Marshall Loeb, CEO of EastGroup Properties, Inc. (NYSE: EGP), joined REIT.com for a CEO Spotlight video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.
EastGroup focuses on industrial properties in major Sun Belt markets throughout the United States, with an emphasis on Florida, Texas, Arizona, California and North Carolina. The company’s growth strategy is based on ownership of distribution facilities, generally clustered near major transportation features in supply-constrained submarkets.
Loeb said EastGroup finished the third quarter with 97 percent of its properties leased. “Markets are strong. We’re full, and that means we can raise rents,” he said. Full buildings also mean that EastGroup can continue to develop new properties, Loeb added.
Loeb noted that EastGoup is active in the ‘last mile’ e-commerce niche, which typically means smaller buildings and infill sites that cater to the likes of Amazon Prime’s two-hour delivery service.
Demand for smaller, infill sites is also coming from companies such as mattress and furniture retailers that are seeking to get goods to customers faster. Mattress Firm Inc. is one of EastGroup’s top five tenants, Loeb noted.
“We’re seeing a great source of demand that wasn’t there two years ago,” Loeb said.
Meanwhile, Loeb commented that although market watchers have been predicting an end to growth in the industrial sector, “we see supply in check and demand pretty strong.”