EastGroup at Nareit REITweek: Strategic Focus on Sunbelt Markets

On Wednesday, 04 June 2025, EastGroup Properties (NYSE:EGP) presented at the Nareit REITweek: 2025 Investor Conference, outlining its strategic focus on shallow bay industrial properties in Sunbelt markets. While the company celebrated high occupancy rates and a strong balance sheet, it acknowledged a recent slowdown in tenant activity for larger spaces. Despite these challenges, EastGroup remains optimistic about its long-term growth prospects.

Key Takeaways

• EastGroup targets last-mile deliveries with average building sizes of 95,000 square feet.
• The company boasts a high occupancy rate of around 97% and low vacancy in its niche market.
• CFO Brent Wood reported a strong financial position with debt to EBITDA trending below three.
• Recent macro uncertainties have slowed tenant activity, but EastGroup experienced record leasing last year.
• The company raised its guidance due to strong first-quarter performance.

Financial Results

• Debt to EBITDA: Trending below 3, indicating a strong financial position.
• Fixed Charge Coverage Ratio: North of 15, reflecting robust financial health.
• Net Effective Rent Growth: Over 50% for the last two years; over 40% in recent quarters.
• FFO Multiple: Below 19x, compared to a five-year average of around 25x.

Operational Updates

• Occupancy: Approximately 97%, highlighting strong demand for EastGroup’s properties.
• Average Building and Tenant Sizes: 95,000 square feet and 35,000 square feet, respectively.
• Development and Acquisitions: Historically ranging from $100 million to $400 million per year in development starts; peak acquisition year around $500 million.
• Geographic Focus: Primarily in Sunbelt markets such as California, Las Vegas, Arizona, Texas, Florida, and the Carolinas.

Future Outlook

• Expectation: Anticipates increased demand once business confidence returns.
• Supply Constraint: Competitors may struggle to match EastGroup’s development pace.
• Strategy: Concentrates on organic growth, strategic acquisitions, and development opportunities.

Q&A Highlights

• Southern California Market: Los Angeles has seen nine consecutive quarters of negative absorption.
• San Diego and San Francisco: Mixed performance with one positive and one negative quarter each.
• Guidance Adjustment: Raised occupancy and NOI growth guidance following a strong first quarter.
• Port Exposure: Preference for proximity to consumers for better predictability and tenant retention.

For more details, refer to the full transcript below.

Full transcript - Nareit REITweek: 2025 Investor Conference:

Jonathan Hughes, Real Estate Analyst, Raymond James: Good. All right. Good afternoon, everyone. I’m Jonathan Hughes, of the real estate analysts at Raymond James. Thank you for joining this discussion to hear more about the EastGroup story.

Joining me on stage is President and CEO Marshall Loeb and CFO Brent Wood. First Marshall’s gonna give an overview of the company, then I will ask some questions address key topics and issues, and then we can open it up to questions from the audience. So, with that Marshall.

Marshall Loeb, President and CEO, EastGroup: Okay. Thank you, Jonathan. I appreciate thank you for moderating our panel. Thank you for everybody in the audience that’s here. We’ll run through our presentation, but please stop Brent and I along the way if you have any questions and things like that.

Happy to help. As Jonathan mentioned, we’re one of the industrial REITs here at NAREIT. Kind of differentiate us from our peers where we fit are Shallow Bay. Our average building size is 95,000 square feet. Our average tenant size is 35,000 square feet.

So, you think of last mile deliveries, that’s really the niche where we’re targeting. It’s not so much getting goods from one port, you know, the West Coast to Chicago or New York. It’s moving goods around a zip code within Atlanta or across Dallas in markets like that. Our markets are primarily the Sunbelt markets, California, Las Vegas, Arizona, Texas, Florida, up through the Carolinas, Georgia. It’s really where the population where we’re going is mostly Sunbelt, but where we’re going is where the population growth is.

