As part of its expansion efforts, EastGroup Properties (EGP – Free Report) acquired four industrial properties in Phoenix in December, boosting its portfolio in the region to around 3.5 million square feet with 98.6% being leased. In effect, shares of the company ended marginally higher on Dec. 31, 2024.
The property under consideration, Akimel Gateway, was developed in 2022 and spans around 519,000 square feet in Southeast Phoenix. It is 100% leased to four tenants and was acquired for $83 million.
In November, EGP purchased DFW Global Logistics Centre 5-8, in the Dallas market, consisting of four fully leased industrial buildings, for roughly $76 million. The property, spanning about 492,000 square feet, is an extension to the company’s existing portfolio of 1-4 buildings in the said market, bringing the total ownership to 2.7 million square feet with 99.3% being leased.
Per Marshall Loeb, EastGroup’s CEO, “We are happy to end the year with two newer, fully leased, state of the art properties located within existing submarkets. This clustering of assets allows us greater flexibility to accommodate our tenants’ growth needs long term.”
EGP’s Recent Acquisitions
In November, the company acquired Riverpoint Industrial Park in Atlanta for around $88 million. With this, the REIT’s portfolio in the said region reached around 2.2 million square feet, with 98.1% being leased. EGP’s expansion efforts in the resilient Sunbelt, shallow bay industrial market seem a strategic fit.
In October, the company purchased roughly 26 acres of development land, referred to as Station 24 Commerce Center Land, in the Nashville market for around $10.1 million. The site is planned to support the future construction of four buildings, aggregating roughly 350,000 square feet.
Final Words on EGP Stock
EastGroup develops, acquires and operates industrial properties and focuses on properties in major Sunbelt markets throughout the United States, emphasizing assets in Florida, Texas, Arizona, California and North Carolina. EGP targets providing functional, flexible and quality business distribution space for location-sensitive customers, mainly in the 20,000-100,000 square foot range in its markets.
With its strategy of owning high-quality distribution facilities clustered near major transportation features, EastGroup is expected to benefit. However, concerns arise with demand remaining somewhat choppy and supply remaining high in the industrial real estate market.
Carrying a Zacks Rank #3 (Hold), this industrial REIT has declined 5.4% over the past month compared with the industry’s fall of 8.3%.
Analysts seem positive on this stock, with the Zacks Consensus Estimate for its 2024 funds from operations (FFO) per share being raised marginally over the past two months to $8.34, indicating a projected increase of 7% year over year. The same for 2025 stands at $8.97, suggesting growth of 7.6% year over year.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Crown Castle Inc. (CCI – Free Report) and Cousins Properties (CUZ – Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Crown Castle Inc.’s 2024 FFO per share has been raised marginally over the past two months to $7.
The Zacks Consensus Estimate for Cousins Properties’ current-year FFO per share has moved marginally north in the past two months to $2.68.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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