentioned, to straight a be lead will be, like internal have we similar cash. it'd that to on been, probably some to per would we relative tenants. being the the be specific million, it I general quarter, to of cash that's component certainly

Eric Frankel

clarify of it's And average a you're core in few leasing specifically, of this helpful. but Marshall, That's kind expressed think, the then to this Okay. bit for years. lease I different of ways, maybe couple than been little just last shorter you've terms the a

plans tenants So bit of installed. uncertainty on growth little have as based that on a just their

few you this will expect So I stay? years? or on years back a go trend quarter. Do to think last leasing to X.X, to the that that it's you're so X.X roughly where think down Is been you

Marshall Loeb

the there down, shock of little is It of It been catch. been a wouldn't X range, but but 'XX, gets uncertainty thing. tradition kind late to to little down. over around Xs, as third go And type that for it's quarter there. the footing, dramatically is economy I think where sound not that me, bit. which bit before Good we've a It's late given kind X.X 'XX, it's the stay kind we'd back to X.X then -- of

good So a kind it of, I think catch. again,

in it on year, quarter, COVID estimating market that do the this depending and is. out. sure it's stick think just first quarter, where I fourth it expect and X-year and next more I uncertainty But not plays we'll we're would a how renewal would hopefully me is because normalize by

Eric Frankel

mile front. you're just question, to Final like you're of Thanks. kind the demand with as demand individual store to customer actual consumers? much your last on just Nike or delivery [indiscernible], of delivery versus replenishment seeing How describing this Okay. is mile what last related

Marshall Loeb

we ship use, going It's used It's inventory. to we're out we've our and retail rather level store. an some of have customer store now of to mostly [Indiscernible] related. to EastGroup than customer usually level our inventory building moved market

the exception. that of are of backup you're but more So that by it, storage There probably where large, level and most house. store it few examples that's a

Eric Frankel

Okay, great. Thank you.

Marshall Loeb

Sure.

Operator

with Mailman Please Go go next to KeyBanc ahead. Capital. Craig

Craig Mailman

kind across X% of significant but any of weakness Hey, rent rise are your mentioned, market guys. outside any Marshall, down you Houston are concessions seeing in to markets? of Houston rents XX%, you or

Marshall Loeb

those and it stayed not probably consistent. mean, we've renewals, really. seen I question, Craig, pretty not Good have on

has month where on rounding two typically in a our everybody of of been tenant free get, and done where broker deal about development just it's getting tenants, base about where a it's rent. there's a pipeline ask vacancy, All the they'll or and rep usually you'll a or third for

in been as there's movement there's the grow pretty the So pretty of little there have free market up we've the been have stable, stable, as where not -- rents out not a many been bit rent rent has increases tenants seen annual -- where tenants realize, market.

than for or longer up but we'll leveled not two term Houston, been could bit they'll a two more little somewhere on months free rather the backwards. rents But and three thankfully, Maybe more So settle out, rent last middle. of chip going outside probably in have a lease.

Craig Mailman

And to that escalators that that push get you we’ve you of there's companies to guys on pre-COVID, Or trend kind you part a lease bumps equation? if some side trend have higher, heard or into of from [indiscernible] maybe of to that X.X%? been the other or to try try guys

Marshall Loeb

you spreadsheet versus this, case comparing higher, it a heading And it's XX-year your probably we would. -- you're usually higher. been X%. to but If I and on materially are X% probably those And into And term, longer to get make a probably that negotiate closer lease back to going to bigger closer around higher, going rather really by probably the going space to or the broker so it to basis. to a they'll typically sense. we're Probably the those the X.X% get We'd push bumps if And pretty tenants -- have and not They'll bumps. boils X%. we're love X.X% go that's two And brokers. can were guess between rep down that, to we trending that's we higher everybody but space, probably to peers, and hard. probably again, if -- has than a percent the where they're bigger X% a go case than tenant

Craig Mailman

just impacted mean, the often, maybe this of deferral just Northeast West [technical collections I little uptick markets get as have at there [indiscernible] and your off maybe the insulated going from what's in communities last marginal kind impact missed it I'm versus bit Coast. looks has driving COVID monthly And curious, like more? COVID kind Okay. away that anything you more start there's markets portfolio here, seeing the Are the but of as a one I the been to more of is requests at of you an on difficulty] that? fall one. also, is apologize And on April. of this, a from there looking if or kind -- then I been further it just