Where we want to catch those trends for you is last mile delivery, which is where the world’s going to, whether it’s goods or services or population growth because finding industrial land gets increasingly harder and harder every year, especially in a city that’s growing rapidly. So, we’re a long standing REIT. We’ve been around probably twenty years plus years. Our returns have been very attractive. I’d say we’ve evolved our strategy, but not really changed it.

Thank you. And so, that’s really where we kind of fit in within our peers. We’re primarily a developer. Although, depending where the market is, we’ll end up owning the same type product. And we try to be indifferent whether we buy it, build it, or buy it vacant, really depending on where that risk reward is at any point in the cycle.

But the end of the day, we’ll get to the same place. So, we just finished a series of buying properties. We feel like the market’s going to shift back, or it was shifting back earlier this year to the development side. And happy to kind of talk more. I won’t take all of Jonathan’s questions quite yet, but that’s a little bit of a summary on EastGroup.

Jonathan Hughes, Real Estate Analyst, Raymond James: Yep. Maybe we can talk about the macro environment. Obviously, there’s a lot of uncertainty out there and tariffs have a lot of impact to some industrial properties more so than others, but maybe talk about what you’re seeing in terms of that impact on your business.

Marshall Loeb, President and CEO, EastGroup: Sure. I’ll talk maybe if I thank you. I go back maybe to last fall, and really last year you heard us and our peers say companies or corporations were being deliberate or methodical in their decision making. So, it wasn’t, we were full, we were 96, 90 seven percent leased, which is we put out a press release ahead of NAREIT, we’re still roughly rounding a 97% leased. I kept hearing that tenants were waiting on the election, and I’m kidding.

Brokers always have a reason why things aren’t happening, and then I’ve heard about three times, and it was explained you have two candidates with widely differing policies. And for better or worse, after the election, in fourth quarter, we signed as and again, we’ve been around probably 40, 30 years as an industrial REIT, a record number of square footage for our company. We put out our earnings, and so we had a record quarter in fourth quarter in terms of just square footage lease. Prologis said the same thing, so that was a little bit eye raising. And then we finished up first quarter, and it was our third most square footage lease.

So, it felt like we kind of came out of a cloudy environment to a blue sky sunny day. We had two of our three best quarters in our history in a row. Our developments were leasing and you felt like, okay, here’s this inflection point that Marshall keeps predicting every year is coming in industrial. And then, really, we had Liberation Day. And so, we signed a fair amount of leases.

What I would say, it’s not like things have stopped, but it feels like we’ve gone from a little bit yellow light to green light back to maybe yellow light again. It’s in the last thirty days, it feels like tenants are a little more hesitant. The smaller the space, again, our average suite is 35,000 square feet. So, say tenants 50,000 feet and below. That’s that activity is still really good.

The larger the space and maybe the my logic is it’s a larger rent commitment by the tenant. Those deals are still happening. We’ve signed leases as recently as last week. We closed on a small property on a disposition Monday. So, there’s still transaction activity, but we went from what felt like record pace to a little bit of a slowdown.

And then, we’ll see. I think it I know this is unlike the GFC or COVID or other things we’ve been through, this one feels more artificial to me or man made. It was everything was fine April 1, April second. The world changed a little bit, and I think in time, and I’m playing myself, things will even out and we’ll, you know, we’re again, I’m thankful we’re 97% leased. If you look at our product type, our market’s about 4% vacant.

So, shallow bay, when you hear about industrial overbuilding or if you all hear that, it’s usually large buildings on the edge of town. That’s not what we are. We’re infill sites, smaller buildings. So, we’re, call it, 3% vacant. Our product type is maybe 4% to 5% vacant nationally.

And supply, what I get excited about is supply is at a record low. I was just reading, for example, Atlanta construction’s at its lowest point since 2014. If you look at markets like Dallas and Houston, absorption last year was 20,000,000. The construction pipeline is around 10,000,000. So, those markets I keep waiting for will snap back fairly quickly.

