First Quarter 2024 Highlights Net Income Attributable to Common Stockholders of $1.22 Per Diluted Share for First Quarter 2024 Compared to $1.02 Per Diluted Share for First Quarter 2023 Funds from Operations ("FFO") Excluding Gain on Involuntary Conversion and Business Interruption Claims of $1.98 Per Share for First Quarter 2024 Compared to $1.82 Per Share for First Quarter 2023, an Increase of 8.8% Same Property Net Operating Income for the Same Property Pool Excluding Income From Lease Terminations Increased 4.9% on a Straight-Line Basis and 7.7% on a Cash Basis for First Quarter 2024 Compared to the Same Period in 2023 Operating Portfolio was 98.0% Leased and 97.7% Occupied as of March 31, 2024; Average Occupancy of Operating Portfolio was 97.5% for First Quarter 2024 as Compared to 98.1% for First Quarter 2023 Rental Rates on New and Renewal Leases Increased an Average of 57.8% on a Straight-Line Basis Acquired One Operating Property Containing 231,000 Square Feet for Approximately $55 Million Acquired 34.3 Acres of Development Land for Approximately $3 Million Started Construction of Two Development Projects Totaling 388,000 Square Feet with Projected Total Costs of Approximately $52 Million Transferred One Development Project, which Contains 133,000 Square Feet and is 100% Leased, to the Operating Portfolio Sold a Portfolio of Operating Properties in the Jackson, MS Market Totaling 159,000 Square Feet for Approximately $14 Million (Gains of $9 Million Not Included in FFO) JACKSON, Miss., April 23, 2024 /PRNewswire/ -- EastGroup Properties, Inc. (NYSE:EGP) (the "Company", "we", "us" or "EastGroup") announced today the results of its operations for the three months ended March 31, 2024. Commenting on EastGroup's performance, Marshall Loeb, CEO, stated, "Our strong performance continues as evidenced by FFO per share rising 8.8% for the quarter excluding an involuntary conversion in first quarter 2023. The industrial market remained resilient, producing a number of other strong metrics, such as our percent leased, same store net operating income growth, and quarterly releasing spreads. The continued economic uncertainty is creating several outcomes, such as longer leasing deliberations among our customers and multiple consecutive quarters of significantly declining market construction starts. Long term, I remain bullish on the continuing external secular trends which benefit our shallow bay, last mile Sunbelt market portfolio." EARNINGS PER SHARE Three Months Ended March 31, 2024On a diluted per share basis, earnings per common share ("EPS") were $1.22 for the three months ended March 31, 2024, compared to $1.02 for the same period of 2023. The increase in EPS was primarily due to the following: The Company's property net operating income ("PNOI") increased by $13,293,000 ($0.28 per share) for the three months ended March 31, 2024, as compared to the same period of 2023. EastGroup recognized gains on sales of real estate investments of $8,751,000 ($0.18 per share) during the three months ended March 31, 2024, compared to $4,809,000 ($0.11 per share) during the three months ended March 31, 2023. Interest expense decreased by $2,964,000 ($0.06 per share) during the three months ended March 31, 2024, as compared to the same period of 2023. The increase in EPS was partially offset by the following: Depreciation and amortization expense increased by $4,155,000 ($0.09 per share) during the three months ended March 31, 2024, as compared to the same period of 2023. Weighted average shares increased by 4,138,000 on a diluted basis during the three months ended March 31, 2024, as compared to the same period of 2023. FUNDS FROM OPERATIONS AND PROPERTY NET OPERATING INCOME Three Months Ended March 31, 2024For the three months ended March 31, 2024, funds from operations attributable to common stockholders ("FFO") were $1.98 per share compared to $1.84 per share during the same period of 2023, an increase of 7.6%. FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims was $1.98 per share for the three months ended March 31, 2024 compared to $1.82 per share for the same period of 2023, an increase of 8.8%. PNOI increased by $13,293,000, or 13.6%, during the three months ended March 31, 2024 compared to the same period of 2023. PNOI increased $5,516,000 from newly developed and value-add properties, $4,843,000 from same property operations (based on the same property pool) and $3,397,000 from 2023 and 2024 acquisitions, and decreased $493,000 from operating properties sold in 2023 and 2024. Same PNOI Excluding Income from Lease Terminations increased 4.9% on a straight-line basis for the three months ended March 31, 2024 compared to the same period of 2023; on a cash basis (excluding straight-line rent adjustments and amortization of above/below market rent intangibles), Same PNOI increased 7.7%.  