What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-23 compared with 2025-04-23 · 182 added, 125 removed, 314 unchanged (49% of the section changed)

9 unchanged sentences

The following are some, but not all, of the risks, uncertainties and other factors that could cause the Company’s actual results to differ materially from those presented in the Company’s forward-looking statements (the Company refers to itself as “we,” “us” or “our” in the following):

• international, national, regional and local economic conditions;

• international, national, regional and local economic conditions and conflicts;

• the competitive environment in which the Company operates;

28 unchanged sentences

The Company’s core markets are in the states of Texas, Florida, California, Arizona and North Carolina.

As of March 31, 2025, EastGroup owned 536 industrial properties in 12 states.

As of June 30, 2025, EastGroup owned 539 industrial properties in 12 states.

As of that same date, the Company’s portfolio, including development projects and value-add properties in lease-up and under construction, included approximately 63,600,000 square feet consisting of 501 business distribution properties containing 58,300,000 square feet, 17 bulk distribution properties containing 4,400,000 square feet, and 21 business service properties containing 900,000 square feet.

During the three months ended March 31, 2025, economic uncertainty and stock market volatility continued 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 during the three months ended March 31, 2025, they may adversely impact the Company in the future.

During the six months ended June 30, 2025, economic uncertainty and stock market volatility continued 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 during the six months ended June 30, 2025, they may adversely impact the Company in the future.

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.

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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.

During the three months ended March 31, 2025, EastGroup sold, and subsequently settled the issuance of, 33,120 shares of common stock directly through sales agents under its at-the-market (“ATM”) common stock offering program at a weighted average price of $183.15 per share, providing aggregate net proceeds to the Company of $6,005,000.

During the three months ended March 31, 2025, EastGroup entered into forward equity sale agreements with certain financial institutions acting as forward counterparties under its ATM common stock offering program with respect to 1,043,871 shares of common stock with an initial weighted average forward price of $182.02 per share.

During the six months ended June 30, 2025, EastGroup sold, and subsequently settled the issuance of, 33,120 shares of common stock directly through sales agents under its at-the-market (“ATM”) common stock offering program at a weighted average price of $183.15 per share, providing aggregate net proceeds to the Company of $6,005,000.

During the six months ended June 30, 2025, EastGroup entered into forward equity sale agreements with certain financial institutions acting as forward counterparties under its ATM common stock offering program with respect to 1,063,825 shares of common stock with an initial weighted average forward price of $181.89 per share.

The Company did not receive any proceeds from the sale of common shares by the forward counterparties at the time we entered into forward equity sale agreements.

Also during the three months ended March 31, 2025, the Company settled outstanding forward equity sale agreements that were previously entered into by issuing 385,253 shares of common stock in exchange for net proceeds of approximately $66,902,000.

Also during the six months ended June 30, 2025, the Company settled outstanding forward equity sale agreements that were previously entered into by issuing 801,320 shares of common stock in exchange for net proceeds of approximately $141,000,000.

Additionally, on June 13, 2024, the Company amended its unsecured bank credit facilities to extend the maturity date by three years to July 31, 2028.

1 unchanged sentence

The Company’s primary source of revenue is rental income.

During the three months ended March 31, 2025, EastGroup executed new and renewal leases on 2,594,000 square feet (representing 4.4% of the operating portfolio’s total square footage of 59,101,000).

For new and renewal leases signed during the first three months of 2025, average rental rates increased by 46.9%, as compared to the former leases on the same spaces.

During the six months ended June 30, 2025, EastGroup executed new and renewal leases on 4,532,000 square feet (representing 7.6% of the operating portfolio’s total square footage of 59,873,000).

For new and renewal leases signed during the first six months of 2025, average rental rates increased by 45.8%, 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 $1.14 for the three months ended March 31, 2025, compared to $1.22 for the same period of 2024, a 6.6% decrease.

Common Stockholders was $2.35 for the six months ended June 30, 2025, compared to $2.37 for the same period of 2024, a 0.8% decrease.

See the Company’s analysis of performance trends below for further details.

Property Net Operating Income (“PNOI”) Excluding Income from Lease Terminations from same properties (defined as operating properties owned during the entire period from January 1, 2024 through March 31, 2025), increased 5.3% for the three months ended March 31, 2025, as compared to the same period in 2024.

EastGroup’s operating portfolio was 97.3% leased and 96.5% occupied as of March 31, 2025, compared to 98.0% and 97.7%, respectively, at March 31, 2024.

As of April 22, 2025, the operating portfolio was 96.9% leased and 95.9% occupied.

As of March 31, 2025, leases approximating 6.9% of the operating portfolio, based on a percentage of annualized based rent, were scheduled to expire during the remainder of 2025.

This percentage was reduced to 5.8% as of April 22, 2025.

Property Net Operating Income (“PNOI”), Excluding Income from Lease Terminations, from same properties (defined as operating properties owned during the entire period from January 1, 2024 through June 30, 2025), increased 5.9% for the six months ended June 30, 2025, as compared to the same period in 2024.

EastGroup’s operating portfolio was 97.1% leased and 96.0% occupied as of June 30, 2025, compared to 97.4% and 97.1%, respectively, at June 30, 2024.

As of July 22, 2025, the operating portfolio was 96.6% leased and 95.3% occupied.

As of June 30, 2025, leases approximating 4.6% of the operating portfolio, based on a percentage of annualized based rent, were scheduled to expire during the remainder of 2025.

This percentage was reduced to 3.4% as of July 22, 2025.

The Company generates new sources of leasing revenue through its acquisitions and also its development and value-add program.

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.

During the three months ended March 31, 2025, EastGroup began construction of a redevelopment project, containing 262,000 square feet in Los Angeles.

