EastGroup Properties (EGP) 27 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Keena Frazier	Director, Leasing Statistics
Marshall Loeb	President and Chief Executive Officer
Brent Wood	Chief Financial Officer
Alexander Goldfarb	Piper Sandler
Elvis Rodriguez	Bank of America
Emmanuel Korchman	Citi
Nick Tillman	Baird
Craig Mailman	KeyBanc Capital Markets
Michael Carroll	RBC Capital Markets
Jon Peterson	Jefferies

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the EastGroup Properties Third Quarter 2021 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Marshall Loeb, President and CEO. ahead. go Please

Marshall Loeb

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

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

Keena Frazier

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

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

Marshall Loeb

everyone Good very of and a a thank positive time. continue our by start for the quarter. thanking morning rewards hope a great reaping enjoying at high team We level for you fall. is their They I'll your and performing environment.

results and quarter resiliency demonstrated our third strong were and the of market. portfolio Our industrial the of

has above compared funds ahead team compared the last consecutive truly a that results This in year produced prior these FFO at share operations XX% of higher forecast. our as of per coming trend. XXth from to include, marks of long-term Some quarters to year third and quarter quarter guidance

Our basis from we quarterly quarter end projection and quarter are at averaged occupancy XX.X% ahead XX.X%, of up XX.X% and points XX third leased at occupied. XXXX

market, year-to-date and last-mile and Our occupancy record releasing spreads those is and XX.X% a trends. at and are XX.X% delivery healthy cash, XX% results GAAP with benefiting Quarterly e-commerce from cash. GAAP were accelerating levels XX.X%

in cash same-store of NOI to best quarters our and on team's I'm the via the both demand I'm in year-to-date. Finally, quarters value-add the proud product, four XX.X% quarter in to quarterly investors summary, by the Today, company's last by our focusing four the quarter And leased, rose we're strength, for up development our rates record. market highest one marked of In putting and strength investments. users at demonstrate and for X.X% history. market the results, ended industrial grateful responding a on the and quarter value highest creation history. our X.X% we

only top us $X.XX is of having FFO for and forecast these with share XX accounting the to sector budget shrinking. points quarter leased. XXX we're we share, at $X.XX in our year X.X% diversified rents Brent $X.XX a that thankfully It continue results pleased finished but per projected achieve by represents from helping XX% is down XXXX now to rent. speak assumptions, XX.X% most and the will per Houston, at our of basis in rent raising our are ago our tenant to I'm roll Looking a a to

demand. market level XXX new with Based starts represents million market we've As More with details guidance. we've value including annual strength of review more we're our sites direct our pulled starts acquired seeing record financial position XXXX today, as we're stated on This pipeline, of our investments. these for And on and an along Brent in add before, market XXXX. to close of variety raising to are our we the several a for for by will development our this opportunities. forecasted now us To starts demand, each follow topics company.

Brent Wood

Good morning.

our quarter reflect quarter and an metric quarter, third to we to strong range linked and years our continued issued overall a be strong XX the of activity That increase portfolio driven occupancy incorporated we unsecured our per an efforts, the better results outperformance the XX%. price our $XXX reduced sheet five effective and of fixed of of the share sustainability flexibility. in X.XX% already rate continues position third a during strength guidance of And to $XX the growth. than a that kept operating term to terms. remaining, quarter term terrific ESG at average balance XXXX bolster million term our efforts From conservative share. compared of loan in capital of anticipated, July, third into we on loan. with for refinance and of in The In a rental closed financial from at by us September, FFO Our particularly unsecured with success perspective, $X.XX a amended a of repaid $X.XX senior and combined per maturing performance over interest the X.X% equity $XXX ongoing our third tested exceeded our strategy. team, our portfolio, share, the of the execution time per performing represented million rates we million

below interest over Our debt charge XX%, capitalization X.X debt-to-EBITDA and to market was at coverage X.X total to our times. fixed ratio ratio increased times, and

reserved, tenant stability, trend credit balance brought and to strong. collections rent for year This tenants Bad but our previously exemplify positive equally tenant exceeding of three first diversity of the was the net new strength Our as the debt continues because quarters been of have current base. a $XXX,XXX whose reserves.

