EastGroup Properties Expands Portfolio with Recent Acquisitions in Key Locations

EastGroup Properties Expands Portfolio with Recent Acquisitions

EastGroup Properties, Inc. (NYSE: EGP) has been active in the market this past November and December, enhancing its industrial real estate holdings significantly. The company’s strategic moves come at a time when demand for logistical space is surging in key regions across the United States.

The Acquisitions

In November, EastGroup finalized the acquisition of DFW Global Logistics Centre 5-8, a collection of four multi-tenant distribution buildings that span a substantial 492,000 square feet. This acquisition was secured for approximately $76 million and is notable for being 100% leased to 13 different tenants. Not only does this acquisition add valuable property to EastGroup's portfolio, but it also increases the company’s total ownership in the Dallas-Fort Worth Airport submarket to nearly 2,679,000 square feet, maintaining an impressive occupancy rate of 99.3%.

Following closely, in December, EastGroup further broadened its footprint by acquiring Akimel Gateway, which consists of four modern industrial buildings covering 519,000 square feet in Southeast Phoenix, all of which are also fully leased. This purchase cost around $83 million, pushing EastGroup's holdings in Phoenix up to approximately 3,518,000 square feet, with a similarly high occupancy rate of 98.6%.

Strategic Commentary

Marshall Loeb, the CEO of EastGroup, expressed his contentment with these acquisitions, stating, “We are happy to end the year with two newer, fully leased, state-of-the-art properties located within existing submarkets. This clustering of assets allows us greater flexibility to accommodate our tenants' growth needs long term.” This statement underscores EastGroup's strategy of acquiring properties that not only add immediate value but are also positioned for future growth.

Financial Performance

In addition to these acquisitions, EastGroup has demonstrated robust financial activity during the fourth quarter of 2024. The company sold a substantial 914,780 shares of common stock through its continuous common equity offering program at an average price of $174.23 per share. This move generated approximately $158 million in net proceeds.

Moreover, EastGroup entered into forward equity sale agreements encompassing 690,953 shares with a weighted average forward price of $175.05, potentially raising around $121 million. The fourth quarter also saw the settlement of previously established equity sale agreements, resulting in the issuance of 1,704,863 shares and net proceeds of about $305.5 million.

About EastGroup Properties

For those unfamiliar with EastGroup Properties, it is a self-administered equity real estate investment trust (REIT) specializing in the development and management of industrial properties. The company focuses on prime Sunbelt markets in areas like Florida, Texas, Arizona, California, and North Carolina. EastGroup aims to maximize shareholder value by providing high-quality distribution spaces tailored to location-sensitive customers, generally ranging from 20,000 to 100,000 square feet. Currently, EastGroup’s portfolio, including ongoing development projects, comprises approximately 63.1 million square feet of properties that are strategically located near major transportation links in supply-constrained markets.

With these recent acquisitions, EastGroup Properties has not only solidified its presence in critical logistics markets but has also set the stage for future growth in an ever-expanding sector. These strategic moves highlight EastGroup's commitment to enhancing its portfolio amid increasing demands for operational space in key locations across the United States.