EastGroup Properties (EGP) 26 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Keena Frazier	Director-Leasing Statistics
Marshall Loeb	President and Chief Executive Officer
Brent Wood	Chief Financial Officer
Vikram Malhotra	Mizuho
Connor Mitchell	Piper Sandler
Jeffrey Spector	Bank of America
Samir Khanal	Evercore
Michael Carroll	RBC Capital Markets
Todd Thomas	KeyBanc Capital Markets
Jason Belcher	Wells Fargo
Ronald Kamdem	Morgan Stanley
Ki Bin Kim	Truist
Vince Tibone	Green Street Advisors
William Crow	Raymond James

Call transcript

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Operator

Good day and welcome to the EastGroup Properties Second Quarter 2023 Conference Call. [Operator Instructions] Please also note this event is being recorded.

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

Marshall Loeb

Good morning, and thanks for calling in for our second quarter 2023 conference call.

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

Keena Frazier

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

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

along are update strategies to and statements earnings and on current company’s that risks. differ report new or company and factors see detail on other Please expectations, remark the intentions, most in and We or assumptions of information whether no actual of that known annual our made. currently included plans, undertake these the views have uncertainties materially. risks, as filings for about our may on a actual information, to our Form made events or more results with involve press prospects to future recent unknown statements result our reflect about otherwise. Such in today and cause the as the Forward-looking XX-K SEC statements release, duty available remarks, based such

Marshall Loeb

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

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

include for from above XX% funds guidance, produced the of operations up in XX% and quarter the results Some coming year-to-date.

FFO quarterly truly share the FFO long-term same share For per over prior year, growth reported trend. exceeded the per has a our years XX in now quarter

at XX% Cash pushing Our cash. consistent from spreads occupancy XXst. same-store with with XXXX up XX% GAAP spreads was XX.X% XX% quarter and up quarter-end XX the of March approximately GAAP in X.X% record and cash of came year-to-date quarterly points reached XX% X.X% these is Quarterly XX.X%, occupancy second basis year-to-date. a averaged which for quarter NOI and to and results releasing

in $X.XX and with the XXXX rents down top our share. falling locations. the finish Helping I’m per in our these is XX X.X% of to from us tenants XX results to second rent rising to Finally, most quarter happy with achieve FFO points sector having quarter diversified role basis of thankfully more

start to In all year. record concerns. of it on the quarters of summary, proud was with recession I’m Statistically, best one our the continued

end raising the This to occupied to rents lease, continue and We’re wider product development. is the industrial XX% quarter focusing and for over a demand XX.X% and geography. on user responding in and new allowed what strength value via creation market market strength through wider rents by average us pushing

are within development park. stated stocks our our pulled we’ve market As by before, demands

XXXX of what economy starts million. closely watching a What’s with pending read-through, response the balanced quarters fallen industrial three our capital primarily consecutive up, continue our on tightening. developments decrease promising XXXX. to with Starts have goal volatility we’re XXXX to see while market third leasing forecasting is being almost and quarter lower quarter second Based allows. we’re of demand $XXX fluid the And credit XX% starts, than in due the

development opportunities. turning allowing to and us tighten, XXXX, continue create will then pushing demand, rents into steady markets earlier reasonably Assuming the

transactions said, since towards Given the when right opportunities, measured pursue find the we capital market mid-XX. volatility, strategic them. a That approach we’ve we taken

opportunities. mainly being opportunistic strategically windows development these investment on core and on seeing side We’re the

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

Brent Wood

morning. Good

per Our team, $X.XX replacements gain share, quarter strategy. at performance recognized to $X.XX of overall second the roof our a of FFO last the and a for success our end compared our was the involuntary that portfolio, of quarter of damaged for range same time-tested in execution $X.XX quarter quarter conversion guidance strong as the attributable continued terrific of of FFO per results result second to hurricane. year. the were an our reflect share upper exceeded

at increase portfolio Excluding results upper last range continues end our XX% of the The by and an $X.XX development share year. the of guidance FFO over operating driven share, outperformance success quarter the to program. at of our the gain, stellar per be was per same

From the access strengthening stock perspective, a continued to equity in provide our capital markets. opportunity to price the the

sold for quarter, per price we gross proceeds at share. shares During million the of $XXX.XX an of $XXX average

equity interest million, million our our assumption. most In year, assumption $XXX debt rates, elevated attractive guidance $XXX the capital source. this stock for increased updated which and our is complete, $XXX unsecured we of remain any to During million proceeds of issuances period from removed

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

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

down Our X.X debt-to-EBITDA ratio was times. and X.X charge increased to XX%. ratio and debt-to-total to is market Unadjusted our fixed capitalization coverage times, interest

and and X% share XXXX Those increases midpoints estimated guidance quarter of range FFO year, $X.XX respectively. $X.XX forward, represent compared X.X% per the for and $X.XX the third over $X.XX to be is per guidance. the to increase prior of prior to the of in $X.XX share our to Looking for year

of X.X% the Revised points guidance. for basis a increase an last growth midpoint produces XX same-store guidance of year, quarter’s from

remainder average result the the XX.X%. We the to budget the outperforming of for with also of is midpoint along continued optimism occupancy by second our basis expectations our XX increased This the of year. points in quarter,

the the year. second closing, and well-positioned were with In entering half of our pleased we are latter quarter results

we team, and quality and good into in times location past, experience portfolio future. financial we of uncertain our rely both us the our in the and the on As to of lead strength, the have our

Now final Marshall make comments. will

Marshall Loeb

closing, Thanks, our team Brent. In the created. proud I’m results of

We’re working strengthen momentum operations development to we’re rents. never while historically to in this Internally, that markets constantly the the sheet. to experience, while high occupancies maintain pushing overall In leading forward. we’re to marked clouded. the meantime, Externally, capital working a balance remain And carrying and remain strong starts. the decline environment and fun is

secular we’ll several space last as over And I’ll well-positioned on-shoring, et term, near-shoring, markets for the will positive longer trends questions. long-term mile, play sunbelt logistics up out cetera, such within EastGroup’s for migration, future. open evolving that There for. bay are distribution now population years, call occurring remain your we’re And and excited change, which shallow

Operator

Craig We comes Please will the [Operator now go with begin question-and-answer from ahead. Mailman The first Citi. session. question Instructions]

Unidentified Analyst

Craig. on costs Marshall, starts touched down, current here the pretty today? happening in with terms you the market Joseph given just materially. you're new construction seeing and recent Nick How also starts own you obviously, demand construction what’s are peaks coming overall and what underwriting industrial in from thinking side on development new them your of -- about

