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Edited Transcript of EGP earnings conference call or presentation 7-Feb-20 4:00pm GMT

Q4 2019 Eastgroup Properties Inc Earnings Call

Jackson Feb 19, 2020 (Thomson StreetEvents) -- Edited Transcript of Eastgroup Properties Inc earnings conference call or presentation Friday, February 7, 2020 at 4:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Brent W. Wood

EastGroup Properties, Inc. - Executive VP, CFO & Treasurer

* Keena Frazier

EastGroup Properties, Inc. - Director of Leasing Statistics

* Marshall A. Loeb

EastGroup Properties, Inc. - President, CEO & Director

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Conference Call Participants

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* Alexander David Goldfarb

Piper Sandler & Co., Research Division - MD & Senior Research Analyst

* Blaine Matthew Heck

Wells Fargo Securities, LLC, Research Division - Senior Equity Analyst

* Craig Allen Mailman

KeyBanc Capital Markets Inc., Research Division - Director and Senior Equity Research Analyst

* Emmanuel Korchman

Citigroup Inc, Research Division - VP and Senior Analyst

* Eric Joel Frankel

Green Street Advisors, LLC, Research Division - Senior Analyst

* James Colin Feldman

BofA Merrill Lynch, Research Division - Director and Senior US Office and Industrial REIT Analyst

* John William Guinee

Stifel, Nicolaus & Company, Incorporated, Research Division - MD

* Jonathan Michael Petersen

Jefferies LLC, Research Division - SVP & Equity Analyst

* Ki Bin Kim

SunTrust Robinson Humphrey, Inc., Research Division - MD

* Richard Charles Anderson

SMBC Nikko Securities America, Inc., Research Division - Research Analyst

* William Andrew Crow

Raymond James & Associates, Inc., Research Division - Analyst

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Presentation

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Operator [1]

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Good day, everyone, and welcome to the EastGroup Properties' Fourth Quarter 2019 Earnings Conference Call. (Operator Instructions) Please note, this call may be recorded.

Now it is my pleasure to turn today's conference over to Marshall Loeb, President and CEO.

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [2]

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Good morning, and thanks for calling in for our fourth quarter 2019 conference call. As always, we appreciate your interest. Brent Wood, our CFO, is also participating on the call. And since we'll make forward-looking statements, we ask that you listen to the following disclaimer.

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Keena Frazier, EastGroup Properties, Inc. - Director of Leasing Statistics [3]

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Please note that our conference call today will contain financial measures such as PNOI and FFO that are non-GAAP measures as defined in Regulation G. Please refer to our most recent financial supplement and to our earnings press release, both available on the investor page of our website and to our periodic reports furnished or filed with the SEC for definitions and further information regarding our use of these non-GAAP financial measures and a reconciliation of them to our GAAP results.

Please also note that some statements during this call are forward-looking statements within the Private Securities Litigation Reform Act. Forward-looking statements in the earnings press release along with our remarks are made as of today, and we undertake no duty to update them as actual events unfold. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially. We refer to certain of these risk factors in our SEC filings.

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [4]

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Thanks, Keena. We had a strong team performance this quarter, maintaining the pace set earlier in the year. Some of the positive trends we saw were funds from operations came in above guidance, achieving a 7.6% increase compared to fourth quarter last year. And for the year, FFO also came in above guidance, with an increase of 6.9% over prior year. This marks 27 consecutive quarters of higher FFO per share as compared to the prior year quarter, and we're especially pleased with our fourth quarter and 2019 FFO growth given that the equity raise far exceeded our original budget.

The vitality of the industrial market is further demonstrated through a number of metrics such as occupancy, same-store NOI and re-leasing spreads. As these statistics bear out, the operating environment continues to allow us to steadily increase rent and create value through our ground-up development and value-add acquisitions. At year-end, we were 97.6% leased and 97.1% occupied. Further, our quarterly occupancy has been 95% or better for what is now 26 consecutive quarters.

In short, demand continues growing for our in-fill location, small bay last mile parks. We're seeing this growth in terms of tenant expansions as well as a broadening range of tenants. Several markets were 98% leased or better, including Houston, our largest market. And while still our largest market, Houston has fallen from roughly 21% of NOI to a projected 13.4% for 2020 and even below 13% in fourth quarter of the year.

Supply and specifically shallow bay industrial supply remains in check in our markets. In this cycle, the supply is predominantly institutionally controlled, and as a result, deliveries remain disciplined. And as a byproduct of the institutional control, it's largely focused on big box construction. While sourcing development sites within the fast-growing Sunbelt markets is a growing challenge, it's keeping supply in balance.

Our quarterly same-property NOI growth was 4.5% cash and 3.7% GAAP, and our annual same-property NOI growth was 4.7% cash and 3.7% GAAP. We're also pleased with our average quarterly occupancy at 97.1%, up a full 60 basis points from fourth quarter 2018. Rent spreads continued their positive trend, rising 9.3% cash and 18.3% GAAP last quarter. And for the year, GAAP rents grew 17.3%, marking our fifth consecutive year of double-digit GAAP increases.

Given the intensely competitive and expensive acquisition market, we view our development program as an attractive risk-adjusted path to create value. We effectively manage development risk as the majority of our developments are additional phases within an existing park. The average investment for our shallow bay business distribution buildings is roughly $10 million. And while our threshold is 150 basis point projected investment return premium over market cap rates, we've been averaging 200 to 300 basis point premiums. At year-end, the development pipeline's projected return was 7.4%, whereas we estimate a market cap rate to be in the 4s.

During the fourth quarter, we began construction on 4 developments totaling 593,000 square feet. And as of year-end, our development and value-add pipeline consisted of 28 projects containing 4.1 million square feet with a projected cost of approximately $420 million. Meanwhile, during the quarter, we transferred 5 buildings into our portfolio, totaling 775,000 square feet, each 100% leased.

Looking back from 2017 to 2019, we've transferred 34 starts into our portfolio with 33 of those being 100% leased. For 2020, we're projecting starts of $150 million spread over 9 cities. This geographic diversity further reduces risk while enhancing our ability to grow the development pipeline on an ongoing basis.

As a reminder, the majority of our starts are based on the performance of the prior phase within the park. In fact, over 2/3 of our 2020 starts are projected to be that next building. As a result, market demand dictates new construction rather than us pushing supply into the market.

Two outcomes of this approach are one, it allows us to manage risk. As in most cases, we're simply restocking the shelves. And in many cases, the start is driven by the expansion needs of an existing tenant in the park, and in most of those cases, we're able to backfill the original space at higher rents.

We had a busy quarter in terms of new investments and dispositions. We're pleased with the quality of our investments as well as the geographic diversity. New investments were made in Las Vegas, San Diego, Dallas and Phoenix. And from a dispositions perspective, we sold 3 of our 4 R&D buildings in Santa Barbara; and in Tucson, a long-term tenant acquired their building.

In sum, while the market is strong, we're working to find development and value-add opportunities, while also using this environment to shed those assets, which are less likely to drive our future growth. The high historical transaction levels we achieved in each of the categories during 2019 are examples of market strength.

Brent will now review a variety of financial topics, including our 2020 annual guidance.