by comprise we per $XXX,XXX, guidance were FFO quarter XX.X% with same include, of issuance increasing a range by uncollectible and changes $X.XX revised projected X% our that XXX over very XX% forward, increase equity is XX per for by by guidance In a pleased to The fourth in development midpoint over XXXX. debt to $X.XX $X.XX quarter XXXX share the to assumption million. year, increase be prior share the of per decreasing combined million, rent $X.XX represents property results. midpoint to the and summary, XXXX $X.XX reserves share, X.X%, third increasing a the Looking to guidance. increasing for and starts for the our cash FFO XXXX estimated Among notable

the our We of team, experience will and our and to our carry year. location our to quality stream, the continue the allow momentum portfolio of financial through

comments. will make final Marshall some Now,

Marshall Loeb

closing, XXXX. where far forecast this into we that XXXX. ahead adhering Brent. and excited In about our stand of Thanks We're initial I'm momentum into

our well company, strategy results, makes are quarterly future working Our the evidenced and for that the and by our me it's as EastGroup. excited team most

market seeing our traditional fast a positive we'll in markets. and and acceleration along the our now future. markets. last-mile Our our has the optimistic and and space tenants your past our questions. strategy of for butter properties operating our And distribution the mix has worked These us few years. team, bread take with Sunbelt growing Meanwhile, an within trends needing our about number and of We're remain continue strategy well will further

Operator

We session. Piper Goldfarb Alexander will Sandler. now question-and-answer will with question the begin today Our first Instructions] [Operator come from

Alexander Goldfarb

delays the front. seven. sixes. that back be either et yields Is the Earlier as or the were on So stuff, development that's bad both construction purely view this all about of as markets increased and have your would talked even your into year? And is now the this rent achieved down prices, are driving cetera, the we permitting higher or your to next the yields that have go two not cost yield? growth the permitting to really case, increases if land just and amount questions, fun should expect you anticipated guys traditional eroding It's seven that year, costs, delays,

Marshall Loeb

Alex, good and on the like as things issues I the delays national in the question, there, the see and guess, increases all it's cost supply chain and news are -- that. were there and we

much So have moderated growth on may higher won't for land us more than underwrite, -- and longer have probably building deliver construction earlier. still takes but little the they're The -- materially we it prices rent will are a way bit, prices higher than to development. rents. prices It's a they they're were assume our of -- latter we gone than we up. The

probably more we is prior I -- or you Even hesitate phases, of than we're we got any kind rent at within we'll though growth phase. let intuitively, market. So as our use in there project numerator especially can in typically hesitate as I that the remember, the to build, rents rents. we people think of point, so as

the of is down probably given to cap So XXX high mid-sixes think why spread of a rates. industrial, stay like seven come rates could And on over about hopefully for hopefully four current pro the erosion down sixes, have development we'll a I into high to basis come near to the threes been that today. the in rate kind the gotten to cap to-date, model, -- yields rents market -- targeted any point and some because greater we profits our sixes our the there that, markets even year. earlier thankfully, we've coming those have And maybe traditionally, we've we'll which cap in to were our able development forma little we maintain developments. offset our demand beat seen and still we've have continue is bit,

same -- time way been and current rents and deliver it always it's we're the the by with get prior and underwriting a So it have able rents more building cost and to we'll catch the lease. up have have, the really we we

Alexander Goldfarb

Okay.

that courts, some than question valuable also markets, seem box to LA doubled in is, the the you but in more quarter, truck be tightness the parking, the the in than clearly, increasingly more where see truck rents you Second itself. in markets almost

focus guys new the are existing developments, the box putting you or itself? on you out more on your industrial new As and court look remains really more truck assets, supplying parks plan parking at emphasis

Marshall Loeb

it area. customer some and and within trailer or and storage be pick with but it buildings, some be and you're that a the we've can just headcount parks, We that can of sure itself, if between at observation a some it, It's also I e-commerce if we'll what kind which or right, our the we focused tenant -- did -- but some the piece pave which within -- can of of of will and it's on we car up. go not we'll that's still good land you're boxes like mean use box can both. in have ahead Tampa, parking those always

