EastGroup Properties (EGP) 25 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Marshall Loeb	executive
Keena Frazier	executive
Brent Wood	executive
Craig Mailman	analyst
Jeffrey Spector	analyst
Alexander Goldfarb	analyst
Nicholas Thillman	analyst
Todd Thomas	analyst
Samir Khanal	analyst
William Crow	analyst
Vince Tibone	analyst
Ronald Kamdem	analyst
Blaine Heck	analyst
Richard Anderson	analyst

Call transcript

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Operator

Good day, everyone, and welcome to the EastGroup Properties Third Quarter 2023 Earnings Conference Call and Webcast. [Operator Instructions] Also note today's event is being recorded. And at this time, I'd like to turn the floor over to Marshall Loeb, President and CEO. Sir, you may begin.

Marshall Loeb

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

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

Keena Frazier

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

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

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

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

Marshall Loeb

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

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

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

both XX. quarterly quarter the percentage share occupancy what FFO For with share XX.X%, June per end prior normalizing long-term and however, growth has from over peak And occupancy the average at in June our now, years a reported exceeded our just year, trend. Demonstrating market's remained quarterly are same and XX per was truly down our quarter the quarterly strong FFO XX third consistent occupancy 'XX at down levels. from lease, were historically quarter at The XX.X%. trend,

at solid, quarterly X.X% record was approximately XX% cash. for year-to-date. XX% XX% year-to-date X.X% and NOI these to Our results cash, spreads reached XX% up GAAP the and releasing GAAP spreads pushed and a Same-store quarter

us I'm a FFO to rising in quarter finally, with rent is roll sector, diversified $X finish with share, points earnings happy tenants and results future as And thankfully the X.X% to basis diversity XX falling the third our top the helping achieve having locations. We our quarter these of the XX environment. tenant to from more geographic in of regardless view rents, and stabilize to ways economic XXXX down most

backdrop. of I'm summary, In year-to-date economic proud especially given larger the performance, our

market be, fully It's leased current This opportunity industrial leased initial at strength We to newer, broader with yields. continue acquire value opportunities. rents rents pleased the user the seeing on the acquisitions. acquisition geography. Due more attractive to predict but strengthen raising throughout product ability we're wider and creation how hard rents, for by portfolio to and our large and markets, allowed market quarter demand to responding to and via strategic with push may a XX.X% recently, properties capital developments below focusing us we're end

solid And we're decision-making. continue by within development are starts prospect XXXX our leasing deliberate developments while of seeing our starts interest, on As forecasting parks. pulled we've with before, market through, read Based million. our stated demand we're $XXX more our

promising environment, seeing also this trends. we're X In

with Starts being third have the third The in roughly lower thing, quarter XXXX. consecutive X/X starts. quarters industrial quarter now XXXX X first decline fallen than for

the development Assuming pushing demand will allowing us in to and rents tighten, continue XXXX, opportunities. markets reasonably than create steady

we're to The seeing prior trend significant with is second being site developers who've closing. completed work

it's in Denver, sale Austin, step several to With the into us window as allowed now and guidance. Tampa, sites several including such shovel-ready our tightening, markets to et will XXXX Brent topics, updated assumptions the within forward speak cetera

Brent Wood

morning. Good

quarter Our strategy. the the per our execution was performance terrific FFO third the portfolio quarter team, per of overall our and results share our time-tested success reflect of the continued strong for of to to result were third claims. the the of with were that same of attributable for damaging insurance quarter FFO $X.XX replacements storms last along year. roof gain, involuntary compared as related share an recognized $X.XX conversion $X

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

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

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

During this capital equity have period most been attractive our rates, of elevated proceeds source. interest

guidance year, by $XXX $XXX to our of our million, the increased million for million we updated is which $XXX In assumption stock complete. issuance

date The the unsecured savings X remaining we debt now in XXX% refinanced interest with while the we effective of term years unchanged, was $X.XX basis quarter, Also, totaling over During million loan produce approximately rate our $XXX a of including maturity $XX loan the the loans reduction term. portfolio X remaining will mortgage. point unsecured. million, that company's repaid secured million XX interest fixed is

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

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

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

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

the budget third our closing, are and continued result we expectations increased basis of final This average along the to XX the with occupancy results with also again XX.X%. is of pleased were year. In We of optimism quarter close the third quarter positioned well our our the in to outperforming by midpoint points for the quarter, year. out

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

comments. Now Marshall final will make

Marshall Loeb

rents. operations is sheet. we're And environment Thanks, closing, In capital of and Internally, Brent. remain creating. constantly the the overall clouded. and the results markets our the team balance remain strong, I'm Externally, while proud pleasant to strengthening I the working And uncertainty, further it's In our all the never occupancies experience, of in meantime, we're high spite a leading positioning. starts. declines maintain like while to pushing in

logistics long-term benefiting migration, secular several as evolving et More specifically, cetera. is such our trends onshoring, positive portfolio population chains, near-shoring, from

proven a have management a We long-term with team public record. track

portfolio and buildings quarter. quality Our improves of markets terms in each

stronger Our expanding base as both it's than our and we're diversity our ever balance in well geography. been sheet is as our tenant

now your We'll questions. take

Operator

Craig comes question [Operator Mailman Instructions] Citi. Our from from today first

Craig Mailman

curious mark-to-market you And a focused and what market kind of the trajectory Marshall, is marketing kind right of don't if some where portfolio looked to maybe impact of clearly mark-to-market, on guys just kind spreads Just you're give kind your know the at I rent your seeing guys stacked growth. of market sequential of I'm you but movement. footprint market sequential embedded the up or of perspective from from the recent now

