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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

__________________________

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (date of earliest event reported):   April 22, 2019

EASTGROUP PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)


 
Maryland
 
1-07094
 
13-2711135
 
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157
(Address of Principal Executive Offices, including zip code)

(601) 354-3555
(Registrant's telephone number, including area code)

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
o

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
        
 

 

Page 1 of 2 Pages





ITEM 2.02.                      Results of Operations and Financial Condition

On April 22, 2019, EastGroup Properties, Inc. (the "Company") furnished the following documents: (i) a press release relating to its results of operations for the quarter ended March 31, 2019 and related matters; and (ii) quarterly supplemental financial information for the fiscal quarter ended March 31, 2019. A copy of the press release as well as a copy of the supplemental financial information are made available on the Company's website and are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.  

The information set forth in this Item 2.02 and in the attached Exhibits 99.1 and 99.2 is deemed to be "furnished" and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information set forth in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.


ITEM 9.01.                      Financial Statements and Exhibits

(d)  Exhibits.

Exhibit No.
 
Description
 
 
 
 
 
Press Release dated April 22, 2019.
 
Quarterly Supplemental Information for the Quarter Ended March 31, 2019.



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:         April 22, 2019

 
EASTGROUP PROPERTIES, INC.
 
 
 
By: /s/ BRENT W. WOOD
 
Brent W. Wood
Executive Vice President, Chief Financial Officer and Treasurer
















Page 2 of 2 Pages

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
 
 Exhibit 99.1



397602123_egpressreleasetemplata05.gif
 
 
 
Contact:
Marshall Loeb, President and CEO
 
Brent Wood, CFO
EastGroup Properties Announces
(601) 354-3555
 
First Quarter 2019 Results
 
 


First Quarter 2019 Results

Net Income Attributable to Common Stockholders of $0.62 Per Share for First Quarter 2019 Compared to $0.83 Per Share for First Quarter 2018 (2019 Included Gains on Sales of Real Estate Investments and Non-Operating Real Estate of $2.3 Million, or $0.06 Per Share, Compared to $10.3 Million, or $0.30 Per Share, in First Quarter 2018)
Funds from Operations of $1.20 Per Share for First Quarter 2019 Compared to $1.14* Per Share for First Quarter 2018, an Increase of 5.3%
Same Property Net Operating Income for the Annual Same Property Pool (Excluding Income From Lease Terminations) for First Quarter 2019 Increased 3.7% on a Straight-Line Basis and 4.5% on a Cash Basis Compared to First Quarter 2018
97.7% Leased and 96.9% Occupied as of March 31, 2019; Average Occupancy of 96.9% for the Quarter
Rental Rates on New and Renewal Leases Increased an Average of 14.2% on a Straight-Line Basis
Started Construction of Five Development Projects Containing 650,000 Square Feet with Projected Total Costs of $65 Million
Transferred Three 100% Leased Development and Value-Add Projects (421,000 Square Feet) to the Real Estate Portfolio
Development and Value-Add Program Consisted of 19 Projects (2.5 Million Square Feet) at March 31, 2019 with a Projected Total Investment of $232 Million
Sold an Operating Property Containing 51,000 Square Feet for $3.8 Million (Gain of $2.3 Million Was Not Included in FFO)
Declared 157th Consecutive Quarterly Cash Dividend: $0.72 Per Share
Issued 232,205 Shares of Common Stock Pursuant to the Company’s Continuous Common Equity Program at an Average Price of $107.66 During the Quarter with Gross Proceeds of $25.0 Million
Closed $80 Million of Senior Unsecured Private Placement Notes with a Fixed Interest Rate of 4.27%

* See Funds from Operations section on page 2 for discussion of adjustment from previously reported FFO of $1.16 per
share for the First Quarter of 2018.


JACKSON, MISSISSIPPI, April 22, 2019 - EastGroup Properties, Inc. (NYSE: EGP) (the “Company”) announced today the results of its operations for the three months ended March 31, 2019.

Commenting on EastGroup’s performance, Marshall Loeb, CEO, stated, “Our first quarter results demonstrate the strength and depth of our team, the quality of our portfolio and the continued health within the broad industrial market. We are reaping the rewards from both a strong economy and the persistent favorable evolution within the last mile logistics market. The advancing shift for distribution to be closer to the consumer and ideally, a growing consumer base is an affirmation of our in-fill, shallow bay, Sunbelt operating strategy.”




400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




EARNINGS PER SHARE

On a diluted per share basis, earnings per common share (“EPS”) was $0.62 for the three months ended March 31, 2019, compared to $0.83 for the same period of 2018. The Company’s property net operating income (“PNOI”) increased by $4,945,000 ($0.14 per share) for the three months ended March 31, 2019, as compared to the same period of 2018. EastGroup recognized gains on sales of real estate investments and non-operating real estate of $2,325,000 ($0.06 per share) during the three months ended March 31, 2019, as compared to $10,308,000 ($0.30 per diluted share) during the same period of 2018. In addition, depreciation and amortization expense increased by $2,061,000 ($0.06 per diluted share) during the first quarter of 2019 as compared to the same period of 2018.

FUNDS FROM OPERATIONS

For the quarter ended March 31, 2019, funds from operations attributable to common stockholders (“FFO”) was $1.20 per share compared to $1.14 per share for the same quarter of 2018, an increase of 5.3%. The Company initially reported FFO of $1.16 per share during the first quarter of 2018. In connection with the Company’s adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company’s business and therefore adjusted the prior year results, including the Company’s FFO for 2018, to conform to the updated definition of FFO.

PNOI increased by $4,945,000, or 9.6%, during the quarter ended March 31, 2019, compared to the same period of 2018. PNOI increased $2,492,000 from newly developed and value-add properties, $1,852,000 from same property operations (based on the annual same property pool) and $822,000 from 2018 acquisitions; PNOI decreased $276,000 from operating properties sold in 2018 and 2019.

The annual same property pool PNOI (excluding income from lease terminations) increased 3.7% for the quarter ended March 31, 2019, compared to the same quarter in 2018; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), same PNOI increased 4.5%. The annual same property pool for the first quarter of 2019 includes properties which were included in the operating portfolio for the entire period from January 1, 2018 through March 31, 2019; this pool is comprised of properties containing 36,948,000 square feet.

Rental rates on new and renewal leases (4.1% of total square footage) increased an average of 14.2% for the first quarter.

FFO, PNOI and Same PNOI are non-GAAP financial measures, which are defined under Definitions later in this release.  Reconciliations of Net Income to PNOI and Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO are presented in the attached schedule “Reconciliations of GAAP to Non-GAAP Measures.”

ACQUISITIONS AND DISPOSITIONS

In January, EastGroup completed the sale of World Houston 5 for $3.8 million. The 51,000 square foot, single-tenant building was constructed in 1993. The Company recognized a gain on the sale of $2.3 million, which is included in Gain on sales of real estate investments; this gain is excluded from FFO.

EastGroup is under contract to acquire Logistics Center 6 & 7, which contains a total of 142,000 square feet of multi-tenant distribution space in two buildings in Dallas. The buildings, which are located in a master-planned park on DFW International Airport-owned property with a 40-year ground lease, were developed in 2018 and are currently 19% leased. EastGroup anticipates closing the $13 million acquisition in late April, and the Company estimates its total investment in the property, including improvements during the lease-up phase, will be approximately $15 million.

The Company has exercised an option to re-purchase Interstate Commons Distribution Center in the southwest submarket of Phoenix for $9.2 million. Through eminent domain procedures, the Company previously sold the property to the Arizona Department of Transportation in 2016. The two multi-tenant distribution buildings, which are located adjacent to existing EastGroup assets, contain 142,000 square feet and will be re-developed by the Company with a


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




projected total investment of $12 million. The value-add acquisition is expected to close during the second quarter of 2019.

EastGroup is under contract to acquire, with a joint venture partner, 7 acres of land in the central submarket of San Diego for $13 million; the Company will be a 95% partner in the venture. The Company expects the land acquisition to close during the second quarter of 2019. The land is currently leased to a company that operates a parking lot on the site. In the future, EastGroup and its joint venture partner plan to develop a distribution building containing approximately 125,000 square feet.

DEVELOPMENT AND VALUE-ADD PROPERTIES

During the first quarter, EastGroup began construction of five development projects in five different cities, all of which are located in existing EastGroup parks. The buildings will contain a total of 650,000 square feet and have projected total costs of $65 million.

The development projects started during the first three months of 2019 are detailed in the table below:
Development Projects Started in 2019
 
Location
 
Size
 
Anticipated Conversion Date
 
Projected Total Costs
 
 
 
 
 
(Square feet)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
Gateway 5
 
Miami, FL
 
187,000

 
08/2020
 
$
22,400

 
Parc North 6
 
Dallas, TX
 
96,000

 
09/2020
 
8,900

 
Steele Creek IX
 
Charlotte, NC
 
125,000

 
10/2020
 
9,800

 
Eisenhauer Point 9
 
San Antonio, TX
 
82,000

 
12/2020
 
6,400

 
World Houston 45
 
Houston, TX
 
160,000

 
12/2020
 
17,600

 
   Total Development Projects Started
 
 
 
650,000

 
 
 
$
65,100

 

At March 31, 2019, EastGroup’s development and value-add program consisted of 19 projects (2,493,000 square feet) in 10 cities. The projects, which were collectively 50% leased as of April 19, 2019, have a projected total cost of $232 million.

During the first quarter, EastGroup transferred (at the earlier of 90% occupied or one year after completion) three development projects, Siempre Viva in San Diego, CreekView 121 3 & 4 in Dallas, and Horizon VI in Orlando, to the real estate portfolio. The three fully-occupied projects contain a total of 421,000 square feet.

The development and value-add properties transferred to the real estate portfolio during the first three months of 2019 are detailed in the table below.
Development and Value-Add Properties Transferred to Real Estate Properties in 2019
 
Location
 
Size
 
Conversion Date
 
Cumulative Cost as of 3/31/19
 
Percent Leased as of 4/19/19
 
 
 
 
(Square feet)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Siempre Viva
 
San Diego, CA
 
115,000

 
01/2019
 
$
14,142

 
100%
CreekView 121 3 & 4
 
Dallas, TX
 
158,000

 
03/2019
 
15,539

 
100%
Horizon VI
 
Orlando, FL
 
148,000

 
03/2019
 
12,234

 
100%
   Total Projects Transferred
 
 
 
421,000

 
 
 
$
41,915

 
100%

Subsequent to quarter-end, the Company began construction of two development projects: SunCoast 6, an 81,000 square foot multi-tenant distribution building in Ft. Myers with a projected total cost of $8 million, and World Houston 43, an 86,000 square foot multi-tenant distribution building in Houston with a projected total cost of $7 million.





400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




DIVIDENDS

EastGroup declared cash dividends of $0.72 per share in the first quarter of 2019. The first quarter dividend, which was paid on April 15, 2019, was the Company’s 157th consecutive quarterly cash distribution to shareholders.  The Company has increased or maintained its dividend for 26 consecutive years and has increased it 23 years over that period, including increases in each of the last seven years.  The annualized dividend rate of $2.88 per share yielded 2.6% on the closing stock price of $110.69 on April 18, 2019.

FINANCIAL STRENGTH AND FLEXIBILITY

EastGroup continues to maintain a strong and flexible balance sheet.  Debt-to-total market capitalization was 21.5% at March 31, 2019.  For the first quarter, the Company had interest and fixed charge coverage ratios of 5.97x and a debt to earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) ratio of 5.30x.

During the first quarter, EastGroup issued and sold 232,205 shares of common stock under its continuous equity program at an average price of $107.66 per share, providing gross proceeds to the Company of $25.0 million.

In March, the Company closed $80 million of senior unsecured private placement notes with an insurance company. The notes have a 10-year term and a fixed interest rate of 4.27% with semi-annual interest payments. The notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Subsequent to quarter-end, EastGroup repaid a mortgage loan with a balance of $46.0 million, an interest rate of 7.5% and an original maturity date of May 5, 2019.

OUTLOOK FOR 2019

EPS for 2019 is now estimated to be in the range of $2.31 to $2.41.  Estimated FFO per share attributable to common stockholders for 2019 is now estimated to be in the range of $4.84 to $4.94. The Company raised the mid-point of FFO guidance from $4.84 to $4.89. The table below reconciles projected net income attributable to common stockholders to projected FFO. The estimated net income attributable to common stockholders is not a projection and is provided solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission.
 
 
Low Range
 
High Range
 
 
Q2 2019
 
Y/E 2019
 
Q2 2019
 
Y/E 2019
 
 
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
Net income attributable to common stockholders
 
$
19,150

 
85,894

 
20,628

 
89,608

Depreciation and amortization
 
24,049

 
95,960

 
24,049

 
95,960

Gain on sales of real estate investments
 

 
(2,325
)
 

 
(2,325
)
Funds from operations attributable to common stockholders
 
$
43,199

 
179,529

 
44,677

 
183,243

 
 
 
 
 
 
 
 
 
Diluted shares
 
36,939

 
37,131

 
36,939

 
37,131

 
 
 
 
 
 
 
 
 
Per share data (diluted):
 
 

 
 

 
 

 
 

   Net income attributable to common stockholders
 
$
0.52

 
2.31

 
0.56

 
2.41

   Funds from operations attributable to common stockholders
 
1.17

 
4.84

 
1.21

 
4.94












400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




The following assumptions were used for the mid-point:
Metrics
 
Revised Guidance for Year 2019
 
Initial Guidance for Year 2019
 
Actual for Year 2018
FFO per share
 
$4.84 - $4.94
 
$4.79 - $4.89
 
$4.66 (1)
FFO per share increase over prior year period (1)
 
4.9%
 
3.9%
 
9.6%
Same PNOI growth (excluding income from lease terminations):
 
 
 
 
 
 
  Straight-line basis — annual same property pool
 
2.9% - 3.9% (2)
 
2.4% - 3.4% (2)
 
3.8%
  Cash basis — annual same property pool (3)
 
3.8% - 4.8% (2)
 
3.5% - 4.5% (2)
 
4.3%
Average month-end occupancy
 
96.4%
 
96.2%
 
96.1%
Lease termination fee income
 
$765,000
 
$450,000
 
$294,000
Reserves for uncollectible rent
 
$800,000
 
$900,000
 
$784,000
Development starts:
 
 
 
 
 
 
     Square feet
 
1.7 million
 
1.5 million
 
1.7 million
     Projected total investment
 
$160 million
 
$141 million
 
$148 million
Value-add property acquisitions
 
$55 million
 
None
 
$14 million
Operating property acquisitions
 
$50 million
 
$50 million
 
$57 million
Operating property dispositions
     (Potential gains on dispositions are not included in the projections)
 
$45 million
 
$47 million
 
$23 million
Unsecured debt closing in period
 
$160 million at 4.5% weighted
average interest rate
 
$140 million at 4.8% weighted
average interest rate
 
$60 million at 3.93%
Common stock issuances
 
$145 million
 
$60 million
 
$159 million
General and administrative expense
 
$15.6 million
 
$14.4 million
 
$13.8 million

(1) The Company initially reported FFO of $4.67 for the year 2018. In connection with the Company’s adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company’s business and therefore adjusted the prior year results, including the Company’s FFO for 2018, to conform to the updated definition of FFO.

(2) Includes properties which have been in the operating portfolio since 1/1/18 and are projected to be in the operating portfolio through 12/31/19 (annual same property pool); includes 36,762,000 square feet.

(3) Cash basis excludes straight-line rent adjustments and amortization of above/below market rent intangibles.


DEFINITIONS

The Company’s chief decision makers use two primary measures of operating results in making decisions:  (1) property net operating income (“PNOI”), defined as Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments, and (2) funds from operations attributable to common stockholders (“FFO”).  

FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”).  In December 2018, Nareit issued the “Nareit Funds from Operations White Paper - 2018 Restatement” (the “2018 White Paper”), which reaffirmed, and in some cases refined, Nareit's prior determinations concerning FFO. The guidance in the 2018 White Paper allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges, on real estate assets incidental to a REIT's business are excluded from the calculation of FFO. EastGroup has made the election to exclude activity related to such assets that are incidental to our business. The Company has revised prior periods to reflect this guidance. FFO is calculated as net income (loss) attributable to common stockholders computed in accordance with U.S. generally accepted accounting principles ("GAAP"), excluding gains and losses from sales of real estate property (including other assets incidental to the


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




Company’s business) and impairment losses, adjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

PNOI and FFO are supplemental industry reporting measurements used to evaluate the performance of the Company’s investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry’s calculations of PNOI and FFO provides supplemental indicators of the properties’ performance since real estate values have historically risen or fallen with market conditions.  PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other real estate investment trusts (“REITs”).  Investors should be aware that items excluded from or added back to FFO are significant components in understanding and assessing the Company’s financial performance.

EastGroup sometimes refers to PNOI from Same Properties as “Same PNOI” in this press release and the accompanying reconciliation. The Company presents Same PNOI as a property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results on a same property basis. Same Properties is defined as operating properties owned during the entire current period and prior year reporting period. Properties developed or acquired are excluded until held in the operating portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods are also excluded.

The Company’s chief decision makers also use Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) in making decisions. EBITDAre is defined as Net Income, adjusted for gains and losses from sales of real estate investments, non-operating real estate and other assets incidental to the Company’s business, interest expense, income tax expense, depreciation and amortization. EBITDAre is a non-GAAP financial measure used to measure the Company’s operating performance and its ability to meet interest payment obligations and pay quarterly stock dividends on an unleveraged basis.

EastGroup’s chief decision makers also use its Debt-to-EBITDAre ratio, a non-GAAP financial measure calculated by dividing the Company’s debt by its EBITDAre, in analyzing the financial condition and operating performance of the Company relative to its leverage.

The Company’s interest and fixed charge coverage ratios are non-GAAP financial measures calculated by dividing the Company’s EBITDAre by its interest expense. These ratios provide a basis for analysis of the Company’s leverage, operating performance, and its ability to service the interest payments due on its debt.

CONFERENCE CALL

EastGroup will host a conference call and webcast to discuss the results of its first quarter and review the Company’s current operations on Tuesday, April 23, 2019, at 11:00 a.m. Eastern Time.  A live broadcast of the conference call is available by dialing 1-877-876-9173 (conference ID: EastGroup) or by webcast through a link on the Company’s website at www.eastgroup.net.  If you are unable to listen to the live conference call, a telephone and webcast replay will be available until Tuesday, April 30, 2019.  The telephone replay can be accessed by dialing 1-800-723-0389, and the webcast replay can be accessed through a link on the Company’s website at www.eastgroup.net.

SUPPLEMENTAL INFORMATION

Supplemental financial information is available under Quarterly Results in the Investor Relations section of the Company’s website at www.eastgroup.net or upon request by calling the Company at 601-354-3555.

COMPANY INFORMATION

EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina.  The Company’s goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 70,000 square foot range).  The Company’s strategy


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets.  EastGroup’s portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 42.3 million square feet.  EastGroup Properties, Inc. press releases are available on the Company’s website at www.eastgroup.net.

FORWARD-LOOKING STATEMENTS

The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “should,” “intends,” “plans,” “estimates” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to:
 
changes in general economic conditions;
the extent of customer defaults or of any early lease terminations;
the Company’s ability to lease or re-lease space at current or anticipated rents;
the availability of financing;
failure to maintain credit ratings with rating agencies;
changes in the supply of and demand for industrial/warehouse properties;
increases in interest rate levels;
increases in operating costs;
natural disasters, terrorism, riots and acts of war, and the Company’s ability to obtain adequate insurance;
changes in governmental regulation, tax rates and similar matters;
attracting and retaining key personnel;
other risks associated with the development and acquisition of properties, including risks that development projects may not be completed on schedule, development or operating costs may be greater than anticipated or acquisitions may not close as scheduled; and
other risks detailed in the sections of the Company’s most recent Forms 10-K and 10-Q filed with the SEC titled “Risk Factors.”

The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.


400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net




EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
 
2019
 
2018
REVENUES
 
 
 
 
Income from real estate operations
 
$
78,637

 
72,120

Other revenue
 
161

 
83

 
 
78,798

 
72,203

EXPENSES
 
 

 
 

Expenses from real estate operations
 
22,302

 
20,676

Depreciation and amortization
 
23,746

 
21,685

General and administrative
 
3,844

 
3,463

Indirect leasing costs
 
93

 

 
 
49,985

 
45,824

OTHER INCOME (EXPENSE)
 
 

 
 

Interest expense
 
(8,846
)
 
(8,607
)
Gain on sales of real estate investments
 
2,325

 
10,222

Other
 
242

 
754

NET INCOME
 
22,534

 
28,748

Net income attributable to noncontrolling interest in joint ventures
 
(5
)
 
(35
)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
22,529

 
28,713

Other comprehensive income (loss) - cash flow hedges
 
(2,313
)
 
3,606

TOTAL COMPREHENSIVE INCOME
 
$
20,216

 
32,319

 
 
 
 
 
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 
 
 
Net income attributable to common stockholders
 
$
0.62

 
0.83

Weighted average shares outstanding
 
36,465

 
34,689

DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 
 
 
Net income attributable to common stockholders
 
$
0.62

 
0.83

Weighted average shares outstanding
 
36,526

 
34,736

 
 
 
 
 



EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
 
 
 
 
 
NET INCOME
 
$
22,534

 
28,748

 
(Gain) on sales of real estate investments
 
(2,325
)
 
(10,222
)
 
(Gain) on sales of non-operating real estate
 

 
(86
)
 
(Gain) on sales of other
 

 
(427
)
 
Interest income
 
(33
)
 
(55
)
 
Other revenue
 
(161
)
 
(83
)
 
Indirect leasing costs
 
93

 

 
Depreciation and amortization
 
23,746

 
21,685

 
Company’s share of depreciation from unconsolidated investment
 
35

 
31

 
Interest expense (1)
 
8,846

 
8,607

 
General and administrative expense (2)
 
3,844

 
3,463

 
Noncontrolling interest in PNOI of consolidated 80% joint ventures
 
(52
)
 
(79
)
 
PROPERTY NET OPERATING INCOME (PNOI)
 
56,527

 
51,582

 
PNOI from 2018 Acquisitions
 
(822
)
 

 
PNOI from 2018 and 2019 Development Properties
 
(3,314
)
 
(822
)
 
PNOI from 2018 and 2019 Operating Property Dispositions
 
(23
)
 
(299
)
 
Other PNOI
 
47

 
102

 
SAME PNOI
 
52,415

 
50,563

 
Net lease termination fee (income) from same properties
 
(140
)
 
(131
)
 
SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS
 
$
52,275

 
50,432

 
 
 
 
 
 
 
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
$
22,529

 
28,713

 
Depreciation and amortization
 
23,746

 
21,685

 
Company’s share of depreciation from unconsolidated investment
 
35

 
31

 
Depreciation and amortization from noncontrolling interest
 
(47
)
 
(44
)
 
(Gain) on sales of real estate investments
 
(2,325
)
 
(10,222
)
 
(Gain) on sales of non-operating real estate
 

 
(86
)
 
(Gain) on sales of other
 

 
(427
)
 
FUNDS FROM OPERATIONS (FFO) ATTRIBUTABLE TO COMMON STOCKHOLDERS
 
$
43,938

 
39,650

 
 
 
 
 
 
 
NET INCOME
 
$
22,534

 
28,748

 
Interest expense (1)
 
8,846

 
8,607

 
Depreciation and amortization
 
23,746

 
21,685

 
Company’s share of depreciation from unconsolidated investment
 
35

 
31

 
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA)
 
55,161

 
59,071

 
(Gain) on sales of real estate investments
 
(2,325
)
 
(10,222
)
 
(Gain) on sales of non-operating real estate
 

 
(86
)
 
(Gain) on sales of other
 

 
(427
)
 
EBITDA for Real Estate (EBITDAre)
 
$
52,836

 
48,336

 
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
 
 

 
 

 
Net income attributable to common stockholders
 
$
0.62


0.83

 
Funds from operations (FFO) attributable to common stockholders
 
$
1.20


1.14

(3) 
Weighted average shares outstanding for EPS and FFO purposes
 
36,526


34,736

 
 
 
 
 
 
 
(1)  Net of capitalized interest of $2,036 and $1,602 for the three months ended March 31, 2019 and 2018, respectively.
 
 
 
 
 
 
(2) Net of capitalized development costs of $1,571 and $1,123 for the three months ended March 31, 2019 and 2018, respectively.
 
 
 
 
 
 
(3)  The Company initially reported FFO of $1.16 per share during the first quarter of 2018. In connection with the Company’s adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company’s business and therefore adjusted the prior year results, including the Company’s FFO for 2018, to conform to the updated definition of FFO.

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

supplementalinformatic93
Table of Contents Conference Call 877-876-9173 | ID – EastGroup April 23, 2019 11:00 a.m. Eastern Time 201 9 webcast available at EastGroup.net F IRST QUARTER Supplemental Information March 31, 2019 400 W. Parkway Place, Suite 100, Ridgeland, MS 39157 | TEL: 601-354-3555 | FAX: 601-352-1441 | EastGroup.net Page 1 of 24


 
Table of Contents Consolidated Balance Sheets....................................................................... 3 Consolidated Statements of Income and Comprehensive Income .............. 4 Reconciliations of GAAP to Non-GAAP Measures ................................... 5 Consolidated Statements of Cash Flows ..................................................... 6 Same Property Portfolio Analysis ............................................................... 7 Additional Financial Information ................................................................ 8 Development and Value-Add Properties Summary .................................... 9 Development and Value-Add Properties Transferred to Real Estate Properties ... 10 Debt and Equity Market Capitalization ....................................................... 11 Continuous Common Equity Program ........................................................ 12 Adjusted Debt-to-Pro Forma EBITDAre Reconciliation ............................ 13 Acquisitions and Dispositions ..................................................................... 14 Real Estate Improvements and Leasing Costs ............................................ 15 Leasing Statistics and Occupancy Summary .............................................. 16 Core Market Operating Statistics ................................................................ 17 Lease Expiration Summary ......................................................................... 18 Top 10 Customers by Annualized Base Rent .............................................. 19 Unconsolidated Investment Information ..................................................... 20 Financial Statistics ....................................................................................... 21 Outlook for 2019 ......................................................................................... 22 Glossary of REIT Terms ............................................................................. 23 FORWARD-LOOKING STATEMENTS The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "should," "intends," "plans," "estimates" or "anticipates" and variations of such words or similar expressions or the negative of such words, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company's current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to: changes in general economic conditions; the extent of customer defaults or of any early lease terminations; the Company's ability to lease or re-lease space at current or anticipated rents; the availability of financing; failure to maintain credit ratings with rating agencies; changes in the supply of and demand for industrial/warehouse properties; increases in interest rate levels; increases in operating costs; natural disasters, terrorism, riots and acts of war, and the Company's ability to obtain adequate insurance; changes in governmental regulation, tax rates and similar matters; attracting and retaining key personnel; other risks associated with the development and acquisition of properties, including risks that development projects may not be completed on schedule, development or operating costs may be greater than anticipated or acquisitions may not close as scheduled; and other risks detailed in the sections of the Company's most recent Forms 10-K and 10-Q filed with the SEC titled "Risk Factors." The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Page 2 of 24


 
Consolidated Balance Sheets (In thousands, except share and per share data) (Unaudited) March 31, 2019 December 31, 2018 ASSETS Real estate properties $ 2,609,914 2,553,481 Development and value-add properties 264,526 263,664 2,874,440 2,817,145 Less accumulated depreciation (832,925) (814,915) 2,041,515 2,002,230 Unconsolidated investment 7,879 7,870 Cash 1,831 374 Other assets 120,421 121,231 TOTAL ASSETS $ 2,171,646 2,131,705 LIABILITIES AND EQUITY LIABILITIES Unsecured bank credit facilities $ 131,189 193,926 Unsecured debt 803,397 723,400 Secured debt 185,606 188,461 Accounts payable and accrued expenses 83,364 86,563 Other liabilities 46,616 34,652 Total Liabilities 1,250,172 1,227,002 EQUITY Stockholders' Equity: Common stock; $.0001 par value; 70,000,000 shares authorized; 36,752,260 shares issued and outstanding at March 31, 2019 and 36,501,356 at December 31, 2018 4 4 Excess shares; $.0001 par value; 30,000,000 shares authorized; no shares issued - - Additional paid-in capital 1,245,660 1,222,547 Distributions in excess of earnings (330,184) (326,193) Accumulated other comprehensive income 4,388 6,701 Total Stockholders' Equity 919,868 903,059 Noncontrolling interest in joint ventures 1,606 1,644 Total Equity 921,474 904,703 TOTAL LIABILITIES AND EQUITY $ 2,171,646 2,131,705 Page 3 of 24


 
Consolidated Statements of Income and Comprehensive Income (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2019 2018 REVENUES Income from real estate operations $ 78,637 72,120 Other revenue 161 83 78,798 72,203 EXPENSES Expenses from real estate operations 22,302 20,676 Depreciation and amortization 23,746 21,685 General and administrative 3,844 3,463 Indirect leasing costs 93 - 49,985 45,824 OTHER INCOME (EXPENSE) Interest expense (8,846) (8,607) Gain on sales of real estate investments 2,325 10,222 Other 242 754 NET INCOME 22,534 28,748 Net income attributable to noncontrolling interest in joint ventures (5) (35) NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 22,529 28,713 Other comprehensive income (loss) - cash flow hedges (2,313) 3,606 TOTAL COMPREHENSIVE INCOME $ 20,216 32,319 BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders $ 0.62 0.83 Weighted average shares outstanding 36,465 34,689 DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders $ 0.62 0.83 Weighted average shares outstanding 36,526 34,736 Page 4 of 24


 
Reconciliations of GAAP to Non-GAAP Measures (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2019 2018 NET INCOME $ 22,534 28,748 (Gain) on sales of real estate investments (2,325) (10,222) (Gain) on sales of non-operating real estate - (86) (Gain) on sales of other - (427) Interest income (33) (55) Other revenue (161) (83) Indirect leasing costs 93 - Depreciation and amortization 23,746 21,685 Company's share of depreciation from unconsolidated investment 35 31 Interest expense (1) 8,846 8,607 General and administrative expense (2) 3,844 3,463 Noncontrolling interest in PNOI of consolidated 80% joint ventures (52) (79) PROPERTY NET OPERATING INCOME (PNOI) 56,527 51,582 PNOI from 2018 Acquisitions (822) - PNOI from 2018 and 2019 Development Properties (3,314) (822) PNOI from 2018 and 2019 Operating Property Dispositions (23) (299) Other PNOI 47 102 SAME PNOI 52,415 50,563 Net lease termination fee (income) from same properties (140) (131) SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS $ 52,275 50,432 NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS $ 22,529 28,713 Depreciation and amortization 23,746 21,685 Company's share of depreciation from unconsolidated investment 35 31 Depreciation and amortization from noncontrolling interest (47) (44) (Gain) on sales of real estate investments (2,325) (10,222) (Gain) on sales of non-operating real estate - (86) (Gain) on sales of other - (427) FUNDS FROM OPERATIONS (FFO) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 43,938 39,650 NET INCOME $ 22,534 28,748 Interest expense (1) 8,846 8,607 Depreciation and amortization 23,746 21,685 Company's share of depreciation from unconsolidated investment 35 31 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) 55,161 59,071 (Gain) on sales of real estate investments (2,325) (10,222) (Gain) on sales of non-operating real estate - (86) (Gain) on sales of other - (427) EBITDA for Real Estate (EBITDAre) $ 52,836 48,336 DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Net income attributable to common stockholders $ 0.62 0.83 Funds from operations (FFO) attributable to common stockholders $ 1.20 1.14 (3) Weighted average shares outstanding for EPS and FFO purposes 36,526 34,736 (1) Net of capitalized interest of $2,036 and $1,602 for the three months ended March 31, 2019 and 2018, respectively. (2) Net of capitalized development costs of $1,571 and $1,123 for the three months ended March 31, 2019 and 2018, respectively. (3) The Company initially reported FFO of $1.16 per share during the first quarter of 2018. In connection with the Company's adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company's business and therefore adjusted the prior year results, including the Company's FFO for 2018, to conform to the updated definition of FFO. Page 5 of 24


 
Consolidated Statements of Cash Flows   (In thousands) (Unaudited) Three Months Ended March 31, 2019 2018 OPERATING ACTIVITIES Net income $ 22,534 28,748 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 23,746 21,685 Stock-based compensation expense 1,065 1,184 Net gain on sales of real estate investments and non-operating real estate (2,325) (10,308) Gain on casualties and involuntary conversion (100) - Changes in operating assets and liabilities: Accrued income and other assets 2,153 2,239 Accounts payable, accrued expenses and prepaid rent (5,919) (22,310) Other 328 476 NET CASH PROVIDED BY OPERATING ACTIVITIES 41,482 21,714 INVESTING ACTIVITIES Development and value-add properties (42,846) (31,212) Real estate improvements (5,610) (5,158) Net proceeds from sales of real estate investments and non-operating real estate 3,679 16,826 Repayments on mortgage loans receivable 3 1,958 Changes in accrued development costs 701 8,713 Changes in other assets and other liabilities (4,857) (2,344) NET CASH USED IN INVESTING ACTIVITIES (48,930) (11,217) FINANCING ACTIVITIES Proceeds from unsecured bank credit facilities 144,635 91,387 Repayments on unsecured bank credit facilities (207,497) (85,634) Proceeds from unsecured debt 80,000 - Repayments on secured debt (2,916) (2,767) Debt issuance costs (153) (88) Distributions paid to stockholders (not including dividends accrued) (26,787) (22,736) Proceeds from common stock offerings 24,400 14,466 Proceeds from dividend reinvestment plan 54 57 Other (2,831) (5,161) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 8,905 (10,476) INCREASE IN CASH AND CASH EQUIVALENTS 1,457 21 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 374 16 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,831 37 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest, net of amounts capitalized of $2,036 and $1,602 for 2019 and 2018, respectively $ 6,646 7,141 Cash paid for operating lease liabilities 281 - NON-CASH OPERATING ACTIVITY Operating lease liabilities arising from obtaining right of use assets$ 12,417 - Page 6 of 24


 
Same Property Portfolio Analysis (In thousands) (Unaudited) Three Months Ended March 31 Same Property Portfolio Analysis (Straight-Line Basis) (1) 2019 2018 % Change Square feet as of period end 36,948 36,948 Average occupancy 96.8% 96.4% 0.4% Occupancy as of period end 96.9% 96.5% 0.4% Income from real estate operations $ 73,390 70,678 3.8% Less cash received for lease terminations (168) (141) Add straight-line rent write-offs for lease terminations 28 10 Income excluding lease termination income 73,250 70,547 3.8% Expenses from real estate operations (20,975) (20,115) 4.3% PNOI excluding income from lease terminations $ 52,275 50,432 3.7% Same Property Portfolio Analysis (Cash Basis) (1) Income from real estate operations $ 73,263 70,103 4.5% Less cash received for lease terminations (168) (141) Income excluding lease termination income 73,095 69,962 4.5% Expenses from real estate operations (20,975) (20,069) 4.5% PNOI excluding income from lease terminations $ 52,120 49,893 4.5% (1) Includes properties which were included in the operating portfolio for the entire period from 1/1/18 through 3/31/19. Page 7 of 24


 
Additional Financial Information (In thousands) (Unaudited) Three Months Ended March 31, 2019 2018 (Items below represent increases or SELECTED INCOME STATEMENT INFORMATION (decreases) in FFO) Straight-line (S/L) rent income adjustment $ 798 1,019 Reserves for uncollectible S/L rent (13) (45) Net straight-line rent adjustment 785 974 Cash received for lease terminations 168 141 Less S/L rent write-offs (28) (10) Net lease termination fee income 140 131 Reserves for uncollectible cash rent (116) (45) Stock-based compensation expense (1,065) (1,184) Debt issuance costs amortization (342) (319) Indirect leasing costs (93) - Gain on casualties and involuntary conversion (1) 100 - Acquired leases - market rent adjustment amortization 192 118 Assumed mortgages - fair value adjustment amortization 6 7 Three Months Ended March 31, 2019 2018 WEIGHTED AVERAGE COMMON SHARES Weighted average common shares 36,465 34,689 BASIC SHARES FOR EARNINGS PER SHARE (EPS) 36,465 34,689 Potential common shares: Unvested restricted stock 61 47 DILUTED SHARES FOR EPS AND FFO 36,526 34,736 (1) Included in Other revenue on the Consolidated Statements of Income and Comprehensive Income; included in FFO. Page 8 of 24


 
Development and Value-Add Properties Summary ($ in thousands) (Unaudited) Costs Incurred Anticipated 1st Qtr Cumulative Projected Conversion % Leased (1) Square Feet (SF) 2019 at 3/31/19 Total Costs Date 4/19/19 Lease-up Falcon Field Phoenix, AZ 96,000 $ 157 8,389 9,400 05/19 57% Gateway 1 Miami, FL 200,000 3,497 23,738 25,600 05/19 100% Horizon XI Orlando, FL 135,000 444 9,167 12,100 05/19 100% SunCoast 5 Ft Myers, FL 81,000 730 7,265 8,300 06/19 100% Broadmoor 2 Atlanta, GA 111,000 234 6,648 7,400 11/19 45% Settlers Crossing 1 Austin, TX 77,000 129 6,389 7,400 01/20 0% Settlers Crossing 2 Austin, TX 83,000 1,054 8,169 8,400 01/20 41% Parc North 5 Dallas, TX 100,000 1,020 7,973 9,200 02/20 58% Total Lease-up 883,000 7,265 77,738 87,800 69% Wgt Avg % (2) Projected Stabilized Yield 7.4% Under Construction Steele Creek V Charlotte, NC 54,000 1,013 4,327 5,900 07/19 100% Eisenhauer Point 9 San Antonio, TX 82,000 1,498 1,498 6,400 12/19 100% World Houston 45 Houston, TX 160,000 6,351 6,351 17,600 12/19 100% Ten West Crossing 8 Houston, TX 132,000 1,760 8,350 10,900 04/20 49% Tri-County Crossing 1 & 2 San Antonio, TX 203,000 3,043 11,938 14,600 04/20 19% Eisenhauer Point 7 & 8 San Antonio, TX 336,000 5,527 18,617 24,900 05/20 55% Airport Commerce Center 3 Charlotte, NC 96,000 1,025 6,818 8,000 06/20 65% CreekView 121 5 & 6 Dallas, TX 139,000 2,065 7,670 14,900 07/20 0% Gateway 5 Miami, FL 187,000 16,536 16,536 22,400 08/20 0% Parc North 6 Dallas, TX 96,000 4,654 4,654 8,900 09/20 0% Steele Creek IX Charlotte, NC 125,000 2,418 2,418 9,800 10/20 0% Total Under Construction 1,610,000 45,890 89,177 144,300 40% Wgt Avg % (2) Projected Stabilized Yield 7.3% 50% Wgt Avg % Prospective Development Acres Projected SF Phoenix, AZ 24 318,000 163 6,972 Ft Myers, FL 35 488,000 177 13,499 Miami, FL (3) 43 463,000 (9,138) 27,193 Orlando, FL 14 216,000 323 6,042 Tampa, FL 8 32,000 - 1,560 Atlanta, GA 10 100,000 22 748 Jackson, MS 3 28,000 - 706 Charlotte, NC (3) 43 475,000 (1,668) 5,541 Austin, TX 15 180,000 118 3,860 Dallas, TX (3) 38 516,000 (1,077) 11,115 Houston, TX (3) 67 963,000 (4,397) 12,042 San Antonio, TX (3) 53 826,000 (716) 8,333 Total Prospective Development 353 4,605,000 (16,193) 97,611 353 7,098,000 $ 36,962 264,526 (1) Will transfer from Development and value-add properties to the operating portfolio at the earlier of 90% occupancy or one year after shell completion/value-add vacancy occurrence. (2) Weighted average yield based on property net operating income at 100% occupancy and rents computed on a straight-line basis. (3) Negative amounts represent land inventory costs transferred to Under Construction. Page 9 of 24


 
Development and Value-Add Properties Transferred to Real Estate Properties ($ in thousands) (Unaudited) Costs Incurred 1st Qtr Cumulative Conversion % Leased Square Feet (SF) 2019 at 3/31/19 Date 4/19/19 1st Quarter SF Siempre Viva San Diego, CA 115,000 $ 67 14,142 01/19 100% CreekView 121 3 & 4 Dallas, TX 158,000 1,739 15,539 03/19 100% Horizon VI Orlando, FL 148,000 4,009 12,234 03/19 100% 421,000 5,815 41,915 Total Transferred to Real Estate Properties 421,000 $ 5,815 41,915 (1) Projected Stabilized Yield 7.4% 100% Wgt Avg % (1) Weighted average yield based on property net operating income at 100% occupancy and rents computed on a straight-line basis. Page 10 of 24


 
Debt and Equity Market Capitalization March 31, 2019 ($ in thousands, except per share data) (Unaudited) Average Remainder 2024 and Years to of 2019 2020 2021 2022 2023 Beyond Total Maturity Unsecured debt (fixed rate) $ 75,000 105,000 40,000 75,000 115,000 395,000 805,000 4.9 Weighted average interest rate 2.85% 3.55% 2.34% 3.03% 2.96% 3.84% 3.44% Secured debt (fixed rate): Balloon payments 45,725 - 85,600 32,655 - 1,549 165,529 Amortization 6,922 9,096 3,962 114 119 374 20,587 52,647 9,096 89,562 32,769 119 1,923 186,116 1.6 Weighted average interest rate 7.11% 4.43% 4.55% 4.09% 3.85% 3.85% 5.18% Total unsecured debt and secured debt $ 127,647 114,096 129,562 107,769 115,119 396,923 991,116 4.3 Weighted average interest rate 4.61% 3.62% 3.86% 3.35% 2.96% 3.84% 3.76% Unsecured debt and secured debt (fixed rate) $ 991,116 Unsecured bank credit facilities (variable rate) $45MM Line - 3.495% - matures 7/30/2022 2,868 $350MM Line - 3.491% - matures 7/30/2022 130,000 Total carrying amount of debt $ 1,123,984 Total unamortized debt issuance costs (3,792) Total debt net of unamortized debt issuance costs $ 1,120,192 Equity market capitalization Shares outstanding - common 36,752,260 Price per share at quarter end $ 111.64 Total equity market capitalization $ 4,103,022 (1) Total market capitalization (debt and equity) $ 5,227,006 (1) Total debt / total market capitalization 21.5% (1) Before deducting unamortized debt issuance costs Page 11 of 24


 
Continuous Common Equity Program Through March 31, 2019 ($ in thousands, except per share data) (Unaudited) Average Shares Issued Sales Price Offering-Related and Sold (1) (Per Share) Gross Proceeds Fees and Expenses Net Proceeds 1st Quarter 232,205 $ 107.66 $ 25,000 $ (600) $ 24,400 (1) As of April 19, 2019, the Company had 4,462,661 shares authorized and remaining for issuance under its continuous common equity program. Page 12 of 24


 
Adjusted Debt-to-Pro Forma EBITDAre Reconciliation ($ in thousands) (Unaudited) Three Months Ended March 31, 2019 EBITDAre for the period $ 52,836 Adjust for acquisitions as if owned for entire period - Adjust for development and value-add properties in lease-up or under construction (64) Adjust for properties sold during the period (23) Pro Forma EBITDAre $ 52,749 PRO FORMA EBITDAre – ANNUALIZED $ 210,996 Debt at March 31, 2019 $ 1,120,192 Subtract development and value-add properties in lease-up or under construction (166,915) Adjusted Debt $ 953,277 ADJUSTED DEBT-TO-PRO FORMA EBITDAre RATIO 4.52 Page 13 of 24


 
Acquisitions and Dispositions Through March 31, 2019 ($ in thousands) (Unaudited) ACQUISITIONS Purchase Date Property Name Location Size Price 1st Quarter None DISPOSITIONS Date Property Name Location Size Gross Sales Price Realized Gain 1st Quarter 01/29/19 World Houston 5 Houston, TX 51,000 SF $ 3,808 2,325 (1) (1) Included in Gain on sales of real estate investments on the Consolidated Statements of Income and Comprehensive Income; not included in FFO. Page 14 of 24


 
Real Estate Improvements and Leasing Costs (In thousands) (Unaudited) Three Months Ended March 31, REAL ESTATE IMPROVEMENTS 2019 2018 Upgrade on Acquisitions $ 297 5 Tenant Improvements: New Tenants 2,917 1,793 Renewal Tenants 500 602 Other: Building Improvements 849 1,000 Roofs 1,596 978 Parking Lots 8 725 Other 284 503 TOTAL REAL ESTATE IMPROVEMENTS (2) $ 6,451 5,606 CAPITALIZED LEASING COSTS (Principally Commissions) (1) Development and Value-Add $ 1,572 762 New Tenants 1,630 925 Renewal Tenants 667 1,305 TOTAL CAPITALIZED LEASING COSTS $ 3,869 2,992 (1) Included in Other Assets . (2) Reconciliation of Total Real Estate Improvements to Real Estate Improvements on the Consolidated Statements of Cash Flows: Three Months Ended March 31, 2019 2018 Total Real Estate Improvements $ 6,451 5,606 Change in Real Estate Property Payables (1,690) (419) Change in Construction in Progress 849 (29) Real Estate Improvements on the Consolidated Statements of Cash Flows $ 5,610 5,158 Page 15 of 24


 
Leasing Statistics and Occupancy Summary (Unaudited) Three Months Ended Number of Square Feet Weighted Rental Change Rental Change PSF Tenant PSF Leasing PSF Total March 31, 2019 Leases Signed Signed Average Term Straight-Line Basis Cash Basis Improvement (1) Commission (1) Leasing Cost (1) (In Thousands) (In Years) New Leases (2) 40 843 4.8 11.2% 2.5% $ 4.13 $ 2.22 $ 6.35 Renewal Leases 45 796 3.1 17.5% 8.5% 0.60 1.05 1.65 Total/Weighted Average 85 1,639 4.0 14.2% 5.3% $ 2.42 $ 1.65 $ 4.07 Per Year $ 0.61 $ 0.41 $ 1.02 Weighted Average Retention (3) 60.3% 03/31/19 12/31/18 09/30/18 06/30/18 03/31/18 Percentage Leased 97.7% 97.3% 97.1% 97.0% 97.0% Percentage Occupied 96.9% 96.8% 95.7% 96.4% 96.4% (1) Per square foot (PSF) amounts represent total amounts for the life of the lease, except as noted for the Per Year amounts. (2) Does not include leases with terms less than 12 months and leases for first generation space on properties acquired or developed by EastGroup. (3) Calculated as square feet of renewal leases signed during the quarter / square feet of leases expiring during the quarter (not including early terminations or bankruptcies). Page 16 of 24


 
Core Market Operating Statistics March 31, 2019   (Unaudited) Same Property PNOI Change Rental Change (excluding income from lease terminations) New and Renewal Leases (3) Total Lease Expirations QTR QTR Square Feet % Annualized % % in Square Feet Straight-Line Cash Straight-Line Cash of Properties of Total Base Rent (1) Leased Occupied 2019 (2) 2020 Basis Basis (4) Basis Basis (4) Florida Tampa 4,177,000 10.5% 9.8% 95.8% 95.8% 402,000 981,000 3.2% 1.9% 27.5% 18.3% Orlando 3,520,000 8.9% 9.5% 99.6% 99.3% 237,000 638,000 3.1% 6.2% 18.2% 5.1% Jacksonville 2,273,000 5.7% 4.4% 98.9% 97.1% 368,000 515,000 2.3% 4.6% 38.3% 24.0% Ft. Lauderdale 1,071,000 2.7% 3.3% 96.1% 94.5% 44,000 293,000 -8.1% -7.2% 12.9% 6.9% Ft. Myers 311,000 0.8% 1.0% 100.0% 100.0% 38,000 15,000 13.9% 12.9% 11.7% 8.2% 11,352,000 28.6% 28.0% 97.7% 97.2% 1,089,000 2,442,000 2.1% 3.1% 23.7% 12.6% Texas Dallas 3,728,000 9.4% 7.9% 99.2% 97.1% 74,000 601,000 2.5% 8.1% 13.2% 8.0% Houston 5,497,000 13.9% 14.4% 97.1% 97.1% 270,000 509,000 2.4% 1.8% -6.1% -13.2% San Antonio 3,042,000 7.7% 8.8% 97.1% 96.0% 297,000 463,000 4.5% 5.5% 12.1% 4.2% Austin 743,000 1.9% 2.3% 100.0% 100.0% 105,000 91,000 8.7% 9.1% 17.9% 12.4% El Paso 957,000 2.4% 1.7% 98.5% 97.3% 99,000 162,000 4.6% 1.8% 13.5% 4.7% 13,967,000 35.3% 35.1% 97.9% 97.0% 845,000 1,826,000 3.4% 4.5% 3.0% -4.0% California San Francisco 1,045,000 2.6% 3.4% 100.0% 100.0% 285,000 116,000 6.9% 10.5% N/A N/A Los Angeles (5) 2,323,000 5.9% 7.3% 100.0% 100.0% 10,000 189,000 2.5% 4.1% 44.0% 28.0% Fresno 398,000 1.0% 0.8% 100.0% 98.5% 107,000 126,000 9.4% 17.6% 26.1% 13.3% San Diego 581,000 1.5% 1.2% 96.7% 92.5% 33,000 15,000 4.9% 8.6% 18.0% 17.0% 4,347,000 11.0% 12.7% 99.6% 98.9% 435,000 446,000 4.4% 7.2% 39.2% 26.0% Arizona Phoenix 2,404,000 6.1% 6.3% 99.0% 99.0% 232,000 429,000 4.3% 7.0% 16.9% 4.6% Tucson 1,055,000 2.6% 2.5% 100.0% 100.0% 19,000 237,000 8.5% 4.7% N/A N/A 3,459,000 8.7% 8.8% 99.3% 99.3% 251,000 666,000 5.2% 6.4% 16.9% 4.6% Other Core Atlanta 779,000 2.0% 1.0% 73.0% 64.9% 19,000 73,000 -20.4% -32.0% -0.8% -5.5% Charlotte 3,131,000 7.9% 7.0% 100.0% 100.0% 254,000 598,000 5.8% 5.9% 20.3% 13.6% Denver 504,000 1.3% 1.7% 94.6% 94.6% 11,000 54,000 22.1% 12.6% 2.4% 2.1% Las Vegas 558,000 1.4% 1.7% 100.0% 100.0% 36,000 15,000 9.7% 10.9% N/A N/A 4,972,000 12.6% 11.4% 95.2% 94.0% 320,000 740,000 6.4% 4.5% 7.2% 2.4% Total Core Markets 38,097,000 96.2% 96.0% 97.8% 97.1% 2,940,000 6,120,000 3.7% 4.6% 15.0% 6.1% Total Other Markets (5) 1,504,000 3.8% 4.0% 94.2% 93.0% 203,000 172,000 3.1% 1.7% -0.1% -8.0% Total Operating Properties 39,601,000 100.0% 100.0% 97.7% 96.9% 3,143,000 6,292,000 3.7% 4.5% 14.2% 5.3% (1) Based on the Annualized Base Rent as of the reporting period for occupied square feet (without S/L Rent). (2) Square feet expiring during the remainder of the year, including month-to-month leases. (3) Does not include leases with terms less than 12 months and leases for first generation space on properties acquired or developed by EastGroup. (4) Excludes straight-line rent adjustments and amortization of above/below market rent intangibles. (5) Includes the Company's share of its less-than-wholly-owned real estate investments. Page 17 of 24