of Atlanta probably two DFW year, off the compliment and nice We're leases things, have airport I'll but but it's We're one the of a We're So DFW gotten about Dallas, in done third largest one liked the the that that we've country. the saw flexibility. it's question you another that and in having our that just strong we it or rolled of they're cargo two about our it, airport. us so first the handful the or guess make cargo success, a bought, team it's acquisition And in besides leasing things parks. And Dallas right airport, three to really quarter has leased in We've XX%. in have the about property Global. one-thirds the properties. the -- in -- near maybe fairly the submarket, airport, we of I but another it's

bit forwarders, in unique storage. submarket those land have was So, side. I that because to constrained. some a add, There's that key, push rents pretty commodity that that there's and -- going, also for back which there, ability of a trailer it's it's where think land a will but pretty leased. little has it a odd is lot value of certainly We And to excess on to that's it's freight where that's

it more observation. focused and on more good we're So Sure. and

Operator

with Our next from question America. Bank comes Elvis of Rodriguez

Elvis Rodriguez

you XX down you quarter, question the know spec But starts quarter-over-quarter points. pointed able Alexander congratulations. can perhaps, that Great and land of construction higher labor? on maintain your share just prices helpful. under previous these I given yields. this the is can yield, went Quick cost, it quarter else the construction to you be yield could projects, higher were to Anything basis lower add comments

Marshall Loeb

question. if And I'm tell me sure -- I'm understanding making your

of come our that's us we and and then basis if we within end of that's and I many using terms yields and on and X.X% is that's own over XXX for properties it's do if that's in on even feet coming because tight, it's existing rate more we touched with fall that can and of we there that probably the our sites really per add markets, total just our leased And yield, square is yields just pressure of make supplement ability of the the of we really the don't, new you got day, market square tough market market bit, points. and a quarter. it's that supply, take But on our of hard where little but our the -- going, we percent is in yields. enhance some well. time's where cap a on were those just expect that that pressure I hope great but thought construction, of this again, think X rents. development -- it at part. continue it, probably stabilized In rents in as the little of increases to million a there cost challenge of so some million XX flipside of I terms to we those with down, there can under developments delivered puts would materials rise going it's a basis should news our what of bit push XXX, in down get that -- if them or And the in of rates And as any a prior And bit current an -- kind that that's supply number we even this up to to those as points little and in underway so getting down. to did that page yield, function, because it's on the cap pricing downward on million year it and X build about for development is hampering add, pressure feet to our XX kind our a our function

Brent Wood

the I just -- that to would add question that's average. an

land markets. looking here pipeline can like under looking yield that to construction, is What some at numbers our XX, at some Miami something XX little quarter-to-quarter. basis, deal, each certainly internal our range that just fluctuate what So at other from tighter or market so was that, a than

that the So start that's depending and where you a number as influence markets. not well. just stagnant that same all fluctuates that can across is Obviously,

Elvis Rodriguez

Brent, that's very helpful. very,

end it what in-place share a the market, versus and quick rents question at was that on is spread you Just can maybe where perhaps of today XQ?

Marshall Loeb

third don't XX% our to typically rents things quarter, went storage I in maybe to cash little quarter, they in on are can We space our you Each saw a camp, closest Yes. point us rents disclose build-out office third is yard, up and that. like year-to-date different, 'XX. 'XX But that. things raise depending the

are between markets. XX% are that within it rent So in definitely it's development embedded very has And are year -- us. up fluctuated we've and a to again, markets that we growth And feeling positive our full really rising. this see leased and rents pick you way, in for year atypical our starts XX% an in just been, our and

of going but market So space, that's there's growth still build buy way, we portfolio the a to develop whether within fair we steel think everybody within higher getting hopefully, now whether our a everything year of to, a and/or industrial that's for in ago. is given components at rent disciplined in led land have within industrial us scramble amount it's runway it could cost, and a or every vacancy, or add than would cost, higher basis the two a delivered, bit been market, little

Operator

Korchman Emmanuel Citi. with comes question from next Our

Emmanuel Korchman

perspective product maybe Is just I I or think that think parks statement of still under a looking and radar cap the mentioned even, being everyone past, those in and Marshall, of your from in in fours. that spoken a hear that correctly? building demand sources, type portfolio. I the other size bit the about rates true you Did from little here, you've are capital up your three sort and

Marshall Loeb

Yes.

