EastGroup Properties (EGP) 8 Feb 232022 Q4 Earnings call transcript

Company Profile

Participants

Marshall Loeb	President, Chief Executive Officer
Brent Wood	Chief Financial Officer
Craig Mailman	Citi
Alexander Goldfarb	Piper Sandler
Todd Thomas -Keybanc Capital Markets
Jeff Spector	Bank of America
Ki Bin Kim	Truist
Samir Khanal	Evercore ISI
Bill Crow	Raymond James
Nick Yulico	Baird
Ronald Kamdem	Morgan Stanley

Call transcript

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

Operator

Good day, and welcome to the EastGroup Properties, Fourth Quarter 2022 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]. is event this note being recorded. Please

now Marshall Loeb, would like go to to over conference the President turn ahead. I and Please CEO.

Marshall Loeb

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

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

Unidentified Company Representative

regarding available as results. our and that and website, them recent measures that note, filed measures in such our are conference and FFO these Release, PNOI GAAP on and non-GAAP furnished financial a earnings will our to for or Please financial our Please of with reports Investor G. the Press call contain to as most the reconciliation non-GAAP our information definitions refer to defined Regulation our both of and today, to use financial page of measures our periodic SEC further and supplement

some call XXXX, the Please the XXXX the Act of Act note of in Litigation are Securities Securities Safe Exchange Harbors XXXX. during Act within Private defined as that and Securities of and also Reform statements under forward-looking statements the this

has remarks Forward-looking the available our to press along statements on are currently information expectations, company based and made. the plans, release, and strategies today the made on intentions, current with the of company’s our as about it assumptions earnings reflect views and and prospects

materially. about recent uncertainties, included our duty factors see new filings, on involve or may on no statements and to statements XX-K otherwise. remarks for risks. Report of events risks, Form to SEC our actual information, these details and results that undertake We actual more result such other unknown most differ cause known as or Annual Please or whether update future a Such

Marshall Loeb

continue a year. and morning. I’ll quarter a fluid opportunities capitalizing on in thanking a They start our by level for at environment. performing and team strong Good high

strong continued demonstrate our industrial and portfolio were quarter fourth the and of the the of resiliency results Our quality markets.

from funds year, coming to and over ahead prior FFO almost term trend. for Some consecutive XX% of for marks the compared of the year our above share quarter, This guidance per operations of higher in as well quarters include, the truly a results the quarter, initial forecast. XX produced XX% long

quarterly occupancy Our end, up year points XX% projections cash. XXXX we're at were at approximately at basis XX% averaged XX.X% spreads ahead of XX.X%, XX.X% and fourth from GAAP XXX leased Quarterly and and releasing robust occupied. quarter

record cash and For respectively. the and a XX% year, XX% also GAAP releasing were spreads

rent X.X% Cash, and X.X% quarter to the same NOI our at share, the the thankfully the diversified tenants and rents. with happy up and XX.X% record. year $X.XX XX Helping results at $X store is most per reached FFO in for us share sector to having fallen top our quarter these for from finally per achieve year, a XXXX’s role in finish of the I’m X.X%

and year capital the proud I’m record, the year uncertainty marked by majority our Statistically, summary, was of results. market on best was of In XXXX while economic it our dislocation.

creating the for to we grateful new user responding the continue development. rents raising XXXX, industrial XX.X% and ended in We record in year the via our and I’m results. focusing geographically market the least, creation by value growth demand on strength with more widespread product rent

our the including was of record. In our are XXX% value was we've Another average before, stocks forecasting another we're average our XXXX, developments, XX occupancy we through, add market return even demand read XXX XXXX as weighted acquisitions, of by And parks. leased. XX are annual of X.X%. pulled delivered when Based million. which XX%, And setting within on indicator our stated of the market strength developments our

balanced a closely to continue goal of what the response fluid Last we year's allows. successes aside, demand pending watch economy the with

Given given sites core sites to demand new level evaluating investments. this We're development and also of volatility, taking into market production. carefully towards required we frame are often place the approach measured the a capital longer time

speak will assumptions within now our guidance. to topics, XXXX several our including Brent

Brent Wood

Good morning.

to $X.XX per $X.XX factors, quarter rental by multiple XXXX to an of and team, the reflect The terrific and outperformance Our tested development our at of execution range of the of results share successful success the the represented portfolio strong quarter growth fourth particularly compared and conversions. rate end our performance guidance fourth our continues quarter overall our exceeded of fourth XX.X%. be high time increase pace FFO our per strategy. share continued of the of for driven

macroeconomic capital in share of all result apart the market million have a the price, XX.X we acquisition and perspective, decline, equity From caused our occurred the in as year issued from the Virtually only during issuance of to stock XXXX. quarter Tulloch a June. of that concerns including first

to several pivot We to proceeds capital sheet balance ourselves a years, have position placing been in sourcing. deleveraging past intentionally over for debt the the

million the note million effective of term million. a rate X.XX%. two In and $XX fourth term rate a interest X.X% the unsecured year loan fixed seven million and node an has with interest closed has and of other January private of X.XX%. XX One for notes $XXX we on XX During XXXX year an on $XXX the totaling and rate we a unsecured interest quarter, $XX of a term placement closed term senior year

simply to flexibility bank successfully facilities market. the remain We volatile additional of Also This credit on our XXXX, revolver. a we the drawn provide expanded of conservatively was in $XXX capacity note, in million from January $XXX capital million. unsecured taken to step

light, other July our mature only near the does debt have maturity with term schedule a million rate company the revolver any reminder, scheduled is than facilities, XXXX. variable to XXX not and As through

in metrics. strong Although and financial balance our healthy cost, capital markets rose remains sheet are and with fluid flexible

ratio capitalization is is Our coverage interest debt debt charge market our X.Xx. ratio XX.X%, at fixed was to total and EBITDA annualized to X.Xx, and

the to $X.XX guidance $X.XX of first FFO forward, per estimated be quarter in $X.XX and of year. share the to $X.XX for for Looking the to range is XXXX

