EastGroup Properties (EGP) 10 Feb 212020 Q4 Earnings call transcript

Company Profile

Participants

Marshall Loeb	President & CEO
Brent Wood	EVP, CFO & Treasurer
Keena Frazier	Director Leasing Statistics
Elvis Rodriguez	Bank of America
Tom Catherwood	BTIG
Alexander Goldfarb	Piper Sandler
Chris McCurry	Citi
Vince Tibone	Green Street
Craig Mailman	KeyBanc Capital
Michael Carroll	RBC Capital Markets
Bill Crow again	Raymond James
Ki Bin Kim	Truist

Call transcript

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Operator

Good day, everyone. And welcome to today’s EastGroup Properties Fourth Quarter Earnings Call. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Also not, this call may be recorded. my President turn and now to call is Loeb, Marshall CEO. it pleasure the to over And Please go ahead.

Marshall Loeb

Good morning, XXXX quarter for our and thanks for conference calling call. in fourth

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

Keena Frazier

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

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

Marshall Loeb

a performing Thanks, great families for our They environment. well. work continue for hope morning, challenging a their a team thank level, and year. and amidst by high are your unique start Keena. at you We everyone time. I'll thanking Good

the Our full our fourth and portfolio and quarter year demonstrate the market. were of strong resiliency of and results industrial

to results XX from above the per as the of marks compared guidance last This consecutive quarter, of Some produced came a for include, FFO to the FFO quarters term operation original compared This trend. an fourth a up year. share higher in long team quarter $X.XX the X% year over X.X% funds pre-COVID per record improvement prior truly to share And represents year rose forecast. $X.XX. our

XX% XX.X% Our at quarter at we and XX.X% quarterly projections end averaged occupied. ahead occupancy leased and of were

from mile GAAP XX.X% spreads year. accelerating healthy benefiting a the benefiting rate and and of retention for cash. Quarterly X.X% with is market e-commerce Also XX% last were strong occupancy releasing occupancy a Our delivery was trends. higher at

cash. GAAP XX.X% This XXXX at an marks re-leasing [indiscernible] of record consecutive annual set XX.X% and years Our further double-digit Xth growth. spreads

and value investors rent Finally, quarter year. year. and XXXX strengthen for XX-month a X.X% same basis our during development team's year on end of we is record. XX.X% by Today largest to quarter NOI points store with projected over rose product prolonged the I'm add Houston, our leased Company-wide NOI of further Further XX.X% demand collection on represents the and by the quarter both leased, the into a remained and XX% ended percent environment, rents, our from industrial Houston of In X.X% a this to of XX fall is fourth proud choppy for grateful users responding for at investments. highest collections market resilient. our rent XXs XX%. average market down via results. I'm we're the and value-creation focusing summary,

and recovers. and and in For There spite monthly diversified are XXXX. accounting assumptions, about fast truly our in speak XX some the XXXX our and still our share will $X.XX how roll when forecast $X.XX rents. of for XX% Brent, unknowns reopens approximately per sector, having rents. of to pleased far, January for the thus but most the we've budget rent collected I'm at only Helping top finished is in X.X% tenants balance we with uncertainty FFO of thankfully the I economy uncertainty

during we're we fourth Thus More last our quarters details sites none each again several our investments seeing value question, we purchases are starts value to quarter. new follow and is for pulled $XXX forecast market close before, as stated to million, demand. in pipeline, began Based us more the development As a in halted following starts And our on Houston. of market along of development position in we XXXX. then investments. few with pandemic, to these starts, to add development by fourth quarter the starts perhaps year, with land we are additions. the or for acquired prenup add strength for And on today,

Brent quarter review or sell last now our guidance. of four our XXXX during Barbara including variety in with along our dispositions the Houston topics, strategic to a another our Finally, asset. will buildings exit the completing Santa of market financial

Brent Wood

morning. Good

results average senior average previously with financial us rate equity as we weighted capital our placement price fourth X.XX%. activity strength already balance And $X.XX, and continues represented XX closed FFO outperformance fourth And of higher occupancy. $X of our of The flexibility. the guidance on sheet exceeded of fourth namely quarter overall XXXX disclosed, notes a driven of of be totaling perspective, just an operating combined unsecured XXX with strong conservative quarter strong the reflect to million during share range over $XX our of and X.X%. From increase in private two challenging interest Our a share. quarter, performance That better our the to performing per portfolio per portfolio, and an a anticipated, at than year. $XXX amidst by resiliency very quarter issued position kept a we compared million team fourth share. our for per has at

Our ratio X.X over is debt capitalization debt times. ratio fixed our is XX%, X.X total to and to EBIT increased times market charge interest and to coverage

equally rent strong. have Our been collections

included We have and the tenant of for of a in revenue, of rent charge higher collected collected rate the California straight-line quarter of have million, tenant single early of Bad a of we XX.X% the $XXX,XXX, a at total part a our fourth half process $X.X existing already credit property. as debt $X.X fourth year rent million. rental quarter much an replacing deferred of ongoing better an with at

the required of balance new tenant was the lease their to write-off Although remaining to due accommodate their the rent cash rent, early we the were probability tenant. straight-line current terminating on to

have impact stated, the on As consistently economy pandemic duration depth is we of and the and the its indeterminable.

of occupancy had the of tenant never budgeted stress and financial However, materialized. XXXX potential we loss throughout degree