Marshall Loeb

now of our record a GAAP what higher kind a in increases numbers guess months than for spite for question. -- interest look Okay. that. terms as GAAP our the maybe a of I Craig, cash averaged recently done and things quarter at for we in and all spreads. the us mark-to-market, good like rate have basis that. rental thanks increases XX news but in of And quarter, little high, cash trailing was GAAP been XX%, again, It on our trailing and our the XX-month rate have the this market's a

around in kind So the XX%. we and in the is average were year-to-date of our come mid-XXs

of but there. but not little continually park, So a the better, out improving

has estimating our And then at were number terms saw CBRE a but the know recently we this some what were I mid-Xs, market done what X%. of I the of peers around in working looking in took growth and we on market and NOI that our market rate on with based X.X%. it Cushman gets an their & that's north and Wakefield, weighted of and -- just really overall market year, you

read calling it's it, the we're and things L.A. least negative yes, & little using our But it's, call we've Cushman as that. markets, like that. above X.X%, in in So a Wakefield, at gone rent,

website. to on we share people, I And you're our if presentation encourage on investor our would the then curious, had really, slide a ability and I wish also

year that you there's through not for -- chart flip a in in time more the and what's lease a the market, delivered rent Page to moved about are big you'll have getting If it, and that deliberate a is boxes little really shows prospects vacancy if moving chance feet XXX,XXX it's where have XX, much rates go to those what's taking and and below happened another those.

year just to for our to you've leased XXX X.X% seen why add And there. this and probably supply that has that our our type, steady points percent hold because So that's been occupancy I'd basis not XX.X%. hold XXX product thankfully, the fairly at

where you And good got feel but fourth rent started mark-to-market, kind still bit rent. consecutive the It's although solid still pretty with I see hyperbolic to encouraged for would it's we the it term, a starts So little frenzy the quarter. longer maybe we've we're fall of agree like was post-COVID, that not growth.

again going I fall the too, on think given world. quarter, they'll in what's in just fourth

our leased steady is, we forward, pretty we with it So XX% ability demand. around going feel as as to can assuming falling push good supply fast about stay rents

Craig Mailman

pre-COVID in quarters next COVID received kind some a appreciate -- I appreciate you some before again, do given But you growth you get 'XX as yet, bit continued I framework of the haven't into I guidance era Or leases? vintage, about guidance people it's anticipate from but you year. guys the a given yet. what's the it are little of maybe XXXX expiring haven't seen as mean kind year, lot And as look just guys kind next last couple thinking of mark-to-market of leases. of right, at you've you of

Marshall Loeb

of think XX,XXX get say feet. really, I'd I bay an -- is our year building Sure. next our and I half shallow average I back tenant process. if good to year, about size push that average feel feet, the A year. And said, optimist I'm I even little about ability more, into think next feel question. where good XX,XXX about absorbed, rents pretty our parse I is about fair what and we the as things then

rates even a of the second feel or 'XX the have the really again, about to it feel eventually to a So I the doesn't better second I those terms look, haven't if lot in economy raising of ability vacancy rates about assuming to little doesn't or rents. bit. rents, better our get Fed you probably our drops worse get stops just half than ability moved, push maybe half even push of 'XX better,

Operator

Our comes Jeff of next Spector America. Bank from question from

Jeffrey Spector

on Marshall, changed? competition? expand more your -- comments there exactly I you are in What's active? sellers your somehow there's Or what's being And Are now bit market? guess, the acquisition I said less can you remarks, changed? opening more on again, opportunities. think there a is little

Marshall Loeb

we've on the we say a in a portfolios, we there bid some market Jeff, X couple dynamic And or There's bid and in been is larger buildings. yield clovered capital -- been a X on We've traded. X seen X the X portfolio like question. those more like few and parts. that. almost really type still it's Xs, When GAAP good and acquisition -- A things X than out years. we've maybe have to transaction it's on I market below

submarkets the are moved acquisition new to cap seen all this GAAP and we've call a that that implied guidance X between And be advantage and few the and of to the markets we've GAAP around, But trend, in a of have X X that able -- had way if our violate being year, equity it, But to closed and at debt, trying mid-Xs were the X, the on another price of not then kind in been about high market ability looked having and in, but we've yield, every by we're then low we're to buy we've one-off we've agreement, below rents. rate, in confidential we of see end transactions. one we we but kind and the at want equal. buildings year, we -- optimistic as indifferent I'm -- and our equity it pretty to

we a or ago sell about of it's have rates to some but would of sudden, would months So there type bidding liquidity funds about and X, hard buildings. cap have been the read and where all frenzy, prices with XX debt those -- awfully sub hear X a needing they and have been and as we are office

get industrial on attractive end the is the trying the by to the And the it product they're closed things -- us, brokers explain have So to the of market. to most year. most as

you're of And our we we're pitch credit. but cases, these all have your bidder, certain may the been, of highest be line where has not most we

second of to market and quarter, outstanding We and in the it. low or we this know on third ability the submarket. into kind of have we roughly a close, X have balance Most

batting actually just the firms, so talking of calls good calls have much X national lower. anecdotally, then marketing and really has worked And has that's firms to where regionals, And the inbound ratio relationships average we'll increased. our been get but brokerage we our with

at we've of X literally our up spread more get but rate than earnings the it we're if terribly rents that average old of I with there, should just year's a buyer, quarter, window below a will I it's awful equity all those so of $X.XX a if buy lined and kind we've but that been an of of add what what a sudden we probably open million, acquire can stay on years investments, more and to attractive And the were assets our today, on ability next was a All to $XXX of acquired. acquisitions. little sudden, think price a kind it's new not X lot third long, run market don't think building and is the

