EastGroup Properties (EGP) 28 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Marshall Loeb	President, CEO & Director
Keena Frazier	Director Leasing Statistics
Brent Wood	EVP, CFO & Treasurer
Elvis Rodriguez	Bank of America Merrill Lynch
Daniel Santos	Piper Sandler & Co.
Chris McCurry	Citi
Eric Frankel	Green Street Advisors
Craig Mailman	KeyBanc Capital Markets
William Crow	Raymond James & Associates
Michael Carroll	RBC Capital Markets
Ki Bin Kim	Truist Securities

Call transcript

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Operator

Good morning, and welcome to the EastGroup Properties Third Quarter 2020 Earnings Call. [Operator Instructions].

Now it is my pleasure to introduce Marshall Loeb, President and CEO.

Marshall Loeb

Good morning, and thanks for calling in for our third quarter 2020 conference call.

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

Keena Frazier

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

We outbreak materially. the coronavirus differ pandemic ongoing and unknown cause in to risks, related results to statements them, result our the future uncertainties and these other Forward-looking involve known actual along as duty of as risks to press with whether factors, today, of filings. indirectly to events in and that release, including otherwise. those of no undertake new are certain Such statements directly the SEC and remarks, a we actual our of earnings information, or may made or refer update

Marshall Loeb

high and way. our amidst families well hope a work like start And morning, and continue a thank out environment. challenging level, thanking for you Thanks, We their harm's your remain that at by everyone I'd to performing of team and Keena. time. Good

such This last marks compared as to solid demonstrated compared truly quarter year. statistics higher of quarters is up funds to and guidance, last per market. industrial per a came as year long-term in FFO of produced the consecutive FFO team XX X.X%. another prior strong up our third operations resiliency quarter quarter, the quarter Our above The quarter portfolio -- trend. were and Year-to-date X.X% share third results with the of from share

Our quarterly was occupancy, occupied. high XX.X% XX.X% leased of year, XX.X% at end while at were averaging below quarter prior projections and and ahead

quarterly GAAP Our year-to-date high also leasing occupancy X.X% trends, a GAAP a is was And cash. and market In from solid were proud XX.X% as benefiting of the Year-to-date spreads at Re-leasing and year-to-date. quarter for NOI X% last with benefiting retention e-commerce results. choppy mile XX% a accelerating XX.X% XX% and healthy environment, I'm during cash. record occupancy finally, our team's summary, at set XX.X% a rate. up and same-store spreads delivery

Our flow liquidity, evolving has restarting include since strength not as in the strategy responding we're is development. to been market and and only the maintaining to March. occupancy, case cash Today, the

rents quarter rent Company-wide highest fall grateful rate at Looking collections remain market, average XX.X% X-month record. at we on our the our collection XX.X% ended resilient. quarter over our second leased, of leased, is with generally each I'm XX%. Houston, goals, XX.X% at an of largest

spite all, monthly collected of than only less truly expectations. economy rents. with how $X.XX uncertainty, many have and towards simply X.X% clarity that Helping our the most a in have share accounting far, July thankfully, tracking October, sector, the will For XX reopens in Brent of our diversified to assumptions, This pre a speak end, our but represents FFO. thus increase we've this and roll of above rent tenants per as I'm fast pandemic rents. our per $X.XX about when towards the we're normal. in we XX.X% $X.XX share for We and to There's unknowns pleased result, per share budget still our forecast top recovers.

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

the starts. So with we new shutdown, halted

in we're fourth these expansion. timing, these we've in a And square investments. quarter property we've select now of hopefully Cucamonga, on strength following will foot planning which transitions first pending close and and including include the topics, position on our And the of near Barbara. we Brent to submarkets, Ontario land in permitting last Rancho review strategic and XXXX value-add few Given Other in details transactions and follow on worked guidance. we're new sites Houston starts our into quarter acquisition on dispositions, working continue XXX,XXX as variety financial -- to Santa us our airport seeing will the closing been also XXXX. pandemic, continue updated park several towards More a

Brent Wood

Good Thanks, Marshall. morning.

share range unsecured guidance and a equity portfolio higher for X.X%. was an exceeded a the of an Our million. third of quarter year. $XXX be the outperformance The team better-than-anticipated senior third closed continues we and our a and to results represented our of our term occupancy third amidst our quarter share totaling a private rate earlier and by overall XXXX per million at strong during X.XX%. capital million a month namely share rent the compared placement performing XX-year $XXX From with has strong to fixed of very challenging third increase reflect average resiliency quarter, issued The quarter collections. of per performance we at notes X per XX-year $X.XX -- portfolio $XXX $XX operating on perspective, interest FFO this $X.XX price note of of driven

XX-year in the $XXX on strong of X.XX%. already a and interest has activity, The strength of with combined is kept our million with rate today. of That $XX conservative sheet, million term a revolver availability a financial second balance flexibility, of complete note and including our position as fixed us