And what we’ve seen, I’ll blame it on pick on Amazon, for us to go through zoning and approvals and entitlement, once everybody wants the good or service quickly, you know, as soon as you hit click or hang up the phone, but no one wants it to originate from their neighborhood or around the corner, you don’t want all the trucks on the street. So, it’s always been a little bit harder. That’s why most of the buildings are bigger and on the edge of town. For us to get zoning approval. I’d say it’s gone up fairly significantly in the last two to four years post COVID.

So, that’s going to and we’ve got the land sites. That’s going to slow down so many developers as they get back in the market when things do turn. We feel pretty good about our runway given our balance sheet and our land holdings that are all zoned and permitted that we’ll be able to move much more quickly than our private peers will.

Jonathan Hughes, Real Estate Analyst, Raymond James: Okay. It’s maybe a good we can continue talking about the shallow bay product type. Historically, it’s a less supply impacted segment of the industrial warehouse market. And talk about the cost to build, why you don’t see more people doing it, just the economics of it, and

Marshall Loeb, President and CEO, EastGroup: Yeah. Well, typically what’s interesting, and we’ll get the question if what you’re doing if you’re building buildings to seven, low sevens today and they’re worth, you know, as we complete probably in the mid mid fours to maybe up to 5%, that profit margin’s attractive. But as I mentioned, it’s maybe two or three things. Land’s harder to come by. When you think of industrial, every other property type can go vertical.

So, we’re the first guys to get outbid for land. We need a lot of land and a lot of flat land, or at least land you can make flat, which is expensive. And it’s just harder to find those infill sites. So, that’s why it takes time to get through zoning. It takes time.

And so many of our peers, not that we’re a small company, but are so much larger. The pension funds, you know, a typical building for us is maybe 120,000 feet. So, you may spend $1,215,000,000, and we may build them. We’ll typically build them in one or two at a time. You’re not putting enough capital to work.

So, they can stay very busy, but not put the capital to work. Well, we’ll try to do that and do it in multiple cities, multiple submarkets, and it adds up. But people typically shy away from shallow bay just because of the hurdles. But one of the analysts, Jonathan’s peers, was we have the highest development returns in the industrial space. It’s just, you know, it would be minimum wage for a number of them for the amount of dollars they could put to work.

So, even the private guys kind of shy away. There’s lands more readily able to find on the edge of town. It’s cheaper, and it’s easier to get through zoning. So Yep. Thankfully, I’ve always said I like where we fit on the playground.

We’re kind of not much competition. Our competition’s usually local and regional players. Not that none of the other REITs do it, but it’s hard to put the capital to work on our size product that you can on big box development.

Jonathan Hughes, Real Estate Analyst, Raymond James: And in addition to the, you know, smaller size, the shallow bays, you have a park strategy, so to speak, so clustering of assets. But talk about what that means in terms of margins, efficiencies for operating these buildings.

Marshall Loeb, President and CEO, EastGroup: Sure. So we’ll ideally good. Thank you for the question. Well, we’ll build a a campus setting, and what we like about that maybe a couple of examples. As I think our peers, I’ll keep picking on the big box or maybe just a difference.

If we went and built a big box, usually we might go build 700,000 feet on the edge of town. Your tenant’s pretty indifferent if you’re on the East Side of town or the West Side. They may need moving goods through Phoenix or Las Vegas or it’s there’s no the the distribution range is much much larger. So, it’s more of a commodity business and it’s all about access and employment availability and and low rents where you’re trying to service where we are like the Golden Triangle as they call it in North Atlanta or the East Valley within Phoenix or markets like that. And, when we build a campus, we’ll build it rather than build it all at once, we’ll build one or two buildings at a time, and it gives us kind of a test case rather than building 800,000 feet on the edge of town.

Because what happens within those two buildings is it makes my job much easier, I’ll admit, and I hope our comp committee is not listening, but what I would say is that as they lease up, I’ll get an inbound call from the field saying I’m 50% leased. I’ve got three proposals out, and I’ve got a couple of tenants that are saying they need to expand elsewhere within that market. So, we’ll start the next two buildings. So, it’s really, maybe my two analogies, almost like a homebuilder building out a subdivision. As one home sells, you build the next one.