EastGroup also transferred two development projects (375,000 square feet) in two markets from Development and value-add propertie s to Real estate properties , with costs of $43,018,000 at the date of transfer.

As of March 31, 2025, EastGroup’s development and value-add program consisted of 20 projects (4,030,000 square feet) located in 14 markets.

The projected total investment for the development projects, which were collectively 25.2% leased as of April 22, 2025, is $573,200,000, of which $142,876,000 remained to be invested as of March 31, 2025.

There were no operating property acquisitions, value-add property acquisitions or dispositions during the three months ended March 31, 2025.

During the six months ended June 30, 2025, EastGroup acquired 94.5 acres of development land in two markets for $50,228,000.

The Company also began construction of a redevelopment project and two development projects containing 731,000 square feet in three markets.

EastGroup also transferred six development projects (1,160,000 square feet) in five markets from Development and value-add propertie s to Real estate properties , with costs of $151,928,000 at the date of transfer.

As of June 30, 2025, EastGroup’s development and value-add program consisted of 18 projects (3,714,000 square feet) located in 13 markets.

The projected total investment for the development projects, which were collectively 16.3% leased as of July 22, 2025, is $531,400,000, of which $157,835,000 remained to be invested as of June 30, 2025.

There were no operating property or value-add property acquisitions during the six months ended June 30, 2025.

During the six months ended June 30, 2025, EastGroup sold a 12,000 square foot operating property in San Francisco, generating gross sales proceeds of $3,573,000.

The Company did not recognize a gain or loss on this disposition.

The Company typically funds its development and acquisition programs through its $675,000,000 unsecured bank credit facilities (as discussed in Liquidity and Capital Resources ).

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.

Moody’s Investors Service has assigned EastGroup an issuer rating of Baa2 with a stable outlook.

In May 2025, Moody’s Ratings affirmed EastGroup’s issuer rating of Baa2 and changed its rating outlook from stable to positive.

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.

9 unchanged sentences

generally accepted accounting principles (“GAAP”), excluding gains and losses from sales of real estate property (including other assets incidental to the Company’s business) and impairment losses, adjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

FFO is not considered as an alternative to net income

(determined in accordance with GAAP) as an indication of the Company’s financial performance, nor is it a measure of the Company’s liquidity or indicative of funds available to provide for the Company’s cash needs, including its ability to make distributions.

FFO is not considered as an alternative to net income (determined in accordance with GAAP) as an indication of the Company’s financial performance, nor is it a measure of the Company’s liquidity or indicative of funds available to provide for the Company’s cash needs, including its ability to make distributions.

The Company’s key drivers affecting FFO are changes in PNOI (as discussed below), interest rates, the amount of leverage the Company employs and general and administrative expenses.

5 unchanged sentences

Properties sold during the current or prior year reporting periods are also excluded.

For the three months ended March 31, 2025, Same Properties includes properties which were included in the operating portfolio for the entire period from January 1, 2024 through March 31, 2025.

For the three and six months ended June 30, 2025, Same Properties includes properties which were included in the operating portfolio for the entire period from January 1, 2024 through June 30, 2025.

The Company presents Same PNOI and Same PNOI, Excluding Income from Lease Terminations, as a property-level supplemental measure of performance used to evaluate the performance of the Company’s investments in real estate assets and its operating results on a same property basis.

4 unchanged sentences

These non-GAAP figures should not be considered a substitute for, and should only be considered together with and as a supplement to, the Company’s financial information presented in accordance with GAAP.

The following table presents reconciliations of Net Income to PNOI, Same PNOI and Same PNOI Excluding Income from Lease Terminations for the three months ended March 31, 2025 and 2024.

The following table presents reconciliations of Net Income to PNOI, Same PNOI and Same PNOI, Excluding Income from Lease Terminations, for the three and six months ended June 30, 2025 and 2024.

Three Months Ended

June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands)

15 unchanged sentences

(6,125) (3,138) (11,313) (5,649)

PNOI from 2024 operating property dispositions

PNOI from 2024 and 2025 operating property dispositions

15 (50) (40) (278)

Other PNOI 455 21 713 102

2 unchanged sentences

SAME PNOI, EXCLUDING INCOME FROM LEASE TERMINATIONS $ 116,327 109,172 229,911 217,031

PNOI was calculated as follows for the three months ended March 31, 2025 and 2024.

PNOI was calculated as follows for the three and six months ended June 30, 2025 and 2024.

Three Months Ended

June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands)

12 unchanged sentences

The following table presents reconciliations of Net Income Attributable to EastGroup Properties, Inc.

Common Stockholders to FFO Attributable to Common Stockholders for the three months ended March 31, 2025 and 2024.

Common Stockholders to FFO Attributable to Common Stockholders for the three and six months ended June 30, 2025 and 2024.

Three Months Ended

June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands, except per share data)

15 unchanged sentences

• Net Income Attributable to EastGroup Properties, Inc.

Common Stockholders for the three months ended March 31, 2025 was $59,423,000 ($1.14 per basic and diluted share), compared to $58,644,000 ($1.23 per basic and $1.22 per diluted share) for the same period in 2024.

Common Stockholders for the three and six months ended June 30, 2025 was $63,299,000 ($1.21 per basic and $1.20 per diluted share) and $122,722,000 ($2.35 per basic and diluted share), respectively, compared to $55,287,000 ($1.15 per basic and $1.14 per diluted share) and $113,931,000 ($2.37 per basic and diluted share) for the same periods in 2024.

See Results of Operations for further analysis.

• The change in FFO per share represents the increase or decrease in FFO per share from the current period compared to the same period in the prior year.

For the three months ended March 31, 2025, FFO was $2.15 per share compared

with $1.98 per share for the same period of 2024, an increase of 8.6%.

FFO increased during the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to the increase in PNOI, the decrease in interest expense, and an increase in gain on involuntary conversion, partially offset by an increase in general and administrative expense.

