EASTGROUP PROPERTIES INC Q1 FY2025 earnings call

• Team execution: The team has worked hard and made solid progress on 2025 goals. • Portfolio performance: First quarter results show the quality of the portfolio and resiliency of the industrial market. FFO per share exceeded prior year, occupancy metrics, and cash same-store NOI growth. • Market uncertainty response: Focus on leasing to maintain occupancy, cautious with new investments and development starts until economic visibility improves. • Leasing volume: Fourth and first quarters were top three in square feet leased historically. • Development: Reforecasting 2025 development starts to $250 million, majority in second half. Longer term, low supply pipeline is promising, but uncertainty delays new plan starts. • Balance sheet: Strong balance sheet with record financial metrics, access to credit facilities, and opportunistic equity market access.

FFO per share excluding involuntary conversions was $2.12, up 7.1% from the prior year. Quarter-end leasing was 97.3% with occupancy at 96.5%, average quarterly occupancy 95.8% (down 170 basis points from Q1 2024). Leasing spreads were 47% GAAP and 31% cash. Cash same-store NOI rose 5.2% for the quarter despite lower occupancy. The top ten tenants fell to 7.1% of rents, down 70 basis points from a year ago.

• FFO guidance for Q2: $2.13 to $2.21 per share, full year: $8.81 to $9.01, up slightly from prior guidance. • Cash same-store growth midpoint increased by 40 basis points, average occupancy by 10 basis points. • Development starts revised to $250 million, majority in second half of 2025. • Relied on financial strength, team experience, and portfolio quality to lead into the future.

• Market uncertainty related to tariffs, which raises uncertainty about economic downturn severity, duration, or likelihood. • Potential delays in new development starts due to uncertainty. • Tenant collection risks, with uncollectible rents estimated in the 40 to 50 basis point range of revenues, slightly ahead of historic run rate.

Q: Can you just touch a little bit more about the pace of leasing you're seeing thus far in the second quarter, whether you're seeing a notable pullback in that, you know, any more apparent in specific markets or if there are any that are more insulated?

A: We've been really pleased with our leasing volume. Fourth quarter was our best quarter ever in terms of square footage lease, and first quarter was our third best. Certain markets like LA Orange County have been struggling, while other markets like Carolinas, Atlanta, Florida have been solid. It's still a wait and see, but leasing volumes have not shifted drastically yet.

Q: The Dominguez building, I know you guys put that in the redevelopment this quarter. Just kind of curious, was that always the plan to put in redevelopment after Starship left?

A: We acquired the building in 1996 and had it scheduled for redevelopment in 2021, but Starship took it as is. When Starship had issues, we're now redeveloping it to modernize, with several prospects and activity on the space. It's expected to be finished by July and leased several months after that, with no immediate impact on guidance.

Q: Can you give us a sense of, like, what you actually need to lease up this year to kind of hit the middle of the guide or even maybe the low end of the guide?

A: From a guide standpoint of development, we've taken development start number down and pushed starts back in the year. Lease up of projects is also pulled back and pushed later in the year. De minimis leasing income projected in second and third quarter, with embedded income in fourth quarter. It would take something to drag through the year and prevent tenants in a few spaces by fourth quarter to lower the guide.