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EastGroup (EGP) Grows Portfolio With Acquisitions & Developments
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EastGroup Properties’ (EGP - Free Report) recent business activities demonstrate its commitment to seizing strategic opportunities and fortifying its position in the thriving Sunbelt, shallow bay industrial market.
In September, the company acquired the Blue Diamond Business Park in the Southwest submarket of Las Vegas comprising two recently developed buildings, spanning 255,000 square feet that are fully leased, for $53 million. This move increased EastGroup's Las Vegas portfolio ownership to 1,165,000 square feet, all fully leased.
However, reflecting broader market concerns, shares of EGP fell 1.25% during Friday’s regular session.
Moreover, the acquisition of Crossroad Logistics Land at the intersection of I-4 and I-75 in East Tampa in September is valued at $15 million. It consists of 44 acres and positions the company for future development.
EastGroup's CEO, Marshall Loeb, aptly describes the current economic climate as "unsteady capital markets environment." Despite the unpredictability, EastGroup Properties has not only weathered the storm but thrived. Loeb acknowledges the strength and resiliency of the Sunbelt, where the company primarily operates.
EGP is not merely acquiring properties. It is also actively developing them. In the third quarter of 2023, EastGroup commenced construction on two projects in Atlanta, GA, and Charlotte, NC, collectively offering 430,000 square feet of space with projected costs of $51.5 million. In the second quarter, three development projects spanning 365,000 square feet and totaling $52.7 million in projected costs began construction in two cities.
EastGroup's performance is a testament to its strategic acumen. As of Aug 31, 2023, the company's portfolio boasts a staggering 98.1% lease rate and a 97.7% occupancy rate. Moreover, rental rates on new and renewal leases signed during the third quarter through Sep 7 have increased substantially, 56.1% on a straight-line basis and 40.1% on a cash basis, reflecting the company's ability to capitalize on favorable market conditions.
EastGroup has made astute use of its equity offering program, selling 759,650 shares of the common stock in the third quarter at a weighted average price of $177.71 per share. The company generated approximately $135 million in gross proceeds.
From the beginning of the year through Sep 7, EGP has sold around 2.55 million shares at a weighted average price of $170.10 per share, amounting to approximately $434 million in gross proceeds. These proceeds enhance the company's financial flexibility and capacity for further strategic maneuvers.
EastGroup's strategic moves align with the broader trends in industrial real estate. This REIT is engaged in the development, acquisition and operation of industrial properties and focuses on properties in major Sunbelt markets throughout the United States, emphasizing assets in Florida, Texas, Arizona, California and North Carolina. EGP targets providing functional, flexible and quality business distribution space for location-sensitive customers, mainly in the 20,000-100,000 square foot range, in its markets.
With its strategy of ownership of high-quality distribution facilities clustered near major transportation features in supply-constrained submarkets, EastGroup is expected to benefit from the healthy fundamentals of the industrial real estate market.
Late in August, EastGroup also announced a hike of 1.6% in its quarterly dividend, raising it to $1.27 per share from $1.25. It will be paid out on Oct 13 to shareholders on record as of Sep 29, 2023.
Carrying a Zacks Rank #3 (Hold), this industrial REIT has rallied 11.7% in the past six months against the industry’s decline of 2.1%.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past week to $3.54.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past month to $12.88.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 3.3% upward over the past month to $1.26.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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EastGroup (EGP) Grows Portfolio With Acquisitions & Developments
EastGroup Properties’ (EGP - Free Report) recent business activities demonstrate its commitment to seizing strategic opportunities and fortifying its position in the thriving Sunbelt, shallow bay industrial market.
In September, the company acquired the Blue Diamond Business Park in the Southwest submarket of Las Vegas comprising two recently developed buildings, spanning 255,000 square feet that are fully leased, for $53 million. This move increased EastGroup's Las Vegas portfolio ownership to 1,165,000 square feet, all fully leased.
However, reflecting broader market concerns, shares of EGP fell 1.25% during Friday’s regular session.
Moreover, the acquisition of Crossroad Logistics Land at the intersection of I-4 and I-75 in East Tampa in September is valued at $15 million. It consists of 44 acres and positions the company for future development.
EastGroup's CEO, Marshall Loeb, aptly describes the current economic climate as "unsteady capital markets environment." Despite the unpredictability, EastGroup Properties has not only weathered the storm but thrived. Loeb acknowledges the strength and resiliency of the Sunbelt, where the company primarily operates.
EGP is not merely acquiring properties. It is also actively developing them. In the third quarter of 2023, EastGroup commenced construction on two projects in Atlanta, GA, and Charlotte, NC, collectively offering 430,000 square feet of space with projected costs of $51.5 million. In the second quarter, three development projects spanning 365,000 square feet and totaling $52.7 million in projected costs began construction in two cities.
EastGroup's performance is a testament to its strategic acumen. As of Aug 31, 2023, the company's portfolio boasts a staggering 98.1% lease rate and a 97.7% occupancy rate. Moreover, rental rates on new and renewal leases signed during the third quarter through Sep 7 have increased substantially, 56.1% on a straight-line basis and 40.1% on a cash basis, reflecting the company's ability to capitalize on favorable market conditions.
EastGroup has made astute use of its equity offering program, selling 759,650 shares of the common stock in the third quarter at a weighted average price of $177.71 per share. The company generated approximately $135 million in gross proceeds.
From the beginning of the year through Sep 7, EGP has sold around 2.55 million shares at a weighted average price of $170.10 per share, amounting to approximately $434 million in gross proceeds. These proceeds enhance the company's financial flexibility and capacity for further strategic maneuvers.
EastGroup's strategic moves align with the broader trends in industrial real estate. This REIT is engaged in the development, acquisition and operation of industrial properties and focuses on properties in major Sunbelt markets throughout the United States, emphasizing assets in Florida, Texas, Arizona, California and North Carolina. EGP targets providing functional, flexible and quality business distribution space for location-sensitive customers, mainly in the 20,000-100,000 square foot range, in its markets.
With its strategy of ownership of high-quality distribution facilities clustered near major transportation features in supply-constrained submarkets, EastGroup is expected to benefit from the healthy fundamentals of the industrial real estate market.
Late in August, EastGroup also announced a hike of 1.6% in its quarterly dividend, raising it to $1.27 per share from $1.25. It will be paid out on Oct 13 to shareholders on record as of Sep 29, 2023.
Carrying a Zacks Rank #3 (Hold), this industrial REIT has rallied 11.7% in the past six months against the industry’s decline of 2.1%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , SBA Communications (SBAC - Free Report) and Americold Realty Trust (COLD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past week to $3.54.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved marginally northward over the past month to $12.88.
The Zacks Consensus Estimate for Americold Realty Trust’s ongoing year’s FFO per share has been raised 3.3% upward over the past month to $1.26.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.