• For the three months ended March 31, 2025, PNOI increased by $14,815,000, or 13.3%, as compared to the same period in 2024.

PNOI increased $6,331,000 due to 2024 acquisitions, $6,161,000 due to same property operations and $2,677,000 due to newly developed and value-add properties;

PNOI decreased $177,000 due to operating properties sold in 2024.

• The change in Same PNOI represents the PNOI increase or decrease for the same operating properties owned during the entire period from January 1, 2024 through March 31, 2025.

Same PNOI, excluding income from lease terminations, increased 5.3% for the three months ended March 31, 2025, as compared to the same period in 2024.

• Same property average occupancy represents the average month-end percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2024 through March 31, 2025).

Same property average occupancy was 96.0% for the three months ended March 31, 2025, compared to 97.5% for the same period of 2024.

• The same property average rental rate calculated in accordance with GAAP represents the average annual rental rates of leases in place for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2024 through March 31, 2025).

The same property average rental rate was $8.55 per square foot for the three months ended March 31, 2025, compared to $8.08 per square foot for the same period of 2024.

For the three months ended June 30, 2025, FFO was $2.21 per diluted share compared with $2.09 per diluted share for the same period of 2024, an increase of 5.7%.

For the six months ended June 30, 2025, FFO was $4.37 per diluted share compared with $4.07 per diluted share for the same period of 2024, an increase of 7.4%.

FFO increased during the three and six months ended June 30, 2025, as compared to the same periods in 2024, primarily due to the increase in PNOI and the decrease in interest expense, partially offset by an increase in general and administrative expense.

• For the three months ended June 30, 2025, PNOI increased by $15,409,000, or 13.5%, as compared to the same period in 2024.

PNOI increased $7,303,000 due to same property operations, $5,618,000 due to 2024 acquisitions and $2,987,000 due to newly developed and value-add properties;

PNOI decreased $65,000 due to operating properties sold in 2024 and 2025.

For the six months ended June 30, 2025, PNOI increased by $30,224,000, or 13.4%, as compared to the same period in 2024.

PNOI increased $13,460,000 due to same property operations, $11,949,000 due to 2024 acquisitions and $5,664,000 due to newly developed and value-add properties;

PNOI decreased $238,000 due to operating properties sold in 2024 and 2025.

• The change in Same PNOI represents the PNOI increase or decrease for the same operating properties owned during the entire period from January 1, 2024 through June 30, 2025.

Same PNOI, excluding income from lease terminations, increased 6.6% and 5.9% for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.

Same property average occupancy was 96.3% for the three months ended June 30, 2025, compared to 97.1% for the same period of 2024.

Same property average occupancy was 96.2% for the six months ended June 30, 2025, compared to 97.3% for the same period of 2024.

The same property average rental rate was $8.73 and $8.64 per square foot for the three and six months ended June 30, 2025, respectively, compared to $8.21 and $8.15 per square foot for the same periods of 2024.

• Occupancy is the percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage as of the close of the reporting period.

Occupancy at March 31, 2025 was 96.5%.

Quarter-end occupancy ranged from 96.1% to 97.7% over the previous four quarters ended March 31, 2024 to December 31, 2024.

Occupancy at June 30, 2025 was 96.0%.

Quarter-end occupancy ranged from 96.1% to 97.1% over the previous four quarters ended June 30, 2024 to March 31, 2025.

• Rental rate change represents the rental rate increase or decrease on new and renewal leases compared to the prior leases on the same space.

Rental rate increases on new and renewal leases (4.4% of the operating portfolio’s total square footage) averaged 46.9% for the three months ended March 31, 2025.

Rental rate increases on new and renewal leases (3.2% of the operating portfolio’s total square footage) averaged 44.4% for the three months ended June 30, 2025.

For the six months ended June 30, 2025, rental rate increases on new and renewal leases (7.6% of the operating portfolio’s total square footage) averaged 45.8%.

FINANCIAL CONDITION

EastGroup’s Total Assets were $5,107,978,000 at March 31, 2025, an increase of $30,502,000 from December 31, 2024.

EastGroup’s Total Assets were $5,189,608,000 at June 30, 2025, an increase of $112,132,000 from December 31, 2024.

Total Liabilities decreased $2,435,000 to $1,782,497,000, and Total Equity increased $114,567,000 to $3,407,111,000 during the same period.

1 unchanged sentence

Real Estate Properties

Real estate properties increased $62,320,000 during the three months ended March 31, 2025, primarily due to:

Real estate properties increased $191,507,000 during the six months ended June 30, 2025, primarily due to:

(i) the transfer of projects from Development and value-add properties to Real estate properties ;

1 unchanged sentence

and (iii) costs incurred on development and value-add projects subsequent to transfer to Real estate properties discussed below.

There were no operating property acquisitions or dispositions during the three months ended March 31, 2025.

During the three months ended March 31, 2025, the Company made capital improvements of $20,253,000 on existing properties (included in the Real Estate Improvements table under Results of Operations ).

The increases were partially offset by the sale of an operating property.

There were no operating property acquisitions during the six months ended June 30, 2025.

During the six months ended June 30, 2025, EastGroup sold a 12,000 square foot operating property in San Francisco, generating gross sales proceeds of $3,573,000.

The Company did not recognize a gain or loss on this disposition.

During the six months ended June 30, 2025, the Company made capital improvements of $38,700,000 on existing properties (included in the Real Estate Improvements table under Results of Operations ).

Also, the Company incurred costs of $3,239,000 on development and value-add properties subsequent to transfer to Real estate properties ;

1 unchanged sentence

Development and Value-Add Properties

EastGroup’s investment in Development and value-add properties at March 31, 2025 consisted of projects in lease-up and under construction of $430,324,000 and prospective development (primarily land) of $255,778,000.

