EASTGROUP PROPERTIES INC

EastGroup Properties, Inc. is an internally-managed equity real estate investment trust (REIT) first organized in 1969, focused on the development, acquisition and operation of industrial properties in high-growth markets throughout the United States, primarily in the states of Texas, Florida, California, Arizona and North Carolina. The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. As of December 31, 2025, EastGroup owned 550 ¹ industrial properties in 12 states, and its portfolio, including development projects and value-add properties in lease-up and under construction, included approximately 65,000,000 ² square feet consisting of 510 ³ business distribution properties containing 59,300,000 ⁴ square feet, 19 ⁵ bulk distribution properties containing 4,900,000 ⁶ square feet, and 21 ⁷ business service properties containing 800,000 ⁸ square feet.

The market for the leasing of industrial real estate is competitive, and EastGroup experiences competition for tenants from existing properties in proximity to its buildings as well as from new development. Institutional investors, other REITs and local real estate operators generally own such properties; however, no single competitor or small group of competitors is dominant in its current markets. As of December 31, 2025, EastGroup's operating portfolio was 97.0% ⁹ leased to tenants in approximately 1,700 ¹⁰ leases, with no single tenant accounting for more than approximately 1.5% ¹¹ of the Company's annualized base rent for the year ended December 31, 2025. The properties in the Company's development and value-add program were 18.8% ¹² leased as of December 31, 2025.

EastGroup's primary source of revenue is rental income from business distribution space. The Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation features in supply-constrained submarkets in high-growth regions. Most of the Company's leases require the tenants to pay their pro rata share of operating expenses, including real estate taxes, insurance and common area maintenance, thereby reducing the Company's exposure to increases in operating expenses resulting from inflation or other factors. Additionally, most of the Company's leases include scheduled rent increases. The Company's core markets are in the states of Texas, Florida, California, Arizona and North Carolina.

During 2025, EastGroup increased its holdings in real estate properties through its acquisition and development programs. The Company acquired 739,000 ¹³ square feet of operating properties and 300.4 ¹⁴ acres of development land for a total of $261,683,000 ¹⁵. Also during 2025, the Company began construction of a redevelopment project and six development projects containing 1,439,000 ¹⁶ square feet and transferred 11 ¹⁷ projects, which contain 2,109,000 ¹⁸ square feet and had costs of $279,082,000 ¹⁹ at the date of transfer, from its development and value-add program to real estate properties. During 2025, EastGroup sold a 12,000 ²⁰ square foot operating property in San Francisco, generating gross sales proceeds of $3,573,000 ²¹.

During 2025, EastGroup executed leases on 9,270,000 ²² square feet of operating properties (15.1% ²³ of EastGroup's total square footage of 61,561,000 ²⁴ as of December 31, 2025). For new and renewal leases signed during 2025, average rental rates increased by 40.1% ²⁵ as compared to the former leases on the same spaces. On a diluted per share basis, Net Income Attributable to EastGroup Properties, Inc. Common Stockholders was $4.87 ²⁶ for the year ended December 31, 2025, compared to $4.66 ²⁷ for 2024, a 4.5% ²⁸ increase. Property Net Operating Income (PNOI) Excluding Income from Lease Terminations from same properties increased 7.0% ²⁹ for 2025 compared to 2024.

In May 2025, Moody's Ratings affirmed EastGroup's issuer rating of Baa2 ³⁰ and changed its rating outlook from stable to positive. During 2025, EastGroup sold, and subsequently settled the issuance of, 33,120 ³¹ shares of common stock directly through sales agents under its at-the-market (ATM) common stock offering programs at a weighted average price of $183.15 ³² per share, providing aggregate net proceeds to the Company of $6,005,000 ³³. During 2025, EastGroup entered into forward equity sale agreements with certain financial institutions acting as forward counterparties under its ATM programs with respect to 1,063,825 ³⁴ shares of common stock with an initial weighted average forward price of $181.89 ³⁵ per share. Also during 2025, the Company settled outstanding forward equity sale agreements that were previously entered into by issuing 1,449,078 ³⁶ shares of common stock in exchange for net proceeds of approximately $258,066,000 ³⁷. During 2025, EastGroup also closed $250,000,000 ³⁸ of unsecured debt with a weighted average effectively fixed interest rate of 4.13% ³⁹.

Net Income Attributable to EastGroup Properties, Inc. Common Stockholders for the year ended December 31, 2025 was $257,402,000 ⁴⁰ ($4.88 ⁴¹ per basic and $4.87 ⁴² per diluted share) compared to $227,751,000 ⁴³ ($4.67 ⁴⁴ per basic and $4.66 ⁴⁵ per diluted share) for 2024. Total revenues were $721,336,000 ⁴⁶ for 2025 compared to $640,234,000 ⁴⁷ for 2024. Net cash provided by operating activities was $480,734,000 ⁴⁸ for the year ended December 31, 2025. The Company distributed $302,507,000 ⁴⁹ in common stock dividends during 2025.

EastGroup's growth strategy is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets in high-growth regions, with core markets in Texas, Florida, California, Arizona and North Carolina. The Company generates new sources of leasing revenue through its acquisitions and also its development and value-add program. As of December 31, 2025, EastGroup's development and value-add program consisted of 17 ⁵⁰ projects (3,473,000 ⁵¹ square feet) located in 12 markets, with a projected total cost of $499,900,000 ⁵², of which $161,317,000 ⁵³ remained to be invested as of December 31, 2025. The Company mitigates risks associated with development through a Board-approved maximum level of land held for development and by adjusting development start dates according to leasing activity.

