EastGroup Properties Reports Strong Q1 2024 Financial Results, Raises Full-Year Guidance

EastGroup Properties, Inc. (NYSE:EGP) released its first quarter 2024 financial results and supplemental information on April 23, 2024, reporting earnings per share (EPS) of $1.22, exceeding the estimated $1.05 and marking a significant increase from $1.02 per diluted share in Q1 2023. The company's Funds from Operations (FFO) excluding specific gains stood at $1.98 per share, an 8.8% increase compared to the previous year, driven by a $13.29 million increase in Property Net Operating Income (PNOI).

EastGroup's operational portfolio maintained high occupancy rates, with 98.0% leased and 97.7% occupied as of March 31, 2024. Rental rates on new and renewal leases surged by an average of 57.8% on a straight-line basis. The company engaged in strategic acquisitions and disposals, including the acquisition of Spanish Ridge Industrial Park and entry into the Raleigh-Durham market. EastGroup also initiated construction on two development projects in San Antonio and Tampa, totaling 388,000 square feet.

Why this matters: EastGroup's strong financial performance and optimistic outlook for 2024 demonstrate the resilience of the industrial real estate market, particularly in high-growth Sunbelt markets. The company's strategic focus on shallow bay, last-mile properties positions it well for continued growth and shareholder value creation.

CEO Marshall Loeb highlighted the resilience of the industrial market and the company's effective response to economic uncertainties, expressing a bullish long-term view on EastGroup's strategic positioning in the Sunbelt region's shallow bay, last-mile markets. For the second quarter of 2024, the company provided guidance for FFO per share (diluted) in the range of $1.99 to $2.00. For the full year 2024, EastGroup expects FFO per share (diluted) to be between $8.17 and $8.30.

"We are pleased with our first quarter results and the continued strong performance of our portfolio," said Marshall Loeb, CEO of EastGroup Properties. "Despite economic uncertainties, the industrial market remains resilient, and our strategic focus on high-growth Sunbelt markets positions us well for the future."

Key Takeaways

• EastGroup Properties reported Q1 2024 EPS of $1.22, exceeding estimates.
• FFO excluding gains rose 8.8% to $1.98 per share, driven by higher PNOI.
• Occupancy remained high at 98%, with rental rates up 57.8% on new/renewal leases.
• Company acquired Spanish Ridge Industrial Park and entered Raleigh-Durham market.
• EastGroup expects FY 2024 FFO per share between $8.17 and $8.30.