The a X% per FFO over XXXX midpoint share increase represents XXXX.

midpoint XXXX property debt $XXX $XXX offset our midpoint starts, new $X assumptions million and include, in of development of notable in issuing by unsecured the debt common of bad occupancy same million average guidance an $XXX comprise issuances which stock be million, X%, of repayment. million $XXX cash of that will XX.X%, debt, Some

In members EastGroup with the results. summary, were listening pleased you, to that XXXX very record Thank we our team call. setting are

location XXXX, maintain continue to page our to momentum. of our portfolio our strength, turn on team and we the our will to rely quality financial we and of to the experience As

Now, Marshall will make final comments.

Marshall Loeb

Brent. Thanks,

I’m our carrying we're never results forward. that to that strong. capital team created, a remain closing, That couple unstable, historically overall in will fund the Internally said and of environment the Brent and and helpful. remain thoughts markets may momentum prove As operations experience proud said,

years. First, past the industrial hot red market few the has been

of environment. view sustained for positive is So market some we healthy settling the

Secondly, this leading is and development marked decline to starts. a

As that secular positive will bay migration, position change, shallow within are construction longer well for long on several markets and a costs work space trends near excited in year a meantime, mile Sunbelt to in off supply. term evolving population in result, we EastGroup's distribution etc., There term for. as the years, the pushing which maintain expect In shoring, we'll later I high drop to new logistics such rents, shoring, and decline play are remain future. last while the out over we occupancies occurring

And now your for we will floor open of questions. any the

Operator

with [Operator will from, Instructions]. go Mailman come question And ahead. the first Craig Citi. Please

Craig Mailman

in assumptions you your of of I Good to a underlying you basis the it like, you through guys to guess bad a in want really much same few morning, in there same years. it or as in have of deceleration, a FFO. and guys kind Marshall, baking seems Brent the some debt bit store reserve, little go have filters points haven't everyone. recognized are Maybe of I side store here, guys XX past of XX just into but which

But, you know XXXX you're fall growth the mark-to-market, could case uncertain know your starting environment. macro Marshall, from the the or decline and off puts of is an XQ market a the occupancy really to through assuming least other just or seasonal go have, if on given maybe if rent this commentary role, you about and what placeholder, at some you embedded whether in you from takes, just the that you're see in but

Brent Wood

I budgets Hey, - good everyone. it's do hate it morning, call a the from as Craig. our placeholder. We to up. build Yeah, morning, Good reminder to ground a

that the we feed literally are going space space, So in assumptions, make or this that up. leases those on roll vacancies, to year with go roll by guys the

number, XX% you're some to by full. as portfolio there's it more challenging to go that space know looking scrub It's XX.X% produce that, occupancy. at it your XX.X% did but to as think you try go and you very might feels to to individually than it the a through made You space tweaks just

a back did looking and we know you occupancy year XX% a store X.X%. the about But same flat guide ago, to

were Of course, same thankfully X.X% XX% which occupancy, to a cash a basis. accomplish to on store able lifted an we

– in on there's We front occupancy stretch range, overly I We our It's or probably like assumptions hope you to the you say, we we from large not year. guess two. in the end to upside. back, XX% that XX%. So and that's year feel know pull just last didn't, know number would to but activity, certainly, were terms of that more push renewal - new a to if just things, get specific and beat we XX.X% of certainly or we tenant maintain equal you during rent hard didn't could so,

just are a of last Craig out to well to we California about. excited the add year, group as make our that point too I’d NOI we lot which

reminder our growth the at future million think California acquisition summer, we There's ‘XX that million of we that in be of or a same example, or feet held about that, X.X tailwind calculation. same that made just that's in for last I of that'll a Tulloch XX% XX/XX. store not large feet to that store X.X

full Certainly basically than XXX, basically on those we you those the that in produced better comparisons we midpoint, part typically assumptions to this once upside portfolio, So do provide, again, the certainly there, hope as will that calendar we the for give the and know but. would so I that can but then have which assumptions we the of was which do the way are consensus. say its there's year in case grid, right do, make we –

about or mark-to-market don’t think mentioned. to Marshall, do know want I rents he you talk I

Marshall Loeb

low a agree terms kind reversion of it's years. Sure. we've the to with bad projecting I been the morning, in the would And Hey! if last say Good wrong usually to been we've row, side debt last Brent. in and we've of and a mean and Craig. thankfully been, I years the few helpful, occupancy, few

If debt. we kind bad heading got We've been were into under do, down. back year recession coming going we're occupancy comp. have many Last which year, historical a think a people we So this we smaller budgeted in. to XXX,XXX of I we've but in get fortunate. we that had credit. we've and bad debt years, tenants In couple know questions bad so got of about the we've minimal last thankfully, very debt,

I beat So during hope year. well a we chance it to get again, the

Really where field the I to things out similar percent the tourists our can and touring kicking call pretty Surrounding, through out this like said all occupancy leases to still like people and know that. say is year leased in occupied, XX% the pretty year. we you along leased, tires robust, the content, from I our, team XX% process ended space, it yesterday is

may capital So like from year we Thankfully the that pretty high that. keep - we've or - occupancy this releasing Arizona ahead we're saw we shallow like got doesn't unstable. embedded got really and markets good spreads, we if slowing for thankfully last XX good company GAAP known year But supply We've were when both year XX% feel stop don't especially of large we I and just a year last about, that expand in north saw outs go anything got thinking, last but strong worried rent was down, growth. and record we any move months, have jump we've down that it's that okay, base known had the releasing Florida so spreads California. supply then but and

lines. So many on merchant side the developers are

we supply. of a when the as continue to pipelines new be drop supply there's quarter, to So of kind going lack think each

just year So and a hang this or more there. you tenants on assuming now from can if the even can bullish hopefully we to economy know in occupancy, our hang

one but lot helpful. that's So hope that's I a of info question, for

Craig Mailman

in another? se, pretty It is wanted blended one but cash a come are assuming I is. basis I up guidance per and circle way ’XX don't delta the because least for ’XX just similar the on guys to GAAP know at expirations you to or on are kind back, up market-to-market you that there a portfolio with mark-to-markets the roll of or

