Key Points
EastGroup Properties raised projected 2026 development starts to $390 million.
The company acquired five industrial properties for $320 million.
Roughly 15% of year-to-date new leasing activity was data-center-related.
On its third-quarter 2026 earnings call, held on Oct. 22, 2026, EastGroup Properties (NYSE:EGP) raised its 2026 funds from operations guidance, a core measure of real estate cash flow, to $9.65 per share. Steady Sun Belt demand continues to keep portfolio occupancy high across key distribution hubs. A resilient balance sheet enables management to deploy capital while competitors face tighter lending markets.
Three things management said stand out.
1. Shallow Bay Supply Constraints Drive Record Development Expansion
Rising construction costs and tighter borrowing terms are making ground-up construction harder for regional developers. EastGroup Properties is leveraging its entitled land bank to expand development starts to a planned $390 million.
Leasing momentum with the development pipeline gave us the confidence to increase our projected development starts to $390 million, which would be a new record for EastGroup.
-- Reid Dunbar, President
2. Tighter Capital Liquidity Opens Strategic Acquisition Windows
As higher interest rates pushed cap rates higher, or the annual cash return on a property purchase, weaker buyers withdrew from negotiations. EastGroup Properties stepped in to purchase $320 million in Sun Belt industrial assets at attractive yields.
Our strong financial position allowed us to take advantage of tighter liquidity in the capital markets. Each of these projects deepens our presence in existing markets, strengthening our platform over the long term.
-- Reid Dunbar, President
3. Diverse Demand Drivers Push Re-Leasing Spreads Higher
E-commerce growth, advanced manufacturing, and data center suppliers are driving tenant demand near end consumers. This broad activity helped the company complete 2.9 million square feet of second-generation leasing in the quarter.
The demand we're seeing for our properties is diverse and broad-based. That demand is supported by multiple tailwinds, including e-commerce, advanced manufacturing, and data center related uses.
-- Reid Dunbar, President
Looking Ahead
Industrial tenant demand remains steady across Sun Belt hubs, and management isn't hiding its satisfaction with current momentum. EastGroup Properties retains advantages in shallow bay locations, entitled land, and low leverage while watching pricing discipline.
Market demand has been steady for several consecutive quarters, and regardless of the environment, our goals are to drive FFO per share growth while raising portfolio quality.
-- Marshall Loeb, Chief Executive Officer
Geographic diversification and financial flexibility continue to support long-term compounding.
Our portfolio quality in terms of buildings and markets is continually improving. Our balance sheet is stronger than ever, and we are upgrading our diversity in both our tenant base as well as our geography.
-- Marshall Loeb, Chief Executive Officer
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