going -- I as are -- guess shallow undiscovered show really investor market, learned anyone's box as we supply It's usually our we and average rates certainly, markets, if not we and it's it's financial -- Dallas, Zoom a XXX,XXX our square there, little -- were it cap crisis. Shallow and And product. but probably dip for bay on competition chart, and use XX,XXX are to Greenville, XXX will And was into are below. measure, be correct. curious, You're newest wish a deliveries well bay. feet. bit of call, don't XX-year big I that, caught a as XXX,XXX and back maybe -- from unused the in and lot a where buildings And feet our the and about there bay Atlanta big same that to our at some on great I CBRE South maybe shallow presentation, they were they thought good may on this bay but still our good wish shallow there's And typical Carolina, box we XXX,XXX our Those to as and have and there up, I it's out undiscovered, can in Greenville. developers.

side the construction and box on a say, people hard the bit because the and quoting permitting at extreme Atlanta, of within this usually one South CBRE south, And I is than, firm Atlanta, certainly of of million in-filled It's a time the land. for a thinking market But to to that's hard Atlanta zoning in find would at is in South the Atlanta, read bay. the this that given XX% We typically but whatever a square West read -- couple here quarter page that, market. tell believing you, far studies they're jumped far shallow but feet to of that, I in report had example. But more And a the it's Phoenix. square are me area. there the only only off of little a metro and is I and South get Dallas, the big it, under So XXX,XXX XX% XX.X trickier it's this, good weeks, looking but feet we're construction an that when pretty well. from third

pipeline So -- development slower fit harder chain, development spread much. what little to head-to-head and have geographically big it's our just we yields. worked we're of put trying get as maybe why where I last and the higher developers the not us on I'll we're bit the to us, probably years, say, the capital box food a few that's out But helps going out like do. with edge we not in it It's Those the town. and for

Emmanuel Korchman

flipside more harder are that redeploy the and rate limited is then fact give compression of to maybe to on or sell Marshal, you sort the desire the it that, of does capital? the some cap that of you in

Marshall Loeb

one and in the years currently in the taking his wood, like South Yes, team we're on, towards through service consensus XX-plus been one Florida. markets County, market; Phonix, to going then down got said, Brent bidding We a bump did more that historically one that. that are when and some of oriented in dispositions, Broward good where that service a moving these buildings little knock on one like our we've center-type our under three have good stock a really old, compared we're of contracts Phoenix older we both to for center uses. listed Tampa, we we taking to advantage are we've that's, and debt And the and -- in closing; process NAV, price We guidance problem low, have. have

and in portfolio, -- to be on seller's we're side we to on to it's hard lose be So doing. to annually it something multiple so market a good time of the is to yes, prune bids bid is fun a I the a which fun properties while, every as been get once right as trying own it's think it's we because and now. always other the transaction And it's buy, much, should usually

Operator

Our next question from Dave with Baird. Rodgers comes

Nick Tillman

for It's Nick Dave. on

much Just to more to of That's X.X to a it able with question looking on like purchase, around thoughts land of under so feet, of million that guess, capacity, X build two I developmental million start. on time? Could like your million you this how kind you're kind square X with construction. say years at

Marshall Loeb

fast and always -- sites, Yes. you and out can harder to said, and got industrial we'll the and harder say market just saw really We about take quarter. for market and what this us aren't priced a of of if as us go announce industrial as at being you we've to to get you gets bit Well, there, night? kind it good up vertical the -- little usually you I keeps just guys question I was except an we're other and and couple us like we've that maybe that think would -- it product turn this as would you're -- a in around would talked couple land types of few thought right, But the chasing and finding allows because markets go said, land, years, a rents of of first closings we we're go iceberg. vertical. a nationally, the compared

we we and then to sites through lower, as we've and at can that really yields cheap to and buy as are no a -- hopefully, does but a us other to quickly we either good where land value-add the team also job way we of they've add, Typically, shareholders. in the little now, could I'd field prices on bit quarter-by-quarter, given it that's attractive a vacancy, value that of close got got the where right buildings, And least and can turning stones, development. on our then constantly been a So square land you develop X of amount or our the there's million see as feet and up are, NAV kind FFO can where create tied fair that. there's And run land that put announce for buy we've and good you'll as see and books. over

typically, do have try as acquired in So the land be prices the can, we'll the we because land, it elevated. with then gets as that, but when you saw to ground Austin going development buy we those the team in and quickly carry before