Marshall Loeb

– the space. you budget we Brent they'll It's each ﬁeld probably – know the in as guys mentioned,

you if think, XXs. this – said, basis. So last the we've we'll like like high continue. of a you XXs It feels the it GAAP expecting low The last what do feels couple then is I'm mark-to-market, years and on been

Assuming stays economy just and in comes below budgeting. light. that actual little those the will retreat, in. okay They've a little We probably of where doesn't numbers a terms typically budgeted match budgeted bit

think our more in put that's I of they But numbers the and on I it terms of think mix. So interesting, each the suite. mark-to-market was

quarter. for continues peers, better probably a mix up. what push I say our deteriorated leases market fourth to where does of where ’XX had look to far they time. and of had in peers, quarter who would it ability of I the year. so longer We the stronger mark-to-market expect a move a rent a our to some of in period over It's even of still measure terms to think they in our I’d was look should were more ’XX – and But it and fourth similar our than solid, is

Craig Mailman

be just break about are people of then how build know Build-To-Suit guys the you of that ﬂat I know And out it’s you you maybe but much an inquiries have think that and to up? can kind comfortable? you more development versus you because mean of space running feel I know of stacks basically – inventory, at that tenant XX% risk may starts, how year-over-year, out parks. need are occupied, I is make zero as out and mitigation, just turning incremental we

Marshall Loeb

question. Good

really peers. all think probably development. but a we'll that's more, – Build-To-Suit maybe all I our from one do few it's or is Almost pre-lease difference a spec

I if leasing over example, said, development for our use just just tenants. third existing Texas That of a is

park buildings the within corner. tenants we it's or whether around So some the have

we're, So lot we quick said, in do. enough and supply space, as tenant have you always time we've someone's look, we we accommodate the at mentioned XX% able we were growth don't of that as A period. a if the retention needs leased or to space lose right

pre-leased portfolio, tenants lot in awful but will an go that So of to within our of terms buildings.

number point single not of take although many, more and this single there's got we've conversations, a At more we've had tenants tenant, building. a multi-tenant

us through some will say, moved the that's and along then more fairly we'll the entire them quickly where next move the to to trying come quickly of and building. we're take So park building

number. they I really than just little pretty economy was kind just The a challenge and the rents in on of out. on some then markets. the million. to stay roll back it feels hope that's where are off a it about throttle ﬁeld felt they the probably we bit, That we lower strong team But higher own again, XXX our If market, of the and coming okay, their the is can trying million if right capital than now them XXX let probably the without would

Chairman it's Powell since but costs second stock last to speaks, every stock Fed around higher seems So The time so meet price disconnect been year. market moves a and jumps. prices quarter or are the strong, our is our debt

probably some more that on of stress it's been is than So challenge historically. Brent

Craig Mailman

the as that ‘XX you to not question limit, I'm where end you be, I on the equity want to it but look you where comfortable? much know your just your run price and mark-to-markets if on And moving Brent, of development of point, over out two without debt or with How are EBITDA ratio purely with guys could is pro leverage deliveries? your you rate ‘XX, beyond fund kind forma

Brent Wood

and five handle on an we annualized been We pushed wanted say we could or it very five run has this with maintain our mid it to need fund keep debt rate say a what really better to know our to year in debt we do good goal to I'd always this haven't and manner, basis. EBITDA you throughout a and

We haven't I equity think. you pushed we here near really that back so recently, But know could bounced has the if that. maintain

that when talk what probably and about know would budget we but will say the numbers those I certainly in in the You we are we’ll of you availability. is guidance debt equity plug based need we be and table, we the what fluid a couple dictate know and issuance And year budget. capital something by in. do do our most mean entire begin I what But the won't on you

is price our equity, so, improved. And

if could perspective, equity heavier the being your on So debt we’re debt on and go from much we us if purely point, had the a to lighter that, could. issuance But we I maintain to to see side.

to sort capacity. keep knee in in market that light the XXX maintaining we a have powder plenty to to release, that million gives prudent that still and You want we a keep to pretty saw don't approach of the terms We've more not we but dry just us large added revolver of conditions, of our balance, have user any been reactions of revolver leeway jerk too. always to so

down So equity is they potential long-term some high, the in debt terms – term Like for from yes, of are rates long peak. have more but I I interest us still they've feel attractive. come said,

now and three months our of right optimistic price the sourcing say than more capital ago. I'm So about it

Craig Mailman

Great. Thanks.