As actual a our issued share year guidance a FFO for per the result, pre-pandemic ago. of our year exceeded XXX

cash share is increase for to guidance and XXXX and forecasted in for $X.X XXXX. occupancy quarter of XXXX XXX XX%. assumptions the the decrease were debt, to The which midpoint debt common year-over-year with pleased assumptions in debt year. increase $XX million of In and property of over results. $XX X.X% XX.X% by our XXXX million guidance, a represents of for a notable the guidance in X.X% the $X.XX FFO stock unsecured in in we year, million forward, FFO first leasing $XXX be per debt, produced range for The Looking to of average and million bad that estimated will which same fourth Other $X.XX repayment, acquisitions, midpoint range share, an of comprise be XXX million bad include issuances, million represents dispositions, summary, $XX XXXX offset X.X%. a very in quarter to per $XXX

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

will Now, Marshall final some comments. make

Marshall Loeb

to proud Thanks, results, our our opportunities. Brent. of excited closing, In XXXX pursue XXXX I'm and

working our through And and me future makes EastGroup. the pandemic, stabilizes, number it's a most evidenced Our as excited company the by of that set. records well are economy the for company as team

acceleration Meanwhile, traditional pandemic, remain we will about space Sunbelt a any trends mentorship and Leland with with recently markets. we'll our fast of foresee bread markets mile growing questions. optimistic has eternal speak operating lastly, myself along past and mix properties These, our an us our floor opportunity miss And butter his out open Our gave continue has we our for few Coming for that, our years. tenants future. distribution worked And Brent, his up he strategy, To team. the founder, Leland away thank the for well and us. and number and of the and passed within strategy for last optimism. I'll the and of team, our needing our will Speed markets. and and this our positive our friendship,

Operator

from comes Bank from Certainly. America. of first Our [Operator Rodriguez Instructions] question Elvis

Your line open. is

Elvis Rodriguez

great morning, guys. Good quarter. And

Just a quick question on Houston.

to that some growth? digits. do you for parcels market come market. low So markets similarly, about exposure, single the you down double ABR But the now land comfortable sort to of as and feel are term increasing Where digits high on longer think continues acquiring other and

Marshall Loeb

question. Good morning. Good

I’ll Houston So down. there's pulling just say both we a number, will magic keep

in for a low that any digits probably be would double I think market.

to the And we the know, the it's in for news we to around asset kind it's Brent love opportunity, you tell you is find than get that, I'd good You is managing have it easier kind runway in those market. today kind know, and the of job away sell way, you opportunities. any my to [indiscernible] much guys so don't to of field, a leased our of that that and oversized find

really can will down shrinking keep So points, dispositions without XX it, in another probably exit Houston that's another it probably fall we And This last budget. dialed we'll asset XXX. And manage we basis into year XX, this but year. we'll were year's two or Houston. this year,

as we double stayed geographically that know, low So that's within - well in if diversity our I our within we base, you geography - think a, as value probably tenant well. as digit,

Elvis Rodriguez

up then Great, balance just follow you. And thank question. sheet a

average. I about, a the the year? issuing you you know, to you're and higher slightly of quarter-over-quarter, how capital it's work should leverage dispositions, you're be through doing some leverage think than equity peer know, when we how and going little ticked but How cadence higher are the needs? lowering So your about funding throughout up you the thinking

Brent Wood

Frankly, little We are, access stock like that. in and very impact bit available our very to lowly-levered. avenues think your us. I'll Obviously, Sure, of are we're there equity. to we and take price debt But can that Elvis, move metrics. both conservative, a

are are We few peer that group extremely low-levered. where peers a a there within are

cap, in all We're all, to But than So we’re we're high and capital on that. a constrained. some not basis, are good total market debt think I in a position. that teens, even less very comparison

driven. you So opportunity know, more we're

those. find can field the in guys the So

access. have We

I us debt to see either think we to path debt there. We're But we're be to down not that we're metrics, with going Elvis, or where necessarily hang the know, comfortable further. you'll not also, generally equity. looking are opposed delever you

So you'll current our part price probably we'll us I some think both, And well. see year. you'd of a little debt given bit there, equity see of probably the stay the early also that to in do as

So I both us see levers. pull you'll think

Elvis Rodriguez

Great Thanks, Right. guys. quarter.

Brent Wood

Thanks.

Marshall Loeb

Thank you.

Operator

our BTIG. next from And question Catherwood comes Tom from

open. is line Your

Tom Catherwood

you. Thank Couple questions morning, of good And on everyone. acquisitions.

go if So obviously $XX start guidance was time. acquisitions. guidance, a to different of we know, very was the million back But, of back then you XXXX

quarter the pipeline year like to and And in pretty is end. obviously commentary the you've sounds the on million the especially call, that looking terms done something ended value acquisitions. think, your almost range. land up Marshal, I $XXX of robust, closing from in add it And another million guys $XX You subsequent with,

year, acquisitions? you you're are actually is when can these this because seeing placeholder in and looking kind your $XX to pipeline million shadow know, that that at you it's know, timing? in Or, hard for be of You chunky, more predict a guidance

Marshall Loeb

release the really One in morning, [ph] to able good leased and were close. first in fourth say announced an time I on they team, question. press the more A value Atlanta, able - we and and those would and then they quarter, one we've acquisition. an like them But get our the mix, reads in our closed were to Atlanta two it two new of adds, buildings, quarter bought we in of we by buildings, Brian Good leased already. and we their which get

hit never rolled but they in, acquisition. development rolled in really So as pipeline, really our

guidance So $XX in the million is identified.

bought leases. local if think can we crossed, into and our like mid fingers for And served and take to number. find a what without term to in find find acquisition. hopefully, today. once you construction were a hearing, long seeing the can was risk we know, and [ph] our cap on sixes to Atlanta a there right more strategic once developments add the we while But like high regional we're rates better and the leasing developed Dallas, can So Northeast feed a out developer it value shareholders, and rates the opportunities. we of get we a every that's we're it yields We unusual, acquisition of acquire be what and Rock, opportunities risks. that in And that are really if fours in patient, it's And The low demand grow probably every that able cap an in while pull We market I trigger building the we'll as on terms is little the location. the estimate on bit. We'll we're in

the you Angeles. able owner saw So buy fourth Distribution the Los again, put We Rancho tenants a an with the to of the in it's it Center, bought couple but on in leasing - user, in. was we same team arrears was us [ph] quarter thing

term our market stabilized points XXX and cap rate on we're that buildings so as XX long think to And it above we basis well.