We can So don't strategy, capital we like that would. we pursue the model. that if we today. And have

equity and we'll it's not that priced like but continue window. Our is our that NAV, watch below to

we've as those I strategy seen And should some the change our terms so what we markets But opportunities. doing. or think And in us market we're of we won't interesting pivot products opportunities. I think but gives

Jeffrey Spector

whether markets? like quantify decrease X on, comment Have I any helpful. in 'XX My starts. guess, the, national made industrial your you in in supply over the that? able in on Very stats you or follow-up is declines again, you supply to have Are the 'XX it's industrial, on

Marshall Loeb

the said, put call. Some I we of to those best and interesting, call I slides hate investor was had -- late is X presentation our yesterday. we some of this our I we on could point Zoom and just with this you wish it a up

I'm may anyone XX, we'll to but Page about rates about it's page, that right through in that the wants flip size show the for and you and -- I So vacancy code. off by ZIP the be

a row there quarter quarter-to-quarter up pretty to X you the starts year, usually was the About X/X and quarters chart peak, supply XX% we bay like down and in our competitive. which far you'll that shallow on webcast. makes and and there's fallen almost bay third quarter and feel last It's will national XX% another in usually we're numbers this [indiscernible] markets any XX, they've It's see down. show shallow Page from of

to have if vacuum I'm before a pipeline ahead should off will like -- 'XX, space our falling people of and being really, with of starts up economy and and a hope our to that. get things there, a kind the rents to when should expansion because question be need and up also the pipeline us optimist, be people which product and they hope emptying about the allow development down on the will there's sign was they road lack our that when ramp market go being some the quickly for better in to construction So developments available and an we but and parks if that's there'll push lease enable out, pre-lease -- feel minute it really usually, a then earlier us supply bit,

So helpful hopefully, to that's you.

and and an I we to of been -- capital to really that's very it's the much years start you of That's stopped. that's kind on where of built nervous mostly of where then what's the lot product vacancies is XXX,XXX vacancies moved most last the people like new until the the a our XXX,XXX graph of said fit average square I've worked could see all feet, You'll get vacancy kind and where with size building the where moved playground. when kind a under feet few you got above. about and hasn't where where always sudden, And put economy work of and because

Operator

Goldfarb comes Alexander from Our Piper from next Sandler. question

Alexander Goldfarb

Marshall, X questions.

one So one follow-up. question, I guess

dropping is as First, of borrow. one supply this sole who the can having to helping on your own, the people out not on there, develop presumably, you guys

this to concerns and you're we all program So up? mean about want over that ramp global rates, seeing as Just trying where or right your sort your you about cetera, guys as look X are opportunity it interest at increased putting the probably et read this you that of you to the risks are Or thinking guys to the understand next going keep are shovels. out level year you development and now?

Marshall Loeb

question A Yes. [indiscernible]. good No, and thanks.

quickly. permit We inventory hand. we we'll if we us always of the we'll Phase We're or expansion need telling is try tenants into and think go Phase park pretty out to they I as go especially -- slowly. in dictates. roll really But as a always fast in have market if to or have run move said we'll X. we've moving as X neighbors, slow space going not

an closed in is -- will hopefully been at all into ready back X and number it so a have in And it tight, out that we think there's ground. past the made is, the we've over and a been go looking or things the regional got the with break they one half every zoning, one couple appetite the for cases, I permitting, in I land recently, like the could of under hadn't done they and I -- basis where optimistic such work pipeline building cases, another being sold wetlands market that years, backed have that next that up built through on seeing flipped minimum, have because industrial to guess to are able of get years developers some opportunities the tighter developers one So the local then not where usually we'll to where of a replaced. what of the comes the those about but seen Where to get those should products the year, haven't the issue in forward the in a end you're we've kind year, we're years acquisition take yet. developers of years, few cases -- Denver X.X we while all Tampa got Austin, land in contract, and it's this --

where had tightening, because capital first needed fourth Tampa it, ability in of of to we companies the rather And for wanting sudden, inning. And So thing And inning than outbid able then example, all the think, with want of opportunities, my move in the they sources capital game you on Heitman, like worked this the been forward. analogy, and out. different name to I the a feels some we've been site in were Nuveen, it's those Denver, put to look years forward for to it same that like to jump into for people window days we XX call for several broke these, closing getting ground it, years. and -- within, they

that gets don't they're looking work in them. Now reverts really the we've said back if awful development they've been cycle. an so and value circumvent created lot of we've Well, able created they all to source for we've seller close and they become a again, step for and to and that capital, this

Alexander Goldfarb

a I Mailman, sort And who year. it to so that, into Okay. going to, next follow-up back then looking of as was Craig sort think asked of about

are always You guys group. cautious a traditionally

mark-to-market But always uptick this next have you're a you in the think was You portfolio, be good, that developer. your rent the it will tougher. year, sole that like COVID big year creates wonderful

So here your stock risk and your Is can't Or forward? issue thus, what's at far seemed to issue. be it have going tenant down truly really is all an that remains which really the you it so equity depressed, slows issues, not that growth?

