EastGroup Properties (EGP) investor relations material

Company overview and strategy

• Focuses on shallow bay, last-mile industrial properties in infill locations across high-growth U.S. markets, targeting areas with strong population trends and local consumption needs.

• Operates in over 20 markets from the Carolinas to California, with a diversified tenant base and geographic footprint.

• Maintains a conservative balance sheet with 3x debt to EBITDA, all long-term fixed-rate, laddered debt, providing flexibility for acquisitions and development.

• Emphasizes operational risk reduction through phased development, tenant and geographic diversity, and a focus on infill sites that are difficult to replicate.

• Seeks to deliver bond-like safety with equity-like returns by balancing conservative financial management with opportunistic growth.

Market conditions and development trends

• Cap rates in the industrial sector have compressed due to strong capital flows, limiting acquisition opportunities but supporting asset values.

• Development remains the best use of capital, with strong leasing momentum across most markets, especially on the East Coast, Texas, and select western cities.

• Supply is ticking up, primarily in large-format, edge-of-town properties, while infill shallow bay supply remains constrained due to zoning and land scarcity.

• Rent growth is expected to remain robust, with projections of 5-6% annual increases through 2027, supported by low vacancy and strong demand.

• Data center-related tenants have become a significant source of leasing demand, with maintenance contracts seen as a sustainable driver.

Capital allocation and financial flexibility

• Maintains significant balance sheet capacity, with $70 million in ATM equity issued and $200 million in forward ATM contracts available through Q2 2027 at just over $201 per share.

• Remains flexible between equity and debt issuance, monitoring market conditions to optimize capital structure and support growth.

• Will be patient on acquisitions, focusing on quality and timing, and is willing to accelerate dispositions in favorable markets.

• Core operations, particularly occupancy and development leasing, are outperforming guidance, with speculative NOI and potential for further upside.

• Bad debt remains at historical averages, with tenant credit health stable and most tenants serving local economies.