Tom Catherwood

you for that. appreciate Thank I that.

Just kind of following up.

in two value in I does Atlanta. add by It messages you've leasing it's know, quarters. yet the wise market, past us seeing in mentioned land with know, added lot happening you're mixed the the rate In any two And thoughts you on negative some the cap the square give there. success that like a spreads seems And what was of your as had you there's quarters, mentioned You tough. in some But you Atlanta not means. past a there add there, for third Can well. spread you've market? value in kind demand trend up maybe two the had what quarter, market kind quarters compression leasing you wise and of with of

Marshall Loeb

Sure.

a you fair growing so we then and the bit we really a is are the levels market lower And little rate growing And like observation at X.X%. for And if and market X.X%. bit Bay what there. look is build, - buildings example, markets, vacancy the higher little rents smaller the shallow Atlanta of at

there. So we've been doing and leasing well buildings

it where when pool the we in and bought, us same annually. it's that buildings probably of hit One store it's we do

up, So starting feet. we XXXX approach to have XXXX is got just it, it well and all you've we're held as to now square a million

the There building. saw footprint Atlanta, lease like roll out give at of newer fourth knew a it's metrics of and we it. a was market. smaller down, you was and like third buildings the memory, bought move went we north X% in in quarter. So doing their grew that then And to it yield some but I'm we it the is some pharmaceutical a dangerous, we kind we of we in, and of re-leasing was with which a can from as and end one going quirky this rent company But

normalize So back are long rents assets I think way and you'll see the above got back some growing saying, market studies a of from winter it Atlanta. there. and got small we pool in of market We

Tom Catherwood

everyone. you, Thank Understood.

Marshall Loeb

Sure. Stay well.

Operator

Alexander our And Piper from comes Sandler. Goldfarb next from question

is line open. Your

Alexander Goldfarb

Hey, good morning.

two So questions.

look yet so lighter other right you guys make in other talk on haven't markets the look Denver, radar other, for considering, And these are the reads to would that then found it increasingly side. that, know, I like know, your you is Are of curious from that some to just Or of But have Nashville, there's Vegas how tough. its Nashville, for are also, The flock been to. of to tried other same some guys a are always we and everyone's these starting about considering? people the hey, you markets that just market It's rationale some way these an the that markets. you entry. is long time. markets first looking portfolio, we're at, your sort other is just, know, multifamily at one of you at

Marshall Loeb

And back question. Good reversal all, I'll come in answering Yeah. Nashville. maybe to it at

that's Las a now that in among question yesterday, we've where in allocation those with are [ph]. expecting and comments opportunities is problem I is as we're top And the capital incredibly our their know, its preference and in is, the markets the we and Las top on go there acquired time to webinar to bit Jersey New so We're projects because to in manage you being now and Business CBREs of cities, all in did Chicago. northern the much Las Vegas, the XX, capital and near industrial industrial, continue compress so about top markets cap under then Vegas and in after We half national project Airways now. chased looking markets. lease right. LA a to, Phoenix, allocated down just and Charlotte things, in But of allocated. And [ph] our Elvis's add and same, airport, Airport, one portfolio near like Orlando Vegas, earlier, we've other ago, to about of markets for capital XX I and there happy out little XX, places are Denver into much was a we're now, ago You’re of like LA where acquire the some it's can had rates a they with kind competitive. and in a team bit maybe and guess to already year strip. be the The grow And a rolled portfolio patient. a color, after a the those a would been and in about Area same value the near little Denver. we're half a industrial Bay year a there's the we under Center, right

So Nashville find it is a number got are hard undiscovered, already a us either keep I part. and opportunities. land And doing not Its And market harder think that. our is things value add fits - and it. will or of certainly for to the only that footprint. we like But probably we'll get probably certainly our like peers

go Atlanta. be could And be may patient have - So things we we Atlanta. we we'll it's one in and we in not in if time, day may back

studied patient, we for we are. to of we of be we'll we enter, Greenville-Spartanburg But trying and we've few made clicked offers of had before adding first in grow a kind we'll thing so we'll the you least and actually markets saw and Nashville, a that the it we on keep at that where out so of go and first kind like find - us some kind identified we years properties And where now couple last found there. we're until do

get one but see may Los other us and some Angeles right, Nashville markets there jump So you're market. before rather grow new a into and in day, we Denver I'd

Alexander Goldfarb

Marshall. continuing that then And

number employment So the cost years, you a for of and really your big focuses not rents quite of as just users the on you and real transportation know, business pressures. for a are that mentioned warehouse peers have how piece

the come of know, a obviously pushing Do remains you for - tenants peers cap any therefore, sort the that view capital rates other because you all work. to which values keep anywhere math part go et up, rents with and still is prices of rents are to are up, going the pressures cetera. getting the ability means rents out? you s rents sense have the any tenants look, pouring pushback make or business to in, negligible on of The near unabated and keep given Just pace the just down, as