So, our, the size of our investment, this or at risk is smaller than our peers and then, we do it very incrementally and then the the flip side, we know if phase three in our park isn’t working, that phase four isn’t, you know, it’s not leasing as quickly as we’d like. Phase four isn’t a way to solve the challenges for phase three. So, can tap the brakes, and really it will go development starts as fast or as slow as really the market dictates. I’ve said, you know, our peers, it’s more of a maybe a push strategy. You’re pushing product out in the market and you hope the market’s there when your product gets delivered.

We’re pull and we know, I guess the other fear is in cases, if we don’t have those buildings going and we’ve got tenants that need to expand, someone’s going to get that space. So, we’d rather cannibalize our own current inventory. But the way it’s worked about a third of our development leasing has been existing tenant expansions over the last several years. So, we’re accommodating their growth and then where industrial rents have gone and are still moving is then we can go back and refill your space in Building 3 at a higher rent midterm. Your midterm, we can kick off Building 7, backfill your space at a higher rent, and just kind of keep working our way through a park and then ideally, if we like the park, we’ll try to find as much contiguous land or land around the corner to keep going as we can and and that also helps us market the suites because every tenant thinks, you know, their goals are they want to outgrow their space, but we can say, look, we’ve got, you know, room for eight or nine buildings, room for the park’s built.

Well, look, we can get you space ideally under the same roof. We’ll move tenants around for you if you give us enough notice or we can put you in Buildings 3 And 4 and you’ll be across the truck court from each other for efficiency. So, rather than have, we do have one off buildings, but ideally, we’d we like that campus setting and it also allows us to control the tenants that are in there, the landscaping, all the things like that, the amenities package. You can really create a nice sense. I’m biased.

I know I’m, you know, thinking I’m talking about different product type than industrial, but you can create a great sense of place with the right tenancy and the right landscaping. And I think that as a long term owner versus a merchant developer who’s going to flip, those investments for us really start to pay off when you’re a ten, twenty year holder of those type parks.

Jonathan Hughes, Real Estate Analyst, Raymond James: Yep. There’s a lot of great charts and slides on this in your presentation. That would be lovely to show. Maybe we could try that next year. Maybe let’s go to an ideal year in terms of acquisitions and development starts.

What does that look like?

Marshall Loeb, President and CEO, EastGroup: I deal you know, we again, I was trying say we try to end up in the same spot and how we get there. We would say, you know, if we went back maybe eight years, our development starts were 100,000,000 a year, and again, at the peak, we probably hit 400,000,000 a year in development starts. Some of that is construction costs going up, land costs maybe, but it was really just the market pulling those next wave of buildings. Acquisitions, it will really go as, you know, as we think about it, how many tenants and where across the country. We’ve bought as much as I think 500,000,000 in a year was probably our peak year.

We don’t want to look, we’ve got we’ve built our company for scale. We’ve grown from a sub $3,000,000,000 market cap to, it, 10,000,000,000 to $11,000,000,000 market cap depending where the stock market is in any given time. But we also want to be mindful of, you know, that our property managers and our accounting team and things like that. So, where are the properties? How many tenancies are there?

But I think we could certainly grow. We’ve done it half a billion a year and start 300,000,000 in starts or when our leasing starts are going well, that was because we the benefit we have of an operator, we felt like we were able to see the leasing velocity we had. And so, we, in cases where we had those local regional developers around the corner, bought their vacant buildings because they’re working off an IRR promote. And that risk return we were we would say acquisitions at the moment were maybe at a five, development was at a seven, we could buy buildings that had been built, but not leased at a six. So, it was really a shadow development pipeline if we could find those opportunities.

And then, that window closed. So, what we kind of see is for a minute the acquisition window will be attractive, and then the development window will be open, and then we remind ourselves it’s okay to just simply be patient. We’ve got organic growth. We’ve been growing our rents at net effective 50% north of 50% the last two years. The last quarters, it’s been north of 40%.