Marshall Loeb

Nick. Thanks morning. Good

ways. maybe were our yields. different of I we’ve the numbers although internally our goal, One, guess, couple a pushed there. We’re up development

it’s leased a So always in works it and conversations call I’ve rather that to that oftentimes even It’s out will or and last to high three phase we’re liked our year the they really tenants is build Dallas updating the our that market start in a or goal, typically, on need we’re are of we way for model two of usually XX% pushing and the to own is and more goal a And than couple field we’re starts. kind build the sixes up leased we more and as it’s corporate who benefit the space. usually buildings. need park. new sevens, the in sub team the out hey, talking then

if has start we of our we’ll taper and leased new phase. really supply demand not into So one that projects up, then next that won’t the

inventory and then restock. wait we’ll market of until fills kind So the the

at looking we’re how that’s So it.

little little world’s about, of the a that demand of we is and agree is of talk and what with bit about question, in or normalizing after this demand. maybe environment going where kind were atypical we like the maybe, pieces that would what some a it terms think I you your makes COVID

seeing the more about hope have know unique strong. get pretty the a some type it’s to early environment that XX, developers, advantage what’s a market it think we like people But shallow it how for assuming then supply it one and is were building growing around our point turn we’re that’s fun, to not to regional, just type is also really still into so encouraged so as it bill not economic flip turn into unsustainable. at capital local, taper can was hard black products or really helps. us but and got we XX in where are It’s of was but felt really start We bay what merchant often there’s look off XX swan that frenetic looking which we or hold in where development yields maybe felt

Unidentified Analyst

occupancy Yes year deceleration of touched helpful. back the cash you’re for increased And obviously the implies you still the sure, NOI maybe know demand in the and on you very seeing. same-store you. it Thank guidance on just year then half but

get we midpoint how to updated of there guidance? in the through the walk just you can So terms

Brent Wood

the Yes, NOI comes a had ahead morning. anticipated and the I’ll jump Yes, is and in in same slower even second we’ve it store Brent. down really little quarter. Nick. growth bit to Good This been we there

We’ve comes were for quarters guy As basis we to came quarter to year’s benefit down example points projecting, really because you quarter ahead do XXX second what’s it’s increases rate it raised to XX first we favorably came in but of were occupancy say have be to the isn’t first which to up had be really more strong side. comparing the we saw what XX% where by the quarter in increase. it of for the down prior It the continue but but slowness. over quarter to on many

looking but XX.X% the example XX.X% few a second same average the in side XX.X% even and is quarter of XX.X% real were and for occupancy quarter you a so and a a occupancy comparison quarter. then occupancy pull and We know moved our gain, they’re that so a basis flatter at all rent store for the had and calls third to you metrics then and occupancy compared our ‘XX XX.X% we points growth, a to fourth for budget XX.X% plus here of becomes occupancy store back bumps for the comparing same rate

two be be to. which benchmarks those the will we’ll comparing so And

of out So, realm projecting the what occupancy at not than of we’re moment. for But comparison. you I what of hope mean we I do projected a ahead step still year. in we’re the better that the end our the it’s got come

pleased the guys have a rent had So the been leverage accomplish We’ve leases again, last still job the years. higher right our and growth. other The very components market able run we’re few annual the -- to of there. over in with we’ve done good bumps

But but clearly, there, statistics bit many FFO head X% evidence been very with of almost bottom often line the of to is store the we’ve overall same per formulate occupancy our to that component double line side wind is to one close a getting an but – it’s our digit says a as and important come component again. bottom and just Marshall comparison as is and share growth pleased the

pieces a and at have of we on very bottom making work our to competitive putting be together line. all So way the

Unidentified Analyst

Thank you much. very

Operator

Please comes Mizuho. with next Malhotra ahead. from The go question Vikram

Vikram Malhotra

Thanks so taking much for question. the

being key in you’ve continue widen a conservative markets the seen look see just second little not touched your view about the will second you rental side some terms rate broadening in and being half, in rent strengthening So to you the essentially of across you updated rent the out spread on or first the But parts maybe guess half? give into spreads into as the and growth pretty out growth of rent a spreads more concerned occupancy. of does Texas just rental rent bit solid second about I imply how we that just half us of and the your Can Florida. definitely

Marshall Loeb

it viewing we’re this XX%, high kind digits rent single Good question. it’s speaking of tracking and call taking -- we’re to feels That growth are Tenants double morning digits, it lower full maybe longer to and and staying good and right. that like year XX% make you’re but decisions, X%, staying, broadly there.

they’re said about questions we Now gotten we’ve Southern still one of California markets when strong. the our things

The type supply still it last us, ago years, markets other nearly good don’t the market difference releasing see the the business population spreads Carolina’s. was just but then so Delta the three you isn’t is when formula growth look Georgia a at changing I California of are and for and really like our the over Southern what years markets and I, in that and thing, growth Texas, given the Florida, couple

I rents to grow. rent continue think is embedded there that and growth

So we had our spreads. first rent Look the of had historically. we quarter feel pretty the about year best good and we’ve best half

that, in where good recession right anticipated So the we’ve pretty a been history period most now. feels in

like come the like there be to and or it like stay And what since, not we’ll probably GFC interesting seen it’s supply going feels we’ve see it’s something to that. down this

it come If if supply could there XX there’s, say continues how was where So demand rents really I I’m it’ll pressure optimist, in an really on than stay see interesting more is, in XX. be to can to down. upward

Vikram Malhotra

to And more clarify Texas, broadly? or just specific is to sub-markets, just comment that talking last in etcetera, you’re your more

Marshall Loeb

Like, maybe laughing was just saying maybe yes. answer is my I

I okay of that. we’re combination what can we fair I we’re on coming growth things a and And than the based like population of our share coming we ours markets supply like in need like And nationally. logistics, on down economy I’ve having nationally, especially is things job the but thought market evolving more purpose. that I is think down change, some it I in in markets, maybe don’t all double our of gain that. we’ll given, supply like onshoring, growth, we’re We if certainly in, need just growth, an e-commerce, like the what great the economy.

can a supply and in with laughing answer I growing you my kind short if got mix where But it demand, to falling was of yes. of

thank markets we’re like you. the I So in.

more the little national I think a average. they’ll than benefit

Vikram Malhotra

been Paso’s just very evidence of us since wondering you give couple were start this but four times Makes you and, you sense. And there’s years into activity, rent probably then trend anecdotal it like to warehouse referenced just specific sort just solid. more I’m on-shoring of points demand? about can El clarify, translate a COVID. Other We’ve for suggest are building? it of a near-shoring, the is data spreads any any, finally that more seeing three, talking I’m wondering,

Marshall Loeb

right. we’re, what Mostly you’re

digits. and or strong, main half releasing it’s other markets, a triple spreads three, markets. low it’s we have maybe continue won’t both kind rate seeing two occupancy will We’re where Paso our and that in in to vacancy the seeing, it within to rental where rates, and markets to go our reading about Tijuana, we’re out Juarez in and California-like of And of side El the but incredibly two those drive growth historically border, that’s really

San new border, that’s strong there’s, of an, Mesa on So excuse our sub-market right portfolio Diego El continues demand. to It me, and company, portion Diego, there’s every and new Paso really a a feels there What like Otay strong. there’s feels the like that quarter, have demand. about San we good a is

the Company And Mesa Every XXXX we’re Otay leased in market, XPL Fortune area. other Transport in is that Arizona. XXX% then