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [5]

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Good morning. We continue to see positive results due to the strong overall performance of our portfolio. FFO per share for the fourth quarter exceeded the midpoint of our guidance at $1.27 per share and compared to fourth quarter 2018 of $1.18, represented an increase of 7.6%. We continue to experience terrific leasing results in both operating and development programs. Average occupancy for 2019 was 96.9%, and we transferred 13 development and value-add projects, totaling 1.8 million square feet into the operating portfolios that are currently 96% leased.

FFO per share for 2019 was $4.98 per share compared to $4.66 per share last year, an increase of 6.9%. Our continued strong performance, both operationally and in share price, is allowing us to further strengthen our balance sheet. From a capital perspective, we issued $68 million of common stock at an average price of $132.52 per share during the quarter, that increased our 2019 gross equity raise to a record high $288 million.

Also during the quarter, we closed on a 7-year senior unsecured term loan for $100 million. With the addition of an interest rate swap agreement, the total effective fixed interest rate is 2.75%. We remain pleased to have access to capital via equity and debt at attractive pricing.

The company had one milestone that may have been overlooked, so we wanted to mention it on today's call. In December, we declared our 160th consecutive quarterly cash distribution to EastGroup shareholders, or 40 consecutive years. EastGroup has increased or maintained its dividend for 27 consecutive years, including increases in 24 years over that period. The strength, stability and growth of the dividend is a testament to the successful implementation of our strategy over an extended period.

Looking forward, FFO guidance for the first quarter of 2020 is estimated to be in the range of $1.27 to $1.31 per share and $5.25 to $5.35 per share for the year. The FFO per share midpoint for 2020 represents a 6.4% increase over 2019.

The leasing assumptions that comprise 2020 guidance produce an average occupancy of 96.3% for the year and a cash same-property increase range of 2.5% to 3.5%. Other notable assumptions for 2020 guidance include $95 million in acquisitions and $40 million in dispositions, $170 million in common stock issuances, $100 million of unsecured debt, which will be offset by $105 million in debt repayment and $300,000 of bad debt, net of termination fees.

In summary, our financial metrics and operating results continue to be some of the best we have experienced, and we anticipate that momentum continuing into 2020.

Now Marshall will make some final comments.

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [6]

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Thanks, Brent. Industrial property fundamentals are solid and continue improving across our markets. Following the fundamentals, we continue investing in, upgrading and geographically diversifying our portfolio. As we pursue the opportunities, we're also committed to maintaining a strong, healthy balance sheet with improving metrics as demonstrated by the equity raise last year. We view this combination of pursuing opportunities while continually improving our balance sheet as an effective strategy to manage risk while capitalizing on the strong current operating environment. The mix of our team, our strategy and our markets has us optimistic about our future.

And we'll now open it up for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And we'll take our first question from Jamie Feldman with Bank of America.

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James Colin Feldman, BofA Merrill Lynch, Research Division - Director and Senior US Office and Industrial REIT Analyst [2]

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I guess just to start, you had mentioned you're seeing tenant expansion in a broadening range of tenants. Can you talk more about the broadening range of tenants, and -- just to give a picture of what we might see going forward?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [3]

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Sure. Jamie, it's Marshall. I'll add, some of what we've talked about in the -- little bit in the past, and then it continues to broaden what's been interesting, maybe and I'll go back 2 or 3 years, our traditional tenants are still doing well and the economy is kind of chugging along. So the granite tile guy, the flooring, the HVAC contractors, all are doing well and expanding. And really what's been a new trend for us is more, I'd say, retail-related or along those lines where they rework their supply chain, logistics chain, some of it e-commerce, some of it not necessarily, but maybe the handful that come to mind would be The Home Depots and Lowe's.

And then we'll -- I guess, what's interesting, we'll see them in a market and then they'll spread, and we'll see them in Florida, Texas, California, Arizona, throughout our markets, I'd say, Wayfair, Best Buy. Of late, probably in the -- maybe in the last couple of quarters. We've seen Peloton, if you're familiar with in the exercise equipment. We've gone from no leases to maybe 3 with them. And a couple more conversations going on, and probably 2 years ago, we were having -- we had more leases with Amazon 3PL groups that we're doing deliveries in the last, call it, couple of quarters as well. We've seen more activity of signed leases with Amazon and have conversations. We may or may not get them, but they're in the market. So they're certainly coming across our radar much more frequently. And that's been -- what's really been interesting, maybe the last 18 months is, once someone shows up and it's good, we build that relationship and have a conforming lease. We think it gives us -- hopefully, if we're fair to negotiate with and have a conforming lease. If we do a lease in Tampa, like with Tesla, for example, is another new name, then we have an opportunity to work with them in Dallas or in Las Vegas.

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James Colin Feldman, BofA Merrill Lynch, Research Division - Director and Senior US Office and Industrial REIT Analyst [4]

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Okay. That's helpful. And then, I guess, as you think about your guidance, I mean, last year, you ended up well above what you initially provided. Can you just help us think through kind of the upside and potentially downside movements to your range, what you need to see to move it higher, both I guess, on the development starts and same store?

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [5]

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Yes. Jamie, it's Brent. Yes, the $530 million -- part of the challenges in budgeting this year is you're on the heels of 2 consecutive certainly record years. And so the template that we put in the press release with all the assumptions, basically, that shows directly the factors that we put in place that result in the $530 million midpoint. And so we do show occupancy down a little bit, same-store down a little bit from the prior year, but they're record levels. We're very optimistic about the year. Certainly, last year, we were fortunate enough to be able to raise that throughout the year. So certainly, if occupancy were to be slightly better, that would be, obviously, a help to the bottom line and to same store.

If we can lease the developments at the same very brisk clip that we enjoyed last year, certainly, there would be upside in stores there. So we -- if things go positive, like they did last year, and we've got no reason to think now that, that wouldn't happen, but there could be some room. But when you start getting around those 97%-type numbers and record highs, it's -- I guess, you've learned us over the years, we're a little hesitant to come in and say, "Hey, we're going to budget to a third consecutive record year." So I think our occupancy that we budgeted to this year, even if it happened exactly as budgeted, it would be our second highest occupancy for the year in the history of the company. So I guess it's a high-class conundrum to be in, but we're very bullish on the year looking as it looks today.

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Operator [6]

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(Operator Instructions) We'll take our next question from Alexander Goldfarb with Piper Sandler.

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Alexander David Goldfarb, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [7]

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Two questions. First, Marshall, you guys are clearly an FFO company. So same-store is not as much of a focus given your development. But that said, looking at your same-store guidance for this coming year, obviously it's lower. You guys speak about wanting to push rent more and given -- and maybe trade-off some occupancy. But I would think on those 2 levers, the bottom line is that you're driving more overall NOI. So can you just talk about how the reduction of occupancy, how you wouldn't more than offset that as you push rents?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [8]

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Yes, good point. And probably, I guess, mathematically, if you pushed -- again, this is just speaking theoretically, mathematically, because of that downtime, if you lose a tenant over rents, even though we may get 5%, 10% higher rent from the next tenant, you probably won't have enough time depending when it happens during the year to really catch up and catch it. You may do better over a 5-year period, but if you end up -- snapshot of 2020, you probably won't catch up.