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

strong. have Our been rent collections equally

deferment. Last and XX% of the thus rose XX% revenue agreed-upon have XX% far and reported collected to have subsequent third In April, ceased. increase XX.X% we agreements that our of our $X.X requests quarter collected requested X entered deferral tenants revenues. our The bringing of an of total have July. for That totaled just into $XXX,XXX for deferral of an million, third X.X% rent XXXX form rent estimated report and that quarter. our X.X%, basically deferrals some to additional our the in only months, only deferred We since represents

impact stated is economy depth We and of on the consistently the the and undeterminable. its pandemic have duration

loss not materialized. potential had budgeted has degree and immediacy stress of the for we However, of tenant occupancy and financial

in per Note or the the an is quarter our to increase for occupancy assumptions to and increased tenants. at the the a a revised midpoint increase Among specific result, the and beginning that over were per potential budget XX% changes performance revised from midpoint year. to XX.X% fourth share $X.X from earnings a The As to guidance bad in actual $X.X uncollectible share decrease $X.XX million average not pre-COVID $XXX,XXX quarter for our $X.XX XXXX. of a X.X% debt from exceeds fourth reserve of FFO our guidance of attributable original million. for rent reserves for

dividend X.X% increasing our Our $X.XX to quarterly share. per directly to contributed continued by earnings growth

very our per shareholders third represents and quarter the with share. rate to dividend we consecutive results. $X.XX were summary, an was Our of annualized In pleased quarter XXXrd distribution EastGroup third dividend quarterly

to next We our of the our will year. momentum financial to our and rely quality continue the on of team strength, into portfolio experience location our and carry

comments. Now make some Marshall final will

Marshall Loeb

proud also our I'm of closing, In Brent. Thanks, quarter third results.

work company this through through and team will one, numerous worked different, too. Our our and, while has downturns

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

remain fast-growing will the along we up Sun continue acceleration for space out in a And our team, properties our now of and future. and your has past we'll markets. questions. for strategy the last-mile well an These, optimistic positive our our needing years. Our pandemic, us has mix this within foresee And and of about strategy bread markets. the and and Belt worked trends traditional coming butter our number our the markets, Meanwhile, few operating open with tenants of call distribution

Operator

[Operator Bank America today Instructions]. our take of from James And Securities. question we first will Feldman with

Elvis Rodriguez

Great on guys. Rodriguez Elvis Jamie. quarter, is This for

Just a questions. couple of

declined and quarter-over-quarter. -- XXX were Or leases basis specific was any you Houston percentage points those Are that can lease there -- expected? So occupancy discuss?

Marshall Loeb

Elvis, it's would dip of I thought bit update. -- of of it parts. maybe Houston specific. little than more an of Marshall. our expected, not would as In moving last had the kind really occupancy expected move-outs, has, is couple some say, thought although quarters and Houston, a We we so kind

It's been industry. of in really I oil bad think airline there's enough, they're the trouble have and -- oddly one debt, tenant. not gas. We did our

in slowdown the that. So more interiors it's just things refurbish with specific and like Houston, than They really airlines.

of expected, Houston XX one So although quarter, tenants. I not any the points. overall that in specific was basis end we've of Since, the those blip regained probably and guess,

through XX.X% So back Houston. XX% surprised rent of with we've it back it's to And better kind at but pandemic collected, collected, been which then just than the We're of average, comfortable be kind started. of XX.X%, at Houston is Houston but at not to average this really kind going to when around portfolio XX% March, company our our has under thankfully, been leased. also pleasantly rounded

be market. our a And of built probably good big And It's not team you'd think people we'll delivered most lot it. So our of as best have Houston. -- fine directly slowed is is we answer. probably There's Supply has thankfully Houston or steady not being box, what -- in as down, imagine, it's there so that's described newly stopped. a more applicable. most

today. has now reality Street out expectations. kind than leased, I how a guess of we much XX% to all XX% year-end. has Street Houston about couple it's think play more of and between things at I -- been think worried The be depending been the The and we'll And

Elvis Rodriguez

Great. follow-up. just X And then

some million from but said development starts, I or outlook your square on supply can going going of next for starts developments 'XX what you know forward, the us I year? feet for and increase you continue it you're XXX know And mentioned give markets feet year. to demand you're from but went for maybe delays to X in versus COVID, million an thinking square your you So

Marshall Loeb

in less our We question. this how kind kind -- plays started, for and you're it's really, news, let's leased Good the than when like maybe today. but July, And quarter end, waiting about been much in March, pipeline, start And but XX.X% in just most finish reported example. bad certainly anything today, said, as what's Sure. our Sure. see happy, we our there to thankfully, we're anticipated, of at for again, peers and been not out. -- it's of new, then of this had

it quarter, third So really, looks like October, was highest say, I'd our record. second on is, lot a quarter

So I market, out some looking really -- to I'll of with And work brokers some and some we've in saying, our for you have that me -- expansion the can credit are that to from. tenants people got you give inventory -- really need internal space.