Marshall Loeb

to don't everybody half won't into I like capture been rent back foresee I we we first people Sure, understand guess pandemic, come because the construction see that things the of to or am Not it, been so negotiate new go outgrown markets talking prices I unabated. hard seeing an guys and them [indiscernible] because it's over and box three is, retail rents again, consolidating it. for. land the it's not digits But That and the you leaving really those a you in don't I entrants and typically call than know, the know of hard because I But we the usually that turned and GAAP new free underwrite. years the during our that six their entrants their tenants three but in we I market. the rent right It's into And I changing. mentioned, and our would quiet was of moving industrial now. I optimist to and do that great cost hotel with way, seeing they've to field, some a and has and have we're so requirements. and row to underwrite coming double office increases higher we They're space like surprised business lose in rent. locations, size they're the We're that. other it's as

So pretty we quite this I be push year. should well rents but not unabated, to I'm able think

Alexander Goldfarb

you. thank Okay,

Marshall Loeb

welcome. You're

Operator

our next with from question And Emmanuel Citi. Korchman comes

line open. is Your

Chris McCurry

Chris Manny. is This on with Hi. McCurry

up on activity. Just quick investment a follow

land of XQ. you in a lot bought So guys

of Just wondering, that some the on for plans your land? you could comment use of

Marshall Loeb

land concrete, in the into the we the steel, then as of trying acquire prior, as could we want quick. put quickly COVID Chris. for were years that did development, to year our production need really, we part we couple order a and really nice said, you didn't morning, order - last glass, and as one - land it last but Good to Yeah, can't the really hit the team job. We we the Sure. can is the is

So end shifted and closer not all is as up this of would at the overdue - year we we as in value the close of really is, next adds, later be at but land, year. tie the kind land than our the hoping it to pandemic strategy we were let's least were but pushed the to

our development the land press down of acquired last release, looking year, we kind our first and quarter so really starts. it's second And

XX%. and are we of terms So and lease. where you through percent the February, in happy same really, we're week in where We're ended the change we it's about year and first place know, happy

of year The this much than first doesn't thankfully. different quarter, feel part fourth

to adding of phases parks, like start again, activity as into tenants we've and started our and things a expansion kind those are seen plans little get new broad leasing our talking more have that about based. our So the needs

our what as we will to us or looking everything acquired saw and always and acquired, things that. second as you So our get permitting quickly that it's goal first we design been like how try December to in depending we start down put can on production to just list quarter, it into - And most on we either quickly plans can.

Chris McCurry

Yeah, smaller for it. of competitive there has if you Got industries landscape could the that changed wondering Or tenant quick challenged? was follow some a are some small just comment all? your any I tenants on up. trends. Are at specific

Marshall Loeb

I couple got interesting think and didn't a and well. say of you won't brought think it collections thing, our take the people say do am blame I articulate Yeah, is maybe that glad think I I show wrong I'll as One I things. I up. it

show collections We that. last some. small have of our do of a of kind tenants COVID know, tenants, our the have XX.X% But for smaller lot – spaces. through the you a But we length really, aren't

military. [indiscernible] but pretty the and business, COVID. still military dirt side know more benefiting things the had our on was renovation portfolio think COVID, we markets. the have they're had, during I really that And has just at out. national in and from us last have, Training that, But in we're for industry. printers transfers feet company jumps a to nothing or But moving have where – the so company XX as And last. we but It's is on maybe bankruptcies Industry-wise, within XX,XXX strip a and many dental that XX, related people one that company [ph] industry evidently been helped more that a been a companies Vegas people more during more to transfer don't tough I demand still that. you and the from that homebuilding a people square as servicing and and we there, that right went like lot have put homebuilding, dentist has up may well. migration that stop has understand there's picked we the need and and very Las a specific. they I flip then be people So It's know, in There then not a and left seeing that Sunbelt a to home may We're few business. but from more active now. that runway to. feels simply we been

Chris McCurry

Got it. Good color. Thanks.

Marshall Loeb

Sure.

welcome. You’re

Operator

Please go next our And from ahead. Street. question comes from Green Vince Tibone

Vince Tibone

Hi, good morning.

XXXX. would your how percentage much budget for full to impact level annualized you But on what of did property, for debt of you portfolio, normalized to are expense just debt percentage NOI, could bad the revenue down be And also, ’XX? or know, if in think about - bad year you bad touch XX% it? how cash, about wherever as mentioned same debt NOI You of you a

Brent Wood

as Brent. Vince, plus, do That's deferred normalize, is we’re it'll this yeah, down. going year, Yeah, bad a One, Marshall things. good collection have a like we forecast to our we feel of already had pleased component XX% alluded rents. very debt very couple of collected of XX.X%

deferred left that will this collect majority which collect, rent So year. in of the XXX,XXX there's X hopefully only to or

same moving tenant in balance around tenant of In we're they out our California, rent, for In remarks terms impact single a of a line the to one it higher credit its lessor where prepared was the on a call much credit, did a store, impact tenant, earlier. write-off straight in I better but alluded repositioning had $XXX,XXX. a and

what generally But our puts So in million, we experienced we forecast But an we trend year events, an ‘XX what uptick between is. trend Obviously, in that the at our year. debt look next historical impact. bad long-term us our budgeting versus had midpoint ‘XX, and of was $X.X to basically in revenue. relative

budgeting head debt. basically to, revenue to that ratio toward we're a you more bad to So know, between back normal that is

especially So, have collections again, to been the you we're shout know, out very Houston, pleased, there exceptional.