 
Lease Expiration Summary Total Square Feet of Operating Properties Based On Leases Signed Through March 31, 2019 ($ in thousands) (Unaudited) Annualized Current % of Total Base Rent of Base Rent of(Unaudited) Square Footage of % of Leases Expiring Leases Expiring LEASE EXPIRATION Leases Expiring Total SF (without S/L Rent) (without S/L Rent) Vacancy 913,000 2.3% $ - 0.0% 2019 - remainder of year (1) 3,143,000 7.9% 20,285 8.8% 2020 6,292,000 15.9% 37,853 16.3% 2021 7,296,000 18.4% 44,403 19.2% 2022 6,070,000 15.3% 37,067 16.0% 2023 4,627,000 11.7% 28,233 12.2% 2024 4,972,000 12.6% 26,237 11.3% 2025 2,220,000 5.6% 12,864 5.6% 2026 1,246,000 3.2% 8,090 3.5% 2027 848,000 2.1% 5,817 2.5% 2028 and beyond 1,974,000 5.0% 10,619 4.6% TOTAL 39,601,000 100.0% $ 231,468 100.0% (1) Includes month-to-month leases. Page 18 of 24


 
Top 10 Customers by Annualized Base Rent As of March 31, 2019 (Unaudited) % of Total # of Total SF % of Total Annualized(Unaudited) Customer Leases Location Leased Portfolio Base Rent (1) 1 The Chamberlain Group 2 Tucson, AZ 350,000 0.9% 1.1% 2 WNA Comet West, Inc. 1 Los Angeles, CA 411,000 1.0% 1.0% 3 Essendant Co. 1 Orlando, FL 404,000 1.0% 0.9% 4 Mattress Firm 1 Houston, TX 202,000 1 Tampa, FL 109,000 1 Jacksonville, FL 49,000 1 Ft. Myers, FL 25,000 1.0% 0.9% 5 Kuehne & Nagel, Inc. 2 Houston, TX 172,000 2 Charlotte, NC 106,000 0.7% 0.8% 6 Price Transfer 1 Los Angeles, CA 262,000 0.7% 0.8% 7 Iron Mountain Information 2 Tampa, FL 184,000 Management, Inc. 2 Phoenix, AZ 59,000 1 Ft. Lauderdale, FL 45,000 1 Jacksonville, FL 40,000 0.8% 0.7% 8 Medtronic Inc. 1 Santa Barbara, CA 82,000 0.2% 0.7% 9 U.S. Postal Service 1 Houston, TX 110,000 1 New Orleans, LA 99,000 2 Tampa, FL 59,000 0.7% 0.6% 10 Arizona Nutritional 2 Phoenix, AZ 228,000 0.6% 0.6% Supplements LLC 26 2,996,000 7.6% 8.1% (1) Calculation: Customer Annualized Base Rent as of 03/31/19 (without S/L Rent) / Total Annualized Base Rent (without S/L Rent). Page 19 of 24


 
Unconsolidated Investment Information ($ in thousands) (Unaudited) Property Industry Distribution Center II (Unaudited) Acquisition Date November 23, 2004 Percent Leased 100% Total Square Feet (100%) 309,000 Company Ownership 50% EastGroup's Basis in 50% Selected Financial Information Ownership Balance Sheet Information as of March 31, 2019 ASSETS Real estate properties $ 9,365 Less accumulated depreciation (1,877) 7,488 Other assets 465 TOTAL ASSETS $ 7,953 LIABILITIES AND EQUITY Other liabilities $ 74 Equity 7,879 TOTAL LIABILITIES AND EQUITY $ 7,953 EastGroup's Net Investment at March 31, 2019 $ 7,879 (1) EastGroup's 50% Ownership Three Months Ended March 31, 2019 2018 Income Statement Information Property NOI $ 244 217 Depreciation Expense (35) (31) (2) Equity in Earnings $ 209 186 Funds From Operations $ 244 217 (1) Presented as Unconsolidated investment on the Consolidated Balance Sheets. (2) Included in Other on the Consolidated Statements of Income and Comprehensive Income. Page 20 of 24


 
Financial Statistics ($ in thousands, except per share data) (Unaudited) Quarter Ended Years Ended 3/31/2019 2018 2017 2016 2015(Unaudited) ASSETS/MARKET CAPITALIZATION Assets $ 2,171,646 2,131,705 1,953,221 1,825,764 1,661,904 Equity Market Capitalization 4,103,022 3,348,269 3,071,927 2,461,251 1,802,957 (1) Total Market Capitalization (Debt and Equity) 5,227,006 4,458,037 4,183,620 3,566,865 2,835,194 Shares Outstanding - Common 36,752,260 36,501,356 34,758,167 33,332,213 32,421,460 Price per share $ 111.64 91.73 88.38 73.84 55.61 FFO CHANGE FFO per diluted share (2) $ 1.20 4.66 4.25 4.00 3.67 Change compared to same period prior year 5.3% 9.6% 6.3% 9.0% 6.1% COMMON DIVIDEND PAYOUT RATIO Dividend distribution $ 0.72 2.72 2.52 2.44 2.34 FFO per diluted share (2) 1.20 4.66 4.25 4.00 3.67 Dividend payout ratio 60% 58% 59% 61% 64% COMMON DIVIDEND YIELD Dividend distribution $ 0.72 2.72 2.52 2.44 2.34 Price per share 111.64 91.73 88.38 73.84 55.61 Dividend yield 2.58% 2.97% 2.85% 3.30% 4.21% FFO MULTIPLE FFO per diluted share (2) $ 1.20 4.66 4.25 4.00 3.67 Price per share 111.64 91.73 88.38 73.84 55.61 Multiple 23.26 19.68 20.80 18.46 15.15 INTEREST & FIXED CHARGE COVERAGE RATIOS EBITDAre $ 52,836 200,788 180,214 166,463 153,451 Interest expense 8,846 35,106 34,775 35,213 34,666 Interest and fixed charge coverage ratios 5.97 5.72 5.18 4.73 4.43 DEBT-TO-EBITDAre RATIO Debt $ 1,120,192 1,105,787 1,108,282 1,101,333 1,027,909 EBITDAre 52,836 200,788 180,214 166,463 153,451 Debt-to-EBITDAre ratio 5.30 5.51 6.15 6.62 6.70 Adjusted debt-to-pro forma EBITDAre ratio 4.52 4.73 5.45 6.05 6.12 DEBT-TO-TOTAL MARKET CAPITALIZATION (1) 21.5% 24.9% 26.6% 31.0% 36.4% (1) Before deducting unamortized debt issuance costs. (2) In connection with the Company's adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company's business and therefore adjusted the prior years results to conform to the updated definition of FFO. Page 21 of 24