So, like that organic growth that we’ve got internally. And look, if the external opportunities are there, we’re not going to do we’re not going to buy a hotel with, you know, your investment. But if we can find the right risk reward, and sometimes it it finds us in the downturn. We had developers who tied up land sites but couldn’t close and we bought about half dozen of those where they had done all the kind of not all the legal work on the land to have it ready, and then they lost their funding, and we were able to step in and that accelerated our ability to start those sites. And then it went from that to the inbound calls became the brokers saying we took this to market, it didn’t close, our buyer backed out, and we were able to say, thankfully Brent and the team had our balance sheet in a good enough shape to say, look, if you’re award we’re I know you’re awarded at this price, we’re here, but we can close in about thirty days.

And that worked for a while, and then I think the investment markets come back. So, that acquisition window, if you follow, you saw us close a few opportunities in fourth quarter last year, we’ll find some strategic opportunities this year, but we were able to buy new buildings that were leased at 6% returns. So, was something we hadn’t that acquisition window was open for about maybe twenty four months. And you’ll just hope is we’re nimble enough and you know when that which window is open to kinda work through.

Jonathan Hughes, Real Estate Analyst, Raymond James: Yep. Maybe that’s a good lead into just the balance sheet and the flexibility that that affords you. Maybe for Brent, take that one, but that’s one thing that certainly is also I think differentiating relative to your peers is your balance sheet.

Brent Wood, CFO, EastGroup: Yeah, no, it’s interesting. As we’ve grown, we’re very pleased. We’ve grown earnings for an extended period of time, as Marshall said. And at the same time, we’ve done it by deleveraging or getting a more conservative balance sheet. Our debt to EBITDA now is trending into three and probably going below three.

Fixed charge coverage ratio is north of 15. So just a historically strong balance sheet for us. We’ve been the benefactor since interest rates began their quick rise two and a half years or so ago. Our shareholders, I’m going to say, know, rewarded us with a good share price so that we’ve had good equity access over that period of time. So we predominantly have been sourcing capital via new equity raises, and it’s been good to have that access.

By doing that, we’ve delevered the balance sheet. We have a lot of capacity to add more debt down the road. We would like to see rates come down a little bit more. They are headed slowly in the right direction, but we have been patient. And I think the important thing to note and the exciting thing as we have that capital available is we have been raising capital.

Our team has continued to find opportunities to invest capital. So we haven’t been raising capital as a means to put out a fire here, do something there. It’s been continually growing the company via the acquisitions, development and the other things Marshall talked about. So a very conservative balance sheet. I think the people that maybe haven’t paid close attention, especially to the top tier REITs over the last handful of years, it’s a much different sector, a much more deleveraged sector, a much more safe haven to like a rising interest rate environment.

And so again, we’re in a good spot. We’re looking forward to having a little more sunnier skies here in the future where we can put all that capital to work. But as Marshall said, we’ll be patient and the team in the field will do it at the pace that the market allows us. And but, yeah, we we look forward to to unleashing some of that dry powder we have stored up there.

Jonathan Hughes, Real Estate Analyst, Raymond James: We’re about twenty minutes in. I’ll give an opportunity to the audience. If there’s any questions, please raise your hand. Go ahead.

Marshall Loeb, President and CEO, EastGroup: Yeah. The the question I I I could hear you. Thank you. But I’m not sure if anybody could. It was really about Southern California.

How do we view that market and maybe Inland Empire East a little better IE East as they call it that maybe perspective, we’re about 5% of our NOI comes from LA, about 5%. We’re about 17% California and that’s really spread predominantly the the Bay Area, LA, San Diego. Maybe, I know your question, San Diego and LA fill or San Diego and San Francisco feel pretty stable. They’ve had, we get spoiled that we’ve had positive net demand in our markets. Dallas is on some looking at Reed who runs Texas demand in like sixty consecutive quarters of positive demand.