Nogales, Mexico’s but still So bit Arizona. strong and a as quite market a further big demand not see away, in little we

feels more incrementally not a sustainable which in markets, those So it’s, it’s well. it light it switch, builds feels but like as

Vikram Malhotra

one peers, cost to then also, of more, referenced guess, capital, pretty wide sense. and I public where are, equity just, you’re raising, just I Makes of last, and you advantage of it’s today. the can you cost And capital if taking relative private sneak your but

spreads, as relative from or maybe deleveraging is of outlined looking sort or anything monitoring apart like there this advantage you you’re have wondering of I’m take to development you else of the better So capital? cost

Marshall Loeb

bit, in a too. Brent and Maybe jump little

an pushed have market, safer part When I interesting and on, equity. where the of think importantly, one I’d lot is in the of really, mean, to going, that’s us where trend sure a a cost the to it not different maybe and rather access we’re you’re more economy’s we’ve opportunities capital, seeing but come seen I these, a capital, are we’ve reasons. what on and sheet, of that that a developers, hopefully than sheet that local, regional had hopefully our number balance of balance we’ll, us in to we’ve have and lot and peers build build them we’ll markets, couple several we more of unsafe a road evaluating. we’re but few closed the a of down

three participate feature, step finding. promote I’ve that them for And expensive. or Would maybe and they It’s up tied conversation or we years. two this hard development and really sites raise had ready to is on it’s that some fee, some shovel you the give to equity It’s generally in, debt. site the more we’re

a have betters line of where two And a ready. that’s had ago, site would they so year where, you it’s have when a or years

have you probably didn’t few a and million dollars the market. could really You spending to break ground, have made

Now, and those a financial developers spot. type

think going me it’s guessing. I to it’s get, not

to some and it real is it’s ripple given to of banks going like think better get through before the worse commercial estate. gets that, their exposure I effects things

that’s usually before close opportunities permitting, where the we a the headwind the where seeing measured of is year or gotten the site. actually on through in we’re two else development zoning, so And sites the has that are things all someone

basically closer do end. the to Well, to having to that of the jump, than in maybe, we’re front chance on a legwork the cut line race have start

Vikram Malhotra

you. Thank sense. Makes

Marshall Loeb

Sure.

Operator

Baird. [Operator Instructions] Please next comes question ahead. Thillman The go from with Nick

Unidentified Analyst

Hi, this is on Hogan Daniel Nick.

or times looks springwood push are longer pipeline, quarter, code. version Only you’ve is the like back assumptions. pushed some of lease that for up and development project stone slower function Those development your back buildings. your at larger looking So dates after

Marshall Loeb

our I factor can play parts. of projects those in enough early -- are, you development. construction, say, would and really probably then a like delay feels One, Yes, part. pending this delivery I’ll in are have definitely normalized electrical of equipment. overall for it’s but lease construction are it’s a the weather where two team, fine. the and going little times It’s construction are weather overuse talking to word on it bit normalized and call most the and the for

So panels, and it’s that issues to pushed our time that the lead all is think where the energy it’s year. we if are one have said the the within everyone, construction, things I you about having green people electrical on transformers,

and a is, related getting level stress to I think could be kind probably and our it’s so little where issue of delivery. availability. bit weather is don’t guys, So -- know those their electrical construction on it little pricing much I any it’s a a equipment just

Unidentified Analyst

it it. Got large then try the past you and still or And seen in in front, putting competition the less their seeing with box Bay on talked capital your break up to similar to you instances about the a supply of developers Or given that mid is Shallow trend? have compete space? any spaces

Marshall Loeb

I they’ll is think it probably -- pressure have that. would -- on would to where financial look, you market do the

guess I maybe think the on margins, box get I the the challenge depending built. and on size could you I --

XX% in feet, size XX,XXX our revenue feet. Our is tenant tenants of the average XXX,XXX square comes under from

dock -- if So you deep such say, built that narrow it a if it an you have less XXX,XXX-foot cut things million-plus. much dimensions of XX,XXX those the I The building buildings, $X but like up on and for if space, building is compete to can’t a you XX,XXX with try doors long and but foot such that. tenant, a up or you end

picture ceiling space kind have our -- of build And a off cutting demising other fire-rated then thing because inefficient the at loading deck. is side enough the to you back walls very happen have landlord becomes you on it would space tenants you rectangle. kind of doors to for don’t from to you of the the if that So the the

so And gets expensive. awfully that

I the wouldn’t improvements So think tenant work.

physically bit, they in two maybe the So when work can can wouldn’t that tenancy unloading, still off boxes, small and for they probably is that’s to why with -- don’t have it piece deliveries a having of to and compete you building, but enough would the not kind one cut or big little maybe it just those because you. go it you’re loading really tenants, XXX,XXX-foot

Unidentified Analyst

clarity. Thanks the for

Marshall Loeb

you’re Sure, welcome.

Operator

comes Piper Sandler. The next Mitchell question with go from Connor Please ahead.

Connor Mitchell

Hey Thanks good taking the for questions. morning.

a and talked having the to you, bit So regional and you access about up builders guys. guys trouble capital merchant have to reaching little developers

bit in bit to So ask do I to back competitors jump mix? and it kind term maybe is of a capital satellites able stay just maintain like near with be they little possible to the soon in guess and about on whether Or a longer? term I’d the see maybe longer find the what these you for

Marshall Loeb

answer. Connor. say other let’s one morning, good I Good one it’s way think. another say it’s a --good question one hard to a to Yes, And harder to question,

in I estate. to think still to would strong. lot where like right the it’s multifamily compared pro I now. incredibly -- go do is sounds attractive Retail, think is capital for industrial, of some real still there’s industrial offices a it’s And that be like hard you

So get alternative so as an you industrial attractive can capital is there.

know little more rates, and building hard I can if and them think until learn in these we’ll been capital to thin less merchant cap interest are because a -- know Me still of lowers it’s not And XX where build I know, months. XX Fed were finishes settles the raising the many so where a are know they’ve to Brent out, pretty it developers to on where flip build you and it willing margin. when developers hard much really we to and today rates guess to it’s

but going get And exposure, product bucket other what isn’t every with still into the we type. we pressures they’re that I have work come regulation reduce their real thrown it estate talked to banks think may like so industrial or to as out to with, we’ve which much that commercial sounds what

the be come near little rates going harder. couple to of And to interest to a the it’s So think going term by in are loans the the than feels I months. be bit sure last harder in like

a going while. are for sidelines So to on be the think those I developers

of And the the in ‘XX, sales the ‘XX demand has at to or that dramatically, as and dramatically and adjusted supply maybe still back demand few lot not more. that much see early had we land in into pipeline. kind of much great a pipeline, in portfolio, and but there’s a more seeing settled has that got for empties bit moderated that was changing than until you not And our We’re that’s next quarters sales the ‘XX the capital don’t the date. but markets forward little out, as least things coming of I kind down

Connor Mitchell

that. then just Thanks, appreciate And a second question.

