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EastGroup (EGP) Expands Portfolio With Nashville Acquisition
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EastGroup Properties’ (EGP - Free Report) recent business activities showcase its resilient portfolio and demonstrate its commitment to seizing strategic opportunities and fortifying its position in the thriving Nashville market.
Recently, EastGroup acquired Park at Myatt in Nashville, TN, marking the company's first acquisition into this rapidly growing Sunbelt market. With Nashville boasting a population exceeding 2 million and an industrial market of 215 million square feet, it aligns perfectly with EastGroup's growth strategy.
EGP recognized the potential in this market due to high barriers to entry and limited shallow bay industrial product availability. The acquisition, valued at approximately $31 million, includes two fully leased buildings totaling 171,000 square feet and is strategically located in the Northeast/I-65N Corridor submarket.
Marshall Loeb, CEO of EastGroup Properties, expressed confidence in the company's ability to navigate a volatile environment, emphasizing the attractiveness of current investment opportunities. Loeb highlighted the quality of the acquired buildings and the company's ability to push rents to market rates as leases mature. This move signifies EastGroup's commitment to capitalizing on opportunities in dynamic markets, fostering growth in its portfolio.
EastGroup's performance is a testament to its strategic acumen. As of Nov 8, 2023, the REIT's portfolio boasts an impressive 98.4% lease rate and a 98.2% occupancy rate. The company achieved substantial increases in rental rates, with new and renewed leases signed during the fourth quarter, showing a remarkable average growth of 74% on a straight-line basis and 50% on a cash basis.
EastGroup has made astute use of its equity offering program, selling 257,592 shares of common stock under its continuous common equity offering program. The weighted average price per share was $169.21, resulting in aggregate gross proceeds of around $43.58 million. Year to date, the company has sold 2.98 million shares at a weighted average price of $170.28 per share, accumulating aggregate gross proceeds of about $507.89 million. These proceeds enhance the company's financial flexibility and capacity for further strategic maneuvers.
October witnessed a strategic modification to EastGroup's continuous common equity offering program. This modification introduced the ability to enter into forward equity sale agreements with certain financial institutions acting as forward purchasers. This strategic move provides EastGroup with the flexibility to lock in share prices for the sale of common stock while deferring the settlement of forward equity sale agreements to a later date.
EastGroup's strategic moves align with the broader trends in industrial real estate market. 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.
Carrying a Zacks Rank #2 (Buy), this industrial REIT has surged 12.6% so far in the year against the industry’s decline of 9%.
The Zacks Consensus Estimate for Welltower’s current-year funds from operations (“FFO”) per share has moved north marginally over the past month to $3.57.
The Zacks Consensus Estimate for Iron Mountain’s 2023 FFO per share has moved marginally upward in the past three months to $3.97.
The Zacks Consensus Estimate for Boston Properties’ ongoing year’s FFO per share has been raised marginally over the past two months to $7.30.
Note: Anything related to earnings presented in this write-up represents 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) Expands Portfolio With Nashville Acquisition
EastGroup Properties’ (EGP - Free Report) recent business activities showcase its resilient portfolio and demonstrate its commitment to seizing strategic opportunities and fortifying its position in the thriving Nashville market.
Recently, EastGroup acquired Park at Myatt in Nashville, TN, marking the company's first acquisition into this rapidly growing Sunbelt market. With Nashville boasting a population exceeding 2 million and an industrial market of 215 million square feet, it aligns perfectly with EastGroup's growth strategy.
EGP recognized the potential in this market due to high barriers to entry and limited shallow bay industrial product availability. The acquisition, valued at approximately $31 million, includes two fully leased buildings totaling 171,000 square feet and is strategically located in the Northeast/I-65N Corridor submarket.
Marshall Loeb, CEO of EastGroup Properties, expressed confidence in the company's ability to navigate a volatile environment, emphasizing the attractiveness of current investment opportunities. Loeb highlighted the quality of the acquired buildings and the company's ability to push rents to market rates as leases mature. This move signifies EastGroup's commitment to capitalizing on opportunities in dynamic markets, fostering growth in its portfolio.
EastGroup's performance is a testament to its strategic acumen. As of Nov 8, 2023, the REIT's portfolio boasts an impressive 98.4% lease rate and a 98.2% occupancy rate. The company achieved substantial increases in rental rates, with new and renewed leases signed during the fourth quarter, showing a remarkable average growth of 74% on a straight-line basis and 50% on a cash basis.
EastGroup has made astute use of its equity offering program, selling 257,592 shares of common stock under its continuous common equity offering program. The weighted average price per share was $169.21, resulting in aggregate gross proceeds of around $43.58 million. Year to date, the company has sold 2.98 million shares at a weighted average price of $170.28 per share, accumulating aggregate gross proceeds of about $507.89 million. These proceeds enhance the company's financial flexibility and capacity for further strategic maneuvers.
October witnessed a strategic modification to EastGroup's continuous common equity offering program. This modification introduced the ability to enter into forward equity sale agreements with certain financial institutions acting as forward purchasers. This strategic move provides EastGroup with the flexibility to lock in share prices for the sale of common stock while deferring the settlement of forward equity sale agreements to a later date.
EastGroup's strategic moves align with the broader trends in industrial real estate market. 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.
Carrying a Zacks Rank #2 (Buy), this industrial REIT has surged 12.6% so far in the year against the industry’s decline of 9%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , Iron Mountain Incorporated (IRM - Free Report) and Boston Properties (BXP - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s current-year funds from operations (“FFO”) per share has moved north marginally over the past month to $3.57.
The Zacks Consensus Estimate for Iron Mountain’s 2023 FFO per share has moved marginally upward in the past three months to $3.97.
The Zacks Consensus Estimate for Boston Properties’ ongoing year’s FFO per share has been raised marginally over the past two months to $7.30.
Note: Anything related to earnings presented in this write-up represents 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.