Our hard. those team team there has numbers up. really Kevin keep his worked to and

down is you for So, very coming various reasons know, we a feel, by third is, achievable. that

Vince Tibone

you Thank color. that for

basis Just bit the Is this of maybe that comp frame help easier I going ‘XX? possibly coming much is to to way? there, off and able point frame up XX same XX decrease me little property to to to the Is basis XX% this maybe it kind how a mean, a contribute follow positive better. points? they're ‘XX in impact

Brent Wood

Yeah, you be properties that bad included they be in occur, X to same are the of Most part of rolled that into January a our - cash, ‘XX. in lesser not I you'll the property. that's definition, know, portfolio same only only will mean, will have property portfolio the since impact. have of by debt would

Vince, by, bad know, you year being of that, So that the debt baked of for for that forecast. think, inherent And most ‘XX. that's the Can't We exact just, year saw to part our portfolio. decrease. put next and same about XX for is that obviously, just decrease to with you some know, guide of percentage felt driven part [ph] upward but do of midpoint in, And store. inherently, going X.X% is part at that finished you our in the be the most store I is same

Vince Tibone

Okay, space? One your the you me, in you're new any thank changes picture properties, for all supply markets seeing multi-tenant given into for the capital coming you. in could discuss more

Brent Wood

are we and entrants the sites if we maybe land we have it's about right new big the price maybe though, still town, makes of that have can said to - don't that's get or term, in, and Most then Most it zoned flow. it us, edge zoning, get of right finding impossible. thankfully of know good box long for are the can at topography seems you that And worry the development. you coming still that

you in and looked look, capital that will it of Dallas, you is way. someone of south foot can be trying average Empire [ph] of we terms know, our lot more the markets, kind can And it you Atlanta, edge as in if or still, your capital at town, million to allocation. buildings X of build On $XX place on to sure you comes more a an way, a it put square industrial to off XXX,XXX money work, investment. out usually Inland So put a within about are South if East, you're lot that bomber

supply So and see on basis you the typically That's what's and much and swing where lot Atlanta, that's XXX points is maybe of a like really vacancy new buildings. that have comes that driving larger where it's then we rates. that

Vince Tibone

thank Great, you.

Brent Wood

welcome. You're

Operator

Craig Mailman Capital. And question KeyBanc from our next from comes

Your line is open.

Craig Mailman

the chasing underwrite the Hey, five what or in you in, the acquisition guys growth now. if of know, to years, of today, of assuming of you've last flat not. able everyone. that finished where just projects does getting been us know, been leased as But and just just, committee better I of you've rents? kind closed, of is yields you're investment gotten you kind the these north have coming versus I'm do this you've over maybe of rents, rents know the you seven up the range don't Marshall, versus been in kind just you on at kind that land historic - have you underwriting Can today's guys of sense rent in, of you're of sort layering where the right at kind and one that a maybe give kind [ph]

Marshall Loeb

the start work kind you change but it. least way, maybe and know, we all in head, of to I'll of that with And, you at the [ph] Sure, denominator my don't thanks. and rents in back the file numerator with your the way

if an And rents. I our delivering leasing. recent what like, especially is park. this you're underwrite where most is in on buildings rents, more two came TI existing and will the We It in the

but rent years, won't So gets could down, by and investment conservative land the I rent to in in we growth. bid and time committee at too then And That we'll our few it dialed out different that's will you factor in it the been we the construction. three the GCs don't may have to we'll typically, for growth. the peers, look be, last say, factor guess, hindsight,

you're to then really have and So construction risk numbers, we'll trying if your anything. you're - manage firm

fast and And the to improvements adjust is we'll can the off tenant remains, typically, get and that how that that credit and things above a rents tenant we if term pending start where it tenants that. So risk improvements. lease on, normal, little obviously, then with the like

rates to helped risk for So and later days - bit to we the And has for XXX into The we basis to and as we we rates is higher we fours, to we XXX to XX. seven in XXX in cap to I underwrote. bought, been use still mid it it we're getting example. to you get underwritten typically in able cap XX know, better in market would closer sixes and was we're proved. higher – And finished was and kind simply If it our a rents we current in had you're that and a wasn't construction, a than and we and us were for and the were that the cap points. target hopefully thought where points delivering in, we enough basis of high able low we're rents, like little getting project rate get thought four, that now, round used rents, we seven, fours that LA use come at of and feels norm, it what's development that thankfully, XXX, coming

Craig Mailman

pricing And, kind to earlier is even That across XX helpful. about you comment, that, markets now just going the you XX know, your of top know, starting to reflect And, you is quality. markets. back know,

to in might be spreads there accretion But right could, stuff like portfolio wrong portfolio, standalone Just, growth in pace? the maybe be, kind non-core a TIs to try the term, you you you you ask time bucket these higher going at that I'm a are this [ph] just as you setting sub of look a or you be guys are going not a park the just either market of - maybe or I'm usually guys that what's while. curious, may know, getting from higher longer just able and cap to offload know, deliberate in than you to it might a some development a accelerate given more of offset to kind of the slightly quality of rate, be maybe that assets, rather kind but are that

Marshall Loeb

credit, amount pandemic really lease Good. that a with was for nothing, and seemed really quarter, ‘XX type nothing were last things, to when market the almost XX a traded of about that year, of us kind year little it the We was done open Amazon fair under on for traded the ‘XX, ‘XX, AAA had you kind know bit, in third all a then up.

