Eastgroup Properties Raises Full-Year Guidance on Strong Rental Growth
The industrial real estate firm increased its full-year development starts guidance to 2.2 million square feet.
Eastgroup Properties (EGP) reported a rise in funds from operations and net income for the second quarter of 2026.
The industrial real estate developer raised its full-year outlook across several key metrics, including development starts and acquisition targets, following a quarter marked by significant rental rate increases.
Funds from operations, excluding gains on involuntary conversion and business interruption claims, rose 6.8% to $2.36 per diluted share. Net income attributable to common stockholders increased to $1.40 per diluted share from $1.20 per diluted share in the same period last year.
Growth was driven by a 10.6% increase in property net operating income, which reached $142.9 million. Same property net operating income, excluding lease terminations, rose 6.2% on a straight-line basis and 8.3% on a cash basis. These gains occurred despite a slight decline in average month-end occupancy, which fell to 95.6% from 95.9%.
Rental rates on new and renewal leases signed during the quarter increased an average of 34.1% on a straight-line basis. Eastgroup also recognized $5.2 million in gains from the sale of real estate investments, compared to no sales in the prior-year quarter.
Full-year 2026 guidance for FFO per share was raised to a range of $9.52 to $9.66. The company also increased its full-year same property net operating income growth guidance on a cash basis to a range of 6.3% to 7.3%.
Eastgroup increased its 2026 development starts guidance to 2.2 million square feet, up from 1.8 million square feet. The company also raised its full-year development starts projection to $325 million from the $265 million projected in April.
Operating property acquisition guidance for the year was increased to $215 million from $160 million.