Operator

Instructions]. [Operator

Goldfarb with Sandler. Our Piper go Please ahead. next question from will come Alexander

Alexander Goldfarb

morning down Good Hey! there.

markets seen, the interest a we've rates, of housing up. to of you it, of like You guidance. have your about and over markets with given out mean very the Phoenix, like just issues portfolio. would the of headlines And commentary to nothing sounds guys the some a that and you economy, that to always as nothing outperformance the headwinds yet exposure given talked and have you you've have indicates health Marshall, that the years with credit like lot anything you've tenant to let exposure reversion few far past about California. in exposure conservative as coming conceivably number a spoken the have a I record see this given track historic on

in have sort build bip know you mentioned what just and space, indicates curious, that you're that. you you that I’m but guys do of by in XX Brent, baking really the space nothing guidance you So talked about decline,

it to this that of cautionary XXX,XXX just going the bad look, saying to we everything tangible is only element the is last just occupancy or are declines more year. this a there back So or that given million feel guidance to actual things just X goes consider causing you on deck year, are prudent from

Brent Wood

wage into balance of good a move Good Alex. Thanks, more There's and like I things it specific tenant look about the it's that, I outs, heading I But issues, prudent, and maybe spot. of we it I economic – is question the hindsight X,XXX driving sheet a assumptions, I think ability our call like recession. doldrums are bad year in measured or through are tenants, tenants’ conservatism do the debt think about debt, all make hope with concerned conservative. much get it's second I – so cost, cost, an and EastGroup's to do in that, that things no as worry

it's but trying the look and we're for keep of be year and bit to it's we’ll So signs get it But not a seen and to our do during we'll quarter and the think each comes again, it, nothing some to signs give conservative little economy. cracks specific, maybe of bit prudent things, course bit, hopefully you the a be anticipatory certainly paranoid I we our chances at to-date thankfully little for in little update we've if look, best. a waiting several but point

– and we our always our internally is kind goals. budgets of have we This we say have then

it. and our was our to goals this beat So budget

Alexander Goldfarb

are that more as you picture, you question new you construction. supply about also pulling the cautious the presumably your power. competitors, how builders more merchant think you giving yet being pricing on as second back, which then is, said the guys far are said is And And you that

trying just points. I'm those the understand So, two to of

independent competitors in on it, your new more the time, feel power are the development make back, side as space. about If same pull you're back economy of again, your the starts? you investment environment. are is new more at pulling beneﬁting conﬁdent you the available capital that overall current about your caution what that competitors in Or wouldn't are it pricing doing, your committing nervous about you competitors gives your But that on

I'm to two the trying comments. understand just

Marshall Loeb

out. an - maybe element throw Look I'll

they equity to we've we of someone's right, where lot feel the to competitors, good permitting site, repricing. tied that able instances some forward to the them are We're get You're the zoning, and been gotten sidelines. a debt our on not get able up move seeing and/or are and

last a the situations we We able weren't different stepped bought where out year contract. into in perform end Texas. of One couple to of their Austin that companies in at private

our renewing know into, So going and buildings, rather anxious people bit start thankfully but we you product it's bay, shallow a the be just little little a What tenants. to more than going that's do of for state mostly plans? put economy continuing it's optimistic. especially staying to deliver months almost type still all and it's nine and okay, since shorter, we development, out. That Are are about delivering type, conservatism when is, these expansion

actually yields up. our the supply. I know, you and to on your So know we've we're hoping same cash, is a NOI on – about store lot like development dashboard the and of of do push we which we continuing our a focus too, metrics feel our good peers things but different things of demand there's will that cost say, that, lot with We're one I there, and

pushing buildings last of value million, ads in north specific just So year, $XXX year and rolled that of in, we what seven. this came we've the including got you're

creates. exceed meet of the development. proud our that, yields of be to We're probably instrument kind development Hopefully a terms with to in creation NAV we’ll or and of six, so continuing year that able go this up, seven I'm rents

here So we're about more things. hard we and probably maybe some construction point come due them things and/or feel and chasing opportunities than where good are people's loans really development this there saying and where at them have seeing

a some be going need a may people There's don't think get to I there, on there'll So lot there the of lot. bad be some distress we – that be out caught but side sites of the capital either buildings this addition up lease trades, to and pick some well. land can development where or year, value create FFO as partial we to our in pipeline

Alexander Goldfarb

Okay. Thank you, Marshall.

Marshall Loeb

Sure, you’re welcome.

Operator

will Keybanc The Thomas from come Please go next question Todd with Capital ahead. Markets.

Todd Thomas

Thanks. Hi!

deal of the it First wanted I where core just and you you several bit here, investments know acquisitions and bottom was non-stabilized I or little do over line know and you guess or to to a has stocks of both you thinking you to bit begin pick either, it as you follow-up months. off know optimistic from deals, to question, bit last capital about little the your of how I you cost the that capital. improved a about the on you are company's mean Brent, see are know today, know questioning flow little a more up relates feel cost starting

Brent Wood

talk Yeah, are there and obviously in so tandem. you more daily know

it basically he volatility, historic especially this record side last positive the yet year. to in cursed a from As accustomed it's to forth of got particularly price you when unusual our equity we're said, an it, have not much year put stock standpoint,

outlay But good attractive price and a guide we whatever out press more I feel capital measured capital conference today's development know a of sort change, which seems we've as we that days, feel these the that, prudent, say a else it was we might come just from, way can hang we you to got but… and source on think gate. make of or can market you that mentioned, a So if in via our like the about there like, equity – in is can can in good you sideways spread

to that the upside keep that something there open If think eyes The match out field in dialing if to opportunities. good talk and we feel capital good can just We'd of guys you the bunch of their didn't like thing. like coming of cost we numbers that's into moment. in pricing are find you can of tandem. opportunities, – – type know a But in for So kind then we’ll is know it. those of to like be know lean buttoned them year with in we it’ll with opportunities, they we just that in

So I answers what be. know would that don’t

We concert, in working are feel we but good. yeah

rebounded. come You used were know available things albeit have rates to us, more attractive, higher interest we to than looks more down. have Price

know start year those you So use it's good to the have a feel optimistic chances to to the and we capital.

