Reit Magazine - March/April 2021 - 38

between Atlanta and Charlotte along the fast-growing
I-85 corridor. When it comes to new markets, " none
are pressing, but Nashville is a market we've discussed
over the years, " Loeb says. " Maybe one day. "
Dave Rodgers, a senior research analyst at Robert
W. Baird & Co., trusts Loeb to do that at the right time.
" A lot of companies make acquisitions that have taken
them all over the map, " he says, whereas EastGroup
has " stayed very disciplined. "

Credit: Colliers

TENANT DIVERSIFICATION

Kyrene 202 Business Park,Chandler, Arizona

Remembering
EastGroup Founder
Leland Speed
Leland Speed, chairman emeritus of
EastGroup's board of directors and a
director of the company, died in January at
the age of 88. Speed was the company's
founder and served as CEO until 1997.
His service as a director began in 1978;
he served as the chairman of the board
from 1983 to 2015 and then as chairman
emeritus until the time of his death. Speed
was also the recipient of the 2008 Nareit
Industry Leadership Award.
Loeb notes that Speed's real estate
knowledge and expertise were instrumental to the growth of the company.
" His leadership and 'healthy, wealthy,
wise' philosophy were the capstone for
our positive culture. From my internship to
today, he made EastGroup feel like family,
and he could often be found in conversations with employees about a variety of
topics, from company history to personal
wellbeing and ways to make positive
impacts in our communities, " Loeb says.
" Speed was a positive thinker, loved real
estate, and he brought positive energy to
all he encountered. He would often speak
fondly of his family, and he loved telling
stories about his grandchildren, " Loeb
says. He adds that Speed's legacy will live
on within the company and the Jackson,
Mississippi community.

38 |

reit

EastGroup focuses on players that include food and
beverage distributors, commercial and residential
construction, service companies, third party logistics
firms, and medical suppliers that need a smaller space
closer to denser populations. " One misconception of
us is that small spaces mean local companies, which
isn't true, " Loeb points out.
The company's largest tenants include the U.S.
Postal Service, with about 1% of the portfolio across
five markets, and Mattress Firm Inc., with less than
1% in four markets. Most of its tenants take between
15,000 and 70,000 square feet, and its top 10 customers represent less than 10% of its annualized base
rent, protecting it should a tenant or two encounter
business issues or enter bankruptcy protection.
Like most REITs, EastGroup has answered investors' increased demands for ESG investment and
reporting. Some 80% of properties have skylights
and/or LED lighting, while seven out of 10 have white
reflective roofing. The company also has 25 properties that have received LEED certification by the U.S.
Green Building Council. However, this isn't a recent
passion, Loeb says.
" As ESG has risen in prominence, we've learned to
document and report much of what we were already
doing, but people weren't directly asking about, " Loeb
says. " We recently published our second annual ESG
report, and it remains a key focus for 2021. We will
continue to take a lot of steps, big and small, that
enhance our ESG standing, " he adds.

" ANY NUMBER OF TAILWINDS "
Heck thinks this year will be a good one for the company. " In 2021, we expect EastGroup to continue to
show solid rent growth through in-place annual escalators and increasing rents on expiring leases, " he says,
adding that occupancy will likely remain steady near
historical highs. " We'll be focused on EastGroup's ability to continue to invest in its development pipeline as
a source of growth and value creation throughout the
year, " he adds.
For his part, Loeb is excited about the company's
future. " EastGroup has any number of tailwinds
that we'll benefit from at different speeds at different
times, " he says. " Compared to some other real estate
sectors, I'm excited about where we go from here. "



Reit Magazine - March/April 2021

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