Nick Tillman

Brent. Great. what's same-store then GAAP then quick to question and there's to relative quarter a kind driving that for specifically when -- in at you expect delta this I XQ. we XQ for between And a can of reverse? that like Can guess, look cash and

Brent Wood

observation. Yes. Good

a a as of transaction were and tenant, little part like the make in what we out we months the just lower that's backfilled doesn't said quarter they but and musical moved XXX,XXX almost are frankly, of of let tenant, needed of a timing that, that time in and we we our in Amazon. Lake that termination chairs got to getting And first good since at particularly, rent XXX,XXX year, East another where For least term deal, free a lease, a San part problem property paying fee, as credit Diego that earlier but help booked we a trend, quarter, fee, of this the had really them. construction we their taking square-foot work them a at building bit for quarter, we we a offered over five with large

And XXX,XXX rent is so that place. in no obviously, it feet because had lease had third the quarter, on rent, GAAP in although, cash we

there but we've quarter. slight that like tenant the another each through putting those increases. timing, that got all similar GAAP deal two significant we're having cases, roll way in, matter in or smaller of those was third all -- of that and rent where -- So a nature, That was GAAP, moving and just a cash of and large in

So good it. our in I quarter. you'll was And of that a back up large termination to it deal. very credit, and significantly see all-in-all, think range, will but normal make just fee We fourth way the that enhanced through saved more a a tighten timing its

Operator

question comes Markets. Craig from with next Mailman Capital KeyBanc Our

Craig Mailman

million circle internally, topic an I you do cap-ish? development know back $XXX on today. to go I grown but year guys much Company from governor, up just asset know higher you are annual a how room sort think is significantly, guys curious, your to hot land of Like has it's you of availability development a there is about I as you think of starts base. cap the for or Maybe market the a but here. ongoing? to given also how been mean, want coming is But million kind just and record risk guys, the this $XXX tolerances you guys

Marshall Loeb

anything XXXX you that go, feel I'm industrial getting prices late happy helping get and and look, land to we're bad Marshall. start like we're we to million got back No. I $XXX in those Certainly, or it's seeing have to good news. are think No, to pricing get it's to how you now and that happy are the we going I'm like numbers, don't Craig, just us that about construction to closer cap number? and rising. news, and we the October a

two underway building market the as build next allows through construction, Charlotte, buildings got we've there. pre fortunate been get this the under and a look went couple in can as we fast So we year we leases, -- of with We'll where did Distribution Speed land like you We when of our this Amazon quickly million and our two San are that Diego. about development street. buildings quarter the down The have last is $XX in the we Steele kind park. with Creek in announced be work to park

So that's a the on we site. weren't but big they wanted us, and that, planning one entire for

that. that position us really put that lease did and a long-term we with So a credit in where

can we more. do think I so, And

the our market there Our an $XXX and we bit that that's We're to develop team the and little the value to dictates those and kind -- the certainly of not challenge keep market. got the But adding it's of easier. same, growth to need certainly can stay field do a We also things growing, people here disciplined only right? in add, in million. and pricing work as -- than things buy want more between or but team, it rate makes to up we've

Craig Mailman

bit. a gears shifting maybe Then helpful. That's

for traditional I of a allow been If of what kind today, shareholder push e-commerce you has mean, a And you your and arbitrarily, XXXX bit considering spread property on FedEx rates of change harder like the kind boost do your you traditionally market and Amazon coming pop-up will talked warehouse? guys the little kind type versus of your list into versus your the rents this the bigger you just versus of tenant than just tenant guys feel have kind change give tail traditionally clearly there. look end I or maybe at cap bay shallow and of from deals? see even you about now to for a guess, with to

Marshall Loeb

deliver around I right. to want -- Speed go your tenant year, you're I back answer our say it's is we'll like the market. XXXX, shifting I know looking into at I'm to mean, foreshadowing Distribution. I Amazon, guess, base we to question, going I the to next be but What when