The Company’s total

investment in Development and value-add properties at March 31, 2025 was $686,102,000 compared to $674,472,000 at December 31, 2024.

Total capital invested for development during the first three months of 2025 was $56,346,000, which consisted of improvement costs of $54,648,000 on development and value-add properties and costs of $1,698,000 on properties subsequent to transfer to Real estate properties.

EastGroup’s investment in Development and value-add properties at June 30, 2025 consisted of projects in lease-up and under construction of $373,565,000 and prospective development (primarily land) of $304,448,000.

The Company’s total investment in Development and value-add properties at June 30, 2025 was $678,013,000 compared to $674,472,000 at December 31, 2024.

Total capital invested for development during the first six months of 2025 was $158,709,000, which consisted of improvement costs of $105,242,000 on development and value-add properties, 50,228,000 for new land investments and costs of $3,239,000 on properties subsequent to transfer to Real estate properties.

The capitalized costs incurred on development and value-add properties subsequent to transfer to Real estate properties include capital improvements at the properties and do not include other capitalized costs associated with development (i.e., interest expense, property taxes and internal personnel costs).

The Company capitalized internal development costs of $1,954,000 for the three months ended March 31, 2025, compared to $2,223,000 for the same period of 2024.

The decrease was due to variations in timing and volume of development projects started in the three months ended March 31, 2025, as compared to the same period of 2024.

During the three months ended March 31, 2025, the Company did not acquire any development land or value-add properties.

The increases to Development and value-add properties were offset by the transfer of two development and value-add projects to Real estate properties during the three months ended March 31, 2025 with a total investment of $43,018,000 as of the date of transfer.

A summary of the Company's Development and Value-Add Properties for the three months ended March 31, 2025 follows:

The Company capitalized internal development costs of $1,717,000 and $3,671,000 for the three and six months ended June 30, 2025, respectively, compared to $2,032,000 and $4,255,000 for the same periods of 2024.

The decrease was due to variations in timing and volume of development projects under construction.

During the six months ended June 30, 2025, the Company acquired 94.5 acres of development land in two markets for $50,228,000.

Costs associated with this acquisition are included in the Development and Value-Add Properties table.

The increases to Development and value-add properties were offset by the transfer of six development and value-add projects to Real estate properties during the six months ended June 30, 2025 with a total investment of $151,928,000 as of the date of transfer.

A summary of the Company's Development and Value-Add Properties for the six months ended June 30, 2025 follows:

Actual or Estimated Building Size Cumulative Costs Incurred as of 6/30/2025

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Prospective development (primarily land) 10,351,000 304,448

Total Development and value-add properties as of March 31, 2025

Total Development and value-add properties as of June 30, 2025

14,065,000 $ 678,013

Total Development and value-add properties transferred to Real estate

properties during the three months ended March 31, 2025

properties during the six months ended June 30, 2025

1,160,000 $ 151,928 (1)

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Accumulated Depreciation

Accumulated depreciation on real estate, development and value-add properties increased $40,980,000 during the three months ended March 31, 2025, primarily due to depreciation expense of $42,308,000 offset by write-offs of assets.

Other assets decreased $5,407,000 during the three months ended March 31, 2025.

Accumulated depreciation on real estate, development and value-add properties increased $82,972,000 during the six months ended June 30, 2025, primarily due to depreciation expense of $85,401,000 partially offset by write-offs of assets.

Other Assets, Net

Other assets, net decreased $14,965,000 during the six months ended June 30, 2025.

See Note 9 in the Notes to Consolidated Financial Statements for further details.

Unsecured bank credit facilities, net of debt issuance costs increased $250,000 during the three months ended March 31, 2025, mainly due to borrowings of $12,406,000, offset by repayments of $12,406,000, and debt issuance cost activity during the period.

Unsecured bank credit facilities, net of debt issuance costs increased $503,000 during the six months ended June 30, 2025, mainly due to borrowings of $22,851,000, offset by repayments of $22,851,000, and debt issuance cost activity during the period.

The Company’s credit facilities are described in greater detail in Liquidity and Capital Resources .

Unsecured debt, net of debt issuance costs decreased $49,874,000 during the three months ended March 31, 2025, primarily due to the repayment of a $50,000,000 term loan and debt issuance cost activity during the period.

Unsecured debt, net of debt issuance costs decreased $49,686,000 during the six months ended June 30, 2025, primarily due to the repayment of a $50,000,000 term loan and debt issuance cost activity during the period.

The borrowings and repayments on Unsecured debt, net of debt issuance costs are described in greater detail under Liquidity and Capital Resources .

Accounts payable and accrued expenses increased $30,045,000 during the three months ended March 31, 2025.

Accounts payable and accrued expenses increased $53,163,000 during the six months ended June 30, 2025.

Refer to Note 11 in the Notes to Consolidated Financial Statements for further details.

Other liabilities decreased $2,532,000 during the three months ended March 31, 2025.

Other liabilities decreased $6,415,000 during the six months ended June 30, 2025.

Refer to Note 12 in the Notes to Consolidated Financial Statements for further details.

Additional paid-in capital increased $73,504,000 during the three months ended March 31, 2025, primarily due to the issuance of common stock under the Company’s ATM program (as discussed in Note 16 in the Notes to Consolidated Financial Statements) and activity related to stock-based compensation (as discussed in Note 17 in the Notes to Consolidated Financial Statements).

For the three months ended March 31, 2025, Distributions in excess of earnings increased $13,886,000 as a result of dividends on common stock of $73,309,000 exceeding Net Income Attributable to EastGroup Properties, Inc.