in good if start some tenants. in XXXX crews on don't enough. We're put budget, -- XX-plus on percent -- a get Charlotte, delivering. couple to that still about really either see legs starts construction the -- through but leased Phoenix And started shut cases, about If things But hold year there like and and our they'll at quarter our start this when and of plans and of working Orlando deteriorate, our pretty this pace 'XX and getting and those I hang this but to headlines from we things we not typical getting and COVID demand are necessarily think of that. starting to starts. don't their opportunity tenants talking to space, about see more a about Everybody's maybe improved, other is would number be at or new we that So say new just the space our start Fort can we of down Dallas, difference expansion I sea if comfortable like timing we'll things feel Worth, markets permitting more mobilized. the Northeast, again, that they same things reading on

-- So I I'm getting a think 'XX will for of to starts expecting good be, hopefully, us. without a too it be year specific

Operator

from Sandler. with next our today take Santos will Daniel We Piper question

Daniel Santos

also Congratulations the quarter. on

costs and if Just us just seeing far cost continuing wondering through would at be what was you I with as could helpful. development development at the That markets. you're walk as theme, yields different

Marshall Loeb

think land. some have Sure. have news, the We've of couple said, and the bids us Dan, are the which then getting of been acquired and a sticky. use to and build Land good come probably along on down. others kind finalized shell construction what's some I'll costs macro interesting as just of is been fairly we're I furthest a Charlotte, level, prices

other keep costs working bucks phase have a adjacent of Myers to of some have and kind You or but predominantly Land to parks from under saw corner Fort kind sticky, and of come the land have not around we dramatically, on shell X%. X% contract park. maybe prices that couple maybe a of but that next down, foot, to been a things

Our in are yields of a have location. a the typically maybe there product town, little infill, box, of where mile thankfully on we're last peers more type. the business hung our on bigger our Most edge park,

rates interest and think we're back that makes is trend just towards other classes, fear I our cap told to pleased been the what capital a we've we've really be in there's hanging of drop-off retail developing a in sense, see the the And cost supplement industrial. with X.X%, asset last I'm of lot or and what XX seen there. So rate in -- X% even is our at been days or between hotel flowing it then That office delivering. yields looking to lower

same, profits development down can our maybe about and our If are gone maintain So our yields slightly. have the up. really rents coming is cost we our

last basis but So the days. when more hang probably in or have value, our been think points to finish, in or creation the yields the XX has able increased so there, XX value we we

Daniel Santos

seeing That's And it's impact. where economic COVID been you portfolio changes there then through insulated a you're or the your been second, occupancy, markets? spike of in and it. behavior I in based least mean, your safe has that tenant well to rent on say, Got activity helpful. your those could has us maybe markets collections at fairly places But from in walk some

Marshall Loeb

to Nothing that mind kind probably market recent comes of so me. much. X I mean, maybe for

up. using look to and project, Gateway Fort then before the and but But good been you we as than, of Peloton, -- next third last-mile slower Florida, Tampa, delivery there our guess, Stadium. looking completed right lease a that's team will Florida, team using there, occupancy has Orlando, been down been to Best X And fine those other at Hard market. is It the buildings. a the We in up -- part. it Florida. I as kind fine, Rock maybe fits But it's we markets talking to interesting is building, If we're delivered Jacksonville, it's them, economically our They Miami Myers, South Lowe's, to built talking be Buy. in to but more what's leased really, shut say, in,

for of guessed COVID done, think would a those, can few X sudden, activity usually it's of local little but bit last about is our than bit to leased where I but that's acquired really we've it. before the all a building because another that's longer of up So the Las market I park, leased we it's harder. and closed Miami, And easier market Because a what months. both economy have Vegas in we've a shut the more being we really your would new in the think X part. been I down buildings, seen where it's And first we the got brand-new in one, being lease. on have really building finish. them of little third third up, have And taken most

Operator

Korchman And we Citi. Emmanuel with will go next to

Chris McCurry

question that giving for is these in for in changed confidence the guidance What This transaction pre-COVID from you how Manny. raising pricing now us. are Chris you volumes? think levels? in markets you seeing is do And Quick McCurry since has

Marshall Loeb

to And XX maybe the late, all it. even X.X% the in X.XX% rates, nearing Austin, I'm of chased seeing cap being of portfolio The top -- they handful we of foot what prices kind good They in in top That probably that we've they're major finished for Xs, close Atlanta. contract Atlanta, X in markets, to range. like At lower that X question, that all basis a will we we're the to seen trying rate then example. had still projects and talking low make certainly points below markets. were XX have in foot -- XX places understanding square I'm if Austin. type point, are CBRE. be to to sure lowest the under were terms waiting X.X% which in pricing cap $XXX a products, we're per lower, not in but

just -- And but to record L.A. confidentiality used that, we're getting seeing at Francisco and San market. it were not Charlotte, we in a we'll for cap spread. were that a to portfolio seeing a probably Charlotte low the So violate now there. of things trying kind and I'm rate Miami, we has as in go and agreements like

comfortable you of want down. think X we're in classes and to some I of what forward two being with told where just in of kind the through industrial those So XX, do call people -- favor. appeal growth that maybe it most are rent industrial lack we're right other is and markets that's cap the multifamily asset now rates again, outside going are And seeing number of

Brent Wood

Yes.

