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What were the key takeaways from EastGroup Properties's earnings call?

- **Topline Growth**: Q3 FFO per share of $2.27 (+6.6% YoY), with 6.2% YTD cash same-store NOI growth.
- **Leasing Momentum**: 80% retention rate, 36% GAAP re-leasing spreads. Development starts reduced to $200M due to slower leasing.
- **Strategic Moves**: Acquired land in Raleigh, Orlando, and Northeast Dallas. 2026 same-store NOI growth midpoint raised to 6.7%.
- **Balance Sheet Strength**: Debt-to-EBITDA at 2.9x, with $475M revolver capacity for opportunistic growth.
- **Market Dynamics**: 4.5% vacancy in <100k sq.ft. spaces, 11 consecutive quarters of negative absorption in L.A.

**【CEO Summary Section】**
- **Revenue and FFO Growth**: Q3 2025 FFO per share of $2.27, up 6.6% YoY. Year-to-date cash same-store NOI growth of 6.2%. Retention rate at 80%, driven by cautious tenant expansion.
- **Occupancy and Leasing**: 96.7% occupancy, with 36% GAAP and 22% cash re-leasing spreads. Development starts reduced to $200 million due to slower leasing pace.
- **Market Strategy**: Focus on supply-constrained markets (Texas, Florida) with 4% vacancy. Acquired land in Raleigh, Orlando, and Northeast Dallas.
- **Tenant Diversity**: Top 10 tenants account for 6.9% of rents, down 60bps YoY. Near-shoring trends driving demand for shallow-bay facilities.

**【CFO Financial Commentary】**
- **Financial Health**: Debt-to-EBITDA at 2.9x, interest coverage at 17x. Issued $200M debt in Q4 for 2026 starts, targeting 4.7% coupon.
- **Capital Allocation**: Used $118M from forward share agreements. 2025 FFO guidance of $8.94-$8.98, up 7.3% YoY. 2026 same-store NOI growth midpoint raised to 6.7%.
- **Balance Sheet**: $475M revolver capacity. Focused on patient, opportunistic debt issuance amid rate cuts.

**【Q&A Highlights】**
- **Development Challenges**: 2025 starts reduced to $200M due to slower leasing. Construction costs down 10-12%, but supply constraints limit starts.
- **Market Trends**: 11 consecutive quarters of negative absorption in L.A., 4.5% vacancy in <100k sq.ft. spaces. Texas and Florida leading demand.
- **Tenant Behavior**: 80% retention rate reflects cautious expansion. Larger tenants delaying decisions, smaller tenants moving quickly.
- **Bad Debt**: 35bps of revenue, stable at 30-40bps range. No material credit risk in portfolio.
- **Interest Rates**: 2026 starts may accelerate if rates stabilize below 4.5%. Patient with debt issuance, prioritizing accretive acquisitions.

EastGroup Properties (EGP)-24 Oct 25-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

EGP

EGP fundamentals

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