Additional paid-in capital increased $150,212,000 during the six months ended June 30, 2025, primarily due to the issuance of common stock under the Company’s ATM program (as discussed in Note 16 in the Notes to Consolidated Financial Statements) and activity related to stock-based compensation (as discussed in Note 17 in the Notes to Consolidated Financial Statements).

For the six months ended June 30, 2025, Distributions in excess of earnings increased $24,460,000 as a result of dividends on common stock of $147,182,000 exceeding Net Income Attributable to EastGroup Properties, Inc.

Common Stockholders of $122,722,000.

Accumulated other comprehensive income decreased $6,927,000 during the three months ended March 31, 2025.

Accumulated other comprehensive income decreased $11,063,000 during the six months ended June 30, 2025.

The decrease resulted from the change in fair value of the Company’s interest rate swaps (cash flow hedges) which are further discussed in Notes 13 and 14 in the Notes to Consolidated Financial Statements.

1 unchanged sentence

Net Income Attributable to EastGroup Properties, Inc.

The following paragraphs provide further details with respect to these changes:

• PNOI was $126,178,000 ($2.43 per diluted share) for the three months ended March 31, 2025, compared to $111,363,000 ($2.32 per diluted share) during the same period of 2024.

PNOI increased $6,331,000 due to 2024 acquisitions, $6,161,000 due to same property operations and $2,677,000 due to newly developed and value-add properties;

PNOI decreased $177,000 due to operating properties sold in 2024.

Straight-lining of rent increased Income from real estate operations by $3,564,000 and $2,224,000 for the three months ended March 31, 2025 and 2024, respectively.

• EastGroup had no operating property sales during the three months ended March 31, 2025.

The Company recognized Gains on sales of real estate investments of $8,751,000 ($0.18 per diluted share) during the three months ended March 31, 2024.

The Company’s 2024 sales transactions are described in Note 8 of the Notes to Consolidated Financial Statements.

• Depreciation and amortization expense was $52,520,000 ($1.01 per diluted share) during the three months ended March 31, 2025, compared to $45,169,000 ($0.94 per diluted share) during the same period of 2024.

The increase is primarily due to the operating properties acquired by the Company in 2024 and the properties transferred from Development and value-add properties in 2024 and 2025, partially offset by operating properties sold in 2024.

• Interest expense recognized was $8,025,000 ($0.15 per diluted share) during the three months ended March 31, 2025, compared to $10,061,000 ($0.21 per diluted share) during the same period of 2024.

• PNOI was $129,184,000 ($2.46 per diluted share) for the three months ended June 30, 2025, compared to $113,775,000 ($2.35 per diluted share) during the same period of 2024, which was an increase of $0.11 per diluted share.

PNOI increased $7,303,000 due to same property operations, $5,618,000 due to 2024 acquisitions and $2,987,000 due to newly developed and value-add properties;

PNOI decreased $65,000 due to operating properties sold in 2024 and 2025.

Income recognized from straight-lining of rent increased by $1,532,000 for the three months ended June 30, 2025, as compared to the same period of 2024.

PNOI was $255,362,000 ($4.88 per diluted share) for the six months ended June 30, 2025, compared to $225,138,000 ($4.68 per diluted share) during the same period of 2024, which was an increase of $0.20 per diluted share.

PNOI increased $13,460,000 due to same property operations, $11,949,000 due to 2024 acquisitions and $5,664,000 due to newly developed and value-add properties;

PNOI decreased $238,000 due to operating properties sold in 2024 and 2025.

Income recognized from straight-lining of rent increased by $2,872,000 for the six months ended June 30, 2025, as compared to the same period of 2024.

• EastGroup did not recognize any gains or losses on operating property dispositions during the three and six months ended June 30, 2025.

The Company had no operating property sales during the three months ended June 30, 2024.

The Company recognized Gains on sales of real estate investments of $8,751,000 ($0.18 per diluted share) during the six months ended June 30, 2024.

The Company’s 2024 and 2025 sales transactions are described in Note 8 of the Notes to Consolidated Financial Statements.

• Depreciation and amortization expense was $53,012,000 ($1.01 per diluted share) and $45,663,000 ($0.94 per diluted share) during the three months ended June 30, 2025 and 2024, respectively, which was an increase of $0.07 per diluted share.

Depreciation and amortization expense was $105,532,000 ($2.02 per diluted share) and $90,832,000 ($1.89 per diluted share) during the six months ended June 30, 2025 and 2024, respectively, which was an increase of $0.13 per diluted share.

• Interest expense recognized was $7,690,000 ($0.15 per diluted share) and $9,832,000 ($0.20 per diluted share) during the three months ended June 30, 2025 and 2024, respectively, which was a decrease of $0.05 per share.

Interest expense recognized was $15,715,000 ($0.30 per diluted share) and $19,893,000 ($0.41 per diluted share) during the six months ended June 30, 2025 and 2024, respectively, which was a decrease of $0.11 per diluted share.

Refer to the table below for additional details.

• EastGroup recognized gains on involuntary conversion and business interruption claims of $1,763,000 ($0.03 per diluted share) during the three months ended March 31, 2025.

There were no gains on involuntary conversion and business interruption claims during the same period of 2024.

• EastGroup recognized gains on involuntary conversion and business interruption claims of $1,763,000 ($0.03 per diluted share) and $1,708,000 ($0.04 per diluted share) during the six months ended June 30, 2025 and 2024, respectively, which was a decrease of $0.01 per diluted share.

The Company recognized $1,708,000 ($0.04 per diluted share) during the three months ended June 30, 2024.

There were no gains on involuntary conversion and business interruption claims during the three months ended June 30, 2025.

Gains on involuntary conversion and business interruption claims are included in Other revenue on the Consolidated Statements of Income and Comprehensive Income.

• Weighted average shares outstanding increased by 4,067,000, on a diluted basis, during the period from March 31, 2024 to March 31, 2025.