just really equity I'm your is wondering, way, in for price a more potential the risk Is So to challenges? tenant growth? what tangible here or it

Marshall Loeb

what is then that about To that's I'll higher, a today, the I end. stab, our higher, and and sheet given rents higher, we got less correct take balance at lot than about worry a demand for with we way especially build said wages worry Yes. tenants disagrees. the do higher, if supply them. not always rates Brent build interest me an years, do on can labor many it's exclamation oil we've he risk point people me, prices

dispositions take this fund equity the I we've to can and or got growth. it push market. have develop rents this I But the tenant order, we we do reverse with So it the that have also do don't about then can have in But feel do that. advantage -- organic it's we when stay development. to -- ability compelled. in of And first land for we full, guess we great can say I'd It's we if worry or We and and demand.

that. a to on the we'll don't or lot think got be growth but all have a It's way good And one our way growth, a I accelerate if company. we've perfectly we'll we buy other. right

to the implement change we've to take be our market our think -- -- several wanted years for we'll it's we acquisition in to is than I U.S. may create strategy, pivot we'll outbid way allows to opportunities, good view now but industrial, people it. what for just us, was when better few way attitude we'll nimble a there's it everybody tried we And we of it And and if won't own some change the And it. advantage that. the it.

mean doesn't to those. hands and sometimes we'll development that but it's sit that we'll organic to And for were pivot too. wait it's talking there, It window And open, thankfully, then a your we've stop to okay about. if you on got growth

Operator

Our comes Nick Baird. Thillman next question from from

Nicholas Thillman

the Maybe touching on acquisition opportunities.

guys pretty more you're Las Vegas Are specific any in? that of there opportunities like kind were recently. markets You active in targeting seeing where you're

Marshall Loeb

The A as then is in -- and we good question. of our way at has about kind we NOI Vegas market, I'll last portfolio been market. complement Las and over look really X% a rents we'll couple it and that the our think percent able a in at are NOI. been Vegas that strong Sacco, of of under-allocated guy it's really to push about kind we've looking really Las years our Mike we're where of

I'm were I'm our really So But worked both we way and those positive strong if we of on not our the the there not story, certain again, acquired, we buyer, believe. just out were higher market offers. most pretty pricing really and that one,

NOI, time XXs and been the real XX% look down bringing from a what's any And want market. percent few at last lot Houston to the years, estate, of We also of our that the submarket under-allocated as right too. Coast And we to by market. right the market. don't We spend into so West we've try then a the it,

itself So part of market. that's how and it real we have much -- it of the then is that estate allocated part is

positions same-store higher things by get And then It's kind having term of each the markets. that's the high-performing our But higher quarter. -- measured NOI long really have spreads, those Las of cash releasing all to think we of NOI, more those we us Vegas from markets. one

lot great Austin. been seen You've Paso in run Florida market. a has strong well. couple a years in El last as the has had of a do us

Nicholas Thillman

existing willing demand just ago? to any you've on from they what like little and really cautious And from X little say, months update today on touching That's maybe Like bit maybe, in development a tenants more parks would like helpful. be pull lease-up seeing or your than Maybe parks you're then historically. X bit kind a from an months existing that Are expand? around helpful. commentary now of

Marshall Loeb

think feel about -- we I'll the parsing our for yes pipeline our development buildings later Answering save understandably in would and we good of can call all dozen leases -- once the are people we business slow. seems getting the closing expand in development so people your and confident and activity red get the And No, in and you we're feel zone climate. Yes. have and given It's getting it maybe to to signed, talk we your I kind half I pipeline. it's and say, larger about pulled economy. hard probably question,

our hip. hesitant a prospects from I our appreciate little more than being the from perspective, future I a -- debt appreciate tenants and So bad shooting

seen brokers like that tenants frenzy was time you had things told in nervous they'd things of little it their the a bit career, where you post-COVID done. and yes, So clock that offers felt to never saying kind and made felt the of a revoking things hadn't point to in passed us years because little people they

bit. I'm decision-making. now a So being and normalized feels And else, little different the their in I in glad it's are -- wars a little interest people rates and slow why get it like deliberate everything X with

Operator

comes question Capital next Thomas from from Our Markets. KeyBanc Todd

Todd Thomas

Do I'm range cap stock below a the low in back you've think updated mid-X% guidance you I'm you that pulled the that's issue little equity you're And equity? implied question, issued NAV. First -- Or continue comments fortunate guidance the to just confused vis-a-vis has $XXX Marshall, was plan that recently. rate here. more in equity the trading do issuance the to million go-forward some the on around these of issue night. been you to you the of incremental the pump last and levels I by mentioned -- at mentioned implied that brakes

Marshall Loeb

you... let I'll Brent,

Brent Wood

just volatility I this realizes the on jump moving is Yes, Yes, has down. even been to price some And itself fluid lot. stock most been our had target, call around very and due this NAV the so year. that I'll Todd, a as moved it's has everyone equity, in. Brent. drifting been macro has concerns a has but mean,

full So on have revolver. capacity we our

on a have drawn little just $XXX We our million. bit

So crunched We've for not capital year. it so depend. just far been would this

around, can you good very we've the been million active on see, somewhere $XXX ATM, very year-to-date issued think, As at pricing. I

or powder that It's impact next us extended to But as pleased a to for we've just year. an obviously, a we on moved the we're So starts comes. to down. period, have got maybe it's pause be doing. understanding been that do of And it pricing, decisions then some on alluded this would just shut plenty you've take the Again, way current able do things the to the what of matter of we opportunities, we've to cost able one-off -- to what we of some our look, dry year. But and funding. could at going up out good take if been acquisitions but certain we're to Marshall, fund maybe won't were very it with on