EastGroup's strategy for growth is also based on acquisitions. During 2025, the Company acquired 739,000 ⁵⁴ square feet of operating properties in three markets for a total of $143,099,000 ⁵⁵ and purchased 300.4 ⁵⁶ acres of development land in four markets for $118,584,000 ⁵⁷. The Company typically funds its development and acquisition programs through its $675,000,000 ⁵⁸ unsecured bank credit facilities. As market conditions permit, EastGroup issues equity and/or employs fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace short-term bank borrowings.

Most of the Company's leases require the tenants to pay their pro rata share of operating expenses, including real estate taxes, insurance and common area maintenance, thereby reducing the Company's exposure to increases in operating expenses resulting from inflation or other factors. Additionally, most of the Company's leases include scheduled rent increases. In the event inflation causes increases in the Company's general and administrative expenses, or higher interest rates increase the Company's cost of doing business, such increased costs would not be passed through to tenants and could adversely affect the Company's results of operations. The Company continues to monitor inflation and interest rates, as well as the uncertainty resulting from the overall regulatory and economic environment.

EastGroup believes its current operating cash flow and unsecured bank credit facilities provide the capacity to fund the operations of the Company, and the Company also believes it can issue common and/or preferred equity and obtain debt financing on currently acceptable terms. As of December 31, 2025, EastGroup had total immediate liquidity of approximately $654,574,000 ⁵⁹, comprised of $1,007,000 ⁶⁰ of cash and cash equivalents and $653,567,000 ⁶¹ of availability on our unsecured bank credit facilities.

During 2025, EastGroup closed $250,000,000 ⁶² of unsecured debt with a weighted average effectively fixed interest rate of 4.13% ⁶³. In January 2025, the Company refinanced a $100,000,000 ⁶⁴ senior unsecured term loan, reducing the credit spread by 30 ⁶⁵ basis points to a total effectively fixed interest rate of 4.97% ⁶⁶. In November 2025, the Company entered into amendments related to five senior unsecured term loans totaling $475,000,000 ⁶⁷, which reduced the credit spread by 10 ⁶⁸ basis points on each loan. As of February 11, 2026, $1,000,000,000 ⁶⁹ of common stock remains available to be sold under the Current ATM Program.

Economic uncertainty and stock market volatility continued during 2025 due to a number of factors, including persistent inflation, interest rate uncertainty, concerns about tariffs, supply chain or trade disruptions and geopolitical conflict. While these factors did not have a significant adverse impact on EastGroup's operations during 2025, they may adversely impact the Company in the future. Changes in trade policy, including the imposition, expansion or modification of tariffs on imported goods, could further increase costs for certain of the Company's tenants and could disrupt tenant inventory strategies, operating margins or expansion plans.

The Company's largest markets are Houston and Dallas. As of December 31, 2025, EastGroup owned operating properties totaling 7,108,000 ⁷⁰ square feet in Houston and 6,428,000 ⁷¹ square feet in Dallas, which represent 9.5% ⁷² and 10.9% ⁷³, respectively, of the Company's total Real estate properties based on percentage of total annualized base rent. A downturn in general economic conditions and local real estate conditions in these geographic regions, as a result of oversupply of or reduced demand for industrial properties, local business climate, business layoffs and changing demographics, would have a particularly strong adverse effect on the Company.

EastGroup faces significant risks associated with its geographic concentration, as substantially all of its properties are located in high-growth regions of the United States with an emphasis in the states of Texas, Florida, California, Arizona and North Carolina, and as of December 31, 2025, its largest markets were Houston and Dallas, representing 9.5% ⁷⁴ and 10.9% ⁷⁵ of total annualized base rent, respectively. The Company is subject to risks associated with the use of debt to fund acquisitions and developments, including refinancing risk, and as of December 31, 2025, had $18,845,000 ⁷⁶ variable rate debt outstanding not protected by interest rate hedge contracts. The Company also faces risks associated with property development, including construction costs exceeding original estimates due to tariffs or elevated interest rates, and as of December 31, 2025, the projected total cost for development and value-add projects was $499,900,000 ⁷⁷, of which $161,317,000 ⁷⁸ remained to be invested. Additionally, the Company may be unable to lease space on favorable terms or at all, and as of December 31, 2025, leases approximating 13.1% ⁷⁹ of the operating portfolio, based on a percentage of annualized base rent, were scheduled to expire in 2026.

Management's message emphasizes EastGroup's goal to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location-sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets in high-growth regions. Management highlights that during 2025, EastGroup executed leases on 9,270,000 ⁸⁰ square feet of operating properties, and for new and renewal leases signed during 2025, average rental rates increased by 40.1% ⁸¹ as compared to the former leases on the same spaces. On a diluted per share basis, Net Income Attributable to EastGroup Properties, Inc. Common Stockholders was $4.87 ⁸² for the year ended December 31, 2025, compared to $4.66 ⁸³ for 2024, a 4.5% ⁸⁴ increase. Property Net Operating Income (PNOI) Excluding Income from Lease Terminations from same properties increased 7.0% ⁸⁵ for 2025 compared to 2024. FFO attributable to common stockholders per diluted share was $8.98 ⁸⁶ for 2025 compared to $8.35 ⁸⁷ for 2024, an increase of 7.5% ⁸⁸. The strategic priorities emphasized include continuing the development and acquisition programs, maintaining a strong balance sheet with access to capital, and managing the portfolio to achieve high occupancy and rental rate growth.