value-add might a that think, from our touch acquisitions I to and increase to a year quicker. Marshall deals of you leased those. they've million, on little planned couple property last none Those then $XX referencing are to close in too, had may our and be we

of end the close I so year. both are under the those going mean, And and contract to before

those hand. So are in deals

Marshall Loeb

was a Coleman John and far building ahead. one were But credit his -- value-add a and probably hand won't our I'll in really too in guess finished. I'll more region to And We'll color. team the acquisitions, of the Eastern was it get a Yes. tenant able before get I little

felt going value acquisition. have be a value-add add, will Center, announced, one then is about a we're now in because think in roll the which close leasing thankfully we freeways taking leasing, year it. that pricing back certainly, very risk Brent the other it's Rancho one by We of you. So was airport, building if between It's to California Rancho X we And for basically. the user bought and And leasing think better that on. near an what that an Ontario, Cucamonga. We as and owner a priced like getting was Distribution a the references, the half

again, They So California. with guess things were I and brokers it it's -- of talking and describe almost in like the helps our their market terms great. goalpost, Southern a in that confidence

they stopped. really First quarter,

Second quarter a a Empire in property and and this business of in lot where that since big pickup especially Inland it's is. Empire, activity been West, Inland

Chris McCurry

Got Yes. helpful color. it. That's

you do of How follow-up. source think quick about versus asset funds? using equity a Just issuance a as sales

Brent Wood

mean, Yes. And issued were and available debt I very very not stock see to markets some with our open of quarter. very pleased we're we this only attractive. we that the price, pleased the and were attractiveness you us, but

So capital. se. so recycling capital, sources than more good some recycling, of primary short it of it's now for we're being I through our think we've of of think will that more doing mean, our several those capital. as I been stewards years But for assets, of not lesser per be I that

very to than it's you'll down year-end. the to navigating that pleased rather continue We've we there aspect XX% away But think and Houston. got anticipate at that more get continuing property that to I into just area see capital. So We're before decline. closing us a chip

a that access, a where we to more and is have have. We versus problem we're position our opportunities good -- bottlenecks, which in like capital opportunities thankfully,

Operator

next will Street. from to we Green And Eric go Frankel

Eric Frankel

if I generally more are was little how us trending. you can color a hoping on give rents market

doing So well, few can could parts at like have your you but more markets really bit. by looking provide rental Texas decelerated other even a color. changes California, while little it a just of Maybe understandably a little be market, looks markets,

Marshall Loeb

strong, still oddly which an of re-leasing the you we It's builds one counterintuitive Eric. California were that during Sure, are to where kind It's this quarter, of what the right. record The helped -- Marshall. happy upset seeing day-to-day. headlines we're it markets and aren't our of where matching Kind pandemic. you're spreads those a

Probably flattened maybe markets, California Area, Fresno a the It's than kind markets, San the So steady. of bigger Houston, our slower, certainly is little has L.A., out. Diego. Bay

anomalies get markets have say yet As have smaller leases at to rolled. of you base I'll you'll of Atlanta about or And some we a a really really see, some quarter, have any don't year-to-date, pending leases least batch statistical good a more have, we measure. but the can it's which number, negative there like enough in get big our

year, activity Houston So improving There in in up gone The little is backwards now Houston. slower. bit a were again. to little picking back them of have staying rents earlier bit rest up pick and a the probably starting with

where second more I up. think and we're lease little starting we quarter of with to excited the you we back the -- and through is it kind deliver, onion, pick starting And at probably, especially the are box. stop the don't typically of to underwrite be By that's dig our that's will back X why development in it construction is construction into charts, really But up the it, big up predominantly 'XX, starting call up. about we looking it back pipeline layer the construction a year have activity. a back we time if

ahead bay at very of are with but not people be market not developing And we private, many the of people are we're shallow looking to right So deliveries. that going think it our now. not some many keeping

Eric Frankel

Right. sense. It makes

look vacations like amazon.com views bit little shape how you any or have might up on slow recovery next just and less would economy little One mentioned services. earnings volume concerts maybe whatever Do that and folks and as spend year peers and their of bit habits up opens change or of the demand? your that consuming earlier leasing on more on this what a a economic the might season kind

Marshall Loeb

we're preface I not economists. saying it guess by I'll

although we anything -- look as fall sense preface say with -- That number times, aren't demand of couple Amazon's beaten I our more a that's bay other dealing. of certainly a having the not And think Amazon Do we'll Brent a of market? described more guidance to true, we're we've I of broker a we have to in that. clearly aren't get can conversations, with good the stores. like true questions. you not have is I companies shallow and you where in -- then space. I X really delivery speak and with I'd and than And e-commerce and will economists, model would think it only disruptor. to to the As I rather in And think adapt creating think more

So team I the -- our our at getting like thing, or with this I rates, abnormal each tenants think kind growing the XX% quarter in currently. of sea not own But rate. do I at won't described of e-commerce goes also It's we're legs. as think economy, by, other it's grow even kind that

First normal. quarter was

Second quarter was a huge disruption.