to we all into phone for money Feds to economy longer can have come want the my in it. this our drop you it to rates it the take higher, I talked well, the is good just consumer interest today, odd and down almost the And bad price so comes. and go factors at have or which we'll The see market's as news, environment say, way been, that slow about must because or look it's

same at to But a have take to bit. allow what But unwind we'll just Obviously, if what And a are have as been, and be we'd to So comes. a -- we're will -- it doing. don't good us, it we'll said, just head as doing. flexible we're what We're time, so up position Marshall -- as in price we're and out the chunks in continue do raises position. about there. we've always grab for the anything. excited its the just we're let we little not opportunities market We're

So we'll take a just wait-and-see approach.

Todd Thomas

for the of pipelines, reflect development value-add bit, conversion around the on Does completion dates into the question looked follow-up dates a conversion XXXX moved some XXXX, moved my the delays little then And in some example. and that of like you delays on lease-up you assets? for that altogether, around capitalizing and assumptions And when Or construction? interest then stop just for the clarification, capitalization cost at I'm of time can conversion? of those is in also curious developments your just Okay.

Marshall Loeb

I or after completion. reverse, completion months to it after earlier will XX% we always of hit guess XX will answering in -- roll well, the as you -- XX occupancy it underwrite when months we

or XX that related last construction So has that. within us The dates, date it's right, thankfully, any like months construction -- been has outside years timing the that that didn't more completion after. do things been you're of than really movement the few we stopping

takes the been And -- supply have weather Traditionally, of that's the it's new switchgear, electrical reasons. chain-wise things like certainly a and transformers, always now. but that things one hearing could gotten things, of type item be that's gotten be what we're better to year that those post-COVID, kind really ordering

or -- takes concrete. used pipeline, so of kept full and equipment or and that's I news on does. But markets times. the work Austin too, we news to or or on our some able that a a had there of my where timely at is we've it's deliver and plants guess X And concrete get Dallas number Phoenix. between in new stretched ordering in basis, of awfully a kind out, that's the whether pre-COVID, we're also subcontractors, than or orders to schedules the to bit The semiconductor what's electrical done little same construction hard for guess any just it's bad about is their is the buildings a now government months able that's while. when timing longer we're normally good be here it those So on the

Todd Thomas

we though. that related Is in under I a Okay. those at if It's them the is schedule guess pipeline set completion But is conversion dates, back did all assumptions. to delay currently the lease-up completion and to related delayed, construction or there that when not your -- you construction for being at is it move that look anticipated right?

Brent Wood

on leased project still a that's would get unless, but if of leased, it's And that or conversion a project obviously, there side date a schedule list that we the conservative, day XXX%, what we build-to-suit, clear, into don't window one, typically up if correct. just typically we the expect just always narrow the Yes, on be to to of -- or to outside typically that delivery then anticipated date base under we we see be put And XX-month XXX% begins the we on being Correct. completion. like we you construction. now, have

that XX projects it's the that But of will in start closer outside once a We tighten from to to newer always case, window basis begin of we on our completion. it's expected started, delivery. months XXX%

around move back those that as time the line. maybe typically month X a expected Marshall construction And mentioned, little so from bit, when or a it's dates

Operator

ISI. comes question from from Next Samir Khanal Evercore

Samir Khanal

Marshall question. This or Brent. of is a modeling more

figure was on your guess earnings. trying to that? just curious, about G&A run rate which down, $X.XX I forward? use driving Just out was was expense what And to guide a going I'm the right

Brent Wood

was actual down for this but actually lines to had is we budget, our capital were G&A Brent. actually The relative anticipated. along than the cost development quarter of Yes, our overhead the G&A we more expenses

And item reduces line so that in G&A. capitalization that

quarters are year-to-date run the So would rate good think be we where for X I number. a

in for landed the be X fourth date particular for that months, that where and relative of pretty I X it the say low much see, from forward. quarterly has impact total is For was the bit the the we're third X, I'd would quarter, quarter, a about you just to other the was again, point as number to that should -- But quarter. capitalization months can say little the that

a now good that much figure I amount think development capitalize things. is that can the the optimal for from number, XX-month maximizes year-to-date we us G&A forecasting pretty we're side of

Samir Khanal

ground. Got in of conversation how it. your is of customers? seeing that And with for And onshoring. mean about maybe a there's sort is lot of much that conversations Marshall, around much what on talk I How your guess I the markets? driver you're a been of demand

Marshall Loeb

and we activity number markets, the of helping. some guess, for mean look in supplier a or near-shoring Dallas, Texas of a together they tech you when example, our definitely and -- on-shoring and market look It's lumping especially in I the I'm I when at of in Sherman, Dallas. Texas, -- company suburb plant is it's the we are electrical semiconductor equipment, building acquired to which and the

things Antonio. up of again, in even and suppliers EV in Northeast plants going picked kind we have Austin. many to we're as So those the We so Austin of semiconductor San Tesla been different Tesla see

-- things so So the the Tijuana San have that. I-XX. the side There plant then we're we're stay on the effects just and and of Diego, to has up Juárez of some of many -- border whether going and although on even Phoenix feeling and this picked TSMC plant, like really

it's those. of up a So number picked

won't -- -- we're to we're if So if whether we helping it's involved, a directly involved be but be directly maybe push are, it plant, we economy the have forward. also that we'll suppliers will that