On a straight-line basis, rental rates on new and renewal leases (representing 3.6% of our total square footage) increased an average of 57.8% during the three months ended March 31, 2024. The same property pool for the three months ended March 31, 2024 includes properties which were included in the operating portfolio for the entire period from January 1, 2023 through March 31, 2024; this pool is comprised of properties containing 51,668,000 square feet. FFO, FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims, 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 Same PNOI, and Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO and FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims are presented in the attached schedule "Reconciliations of GAAP to Non-GAAP Measures." ACQUISITIONS AND DISPOSITIONS In January 2024, EastGroup acquired Spanish Ridge Industrial Park, which consists of three recently developed business distribution buildings totaling 231,000 square feet, for $54,859,000. The buildings are located in the Southwest submarket of Las Vegas and are 100% leased. This acquisition increased the Company's ownership in Las Vegas to approximately 1,395,000 square feet, which is currently 95.3% leased. Also in January, the Company acquired Brightstar Land, a 34.3 acre parcel of development land in the I-20 West submarket of Atlanta for $3,302,000. This site will accommodate the planned future development of two buildings containing approximately 315,000 square feet. During the three months ended March 31, 2024, EastGroup sold a portfolio of properties in the Jackson, MS market in an effort to recycle capital into higher performing markets. The properties total 159,000 square feet and were sold for $14,050,000 resulting in gains of $8,751,000. These gains are included in Gain on sales of real estate investments and are excluded from FFO. Also, during March 2024, the Company sold a small parcel of land in San Francisco, which was obtained during the acquisition of Tulloch Corporation during 2022 and is located in a submarket which is not a target location for EastGroup. The 3.9 acre parcel was sold for $4,000,000. A gain of $222,000 was generated, which is included in Other on the Consolidated Statements of Income and Comprehensive Income and is excluded from FFO. EastGroup has entered into an agreement to purchase a 275,000 square foot newly constructed industrial property in Raleigh for approximately $54,000,000. This property, which is 100% leased, represents the Company's entry into the Raleigh-Durham market, which has been a target market for EastGroup for several years. DEVELOPMENT AND VALUE-ADD PROPERTIES During the first quarter of 2024, EastGroup began construction of two new development projects in San Antonio and Tampa, which will contain a total of 388,000 square feet and have projected total costs of $52,100,000. The development projects started during 2024 are detailed in the table below: Development Projects Started in 2024 Location Size AnticipatedConversion Date ProjectedTotal Costs (Square feet) (In thousands) Northeast Trade Center 1 San Antonio, TX 264,000 04/2025 $ 32,100 Crossroads 1 Tampa, FL 124,000 10/2025 20,000    Total Development Projects Started 388,000 $ 52,100 At March 31, 2024, EastGroup's development and value-add program consisted of 19 projects (4,332,000 square feet) in 13 markets. The projects, which were collectively 29% leased as of April 22, 2024, have a projected total cost of $611,200,000, of which $203,816,000 remained to be funded as of March 31, 2024. During the first quarter of 2024, EastGroup transferred one project to the operating portfolio. The project, known as Gateway 2, is located in Miami, contains 133,000 square feet and is 100% leased as of April 22, 2024. The development and value-add properties transferred to the operating portfolio during 2024 are detailed in the table below: Development and Value-Add Properties Transferred to theOperating Portfolio in 2024 Location Size ConversionDate CumulativeCost as of 3/31/24 Percent Leased asof 4/22/24 (Square feet) (In thousands) Gateway 2 Miami, FL 133,000 02/2024 $ 22,228 100 % Projected Stabilized Yield(1) 8.5 % (1) Weighted average yield based on projected stabilized annual property net operating income on a straight-line basis at 100% occupancy divided by projected total costs. DIVIDENDS EastGroup declared a cash dividend of $1.27 per share in the first quarter of 2024. The first quarter dividend, which was paid on April 15, 2024, was the Company's 177th consecutive quarterly cash distribution to shareholders.  