I getting read about are it speak And us safety out almost we've think of first own couple different at stock. a where had times. tenants what to cases was of used run to or saying inventory our they there's we tenants

up. EastGroup, industry the will plumbings it Ferguson to that starting we're a -- think benefit and and the we've little see more, homebuilding got typically picking other Now and more Delta, the we've Kohler I

to thing. see as well I seeing portfolio, that we'll and up we're be other within Home population some of more the think ramping that's but the activity homebuilders shifts. and homebuilding doing and our renovation really think I seem

more and better to we here thought, 'XX about was in optimistic about I'm able I been than 'XX. more grateful I'm our So than we've 'XX. I'm hang but team that optimistic

I not all -- I'm huge guess Assuming dangerous, my we curveball not another there's on. there's assuming get

Operator

And we Capital. go with next Mailman will to KeyBanc Craig

Craig Mailman

debt you for cap has low talks sheet there Maybe just higher to cost equity trend help think your want industrial in just circle of Kind the risk, And extremely from balance maximize to balance a made those by what And it nature, math the of also as just minimize the X cost for but to kind the the and do upward fund, raise But of Clearly, assets, need you maybe debt-to-EBITDA about context ATM the to guys level. kind works. capital of very conducive back internally? lower of way use is everything? to debt now. the structure rates maximize to just to to guys in how to able of things? be of be curious, EBITDA, earnings, are kind you does just some guys optimal I

Brent Wood

it's a positives. views the And have from it's thankfully, frequently. been conversation Craig, two Yes, we of

carrying guess, a on it's would change call we're it bit As I even put attractive mentioned earlier, will balance the cost debt. we it this I been today, and on fairly of quickly, revolver. our We equally attractive We you year mentioned, cost but a conservative being, an an as of equity not release. in the also, you actually, as side of as merit

company. drawn my the million recall, $XXX not in which the years is I revolver, almost first Our can being time with

your price $XX being conservative the a you or of all about goes and to then where that $XX to it's And earlier as you we want more feel situations levered, an a So discussion. should and ongoing we don't -- in you had then maybe have like know, a we year be as feel I we are. share. little sudden, There's times better

where it trended are, things ebbs our over and out, flows debt-to-EBITDA has but down time. I So point would with

develop would to goal to -- be means a goal, to a not ramp up way with sub but bit that growing, when that a quarter a especially go it's debt of X% we challenge. mentioned, EBITDA, continuing development debt-to-EBITDA via do wouldn't us If where that preclude that works. bit a development you're as us from producing the it's perennially drawn did challenge just more extent -- which, bit development. Craig, of you as a we would inherent on NOI we goes makes But costs up where overall, you're Although, for this that a the just past little yet aren't that's

that spot. -- So in we're good a

in sheet, focus of So energy the we shape, is our opportunities. really find just it's like more and balance time and how do say, I good those

the job trying find looking for Our do the on rocks to the guys with and under a us. boots ground terrific that things work

So really, to focus there. continue be the

Marshall Loeb

guess years would cap Brent, market more or couple, XXX we're I mid-XXs and a of ago probably like X.X, higher bit probably rates. we with it's little build back have points. if count. agree was our a Maybe to the ratios X around basis to market can I X Craig. And more today, was things we the debt-to-EBITDA when couple spread over cap that. and a point to our if about add. XXX debt years, I Meaning a targeted in Typically, we basis went really, last

So and we've kind position about you're our we of do as tempted. ourselves, how talked strategy

product want much don't into the to You push too market.

advantage be -- we're going said, some creation You want kind for kind sheet environment, little to keep the to the inventory with see let's let's a of balance bit operationally as waiting aggressive so kind disruption. we absorbed for that, it it's to value reloading of a there, development. take the if safe. of getting But have We to the be attractive offset of

where be think gave we something it comfortable a are asking market but have love little when us it market the on And that or in to the opportunity continue that's really seeing feel stepping sheet We I we're to can today. really a been presents delever. we the our to the need also do. balance we really opportunity thankfully, to our So as those to itself, down gas history, the we pull where balance case spreads if behind started. sheet the might wide to is the And development them lease-up company for of opportunities. ever in as bit takes longer they've there. several safe They helps but is don't

Craig Mailman

think at we guidance, X.X% That's midpoint? get guys Is of year, the sort there. that does to guys this Or in And mean, it's thoughts I helpful. harder range? to you of be the conservatism? is that are Brent, should late XQ just XQ this more But then I at to year-to-date. decel levels to numbers. from X.X% relative appreciate the X.X% just, end higher imply in the move the X%. to could so a Or you Midpoint it's same-store

Brent Wood

do, to midpoint on equates traditionally in we of is transparency put guidance the we FFO. that As what information that just table

where case, we've right happens that quarters. as X.X%. we've to that as imply budget dial basically year, a now from And as up what than Each to in slower is fourth been into, you quarter are the earlier that it And the in ahead quarter what got through anticipated. now, backing here So does have that of we perspective, does of there. dialed a bit