So, it’s just where is supply at any given point relative to that demand. Atlanta’s something like 40 quarter, 50 quarters in a row. So, most of our markets where California has thrown us a little bit was San Diego and the Bay Area would have one positive quarter, one negative quarter, that type thing. LA, unfortunately, has had nine consecutive quarters of negative absorption. First quarter was negative 2,000,000 square feet.

So, it’s been a harder market for us. We thankfully only have, I’m aware of, one vacancy there. We had a it’s in Carson, so we’re down by if you all know L. A. Port Of LA, Port Of Long Beach.

We have good activity. We’ve been lease out a couple of times. I think at least once post April 2 but those tenants have put things on hold. The tenancy there is very port driven. And what’s thrown us a little bit, I would argue that was traditionally probably our best market in the country of our markets.

And it’s probably been arguably the worst for the last eighteen months. And unfortunately, we just haven’t I’d love to tell you, I think it’s turning around or stabilized, but until they can have at least a positive quarter or a flat quarter of absorption, it still feels like and what’s interesting to me usually, if you said historically, my experience, what ruins a real estate market is it’s all supply and demand but in LA, they never had the supply because there was already no land. It was really as the best I can tell coming out of three kind of COVID, all the logistics companies raced to take space. They have more space than they wanted. And Inland Empire East, so our portfolio is predominantly Mid counties, city of industry, and West.

And so, we feel good long term about consumption. It’s what 17,000,000 people or maybe all slightly on how many people are in the metro area area. So, that’s a lot of consumption. Even if you’re near the port, that’s also happens to be south of downtown. You’re not that far from Santa Monica and the beach communities.

Inland Empire East, if you get more towards San Bernardino, Redlands, those areas of LA, it’s really very port driven where goods come in from the port, get unloaded there, and then they make their way to New York, Boston, Chicago, Philadelphia. That’s a trickier, and maybe I’ll use it, question not asked, but if you say why do we like being near the consumer, we think it’s a lot more predictable, stickier demand. We we do have three buildings kind of new in that South Bay area of LA. Again, the overall market’s 5%, but I’ve used examples in an earlier meeting. We’ve been in markets like Houston which Brent ran for us for years, and we’ve been since the 90s.

We’ve been in Jacksonville, Florida since the 90s, but we’re nowhere near the ports in those markets because ports are to me are harder to predict. You know, if you can invest and own our stock, I hope you will, I would say, to me, it’s a lot easier prediction to say more people are going be living in Nashville, Tennessee, or Austin, Texas, or Tampa, Florida in five to ten years than the Port Of Houston is going to gain market share from Savannah versus Miami versus Jacksonville, LA, Long Beach. So, we we are not really port driven. At at times, we’ve probably maybe missed some opportunities as certainly as Houston’s port has done well the last decade, it feels like. But we like being as we want to be in a low visibility, great access, low visible retail location.

We want to be as near your homes as we can, and that’s why we see tenancies like, you know, because Amazon’s our largest tenant but we also have Best Buy, Home Depot, Lowe’s, the goods that you probably can’t fit in your can’t fit in your car. They’re white goods. So, if you buy a refrigerator, you’re not leaving the store but it can come from one of our properties and be at your house later that day. So, again, that’s how they’ve used us as they talk about going from store level inventory to market level inventory. We get the big bulky items from Amazon and some of them.

And so, we’ll, you know, LA has us a little bit concerned. It’s still not, I’m glad it’s 5%. At times, we’ve wished we were a lot larger than 5%, but it’s it’s also a reminder of us. We like tenant diversification. Our top 10 tenants are about 7% of our revenue stream, and that’s about half the industry average.

And we like geographic diversification because every market that seems red hot suddenly can turn. Rents doubled in LA really rapidly, and then they’ve come down like a rocket as well, unfortunately.