• Weighted average shares outstanding increased by 4,234,000 shares on a diluted basis for the three months ended June 30, 2025, as compared to the same period of 2024.

Weighted average shares outstanding increased by 4,151,000 shares on a diluted basis for the six months ended June 30, 2025, as compared to the same period of 2024.

The increase is primarily due to issuance of shares through common stock offerings, as discussed in Liquidity and Capital Resources .

EastGroup entered into 39 leases with certain rent concessions on 1,360,000 square feet during the three months ended March 31, 2025, with total rent concessions of $3,161,000 over the terms of the leases.

EastGroup entered into 35 leases with certain rent concessions on 727,000 square feet during the three months ended June 30, 2025, with total rent concessions of $1,635,000 over the terms of the leases.

During the same period of 2024, the Company entered into 31 leases with certain rent concessions on 1,112,000 square feet with total rent concessions of $3,164,000 over the terms of the leases.

The Company’s percentage of leased square footage for the operating portfolio was 97.3% at March 31, 2025, compared to 98.0% at March 31, 2024.

Occupancy for the Company’s operating portfolio at March 31, 2025 was 96.5% compared to 97.7% at March 31, 2024.

The following table presents the components of Interest expense for the three months ended March 31, 2025 and 2024:

EastGroup entered into 74 leases with certain rent concessions on 2,087,000 square feet during the six months ended June 30, 2025, with total rent concessions of $4,796,000 over the terms of the leases.

During the same period of 2024, the Company entered into 64 leases with certain rent concessions on 2,654,000 square feet with total rent concessions of $5,798,000 over the terms of the leases.

The Company’s percentage of leased square footage for the operating portfolio was 97.1% at June 30, 2025, compared to 97.4% at June 30, 2024.

Occupancy for the Company’s operating portfolio at June 30, 2025 was 96.0% compared to 97.1% at June 30, 2024.

The following table presents the components of Interest expense for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended June 30,

2025 2024 Increase

(Decrease) 2025 2024 Increase

(In thousands)

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(excluding amortization of facility fees and debt issuance costs)

Amortization of facility fees — unsecured bank credit facilities 244 252 (8)

Amortization of debt issuance costs — unsecured bank credit facilities 265 253 12

$ 12 24 (12) 23 66 (43)

Amortization of facility fees — Unsecured bank credit

237 252 (15) 481 504 (23)

Amortization of debt issuance costs — Unsecured bank

credit facilities

265 253 12 530 506 24

Total variable rate interest expense 514 529 (15) 1,034 1,076 (42)

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(1) Includes interest on the Company’s unsecured debt with fixed interest rates per the debt agreements or effectively fixed interest rates due to interest rate swaps, as discussed in Note 14 in the Notes to Consolidated Financial Statements.

The Company’s variable rate interest expense decreased by $27,000 for the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to a decrease in average borrowings on its unsecured bank credit facilities, as shown in the following table:

The Company’s variable rate interest expense decreased by $15,000 and $42,000 for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, primarily due to a decrease in average borrowings and interest rates on its unsecured bank credit facilities, as shown in the following table:

Three Months Ended

June 30, Six Months Ended June 30,

2025 2024 Increase

(Decrease) 2025 2024 Increase

(In thousands, except rates of interest)

Average borrowings on unsecured bank credit facilities - variable rate $ 820 2,704 (1,884)

Average borrowings on unsecured bank credit

facilities — Variable rate

$ 937 1,518 (581) 879 2,111 (1,232)

Weighted average variable interest rates

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5.26 % 6.29 % 5.25 % 6.29 %

The Company’s fixed rate interest expense decreased by $1,702,000 for the three months ended March 31, 2025, as compared to the same period in 2024, primarily as a result of the unsecured debt activity described below.

The following table presents the details of unsecured debt repayments during the three months ended March 31, 2025 and the year ended December 31, 2024:

The Company’s fixed rate interest expense decreased by $1,824,000 and $3,526,000 for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, primarily as a result of the unsecured debt activity described below.

The following table presents the details of unsecured debt repayments during the six months ended June 30, 2025 and the year ended December 31, 2024:

UNSECURED DEBT REPAID IN 2024 AND 2025

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The loan, which previously had five years remaining, now has a three-year maturity with two one-year extension options, at the Company's election.

EastGroup did not obtain any unsecured debt during 2024 or during the first three months of 2025.

EastGroup did not obtain any unsecured debt during 2024 or during the first six months of 2025.

EastGroup’s financing and debt maturities are further described in Liquidity and Capital Resources .

Interest costs during the period of construction of real estate properties are capitalized and offset against interest expense.

Capitalized interest increased $307,000 during the three months ended March 31, 2025, as compared to the same period of 2024, due to changes in development activity and spending.

Capitalized interest increased $303,000 and $610,000 during the three and six months ended June 30, 2025, respectively, as compared to the same periods of 2024, due to changes in development activity and spending.

Real Estate Improvements

Real estate improvements for EastGroup’s operating properties for the three months ended March 31, 2025 and 2024 were as follows:

Real estate improvements for EastGroup’s operating properties for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended

June 30, Six Months Ended June 30,

Estimated Useful Life 2025 2024 2025 2024

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(1) Reconciliation of Total real estate improvements to Real estate improvements on the Consolidated Statements of Cash Flows:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

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Capitalized Leasing Costs

The Company’s leasing costs (principally commissions) are capitalized and included in Other assets .

The Company’s leasing costs (principally commissions) are capitalized and included in Other assets, net .

The costs are amortized over the terms of the associated leases, and the amortization is included in Depreciation and amortization expense.