Todd Thomas

those and potential I of and at up my any ahead And pipelines how then question, do for what's take up looking under to sort pipelines, just that's the on construction might Okay, helpful. some for there construction. additional see and place XXXX mean, you lease know lease the second to pace of I that under leasing, guess you just of schedule. additional comments compared on of conversions sort

quarter. You couple had this a

in ‘XX. you and are perhaps some way into know earlier, ‘XX, ’XX You for later the ’XX, of know bit little is a slated maybe their some that making

Marshall Loeb

point. good No,

is the happy, were issues, of last of the know some one only we Now on in rolled in you ones really our and of XX’s XX it – it's one and out the had Orlando little that those, XX, vacancy the year actually that may so that's wood, a we it bit – was briefly shy it. in right look, in now. was be at one it’s about that's It actually and knock XXX% were tenant

always I take but for again, we'll to design years, fast – a few then we'll single good deliver multi-tenant of construction last hope a interesting guys, how becomes that more have it the sudden frequently and so it they and race all – building, been can more a what's a our tenant building.

that So we buildings of under you not I the to can quickly. are what's XXX%. that looking along move those number at of fairly they can construction, our thankfully, or know Usually there's size think projects move a

which have year. year's really in with leased delivery help I'm budget, had been get a that So Ian be toe, year that If certainly little out, buildings better. later will turned the In them tenants the again some of slowed would but could of of happy and the couple we to this fourth fully hoping last quarter we year. with this Fort year next in I'm Myers down hurricane can we upside those, deliver a how

probably last really year activity So the like and – finding yeah, space rapidly at things that. And of you good, and pretty red and know were we I about hot would worrying things moving of in this tenets kind say was, it switch terms feel of time second over space when the have always the light on couple that's our kind about of you we last years know, it said, of then growth amazon overdid quarter, slightly, hey, slowed it's think things when down.

use enough, gracefully know all feel, But nervous. a good So so felt it rocket. it's but frenzied. lands I've late of like anything off takes what activity, a as so there's just we've not usually you done it us a bit heard was little That it parabolic. where brokers makes as long steady also that rocket the early some ‘XX, of kind ’XX,

or every had it. like feels telling fun six up you lined me So but because space wasn't tenant was rep or where for every prospects of anymore, there's handful not you a space, five job for a know tenants it his know broker

we LOI’s in good. convert leases, we We the the just got pipeline. we've signed activity but the like feel So the and to need

Todd Thomas

Okay, great, thank you.

Marshall Loeb

Todd. Thanks, Sure.

Operator

from Spector come will Bank question go next ahead. of America, please Jeff with The

Jeff Spector

up thank you. first discussion. on follow My question is prior Great, a the

half the there discussions guess year-to-date, Can versus demand of year-to-date? any characterize has ‘XX. say confirm, to been you let's change seeing in you're tenant I what second Just or

Marshall Loeb

a it the It first this could and and to and what downturn, to you could was vacations back, family see people okay, Jeff. morning, our season thinking, – but it travel start take the was really the described of do things. that given holiday the COVID, think when way time – feels pretty was described, the Good a similar bit had antenna it holiday of kind up is of it took little pause this was that way

a the attorneys things things So like that, tenants whether couple the brokers and was slowed of it for down tenant rev or or their weeks.

same maybe December, fourth back activity it's and did last it picked and say up year. of of quarter but first part half second early the January, The tenant the feels as third right

are feel late So were with to know, knock wood, you really numbers good and we on we our where consistent year. last

it we're – any thankfully. doesn't activity, So slowdown not seeing and

Jeff Spector

on Great, decrease or supply, this, you the sorry if I'm quantify missed then but did can discussed. thanks quantify confirming. for you you And I

said you supplied off later expect to in the think I drop in you year.

second verse and three if don't half anything you I or ‘XX second know point. over twenty numbers ‘XX/’XX half So ’XX ’XX you of on kind at then of know have on this

Marshall Loeb

like equipment, to not electrical still look to as well I'd difficult HJC are tricky still the you of at but Dallas, I be, some – helpful, the maybe numbers if pretty not big. full or our it’s see time. you'll numbers it's that What's specific major pipelines, by equipment, takes as mean, Yeah, Phoenix, if it's it description get stock is Typically quiet those. it’s markets, Atlanta units, the are my with market.

than the that coming slowly So I did more precipitously. pipeline what's start in moves think issues. it down pre-supply But in chain will

off new another seeing that busy, comes construction some but every one example seems leveling The still like for to contractors concrete, for so think drop in pricing, and hearing I we're much ahead. are one bidding item really jobs of price, up developers they're pipelines as sidelines. have busy, on There merchant the are contractors, the still looking put the in the from not but that what things been we're they're

out think get replaced. they won't I So things get pipeline, replaced or the won't of as come

go the me bid-ask our and be Brent spread has I say, hard building been if the it sense what I'm I discovery I and you think is I've it is. of will – in and you, exit kind think everybody say, type numbers heard from, and XX% those hearing. off that's would numbers merchant a see on rate -- were it build developers, of XX% price makes to drop Kind to know And acquisitions. cap

So that's put on… them

on the and down it more that our number we of for been of same of have year complement real REITs, But heard lifting from number the earlier been besides far and by example a finding was just in pretty his it's heavier I'll pencils team your a were – as for would expanding banks banks than One, equity, have debt well. and diﬃcult, estate Brent large and line that and credit.

us, tricky site few sales make that's ﬂip forward and in things and and got permitted someone putting is people really where We've it get built. and for tracks it years. can would a the a So zoned that where – we've a you seen but good building of news return good really it's in and their any last number the projects,

buying. were We

priced building ads and newly got wanted up learned could buyer value often is at going constructed, out what year. a were really another numbers rents that XX% underwrite Our we but that market, of whatever rents were they because were unleashed we

were too bids, conservative being lot those of stopped. we a So all on that but

probably probably our each keep I XX% think XX% product will down dropping there. from So to type month is and