Regarding the while, rise in the new XX we haven’t a homebuilders and XXXX. even past houses, maybe or demand which before for years so seen in

was rise newer growth the in the the overall Just markets? the up demand in and the Or it like it has some in I housing wondering demand, how the showing market? more materially the impacting is be towards warehousing Sunbelt can new attributed homebuilders industrial maybe and

Marshall Loeb

it’s it’s think much growth Yes, population little seeing we’re County, business Certainly, reading as had, it. Arizona, so differentiate population Maricopa contributor. to The hard with Florida -- little positive where a not a Phoenix, a huge our driving we’re has Texas. exactly, a It’s Carolinas Austin, but Florida. I definitely the

they’ve share we the from tenants definitely have Buy, And taken growth. then the like Depot, a Lowe’s, benefiting couple or developments. our that and that of we’re air our some where train, tile like So conditioning whether their companies things all of Best it’s of Home

things more to To appliances, we diversified. it’s tenancy like that so so me thankful to that it’s benefit, be I we’re well, think homebuilding we like in too it on get But a can where it picking a sounds like, couple cyclical. homebuilding reliant of one was is right it because as kind seems read -- Fort where now, a I shortage up. I but have. related nice about wouldn’t to it it is people that of want and There’s of tailwind Myers, homes,

Connor Mitchell

much. color. very Thank great It’s you

Marshall Loeb

Connor. Thanks,

Operator

The with Bank ahead. go Jeff of Please America. comes next from question Spector

Jeffrey Spector

Great. Thank you.

drivers I what we’re just appreciate debate a still thinking some the all here these the big demand innings? of late drivers? picture, between demand. drivers over you and say, that let’s and Like them different there still demand a of there about some comments nice how are on guess, picture, per angst of just or various drivers guess where what the driver Just those characterize would it? cycle we inning lot balance mean, I is big your in thoughts is you on are Marshall, for all of the the of I is early, or still in mid, of are,

Marshall Loeb

Hey Jeff, number good drivers. got any I morning. like that we’ve of

I think picking of still do and I kind early to innings, hard of it’s and retailers think mile delivery on last early innings think -- how we’re e-commerce I call but they kind like apart -- as they earlier we’re things I continue curbside innings think like or think that. more that, I of go things they do to rationalize delivery, store count terms there’s and in how to there. them

a China plant plus on multiyear China that strike would move a out process or innings manufacturing. because onshoring think one to early near-shoring we’re me as I and of

but last like of early flow I question it’s on like think I some things think happening, we’re our ebb the there. and and And on homebuilding that.

a also e-commerce versus the drip, there’s many. penetration, I So think just continual And drip, drip like brick-and-mortar. that I that just is

I a I gain little away. think year market is more But as delivery. think do brick-and-mortar don’t going seems their and e-commerce they to share faster every faster with get and just better

in locations. So infill flexible, that us, to like estate low-cost -- I real we’re there’s very

Our revenue tenants year over is a X.X%, actually are ago. points is which just top XX from down basis XX X%, our

variety an all know of tour, use really and the if would good I of you’re use ways you our get like take And any join you million tour, just to analyst that a I buildings. encourage you out I a for there’s buildings. the investors So have, sense ways a industrial people want to

had with that we’ve quarter feels few a seems of new years tenants or there’s energy to green one a green and now new we’ll it prospects we tenants every any it years number every three have energy or and one, are something that two wouldn’t like. XX And doing lease ago, like is got XX

but we several push as -- as it’s like pie pharmacies or may to a one before, feels tenancy something we of didn’t seen die like online than inning or reaches companies I or new it’s we’ve got tailwind say a, continues down if to have [Ph] And that type then were CVS the your prescriptions that order there’s of of late a you several recurring it widen. So up these online rather tailwinds our those [indiscernible] hadn’t brick-and-mortar. it and years insurance now pick ago, we to

tenancy. And so new that’s type a

we’ll tenancies, or like -- I had take full won’t this those prospect And meantime tenants there and continues XX years. of distributor All in but and are Budweiser I to for that So guys pool we list our this still grow. up and of the that. the that the tenant whole supply hour then base

Jeffrey Spector

Very explain second you. question, this. sorry development And I then didn’t, if Did I’m more please? you yields? If then stabilized Thank you missed in the if detailed helpful. my you can, bump the

Marshall Loeb

it’s forma. get than what a bit really we rents Okay. what I’m No, had higher -- we’re little there. we had able -- I we had to where It’s guess pro glad rents. it. It’s

we have of couple rents that to hand-in-hand okay, break time and help things we when better yields and the mainly kind one lease the ground will the market construction getting current a can rents go. little when we the underwriting, bit than let’s of get and buildings, at us said, market do costs be, we lot of a we was higher were times, that -- as So we’ll underwrite those

up be on the usually would can then two, up we getting the pick thing leased building faster. other And

carry bit a our So less. is little

how rise. but the So the to of would just driver a combination bigger be continues those, market

hopeful growth pick time glad they basis a to as driver few got and think it maybe trending I’m again, under NAV by better very the that our and can can mentioned what and huge important, and can lease-up points And the get our way out single rents, TikTok, are we we if has a so gets I’m up that but up NOI the FFO been look, and and between right buildings all a at then. If we we’ve we under raise Brent or takes that capital quickly tenant those like creation. construction things it move had And keep we’ll development now successful higher. our program leased earlier, same-store

to yields up. those So great coming see it’s

Jeffrey Spector

Thank Great. you.

Marshall Loeb

Sure. Thanks Jeff.

Operator

from with comes next question Evercore. The Khanal go Please Samir ahead.

Samir Khanal

Marshall. Hey good morning

understand you operations at talked be On looking on little kind strength, what strong holding intact. at what’s it’s you’re demand back you that But guideposts then like aggressive -- the I’m to and number higher? about to are of then hand a still guess trying when I about from starts, look market that? pushing right? the modestly, So talk you drivers up one development being get your I bit just

Marshall Loeb

-- really like I’m -- up us is a years us. is is happy at we over Ours And we’re this feel with start holding really rate for for million -- that. we’ll us, if things with pretty good two helpful. I the $XXX don’t look

$XXX a internally, We shadow have get $XXX the of out which we we times that the our the couple we’ve and about here’s for pipeline starts we’ll happen year, this solid it look and and feel next raised is it a when here’s year. we pretty to call could dialed pages batch the the phase we’ve if this And year, good of it, lucky, that they’re next million what at a million then happen. of really, and typically, going part

much if there. we’ll demand is million it to. the if that, comfortable hopefully, or low would in on but -- take market up and we’re as field will leasing development I’m lease I our an right them going a to is million built, it’s I current the go hope really $XXX not what us we our get III tried for think glad to decision. if tenants the the I’ve like $XXX I from there. And capital rises, opportunities. -- up, capitalize -- to team approach task corporates tells or at for doesn’t help leased high the below those Phase and the I’d act million finding our part the we’re it’s to XX.X% But really $XXX always go be we’ll that market number as as and investors, to demand

of how next and it look million, we’re if and $XXX million. we’ll last we’ll the as phase couple faster pulling it, through, out. as plays markets that’s the happened $XXX the demands and what’s of buildings really July, forecasting So market or re-leasing then But means becomes late fast that in great, park call slow our go and really the this up years, see the And year faster. as

