EastGroup Lifts 2026 Development Starts to $390 Million

The Tip Desk · October 26, 2026 · 3 min read

FFO excluding gains on involuntary conversion and business interruption claims was $2.45 a share, up 7.9% from a year earlier, as the company raised full-year FFO guidance to $9.62–$9.68.

EastGroup Properties (EGP), the industrial real estate investment trust, raised its 2026 development-start target to $390 million and 2.5 million square feet from the $325 million and 2.2 million square feet it had given in July, and lifted operating-property acquisition guidance to $360 million from $215 million.

President Reid Dunbar said continued leasing momentum gave the company confidence to raise development starts again, and that attractive opportunities allowed it to increase acquisition guidance. Full-year FFO per share guidance moved to $9.62–$9.68 from $9.52–$9.66, implying 7.5% growth versus 6.8% previously. Same-property PNOI cash-basis growth guidance was raised to 7.2%–7.8% from 6.3%–7.3%.

For the three months ended September 30, 2026, FFO excluding gain on involuntary conversion and business interruption claims was $2.45 a diluted share, up 7.9% from $2.27 a year earlier, after a 6.8% year-over-year increase to $2.36 in the second quarter. Net income attributable to common stockholders was $1.46 a diluted share. Property net operating income was $147.89 million, or $2.75 a diluted share.

Same-property net operating income, excluding income from lease terminations, increased 5.3% on a straight-line basis and 7.1% on a cash basis versus the same period in 2025, after 6.2% straight-line and 8.3% cash growth in the second quarter. Same-property average occupancy was 96.9%. The same-property average rental rate was $9.46 a square foot.

Average month-end occupancy of the operating portfolio was 96.1%, versus 95.6% in the second quarter. The portfolio was 97.3% leased and 96.5% occupied as of September 30, 2026. Rental rates on new and renewal leases signed in the third quarter, representing 4.6% of the operating portfolio’s square footage, increased an average of 36.3% on a straight-line basis, after a 34.1% average increase in the second quarter.

Chief executive Marshall Loeb said the team and the portfolio performed ahead of expectations this quarter and so far this year, and that the leasing environment had been more stable than headlines would suggest.

During the third quarter EastGroup started construction of four development projects and one redevelopment totaling 998,000 square feet with projected costs of about $162 million, and transferred a 113,000-square-foot Orlando project to the operating portfolio; the project was 100% leased as of October 20, 2026. At September 30 the development and value-add program consisted of 21 projects totaling 4.061 million square feet in 14 markets, 25% leased as of October 20, with a projected total cost of $636.7 million.

In the quarter the company acquired two operating properties containing 531,000 square feet and 107 acres of development land for about $164 million. Subsequent to quarter-end it closed three operating properties totaling 1,031,000 square feet and 25 acres of land for about $262 million. Subsequent to September 30 it also repaid a $100 million senior unsecured term loan at maturity.

EastGroup entered forward equity sale agreements for about $486 million at an initial weighted average forward price of $202.06 a share. As of October 20, 3,443,388 shares remained available for settlement for anticipated net sales of about $685.2 million at a weighted average forward price of $199.00. Debt-to-total market capitalization was 14.6% at September 30.

The company declared a cash dividend of $1.75 a share, a 12.9% increase and its 187th consecutive quarterly cash distribution. It now estimates 2026 EPS of $5.99 to $6.05.