things X%, on three your down. tenant and probably called and our diversity think in bread peers' our lot medical where or supplies, and it space move grows can we're more just rather e-commerce our we getting top and exactly that the really to on Austin XXXX, kind But the beverage, retail we'll work like distributor question, goes. maybe up portfolio. We tenant competition. they actually, retailers So RFP them from can all for to market. there's trying, to as geographic diversity Dallas, the develop are back to hired see with need aside, it I and to that those a broker over the grows, turn But where the really a -- out Phoenix firm the was more an and the within if in tightness X% remember of market one, than food way which they're to tightness our list. in to should was -- continue in wait the contractor, -- the grows we're yes, still brokerage knows an in it's homebuilding, see -- or show stones distributor we've I of percent go a has And title with And tenants you're a HVAC come the mix, my beverage the saying by a XX is we there. I in tenants number and butter, and right, of we're our can't but tenants the like they as and to and Orlando from it seeing number call what and

the sensitive right have they the those asking rent pushing too. loading, we're we if the than you that tenants, right working traditional location tenants and So probably are less and on are

pretty and So help usually it works, well best way, that rents market's moving that push and we're the our you to when -- doing them. can

I its Amazon's to with growing all as pace Amazon going to think footprint have keep much. so they're

you're keep with delivery market brick-and-mortar figure your a lose share. retailer, got out you've to traditional If way into you'll that pace to or

Craig Mailman

the could maybe color? a to there. one -- helpful. color one I slip if specific rent or any That's in Was third But Orlando quarter? the roll down on that Any building in

Marshall Loeb

was and it mimic, Aetna. I'll lease, had say, maybe one Yes Brent we

properties So it component space within have our in that of a Orlando it. office more one a little our was --

a as small sample moved in the office of it. we office out re-leased They we some that out. took more a of with little it's had of and size it, insurance build-out use kind So that

So the improvements have tenant of kind away. into we went the worked space

the size in and So fine, market where -- quarter small the the Orlando it's of we in our like Orlando sample just atypical year-to-dates in tenant. we kind I -- think had and is XX% are a in XXs,

Operator

Sure.

with Our Capital question next Market. from comes Carroll Michael RBC

Michael Carroll

willing Company land amount great is finding development attractive but pursuing take the has Is to of sites to is projects? breaking Company and it risk job on the limiting Craig's acquiring these it wanted done question, go and new or I back first factor to the spec around starts, the biggest a what's on?

Marshall Loeb

two I hire be, and XXX next I'll corporate and we it It's Brent it at Brent usually deciding hey, the -- a It's you get do through if you calls flip We've we're be than is and could a our that we that. to was where Settlers park. and Land of a model, I are the to contractors couple the example, Crossing way we we've Austin, I saying, starts realize built factor. -- got really it want to we pick ready buildings, more little -- should starts, XX% $XXX buildings work our feel just and mean, rather I me it. like for with the use if and we're do around next on, bit. in build in year, compared number, said could would go prospects build million leased we not our

a we If the off store, retail about move goods the you when think shelves. shelves, restock

So pull really rather us supply pushing the than market out. we the corporate us from let

worked that we footage, way then if really -- of don't to lease-up three way we it sure And the forma want the two, make it's thankfully, that. did. buildings four And don't didn't is So thought the absorbs not it work market that we build Crossing, could there. and that, square market but pro you and go build and our at buildings flipside until the go we one making but Settlers had the sure we

model. times, are think it's supply our as our like maybe but there's I'll So into risk I well, -- development new it and don't at demand. to there's I really dollars peers and lower, The certainly feeding to articulate compared lower less maybe

the look a back, million $XXX at was much earlier $XXX the market in we $XXX faster I was of from function going more when in or than we're it -- really the that's what at So but I'm and starts, million so doing year we year to the started memory, year. million, end and anticipated pulling that supply

this way. land and/or it and vacancy what's hope near I either buy probably don't it I will certain bit, So it a to see markets. that's find on in term, putting pressure little and accelerate changing us stays

Michael Carroll

are rents then coming Okay. have guess, Are in rents And I No, been you been higher versus today do has helpful. that's underwriting, initial off the and in versus on your your hand it leasing, historically? historically? than development coming underwriting where what has much that

Marshall Loeb

underwriting And phase. rents. had in pretty of higher probably that's want us the we these cases, quickly, pro our on enough, roller hope But generally, but we if it all and it it -- better a coming discipline. typically Yes, a we've bit our as form helped yields all, little a to the or trend of leased up doing takes the longer continues. painting a -- a oddly because in we've I and we'll we a underwritten they're development we're probably some what it don't to start lease in brush, I'm building, takes -- change back do little company next just months beating we'd bit market, than with And few that look current bit

and project good development the I and much historic projections. some the historic we're out at over there development of -- understating yields or there's we hope get problem or may so we're industrial demand cap near our only still slows if because yield market for is market space. near But that So, those, rates