So moving Dallas, the onshoring, more mentioned just Phoenix, really U.S. seems I to and then plants whether and -- a activity. e-commerce you up more come like some end lot it's to the year or drivers, secular people near-showing, with like again, Texas, when that Orlando every the it of tech on I those growing

and some like with in it, given down. I but an been as Arizona, again, that seems San and to in we And try pace -- started of the each partner. we'll we El don't good activity and as seems our trade we're to to We've California in grow hard border. trade we'd think it piece just China that Diego patient market the And It in opportunity It's the and trade a China. tariffs really of those -- grow to with next for share. that kind Paso Southern slowed with grab of quarter, been of that markets Mexican between until across position Texas, the find looking Mexico the X our with And example. a markets falls like wait think

Operator

Crow from question comes next from Our Bill James. Raymond

William Crow

looming being roll think retention to ahead you year, talked Marshall, tenant, out the their Wondering lower about health rates that the were, is about year? next you there the being balance look you of risk this et as to say, than lease they sheets, causing the cetera. potentially

Marshall Loeb

interesting. to people nervous when like COVID, No. makes me our seems And to expand that. retention goes get or is is Actually, things guess It's what I to like sense bad, rate up. are what happen things during

a do renewal. might you shorter-term So

from where market. us for those as push down I an We're move opportunity taken think today's be we've should started. we year's year about bite big XX%, we next role -- to a it to of next rents out it to

to think today the the I guess be compounding high a you things effect. may I any our tenants immune about all worry say and At of it are business I'd just aren't that level, impacting all that. twofold.

bad concerns been feels so than then on less been actually, very it's budgeted our when it's But what that quarter, a And list, we and wood. I me. watch each it look bit little knock our at And debt, manageable. --

point will think an role give this like So expected increases. rent tenant in in hope to can convention next had have year's I drops the hang probably things benefit of given our I'm from kind the have that. diversity really I do the as us as and assuming tenants we which And next the more benefit even door at would push than a year mainly opportunity will in well tenants we haven't this and the will XXXX, there I problems, the midyear buildings supply. time. we glad rents, year And next

William Crow

Is material next there to NOI to reason think year? as we in calendar any downshift the about a same-store turn

Marshall Loeb

we're we if occupancy. as be bankruptcies, big moving building up always seems XX% have if isn't number a XX% our our always were And guess, in to even that would we I think low park. be on -- next I'll if we XX% especially and basis any can -- at little but to a it up shake we quarter, When weak, lot an try rate. pretty if a around, have a bit a to would retention picking mathematically, drop That kind of we'll to of somewhere in about about it seems the model into of have rolling. annual we out bounce Unless company, them bad, I economy coverage And it tenant where any gets time. average might it the I pick

Operator

Tibone Advisors. comes from question next from Our Green Vince Street

Vince Tibone

like profit these now looks you're starts, you what It of pipeline. targeting of what for any that case? uncertainty where slightly a the And margins than some higher cap new on margins around where and the on right of new confirm today there's also be third be the of just cap believe developments. could profit And on quarter rates given lot if starts may were kind kind developments? was just just existing market Can are expected yield you development discuss rates

Marshall Loeb

rule closely typically city -- of we'll probably on we what look, for Yes. the ideally, we tenant do. that's now, some and cap cap been than we pretty fluid And it It's will and start if Good point. all rate. study it you market. It's X, rates XXX even probably risk had justify thumb, a would say the say, and like typically basis construction the a rates because We as the cap north we'd leasing I'd a to a existing points pre-leasing above market or development. of a I depend new in will going again, new said more vary of

not kind cap attractive X, on rates at buildings transactions. portfolios, of portfolio And one-off we've portfolios. X, buy big X to building clobbered able some been again, gotten and We've meaning

So seem now. fluid pretty cap rates right

above will thought like can a have when X from Xs, creating call now. or at bet we if cap looking Austin, has been another of our the And the in rate the ideally, merchant X, developer, we're cost to million and Texas be about to model to people I deliver there our XX the private always equity compared what we start years capital, X.X high building maybe REIT value in we it, least at we you're

with can yield, good we start over a grow if it will So time. only

So of think if that's how we helps, it. it about kind

Vince Tibone

on really that's No, Xs, a yields. is point. helpful. low When Xs, clarify that a maybe GAAP basis cash of high say that kind just you X or And

Marshall Loeb

usually and GAAP basis call it, It's I spread. quoting to usually XX try about, XX XX. point about it's to a XX

Vince Tibone

market you if helpful. trends a That's then in one more I it. some Got quarter. discuss me. the markets few guys parcels in I And for different in bought development just for the you know maybe land. mean

significantly? lower Do market? have down how think third that like you think volatile the would values price in quarter? ago? are at bought XX stuff a the you you much you is than Do you that even Or Just got X, months

Marshall Loeb

prices had the speak to of can't came more would their -- when on and tied probably They thankfully, -- ago options those. I had all the with their basically work markets think that. contingencies more, risen. were But was years what they the -- And the time planning, we answer it I limited. all run for And Short yes. of -- be like had or kind it then up the it the and of things close, a developer through successfully, groups zoning, of couple permitting

greenfield to probably really was ability able we they further is were but because things along prices, the site to to that step those closed in with their on to their get the perform seller pressure time about timing some projects much a -- land didn't it, at and their lose basis money -- into under And that's acquiring we're trend along than far are scratch. or seeing jump a start they pretty from us So were there.