still we a really, we those with just were getting know, working two large allocation. it an But is, manage I'm So And way Houston distribution Street's I'm asset a of R&D, out maybe our that bucket, in were with this you had some in you'll discomfort and we're R&D good a it's Wall values assets. of as see Houston. and we're XX% What not buildings, Santa our we're partly I okay storey true glad of size they two too gains, opinion through really where probably year not glad broker Houston, Barbara, and clearly, market. mean, dispositions or

tenants selling bit the as and vacancy lot, those and they're industrial it, TIs the Now, to were way hang around what older then but center lot single team value. some storey the value, typically, will everyone where but smaller that did not job - there we a and of buildings, higher. Florida. to needed bit little good a maybe create ones some we here and say little are And another and service you a the in harvest that's of a mentioned, the will And and - compared Brent have longer to a

So thankfully, where a should getting But we there selling least. hung has, those. we're every part, those have those year. got always broker I opinion we've some industrial to things most of you few And the some in at think exit values of for be know,

it's some you and million to year whatever on year - afford kind But it. that think you not if whether time big, get to you $XX don't bucket every is of be to that can million and manage sales, assets. that now want a or I good let we'll afford, do can know you probably worth those $XX sleep of it go to of you sell exiting too

You're right.

Craig Mailman

a year, of what today, percentage of you had, $XX aid you or portfolio? off think that if band the So that if value to know you to but had you $XX you know, million million of the think to the rip do

Marshall Loeb

ones and you I industrial get depends really number because I in - older like buildings there looking the we industrial some it into not started some of older are on probably there's you Los know, go for it, a back - [indiscernible] dimensions of Angeles physical, they're Area, in what that. - and Yes. jewels know, to we which our irreplaceable after wouldn't phrase those you have There's you sell. some be, guess really not I'll build would at assets as don't it, his know, would those have would buildings, mentioned, to that was you today, our may and of he crown that the want assets, but basically I they founder Bay

that maybe or service some our handful in and five in centers, we in portfolio [indiscernible] markets. So Dallas it's older throughout a And of the and of six in Houston, a of done really industrial have number

in we're back, scale then little our just we a And we've of already basically As and sold the bit we've Houston. to - even older down parks Houston. product

of think in had a [ph] moving away But us do think think of pay from us park – thankfully that it's bit. felt I is was think to always you be trying that's the I thinking good So always built, be neighborhood but I little was Houston, probably what them it one like not much. we to we'll a we

a maybe couple ago park, years now. that exited we so And

Craig Mailman

Okay. Thanks.

Marshall Loeb

Sure.

Operator

our And from Bill question James. comes next Raymond from Crow

mute line on. And open. we'll is is check you open. your just move Bill, us? line All and your function Can for right, Your

Our next question Michael from comes from Capital Carroll Markets. RBC

Your is open. line

Michael Carroll

I your And to Yeah, call. thanks. that you looking more Marshall, that for expect of the I we highlighting far wanted the over guess date land several prepared Is active guess kind on, months? done did next get remarks here I you're that land? closures hear correctly in the earlier more there still so in I I touch you to were guys purchases, to guess

Marshall Loeb

Creekview got- and tied yes, know, more few nearby up in for find, can buy land things for the few diligence, moving. but us up and we've really existing park we're and Acres contiguous part, least saw more, next the, quickly, a if at working markets leased you our trying you then a XX through or all keep have And maybe we'll we the out We've where got to, land, successful ideally as that's one if phase, the a where we're land. we due the ideally, example, of

will example a things bank development got where a a So our we land become is, the parcels for and and bad. XXX, can think the taxes are we if the, drag entire because way carry like our pull the on use with contract, it more a, land bank rates it few I go ratios, call know, we successful But the basis you turn for interest earnings land we've under off to about won't it, value, one crazy and if on year. can it XXX points carry really the we will it pipeline, a

That it carry. little as land said, of are try land then can. into why a offset more we production we creation the quickly And as carry. to there's that's So and value mindful we put

first, of feeding it. keep grab there we And land. is this up development So out we'd closings - can through of to where as side, the third markets back see come, tied kind right some quarter we second, some hopefully some report find parcels. diligence, love And but to with that work between year. we're pipeline, If we've due us other you'll

Michael Carroll

just then, month the for that And those ground as much could this on mean, land year you talk all And guess about that currently me own? prices the to you basically that, identified right those last I development starts land break have valuations a little of you of depreciated? I off bit now? on projects have how planned

Marshall Loeb

shadow list quarter then hey, And build a what we we'll really, the what that, when, field. deliver quarter, pipeline, plan keep identify phase of all which back else get could from year. that goes to Yes, if then and what by is we'll quickly, and that a decent do this you

and fluid XXX – So they're pipeline, and imagine a feel our, pretty identified front mostly better you development but know, loaded. it's main starts, of all I you if that's end

in got better break feel there's I quarter, than quarter. leasing of this is we've and lot rather to Though there, fourth third do fairly year. a late hey, know, that So then we'll of some over ground early you half

everything have held what it land And off tie feels with us you the getting probably towards more maybe and the certainly - up. we else. And and certain construction everything park working know, lined and pricing, land the building and that that's So up, the helped name stable. those bids permits starts we're and and and

expect. tied builds pretty gets market of market But glad things in is a thing seen bit they other certain hard moved were prices comes and year construction to Tesla companies close. a us, a and in prices. pressuring there, and we that And Austin, little the places saw up probably out this And most people. underway. in really many the Tesla often is to some a you'd we've certainly quickly we've for where an just that parks, struggle was people there Some land and that up you parcels seen the of year it town land in prices and have land up we changed land. live maybe companies. moving tied in there certainly weren't those. There's parts technology in growing, which which Phoenix say And valley southeast It's the of with we've is because late were that's but them year plant, when looking many, That's same Texas, as got a where the huge all But Dallas, we that's ago, XX% technology from some like December, developers. not of with by - for estimate. in [ph] I'm gobbled

Operator

is James. Bill try will we And Raymond open. right. your line Bill, All again from Crow

Bill Crow

morning. Good hear me? it. appreciate you I Can

Marshall Loeb

Yes.