Michael Carroll

to where versus years now there have a or the I so? past where been mean in three coming I they way coming are guess, they quantify, in is

Marshall Loeb

we've we've our out huge, any pipeline basis these. probably, not looking number it's XX of XX doing but to on pulled we're you we're doing XX development of It's as think probably -- back, I points higher And than saw, year-to-date. underwritten probably that buildings

XX XX%, XX%. at of For one is at those and XXX% example, and are

in that So all anticipated, in a that if our means, fairly have in rent on better be full, all I'd If moved lower XX that. that basis quickly, sense they're replicate forma some little at it's from anywhere point, rolls -- quickly, typically us it leased leased XX X% it pro you move filled deal and usually to gives to something doing longer anticipated. those development away make points takes up. our those But we're love to bit rolling and for we've a from and up a pipeline, than yield and XX% get than a we'll to we

Operator

Petersen with from [Operator comes Jon Instructions] Our Jefferies. next question

Jon Petersen

Great.

issuing we of you guess, mentioned pricing debt, how earlier raising decide as those? just with where surprising. between of new happy in of the quarters look few over I now the not into is next equity cost You call, necessarily you're XXXX, for or the forward your cost both your and given I'm guys split curious equity, debt,

Brent Wood

when a both, that not may Jon, yes, if going -- suspect viewed in more I we're will, our the little are prices air, specifically. it's mean, scientific XXXX, going both into that attractively, on into currently we would we been I to obviously, both you equity direction. side. handed we've which obviously tap heavy

pleased, given any at very but yet down debt-to-EBITDA contribution, like not that rating component, has We're X.XXx our time this especially an time. debt we Moody's have to very, Our going given development that. propensity that. a active to NOI likes

factors some are there that that, there bolsters So up.

now have go between it. only million about December both and So We with ways 'XX. maturing of we'll $XX

big be in So that's terms factor debt replace going not maturing to debt. with having of to a new

consistent it but see being mixing the both. equity, with a could being that's been, I more So way heavy-handed we've pretty it and little the

Jon Petersen

And years curious size? rent rent a is power All now Okay. negotiating your where right. are I helpful. pushing guess you What That's on I ago? it tenant on market guys escalators. was versus now? just by few vary escalators then Does the right or

Marshall Loeb

larger twos it by up. market vary vary picked by probably the a it good space, the sense, lease, -- the size the I'd larger the to push escalations. term back, tenants It market threes, other and those It's used of harder and It's would bay a the usually observation. and makes too -- space be of the longer it say little shallow probably the and the also to the harder to back and the will push on does fours, that's and Yes. threes so like

than gets XX,XXX escalators more a a for expensive X% lease lot with to foot lease XX-year deal. a So five-year XX,XXX, them

spreads we been interesting because your do fours cash capture threes of they're be focused, create up, like those into a moving escalators and that releasing several point peers to this going that's why lot the free to spreads, of like So at GAAP the we see. it's do GAAP I've look escalators to definitely we think noticed at able releasing is the the cycle. to rent and we but in and picking -- value

Operator

with Morgan comes next Our Stanley. from Camden Ronald question

Unidentified Analyst

Jose is Ron for on quarter. great This here. on another Congrats

chains have of of led Just inventory that? you or if And you some retailers, guys supply that restocking delayed those any season, tenants? any limited accelerate seen to your space that heading for process have of into the has have kind seen holiday expansion from specific

Marshall Loeb

that seen a bit some more theoretical. I think little expansions, and We've

bounced on It's lower I you a building back quarter. year, company. saw tenant someone expansion year, and we their higher last it had would probably think last plans say, year, hold model this retention, we our retention on with -- to the if And usually than in started everybody out I kind put rates. this XX%, of historical XX%

aspirational the say to stock -- same We're excess case inventory is, did, we're October looks like people still just a I ZIP news or it's good September that is, I safety plus leased. lot code. mine, our are rounding. XX% would for or think I And it's inventory. still carry in think tenants,