Samir Khanal

about right? we about bit it. we’ve that understand to the a I going talk know which that in be driving level, earlier look, implying And mean, there’s talked the that. maybe markets then a markets, that, half? at sort driving in high so slowdown growth a of sort about other some growth are I your coming But And that I second asked I is a half. NOI Got second guess about certainly been that this off know my of very -- lot. your question guidance. second that’s was of is maybe But talk slower of I know you’re L.A., around the

Marshall Loeb

vacancy square it’s vacancy. a less. then a the I’m I It’s wrong just the It’s big a market the San some It’s got to Fort next Worth, the and move typically is where get get it’s more NOI is And market Worth had year kind -- year. mainly we we off that good we’ve bit this of -- with out. pulls not a looking Francisco and of those -- at mean but a leased at same-store million it, where nothing there. little be year. market the XXX% XX%, more of Fort I coming you’re we you There’s market, a will for markets function are down feet.

of about acquired think NOI, one I it’s same-store properties the that, that in it’s will As but year. not last our we --

where moved backfilling a We’re space tenant out. a

a So next nice should it pickup year. be

a more market. and above it’s below rolling function, that and vacancy average, probably any market of So is not their of are much so the where as out seeing in in that we’re weakness terms --

Paso, look what And then more I it’s next. It’s stats, cash positive the we used California year-to-date, as maybe where I market see our of helpful one our if when one same-store of and at to of portfolio. think to Las year, mean for and NOI Phoenix, peers quite the El growth, GAAP GAAP Dallas, closer there rent particular, that we’re growth not when I same-store or look much core negative achieve kind our in all given or rent only I I maybe Vegas, and in I’ve kind any year same-store always big the to just peers, NOI great a in as here those can or out very see our move widening. make some our in of thought

Samir Khanal

so Got much. it. Thanks

Operator

from Capital comes Carroll question ahead. Markets. go next RBC The with Please Michael

Michael Carroll

thanks. and over commented I market questions changed when I down? yields time? have those yields development projects, the of targeted new rents that to those you on so? construction how over mean, have Or higher costs yields how I the mean has costs or unchanged initial year development that past kept pulled really I financing Yes, kind underwrite really earlier. touch -- wanted have you mean, the

Marshall Loeb

[Ph] X, points like basis markets, because probably a it seeing X.X, cap it’s not market more a more -- market in still maybe what we said, and, we the in X that or if we have Hey, XXX something that as at would would it’s rates rate, above we’re really have exit, any come rates new our point a It’s call have let’s but of and just terms has with moved cap it off higher time, gone When cap major development kicking morning. Good development. a rates, interest would Xs floor as as at would looked their were have given rates. into But changes. the interest really rates at up, things where probably in in of call our -- and one in we -- were low why cap threes we low capital probably were it,

The bit pace good have achieved we or we years was to we we’re and slowed competed things at would up looked would really much would we and sped said rents even probably XXX on – probably little it what been have those yield, kept is good projects hasn’t you like dipped project, and of a or have below a somebody -- to were risk where so news would underwrite get as little costs better development accept lower lower probably pre-leased bit still offset that two. achieving two if as a of that’s have land, it our we’d or you’re less. yes ago, a have was right, we in just kind it it’s thankfully, probably points. to, risen, be for need some or yield bit let’s is if keep on think but basis it willing we’ll we the -- X moved the something, -- to And the so probably pipeline And an those, though but construction yield up working to, those now because

Michael Carroll

the in year? Or higher actually if you your basis last about similar still XXX X Xs, achieving kept amount than year? really market over as about so you past that probably And is like heard them the projects? exact yields yields high the Okay. has is the but mean, those were has I I increased by rents you’re points correctly, see -- what what target it was

Marshall Loeb

Yes, call yields good stayed matched More has of I range. that by, you’re risen high it, consistent -- in -- Xs, have our risen so basis target rents correct. the X points, the our probably construction XXX a pretty has that threshold type have but

Michael Carroll

Okay. Great, thank you.

Marshall Loeb

Sure.

You’re welcome.

Operator

question Markets. Capital The from Thomas with Todd next go comes ahead. KeyBanc Please

Todd Thomas

Brent, should Is guidance year perspective, stock provide to quarter that weighted year? the increase in ratable toward the guidance? first, third about today? in and $XXX where common heavily on of stock within how assume stock we issuance the throughout a given from more quarter the in think million issuance that the embedded timing the just balance guidance. And you regarding some you it’s ask more -- remaining for the is Or the I thanks. guess, do of the detail the maybe raising the wanted can issuance. revision, gears the I about and capital impact switch around additional updated the just the forecast had Hi,

Brent Wood

of always do, the year there. million, for at $XXX the our source. the a or I’ll capital we’re equal when required. just much looking from have to as that’s the back And outside pretty funding that our Yes, Yes, throughout as with weighted sources start remainder latter we moment, funding up we

going you $XXX about to outside look I back and about we say, XXXX, would what was of $XXX If million debt. had million external funding source that of or

And we did that.

we equity that what million we of did kind good, rate got which only in in looking debt look year, you of and We very mean hindsight we ending did rates million we felt $XXX did remember, last hindsight hikes. ahead Latter of But half us X%. at up. to year. up of BAAX the X year at $XX you as X.X%, back get like is years rate average for If did and X-ish. somewhere XX an at last of you’re then [Ph] crept probably around given this go today, this year, I long-term our

far in so, the like -- were months on now And itself. been we we at somewhere And the in is be XX term the you if has So probably X, short cheapest debt obviously revolver had X.XX X% top. sub-X%. where has been would is there traditionally revolver which even by

So a you any that pretty have on the suddenly sitting revolver dollar percentage. now costing you meaningful

year this seen pivot to equity you’ve why us the side. that’s So

we’ve a So year. opposite $XXX kind of of pivoted projected, million last call sourcing, of of the external it, out

million million which did debt, We’re $XXX $XXX projecting done of of back January. and million we equity, $XXX of which in

can’t But much. you it’s to and they’re which important at moment, to leaning for period, kind and back it every out, each, continue in yourself heavy look everything think measurement when while of look toggle back tap up are. really avenue a we we’ll you a forth So into lever into we to short too average equity, might

want get to to don’t You either. delevered

end. So we rebounded has is. it since quarter price like where The some actually

could more incrementally even -- be in there it would So if attractive. hang

capital. we The good good news reason is to raise is, to continue have

that We’re it not a raising this money the retiring team work primarily other continues avenues for at make capital our or and capital we’re -- because do very to be so. raising still accretive development, that this but put other, certain to debt to very

of flexible that’s million if now again, said, right equity some find did buys that’s we couple like then but the could ratchet kind at opportunistic kind looking change. to guys so with and or And markets -- yes, good because continue you if as those, Vegas property, of development a how you starts that may it’s number. climb that of Marshall it If left But the a of -- could that’s get we’re that the $XXX we higher, number at moment.