Bill Crow

just Yeah. to really Hey, of who by EastGroup Marshall, in shout the you the Leland, early I my of thanking read but space was preface [ph] out want for to general. pioneer founder an Parkland, only question in the not

trends So your We any being I and levels automation is all lot a box. people on that I'm term if on I your tenants question or and and material changes tenant you're seeing phone just part appreciate anything And TIs? on into that. about the changes And whether of investment that longer in changes My think that. really wondering you're appreciate big any trends seeing think properties. trend any

Marshall Loeb

and said, putting manufacturing we XXX,XXX like had then We've added won't [indiscernible]. That bit of are Thanks, they're Bill, Leland the that appreciate I in X, type And and building. parkings we'll spaces, a little on more. it's probably those- where comments our dwell with with more depending smaller tenant on foot [indiscernible] later more seeing TI doing. of much the or and We've inventory everybody side, their HPAC glass money see it. [ph] and than, you more on here it and too know, the

XX-plus added like buildings sometimes but more seeing added probably trailer storage our ago if been know, or glass that's and own city's glass, and at to request the we within car that that. HVAC building with we're did we've You along racking design, investing we've in more years said and and nudging things parks, you and and our zoning

they think to the stickier and a in - them we are its space. move for I makes getting little trickier like more, that it So which

as they would and So Amazon have it's tenants more but say it, usually are and where much trend their capital we are national tenants it's seeing more building, box into to in as the do have not maybe space. automation, some quite that they our putting where big the

Bill Crow

Yeah, appreciate me. it. That was you. Thank it for

Marshall Loeb

Bill. Thanks, Sure.

Operator

Dave Baird. comes And our next Rogers question from from

open. is line Your

Unidentified Analyst

Dave. Hey, guys. for Nick on Its

for like how e-commerce in is return term processing to firms? of logistics if reverse or Just question And the like on is how that any, inventory one shorter quick the occupancy much then year-end, pickup much related related to leases?

Marshall Loeb

question. had minimal. where two have for good delivering we holidays revenue, We least some of with can really Amazon. of post think of Diego largest in space had to packages the in did only seasonal, too where I they a the office jumped Not third the a about and at places, taken terms that's they they're San Sure, out through both

we So done acquired office We was we're Diego and the took building with We San leased, the the value reverse add. the in leasing underway really Orlando at and Diego they have logistics. works space, a and post San done got being of it thankfully TI was TI, now a the kind placeholder.

would not I'm some, it's spaces, that, leasing I'm some larger sure within the not we probably got space aware anyone see. than there's of warehouse tenant really have portfolio. but We a typically to us, our within be there's seen return for

to, increase continue have but and know, demand maybe will follow tenant within marginal it's sector. set it about reverse And I So that you within space, specifically but tenant no think a up for new logistics, the certainly read it. industrial

Unidentified Analyst

then Do you home you able And normalized a any in tenants follow mentioned for, you've just expecting there builders expectations like this demand? that of kind stuff Yeah. e-commerce Then other for XXXX. Are holes, might and like quick they'll more as like such improving to be year? to think tenants, be? backfill up

Marshall Loeb

with last - you continue where - we it with growth, the it e-commerce know, rates, those store on I environment, and bigger conversations facing it's growth for it these some I And are you of the optimism pickup to our that's do further end us things industrial just and when more other do whether order dramatic stable retail of a have online our interesting. year, two said between of down think properties at located won't growing. think than times had in competition up some terms distribution but spaces. size part want the and of are on, is road, even We've buildings. how some will Hope the we they it's, been had and going do expect some

coming the type economy, it air conditioning, not XXXX, XXXX, that home hope we'll again, there and delivery, with those our tenants, expansions those a are away, the more services, think homebuilding, predictable It think going new to the leasing as much and higher, be our demand we third plans the for rate about park call tenants, we I a while about traditional XXs. retention our predictable usually up as guys on growing which and XX, for finished its a economy, us. think low continue we year driver mile And our was of a the of was e-commerce a year just because lot a curbside I maybe from appreciate people felt existing So was and last XX. little - that their until a of see and world bit normal. But last hold put

butter the guess, maybe low see think, our bread I of by start know, to back and more those expansions. if but again. you'll so to it's will But normalize retention you And see anyone's year, our and we'll XXs mid rate

Unidentified Analyst

me. it that's for Okay,

Marshall Loeb

Thank you.

Operator

Vikram comes question from next Stanley. from Malhotra our Morgan And

open. is Your line

Unidentified Analyst

same for of the should store just Thanks just This modeling. throughout XXXX Morgan's through My Hey. from first Vikram. - for the think on is we trajectory How question is quarter-by-quarter? Elena about taking question.

