REIT Magazine - May/June 2009

One-on-One

By Lorna PaPPas

Active Duty

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

close uP

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 new competition.

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 EastGroup Properties. Hoster: EastGroup is an equity REIT focused on developing, acquiring and operating multi-tenant business distribution warehouses in major Sunbelt markets. Our

Age: 63 educ Ati On: B.A. in history, with honors, Princeton University; M.B.A., Stanford University FAmily: Wife Missy and two grown daughters HObbies: Fly fishing, hiking and reading FAvOrite spOrts teAm: Stanford Cardinal football team FAvOrite vAcAtiOn spOt: Jackson Hole, Wyoming FAvOrite type OF bOOk: Mysteries by Michael Connelly and John Sandford prOFessiOnAl Activities: 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.