By Lorna PaPPas
EastGroup Properties’ David Hoster focuses on
integrity, accountability and responsibility
One common trait shared between the armed forces and
EastGroup Properties’ (NYSE: EGP) CEO and President
David H. Hoster is that they both demand personal responsibility. In fact, that notion epitomizes EastGroup, a mid-sized distribution warehouse REIT based in Jackson, Miss.
Hoster’s management style both parallels, and counters,
his military training as a First Lieutenant in the U.S. Army.
While he epitomizes personal ownership, honor, pride
and devotion to the cause, he also revels in a flat chain of command, without the bureaucracy that separates him from what
he enjoys: day-to-day developments on the property level.
Hoster’s insistence on accountability,
integrity and discipline helped steer
EastGroup to its 117th consecutive
quarterly dividend, paid March 31, 2009,
and to its consistent outperformance of
its industrial peer group and the F TSE
NAREIT Equity REIT Index for total
returns to shareholders.
He also led a team effort that produced
impressive 2008 year-end results, especially given the overall economic slowdown: FFO for 2008 was $81.3 million or
$3.30 per share, an increase of 5. 8 percent
compared to 2007. Net income available to
common stockholders in 2008 was $32.1
million, or $1.30 per share. Additionally,
an annual dividend of $2.08 per share was
paid out in EastGroup’s 16th consecutive
year of dividend growth, with an average
annual increase of 4. 7 percent.
Recently, Portfolio sat down to learn
more about EastGroup’s commander-in-chief.
focus is on mid-sized, flexible facilities located near major
transportation centers and on infill sites with barriers to
Additionally, we seek markets with higher populations
and job growth than the U.S. average. The strength of
local markets influences our success because our customers
generally distribute to their local metropolitan areas rather
than to regions or nationwide.
Our properties range in size from 5,000 to 50,000 square
feet, with large, flexible surrounding lots to appeal to as
many potential customers as possible. Our average customer
is a private entrepreneurial company utiliz-
ing a 24,000-square-foot dock-high space,
200 feet or less deep, with 15 percent of
office space and storefront glass.
Today, EastGroup’s portfolio totals
25. 8 million square feet with an additional
1. 5 million square feet under development.
We employ 69 people, including six senior
officers who have been together for over
eight years. Collectively, our approach and
team members have created an impressive
track record for providing long- and short-term value for shareholders.
Portfolio: Please give us an overview of
Hoster: EastGroup is an equity REIT
focused on developing, acquiring and operating multi-tenant business distribution
warehouses in major Sunbelt markets. Our
educ Ati On: B.A. in history,
with honors, Princeton University;
M.B.A., Stanford University
FAmily: Wife Missy and two
HObbies: Fly fishing, hiking
FAvOrite spOrts teAm:
Stanford Cardinal football team
FAvOrite vAcAtiOn spOt:
Jackson Hole, Wyoming
FAvOrite type OF bOOk:
Mysteries by Michael Connelly
and John Sandford
Member of the board of governors
of NAREIT; member of the
board of Trustmark National
Bank.; member of the board of
the Community Foundation of
Greater Jackson; head of Princeton
University Annual Giving for
Mississippi; former member of the
board of trustees of St. Andrew’s
Episcopal School and the board
of Goodwill Industries.
Portfolio: When looking at investing
alternatives, why should investors
choose EastGroup over a competitor?
Hoster: There are several reasons.
Historically, we have had an extremely
conservative balance sheet. Our financials
are extremely transparent and easy to
understand. Additionally, our dividend
is, and has been, 100 percent covered by
rent from properties, not joint venture
fees or transaction income. We raised
our dividend for 16 consecutive years,
and in March 2009 announced our
117th consecutive quarterly dividend.
EastGroup’s market strategy has remained consistent year over year, unlike