Marshall Loeb

voice. your hear to good Elena,

You quarter fluctuate a three over period. quarterly know, same in can fourth on based store bit a month this can little metrics fluctuate you individual know, year, as you saw just

are our we that trajectory up but optimistic and it, be up. consistent those it But store in We of that a by be quarter-by-quarter overall as within So we're have the guide, see, to there'll it overall, some pretty be although down range. will midpoint of but does be viewing because forecasts that, projection same fluctuations. some don't you may have give will fluctuation, that it

Unidentified Analyst

trends And like up nearshoring Great. currently levels? like Are starting all know just a inventory or going second to those higher any and time question, my to from lot. lows, at then we're benefits see those you inventories picture. larger are pick bigger see more I

in any So if markets? manifested your any wondering just of of that's

Marshall Loeb

have I move go example, was maybe parcels about guess we or the we we're bullish San believe while Good just a first And one that's Diego, we'll question. a there, in star on. the and we on Paso hear of one which time you low El Paso, lot And to, plus market. is same that's strong elsewhere, but we'll then and will a of sub-market of onshoring on a in really market acquired within what strategy southern is saw somewhat land another people China where is a building in develop may that know, near And for thing kind or they vacancy shore. the El you nearshoring

actually left both. And think tenants I rates. long-winded Kary, South and so we're on we've seeing we're answers low is about and a the San innings more the had with only Paso's but Diego, El And in the conversations land on market, from strong inventory, benefits probably that's vacancy that industrial market. early

what we'll feel I expecting. manufacturing will on take that and we're couple and guessing year, plants moving inventory probably is years and more see a this more And stabilized were think we Kary is as it. later probably more it to things starting see

Unidentified Analyst

me. for it That's much. so Thanks Awesome.

Marshall Loeb

Thank you.

Operator

And Truist. our from next Kim Bin question comes Ki from

is line Your open.

Ki Bin Kim

everyone. Thank you. afternoon, Good

demand much in is – years of your the drivers location… how So you've impact industrial, drivers horizon much company? up, But for terms corporate population migration, over you look level, simple next your make that to high I'm to going home talked or migration building, like back an Given for how when you about curious e-commerce. couple does economy type several the opening demand the for

Marshall Loeb

read It's look, their replace, like our Atlanta see the numbers to feel is we've markets we strategy Yeah, and and [indiscernible] sure. awfully it helps Las five we're our hard know, in typical, seen, we really buildings, major local Good been numbers you term in that's XXXX there, traditionally into our you morning. the we you and accelerate. long always Orlando, people COVID, the say over about and Florida years, happened then state. XXXX Vegas, the We've to think about market, with in would really And location And move is will infill Florida. serve

from they fair showing imagine would the other team not, of kind sure, just manufacturer was it made and more cities equipment was So we in thinking the were and but our Dallas a we're I'm anecdotally than in relocating share was Orange day, or not I our capturing those whether medical deal County.

throughout same of So Florida that, term hearing ripples long relocated you we one and And of we think East they've move from more remote well. Northwest of We’ve Pacific in the as seen and out kind out I to up people that where relocations in may home Central we've as those, California. Tucson Coast into that's stories and from and things know, over Vegas pick some been years. like been are successful we people but reason Las and - the that expect work

So for think our individuals all California of know, customers relocating it's for markets to South showings well. as or that us other firms you things that or certainly had companies to Florida about helps like whether looking and where move driving Northeast demand talk out financial out and move of some people, we've that have the I seen

Ki Bin Kim

of the at company then leg you long the size can markets. I of guessing know that done lot if wonder, wondering looking just raising the I I rate, capital what But And debt if the market debt and unsecured just million sector. at better there's raising the at pricing. guidance in you how projected $XXX about peers that's And X.X% Obviously, drive for do in when will question, I tagged I than differences your in. And at in that I'm look that, look your have second of but under you've Okay. industrial from X.X%, part. though, more some been look you You know, little the are other a not your just it know, maybe just definitely you're bond where just to like maybe investors what a haven't But peers? for? your to For bigger guys debt raising debt? where over time? more there's I'm go history you're at benefit, I second to Is a down story get sides? some the you raises, money cost

Marshall Loeb

some on we've the just to they're they I'm times, And Moody's. out being know, a larger to history you hopefully I we've the lower But, rate Since you ago, waited, you debt of budgeted us same had end, I little in again, than now, on be look And conservative the you X with with just, know, a basically at Ki. much of know, coverage back think, with rating. can't very at Yeah, the X, fair that been peers, of accomplish. proves then the X, front able some having conservative. showed long what that. but hopefully, That's jealous. we've with a And we at got budget, not we're say being dialogue do spreads, back going initiated to end question. higher years seven rates

we're quite a company obviously So we were than then. different

And the ladder we, rung up obviously tighten some spreads. so would get that help to you know, there, would up a help

been been we you that of that know, market get line unsecured the You with lever bond of up that maybe maturity try on tapped we the mind know, to And try to bites level. that to know, and to a debt large into, to, some $XXX get, quite to side just our the really haven't you and minimum align that peers basically about aggressive has a haven't have million that the threshold.

So we'll way, angle that do looking in to for over know, here. but we're continue we we're will that. have from than our we hopefully get better be And what growth Bin, But, hopefully can we down. that growing to Ki time, I you still every and think awarded benefit

Ki Bin Kim

I debt your just you the market do times hasn't verify your lot. post four now? you respect guys mean, which full leverage, It the because seems to given is that really like almost EBITDA debt interesting a grown and excluding it company's low that was developments

Marshall Loeb

- to New York, meeting the going next our Mood’s Bin. We're next to going we're to in take to you Ki you take to Moody's

Brent Wood

We’re going that. to reply

Marshall Loeb

Yeah.

Ki Bin Kim

right, thank you. All

Marshall Loeb

Thank you.

Brent Wood

welcome. You’re

Operator

that, to turn remarks the it with today. like for I speakers would back closing to And any

Marshall Loeb

Brent for questions EastGroup. in good up has day. will Have any again. are see virtually time, we everyone's and I Good you a anyone afternoon, follow next appreciate appreciate interest the soon I at and your hopefully certainly Thanks, available conference. everyone.

Brent Wood

Thank you.

Operator

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

You may any at disconnect time.

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