But year, highest So a I my to hope would think, be some the conservative that, reminder, just again. yet percentage we've the the improves that a and on marks were quarter the of last bit of our, err had and history proves side little company. fourth lease third in

there that is you'd going I you're assumptions of beat is know the to day, hope compare goal so in up measuring the you strong. against just, you much every And objective stick much an so aren't pretty that. or that our budget darn So don't deceleration again, as as markets

we'll just to So quarter see. only I go say, it's there. we're to there, a two months and Like go

we where to here of we in like focus quarter, up pretty point at how stacks our fourth that would year. So and are for next the this kind turn quickly see

Craig Mailman

i.e., quarter? I then you that in. if guys one Marshall, And more the that is Rancho slip deal deal, Right. West the did the $XX Cucamonga could million, in

Marshall Loeb

Yes. correct. You're

Craig Mailman

versus kind what moves of down? in put yield about of tenant either or out be it rent guys the talk initial capital stabilized you is when what just kind place or the roll and you Can up in could

Marshall Loeb

probably back, today, market leased Xs. are higher call would owner rents to the I that mid- The the at building and so Yes.

today I we put tenant, a, in in think if Fortune unit we're not and of X market it XXXX, to -- rates call flip and could not Brent, terms going it, like the it's market to a if we it asset. are. sell But -- higher Xs we where probably and cap were X-year the not

So stabilize. think I we'll

are we'll ago, I'm rents constrained the our a time what's be days Empire underwrote it, land Inland now. maintain we as from we out, being, XX little below is West optimistic that that and think moves that area it, going how call on that months going I bit the X underwrote yield. in given by market to tenant

We'll the we up think we'll of I end the said, Hopefully, that that. up bit term, but -- a X%. tenant, X%. any like something little below So end X.XX, below get call it,

So cap market I think to we're today. getting a would good XX-plus where basis be point rate premium

Craig Mailman

appreciate it. I job. Nice

Marshall Loeb

I are to then patient, lining be too strategically Barbara little to thinking, No, of close. trying last Southern we're then and in And material still it But have things a in opportunity exit fingers an I like another that Houston. none telegraphs and like of do couple asset our R&D building if crossed close and to grow a them awfully to find Santa our to them and color, and of -- we like is sell which in to kind LA. to hard California, up there on add we and is like maybe

points our second So in we'll fourth our Houston from in keep the of been direction portfolio terms what kind turning we're just of description. this quarter, dials down quarter. and the something And XX basis hopefully, has in sell is right in then

allocation. So on big They're thinking the all of kind of maybe terms not X that them. all right in steps helps, but least direction we're how they're of of at moves, in baby portfolio

Operator

go will we So James. with Raymond next Bill Crow to

William Crow

be this new a inflow think and other on new And times of kind Marshall, seeing places. sector evidenced to in the X-part Is you've periods development Are leads discipline, of lease-up in extended which from into thing three, couple might construction? erosion a competitors question. capital guess an And you the of how referenced I ends? do you that acquisitions? there today

Marshall Loeb

and seeing although on I if X both. which into we I and And acquisition those. entrants more, remember can side, probably of remember we the Yes, I are makes new but all, industrial, sense during development it we can all see seeing more are and pandemic, a hope me surprised

like Dallas in much projects big things we that town Dallas, won't, remember the boss. like typically, seen to and and edge specific new I'm not to mean development. but more they We're that. we date, in And development case, entrants trying were Some seeing in of the haven't to an oversupply, doesn't

put work. to You dollars more can

over you're would into and I about aren't in market career calls about If it talk coming industrial, to view that. gotten think the things the industrial it it like time I've really we where acquaintances that working and and of and your call how do

So nervous you giving like it are. does Uber you your driver softails. about where It's things make

get So nervous. you I will think it

out horrible oversupply, like them oversupply. tell It's Stay of not it's that. But it. we're we a So things sector. seeing

XX industry the us, us to our new and the everything seeing optimist. was am more in when a know oil have as And where ends, I wouldn't I rapidly Houston was more surprised are down. Brent the -- But -- at -- because an XXXX, in me, you is of We much and where member numbers. up it think development I institutionally terms didn't loan, And in industrial entrants. it said unlike days -- much late I XXXX, wouldn't is although gas turned down what pandemic, disciplined owned. I one institutionally in the and late and kind reading of if so looking XXXX, a think back held, too, shut bank this And fundamentals that do through old there time, held X where of just board

did have and shut down they earlier things did they still Texas think the to in like year. in I this XXXX, ability So like

I'm So an I well. think ends optimist. it

to is we'll we're that. of leading shallow it lot customers whether new rate new seeing buildings. better And always the shops, X from I more pickup at And of, portfolio be and locations I see that's have growth public of sometimes And good, more but type The -- that I so a over pick bay think that. Amazon our customers it's to lucky up many repeat retailers of years, because years, other but is -- curbside American and just to see beginning. we'll and or business starting seeing where uses from e-commerce for is or in lot take it's where the look worked. think, and delivery our the online how thing than kind growth infill a We're next of will in year our

Operator

we from Michael And next Markets. move Carroll RBC Capital will to

Michael Carroll

to happened? the guess, occupancy have of just I Is quarters? it wanted bit that well little issues your held talk both? guess guys a leasing is past about been X a better over due to expectations. I it that. I less thought over trend. past Obviously, Or bit quarters up able to possibly that what's have tenant little it strong could you fairly it's few guidance volumes driving Is than, deliver you that the the