Todd Thomas

opportunities the development was terms it Okay. there, Yes, and have sense. I makes you investments, lease-up some the Yes, you’re of around see guess, spend pipelines, maybe I of and provide helpful. seeing color in to a you’re of terms that’s for funding a surface? use Marshall, that mean, about of better million some relatively little starting remaining whether the I quiet quarter, just today under But what talk guess, pipeline in maybe, you so $XXX can

Marshall Loeb

Good Sure. Todd. morning,

or the whether grow that, be -- opportunities the it’s I’d We’re to on and happy to take the of Vegas, we development successful there’d It’s step buying better kind a having higher, seen equity into, found have today. as that haven’t core but of, turned tried opportunities the strategic in with market opportunities turn market. strong things going pool that which been is -- to want still that rate debt been acquisition capital that market we with the stretched, funds we of or be we’ve and market approach We’ve there’s in. is as out that we to acquisition growth like haven’t on rental Las were this kind thought seen we of redemption private challenges buyers hoped another the a private given

we’ve make it of some strategic if But acquisitions, any and owner-user a -- capital. of we’re distress building, or of that our That take where good or grow the raise can of are helpful, offer is having way be the find bit little looked pipeline set funding an We’ll there. to said, this we for make maybe couple in continue We’ll to it’s we’ve about the keep And off-market selling to on opportunities we we mind kind if development don’t it. tried and it’s okay. the a multi-tenant a too, pace kind here we can. a them it’s if if way cases, owners a and at

on attractive in. at basis, can far That not get enough that where or a we’ll risk-return where that’s if the that least step away yields are development we from spreads are

but we’ve disciplined which year we And but before but where that which can how not bit, it trying we’ll we’ll were up firmed -- the property number a year find the has bidders way. I end, from was we’re make in second active, really but about of be hope we and portfolios, a and one trades a we’ll rounds ago, definitely more is hopefully, year can we really be to few bad come certainly there either dramatically good never two And still close acquisitions meaning more but another was was of one ago, year-to-date. bulk patient and where third or market only was market okay to be seeing a it. So a

Todd Thomas

you. Thank alright. Okay,

Operator

Jason comes question from [Operator Please Wells Belcher next Fargo. Instructions] go The with ahead.

Jason Belcher

your on quarter, to on drove down. interim so? provided update that us flat over lease Can was the month Hi months quarter or June sequentially what X.X everyone X divergence past were that that just will Both at some flat the there. just a give prior up when be noticed about while you out the I time. color you in your ago was rate occupancy

Marshall Loeb

to -- ago. maybe watching I just don’t trying month a June, think that -- have it that I of I’m in terms that

with came And XX We’re quarter the And that same-store. basis glad for again, for average out. was this up. quarter. grateful a bit and we’re points little quarter don’t I XX% getting spreads was as were and cash end our occupancy almost portfolio the where bit a the little them -- the actually year-over-year we better to and The numbers the first higher of one the flat quarter happiest indicative overall here the market I’m happy know that’s re-leasing a are XX% And little so GAAP. know that’s The just -- the at our if I I’m there. much of of of with move

maybe things we out we July. time looking and at the And of our again, wrap get I’d say quarter where of least up by the kind release virtually at end second at stand, are

at XX% it’s flowed pretty kind of XX% least occupied. a around year. been months year, We’ve and consistent leased, So seven of stayed ebbed the

been So pretty trickiest the stable year last five months mainly how shake market given pretty and seven at the environment in capital are months But times the we’ll unstable fluctuation. -- like what grateful see those of a felt that the out. I’m have

leased of of -- historically, consistent XX% against not think used -- a a the I and for at last highs at where terms to leased, pretty our but know XX% end not which is the on there’s which kind second of was fully is is to up in occupancy company our of as leased. answer, Brent that’s specific quarter that was that. where we’re coming and least we’ve at So XX% of We margin quarters, very couple percent a day, helps much with been XX-year said, year, improve

those So comps. there we’re happy that we’re hanging in versus

Jason Belcher

line color Understood, on there little thank like you. that out you it weeks to decision lines maybe And time does it today is continuing recent you time appear is tenant versus comment give a widen ago? or then the looks in remain more year as or that months? elongated. time and line or today, us to Can what just And or a secondly, somewhat elongated so if lengthen have that mentioned stabilized

Marshall Loeb

you Maybe fun. space. we at a much maybe remember of so overdone jobs. to wanted afraid ago, more have of hot, two large their brokers things felt of a to space and looking felt to a space. same of would were little And couple saw they maybe had stable. be told losing like that. like later They a that commit people rush when feels it turned rep going or It they and like more out users are tour three how in to it I And things tenant were other talking things couple were people that, years space, couple than and take Not people a that’s said, and the saving

and like think that feels needs about for large more patient space a just it and company there’s national, on -- companies have probably the normalized. being better economy it’s forth it’s I probably two I waiting don’t thoughtful the recession -- getting think I it isn’t it’s happens larger legal maybe buckets, pretty read so and longer. and their and it the or that, quickly as like they’re human when of And I’ve that all companies it’s about or that smaller oversimplify for those approvals the their like much it the and regionally owner leases psychology there’s it’s the it’s takes told more maybe their news -- and the you the kind cumbersome. based, concern moving process longer, and maybe -- if just things almost myself natural and back quite news, watch an things still And

is takes are the company another explained their much explanation, as last layer there. in -- that of was dollars terms liability, and so a the committing cases, of over The requirements, before in me is has it two the the so can or number risen depending if have the lease helpful, of they to one rents the risen much approvals other absolute brokers years to of it what this space tenants few get

a just -- So liability or more it the year got so into layers why earlier. approval bigger sign long approvals triggering and had sense took two get other me the LOI, to the to makes lease by company, than you once it -- lease that made of at least the maybe of a was

Jason Belcher

sense. Makes Thanks much. very

Marshall Loeb

Sure.

You’re welcome.