I'd like to think our guys -- as we said, 5 years of double-digit GAAP rent increases, and last year was actually a record GAAP increase for us at a little over 17%. So hopefully, we'll see similar numbers. And we're 97.5% leased at year-end. We think it's a good time with rising construction prices to keep pushing and hammering on rents, where we have those opportunities. But that said, if we think the right thing is, it's a great time to also improve credit quality, so you could lose some tenants, and we may lose some occupancy that way where we -- if someone's had trouble paying rents and things like that and then pushing rents.

So hopefully, we can make the trade-off and maintain and improve our NOI and do it all in one year. But as Brent said, last year was such a great year for us. We budgeted a little bit of loss. And then if you mathematically work through it, we were saying that, call it, the 60 basis points, that's about 200,000 square feet for us. So it's not -- that's about 6 -- on average, about 6 or 7 tenants. So it's not a -- it's almost like coin toss, it's on that many leases rolling and 200,000 feet, 6, 7 tenants, I hope we're guessing wrong and we get those renewals done and we push rents, there could be some upside to the numbers.

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Alexander David Goldfarb, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [9]

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Okay. So it sounds like it's just the downtime between the tenants is really the delta. That's helpful. The second question is on development, sort of a 2-part -- or 1. Some recent articles about increased supply but you mentioned in your comments about sort of less supply and maybe it's a geographic market thing. Maybe all the new supply is still out in the cornfields, whereas you guys are closing in. So comment on that.

And 2, you bought a bunch of land, again, just thinking about how costs have accelerated, are you still seeing rent growth in excess of cost, and therefore your 7%-plus, the 300 to 400 basis point spread, still is applicable today as it has been over the past few years?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [10]

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Sure. I guess a couple of different thoughts within that. We are seeing -- we're certainly cognizant of supply and the fact that the industrial market has been hot now for a few years. It's certainly attracted the world, really, in terms of investments and acquisitions and even development. Everybody has an industrial platform now. It feels like whether they're a developer or an acquirer, so we see that, but we also know we struggle for infill sites in fast-growing Sunbelt market. So that's helped along with the institutional, but we are watching supply.

What makes us feel a little better as we think about it is, as you said, not all supply is equal, a lot of -- an awful lot of it is in the cornfields and it's bigger box. Our average tenant size is 30,000 feet, about -- it's roughly 60% of our tenants are under 50,000 feet. So a lot of the supply isn't -- simply isn't designed for our tenants. And then with fast-growing markets, we're in 13 of the 15 fastest-growing cities. So with the growth in our markets, there should be more supply. And really, with e-commerce and supply chain logistics, that's the other thing, even if Dallas hadn't added 120,000 jobs last year, there'd be more demand, but those 120,000 jobs and the secular shift away from brick-and-mortar retail towards our end is really helping us there.

So we feel optimistic about it. And really, I guess, I'd also say, what I love about our model is, it almost doesn't matter what Brent and I feel, it's really how well did the last building lease. And if it did well, we'll restock the shelves. And if it's languishing a little bit or behind on pro forma, we'll hold off. We've said kind of the rents are rising, but that our yields would come down, maybe to the low to mid-7s. That said, we -- everything we transferred in last year was at a 7.5%, and our pipeline for development is penciling out at 7.4% and value adds at a 6.4% and cap rates are staying compressed in the 4%s.

So even if we -- I kept thinking, we'll come down to the lower 7s just with construction prices, but we've been able to hang in there so far. And some of that they've leased up, like for their starts last year faster than we anticipated or pro forma.

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Operator [11]

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Question from Manny Korchman with Citi.

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Emmanuel Korchman, Citigroup Inc, Research Division - VP and Senior Analyst [12]

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Marshall, you talked about the tenant relationships, taking up some of the space. You mentioned some names like home improvement retailers, Tesla, et cetera. How many of those conversations are happening because they have a relationship with you and you're utilizing that relationship for new deals versus them wanting to be in the markets you're in? And then on the flip side of that, how often are they asking you to go or find them opportunities in markets that you're not in, but they want to be in?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [13]

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Good question. I mean, I'd love to evolve to the former, and it's probably more of the latter today. What will happen is, it makes sense. Everybody has a tenant rep broker and -- with kind of smaller company, but we have a pretty good grapevine within the company. We'll hear that Best Buy is looking for space. We signed a lease with them recently in Miami, was looking in Miami, and we signed a lease with them in Charlotte or L.A. Ryan had worked with them, and so that word of mouth and that -- it usually follows the initial contact from the tenant that they're out looking for space. And then we'll connect those dots and try to get in front of them and get a leg up.

That helped us, for example, in Las Vegas in our acquisition. We bought 3 buildings there. And one of the full building users we got, it was a tenant rep broker that we knew and he learned we were acquiring the building, and I think that -- and I won't speak for him, but I think that was helpful for us landing that tenant. He was out of Dallas and was doing national rep work for that tenant. And once -- he had done a handful of deals with us already, and he was comfortable with us. So that helped. That helps, but we're more reactive at this point still.

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Emmanuel Korchman, Citigroup Inc, Research Division - VP and Senior Analyst [14]

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Got it. And Brett, maybe one for you. If we think about your guidance going into 2019 versus your guidance going into 2020. If we think about the levels of both acquisitions, dispositions and equity, those moved up quite significantly in '19 versus where you first came out. What's the setup for 2020? What needs to change for you to sort of increase those targets for both acquisitions and dispositions? And then also what would make you raise more equity than the $170 million that you have in guidance?

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [15]

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Yes. I think it would be just what you're saying. The -- our equity issue really is just a byproduct of what we budget from acquisition standpoint. So we certainly like the pricing of our stock price and/or debt if we needed to issue it. So we certainly don't view ourselves as capital constrained. So our guys in the field and all the markets are on the ground daily trying to drum up, acquisitions are very difficult value add. We've had some success. And then, of course, the majority of our success in the development program.

So as we have success and have those opportunities, we will certainly ratchet those up. But given where our balance sheet is, we won't do that just in a vacuum without -- given where we are today, we're not looking to drive our debt-to-market cap even lower that type of thing just arbitrarily.

So we're in a good position. I think just in terms of that volume, it will be a matter of what the guys can come up with. I know Marshall and team got a couple value adds early in the year, which is a good start. That guide that we have in that category are basically what we hope are known at this point. So we'll go from there. But we -- there's certainly upside on the capital side, that will not be limiting us in any way.

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Operator [16]

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Question from Bill Crow with Raymond James.

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William Andrew Crow, Raymond James & Associates, Inc., Research Division - Analyst [17]

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I want to follow that last question with another question on the balance sheet. It just -- it feels like you're over-equitizing a little bit given your goals for expansion for 2020 versus the capital that you raised. At what point when you start to look at the cost of debt does it get to the point where you need to add some more debt?

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [18]

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Bill, that's -- it's a conversation we have quite frequently. And I think Marshall and [Joe, what he wouldn't tell you,]we didn't realize we were hoarders until we saw the stock price and all the sudden we've become hoarders. I guess you remember, Keith, our long-time CFO, predecessor, kind of an old statement "you get equity when you can." And this window has certainly been open longer than historically typical. And so like I said a second ago, I don't view that we're in a position now that we would issue equity just for the sake of further strengthening. But given those situations, Bill, as bright as the sun is today, there will be a time where it's maybe not quite so bright. And we would like to -- it served us very well in the last Great Recession to have what was viewed as a very conservative balance sheet, and it turned out to be, in hindsight, probably where we should have been, and we were positioned then to pick up on some other people's weakness. And certainly, if that were to happen again, we would want to be in that same boat.

So it's a trick one way or the other, but we do keep an eye on debt. Last year, we -- when we did the 2.75%, it was more of a reaction to where the markets were, and so we were able to move on that pretty quickly. And that wasn't something that we had said, let's just go do this. It was the market looked attractive at the moment. So we pulled that lever versus the equity lever. So we'll keep an eye both ways.

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [19]

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Yes. And Bill, I agree with Brent. And I'd jump in and add, it's been interesting over the last years, and a lot of ways to do it, but as we look at our cost of equity versus where the 10-year and the spreads are, there have been moments in time where that difference really wasn't very great. So given how close they were rolling towards equity just for the safety for our shareholders of it. But we'll -- and so we like where we are balance sheet-wise, but it's been interesting to see how close that gap has come at different times.

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William Andrew Crow, Raymond James & Associates, Inc., Research Division - Analyst [20]

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I appreciate that. Marshall, is Houston kind of, I don't know, highest up on the watch list from a supply-demand perspective, is it closest to the precipice? If not, which market is?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [21]

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It's -- we watch all of them, Houston, Dallas, Atlanta, are always big, the last few years, supply markets. Typically, Dallas, Atlanta, have been south of town and literally far enough away, especially Atlanta. We're north of town, and so much of the supply is south. The port area of Houston is pretty far away, but we've watched supply creep up in Houston to the point that we're definitely keeping an eye on it. I'd like at least if we look kind of within our own portfolio. And you've -- we're -- I'm thankful or grateful that we're 90 -- little over 98% leased in Houston as we ended the year with a little under 7% set to roll this year, kind of another context as we like, and this isn't so much Houston as any market. But last year, it was within our pro forma, our budget, it was 13.8% of our NOI this year, it's projected to be 13.4%. So we dropped 40 basis points in Houston. And then even at the end of the year, it falls below 13%, and that's without any disposition.

So we may pull the trigger on an asset or so in Houston. We've said in the 2 buildings, I guess, I say that at a high level on Houston, and we finished 2 buildings at World Houston in the fourth quarter. And by the time we delivered them, the guys had on 100% leased and occupied. So hate to stop that when you're getting that kind of performance, but we'll probably build to the 7s and sell in the 5s to somewhere in the 4s, wherever the market allows and kind of watch it. But you're right, it has crept up 17 million square feet in Houston. It's a pretty decent-sized number when they've been absorbing about 11 million square feet. So not all of that's competitive, but it's definitely on our radar.

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William Andrew Crow, Raymond James & Associates, Inc., Research Division - Analyst [22]

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Marshall, I'm going to violate the rule and just add one more -- ask one more quick question. Are you hearing -- I assume you're not seeing anything, but are you hearing anything from tenants or other owners of any impact from coronavirus from ships coming over empty from anything related to that?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [23]

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No. And I will let you violate the rule. I'll violate it with 3 answers and short -- I'll be brief, then, is no. We really have not. We've kind of watched for it and maybe just with the nature of our tenants and portfolio. I've not -- no one's used that as an excuse to not sign -- to back out of a lease yet. There's always a first, but I haven't heard that one.

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Operator [24]

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Question from John Guinee with Stifel.

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John William Guinee, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [25]

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Great. Another stunningly good quarter and guidance. Congratulations. Just a curiosity, and I don't know if John Coleman's on the call or not, but I noticed that your 43-acre site in Miami, 465,000 square feet, you're in it for about $35 million -- $34 million. That's about $75 per square foot. Is that because you've got a lot of infrastructure you built out? Or is that just the cost or value of dirt down in Miami these days?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [26]

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Yes, I'm trying -- I don't have the -- if I can pull the numbers and maybe we can circle back if we need to. John, it's Marshall. But we have added the infrastructure for the park, have built and delivered 2 of the 5 buildings there and are building the third building. So that land, we were in it for -- we bought it for about $10 a foot and so that's really -- and land prices have really risen in Miami in the last couple -- with the success of industrial, a fair amount as well. So we like our bases in Atlanta.

I see what you're looking at now. So it probably does -- as we put the roads in and the retention. So everything is in, and I'll brag on John since he's not on the call or give him a complement, he'll have everything set, and his goal is to have the permit in hand. So as our third building, as you saw with our second building leased up with Best Buy, he quickly moved to the third building this quarter, and we started it. And then as that building leases up or gets full, we'll pull the trigger fairly quickly on our fourth building there.

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John William Guinee, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [27]

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I'm embarrassed. I should already know the answer to this. But if you look at your pretty sizable lease-up portfolio, 2.3 million square feet, you're obviously capitalizing all your costs during the lease-up period. But a lot of these are generating income. Are you capitalizing the income also? Are you recording the income in your top line revenue?

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [28]

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On which...

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [29]

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On the development?

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [30]

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On the development and lease...

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John William Guinee, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [31]

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On your lease-up, on your lease-up assets.

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [32]

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Yes. On the lease-up, based on the way that works, we capitalize on the unoccupied portion. And then, of course, on the occupied portion as it becomes occupied, you collect the rents. And so as you see the lease percentages based on a little bit of timing, but it basically works in that manner. And obviously, when you see a property 100% leased, but it's still in a lease-up, it means we've signed the lease, but the tenant hasn't yet occupied because as soon as they occupy at that level it would transition in. So as long as you're still in that lease-up category window, the unoccupied portion expense related to that is capitalized.

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John William Guinee, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [33]

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Okay. Income is always put into the top line revenue, though?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [34]

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It is.

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [35]

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Rents, even if you have a 25% leased property and that tenant's occupying paying rent, you are booking that 25% rental income to the bottom line as soon as they start paying rent, yes.

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Operator [36]

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We'll take our next question from Jon Petersen with Jefferies.

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Jonathan Michael Petersen, Jefferies LLC, Research Division - SVP & Equity Analyst [37]

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I know you talked about pushing harder on rent this year. I was curious if you could talk about lease term, and if you guys are pushing harder on that with renewals and with new leases and also where you guys are at on annual escalators on new leases you're signing versus the ones that are rolling off?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [38]

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We will push -- the terms used is construction -- it's Marshall. I should say, is TI cost, construction costs have risen. Usually, again, everybody will have a tenant rep broker, and you'll get an RFP for a 5-year, 7-year lease. We'll typically start -- you'll want to match that with our initial response. And as we work through the deal and a lot more recently is the TI costs have escalated, you can end up adding a little more term and/or a little bit higher rent. So that's typically how that conversation goes, as they settle in our building and we get the construction bids back, we'll say, you can either fund dollars over, call it, $12 a foot or whatever if it's new space, however it works out or we'll amortize it, but we need another year of term.

So terms have probably crept up a little bit, but they've always kind of stayed within that 4% to 5% portfolio wise, dialing in renewals, 4 to 5 years. And bumps typically 2.5%, 3%, the longer the term of the lease and maybe the higher the rent starts. We've seen a little bit of pushback on that, but it's typically 2.5%, 3% and almost a every lease we have has some type of escalator in it.

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Jonathan Michael Petersen, Jefferies LLC, Research Division - SVP & Equity Analyst [39]

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I guess what's the difference, though, between when you sign a renewal on the escalators on the lease that's rolling off and the new one that you're signing? Are you still pushing those higher? Or are you kind of holding the line on the same escalator as the old lease?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [40]

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They may be a little -- they're pretty close, but they may be a little bit higher on a 3-year as-is renewal. You probably can get more of the 3%-type bumps. If it's someone signing a brand-new 10-year lease and the rents climbed up, they're pretty high, they'll push back and get -- you may get 2.5% to 2.75%. So it's not night and day difference, but that's where that -- the longer the lease term and maybe the higher the rent starts out, those bumps, you may get as high as absolute increases, but that percentage gets pretty high.

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Jonathan Michael Petersen, Jefferies LLC, Research Division - SVP & Equity Analyst [41]

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Okay. And then on acquisitions, I'm curious if 2020 is going to be a year that we see EastGroup enter any new markets? And if so, which markets look appealing to you?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [42]

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Sure. Good question. We feel like we just got to Greenville, South Carolina last year, which is a market we like, and we continue to kind of kick tires and turn over stones there. And there's some we've considered like a Nashville and some markets like that. But if I were going to guess, and it is that, I'd probably say no. I'd rather -- if we had our preference, I'd rather us fill in on the markets where we're under allocated. Today, you've seen us do a lot out in the western region, which is thin. We like South Florida. We feel like we're still fairly new to Atlanta and have some runway there, that we're active in Dallas.

So I'd rather see us grow in existing markets, but if the right opportunity came along, and it probably fit our footprint, you won't see us jump to overseas or do anything, hopefully, surprising. I don't -- we don't think that would be well received by the market. So we'll stick with kind of the markets we know and kind of manage our portfolio allocation within those most likely.

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Operator [43]

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We'll take our next question from Eric Frankel with Green Street Advisors.

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Eric Joel Frankel, Green Street Advisors, LLC, Research Division - Senior Analyst [44]

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I just want to know if there's any known tenant move-outs in which markets we should kind of be focused on, just given that a lot of your lease roll seems to be concentrated in Florida, I guess, to a lesser extent, Charlotte next year?

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [45]

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I'll start and Marshall will fill in with maybe individual transactions. But on the known vacancies or -- there's nothing specific that we're overly focused on. I would even add on our tenant watch list. Our bad debt that we've got budgeted is a generic bad debt number. We don't have that assigned to specific tenants. I know Tampa is a little higher rollover this year. There's a couple of large leases. I think, Marshall, you have detail on kind of a couple of those or even in the positive category early potentially?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [46]

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Yes. Tampa, we had about a 200 -- since the year-end about a 225,000 foot lease renewal that's been signed. So that one's done within Vanity Fair. And then in Charlotte, we had Home Depot, it's about 200,000 feet has renewed there as well. So a good eye to pick up. We'll kind of look and see where we have large lease roll. And thankfully, we've knocked out a couple of big leases in each of those markets. And then talking to those teams, the balance, it's a pretty mixed bag that's remaining, and we typically end up renewing. If you and I were building a model, Eric, I'd say let's assume 70% retention rate, and we may miss that in a quarter or 2, but over 4 quarters or a little bit longer, we always seem to hover around that ratio. So I think that we'll probably do that in Tampa and Charlotte, plus or minus.

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Eric Joel Frankel, Green Street Advisors, LLC, Research Division - Senior Analyst [47]

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Okay. 70% of it is. Just another final question. Obviously, you tend to lean, I guess, a bit on the conservative side in terms of your guidance and your investment budget for this year. But maybe you could touch upon whether -- I think last year, you bought a fair amount of newly developed assets that were in lease-up, and maybe you can talk about that opportunity set this year.

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [48]

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Thanks. And I hope you're right. I hope we're conservative. Again, we've been accused of worst things. So that's a good thing. I hope -- again, "this is our budget, not our goal" is kind of one of our internal sayings. And you're right. We like that value-add category because core acquisitions are so competitive. I think last year, we bought one property, it was all of our either acquisition or value-add, that was actually a listed property. We came in second and third a lot, and we'll pursue those, but -- when everybody's got a checkbook, so we really have no differentiating factor there, and we are turning over a lot of stones.

Our value-add kind of within our development pipeline, those are averaging about a 6.4% yield. And with cap rates where they are, we're getting a good 150 to maybe 200 basis point spread over core assets. So we like that risk return given that someone else has held the land, gotten the zoning done, taking the construction risk, and it's usually either all or some portion of leasing risk that we have to take. So they're hard to come by.

As Brent mentioned, the $30 million in our budget as of today is identified in project -- specific projects, and we'll try to grow that number. It's a little bit of a shadow development pipeline we said as another way to create some NAV. The spreads aren't quite as high as development, but we like the risk return of those, and there's -- it's usually a developer with a financial institution as their partner, and they can make some money with their IRR promote, maybe not as much as they would have made if they had finished the project, but they're happy to take the promote and kind of build the next building before the cycle ends is more their mentality. So we keep chasing it.

And I guess, the risk of that, as people have pointed out is you don't want to create false demand. But so far, when you look at our yields, and when we were looking back at the end of the year, that 33 of 34 buildings over the last 3 years have rolled in at a 100% lease. You could be -- feels like we're busy, and I know the team's going to say that doing a lot more, but you could be critical that we should have done even more, that 33 of 34 is too high of a batting average.

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Operator [49]

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(Operator Instructions) We'll take our next question from Rich Anderson with SMBC.

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Richard Charles Anderson, SMBC Nikko Securities America, Inc., Research Division - Research Analyst [50]

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So I'd like to, if you could, do you have a sense of what percentage of your portfolio is truly infill last mile? I know the vast majority is on the smaller side, but like in Atlanta, for example, you're a bit far afield from a population center, if memory serves correctly. And so I was just wondering if you could kind of give some parameters about what is really inside the population center and truly fits into this last mile concept?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [51]

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Sure. Good question and a trickier one to answer. But maybe here's a couple of stats. As I mentioned, I'd say our average tenant size is 30,000 feet. So that's not really a logistics chain, getting goods from China to New York, for example, type thing. What's -- and I'm doing this from memory, 60% of our tenants roughly are under 50,000 feet and 85% of our 1,500 tenants are under 100,000 feet. So we have a lot of smaller tenants that do distribute within their regional area. And we've set probably a better -- really our strategy better indicator of our growth as people moving to Orlando, people moving to Phoenix, people moving to Austin, Texas.

And last mile in Atlanta, it's interesting as we studied it. It -- almost maybe having spent some time in retail, it reminded me, where -- you're right. If you look at the map of Atlanta where we are, it isn't the bull's eye of the Atlanta map, but that north quadrant of the city, call it, 10:00 to 12:00 clock or what locals refer to as the golden triangle. If you're with Wayfair, for example, that's a pretty good, highly educated, above average per capita income. That's a good last mile delivery spot or if you're just an HVAC contractor and your restaurant -- your service is out and it's July, and you need to get your guys to the location quickly, that's where the higher end retail is.

So a little bit similar -- it really struck me, Jacksonville, where we've been for 20 years, we're on the south side of Jacksonville away from the center of the city, but in the path of population growth and the type of population growth that's attractive to tenants as well. So it's a little bit like -- it reminds me a little bit like retail in time. So where do you want to be, where is your customer going to be, and that fits well for our tenants.

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Richard Charles Anderson, SMBC Nikko Securities America, Inc., Research Division - Research Analyst [52]

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So back of the envelope, 85%, you would say, is definitionally last mile?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [53]

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If not stretched. Yes, just because they're that small, I know and probably even more than that 85%. They really are not in that -- they may be selling off of a website and shipping around the country, but they're not in any type of supply chain for Home Depot or Lowe's, yes.

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Richard Charles Anderson, SMBC Nikko Securities America, Inc., Research Division - Research Analyst [54]

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Understood. And second question for me. How would you describe the price sensitivity of your tenants? In other words, is the rent that you charge sort of low on the total pooled for them and hence, gives you the ability to be a bit more aggressive? Or is it a little bit more important to them? And are they more focused on rent, particularly now with past couple of years of the strength in fundamentals?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [55]

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No. I think it really matters to them, but in their equation, it's pretty low. So thankfully, we've got a low component within their overall cost and then that's what I thought too. In a rising market, it often helps when they have a tenant rep broker. So by the time we sit down, they know where our market is, and we'll push as hard as we can. So there's always competition. They always seem to have an option, and you're trying to figure out if they like, what your advantages are over the competition. But thankfully, it's a low component. So it's -- that's why you've seen us and our peers, be able to probably push rents the way we have. It's becoming more -- this is the location. Certainly, location-specific and labor pool driven. The bigger the tenant, the more the labor pool factors in.

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Richard Charles Anderson, SMBC Nikko Securities America, Inc., Research Division - Research Analyst [56]

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Do you have a rent coverage number of any kind that you can share, like property level?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [57]

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Yes. Not really because you get into things like side yards, and is it HVAC. And I guess, I'm equating it. I'm going to go back to retail, again, where you could say 14% of occupancy cost, you could pay us gross rents, kind of plus or minus spending on your sales per square foot. There's really not that kind of same factor or it's not as formulaic as I've seen in office or retail.

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Operator [58]

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We'll take our next question from Craig Mailman with KeyBanc.

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Craig Allen Mailman, KeyBanc Capital Markets Inc., Research Division - Director and Senior Equity Research Analyst [59]

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Marshall, you had mentioned 2/3 of your 2020 starts are going to be existing parks. What markets are the other 1/3 in? Could you just describe kind of how that differ or just give some color?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [60]

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Yes. Sure. No, happy to. And usually, that other 1/3, for the most part, I'm kind of looking down our list, it means we ran out of land at a park, and the guys have done a good job of -- and we've compared it to a residential subdivision, finding land for the next subdivision. So in Orlando, where John and Chris and the team have done a great job with Horizon, we have land tied up, haven't closed yet, but for our next park in Orlando. So this would be our third kind of million square foot park if everything tracks and goes well, and Fort Worth, you saw us close on some land in fourth quarter. We finished the buildings that were a value-add as well as the land we acquired in Fort Worth. So that's the next new start there.

I'm kind of looking down, doing this from memory from the list, we have Ridgeview in San Antonio. I'm trying to think we finished Eisenhower Point, and that's our next new park there. So it's really where we've run out of -- for the most part, that other 1/3 is where we ran out of land, and we need to go start the next 3, 4, 5 building parks.

I would say as an aside is part is lands come and you've seen like World Houston and some of our parks that, that one's crazy and that Brent had land for 40 buildings. Typically, if we can get to 10 or 12 buildings, it's a good-sized park. As someone described to me now, land is so hard. If we can do it 3, 4, 5 building park, that's about as big as you can find the land parcels anymore. So it probably leads to more churn with the next park just because they're not -- we can't find the land we could 10 years ago.

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Craig Allen Mailman, KeyBanc Capital Markets Inc., Research Division - Director and Senior Equity Research Analyst [61]

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That's helpful. And then the operating land you guys bought in San Diego during or subsequent to quarter end, I think it was, when does that be put into production?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [62]

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We're working through -- we've made good headway on zoning and all the compliance to break ground. There's still a little more work to be done. It is -- it's really -- it's leased to, I think, it's 28 tenants. It's a junkyard, storage yard today, I hate to say junkyard, but if you were there, you'd call it a junkyard, to be honest. It's not the best...

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [63]

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Nice junkyard.

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [64]

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But as we get the zoning done and we're ready to break ground, it's a nice way to earn. I think we're about a 5.5% yield, while cars are stored there and RVs and things like that. And when -- as soon as we can get through all the zoning and ordinance hurdles in California, which takes a little bit longer than our other markets, they're month-to-month tenants, and we'll terminate their leases and put it into production. And we've actually already had a meeting or 2 with possible pre-lease there was some tenants that we're excited about. So hopefully, maybe a year, and hopefully, it's a 2021 start.

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Craig Allen Mailman, KeyBanc Capital Markets Inc., Research Division - Director and Senior Equity Research Analyst [65]

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And then just one last one. I know people haven't seen really any impact from supply in a big way yet. But on the margin, are you seeing kind of tenant decisions taking a little bit longer as maybe some people have some other options with new supply or anything that's kind of an early indicator of any potential weakness from supply?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [66]

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Not really. Haven't heard it, honestly, on supply as much, although there's certainly a little more out there given everybody's success. What we're hearing is it takes a little longer as one of our guys described that deals get in the red zone and take a little bit longer to close. But their thoughts or what we've heard from a couple people, tenant sizes continue to grow a little bit, even within our build -- maybe from 40,000 feet to 60,000, 70,000 feet and with rents as a higher per square foot number, that commitment is taking a little bit -- it takes maybe another layer of approval and things like that. So we get deals closed and then they hover for a while. And they don't -- most of them, knock on wood, don't die. They do get over the finish line, but it takes a little bit longer to get leases done than it used to. And the best explanation I've heard of that is it's more layers of approval, given more square footage and a higher rent per square foot.

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [67]

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I think, Craig, one thing I would add to that is when we talk about multi-tenant supply versus big box supply, I would just point out that we're still building, fortunately, in that mid- to low-7% yield. And if you look really at some of the big box developers, they're building more in an upper 5 around 6% yield. And I think that's a direct example of supply demand. I mean, obviously, you would build at the highest yield you can, if you could. And I think that just goes to show, there's a little more competition in the mix there that depresses those yields a little bit. So I think if you look at our yield being a true multi-tenant developers versus some of the big box, you'll maybe get a kind of a picture there of how the playing field, we have competition, too, but maybe not quite as rigorous as the others.

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Operator [68]

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We'll take our next question from Ki Bin Kim with SunTrust.

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Ki Bin Kim, SunTrust Robinson Humphrey, Inc., Research Division - MD [69]

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So going back to development, maybe I can just ask it in a different way. If I look at your dollars at risk from development, so after taking into account the percentage leased, it's about 3% -- a little more than 3% of your gross asset value. And I just want to understand a little better your internal motivations. Do you look at it that way? Or do you look at it from a kind of more practical way of what can we get done and not necessarily base it off the company size and what moves the needle on those things?

And last second part to that is, if you want to grow it, where should we expect that? Is that the 2/3 within the park? So maybe you start doing 2 buildings instead of one. Or is it really trying to expand that 1/3 of the portfolio where you're looking for new business parks?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [70]

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Okay. Good question. We don't look at development, I guess. I'd say it's direct, quite like the 3%, but we do put that in what we view as our low-earning bucket. And so we'll look at land, development and value add and what percentage of our assets is that. And then hopefully, that pipeline is moving pretty rapidly. It's been a great value creator, NAV creator and FFO creator for us the last few years, but we don't want to get, as you said, too far out over our skis and things like that.

So we'll walk the value adds in as well as just the land we're carrying waiting for the next development. So we do -- definitely do watch that and don't want to get too far out there. And again, in each component. Hopefully, the value adds, if we can get the leasing done, can move pretty quickly in and out of that pipeline, certainly as compared to where the land sits today. It's just a shorter gestation period.

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Ki Bin Kim, SunTrust Robinson Humphrey, Inc., Research Division - MD [71]

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Okay. And just second question, what are your market rent growth forecast for your portfolio? And how does it compare to 2019. So I don't mean lease spreads, I'm talking about the spot rates increasing.

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [72]

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Yes. As far as spot rates, I guess, I would first say, Ki Bin, that our expectation for the overall portfolio, we've really 3 consecutive years now and no reason to think this would be a lot different where we've had high single-digit cash, mid- to upper teen, in the case of this past year, GAAP. We feel like that's probably still a good run rate just based on our vibe.

In terms of just spot rates market to market that would vary probably. And Marshall and I are look at each other, maybe in the 4% to 5% range. And again, that could be higher in some markets and maybe a little tighter in some other markets. But it feels like rental trends are still kind of on pace where they've been in the last 3 years or so.

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Operator [73]

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We'll take our next question today from Blaine Heck with Wells Fargo.

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Blaine Matthew Heck, Wells Fargo Securities, LLC, Research Division - Senior Equity Analyst [74]

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Just a couple of quick ones. Can you remind me -- do you guys have any additional properties in the Houston market that you'd identify as noncore and earmarked for sale? Or have you guys kind of worked through all the noncore product at this point?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [75]

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Nothing in the held-for-sale category. That said, we'll keep pruning away of Houston, and we -- maybe an indirect way, we probably have 2 or 3 assets that we've said and really, we try to do that in every market. If you could sell 2 or 3 assets or if you got a call about a tenant bankruptcy, which building would you want to get that in the least or where are we in terms of leasing on that if we maxed out the value. So we've got a couple of 3 buildings we might sell in Houston. That's probably dialed into our disposition guidance a little bit this year. And I'd like -- although I like Houston and our team does a great job there, I like that Houston continues to drift lower as a percentage from over 21% to -- projected to be under 13% this year, absent any sales.

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Blaine Matthew Heck, Wells Fargo Securities, LLC, Research Division - Senior Equity Analyst [76]

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Got it. That's helpful. And then just on retention, obviously, 70% is great in a solid target, but I wanted to talk about the 30% or so that aren't expected to renew. Can you just talk about the most common reason for the move-outs that you've seen so far? Is it usually just the tenant that needs to expand, and you can't accommodate their needs? Or is there any pushback on rental rates that you're seeing out there?

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [77]

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It's a good question. Not as much rent, it's more expansion. I know we lost -- I was glad we got the land in Tampa that we did the back half of last year that we lost Ferguson Plumbing, and we had a couple of other tenants that want to expand, and we were really full and couldn't accommodate them. So a lot of times that we could do, it almost feels like a Rubik's cube where you're trying to figure out how we can accommodate our tenants and that's what's great about building these larger parks.

What drove Horizon so rapidly was an existing tenant expansion, and we can move you from building 3 to building 8. So it's expansion. In some cases, it's consolidating 2 or 3 locations to under one roof and maybe we're one of those 2 or 3, and they're moving around town. So it seems to be more of a logistics-type chain or they're just shuttering their business, in some cases are relocating to a different state and things like that. That probably accounts for the majority of them.

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Operator [78]

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And there are no further questions on the line at this time. I'll turn the call back to Marshall Loeb for any closing remarks.

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Marshall A. Loeb, EastGroup Properties, Inc. - President, CEO & Director [79]

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Thank you, everyone, for your time. We -- again, we appreciate your interest in EastGroup. We're certainly available this afternoon for any questions, and thanks for your time.

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Brent W. Wood, EastGroup Properties, Inc. - Executive VP, CFO & Treasurer [80]

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Thank you.

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Operator [81]

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This does conclude today's program. Thank you for your participation, and you may now disconnect.

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    a href="https://www.marketwatch.com/investing/stock/ftnt" (FTNT) 2.2% -16% -6% 52% 12/31/2019 Computer Communications IPG Photonics Corp.

  • Saudi Arabia, Russia Push Negotiations for Global Oil Pact
    Business
    Bloomberg

    Saudi Arabia, Russia Push Negotiations for Global Oil Pact

    Saudi Arabia, Russia and other large oil producers are racing to negotiate a deal to stem the historic price crash as diplomats said some progress was made on Sunday. The talks still face significant obstacles: a meeting of producers from OPEC+ and beyond -- delayed once -- is only tentatively scheduled for Thursday. Russia and Saudi Arabia want the U.S. to join in, but U.S. President Donald Trump has so far shown little willingness to do so.

  • Warren Buffett Dumps Delta Air Lines, Southwest Airlines As Coronavirus Pandemic Slams Industry
    Business
    Investor's Business Daily

    Warren Buffett Dumps Delta Air Lines, Southwest Airlines As Coronavirus Pandemic Slams Industry

    Warren Buffett's Berkshire Hathaway has sold off millions of shares of Delta Air Lines and Southwest Airlines over the past few days, regulatory filings showed on Friday. That sent Delta stock, Southwest stock and other airline stocks lower after hours. Delta stock was down 9% in the stock market Friday.

  • Business
    Financial Times

    Luckin Coffee apologises for alleged fraud

    Luckin Coffee on Sunday apologised and pledged to strengthen controls after an internal investigation found hundreds of millions of dollars of alleged fake sales last year, wiping about 75 per cent off the company's market value. Lu Zhengyao, the company's chairman, said on social media that he was “ashamed” and “accepted all questions and criticisms”, while promising to do his best to recover the losses. Mr Lu backed the start-up in 2017 as it aimed to take on Starbucks in China and remains one of its largest shareholders.

  • He nailed the March coronavirus selloff — now he says there’s another 30% to go before the stock market hits bottom
    Business
    MarketWatch

    He nailed the March coronavirus selloff — now he says there’s another 30% to go before the stock market hits bottom

    Hedge-fund manager Dan Niles, in a note cited by Yahoo Finance this week, warned his clients way back in February that he was getting “increasingly worried” investors weren't ready for the impact the spread of the coronavirus could have on the U.S. economy. While the Dow Jones Industrial Average (DJIA)posted its worst first quarter ever, his Satori Fund closed in positive territory.

  • Investors Are Wondering: Where’s Warren Buffett?
    Business
    InvestorPlace

    Investors Are Wondering: Where’s Warren Buffett?

    Everyone knows legendary investor Warren Buffett of Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) stock never lets a crisis go to waste. No one since J.P. Morgan has taken advantage of more crises than the 89-year-old Sage of Omaha. We know he's been getting ready.

  • Bearish Bets: 2 Stocks You Should Think About Shorting This Week
    Business
    TheStreet.com

    Bearish Bets: 2 Stocks You Should Think About Shorting This Week

    Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, Trifecta Stocks identifies five names each week that look bearish. While we will not be weighing in with fundamental analysis we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names. Zillow Group Inc. recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.

  • 3 Coronavirus Stocks That Could Lead the Market to Recovery
    Business
    TipRanks

    3 Coronavirus Stocks That Could Lead the Market to Recovery

    Based on a new report from the Labor Department, the U.S. economy saw 701,000 jobs erased in March, much more than economists originally expected as the figure doesn't even include the 10 million unemployment filings that occurred after March 14. In addition, New York Governor Andrew Cuomo announced on Friday that the state had experienced the biggest jump in COVID-19-related deaths the day before, sending the market plummeting even further. According to some Wall Street pros, these new technologies represent a possible inflection point in the war against COVID-19, and could even help drive the stock market's recovery.

  • U.S Mortgage Rates Slide Again, with Purchase Applications also on the Slide
    Business
    FX Empire

    U.S Mortgage Rates Slide Again, with Purchase Applications also on the Slide

    Mortgage rates fell for a 2nd consecutive week in the week ending 2nd April, with the downside attributed to lenders lowering rates as application backlogs slid. Mortgage rates had been on the rise in mid-March due to a surge in demand stemming from a COVID-19 driven slide in mortgage rates. Lenders had had to increase rates to deter applications as backlogs continued to rise and capacity issues hitting processing times.

  • Justin Trudeau Says Canada Won't Retaliate Against U.S. for Banning Exports of N95 Masks
    Politics
    Meredith Videos

    Justin Trudeau Says Canada Won't Retaliate Against U.S. for Banning Exports of N95 Masks

    Prime Minister Justin Trudeau said Saturday that Canada won't bring retaliatory or punitive measures against the United States after the Trump administration announced it would prevent the export of N95 protective masks.

  • Introducing Chesapeake Energy (NYSE:CHK), The Stock That Collapsed 99%
    Business
    Simply Wall St.

    Introducing Chesapeake Energy (NYSE:CHK), The Stock That Collapsed 99%

    For example, we sympathize with anyone who was caught holding Chesapeake Energy Corporation (NYSE:CHK) during the five years that saw its share price drop a whopping 99%. Shareholders have had an even rougher run lately, with the share price down 81% in the last 90 days. Given that Chesapeake Energy didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development.

  • Co-founder of George Soros’s legendary Quantum Fund warns of the ‘worst bear market of my lifetime’
    Business
    MarketWatch

    Co-founder of George Soros’s legendary Quantum Fund warns of the ‘worst bear market of my lifetime’

    Jim Rogers has been sounding the bear alarm for a while, and now that the market finally seems to be cooperating, the Rogers Holdings chairman is turning up the volume. I expect in the next couple of years we're going to have the worst bear market in my lifetime,” he told Bloomberg in the wake of the worst first-quarter loss in the Dow's history. Why so glum?

  • 4 Top Stock Trades for Monday: AMD, BA, UBER, LVGO
    Business
    InvestorPlace

    4 Top Stock Trades for Monday: AMD, BA, UBER, LVGO

    Top Stock Trades for Monday No. Advanced Micro Devices (AMD) Advanced Micro Devices (NASDAQ:AMD) was trading great on the long side when the market was rebounding higher. In all, AMD stock has actually been trading pretty well amid the novel coronavirus pullback.

  • These 60 large U.S. companies are ‘susceptible to a dividend cut,’ according to Jefferies
    Business
    MarketWatch

    These 60 large U.S. companies are ‘susceptible to a dividend cut,’ according to Jefferies

    a href="https://www.marketwatch.com/story/these-60-large-us-companies-are-susceptible-to-a-dividend-cut-according-to-jefferies-2020-03-31? siteid=yhoof2" (GIS) 3.62% 1.49 177.3% Evergy Inc.

  • Barron's Picks And Pans: Post-Pandemic Ideas, Safe Dividends And More
    Business
    Benzinga

    Barron's Picks And Pans: Post-Pandemic Ideas, Safe Dividends And More

    How might Amazon.com, Inc. NASDAQ: AMZN), Home Depot Inc (NYSE: HD) and many others fare? Can Johnson & Johnson (NYSE: JNJ) or Procter & Gamble Co (NYSE: PG) weather the coronavirus crisis with payouts intact, if not higher?

  • China's Luckin Coffee says business will continue amid financial fraud probe
    Business
    Reuters

    China's Luckin Coffee says business will continue amid financial fraud probe

    Luckin Coffee Inc said on Sunday it will maintain normal operations at its stores and apologised to the public, days after it announced an internal investigation had shown its chief operating officer and other employees fabricated sales deals. Shares of Luckin, which competes in China with Starbucks Corp, sank as much as 81% on Thursday in New York after it said the investigation had found that fabricated sales from the second quarter of 2019 to the fourth were about 2.2 billion yuan ($310 million). "Regarding the suspected financial fraud and the extremely bad impact it has caused, Luckin Coffee hereby sincerely apologizes to the public," the company said in a post on its official Weibo account.

  • Business
    Barrons.com

    REIT Investors Can Expect Dividends to Be Paid Mostly in Stock

    Real-estate investment trusts are known for their dividends. But as the coronavirus pandemic worsens and various REIT tenants are cash strapped during the impending recession, investors should prepare to start receiving more of their dividends in stock. I have little doubt that the REITs will begin paying dividends largely in the form of their own stock,” says Robert Willens, a tax and accounting expert who runs an eponymous consultancy.

  • Coronavirus, Good Friday, oil: What to know in the week ahead
    World
    Yahoo Finance

    Coronavirus, Good Friday, oil: What to know in the week ahead

    COVID-19 cases are on the rise and have yet to show signs of stabilization in the U.S. As of Sunday morning, there were 1.216 million confirmed cases globally and 65,711 confirmed deaths, according to Johns Hopkins University data. According to RBC's March 2020 Equity Investor Survey, investors said outlook surrounding the coronavirus is critical. With market volatility largely expected to continue for the time being, RBC's survey found that 57% of investors believe the market will bottom in the second quarter of 2020.