Marshall Loeb

Brent out this take I'll and in. jump

the won't less much I been group, make start which anticipated. the of this -- the we this, that by I out at I think where trouble, downturn maybe the has than tenants last taken was, to and get given of would economic it to felt worried each we looking kind guess attrition we March, have was side comfortable really -- sheet certainly tenants, the about X,XXX other that tenant all shutdown. And I but balance with back, say of I'll our

the rates retention at low believe thing, we our it's our then XX% historically that's And the time. probably XX%, over So to high with uncertainty, think, I the occupancy. helped is and average I XX%. other And typically in year-to-date,

think hold. been with XXXX tenants I that have growth they plans in had late So early growth put on uncertainty, -- 'XX, plans put has

is. done But where of X because they uncertain leasing a So we've budgeted to said, going turn has we consistent a always years it just of renewals I'm out well, north what just -- they our move year vacate, our were keep to where number earlier been happen. a the been rather to where tenants. able do of was than had they in little tenants going There were we had

those Texas, that's big just thankfully, economics, me. that X activity. of the the our it's rest earlier think business seen Atlanta, of opened the and of whether than Florida, where and speaking thankfully, majority really markets we've reopened, markets I medically, the country, team -- drivers won't up Carolina, terms And been have as but I in to the So -- the our not then

guys of to say some it's leasing in terms days. levels of we're back these -- velocity And the pre-COVID

Michael Carroll

in your looking how sectors that of exercise have done guess, that you're tenant near-term Okay. cause And are leisure that or could it much that are you for that space risk front? too disruptions? are roster, I in if -- to mean, overly back your event get then have tenants at I like exposed some you you planning many on modest see Or that so really an is might don't

Marshall Loeb

things. little glad two bit. look has certainly sectors. at -- moved maybe at I a mean, ours I'm We around those and

Our we've And far the north of industrial sector. XX by within revenues. of about just seen our lowest the are that's tenants top X%

on Vegas. handful surprisingly than Those sticky, of like I we're to had we diversity. worry fewer hung have markets a our been, diversity, landfall that, We those our Orlando geographic Las you internally, issues months and and about so where ago. we tenants tenants have working like we and and again, I have would list on So -- and certainly on watch guessed or

the we months those, do relief And been coming rents last but tenants we PPP around, see was thankfully, And improved. were what move then, August, there. last and April. when months, our of October month X the waiting We but coming has next ones hung in, since in request in better thankfully, than are than kind in earlier earlier think have those, September. of the each they I watch collections. September then ran our X rent came out, in happens really And in and

So like improving. it's it feels

XX So our earlier. that revenue, a collected gone them, fair point, got away, of down and rent points at they gone they've not we've -- amount rent of materially. And this deferred request, were surprisingly, our but relief haven't basis

that We amount a of rent. fair collected have

bad And, raise the that hasn't to it feel on sorry, wood, all us when. REITs, on better really of knock quarter quarter, news expect, back things out. makes played any expected of able as as okay, about again, you're harsh again we -- this probably it portfolio I'm industrial last been waiting these as and So for -- and we're guidance the kind

Michael Carroll

talk And guess, big Okay. X, did jump I question, guess, guess I a compare, how I'll watch mean, watch little ago? what, last did I you it months how list list. X is that off now? and bit I right Great. is, about your

Marshall Loeb

your than Probably I it's you're like like one it's -- months not the in X by whole business doing X and I a or gets dental when this it's for was had hit, supply dentist tenants refurbishments stopped bit. hit the the or airplane mean more industry or where even really mentioned -- market in Atlanta. to ago. Houston, we in And someone less that people going the

So got those were pulled the that under. tenants

no good even have but X,XXX probably economy, with we a think I it's tenants longer thankfully now, right our normal. tenants, in than on watch list,

Brent Wood

Yes, I would agree.

originally bad in to less come debt clear. anticipated. list really receivable Our been than had continues has maintained, And we pretty watch the and ledger

done and impressed continue have team, there, collections. extremely our Kevin mentioned. we with job, Houston our his be as terrific and collections So team And impressed Marshall a with to

deferral, -- our in tenant But team things is third of all Houston for testament quarter, For there there considered, third watch and and collected XXX% which to base. manageable. is collections the so rents rent just a our very list, we between the quarter

Operator

Kim with Ki to Truist Securities. next Bin We'll go

Ki Bin Kim

you or also, tenant your do look today? aware tenant months we your When rolls how the next XX you pockets that into should think be about Firm any for of? concern so, And of Mattress

Marshall Loeb

and of one we spaces. about locations I within consolidating. movement the has know where It's always more There's our tenants. can multiple tenant think

and in There's today, So and that one upside the leased. thankfully, we'll building that space L.A. But there's get the we'll that on back. they're refurbish rents get paying