Operator

comes Kamdem Ronald go Stanley. ahead. Please with question Next Morgan from

Ronald Kamdem

from ones quick me. two Hey

the to just And So coming rise look with see the cash all year? and what your taking I on like in XX% could we’re XX% build if [Ph] the early a function year. NOI, due, XX% same-store first for trying next think up I is quarter next that I’m --

get to X% number. easily You X% a to

is is, year delta sort debt, so bad and forth? thinking biggest next really about the should question of and that the So be we occupancy

Brent Wood

on of mid-Xs -- -- escalators and Yes. you’re we to used right Ron, that of vast, the lever I component say majority this I’d certainly, have to growth and Brent. our X% that good about say of just occupancy feel And north as vast be grown rental Bad good. annual bad as well. collection that’s we’ve now low, to rate on that’s be like be continues would grown I debt. to based average. still versus is been look we on. component, now to and able would overall is leases, year more And would side for say debt be next that

to that not say feels at a increase, but so it pace. couldn’t And manageable

for XX.X%. that is the quarter going year just I I mentioned same-store for comparable our I The know. bucket. going occupancy current example, be occupancy same-store comparable quarter be was earlier, the side fourth the for in bucket bucket, last again, as that to for third -- mean we the is year occupancy to the for last XX.X% same-store in mean,

So hefty pretty those be comparisons. are going to

I it of rate so the increases rental about part -- to being do where be. going then think with would you to of agree in that is matter X%, and think what of you’re I be And saying that component it’s it a X% occupancy

down, it measurement as continue stubborn said, -- XX%. to point budget and We hang pretty and coming basis Marshall slightly be to slightly around continues continues on to it

better the what two up do So we just slight pullback. right that the of -- year, we’ll a because are through biggest of than now dialed happens or But if bit showing we’ve got I last agree one year the same impact next how -- that’s going that to see, might you, way we’ll so but -- other that is probably store. is into on component with quarters the

Ronald Kamdem

Great. second and commentary bit maybe more Fed a storing my little And on so just then one, on or forth. onshoring

Just flowing of about you in curious in seeing the from markets? what news, are sort the of hear data the it hearing portfolio? you where We Thanks. but or are through a lot that’s tenants

Marshall Loeb

little, on mean, It’s and put twofold is seeing we’re more not maybe nearshoring within -- that’s in then has Maybe Texas, even population Tesla see what we what in or then so seeing guess, tech. we’re I it’s maybe companies, a in shifts. much. Tesla And I’ve just not -- up picked Antonio, -- guess we’ve directly I impact and San I had suppliers. a indirectly large Austin onshoring

in Dallas relocation that their it Where more we’re seen has Texas activity. dramatic we’ve pretty medical-related seen technology for And been and seems pick -- buy Austin, buildings are So manufacturers, leased where And did we but then that was there. over in leased and San prospect and and that we’re we’ve is XX% those seen a medical on and up the pickup full opportunity that and when and next we’ve things impact. Diego, manufacturing border. coming to products looking that, are up, electronics, manufactured where four it and Tijuana like quickly

city tight you actually Amazon, one to Diego opportunities, pre-lease So our markets further big in land. south. San city the San have be to was who and wanted as the couldn’t further but Diego, find the stay and closer they of pushing of then those

then And will helped really more I So that building border together as the Diego technologically second the it at that be crossing they’re all other a gets San think thing there border. pushed advanced.

in crossings. crossing those lot two between a So border product is our faster a it’s of and border possibly

to that We trying So but seems there. say shouldn’t find it’s next on opportunity here there, build Diego. we’re to the San -- I because and need it bullish slow South we’re be

And vacancy when of you was Tijuana dangerous, is the look, about memory, think rate same. I like which think and doing And and but is Juarez, this that. things from I Mexico X% the under

seen -- us. and over grow, just -- and markets to more in Las up we continue and a where there’s So market, markets those we’re picking like tight stays look, continues spill it leave we California -- in help that tenancy that Arizona do in like we’re and again, And that to are we’ve strong Vegas hope when people California, Texas and companies we if well. as that but and balanced

Ronald Kamdem

Thanks so much.

Operator

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

Ki Bin Kim

good morning. Thanks

I’m think that million to some a to follow to times. we’re the inputs get just on curious And X equity what up half. you if you leverage $XXX that, second the question. that once I decision closer execute Just will additional -- be equity raise in of your of

defensive it I that acquisitions, in I’m just appeals? or more your do see and there are but -- curious large in but to opportunities little a haven’t bit the known know posturing, sounded been press some deals you larger-scale release, like horizon for you

Brent Wood

us And first debt our Again, gone matter the almost out a alluded what is the address we then as of wound kind we’ve I’ll to being year, the in Yes, that $XXX best earlier, evaluating early about XXXX, heavy million. in feel $XXX And of it’s million I moment avenue. the other. up of like part. this year really,

If equity to ‘XX between the we’re together, you XX-XX basically debt put and two ‘XX.

got lower to So be our does try say it debt long we’re careful than debt-to-EBITDA run, the to you certainly drive the to but continue balanced need in they run, to down and short metrics there. on be would

more interested just just between, But equity equity revolver, X, reason. or versus capital environment, interesting in is that you will the Bin, you where fund our Ki short-term because a that more to over the rate it’s we as se decide little been revolver a bit float immediately and the an say, issuing in the or down, low let a say park to it that’s this thing it’s on us as period a then glide spread one we day per dollar And equity, may on just That even over comes could revolver X want X.XX then debt I down. do one begin within like to time go come revolver dollar. now, has highest a basically right a of might time, and versus such big say, kept the of would if I

where, a had point there’s private it to placement. look But our besides so at Certainly, avenues. you to as it do other traditional want to comes. it’s even we continue at We We’ve you looked go lower? -- take avenues -- other reached

in today. other We’re of at and that amongst convertible some more companies bonds you’re seeing out market looking the

looking into to moment. as those tapping it just our is sources at the role and at Hopefully, always then looks as it So that’s best helpful. be

Marshall Loeb

with in this use jump facing you Brent, And the opportunities Marshall. side. those agree and development we’re Bin, phrase, I I is on seeing would are powder, dry Ki and remember did I good and the you

to ability acquisition And an step if than And that. find or the point been keep better know So we’d I out banks market it. don’t opportunities opportunity but those. being regulators the find you hopeful played have if have off hopeful as I now. the things yet waiting or sure want execute books and on I’m allowed some you in some in for has good to all me It’s well. loans that’s issues been some to reality, I’ve their get more like at not

some kind of corner, be other in grow if ability we capital we find ahead people step long-term been So we the whether needed. can a if that and the don’t have strategy, worst we’ll strategic case, building good goal. funding may in ideally we’re those what both. find opportunities, constrained best when couple wanted it’s in the we of continue to case, And to market we maybe And has or around do we’ll development acquisition of months a offer, a

Ki Bin Kim

to the XXXX realistic bond? convertible just effective on mentioned like question what second straight yield the you And something compared is And that pricing bonds. address and does to the maturities? your a that’s How more

Brent Wood

spread public you got yield so though convert -- go coupon associated that that other you’ve in lower and to components along have a right, than what and that the is bond, that that but got then to you’ve rate. initial say the the costs it Well, dial is to with ability with conversion that adds

apprised Again, there’s we’re it’s So just ourselves keep that there. moving components to. something some

-- low of And tap -- so you again, sort like your needed. $XX aware -- the maturities next coming I million and about want million look comes due year, we a only of December. all just million think about, you will $XXX don’t you say at like the -- that’s be look at to cognizant into arrows this have them next one it look year’s completely as when $XXX of at August and very and the we late of you keep can then schedule I that in quiver

us. so to XX it, need ATM [Ph] So again, we so of coming due we decisions all months we be, don’t capital drip slugs it we and don’t for the the a as yes, source kind evaluate lot have just evaluate go. a big continues next over the good But make

Ki Bin Kim

you thank guys. Okay,

Operator

The next Vince Tibone question ahead. comes Green Street Advisors. with from go Please

Vince Tibone

can challenges transferred original thanks some touch Bay of ownership the also my acquisition discuss versus that acquisition the value-add over touch And taking expectations? portfolio of so Area to the leasing how if the has Can Hi, for quarter? this year just on Tulloch performed you and the on operating health that specifically fundamentals you a question. or Hayward of your

Marshall Loeb

but some owned morning like value maybe better has and thanks interesting Bay minute kind we’d that. Hayward to not value say up things older and building. learning The the stock parts. was number good question. been you, than great as on I what The Area, we’re location, slower two lay-offs a leased acquisition Vince, The Hey there’s It would add of the was I of of hoped. adds. building institutionally the wise so and it and it’s to watch just get us sorry and took we tech then -- appreciate a

clean office. of there work, was lot so up, of a And we vacancy. one few the It’s existing building, months kind really painted the parking getting

We’re wood a next to of couple knock weeks. close on here start lease three in could the that

e-mail you we if that. I’ll So an me you’ll or I’ll hear drop -- get can

So longer, tenant. XX,XXX really feet, that’s one taken a it’s little and bit

to So in -- last vacancy that X.X% I from I get rate say, and want the was number is read Hayward we’ll CBRE.

been a has leasing to that a it longer on on just it’s we’ve date the forma, working so Venesia say with took tenant been we’ve happy with change out. all, tight leased. I’d that and all it that So market, one get We of Tulloch, a then the do [Ph] move we’re bit little vacancy there our submarket within of in pro backfilling that. to or ahead have North Shore done that And brokers

rents we all, acquisition. the in ahead of the that’s Tulloch. what date, had at within all But we to as have done And has the been only underwritten vacancy made we time the thankfully, leasing market

some days. shareholder, gentleman I like, a little Bay watch other easy seller work closely the the thankfully and been than do now, been has Area Eastwood all with. you markets a portfolio a and with still big is like of a we’ve bit the you market He’s California, So of to although it and guess, happy kind these of more that

Vince Tibone

Yes, very helpful color.

wanted simply, just activity are spread to more get to between the Or quiet second just buyers market? core in sellers, Just the of pretty gears is transactions with switching any the I your my question. on kind still market. products? wide deal and starting thoughts of to for your And state private you see bid-ask more it

Marshall Loeb

kind out picking it’s feels or smaller is it like feels It of there more one-off or break up people like up. will Yes. picked That portfolios.

the one to and large is now, national finance like of that One portfolio and was more inability that. that function heard brokers an I comments things a from a a discount of the of

ago stand core those. I things we bidding on portfolios, seeing kind of hopefully then bid activity, and like better a ask and feel year it at it those, very we year little not a more does there but still number activity but So more where And acquisitions just and a was not where were ago nearly they’ll of peak successfully, market-specific on improving was have but it are is a on that the than transaction on at, quarter-by-quarter. bid

Vince Tibone

Great. Thank you.

Marshall Loeb

Thanks, Sure. Vince.

Operator

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

William Crow

decline we that that that the just we’re that all XX time not I good -- side, sudden, a whether we XX afternoon. Thinking ahead now at side of the Hey And of back quite months wonder look a about seen a of again. in sudden fundamentals have ever got all supply we’re good guess when we possible? have the starting out side, a starts development it things, or development morning, and giving months question. so such Quick dramatic me been XX% strong? makes Isn’t on

Marshall Loeb

possible. certainly It’s

most I about gone not something old are sell on are -- am. as that in I that a ever fundamentals don’t economy fundamentals drop, say markets know The old capital development where as maybe anticipated would are fundamentals the bad, we’ve been the have really when Before I when to guess, bad. but starts the it, the feels good. a want but I’ve -- I recession we usually, seen kidded actually shaky, good. over year. And I

expensive, that demands year So find debt, I’ve there, to early there, the can pretty and the in felt are bit execute capital to maybe better wise little Brent going the today us never at a just stressed demands certainly get seen price you stock as we the it. about That’s where had what it’s probably on said. --

I should And I’m was as look at I’d it hopeful, know some right there don’t have have I to demand would would delivered the crazy. that. we construction kept frame look, then if and COVID thought won’t I -- at capital never fast and compare few through back to -- really good their it we XX% XX to get supply go But but we gotten supply and I’ve market sit hope would have this have to back I at -- products pricing. and started, a get COVID put private everybody more as developing just when it normalized hang I be occupied, And as demand time when falling we leased level, and was the can as today developers in is. before pick order but jump seen private demand it we in there quarters those may up, can will back will in a back that

last was, of And that estimating I’m second be quarter third think lower XX% will was. of terms will something When in third say quarter drop starts. was half what I -- I quarter quarter like than bigger year a we drop, think third -- it

William Crow

may because clearly, there... Bay happen it seeing multi-tenant has and think winning seeing Or over of next In you do product? words, other been like like more more the today you’re ones so, And feels Mile, think Last the you? here. you’re you you’re sort there or Shallow Is that start the year

Marshall Loeb

the to listening I but those, a mean, I probably than -- Maybe percentage. maybe periods pipeline, there are in those be hear boxes, bit what lack of in longer higher blot It hold and if get that, call because that’s the those and not the but of there is XXXX, a temporary the supply we’re Fortune developers a those a that’s it lot will usually eventually, little be following where was we big of and of may taken. just will underwrote.

many industrial so are So percentage, off we completely but in really may sidelines. of developers until have the higher developers XXXX competed XXXX really slightly the bit little are on took and a of kind the are we I developers they aspiring think with ones that weren’t

-- years. it’s so few the had few are to there last out nearly starts And what grown accustomed we not a the there’s but seeing

comparable specific. And we but And within that probably a what’s a getting bag of think And I started, lot mixed say in we usually the of is probably not XX% what’s of is it’s for markets but our than because that true. Maybe what is box to just big faster probably is terms up materially. bay, hasn’t it deliver, and slightly so XX% much. dropping of still pipeline, moved pretty tenant number holding in probably shallow

William Crow

And Got appreciate. you. Thanks for color. the

Marshall Loeb

Thanks Bill.

Brent Wood

Bill. Thanks

Operator

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

Marshall Loeb

in you for morning. everyone’s appreciate Brent later, Thank and If anything to up me question EastGroup Thank your free to that. soon. didn’t get We I time out or we your reach and and this feel or to you seeing look forward appreciate comes e-mail interest you. if

Brent Wood

Thank you.

Operator

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

disconnect. now may You

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