The Company has increased or maintained its dividend for 31 consecutive years and has increased it 28 years over that period, including increases in each of the last 12 years.  The annualized dividend rate of $5.08 per share yielded 3.1% on the closing stock price of $163.34 on April 22, 2024. FINANCIAL STRENGTH AND FLEXIBILITY EastGroup continues to maintain a strong and flexible balance sheet.  Debt-to-total market capitalization was 16.3% at March 31, 2024.  The Company's interest and fixed charge coverage ratio was 10.43x for the three months ended March 31, 2024. The Company's ratio of debt to earnings before interest, taxes, depreciation and amortization for real estate ("EBITDAre") was 3.99x for the three months ended March 31, 2024. EBITDAre and the Company's interest and fixed charge coverage ratio are non-GAAP financial measures defined under Definitions later in this release. Refer to the schedule "Reconciliations of GAAP to Non-GAAP Measures" attached for the calculation of the Company's interest and fixed charge coverage ratio, the debt to EBITDAre ratio, and the reconciliation of Net Income to EBITDAre. During the three months ended March 31, 2024, the Company entered into forward equity sales agreements with respect to 286,671 shares of common stock with an initial weighted average forward price of $181.95 per share. The Company did not receive any proceeds from the sale of common shares by the forward purchasers at the time it entered into forward equity sale agreements. During the first quarter, EastGroup settled outstanding forward equity sale agreements that were previously entered into under its continuous common equity offering program by issuing 272,342 shares of common stock in exchange for net proceeds of approximately $49,294,000. Subsequent to quarter-end, the Company settled additional outstanding forward equity sale agreements by issuing 133,699 shares of common stock in exchange for approximate net proceeds of $24,496,000. As of April 22, 2024, EastGroup has 286,671 shares of common stock available for settlement prior to the expiration of the applicable settlement period, ranging from February 2025 through April 2025, for approximate net proceeds of $51,600,000, based on a weighted average forward price of $180.00 per share. During the three months ended March 31, 2024, the Company only utilized the forward component of its continuous common equity program as noted above, and did not sell any shares of its common stock directly through sales agents. OUTLOOK FOR 2024 We estimate EPS for 2024 to be in the range of $4.45 to $4.65 and FFO per share attributable to common stockholders for 2024 to be in the range of $8.17 to $8.37. The table below reconciles projected net income attributable to common stockholders to projected FFO. The Company is providing a projection of estimated net income attributable to common stockholders solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission. EastGroup's projections are based on management's current beliefs and assumptions about our business, the industry and the markets in which we operate; there are known and unknown risks and uncertainties associated with these projections. We assume no obligation to update publicly any forward-looking statements, including our Outlook for 2024, whether as a result of new information, future events or otherwise. Please refer to the "Forward-Looking Statements" disclosures included in this earnings release and "Risk Factors" disclosed in our annual and quarterly reports filed with the Securities and Exchange Commission for more information. The following table presents the guidance range for 2024: Low Range High Range Q2 2024 Y/E 2024 Q2 2024 Y/E 2024 (In thousands, except per share data) Net income attributable to common stockholders $ 49,773 216,899 53,641 226,638 Depreciation and amortization 46,540 189,671 46,540 189,671 Gain on sales of real estate investments and non-operating real estate — (8,973) — (8,973) Funds from operations attributable to common stockholders* $ 96,313 397,597 100,181 407,336 Weighted average shares outstanding - Diluted 48,342 48,695 48,342 48,695 Per share data (diluted):    Net income attributable to common stockholders $ 1.03 4.45 1.11 4.65    Funds from operations attributable to common stockholders 1.99 8.17 2.07 8.37 *This is a ...