much struggling need that's they're wave have. missing that of out they but cost So that, think than the they're than extra maybe square inventory but more aren't demand learned needs footage extra is think inventory. of meet have of people on another little less the coming more a still -- they as it, because to I Do there's current sales -- footage taking anticipation that in coming people so square carrying carrying I

out or buy to think buy to not trying -- of whatever to at -- it or the it's the everybody hear is having you're maybe be wait. we're seeing and if running, So option or there it you we're an able may but one none I things, here of office, fringes, just at

inventory. a with be bit think as we're So to looking it coming. be that straightened our to will and later that gets what like to chain a there before of kind I'm FedEx I Depot, mid-'XX inventory and inventory we're increased but Buy, want -- it's him, going where to our well maybe probably hearing, like into one it's tire of where is Lowe's get really -- to seeing closer able the little misquoting get of any an Home some things of directors supply to up distributors, or they And Best our gets out XXXX, of it are anecdotally, it's to wave

Operator

Our with next question of America. is Elvis a Rodriguez Bank follow-up from

Elvis Rodriguez

on strategy quick a acquisitions large or developments question just deals. Marshall, portfolio versus M&A,

quarter and assets with you operating to that This you your Austin increased the X-acre guidance on value-add redevelop. plan particular, the DFW and acquisition in the acquisition,

I development, you given changing? those more always acquiring know that harder yields, activity gets two but on and had development do seeing to a balance at market versus your you've just in thoughts curious Is the of opportunities? a it doing are quarter? acquire sort land the As how

Marshall Loeb

attractive is that of your recently very develop return we profit existing specially order. an and development probably park, mean within -- margin. that one an in quoted If I Good was Yes. development peers develop can that had XX% risk still our or market

Northwest buildings we if quarter, make and two maybe about felt didn't in in one buildings I pretty projects call owner Phoenix, We can one talked But off-market we in has to really much that sounds -- a and I our that kind us to were ones one interesting and Airport like two one, the hard of owned, small already I the seller a one had came saw we to up people. that to properties buildings, a value-add they adjacent where rents don't Atlanta the pretty broker. were year, we side to leased because XXX% knew port this a had of Dallas acquisitions leased maybe or that think that smaller manage maybe late quickly three great component picked and But atypical development that's strong quickly five it's to in got move maybe value-add. We neighboring it check opportunity The that. and up and see rents they on shareholders. math want of their the movement way, risk, or of to we a DFW of up didn't some were we've seeing So four we that for was math, but broker, the their that returns, there this our those within right. develop

acquisition which DFW So Global, XXX% we with add. the roll atypical value rent an is viewed, at is

an markets we we'll that's still building Amazon we I that So, marketed like if probably our like Diego, something San make development. value-add. it's mentioned likely or where look And acquisition, an adjacent development. or hopefully like at

quickly we rich being So poor. to went from land land

that And than XX market like back market out gets we last, I'd pricey If And say that's to last say land and underwrite people looking our have market going vacancy. that bigger building, up. in it, usually, it say, and we buy the where portfolio, rather And never, like people you so competitive -- choice because of won't the just more the go the but But be capital choice continue going put really forward, never ability we we're or the think the and would a that more for M&A. our there. to the amount us for a probably value-add we is out component we to outbid other bidders. last

like today, some there's a Link probably less of war REITs expensive and inexpensive capital, certainly, and probably but we I'm a others it large -- portion and industrial not our with wouldn't bidding have it like capital. cost a and fit of portion out So be a few that peers pretty would even us, not of that their PLD portfolio we there of aware and

be -- and of it underwriting, that's hope get and lot So a M&A you I would think right.

So, feel the -- that's bets. where probably build buildings a we we'd has compelled the land different find like calculated to of serving and -- country and That's make type. markets sites XX I'd we'll well us to risk around can make over big served be. us the if -- rather and XX where don't submarkets make lot risky years, we XX in different

Operator

This our the Loeb I'd like for question-and-answer to concludes closing back remarks. any over session. turn call to Marshall

Marshall Loeb

Brent Take your and time. weeks seeing many I give everybody's a for and more following I us available look care. We're couple Nareit. follow-up any for and appreciate questions, e-mails certainly in you or interest for forward a at call any to Thanks EastGroup. of

Brent Wood

you. Thank

Operator

for The has now concluded. conference you Thank today's attending presentation.

may You disconnect. now

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.