Brent Wood

morning. good answer Craig, Yes, part I'll second first. the

We thankfully, [indiscernible] have seen deferral not deferral here off. uptick an request, in the and other have it's way. The request trailed really so actually gone

each reporting the update, running now, basically in at three least Our those guys, four been been getting field we or request. have weekly maybe a have asset there's no no and we're manager where weeks of lot meaning updates for new process from a new

pleased off AR And so can The trailed deferred that significantly. very little. with where we're collections certainly are. see has the you And we've very

Our remained collections have high.

a decline minimal reported that's worked hard. month-over-month, been, even as we've this XX.X July, got you and certainly Our we've since XX.X. print very put now There the fluid. is yesterday, on teams here mentioned, that has

each So those literally numbers of all day change.

closer a But tenants keep opportunity originally on. there. vast to some there we and for it, I majority eye deeper obviously sort hang have tenants on whole, go we've But to the had that think the have pressure, assistance the that group been maintain continued certainly the one of just into pay. the in to it's for of asked that our of

any So where high point it's keep for on. we alarm we an at bells going or this anything have off -- sure. not XXs. But don't It's eye in are those we

Craig Mailman

your And and type exposure in. may be just one brick more and tenants? What's to [indiscernible] retail mortar

Marshall Loeb

in say funny, couple retail did Wayfair, we as we years actually great, grown as not but few years. Depot, the Home Nordstrom would e-commerce, for the the Orange it's that not get years Almost we a of between can and we over -- had I there's County. XX the last it's with think a tenant about think I Charlotte. It's and have Conn's ago Lowe's, questions of have much we over And

warehouse got We've trying big Penney and and but here we morning got it's but a think it's three brands. different So have in don't some there, J.C. Tuesday Nike I'm or, we've people different Orlando, or it's park, that really to locations because their and a within here different there. of spots

… So

Craig Mailman

anything? or speakers] [Multiple

Marshall Loeb

our since … I [indiscernible]. I don't [indiscernible] of of kind of with what a those know some brands can't anything think or

Craig Mailman

you, memories. Repressed guys. right. Thank All

Marshall Loeb

Craig. Sure,

Operator

Mizuho. next Venkat ahead. to Please Kommineni go with Go

Venkat Kommineni

Hi. Good morning.

some two And it I business wondering back quarter. and XX.X at tick can to with then the in like comment up of Just compares on it questions in in that if the XX the end a near the that to occupancy vacated lease you declined it Xst as update Houston they list? up June then Agility I movement around the provided When XQ, in to the XQ XX.X. and top of looks guess XX occupancy to during help and show Houston or Was maybe April more rate occupancy May initial that. as tenants your collection increase with in signed in in that XQ 'XX June, decline driven in And follow-up, Houston, by space? as now challenged XXX% explain some does from weaker

Marshall Loeb

good mean, I [indiscernible]. No,

building. Just with occupancy more really taking of it's the new tenants, and then number signed and Agility of was delivery a

top It's third-party a So They global thought firm that's good into Houston when they a of took [indiscernible], XX. logistics jumped, couple park. our buildings.

So top ten. that moved into our them

and parts. is almost them someone an taking X.X where tenants, compliment could tenants what but Houston, feet, with and moved some there's backfill. and team unless to flow apartment it tenants able long out we've of had where really Agility moving think ways kind had one And -- a new Antonio of Houston, a kind you organic it's bit, if of negotiate, just our instances, with and more where building probably I'll was markets collections building about been movement then I complex, But of of and always in. some was they've San have kind really our think like But delivering in of problem smaller We ebb million and occupancy getting market going any it's square where out occupancy those little that. fewer that really in coming

Venkat Kommineni

Great. Thank you.

Marshall Loeb

Sure.

Operator

And for remarks. it floor to our appears presenters no questions. any I'll we return closing have further the

Marshall Loeb

EastGroup. you, you Staci in I Brent, seeing the Thank again available interest look Tyler, time. these and you of are the your for days hopefully follow-up and everyone after person for world certainly to all questions your call for whenever forward Thank all in one allows.

thanks again. take and So care

Brent Wood

Thanks.

Operator

this participation. your And Thanks conclude for will today's program.

disconnect. great a You Have day. may now

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