Jonathan Hughes, Real Estate Analyst, Raymond James: Maybe talk about five, six weeks ago, you were the only industrial player to adjust guidance upward, raising occupancy and NOI growth guidance. What gave you the confidence to do that in this macro uncertainty that we’ve heard about for the past twenty five minutes or so?

Brent Wood, CFO, EastGroup: Yes, I’ll jump in there. We part of it is the team we had a strong first quarter. I think we were about $03 above our midpoint in the guide. So it gave us some flexibility in the latter part of the year. And just strong performance, we continue even though things, as Marshall said, coming into April 2, at the time we did the call, you weren’t exactly sure how that was going to play out.

But we’ve seen continued strength in rental rates. We’ve maintained a very strong occupancy and lease percentage. Probably where that little bit of slower activity has shown itself more is maybe in our development leasing, just trying to get those deals over the hump has been a little bit slower. But really, we build our budget and our guidance from the ground up, meaning all our asset team, it’s not at the corporate level us making global assumptions. We build it from the bottom up individual leases that are either vacant or rolling for that year.

We roll that up. We add our corporate expense and that type thing to it and then measure. And then thankfully, we rolled it, we were just in a good position early into the year. And we put out a release a couple of days ago, which is sort of a market update. We’re trending at or maybe slightly ahead on an occupancy level of where we’ve projected.

So it was just a good strong quarter, as Marshall talked about. And then we’re just trying to sustain that momentum into the year and trying to be patient and wait this out to where if there is some clarity, you feel like there’s the opportunity for some uptake given supply being tight and some of those other factors. But it was really just a strong it always helps to have a strong quarter and the quarterly reporting gives you a little more runway to kind of push the rest of the year. And so we’re glad the team afforded us that opportunity.

Jonathan Hughes, Real Estate Analyst, Raymond James: All right. If there’s no other questions from the audience, maybe, Marshall, you want to leave us with kind of a a summer summary of what the investors in the room should know about the EastGroup story over the next few years.

Marshall Loeb, President and CEO, EastGroup: Sure. And maybe with the thank you. With the preface that take this, I’m an optimist. So but here’s with that in mind. I really like our positioning better than I have and I I would have told you I’m an optimist the last four or five years but I like it better today than I would have in at any given point before even with the tariff news and things but and my reasoning is, you know, we’re, if I round, we’re 3% vacant.

Our property type is 4% vacant. Our balance sheet’s literally as strong as it’s ever been. So, we have that dry powder to take advantage, and supply is at its, you know, it was low a year ago, I say a year or two ago. But, with the downturn and the run up in interest rates, or really capital markets downturn, it wasn’t an occupancy downtown downturn or anything like that. So many of our private peers have been pushed out of the market.

They didn’t have the balance sheet because they were entrepreneur to carry land, carry a construction team. So many of our peers have been sidelined that it’s going to take them a while to catch up when things do turn. So, I feel like with a little bit of business confidence, which we saw in, I wouldn’t call the economy great in fourth quarter or first quarter of this year, but just better or consistent, that I feel like there could be a pretty sharp turn, and it’s going to be a while before our people can, our peers can catch up on development. And then, other thing I like, if you look back for what it’s worth, our average FFO multiple, probably our five year average is around 25 times. We’ve gotten as high as in the 30, call it mid thirties FFO multiple.

Today, we’re a little below 19. So, I think the fundamental setup is better than it’s been the last handful of years, and yet our FFO multiple is five or six turns below where it’s been over that time period. I don’t know the 25 is the right number or not, but for what it’s worth, that’s roughly the average. So, it feels like our stock price doesn’t really reflect what we feel like is this inflection point coming. I’m convinced it’s coming.

I just keep getting wrong when that is. It’s like I I keep saying June. I just thought it was going to be June of twenty four. Now, I’ll say June of twenty five. But at some point, when business confidence comes back, we feel like there’s pent up demand and that will that will affect us, and I’m seeing zero.

So thank you all.

Jonathan Hughes, Real Estate Analyst, Raymond James: Yep. Thank you, Marshall. Thank you, Brent. Thanks everyone for joining.

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