Yahoo Finance EastGroup (EGP) Buys Atlanta Property, Issues $60M Notes
EastGroup Properties EGP announced the acquisition of Gwinnett Progress Center, a property in Atlanta for $29.2 million. Gwinnett Progress Center includes a total of 392,000 square feet covering four distribution buildings and an extra 10.5 acres on which an 85,000 square foot building could be created as a part of expansion.
Also, the company issued senior unsecured notes worth $60 million to an insurance company. These unsecured notes have a term of seven years. The interest payments are semi-annual with a fixed rate of 3.46%.
The president and CEO of EastGroup, Marshall Loeb said, “We are excited about the opportunity to acquire the 17% leased, state of the art buildings in an off market, value add transaction. This acquisition raises our Atlanta portfolio to over 700,000 square feet with two adjacent development sites which upon development will raise the total to over 900,000 square feet."
EastGroup is a company which primarily manages industrial properties all across United States. Notably, in the industrial real estate market, demand for space has been high for several quarters.
Particularly, amid economic expansion, e-commerce development and heightened urbanization, companies are shifting their strategy toward services like same-day delivery and other options, propelling demand for warehouse distribution facilities. Also, according to a report from Prologis Inc. PLD , for a given level of revenues, online retailers require three times the distribution center space compared with traditional retailers. This is creating scope for industrial REITs like Prologis, DCT Industrial Trust DCT, Liberty Property Trust LPT and EastGroup Properties to prosper.
As a result, EastGroup Properties’ stock has gained 6.2% over the past six months, widely outperforming the industry’s 0.1% rally.
The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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