EastGroup Properties, Inc.

Reported Q2 2026 FFO was $2.36 per share, above the guidance midpoint and up 6.8% from Q2 2025. Year-to-date FFO per share is up 7.6%. Quarter-end leasing was 96.8% and occupancy was 95.6%; average quarterly occupancy was 95.6%, down 30 basis points from Q2 2025, while same-store occupancy was 96.9%. Cash same-store NOI increased 8.3% in the quarter and 8.8% year to date; leasing spreads were 34% GAAP and 19% cash for the quarter, and 35% GAAP and 19% cash year to date. Guidance was raised to $2.37-$2.45 for Q3 FFO and $9.59 for full-year 2026 FFO, up $0.03 at the midpoint and implying 6.8% growth over 2025 actual results. Same-property cash NOI guidance midpoint was raised by 60 basis points to 6.8%, same-property occupancy guidance moved to 96.7%, and average month-end portfolio occupancy guidance to 95.7%. Development starts guidance increased to $325 million from prior assumptions, and acquisition guidance increased to $215 million; gross capital proceeds guidance remained $300 million. The company ended the quarter with no balance drawn on its secured bank credit facility and $675 million of available capacity.

Marshall Loeb struck an upbeat tone, calling the quarter strong and pointing to portfolio quality, industrial market strength, and a long-term pattern of FFO growth. He emphasized that demand is gaining momentum, that the company is benefiting from secular trends like population migration, near-shoring/on-shoring, and data center supplier demand, and that EastGroup is improving tenant and geographic diversity. He also said the company’s balance sheet is stronger than ever and that the goal is to keep growing FFO while raising portfolio quality and NAV.

Staci Tyler said Q2 FFO of $2.36 per share beat the midpoint and was driven mainly by higher-than-expected same-property NOI and occupancy. She highlighted a strong balance sheet: no borrowings on the secured bank credit facility, $675 million of capacity, debt-to-market cap of 12.9%, debt-to-EBITDA of 3x, and interest/fixed charge coverage of 15.1x. She raised full-year 2026 FFO midpoint to $9.59, lifted same-property NOI guidance midpoint to 6.8%, increased same-store occupancy guidance to 96.7%, and boosted development starts to $325 million and acquisition guidance to $215 million, while noting $210 million of forward equity sale agreements remain available at over $201 per share.

Analysts focused on data center-related leasing, development timing delays, the balance between buying and developing, cash rent spread normalization, and whether guidance could have been raised more aggressively. Management said data center-related tenants represented about 40% of first-quarter development leasing and 20% in the second quarter, describing it as an early-stage demand driver but noting EastGroup is not building tenant-specific assets. On development timing, they cited longer permitting, construction lead times, and equipment delays, which push NOI contribution later even when leasing is strong. On guidance, management said it narrowed the range and raised the midpoint because much of the newly signed development leasing will likely benefit 2027 more than 2026, and because they want a more accurate range as the year progresses.