I think I that expect grow. number to

really about can't people of the equity, lot are it's price going going still the a is down economy debt on. to discovery and nervous get think you I slow and the things and if

market. We've looked was they back the that typically pricing they out packages looking of to bringing number at and at it wanted on get it the any market, didn't they're that

we that's a will point pricing there's So disconnect just disconnect that good pretty yet. tells the there's and at some on settle which to and that a Two, assets development me hasn't story a hearing. but it a market existing on keep degree out, pricing

Jeff Spector

thanks. Great, helpful. Very

Marshall Loeb

welcome. You’re

Operator

Please will go Truist. question Bin come The from ahead. Ki next with Kim

Ki Bin Kim

good want development. Thanks morning. on your and to to I back some just of go questions

number and track may deliveries developing and years guys with on impact parts the industrial the that record you realize an markets supply compete I own directly a development not some obviously that excellent of in might where larger over you're have your MSA. So large

my those Atlanta. might increased slow markets or it of cost But if where for market because do speciﬁc down, And larger Austin might more new I much round you three, the to how like in the the land with the think question development relative next mentioned that's to be supply see demand that Houston, your is, looks things have do development. like you resilient

Marshall Loeb

and I And access system in that's be pretty look resilient and slow growing more that. it's the is to sticky. by also will consumer And demand where nearer; – look, ours Valley down, where at the residential I do things won’t Phoenix the to are. you buildings self-serving, that our and freeway We Ki but of may be like related. ideally population that, Good but East is Atlanta, the and Bin great or our think morning near the like consumer is end consumers, more

So we're China not Dallas New air around that. example, Worth as units things like Fort and getting from conditioning train moving for delivered York, to goods so to much

own I articulate like typically, building like and our it it what the than much model put have I more know but higher lower -- and well risk is are brokers tenant of that new it's park lease or box development we're just think think some last how yields our start resilient when So tenants we on it And will big our in whether the developer I building, -- yields and activity, that I'll I me. building. higher that spec I then kind to enough. be built and yields our rep are about market then Maybe we a the merchant also in we top be may we don't than.

delivering but not we have a into. may have we sign, that So lease activity we're

the lease, corporate of hey if it's not of in I’m for X next me, to team buildings X that, solve it's know usually easy. isn't the and in we building the saying, a we need And inventory, in the of Phase pretty side the building, Phase then inventory. two build saying And build field that's to out Phase know calling It's does about economy out ﬂip the run X. answer I’m go the example, if We one. to next if Charlotte didn't slow,

our given any up time, halls demand we've could it stopped at markets So and with until hit catch development, really supplies.

time the why spent stocks. the So everyone related to and good we modernizing as the about can a directionally beat supply make number. as money like like fast and teams and more has pretty be that their going of those let predicting movements good that sticky And I few chain but we’ll a where of as think, market over that's that's ports the avoided. on we've around Ports a lot feel go investment, in industrial, is we're point kind always to I over so I'd port money last than kind to and hope million, think, $XXX consumer us little are ﬁeld all – people and years that's country. of the will The the easy much I shift

Ki Bin Kim

Okay. assets are you has And here? assets good cap any kind and bit good can commentary of bid what share stabilized broad rates on aspect the think markets for and you if a on narrowed

Marshall Loeb

transactions. lot It doesn't We're a it's feel not seeing like of narrowed.

got those that rates, cap moved those market what us, that, more at months. it you've up single and have Those is mainly for if asset, and the several we're brokers you've hearing bond the the most sense. heard a things We actively from tenant assets. looked and all haven't makes like long We've been in term, say are

rate So the interest most sensitive.

of multi-tenant lease terms project a in and weighted got you've term. talks everyone if then average or price But, WALT

So, you in threes the then Cal, got fairly below-market those, we interesting. us until where it or get some with rates but if being you're and cap know brokers heard probably of that's that sincere, could they're of Southern are fours talk fours see those may rolling you in you've and high be leases fives in different still for thing I soon, but know low the market to know pending we the some in and threes one markets, hear trade, about those, it's

half drop-off development year. ﬁrst the two. acquiring add we up some the not or probably ideally half and could But or market. to pick if asset will but the can a value pricing we're to the that something drop, the disconnect of taking us capital in good and construction see expecting an the Look, we because be this two construction, or our second I some of in it to in of and year, – asset strategy with think market have add there's our

demand four because five in of may be, bit little costs on think be or work to So, a we months the or miss I the development, new demand, may quarter if don't sidelines. I favor everyone to wait our Again, start a the want there'll is reward. a but

Ki Bin Kim

Okay. Thank you.

Marshall Loeb

Sure.

Operator

will from come next question The with Samir go Please Evercore ISI. ahead. Khanal

Samir Khanal

customer decisions stabilize think whether mean time you gone elongated [inaudible] it's a if Hey even maybe from markets renew look bit morning. back just an at I going demand I period. regional at side, at point. the the has guess had standpoint, Good talked, we But I to tenants behavior, longer when are make I started time this your taking I Marshall! to mean that frame that to so this know, or point. or

wanted that a to through Just kind little bit. think

Marshall Loeb

take get a get Deals the while. ramped tenant patients, the morning dotted maybe seems like slower Samir. you're crossed but getting know the do is, you more and T’s red the I’s that we zone the and take. through maybe all into It and it own and right but TI the attorneys - tenants to my Good then to pipeline, the speaks they up deals the and them and getting and pricing that's larger feels

ago. And there I are get it, dollars were years several from higher and the they than

news think is some you're make more, bit this of little get and me, to I there's But little takes nervous. it that to So, read more you're bit which nervous to And will still a about would the off. a approval a you economy, every make for headline little deals a you sense is then but tenant if not good people sign layers there, sometimes the of longer output ﬁnalized.

back a although don't is away unfortunately, I I So, had panic don't dropping. and that maybe come that with going people year think there missing - see think for a supply space that don't could I ago,