 
Outlook for 2019 (Unaudited) Low Range High Range Q2 2019 Y/E 2019 Q2 2019 Y/E 2019(Unaudited) (In thousands, except per share data) Net income attributable to common stockholders $ 19,150 85,894 20,628 89,608 Depreciation and amortization 24,049 95,960 24,049 95,960 Gain on sales of real estate investments - (2,325) - (2,325) Funds from operations attributable to common stockholders $ 43,199 179,529 44,677 183,243 Diluted shares 36,939 37,131 36,939 37,131 Per share data (diluted): Net income attributable to common stockholders $ 0.52 2.31 0.56 2.41 Funds from operations attributable to common stockholders 1.17 4.84 1.21 4.94 The following assumptions were used for the mid-point: Revised Guidance for Initial Guidance Actual for Metrics Year 2019 for Year 2019 Year 2018 FFO per share $4.84 - $4.94 $4.79 - $4.89 $4.66 (1) FFO per share increase over prior year period (1) 4.9% 3.9% 9.6% Same PNOI growth (excluding income from lease terminations): Straight-line basis — annual same property pool 2.9% - 3.9% (2) 2.4% - 3.4% (2) 3.8% Cash basis — annual same property pool (3) 3.8% - 4.8% (2) 3.5% - 4.5% (2) 4.3% Average month-end occupancy 96.4% 96.2% 96.1% Lease termination fee income $765,000 $450,000 $294,000 Reserves for uncollectible rent $800,000 $900,000 $784,000 Development starts: Square feet 1.7 million 1.5 million 1.7 million Projected total investment $160 million $141 million $148 million Value-add property acquisitions $55 million None $14 million Operating property acquisitions $50 million $50 million $57 million Operating property dispositions (Potential gains on dispositions $45 million $47 million $23 million are not included in the projections) Unsecured debt closing in period $160 million at $140 million at $60 million at 4.5% weighted 4.8% weighted 3.93% average average interest interest rate rate Common stock issuances $145 million $60 million $159 million General and administrative expense $15.6 million $14.4 million $13.8 million (1) The Company initially reported FFO of $4.67 for the year 2018. In connection with the Company’s adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company’s business and therefore adjusted the prior year results, including the Company’s FFO for 2018, to conform to the updated definition of FFO. (2) Includes properties which have been in the operating portfolio since 1/1/18 and are projected to be in the operating portfolio through 12/31/19 (annual same property pool); includes 36,762,000 square feet. (3) Cash basis excludes straight-line rent adjustments and amortization of above/below market rent intangibles. Page 22 of 24


 
Glossary of REIT Terms Listed below are definitions of commonly used real estate investment trust (“REIT”) industry terms. For additional information on REITs, please see the National Association of Real Estate Investment Trusts (“Nareit”) web site at www.reit.com. (Unaudited) Adjusted Debt-to-Pro Forma EBITDAre Ratio: A ratio calculated by dividing a company’s adjusted debt by its pro forma EBITDAre. Debt is adjusted by subtracting the cost of development and value-add properties in lease-up or under construction. EBITDAre is further adjusted by adding an estimate of NOI for significant acquisitions as if the acquired properties were owned for the entire period, and by subtracting NOI from development and value-add properties in lease- up or under construction and from properties sold during the period. The Adjusted Debt-to-Pro Forma EBITDAre Ratio is a non-GAAP financial measure used to analyze the Company’s financial condition and operating performance relative to its leverage, on an adjusted basis, so as to normalize and annualize property changes during the period. Cash Basis: The Company adjusts its GAAP reporting to exclude straight-line rent adjustments and amortization of above/below market rent intangibles. Debt-to-EBITDAre Ratio: A ratio calculated by dividing a company’s debt by its EBITDAre; this non-GAAP measure is used to analyze the Company’s financial condition and operating performance relative to its leverage. Debt-to-Total Market Capitalization Ratio: A ratio calculated by dividing a company’s debt by the total amount of a company’s equity (at market value) and debt. Earnings Before Interest Taxes Depreciation and Amortization for Real Estate (“EBITDAre”): Earnings, defined as Net Income, excluding gains or losses from sales of real estate investments and non-operating real estate, plus interest, taxes, depreciation and amortization. EBITDAre is a non-GAAP financial measure used to measure the Company’s operating performance and its ability to meet interest payment obligations and pay quarterly stock dividends on an unleveraged basis. Funds From Operations (“FFO”): FFO is the most commonly accepted reporting measure of a REIT’s operating performance, and the Company computes FFO in accordance with standards established by Nareit in the Nareit Funds from Operations White Paper — 2018 Restatement. It is equal to a REIT’s net income (loss) attributable to common stockholders computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains and losses from sales of real estate property (including other assets incidental to the Company’s business) and impairment losses, adjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure used to evaluate the performance of the Company’s investments in real estate assets and its operating results. Industrial Properties: Generally consisting of four concrete walls tilted up on a slab of concrete. An internal office component is then added. Business uses include warehousing, distribution, light manufacturing and assembly, research and development, showroom, office, or a combination of some or all of the aforementioned. Leases Expiring and Renewal Leases Signed of Expiring Square Feet: Includes renewals during the period with terms commencing during the period and after the end of the period. Percentage Leased: The percentage of total leasable square footage for which there is a signed lease, including month-to- month leases, as of the close of the reporting period. Space is considered leased upon execution of the lease. Percentage Occupied: The percentage of total leasable square footage for which the lease term has commenced as of the close of the reporting period. Page 23 of 24


 
Glossary of REIT Terms (Continued) Property Net Operating Income (“PNOI”): Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company’s share of income and property operating(Unaudited) expenses from its less-than-wholly-owned real estate investments. PNOI is a non-GAAP, property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results. Real Estate Investment Trust: A company that owns and, in most cases, operates income-producing real estate such as apartments, shopping centers, offices, hotels and warehouses. Some REITs also engage in financing real estate. The shares of most REITs are freely traded, usually on a major stock exchange. To qualify as a REIT, a company must distribute at least 90 percent of its taxable income to its stockholders annually. A company that qualifies as a REIT is permitted to deduct dividends paid to its stockholders from its corporate taxable income. As a result, most REITs remit at least 100 percent of their taxable income to their stockholders and therefore owe no corporate federal income tax. Taxes are paid by stockholders on the dividends received. Most states honor this federal treatment and also do not require REITs to pay state income tax. Rental changes on new and renewal leases: Rental changes are calculated as the difference, weighted by square feet, of the annualized base rent due the first month of the new lease’s term and the annualized base rent of the rent due the last month of the former lease’s term. If free rent is given, then the first positive full rent value is used. Rental amounts exclude base stop amounts, holdover rent, and premium or discounted rent amounts. This calculation excludes leases with terms less than 12 months and leases for first generation space on properties acquired or developed by EastGroup. Same Properties: Operating properties owned during the entire current and prior year reporting periods. Properties developed or acquired are excluded until held in the operating portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods are excluded. • Quarterly Same Property Pool: Includes properties which were included in the operating portfolio for the entire period from January 1, 2018 through March 31, 2019. For first quarter results, the Quarterly Same Property Pool is the same as the Annual Same Property Pool. • Annual Same Property Pool: Includes properties which were included in the operating portfolio for the entire period from January 1, 2018 through March 31, 2019. Same Property Net Operating Income (“Same PNOI”): Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense), plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments, for the same properties owned by the Company during the entire current and prior year reporting periods. Same PNOI is a non-GAAP, property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results on a same property basis. Straight-Lining: The process of averaging the customer’s rent payments over the life of the lease. GAAP requires real estate companies to “straight-line” rents. Total Return: A stock’s dividend income plus capital appreciation over a specified period as a percentage of the stock price at the beginning of the period. Value-Add Properties: Properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. Page 24 of 24


 
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