Capitalized leasing costs for the three months ended March 31, 2025 and 2024 were as follows:

Capitalized leasing costs for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended

June 30, Six Months Ended June 30,

Estimated Useful Life 2025 2024 2025 2024

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(1) Reconciliation of Total capitalized leasing costs to Leasing commissions on the Consolidated Statements of Cash Flows:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

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The Company anticipates that its current cash balance, operating cash flows, borrowings under its unsecured bank credit facilities, proceeds from new debt and/or proceeds from the issuance of equity instruments will be adequate for (i) operating and administrative expenses, (ii) normal repair and maintenance expenses at its properties, (iii) debt service obligations, (iv) maintaining compliance with its debt covenants, (v) distributions to stockholders, (vi) capital improvements, (vii) purchases of properties, (viii) development, and (ix) any other normal business activities of the Company, both in the short-term and long-term.

The Company expects liquidity sources and needs in the coming year to be consistent in nature with those for the three months ended March 31, 2025.

The Company expects liquidity sources and needs in the coming year to be consistent in nature with those for the six months ended June 30, 2025.

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The Company may also access the public debt or convertible bond markets in the future as a means to raise capital.

As of March 31, 2025, EastGroup had total immediate liquidity of approximately $882,933,000, comprised of $20,515,000 of cash and cash equivalents, $672,412,000 of availability on our unsecured credit facilities, and approximately $190,006,000 of gross proceeds available on our outstanding forward equity sale agreements.

As of June 30, 2025, EastGroup had total immediate liquidity of approximately $823,832,000 comprised of $32,921,000 of cash and cash equivalents, $672,412,000 of availability on our unsecured credit facilities, and approximately $118,499,000 of gross proceeds available on our outstanding forward equity sale agreements.

See further details discussed below.

Net cash provided by operating activities was $133,708,000 for the three months ended March 31, 2025.

Net cash provided by operating activities was $277,081,000 for the six months ended June 30, 2025.

The primary other sources of cash were proceeds from common stock offerings and borrowings on unsecured bank credit facilities.

The Company distributed $73,205,000 in common stock dividends during the three months ended March 31, 2025.

The Company distributed $146,299,000 in common stock dividends during the six months ended June 30, 2025.

Other primary uses of cash were for the construction and development of properties;

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and capital improvements at various properties.

As of March 31, 2025, the Company was contractually obligated to pay the dividend declared in March 2025, which was paid in April 2025.

An amount for dividends payable of $74,153,000 was included in Accounts payable and accrued expenses at

March 31, 2025, which includes dividends payable on unvested restricted stock of $1,087,000, which are subject to continued service and will be paid upon vesting in future periods.

Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs ), as of March 31, 2025, are as follows:

As of June 30, 2025, the Company was contractually obligated to pay the dividend declared in May 2025, which was paid in July 2025.

An amount for dividends payable of $74,932,000 was included in Accounts payable and accrued expenses at June 30, 2025, which includes dividends payable on unvested restricted stock of $1,277,000, which are subject to continued service and will be paid upon vesting in future periods.

MATURITY DATES Weighted Average Interest Rate (1)

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The credit facility contains options for two six-month extensions (at the Company's election) and an additional $625,000,000 accordion (with agreement by all parties).

The interest rate on each tranche is reset on a monthly basis and as of March 31, 2025, was SOFR plus 73.5 basis points with an annual facility fee of 14 basis points.

As of March 31, 2025, the Company had no variable rate borrowings on this unsecured bank credit facility and an interest rate of 5.160%.

The interest rate on each tranche is reset on a monthly basis and as of June 30, 2025, was SOFR plus 73.5 basis points with an annual facility fee of 14 basis points.

As of June 30, 2025, the Company had no variable rate borrowings on this unsecured bank credit facility and an interest rate of 5.162%.

The Company has a $2,588,000 standby letter of credit pledged on this facility, which reduces borrowing capacity under the credit facility.

1 unchanged sentence

the Company also has two six-month extensions available if the extension options in the $625,000,000 facility are exercised.

The interest rate is reset on a daily basis and as of March 31, 2025, was SOFR plus 77.5 basis points with an annual facility fee of 15 basis points.

As of March 31, 2025, the interest rate was 5.235% with no outstanding balance.

The interest rate is reset on a daily basis and as of June 30, 2025, was SOFR plus 77.5 basis points with an annual facility fee of 15 basis points.

As of June 30, 2025, the interest rate was 5.275% with no outstanding balance.

For both facilities, the margin and facility fee are subject to changes in the Company's credit ratings.

Although the Company’s current credit rating is Baa2, given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is based on the BBB+/Baa1 credit ratings level.

In May 2025, Moody’s Ratings affirmed EastGroup’s issuer rating of Baa2 and changed its rating outlook from stable to positive.

Given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is based on the BBB+/Baa1 credit ratings level.

This favorable pricing level will be retained provided that the Company’s consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%.

The $625,000,000 facility also includes a sustainability-linked pricing component, pursuant to which the applicable interest rate margin is adjusted if the Company meets a certain sustainability performance target.

This sustainability metric is evaluated annually and was achieved for the year ended December 31, 2024, which allowed for an interest rate reduction during the three months ended March 31, 2025.

The margin was effectively reduced on this unsecured bank credit facility by four basis points, from 77.5 to 73.5 basis points, and the facility fee was reduced from 15 to 14 basis points during the three months ended March 31, 2025.

The Company’s unsecured bank credit facilities have certain restrictive covenants, such as maintaining minimum debt service coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial debt covenants at March 31, 2025.

This sustainability metric is evaluated annually and was achieved for the year ended December 31, 2024, which allowed for an interest rate reduction during the three and six months ended June 30, 2025.

On October 25, 2024, we established an ATM common stock offering program pursuant to which we are able to sell, from time to time, shares of our common stock having an aggregate gross sales price of up to $1,000,000,000 (the “Current ATM Program”).