outcome but So in successful they us than smaller where get peak, or would have it X case able been was with partner Denver, way. a the move the stay project a at and in on on and in less to were it

Operator

comes Morgan question next from from Our Kamdem Stanley. Ronald

Ronald Kamdem

back about down, of could as lease can remind is guidance, into thinking NOI takes 'XX some figure us, to as to trying the puts as sort going but you be was we're the occupancy the and roll and as rolling we're large 'XX? what it 'XX, same-store out maybe Just obviously, of in just just are potentially

Brent Wood

achieved. but at very roll you this number anticipate here hundred some had this several the we'd the at Obviously, XX% in is than pretty exact XX% our The part I is that if Brent. lower leased. typical having what has lease -- basis this know around point. year and standpoint for over And still -- the for be be we've and did roll October executed forget be -- a original sitting now, We're we of was to team didn't was headwind appreciative well. and we it us. lease points similar occupancy recall, guide midpoint very The It's very is occupancy, we

bit rental more been the which good That's ability of higher the about of up the to escalators annual kind to also bit that our able We've rate things, obtain push the X% earlier add So a rents. maybe that guiding area side comment didn't almost over we X% in as been feel leases, in time. an that the midpoint in that to now we're factor wildcard this of -- X a past. is to one, or to But incur the on X% opposed in year, a much the store. so occupancy we higher same

room year, XX%, it put XX% in want bit that you just factor factor of just be we point. again? you do that's to of or finger That's Or depends in your part not. the if hard to give at Next a little on this if could up

Ronald Kamdem

just shallow follow-up one is on And the are you focused my on or then clearly bay. development Great. guys side, small

table is interest? peak development a where, something off center that is basis data one-off that or your mean that could does completely So the on

Marshall Loeb

or always say never -- probably never. it's guess I

submarkets could it, business. talk are the driver -- But a transaction, or at focus there our look of that a the of won't center couple -- It's when land, and it or lease like look explored ground that land opportunities data the that. But center from there's things we've sense the if some get to would right brokers. either just be going centers. if be at our to business. have there we have the right do and we would be type then of sell the margin. we would we So got circumstances We centers not data we've we our and aligned It It where the rather markets foot we're kind ancillary do a look, year I'd it will of went and what be it or Brent in data right be look, or exploring shoot we rather in more or But we understand road. would with should centers. stars I and a well and stick one, -- big myself shoot do X minor I for ourselves advantage do time looking will would the we a to the over it of really or down the to it, ourselves in than out we take if data than but net tell it,

Ronald Kamdem

Great. Congrats on great a quarter.

Operator

Our next Fargo. Heck question comes Wells from Blaine from

Blaine Heck

and bumps you're Can in the increases the just newly rent is point? also getting I talk that lease guys this remind of incorporating what contractual agreement? at you what average whether across pushback any portfolio leases? on guess, your you signed then escalator And aspect about are And or us

Brent Wood

Yes, is this Blaine, Brent.

would it's more lag would a up the little make. X% where maybe I to As there. landlord been side, able it's I And time in the that's long average. done the the the a annual and mentioned, probably markets, win we've been I as pronounced kind of in Any rent But other quite caught on more well we've really as you have been Texas that's say leverage that's bumps some. say

the On for the portfolio, average to that mid-X toward upper on an to escalator. able Xs we've more average time move been from annual the over

XX%, continue high it It's to to we you're environment, XX% important when obviously, stabilization, help -- maintaining that's a don't that be as though you great because in roll been made. And that's have this wins year through it same-store to to So be needs want that turn that. have, and we'll contribute, a also need but we've to growth. occupancy you strong as landlord we some also

that. that been some one it point, so and markets versus And it, markets field period. a are some executing our up now job Florida California, had other, even of so of of has team it's say, ancillary Texas and call good all in catching done during more this at our I our or concentrated our base and growing the across's broader And a would say of

Blaine Heck

affecting properties any smaller as from on Okay. that begun market. potentially then market? the reluctantly that Great. of do spaces your of segment in the have you And ground? supply the some we've demand brokers up them developers of you in feel chopping is seen kind box that into large of the Have heard And segment guys how of that smaller about

Marshall Loeb

I think -- Marshall. it's

but of inevitable. it box it's could it. guess want I our don't some is But have twice XX,XXX depends really. I tenant foot we is deep are of average And you've on Again, on XXX,XXX-foot that. tenants building, if or you be may long how for think think example, the than to you of that, size that big certainly see how lease think million for -- our or a feet. XXX when building, And us. an that larger square got big carry I building if depth probably we that depending large feet is the depth XXX you

very dot few with And end very a so is that doors. for long tenant, what it's space with up you narrow

and where one inventory warehouse and to it's dot up run the the efficient for going down those that awfully Ideally, forklifts X or not is of So long side doors. from the running down X tenants. you're if an

going tenants. the rate be demising big day, sheet I then And plans not that's in office loading expensive for buildings fire the those it's build But rock, those up. on be going the which you walls and So I going where think think the of to how you those think in, -- that of cost more end walls, efficiency ideal they to expensive original awfully be isn't to at they of developers. the much awfully that's wasn't adding their for Florida and when are, will depending sealing break

you've So X for. or you the tenant, built I what were -- probably they they way it move the in were to what you and a it can cash, designed built, but -- designed buildings, it's have think kind but to of happen, be [indiscernible] some to X tenants hard maybe single put doesn't those will of

Brent Wood

where tenant designed about quad we can even a way even or maximum add divide XXX,XXX in a you're if it about some it, we "Hey, But put square a say, XXX,XXX, much Blaine. I do sometimes into probably to that, quarters." talking they size. way pretty Blaine, properties where building box building be foot the bigger would those still -- talking minimum Yes. larger divided building, want large a bulk I would you you they that don't to by mean to but look could of to do you're X. When at there, XXX,XXX easy an you're

XX,XXX, like you building, you're bigger you're So a said, kind you few -- it, put I Marshall pretty the once to cash is the commit what tenants of much but in [indiscernible] could size really they still to going a down not foot get going very like tenant type still to XX,XXX, aren't building, cross-pollinate square into in you multi-tenant XX,XXX see would that much.

Operator

Anderson Rich from Wedbush. from comes question final our And

Richard Anderson

Final question.

about that. Sorry

So have acquisition I question specifically. do it a as to relates

down, are guidance unique disposition You and your came your acquisition went guidance up.

nature of assets. idea there acquisitions, inning, trends in an I'm operate seeing banks potential but you comes cases. But when are the in a mentioned seller? operating assets, picture with to So like to can in acquisition, you coming of things sort guys. some or you at that give fourth all operating involved operating about specific developers the of if just looks what terms of any obviously you the materializing the of curious the of any to Are is sellers property specifically pipeline it of

Marshall Loeb

portfolios time. could mentioned funds the is there'll either acquired what seen I you they wanted again, a and have might to involved, seen that that at industrial maybe needed had they in that conversations liquidity were come different we've -- we've a of selling have it's couple their and pension from where distress, of some Rich, it's no Yes. or be hopeful pension liquidity been a things, they funds we've itself although and fund lot some looked of been or banks earlier, couple -- just we funds raised And they've of to -- are sell. industrial. -- Kind that, or whether raise and

a more got where year, weren't to tenant difference, the the we one that looking were specific. had the $XX a by the they sell is of at our million hopeful do would next assets we placeholder this we've say little a the of disposition. numbers, got buyer. and update, On probability the big We've whereas since the the got on better end quarter, funds probably we maybe I little what We've and this dispositions, again, point. risk than asset hopefully, at And more a I'm bit, it's they that know me gives bit higher

as get but that will we close closed. under of that another that probably letter And thought January really they might a get intent year, their financing, we of into hopefully this will it 'XX that drift

what So drop. the drove that's

find can it keep acquisition higher rate some a kind equity $XX like of chips $XX in source we little kind it, around total growth we million, call. the good we'll will kind on last the call do the it's road dispositions nudge a to trading older where XX be were than of feel further running. X, So stays a we're of to bit idea And we X, our right that move better in but days the keep those -- just of little I stand later, if at one-off XX, those I And down assets. future. to of if terms with capital transactions that X bit of just where million of -- is. It

Richard Anderson

swallow dial bay average. I talked your more profile And why an necessarily you the of getting Or since as acquisition the interested terms And quite side. want not their that? some that you that not about and to for Do aren't largely that with Yes. pressure? maybe that's you how you in easier your see is, merchant are more it little would was to development in on be second expensive. you just about cost pill into of shallow out do with and being seeing to And yourself you would the a with secret this market assets I square bigger XX,XXX something bit not, is start the think build of I all they then question and if come down developer. foot model? competitive But concern developers a guess, competitive more

Marshall Loeb

mean, be Probably it's threefold. -- or have one, website. and company to I public hard a X and a I secret don't

can things we do. other do go all You and NAREIT the

could we be it. we wish secretive about are I more So at than times

it So balloons industrial an of said stock tips. there. development, certainly, of the giving developer. Uber kind everybody think it's out you was I driver developers And became We number industrial your

too You things hot. knew -- was were it

If private much pension our like a larger that Probably capital it's public million, makes us allocation stay your -- develop million you maybe put work. not have we targets or big busy, to what but our a secret. the developments do. $XX it's don't awfully doing twofold I $XX The to well-kept next comfortable peers so miss that phase, they is average building funds, can

flipping the permitting you of in struggle promotes million of a be production than of an land of of good infill Empire money Southwest for put point, building. go Phoenix, Dallas, and that, is land building it edge through in sites town of issues order. more reverse of much to so deal biggest some East. low all a And find and So then working to land can Atlanta, and of into to It's developers, south find zoning, and south than regional tracks easier think more it's merchant reason side. we infill doing couple XXX,XXX-foot X the the foot a kind with price we square bigger on inland that's reasons can that years quickly that measured X.X a The in I so probably I'm make talking local the one even they're things like

around actually the originate think it's and everyone is immediately, it to but gotten to really don't house person delivery corner. dilemma I -- so the their wants from the the want repair or with they And It's Everyone the worse. interesting e-commerce.

our harder couple last over think I of have gotten So zoning years. the challenges

Operator

any and that, management be ladies I'd like And to turn closing over gentlemen, today's concluding session. back for the remarks. with floor team question-and-answer to the we'll

Marshall Loeb

-- phone, questions, many any Thanks, of in your NAREIT. e-mail, a Jamie. certainly couple your interest to we're have by and everyone, in look time, by If follow-up for seeing you in available of we EastGroup. weeks forward we you Thanks, if

Brent Wood

everyone. Thanks,

Operator

webcast. be joining. we'll concluding with And that, and today's call conference We for thank you

You may your now disconnect lines.

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