Samir Khanal

where like for is XXXX in the I think in just next pricing versus or the more land operating the now? today right Is as bit months question, of a second you uncertain guess I development we my XX And mean assets sort more opportunity about acquired where it Right. of see quarter. looks you maybe that little

Marshall Loeb

have without them way. opportunities that lean where ones we and would conﬁdentiality, And the a to couple I things perform. under violating bought, people able weren't the contract of

were pick we thought able attractive we up what were to So pricing.

up there. and leased of any partially we've are picked the so couple looked opportunities along it's We've And opportunities or assets assets, existing a there those not someone. out lines although at of

coming or due two their we'll may part, equity. buildings once where and buildings someone at four loan construction a You one is and a know built wants time build at to six the more have lender

we're their it their year And of was hearing a loans what roll banks that off ago. isn't from

So the it's making their too. level at capital more precious bank and more expensive

chance have if as but the solve have we capital price, be, the we and will not and probably a think mindful We're pick we land we're some that on We've acquisitions will the in up move and capital I hope to there be we a think bind, that wishing I hopeful. can asset I people year. we So this maybe seen be may in of help own and I’m and through able on at them bank some but our a seeing opportunities, right execute the it them, and case, get it it been that. for problem to ourselves of good with step capital on the

Samir Khanal

Thanks very much Marshall.

Marshall Loeb

Sure.

You are welcome.

Operator

ahead. go Bill with The Please from next question come Crow James. will Raymond

Bill Crow

just starts? seeing construction questions. Marshall, morning two in drop you're Any Good a Hey! guys, there markets that new out not thanks. off Hey quick

Marshall Loeb

all I've Good got or or year guys is I Houston, and the things mean merchant like see what our probably and Phoenix, Hey Orleans, and merchant in broker it like be relayed is assets level things three developers major Jackson He mean sea markets, a city one this the morning. golf we the builders event a and it lot the we'll next tiny always We've where that. of below where New is, you was in two Atlanta, been. construction when better entire markets has Dallas, Orlando, the said its at that. the If But really, has Bill! story. new said, this tournament

dropping is at developer competitive, someone what supply a gotten to think in, by Heitman, pencil least local because whether that, than a it's usually, and a or it as I and year lot that or So, a we Clarion it's like ago. view to was lot come regional your exit KKR has debt partnering equity and harder harder off especially it

Bill Crow

Yes, okay.

some space to question seeing is you given margin, of existing are were macro second make The hesitant the issues? tenants your on the expansion

Marshall Loeb

need seeing and It's expansions waiting no, a a they're It to the to the of seems hear they logistics more a But uncommon, proposals. a proposal or and space not our still space. going deals it's and amount get to leave we're it, a of like number take back if either contract, fair they're company on longer.

So the takes bit, portfolio side a the development. and deal on our about still we're seeing good within fairly expansions but tenant that's feel little good us what time makes the

kicking building is old, I the love eight building move space that which that building number it's by can market original now, into backfill and their hopefully it by whatever new the building. it the if is off their idea of it's taking is, tenant below from and the lease park, time we couple years from because them three a or to we XX% call of

sales the last pitches to big that nice kind So that's and really just the that's rubiks years. It's of what cube our moving team's of done job one few doing a tenants.

and we be and accommodate going an needs. to everybody move space when we'll your their in. is determined, flexible and move entire the park, growth they're within have can outgrow As you they park But

Bill Crow

much. right, very thank All you Yep.

Marshall Loeb

Bill. Thanks Sure.

Operator

question with go ahead. Fargo. come next will Wells from Please [Ph] The Yung Poo

Unidentified Analyst

thank right, you. All

go again. to Sorry question back to guidance

you're guidance, or your cautious Just debt industries where bad being and little markets a assumption? regarding occupancy certain there bit more on your are

Brent Wood

Not a at the like speciﬁcally. not is it's I’d I property more debt It's again level ground-up at component. the speciﬁc or is bad The Brent. applied tenant This say, level. really Yes. particularly, corporate

revenue. to put of X.X% reﬂection is that the been reason of We've well again, were the what think I more sort just debt put run bad got again. about below onto that the year those below I a So that to be you've premise of the together, could historical start few it we guess culmination no rate number somewhere. of last our and the the we years, would that of

the we'll And so We positive are. that's goes see. but progresses, as hope we that year where that

XX or mentioned, whatever It ending as As days feels we the good. year, did year. we it last into Marshall feels as are good

and seeing not let got measured, you to you feel quarters and prudent the still manner the four the go to year. play about we're any then so go, we from So story But, together, when to just budget put you've optimistic and out in there. start headwinds the want year a again,

Unidentified Analyst

good And more, the the What January one Got guys in a bit know. the looks was of to activity seeing sentiment you kind just on job expected. that's so of better terms print down it in homebuilding are or little construction like it, than Sunbelt?

Marshall Loeb

lot we're and Florida, like industry, We're a of Arizona, home the our Texas, that homes large fair the buildings then rates lot does that, obviously, of we feel with things tenants more coming of all in the with It in-migration company are mortgage a and - a up like. Hopefully, those. - optimistic the relocation. come going number worry and of and markets,

Tesla the there's in San and see, of homebuilding Arizona We've we of we've and to that tenants to in Las out sure picked suppliers So is Vegas and to Austin lot that. a I'm got it Antonio to Texas. California some follows up moving

Florida we've to maybe companies and in It's with and time, fast, to they're that look, and going mortgage up things that homebuilding, term good and it rates are got pretty people like enough pretty COVID with markets, really Texas picked moderating good things we're point. this and Texas, and pace to It become dear and but So, there's these relocating. That feels still over that. steady near sites long feels how it slow just like the that only and relocations at with of and may Carolinas companies. about, bullish there more quickly there's after are