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Additionally, the forward price that we expect to receive upon settlement of an agreement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.

During the three months ended March 31, 2025, EastGroup sold, and subsequently settled the issuance of, 33,120 shares of common stock directly through sales agents under its ATM program at a weighted average price of $183.15 per share, providing aggregate net proceeds to the Company of $6,005,000.

During the three months ended March 31, 2025, EastGroup entered into forward equity sale agreements with certain financial institutions acting as forward counterparties under the Current ATM Program with respect to 1,043,871 shares of common stock with an initial weighted average forward price of $182.02 per share.

During the six months ended June 30, 2025, EastGroup sold, and subsequently settled the issuance of, 33,120 shares of common stock directly through sales agents under its ATM program at a weighted average price of $183.15 per share, providing aggregate net proceeds to the Company of $6,005,000.

During the six months ended June 30, 2025, EastGroup entered into forward equity sale agreements with certain financial institutions acting as forward counterparties under the Current ATM Program with respect to 1,063,825 shares of common stock with an initial weighted average forward price of $181.89 per share.

The Company did not receive any proceeds from the sale of common shares by the forward counterparties at the time it entered into forward equity sale agreements.

Also during the three months ended March 31, 2025, the Company settled outstanding forward equity sale agreements that were previously entered into under its ATM programs by issuing 385,253 shares of common stock in exchange for net proceeds of approximately $66,902,000.

Subsequent to March 31, 2025, EastGroup settled outstanding forward equity sale agreements that were previously entered into under the ATM programs by issuing 250,516 shares of common stock in exchange for net proceeds of approximately $44,430,000.

As of April 22, 2025, the Company had 793,355 shares of common stock, or approximately $143,597,000 of net proceeds, based on a weighted average forward price of $181.00 per share, available for settlement prior to the applicable settlement period expirations, ranging from February through March 2026.

As of April 22, 2025, approximately $523,593,000 of common stock remains available to be sold.

Also during the six months ended June 30, 2025, the Company settled outstanding forward equity sale agreements that were previously entered into under its ATM programs by issuing 801,320 shares of common stock in exchange for net proceeds of approximately $141,000,000.

Subsequent to June 30, 2025, EastGroup settled outstanding forward equity sale agreements that were previously entered into under the ATM programs by issuing 647,758 shares of common stock in exchange for net proceeds of approximately $117,065,000.

As of July 22, 2025, the Company had no outstanding forward shares available for settlement.

As of July 22, 2025, approximately $520,101,000 of common stock remains available to be sold.

Future sales, if any, will depend on a variety of factors, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to us.

EastGroup’s other material cash requirements from known contractual and other obligations, including real estate property obligations, development and value-add obligations and tenant improvements as of December 31, 2024, did not materially change during the three months ended March 31, 2025.

The Company has no material off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Land is valued using comparable land sales specific to the applicable market, provided by a third party.

The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties.

The Company determines whether any financing assumed is above or below market based upon comparison to similar

financing terms for similar properties.

The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates.

2 unchanged sentences

The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term and (ii) management’s estimate of the amounts that would be paid using current market rents over the remaining term of the lease.

The amounts allocated to above and below market lease intangibles are included in Other assets and Other liabilities , respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining terms of the respective leases.

The amounts allocated to above and below market lease intangibles are included in Other assets, net and Other liabilities , respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining terms of the respective leases.

In-place lease intangibles are valued based upon management’s assessment of factors such as an estimate of forgone rents and avoided leasing costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.

These intangible assets are included in Other assets on the Consolidated Balance Sheets and are amortized over the remaining term of the existing lease.

These intangible assets are included in Other assets, net on the Consolidated Balance Sheets and are amortized over the remaining term of the existing lease.

The significance of this accounting policy will fluctuate given the transaction activity during the period.

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See Note 21 in the Notes to Consolidated Financial Statements.

SUPPLEMENTAL U.S.

FEDERAL INCOME TAX CONSIDERATIONS

The following discussion supplements and updates the disclosures under the heading “Certain United States Federal Income Tax Considerations” in the prospectus dated December 16, 2022, contained in our Registration Statement on Form S-3 (File No.

333-268821) filed with the Securities and Exchange Commission (the “SEC”) on December 16, 2022, (the “S-3 Tax Disclosure”) and as supplemented by the disclosures under the heading “Supplemental U.S.

Federal Income Tax Considerations” in our Annual Report on Form 10-K filed with the SEC on February 12, 2025 (together with the S-3 Tax Disclosure, the “Existing Tax Disclosure”).

Capitalized terms herein that are not otherwise defined shall have the same meaning as when used in the Existing Tax Disclosure.

On July 4, 2025, H.R.

1, informally known as the One Big Beautiful Bill Act (the “OBBB”), was enacted.

The OBBB makes major changes to the Code, including some provisions of the Code that affect the taxation of REITs and their investors.

In particular:

• For taxable years beginning on or after January 1, 2026, the OBBB relaxed the REIT asset test requirement with respect to taxable REIT subsidiaries, providing that not more than 25% (relaxed from 20%) of the gross value of a REIT’s assets may be represented by securities of one or more taxable REIT subsidiaries.

• The OBBB permanently extended the section 199A pass-through qualified business income deduction, generally allowing certain individuals, trusts and estates to deduct 20% of the aggregate amount of qualified REIT dividends distributed by a REIT.

This deduction was due to expire for tax years beginning after December 31, 2025.

To the extent the information set forth in the Existing Tax Disclosure is inconsistent with this supplemental information, this supplemental information supersedes the information in the Existing Tax Disclosure.

This supplemental information is provided on the same basis and subject to the same qualifications as are set forth in the first six paragraphs of the S-3 Tax Disclosure as if those paragraphs were set forth in this Quarterly Report on Form 10-Q.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis