Good morning, ladies and gentlemen, and welcome to the EastGroup Properties Third Quarter 2025 Earnings Conference Call and Webcast. At this time, note that all participant lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Friday, October 24, 2025. I would now like to turn the conference over to Marshall Loeb, CEO. Please go ahead, sir. Good morning, and thanks for calling in for our Third Quarter 2025 Conference Call. As always, we appreciate your interest. Brent Wood, our CFO, is also on the call, and since we'll make forward-looking statements, we ask you to listen to the following disclaimer. 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 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, as defined in and within the safe harbors under the Securities Act of 1933, the Securities Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements in the earnings press release, along with our remarks, are made as of today and reflect our current views on the company's plans, intentions, expectations, strategies, and prospects based on the financial information currently available to the company and on assumptions it has made. We undertake no duty to update such statements or remarks, whether as a result of new information, future, or actual events, or otherwise. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Please see our SEC filings, including our most recent annual report on Form 10-K, for more detail about these risks. Thanks, Casey. Good morning, and I'd like to start by thanking our team. They've worked hard this year, and we're making solid progress towards our 2025 goals. I'm proud of our results. Our third-quarter results demonstrate our portfolio quality and resiliency within the industrial market. Some of the results produced include funds from operations at $2.27 per share, up 6.6% for the quarter over prior year. For over a decade, our quarterly FFO per share has exceeded the FFO per share reported in the same quarter prior year, truly a long-term trend. Quarter-end leasing was 96.7%, with occupancy at 95.9%. Average quarterly occupancy was 95.7%, which, although historically strong, is down 100 basis points from third quarter 2023. Quarterly releasing spreads were 36% GAAP and 22% cash for leases signed during the quarter. Year-to-date results were slightly higher at 42% and 27% GAAP and cash, respectively. Cash same-store rose 6.9% for the quarter and 6.2% year- to- date. Finally, we have the most diversified rent roll in our sector, with our top 10 tenants falling to 6.9% of rents, down 60 basis points from last year. We target geographic and tenant diversity as strategic paths to stabilize earnings regardless of the economic environment. In summary, we're pleased with our results and the increase in prospect activity we're seeing. Converting that activity into signed leases still takes time, but we're pleased to see the growing pipeline. In terms of leasing, third quarter improved materially from a slower second quarter in both the number of leases signed and square feet. From another angle, those metrics were also markedly improved versus third quarter 2023. Similar to last quarter, the market remains somewhat bifurcated, such that we're converting prospects 50,000 sq ft and below. Our larger spaces have prospects, and we're cautiously optimistic with improved activity in these spaces. In the meantime, with larger prospects being somewhat deliberate this year, it's impacting us in several ways. First, delaying expansion means the portfolio remains well leased and is ahead of initial forecast. Our quarterly retention rate rising to almost 80% is an indicator of tenants' cautious nature. On the other hand, our development pipeline is leasing and maintaining projected yields, but at a slower pace. This, in turn, lowered development start projections from earlier in the year. Our Starts, as we've stated before, are pulled by market demand within our Parks. Based on current demand levels, we're reforecasting 2025 Starts to $200 million. Longer term, the continued decline in the supply pipeline is promising. Starts were historically low again this quarter. Coupled with the increasing difficulty we're experiencing obtaining zoning and permitting, as demand increases, supply will require longer than it has historically to catch up. This limited availability in new modern facilities will put upward pressure on rents as demand stabilizes. As demand improves, our goal is to capitalize earlier than our private peers on development opportunities based on the combination of our team's experience, our balance sheet strength, existing tenant expansion needs, and the land and permits we have in hand. From an investment perspective, we're excited to acquire the previously announced properties in Raleigh, North Carolina, new development land in Orlando, where we'll break ground this quarter, and new buildings and land in the fast-growing supply-constrained Northeast Dallas market. Brent will now speak to several topics, including assumptions within our updated 2025 guidance. Good morning. Our third-quarter results reflect a terrific execution of our team, the solid overall performance of our operating portfolio, and the continued success of our time-tested strategy. FFO per share for the quarter exceeded the midpoint of our guidance at $2.27 per share, compared to $2.13 for the same quarter last year, an increase of 6.6%. Our outperformance continues to be driven by good fundamentals in our 61 million sq ft operating portfolio, which ended the quarter 96.7% leased. From a capital perspective, we took advantage of favorable equity pricing early in the year, which allowed us to enter the quarter with a reserve of outstanding forward equity agreements. During the third quarter, we settled all our outstanding forward equity agreements for gross proceeds of $118 million at an average price of $183 per share. Our guidance for the remainder of the year contemplates that we utilize our credit facility, which currently has $475 million capacity available, and issue $200 million of debt late in the fourth quarter. As we often emphasize, our evaluation of potential capital sources is a fluid and continual process that can result in varying outcomes depending upon market conditions. Our flexible and strong balance sheet with near-record financial metrics allows us to be patient when evaluating options. Our debt-to-total market capitalization was 14.1%, unadjusted debt-to-EBITDA ratio of 2.9 x, and our interest and fixed charge coverage increased to 17 x. Looking forward, we estimate FFO guidance for the fourth quarter to be in the range of $2.30- $2.34 per share, and for the year in the range of $8.94- $8.98, which represents increases of 7.9% and 7.3% compared to the prior year. Our same-store occupancy for the fourth quarter is projected to be 97%, which would be the highest quarter for the year. As a result, our revised guidance increases the midpoint of our cash same-store growth by 20 basis points to 6.7%. We lowered our average portfolio occupancy by 10 basis points due to the conversion of a few development projects prior to full occupancy. Considering the slower pace of development leasing, we reduced construction starts by $15 million. Our tenant collections remain healthy, and we continue to estimate uncollectible rents to be in the 35 to 40 basis point range as a percentage of revenues, which is in line with our historic run rate. In closing, we were pleased with our third-quarter results and remain hopefully optimistic that signs of macro uncertainty subsiding and consumer and corporate confidence strengthening setting the stage for next year. Now, Marshall will make final comments. Thanks, Brent. We're pleased with our execution this quarter and year-to-date, moving us ahead of original expectations. Market demand seems to be dusting itself off and beginning to move forward again. Regardless of the environment, our goals are to drive FFO per share growth and raise portfolio quality. If we can do those, we'll continue creating NAV growth for our shareholders. Stepping back from the near-term, I like our positioning as our portfolio is benefiting from several long-term positive secular trends, such as population migration, nearshoring and onshoring trends, evolving logistics chains, and historically lower shallow bay market vacancies. We also have a proven management team with a long-term public track record. Our portfolio quality in terms of building and markets improves each quarter. Our balance sheet is stronger than ever, and we're upgrading our diversity in both our tenant base as well as geography. We'd now like to open up the call for any questions. Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please note that out of consideration to other callers and the time allotted today, we ask that you please limit yourself to one question and get back in the queue should you have any follow-ups. Thank you. Your first question will be from Samir Khanal at Bank of America. Please go ahead. Thank you, and good morning, everybody. Hey, Marshall, thank you for your commentary. I guess maybe expand on leasing a little bit, kind of the color that you provided, especially as it relates to the development pipeline. I know you've got Rural Houston, other projects in Texas. You also said the conversion to signed leases is taking longer for those bigger sort of boxes there. Maybe talk around, maybe expand on your comments a little bit, and maybe what these prospects need to see to get to the finish line. Thanks. Okay. Hey, good morning, Samir. Very good. Good question. I'll try to cover it. I think I would say a couple of things. One, we're certainly more encouraged. The tenor of those conversations has kind of each month gotten better, maybe starting in May, which really was May when we felt kind of the tariff impact through today. Better than, say, when I got asked that question earlier in the week when we were at your conference in September, for example. In our portfolio, and maybe we're a little unique in that so much of our, about a third of our development leasing is existing tenant expansion and movement within a park. We've seen, and you've seen it in our numbers, our retention rate, especially in third quarter, ran pretty high at almost 80%. The portfolio is benefiting. Our same-store numbers are benefiting. On the flip side of that, we've hit the slow button on our development pipeline or starts a few times, kind of each quarter, bringing it down. We do have more prospects than we've had as the year's played out. It's getting them, and I don't know, I was hoping, you know, one, we have one interest rate cut. According to your economist, we'll get another one coming, at least the emails I'm seeing this morning and things like that. Hopefully that, maybe a little bit of ceasefire in the Middle East, things like whatever it takes to get business sentiment a little bit better. I would say it is. I think people got beyond the shock factor. Look, we know our task at hand, which is to lease these development projects, the ones that are in lease up when we finish the construction, and the ones that have transferred over. We're not assuming any spec leasing in the balance of the year budget. I'm hoping there's potentially upside there. We're running out of time this year, but we also build out spec suites in our vacancy. If someone needs to move quickly, which they often do in these smaller spaces, we're able to accommodate that. Things are better, but it's been an odd year in that you send out leases and they haven't always come back. I remember that more. That's been more eventful this year than it's been in the prior five years. Thank you. Sure. Thank you. Next question will be from Blaine Heck at Wells Fargo. Please go ahead. Great, thanks. Good morning. Following up on development, can you just talk about how construction costs have trended more recently and whether that's been a constraint on starting more projects? Kind of related to that, where do you think market rents are relative to rents that would, you know, generate acceptable yields for you guys on those development projects? Good morning, Blaine. We've seen construction pricing come down. Really, a lot of it is we've been watching with everything going. We've not had labor issues. Usually what our construction teams will say is that we get pricing, it may be a little high, but once they realize you're really serious, that's come down maybe 10% to 12% because people are so hungry for projects, given just the lack of, outside of data centers, no other sectors are really going as quickly. Thinking of data centers, getting transformers and the electrical equipment is challenging. We can get those, but there's a lot of demand and a long lead time. The land we acquired this quarter, we'll usually underwrite it on today's rents, not forecasting any growth. I hope it grows, but we're not forecasting that. And today's construction pricing and everything's still kind of penciling out into the seven or low sevens. It's not easy to find the land. The permitting and zoning on these infill sites gets harder and harder, but we're pleasantly pleased with how that's going. It's not construction costs that have slowed us down so much as demand, which was really strong in the fourth quarter a year ago and first quarter, slowing in the second quarter. It picked up in the third quarter. We got more leases and more sq uare foot age than we did in the second quarter or third quarter last year. We're pleased with that. We just need to keep that momentum and get our, look, it's our potential revenue is get leased up what we've already spent the capital on. It's more fun to go as fast as the market tells you to go, but this year we're trying to go as slow as the market tells us to go as well. Great. Thank you, Marshall. You're welcome. Next question will be from Craig Mailman at Citi. Please go ahead. Hey guys, not to dwell on the development pipeline, but the incremental leasing there was pretty muted quarter- over- quarter. I saw you did get some leasing done at Dominguez, but you also kind of pushed out the stabilization date there. I guess my bigger question here is, you know, you talked about sending leases out but not hearing back. If you look at the availability in the development pipeline, how much of that availability has active prospects on it versus just quieter from a tours and interest perspective? Is it rent-related where you can toggle that up or down or concessions, or is it just if people don't want to make a decision because of concerns, the other pricing stuff doesn't matter as much? Yeah. Hey Craig, good morning. I would say during the quarter, kind of since the last call, we ended up with about, you're at total, I wish it was a bigger number, about six leases, roughly 215,000 sq ft. What's, I guess, being more specific, at least on Dominguez, oddly enough, we sent out five leases on that space, and the fifth one's the one that came back. As we threw out a bigger net, we said we'd subdivide the building or even consider a sale, which we haven't ruled out, although we've gotten part of it leased. In subdividing the building, we're adding an office component on the other end of the building. That's what we decided, again, trying to, rather than lease it as one 260, that we would break the building up. It's delayed the delivery, adding a few thousand more feet of office in L.A. Kind of broadly speaking, the other thing within our development numbers, and I don't remember us doing this, we got a 97,000 ft development lease signed for a full building in Texas. Within a week, and they had a broker and attorney, they reached back out to us to tell us they've changed their mind. It's been a little bit of a maddening year in terms of leases sent out that didn't come back or in this case, a signed lease that someone, and we're working through the termination and some things like that. That's not in our count. I'm leaving that lease, even though it was a signed lease, we pulled that one back out now. I don't think they're going to occupy. That's odd or atypical for most years. In terms of kind of looking at our development schedule, I'd say about everything has some degree of activity. We need to get it signed. I'm trying to think, and some of these are odd, where to me, it hits me like I'm looking at the list, Horizon West 5, where it's probably our seventh building in a park, same architect, same broker, but that building's a little bit slower than we'd like, although we've got activity and Orlando's a good market. That just tells me where the market is, where it's the seventh, eighth building in a park, which usually goes faster than the first buildings in a park, but they're taking a little bit longer. We have activity. You know, the other thing I'll say, and I'll say it carefully, we have in the last 30 days more large tenant, more kind of pre-lease, again, given that lack of supply activity. What, 92% of our revenue is from tenants under 200,000 ft. We have several deals, they'll take a few quarters, that we're working on with tenants and/or prospects that would materially move that number where we would be building up a non-shallow bay building that they're out, but they like our land or they're existing tenants who need to expand. That's promising, and I'm hopeful, but I'd rather show you those. The good news is there's more in the pipeline, and about every building has a certain amount of activity. It's just where things shook out, you know, between third quarter through today's call. We know we've got our officer meeting next week. We're all getting together, and we know our task at hand, which is to get, you know, signed space, collect rent. Thank you. Next question will be from Nick Thillman at Baird. Please go ahead. Hey, good morning. Marshall, you kind of commented on the overall operating portfolio and the leasing volume you have there. As you're kind of looking at the expiration schedule for next year, rents are a little bit lower here. As we look at the mix, it's pretty much in line with your exposures. Can we see another kind of just overall strong year and spreads here in the mid-30s for a GAAP? Just kind of looking at the mix and what you guys have been seeing on that activity level? Yeah, good morning, Nick. Yes, I believe we'll, you know, I know a couple of things. Third quarter was a little lower. One difference, and again, maybe offline, welcome for feedback. We're a little bit of an oddity in the industrial REITs in that we report releasing spreads on leases that got signed during the quarter where most of our peers report on what commenced. Our numbers, we like that. I think trying to be investor-friendly, it's a little more real-time than what may have gotten signed a few quarters ago but commenced in third quarter. I guess that, and then really focusing on your question, yeah, I think we could, you know, kind of maintain those third quarter levels. Certainly next year, end of next year, where I keep waiting, and I know one of our peers made the comment, this is the best setup they've seen in 40 years. I haven't done this 40 years. I've done it a long time. I'm not that level, but I really like the low supply. I saw the deliveries in third quarter nationally were the lowest level since first quarter of 2018. It's hard to get inventory built and becoming harder, and there's not much of it out there in the shallow bay. I think we have embedded growth. I think it'll level out. I think when demand turns, it won't take much because there's about 4% vacancy in our markets in Shallow Bay, and there'll be a flight to quality as people expand too. I think we'll have another leg up in rents. I think if things stayed where they were, we could keep at that level, but I'm hopeful between, you know, maybe now and the end of next year that there's, you know, in a mid-term election year, maybe the headlines will be a little bit less that people will, when things turn, they surprise me how quickly they turned at the end of last year and into first quarter. It's gotten to where the headline risk has more impact than probably I thought it would. Looking back, the last the headline in fourth quarter, the headlines in April, and maybe next year, if we can avoid some headlines, I think you could have a kind of a rent squeeze. Someone used the quote, there's a cost to waiting on leases and things like that in our peer group. I'm not sure we're there exactly yet, but I could easily see that coming. Again, I'd rather, I'm better at calling things in hindsight than forecasting, I'll admit. Very helpful. Thank you. You're welcome. Next question will be from Connor Mitchell at Piper Sandler. Please go ahead. Hey, good morning. Thanks for taking my question. I appreciate all the commentary so far. Marshall, you've given a couple of specific examples on some of your markets. Just wondering if you can kind of provide a bigger picture or even drill down a little bit on just what you're seeing for the regional breakouts, whether it's Texas, Florida, California, some of the other markets, where you're seeing some more of the strengths in those markets or weaknesses in those markets for the retention rate that you mentioned, but then also adding some new tenants into the pipeline as well. Just kind of get a feel for how you're thinking about each of the markets and almost like a ranking of them in a sense. Sure. I guess, good morning. Hey, Connor, good morning. I would say the eastern region, you know, with a broad brush has been the strongest region or had the strength kind of from mid-year on. Florida's been, broadly speaking, a good, really strong market there. I wish we were bigger in Nashville, but that's a really good market. You've seen us growing in Raleigh. We like that market a lot. Texas, generally, you know, we like Dallas. You saw us acquiring more land there. At the moment, we've got too many buildings and too many tenants, but I'll thank our Texas team. We're 100% leased in Dallas. We need expansion space, that land for tenants to expand. We're happy there. The other market, I'll compliment our team in Arizona. There's a lot of vacancy in the Arizona market. There was a lot of supply that came in, but we're 100% in Phoenix, 100% in Tucson, and have been able to push rents and our development leasings there. Those would be on the good side. On the a little bit of a beat the same drum, the California markets are still slower than our other markets, really, with L.A. The Inland Empire had positive net absorption, but L.A. has had, I think it's 11 consecutive quarters of negative absorption. I'd love to have just a flat quarter in the city of L.A., a little over a million sq ft negative in third quarter. I thought they would turn. I'm glad we got the activity we did on Dominguez and got that signed. Denver's another market that's been a little bit slower for us. We're not all that big in Denver, but those, if you said, what are the markets where you're kind of thinking a little more? Denver's been a little bit slower for us on our development leasing there than we'd like. California has been a tough market for 18 months or longer. I appreciate all the colors. Thank you. You're welcome. Next question will be from Rich Anderson at Cantor Fitzgerald. Please go ahead. Hey, thanks. Good morning. Back to the releasing spreads, the 22% cash-based number for the third quarter. Let's just say hypothetically that this deliberate tenant thing continues, for whatever reason. It's two years from now, and we're still sort of on a treadmill-ish type of thing. How much time do you have for that, that 22% to sort of close in on a fairly pedestrian, single-digit type number? I mean, how much more bites of the apple do you have, do you think, before you need to start to see activity really start to ramp so that starts to revert, the direction starts to reverse again? Hey, Rich. Good morning. I'll take a stab at it and let Brent add color. I think the one, I think, I've kidded. I don't remember much about Econ 101, but when I just look at supply, and it wouldn't take much demand to kind of tilt the rents. Hearing your question, if we stayed steady state, we typically, you know, next year, I think we've got 14%, I'm doing this from memory from our supplement rolling. It would take several years before we could address those leases. Again, the later, the latter you got into that, what's that, be seven years, but some of those, you know, there's a number of leases pending the term of that lease that just got signed in the last couple. There's probably not maybe 20% rent growth in there. It would take a while, just I guess when the market's good, it takes us a while to get to that embedded growth. As the air goes out of the balloon, which may be kind of your question, it will take a while for the air to go out of the balloon with kind of most of our leases are somewhere between three to 10 years. It would take a while for us to move all those to market. I can't, yes. If that happened, that's how it would play out. I can't imagine the market seems to net, for better or worse, never stays flat like that. Yeah, I would agree, Rich. Hey, this is Brent. Yeah, I mean, when you're rolling 15%- 20%, of course, you can do the math and figure out when you start having flat and how long in terms of rental rates. You could say, you know, four to five years and how far are you into that already. Again, I know that's a hypothetical, but it feels much stronger than that with supply. Supply, you know, really, in my career and time, seeing supply get this tight really kind of excites me because it wouldn't take much shift in sentiment and some execution for, I think, the markets and development starts and those type things to turn very quickly, much more quickly than I think people are thinking. Kind of along those lines, the question of rents and does that impact construction starts? I think the good news there, when you kind of think of this as a four-legged stool and, you know, the cost side, as Marshall said, decreasing generally, rents have been very sticky because talking about the third leg, supply is very tight. It really comes down to that last leg being demand. As we've talked about, there's interested parties there. There's demand there. We're getting leases signed and certainly getting very acceptable yields. It's not a function of cutting rates or trying to increase activity that way. It's just strictly confidence gaining to the point where they're pulling the trigger and then we can move that conveyor belt of new starts along a little more quickly. Back to your question, how long would it take? I think we would still be a number of years out, but I don't feel like the table's set for that to play out. Certainly hope we're not on that treadmill you referred to there, Rich. Okay. Agreed. Second question, while you guys are kind of a consumption-oriented story, not so much a supplier-manufacturer story, do you agree though that, with everything that's happened during the pandemic in terms of simplifying supply chains, and now with tariffs, with one result possibly being more in the way of manufacturing, onshoring, is that the leading sort of dynamic to help industrial overall get out of this current sort of lackluster situation? Does manufacturing lead it followed by consumption? Is that your way of thinking about it, or do we have that kind of completely wrong? Hey, Richard, it's Marshall again. You may be right. The consumer is certainly what our strategy has been to always be how close can we get to a growing number of kind of higher disposable income consumers. That said, the consumers carried the economy a long time. I don't know how much upside there is. Hopefully, the economy gets better and they continue to push the economy. You're right, that new source of demand is, I think, through our portfolio and especially kind of our markets. We are seeing the manufacturing companies and the relocations a lot into Texas. You're right, that could, that will be a driver in that we don't have, we have a number of Tesla suppliers in Austin and in San Antonio, the new chip plant that Intel's building in Phoenix. We actually have Intel related to construction there, a supplier to Intel. Same thing with the Texas Instruments plant as I'm kind of thinking out loud in Northeast Dallas. We have a supplier there. We do pick up a lot of suppliers. As those plants get built, it's, I guess my hesitancy in putting consumer ahead of or manufacturing ahead of consumer, I think it, I think you said that it may be our children's children that really get the benefit of that. We're certainly seeing onshoring and nearshoring. We're having those type conversations in Arizona and as well of we need more light manufacturing space. We've got relocations from California type discussions going on and things like that. I'd like to think of kind of like e-commerce. It was a new additional tenant within our portfolio. We were already pretty full, but we've seen a pick with e-commerce. It was one more demand source. I think now we're, you're right, we're seeing it for supplier source for these big plants. A lot of them are getting built in the Carolinas and in Texas and Arizona and markets like that. They probably have an outsized market share. Great color. Thanks, Marshall. Thanks, Brent. You're welcome. Next question will be from Jon Petersen at Jefferies. Please go ahead. Oh, great. Thank you. Good morning, guys. I actually wanted to ask you, is there any change or can you give us the level of bad debt in the quarter, and then related, any change in the tenant watchlist? Yeah, good morning, Jon. The bad debt continues to be, thankfully, a non-factor. We're still in that 30% range or something like that. Really, the last two quarters have been at a run rate about half of the prior five quarters. It tends to be contained amongst just a small number of tenants. Our watchlist has been very consistent this year in terms of the number of tenants, nothing really growing there. That has felt good and, you know, testament to the portfolio and the credit and the groups, the tenants we have in place. We're still seeing that 30% or so, 30, 35 basis points relative to total revenue as being pretty consistent here over the last couple of quarters. Okay. All right. That's helpful. As we're seeing interest rates come down, I think the 10-year is just a touch below 4% right now. You guys have allowed your debt levels to come down as you've leaned more on equity. I guess what's the, you know, what's the right interest rate where we would expect your leverage levels to kind of start to tick back up to your long-term targets? I think that's a component of a few things. I mean, it would be the interest rate, but relative to, say, what's our equity opportunity and what are other opportunities. We're constantly weighing those out. In the guidance, we showed bumping some capital proceeds, which was, and I think I said in my prepared remarks, we're looking here in the fourth quarter of doing $200 million, $250 million, maybe in the way of an unsecured term loan. I think that could price in the low 4.3%, 4.4% type range, which we view as very attractive. Just backing up for a moment, the two and a half, three years we're into these higher interest rates now, we take a lot of pride that we haven't, not that there would be anything wrong with it, but we haven't issued debt even with a five-handle at this point. Yet we've continued to fund our growth and we've, as you point out, delivered the balance sheet now to a 2.9 x debt-to-EBITDA ratio. Very, very low. We have a lot of dry powder there. I think you're going to see us in the fourth quarter begin to dip into that. We continually are monitoring public bonds, the public debt markets. Certainly, at some point in the future, whether it's near-term, long-term, whatever it is, we'll be there. You weigh all that and you weigh your equity, cost of equity, and the balance of that and where you are. It's all a kind of a fluid moving situation. The other thing I would point out, Jon, is that over time, the revolver balance or the revolver rate now, though it's variable, it's much more tied a little more to how the Fed fund rate moves. That's now moved into like a 4.7% sort of range. We'll probably begin to keep a little bit of balance on our $675 million revolver there. That gives us time and availability to be patient and look for our different opportunities there. We feel real good about our capital position, our ability to tap into that debt. Thankfully, our team, three good acquisitions this quarter, continue to make a way through our development pipeline. They continue to, we continue to have a need for capital because they're finding good ways to put it to work and accrete it for the shareholders. We're in a good spot and feel like things are turning the right way and giving us more options. We're excited about that. All right. Thank you very much. Appreciate it. Yep. Next question will be from John Kim at BMO Capital Markets. Please go ahead. Hey, good morning. I was wondering if you could provide the average rent per sq ft signed year-to-date and how we should compare that to the 2026 expiring rents, which at the beginning of the year were at $8.42. I know there might be a mix or a timing discrepancy between the two, just trying to see some of the building blocks for the GAAP same-store NOI next year. Yeah, good question. We can dive into that. I could go offline and see if we can get some numbers for that. I would give you the standard answer that across all of our markets, the average rent per sq ft can move around quite a bit. California is certainly very high rates relative to some other areas of the country, even though there's been softness there. Looking at our average roll next year in terms of where that sq ftage is rolling, what I would say, John, maybe give you some color backing up for a moment is even though we've seen rental rates come down off their peak or highs, they still, as I alluded to earlier, they're still very sticky. Certainly, they've moderated a little bit from the highs. Getting the, again, getting rental rate out of deals hasn't been the big part of the equation. It's just been more the sentiment and the demand pace more than anything else. We're not sensing a lot of headwind to still having, as Marshall alluded to earlier in the call, to having strong rental rate growth numbers. I guess what I'm trying to say there is we don't see anything there that's going to change that in a material manner. In terms of actual numbers on an average per sq ft, we could circle offline and give you some color there. We'd have to run a few numbers there. Maybe as a follow-up, can you comment on the acceleration you saw in the GAAP same-store NOI this quarter and whether or not that's a good run rate going forward? The GAAP, yeah, we're having really, I think, kind of an untold story here is we're having a terrific operating year in our existing portfolio. I mean, obviously, there's been a little more slowness in the pace of which we've moved our development leasing than we would like. I would point out that, you know, our same-store guide of up into the, you know, approaching 7%. You know, you could do the math and work backwards, but to get to our midpoint cash same-store for the year guide, you know, we're looking at like an 8.2% fourth quarter cash same-store number. That's based off of, as I said in my comments, a 97%, exactly 97.0% same-store occupancy number. The operating portfolio, when you look back, we really, we hit the low point. In the fourth quarter last year at 95.6% in our same-store occupancy, then that moved in first quarter to 96%, then to 96.3%, and then the third quarter 96.6%. We're projecting 97% for fourth quarter. A very good, steady, stable growth story in the operating portfolio at an 80% retention. All of that feels very good. That momentum feels very good going into next year. Hats off and compliments to our team for putting that together. In terms of your run rate, we feel good about, you know, where we are, where the numbers are trending throughout this year. It's been pretty consistent stabilization in operating portfolio as we lead into next year. Thank you. Yep. Thank you. Ladies and gentlemen, a reminder to please limit yourself to one question and get back in the queue, please, if you should have any follow-ups. Thank you. Next question will be from Brendan Lynch at Barclays. Please go ahead. Great. Thank you for taking my question. Historically, I think you focused more on stabilized acquisitions, and you had a few this quarter as well. When you think in the rationale, it was that you want to limit lease-up risk to the development pipeline. As you kind of bring down the development pipeline now, does that change your perspective on acquiring vacancy going forward? Good morning. A good question. You know, this is Marshall. I'd say the way we think about it is trying to, at the end of the day, we want to own well-located kind of shallow bay near-consumer buildings. At different points in the cycle, the risk-reward shifts. There for a while, I thought with the tariffs, cap rates might go up, but they really, those have been sticky. What we've bought has been pretty strategic. Usually, what we've liked, it's a, and we've got a couple of things we're working on. They're in submarkets where we're strong and have, we've been for years, and they're immediately accretive is another way we look at them. Probably, and they've all been one-off. The portfolio deals get more expensive, but broad brush, we're usually about up, we've been around a 6% or just north of a 6% net effective return, new buildings. I would put them in the top third of our portfolio. Maybe in a kind of a flatter market where we've been a little bit, acquisitions, you're right, are more attractive. I think what will turn, you'll see us be a more active developer. It's been maybe another interesting trend that I think is a good sign. We've had more inbound calls to us looking for us to be the equity partner or get involved with a local regional developer. I'm not sure the market's quite there yet. You're seeing it in our own development numbers, but it's telling me there's not a lot of capital for development starts. As the market kind of heats up, we did a number of that or the leasing market where we bought vacant buildings or partnered with people to help them build buildings. We'll try to step on the gas. That's why we like having a safe balance sheet when things are good to create that value. Sometimes you're better off, you know, again, trying to be patient and find the right quality and kind of build our cluster of buildings that we try to do in the right parts of the markets we like. That's the, and again, I think the trick is being nimble enough to turn the dial, kind of figuring out where the market is. It's usually based on inbound calls of where the best risk return is right now. Great. Thank you. You're welcome. Next question will be from Todd Thomas at KeyBanc Capital Markets. Please go ahead. Hi, thanks. Good morning. I wanted to follow up on some of that commentary a little bit and also around the pace of development leasing and how you're seeing conditions thaw out a little bit. It sounded like some of your peers may be leaning in a little bit to development. Your comments were constructive around the broader environment for starts, which you mentioned at a low dating back to 2018. I'm just curious if some of the delays on your side push into 2026 and you ramp back up with a higher amount of starts, or if you think the slower pace could sort of persist a little bit further and put a little more pressure on starts in the near-term as you think about 2026. Hey, Todd. Good morning. I guess it's hard to look, I've been calling the recovery. I've missed it by several quarters. I keep thinking we're about there. It feels like you're at the starter's block and it keeps getting delayed. I'm hopeful next year, and it wouldn't take a lot. When I look at our development pipeline or our transfers, it's not a huge amount of sq ftage. If I take out what's under construction, we don't need a lot of quantity of leases. Like the one where the lease, as I think about it, where it flipped, where we had a signed lease, which meant we were out of inventory, we were getting ready to break ground on the next building, and the tenant changed their mind on it. It can kind of just flip that quickly. I'd like to think next year, I'd like to think we'll be North of $200 million in starts. That may be back, depends on when things pick up. If the market's not there, I think we owe it to our investors to come down from $200 million. If the market picks up, the beauty of having the parks and the team we do and the balance sheet is our team will say part of their job is to have the permit in hand, and we can build the building and call it eight to 10 months. As things turn and we feel pretty confident about the last project leasing up or running out of space or tenants needing expansion, we'll go ahead and break ground. It'll be fun when we reach that point. We're just trying to be patient and see the demand maybe rather than call the demand on it. I don't think that we really will get punished too badly in any market for being, I'd rather be slightly late than too early. Right now we're seeing the activity. We just need some signed leases, and that'll pull that next round of starts. Thank you. Next question will be from Omotayo Okusanya at Deutsche Bank. Please go ahead. Yes, good morning. Sorry to beat a dead horse about the mark to market this quarter, but I just wanted to understand or clarify the deceleration this quarter. Was that mainly a mix-related issue, or was there also some pricing pressure? I think this is Brent. I think it's more just a mix. Like I say, there certainly, if you look back a few quarters and look at our peak and high, we're certainly off that a little bit, but it's within reason and modestly. As Marshall alluded to, we report leases signed, which we think obviously gives you direct information about what we did this quarter. If you were to look at just leases commenced for the third quarter, as opposed to a 35% GAAP number, which is what we reported, we would have been 45%. That being said, it can be a different mix. Again, as we talked about, that mid-30 range of GAAP leasing increases feels very sticky. Like I say, the vacancy continues to be tight. When you look at vacancy in the less than 100,000 sq ft space range, which is where we live, work, and play, that's looking at like 4.5%. Part of our challenge isn't that potential prospects compare us to eight other options in the market and you're trying to figure out a way to whittle your rate down to make the deal. It's more so just having someone that's really committed to moving their business into and occupying new space. Once you do that, you have pretty good leverage on the rent side because there aren't many options. Certainly from a quarter to quarter, it could move 5% one way or the other just based on the mix. By and large, it feels like that area that we're in, that 30% GAAP sort of range is, as I keep saying, pretty sticky. Thank you. Yep, thank you. Next question will be from Mike Miller at JP Morgan. Please go ahead. Yeah, hi. You kind of touched on this before, but going to development, you started the project in Dallas. Out of curiosity, when you look at the overall pipeline at kind of 9% pre-leasing based on what's under construction and recently completed, does that come into play at all when you're thinking about what to start or not? Is there some sort of a cap on spec development lease-up space that you want to have, or is it really the opportunity that you're looking at that's going to dictate whether or not you put a shovel in the ground? Yeah, I guess. Hey, Mike. Good morning. It's Marshall. I'm trying to be cute. The answer is probably yes. I think it's a little of both. We do look at kind of, I call it risk at the entity level of, you know, yes, there's a level we should have. I'm not sure what we've got a calculation. We've usually looked at it as a% of assets kind of valuing it. It may have, and I'm doing it like maybe 6% and things like that. We haven't been close to that. That could be a combination of land value add, meaning unleased buildings, and what's under development. We do track that on a quarterly basis. We've thankfully been below that. Really more day-to-day, it is, you know, park by park, submarket by submarket of what's the activity do we have there. You try to stay ahead of it, but maybe only a little bit ahead of it of, you know, it would be Brent and I calling you saying, "Hey, we're 50% leased. I've got good activity on the balance, and a couple of tenants say they want more space." That's when we'll break ground and build the next building or two. I've always said what I like about our model versus a lot of the traditional developer model, it's not us pushing supply into the market. It's really getting pulled by our teams in the field saying, "I need more inventory." That's where, you know, look, we've pulled back and slowed the manufacturing line where we've said, "Okay, you've got the inventory. You don't need any more. Let's get that accounted for." We'll try to keep the factory going as fast or as slow as the market tells us it wants it. Right now, again, I'm happy, as Brent mentioned earlier, happy where the portfolio is. It's exceeding our expectations this year. I like our same-store numbers. I'd like to think our occupancy has more upside. We were coming off record highs. We've been battling occupancy declines on same-store for several quarters that we have a chance to pick it up on rent and occupancy. Development is really, look, the capital's been spent, the office space has been built out, and a large amount of these spaces that we've delivered either transferred over and lease up. We just need to kind of get those prospects to convert next. That's what we need to show you. Sure. Got it. Okay, thank you. You're welcome. Next question will be from Ronald Kamdem at Morgan Stanley. Please go ahead. Hey, just I guess the quick one, just on the dev starts, you know, coming down, can you talk through just which markets you think could pencil or did you want to do stuff at the beginning of the year that you maybe have pulled back on currently as part one? If I could just ask a quick follow-up on, I think you talked about next year maybe getting a chance at occupancy gains and you have the rent escalators and so forth. Is the spreads really going to be the big sort of delta for you guys as you're thinking about same-store for next year? Thanks. I'll maybe touch on development. Hey, Ron, good morning. I'll touch on developments and maybe Brent or between us, we'll on the same store. Look, we always have kind of a list of starts that you feel comfortable about and then potential starts based on if leasing falls one way or the other. It's not any one market, although I will say one of the Texas markets where we had the signed lease, we were out o f space in the park and we were starting the next building. That was probably a $20 million, $25 million swing. You know, it's okay. We'll work our way through it. Long term, it's not an issue. It just, you know, based on what we knew at one point in time, we thought we needed to build another building. Today we've got inventory we need to backfill. That's probably the swing there. There's still, I think there's only a couple or three starts this quarter that we've got programmed in. We feel pretty good about those. That's some of that's based on leases that are out for signature that would pull that next ticket. Yeah, and in terms, Ron, good morning. In terms of the same-store, certainly, on the rent side, as I mentioned earlier, it still feels, although off the highs, it's still from the cash standpoint, that 20% range still feels sticky. If you figure you're rolling, I don't know, 20% of your portfolio in any given year, maybe you've got 4%- 5% there in terms of potential growth. As I mentioned earlier, we began this year at 2025 at about a 96% same-store occupancy, and we're projecting to finish the year closer to 97%. As you flip the calendar, if we can maintain that or even incrementally build on that, then for the first few quarters of early next year, ideally that should stack up favorably. We obviously haven't looked at numbers or looked into specifics on that, but certainly we feel like the ingredients are there for a solid same-store run rate going into next year. To kind of tag along with what Marshall says, it excites me that we've been in the top of our peer group, really in the top one or two in FFO growth. Last year we grew our earnings at about 7.9%. This year we're forecasted about 7.3%. So 15% combined. We've done that despite slower development leasing, which can be at times a really big catalyst to our growth. To have this space poised and ready to go, as Marshall said, money spent, office space ready to go, just an incremental increase in activity and signings and confidence. That would be an entire cylinder that could fire more strongly than it has been that could even give us more lift. Again, feeling that could be a lift to us going into next year. Helpful. Thank you. Yep. Next question will be from Michael Griffin at Evercore ISI. Please go ahead. Great, thanks. I wonder if you can give some color around leasing costs and how you expect those to trend maybe over the next couple of quarters. Marshall, maybe specifically as it relates to the development pipeline, could you look to get more aggressive, whether it's, you know, TIs or other aspects to kind of get these deals over the finish line? Are you expecting to remain pretty judicious in the leasing cost perspective? I think, and I'll say, California, we've seen in terms of lease, true dollars out of pocket or maybe on the construction costs, those have been pretty sticky and really lease by lease. With the increase in rents, we'll spend, I'm just looking, usually $1.10, $1.20 a sq ft. It's gotten to where more of that is the commissions than the actual cost per pocket. One advantage we have as a larger entity, in some cases, the smaller developers who usually have a bank loan or this or that, they can be more limited on the TI they can offer tenants. If the credit's there and we can protect ourselves on the credit side, we can certainly fund more TIs than some of our smaller peers can, thankfully. I would say it's not that, good questions, but it's not that companies don't like the rent, they don't like the TI package or this or that. It usually comes back, it was one where they took, they wanted a full building, then they took the space down and we got a lease signed. This is all this year or in the last few months. Now we're talking to them about an expansion, which I'm glad we are, but it's really people trying to predict their businesses more than the economics we're offering. I think as they get more comfortable, which they seem to slowly be doing or kind of, as I mentioned, dusting themselves off and ready to look, I've got to run my business in spite of whatever headlines are out there, we're making market deals and those make sense. I don't think near- term, I think given the lack of construction going on nationally, I would think our commissions will probably continue trending up just because they're a percent of rents and our TI should hold pretty steady. Look, those certainly, I call it $1.20 a ft per year of lease term, thankfully for industrial compared to other property types, we're getting off light from that front. It's easier to do the credit risk. It's lower. Great. That's it for me. Thanks for the time. Okay, thanks, Mike. Thank you. Next question will be from Jessica Zheng at Green Street. Please go ahead. Hi, good morning. It sounds like the smaller tenants have been more active on new leases. Just wondering if you're seeing any changes in overall tenant credit quality or lease term preferences on these leases? Yeah, no, this is Brent. It's really been, you know, same type tendency that we've seen. As we talked about earlier, our bad debt being good, we're always vetting credit depending on the deal, but we've seen nothing really changing there. As Marshall alluded to, really the TI packages and that type thing, it's all been, you know, thankfully for us, we're still in that 12-15% office finish risk warehouse. Any particular deal might have some nuance to it, but all of that continues to be pretty consistent. Really no changes in terms of the specific type or credit of tenant that we're seeing or evaluating relative to any other time, really. Okay, great. Thanks for the color. Sure. Next question will be from Michael Carroll at RBC Capital Markets. Please go ahead. Yeah, thanks. Marshall and Brent, I wanted to try and tie together some of your comments that you made throughout this call. I know that you seemed encouraged about the improving leasing prospects, but the company also reduced its occupancy guide, I mean, albeit modestly, the development start guide and pushed out a few development stabilizations. Is both true that you're seeing better prospects, but your expectations were a little bit too aggressive last quarter, so you needed to right-size those? Are we just seeing this temporary lull right now and things should bounce back as you kind of get into 2026? Yeah, good morning. I think on our occupancy, it's really the portfolio is more full than we, the same-store portfolio occupancy has gone up. It's the first time I can remember the last two quarters we've raised our same-store guidance, but as you said, slightly lowered our occupancy. That's a reflection of developments rolling in a little bit more slowly. Development leasing as a whole has certainly, over the course of the year, the portfolio's outperformed, the revenue from developments has not, we were aggressive in our underwriting on that. That's come in light. Glass half full or half empty, that's our, as Brent touched on, that's our potential for next year to go from zero to whatever those rents are there. That's been opportunity. Ahead of us, but that's probably where it's, and developments were really, I guess if I'm tying the comments together, you know, look, the best way to lease up phase two within our park isn't to deliver phase three. We've slowed down our development starts simply as a function of we have the inventory available. It's still on the shelf. We don't need to create more inventory. We've slowed the developments. I think with our retention rate of 80%, things like that, that tenants have been sitting still given kind of some of the headlines. I'm more encouraged if I go back, call it 60, 90 days, our prospect conversations are up materially in terms of just the number of prospects and then the size range of a few of those conversations. Give us a couple of quarters and we need to get those turned into signed leases. I'm more encouraged by the prospect activity. Certainly, it's much better than we saw in June of this year. Until it turns into a signed lease, it's just that, it's prospect activity. If that helps, I'm trying to be consistent or kind of paint, but that's how, that's where we've headed direction-wise. We'll just kind of go as fast as the market allows us to. Okay, perfect. Thanks. You're welcome. At this time, Mr. Marshall, Sorry, Mr. Loeb, we have no other questions registered. Please proceed. Okay. Thanks, everyone, for your time. We appreciate your interest in EastGroup. If there's any follow-up questions or thoughts, feel free to reach out to us. We hope to see you soon. Thank you. Thank you, gentlemen. This does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect.