EastGroup Properties raises 2026 FFO outlook as quarterly FFO rises 7.9%

EastGroup Properties, Inc. (EGP) reported third-quarter net income attributable to common stockholders of $1.46 per diluted share on Wednesday, up from $1.26 a year earlier, the industrial real estate investment trust said in a filing.

Funds from operations, excluding a gain on involuntary conversion and business interruption claims, rose 7.9% to $2.45 per diluted share from $2.27. The results were furnished with a press release and supplemental financial information attached to the filing.

Here's how the company did:

• Net income per diluted share: $1.46 vs. $1.26 a year earlier
• FFO per diluted share, excluding the gain on involuntary conversion and business interruption claims: $2.45 vs. $2.27 a year earlier
• Total revenues: $199.4 million vs. $182.1 million a year earlier
• Property net operating income: $147.9 million vs. $134.4 million a year earlier

Property net operating income rose 10.1%, or $13.5 million, from a year earlier. The company attributed $6.8 million of the increase to same property operations, $4.2 million to newly developed and value-add properties and $3.2 million to 2025 and 2026 acquisitions.

Same property net operating income, excluding income from lease terminations, rose 5.3% on a straight-line basis and 7.1% on a cash basis. The operating portfolio was 97.3% leased and 96.5% occupied at Sept. 30, 2026. Average month-end occupancy was 96.1%, up from 95.7% a year earlier.

Rental rates on new and renewal leases increased an average of 36.3% on a straight-line basis.

“The team and the portfolio performed ahead of expectations this quarter and so far this year,” CEO Marshall Loeb said. “The leasing environment has been much more stable than headlines would lead one to expect.”

For the nine months, net income per diluted share was $4.63, up from $3.60. FFO excluding the gain was $7.11 per diluted share, up 7.6% from $6.61.

General and administrative expense was $6.3 million, up from $5.6 million, and interest expense was $9.6 million, up from $7.7 million, net of capitalized interest. The quarter included a $4.7 million gain on the sale of non-operating real estate, or 9 cents per diluted share, from the July sale of a 6.9-acre parcel in Miami for $14.25 million.

Acquisitions and development

In the third quarter, the company acquired two operating properties containing 531,000 square feet and 107 acres of development land for about $164 million. After quarter-end, it acquired three operating properties containing 1,031,000 square feet and 25 acres of development land for about $262 million.

The company began construction on four development projects and one redevelopment project totaling 998,000 square feet, with projected total costs of about $162 million. It also transferred a 113,000-square-foot development project in Orlando to the operating portfolio. The project was 100% leased as of Oct. 20, 2026.

President Reid Dunbar said: “Continued leasing momentum gave us the confidence to raise our development starts again, to $390 million for the year, and attractive opportunities allowed us to increase our acquisition guidance to $360 million.”

Dividend and balance sheet

The company declared a quarterly cash dividend of $1.75 per share, an increase of 20 cents, or 12.9%, over the previous quarter. It was paid Oct. 15, 2026, and is the company's 187th consecutive quarterly cash dividend. The annualized rate is $7.00 per share.

The company said it has increased or maintained its dividend for 34 consecutive years and increased it in 31 of those years, including each of the last 15 years.

During the quarter, the company entered into forward equity sale agreements for 2,402,931 shares at an initial weighted average forward price of $202.06 per share, totaling about $486 million. It received no proceeds from the forward purchasers' sales of common shares when it entered into the agreements. As of Oct. 20, it had 3,443,388 shares available for settlement before settlement periods expire between February 2027 and February 2028, for anticipated net sales of about $685 million at a weighted average forward price of $199.00 per share.

Debt was about $1.8 billion at Sept. 30, 2026, or 14.6% of total market capitalization. The company's annualized debt-to-EBITDAre ratio, where EBITDAre means earnings before interest, taxes, depreciation and amortization for real estate, was 3.2x for the quarter. After quarter-end, it repaid a $100 million senior unsecured term loan at maturity, which carried an effectively fixed interest rate of 1.98%.

2026 outlook

The company now expects 2026 FFO per diluted share attributable to common stockholders of $9.62 to $9.68, up from the July range of $9.52 to $9.66. Excluding the gain on involuntary conversion and business interruption claims, it expects $9.58 to $9.64, up from $9.48 to $9.62. It also estimates 2026 net income per diluted share of $5.99 to $6.05.

Other revised figures include cash-basis same property net operating income growth of 7.2% to 7.8%, up from 6.3% to 7.3%. Development starts are projected at $390 million, up from $325 million. Operating property acquisitions are projected at $360 million, up from $215 million. Operating property dispositions are projected at $44 million, down from $75 million. Gross capital proceeds are projected at $625 million, up from $300 million, assuming issuance of about 3,000,000 shares under its continuous common equity program in the fourth quarter. The projections exclude potential gains or losses on dispositions.

The company will discuss the results on a conference call on Thursday, Oct. 22, at 10 a.m. Eastern Time.