I'm the Again, low stabilizes that retention So back the to where we traditionally up. But lower I more into weeding economy are. of rate XXs kind there's XXs expect from through the jumps there. collection happy drop our as would major nobody more XX% hopefully, looking cases, and And upgrading we're tenancy at out Again, in prospects had pandemic. some the out. we've

through couple of from they're you XX going Firm are a they've Mattress The next in years. at to -- on trying this. when memory average the multiple leases guess, everything had do of we But through ago, it was So our tenancy. Firm those building use time chance age, not there, do their some lease And buildings. it's to news I'm Mattress good upgrade bankruptcy. their fair locations. me is say, want about the the winding get tenants. through they I and in years a the I X the maybe months I to been bankruptcy But through the bankruptcy, number of and for probably and to really about here complain can't is -- Their

Houston they're tenants. in in so and some new there's and some enough developments in Myers velocity places where like markets moving Tampa, Fort So

the today. they're just the but So leases we're you they're certainly they're those because watch think some I the to And current on we a at of -- end And probably demand. in industry, are ones closer than tough they're industry beginning.

we'll look guess. spaces at really I a their those and learn take So too, what are, plans

Ki Bin Kim

to Okay. do And can estimates early any tax base have you for XX in your and that Prop California? what do

Marshall Loeb

all mean, really, virtually our California think net. triple I I of are leases

through to phase our mid- for people XXs, rents which X get our California, of tenants. to our at buildings to has strong but read for would that would tax through did the years think X tenants, Thankfully, put I it So years years there. the pass, couple -- knows -- damper market. assessors get at high And cess been passed it a on it the really ability then a what to pass in XXX%, who that. I affect least in -- tenants, past that they where get but X won't we to through X will us, would on to I've take not won't latest least, and It to of on really it a push well to reassess expect the say

Florida say hard and concerned the California why That to be Carolinas that's So and appreciate term. all we in that diversified about like and Texas that California. as it's -- said, well. a to headlines in watch portfolio me not trying makes economy the grow But I won't California we're and in the long

be will it There's if has if only ability reimbursement. many to or to care call rent impact it Bin rents because rents can property tax Ki so insurance dollars I passes, you don't slow of delayed pay. as It it. will push said I watching So gross reimbursements and we're me, a our a it's once or it bag money.

have manage So on working years that some to -- into just of are size And rents pulled our dollars happens. taxes those when would on in get gone we and couple California, have as last if like that Houston we'll will well. the of

Ki Bin Kim

at you Maybe might your like the in data, giving of the currently can if tax point, what -- ingredients, is like a be difficult this of California? you the bill California? estimate can in vintage just for And maybe total I provide couple have is you know impact average here but an what

Marshall Loeb

impact Rancho of in because and yet one are some we've of that bought what been awful Cucamonga, it, kind no just An lot been and 'XXs. San in there's in where where mean San a acquired, the we got like there's I Diego. legacy are that in assets a Francisco, number of L.A. we lot we've those San the -- of they That active assets said, bought of in Diego, we've

bigger gone get of of knock hit we've X% Santa although out We'll some on So up be assets. probably year-over-year, we a Barbara, those wood. on

fair L.A., 'XXs vintage a of bank be older. some Bay Area would that And that's there's say one an of older the in kind And older older. -- so project of Fresno There's -- mix amount late it's older not a in there's on those.

more assessors guess, work. where aggressive estimate the our how little other they be depending on deals to will hard that's is the too, those assessed, so how I a thing And are exposed, and get

today I in that. have market are then lot of Diego all on awful just number that don't a an for They So San you in already. at And probably were market.

Operator

final question Feldman from take will James is today a Bank our America of follow-up we with Securities. And

Elvis Rodriguez

in that deferrals July Houston? Just in else Or you more anything from tenants? to share those related from Brent, can quick you Anything they Are tourism mentioned now. that? one increases one. more from $XXX,XXX

Brent Wood

have the It's Marshall nothing amongst tenants continued Everything We've just to earlier, through total have diverse, tenants, due, pretty third up topped to been alarming that deferred altogether alluded we're the X.X. -- end that seems a many September. the already that at to just that collected out But thankfully, number basically be single $XXX,XXX. we had that No. of as through collected the substantially. that very there's number the of drive not $XXX,XXX was pleased and quarter. that Again,

is X/XX, we've due to already outstanding. all reduced paid $XXX,XXX but So that million figure by be that of I And at $X.X December guess, back XXXX. about to of

So not job our pay of the we at which team a date. some them and did allowing deferring a were to of good prolonging duration room that later

for it anything It or there lot of a of the was So of to specific mix a pretty bit diverse help on wasn't really, $XXX,XXX total. that matter, the different alarming customers. a or little on

Operator

today. to call Q&A. this turn does remarks closing or And for additional the I'll our presenters our conclude any back

Marshall Loeb

Brucella. time in your this and Okay. Thanks, interest morning EastGroup. Thanks, your for everyone,

both on we know questions, are on We their Q&A, available. are and their certainly everyone but I Brent available. limited I

easiest, an Thanks. any next. at us guess, to you have is follow-up, virtually forward you look shoot give whatever a and seeing please us I call, e-mail, If NAREIT,

Brent Wood

Thanks.

Operator

for This your does participation. conclude program. Thank you today's

You at any may time. disconnect

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