Unidentified Analyst

Thank it. you. Got

Marshall Loeb

welcome. You’re

Operator

Rodgers The from next Baird. come Please Dave go will with ahead. question

Nick Yulico

on that seeing like actually Nick question It’s on up of is you're land. A Where versus on land some on following for peak Dave. maybe the the guys! parcels pricing today XXXX. in at Hey

of but You down could land XX%, could as much you there? down asset be XX%. opportunity be do as that heard kind XX% to guys And any prices see

Marshall Loeb

it. they've opportunities. different, sellers some and say we land the tow up while the would they picked owner, pretty owned We've and at to there's you question. to it Good land know prices two of morning! maybe And get least types a sticky for where own Good we’ll intent two farmer, it's are continue historically, different long-term

now or Where steel has seen in or can't or seeing had the that that's people up opportunity where some where equity forward someone takeout is and they've sale two they they come it the good want and have you're pricing the extended or and come even contract's electrical that we've that a down. ordered like instances and a the get where the usually has debt land. tied price tied and equipment risk a else a they things and up got time some more at the They money and got

bit it part, We run quickly. and pretty but tied moved XX%. made price that’s those have original the of down the to get up that pretty a window timing were able probably it closed, good has little you're person land prices And tricky still their so that pricing had they of right, money, – some some XX%, where backwards come much, up because reductions

the that's and project see and across and And to fee in while a that's before developments within prices, land and own tenants street, some little as least, sidelines and want we new bit get that’s spec to can started the are development, wait for especially little markets people if new or a you'd keeping merchant build where the step if unstable. a it's our tenant on it you construction another the hopefully bit thing probably developer, a prices movement, you're probably movement little

Nick Yulico

like pushback quick That's are - helpful. from the you're rents on beginning existing margin discussions, getting rents. on one When seeing maybe tenant. just And on renewal anymore then question the you the

Marshall Loeb

No, thankfully.

the a tenant they and thankfully the think educated of if reasons of rep that is the our we've I we push Our been rent XX% of track their so our out, the low a move sit rents of time not down just our appreciate through okay, a and rising us move especially rents. that I by in can go – them high, renewals, broker, in, you own component This about ability list their their our to us, to have brokers market where is like and same cost, was with rent. it's when even too cost they that paying transportation given the wages structure you're market and but to such are costs, going be that compared it's

And far I energy rents it's our back. is we going haven't up, but do for cost so going, costs, structure whether wages, emphasize tenants on gotten with their knock wood, pushed

we're because doing premium. can or rent. within move-outs - Our or our tenant aren't earn we're hopefully high, reasons accommodating or due and locations slightly more the too we're It's your market to growth if strategy more consolidating of rents above different at job, than kind that macro

Nick Yulico

Very helpful. Thanks Marshall.

Marshall Loeb

welcome. You’re

Operator

will question Stanley. Morgan Ronald from Kamdem next The ahead. with Please come go

Ronald Kamdem

late, jumped ones. I but Apologies, quick two just on

Just out. jumped of to guidance the I number back think question, occupancy the going sort

to Just guide? about what of occupancy decline, in a actually get sort trying is bad into driving sense you are conservatism that of baked thinking debt? What that? that's What's the

Brent Wood

Yeah, Ron. good morning

space certainly But basically and square you not assumptions, square XX our a run rates, was based couple again to a points at on an debt years. footage, historical maintained just then size, the the based a of it's good. Just a on that given actually that bad you yes, start reserve, looking last impact. that, feet. The just times been XX% on basis again that rollout recap is that's much we makes can’t below certainly have, well more we've know If when

You would know express that I balances. line remind bad does debt straight everyone include your potential

XX suddenly times of rent. current files and have to tenant, may we their say, of for lot a occasion where lot came a a you I some had So on they Chapter happen, have we've are but times there – an

aware straight-line but situation, may have that rent not were in tenant they a you're with you to balance that you even So reserve. associated that that have

earlier, just in numbers as you the just start So good and would mentioned did year. year we environment we'll unfolds. like to prove a hopefully, those But, start, this be got I the we last to way to be just thought approach conservative year with and measured good somewhere, then see how

Ronald Kamdem

And them your cycle. on where Thanks. ground? they much you're What of of the Would my too talking are to to inventory you of a the in tenants. from Great! then perspective is retailers have hear of Have sort love gone second sort it? through hearing inventory? Do lot are one we

Marshall Loeb

retailers – know for is inventory, probably it's of back Hearing pretty built shortage wrong much gotten there that unlike is Maybe scary and too you have it's inventory could be that. that the much some too but it inventory, a and was where characterized better. as before like things

of of yet, we they’re year, they than achieve to been able of it think to inventory, haven't restocking that XX ago. but and that a our safety all tenants were months kind closer But stock still

expansions. their are or levels is more it's got that's on and – is that probably it hard Is inventory. better So answer like to I it know they'd our yes the a carry up, inventory sometimes is, and/or to business know little exactly back you think that picking be to

companies. of activity certainly the third-party a from seen lot We've logistics

it that and to to get So inventory. more more people try me outsourcing tells are

safety isn't it a than So shortage seem the shocking there's new in shortages, and better more front room I that that get we shortage that they but hear was, to still week in things on And to run every still where news like feel about something something. of needs think on the to be. stock the to it's to to news

Ronald Kamdem

much. so Thanks Great.

Marshall Loeb

You’re welcome.

Brent Wood

Thanks Ron.

Operator

for over Mr. concludes would our question-and-answer Marshall to like session. sir. I Please turn This back any to the conference Loeb go closing remarks. ahead,

Marshall Loeb

and time in you. certainly everybody's EastGroup. appreciate Thank We interest

forward We to season to and to any we if able anybody are available dive into after questions, you get you. has the call. question soon If Thank weren't we or conference look your follow-up we as next. seeing

Operator

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

disconnect. now may You

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.