JACKSON, MS-EastGroup Properties Inc., a leading developer of distribution space for small businesses in the 5,000-sf to 50,000-sf range, has closed the books on first quarter operations, showing a hefty balance sheet, the company reports.

The Mississippi-based REIT posted funds from operations of $15.7 million or 71 cents per share, up 10.9% from 64 cents in the comparable 2005 period. Net income was $5.5 million or 25 cents per share.

EastGroup president and CEO David H. Hoster II says in a prepared statement the first quarter included gains of $649,000 or three cents per share from land sales. FFO also increased due to higher property net operating income of $2.38 million, an 11.2% increase. Hoster attributes the increase in PNOI primarily to $1 million from 2005 acquisitions; $584,000 from newly developed properties; and $784,000 from same property growth.

"We are pleased with our continuing growth in FFO per share, with the first quarter of 2006 representing our seventh consecutive quarter of increased FFO, as compared to the previous year's quarter," Hoster says. "It was also the 11th consecutive quarter of positive same property operations for results, both with and without the straight-lining of rents."

EastGroup is looking at Phoenix and Fort Myers, FL for new growth opportunities this year, the company's chief says. EastGroup expects to close in the second quarter on 17.7 acres in Phoenix and start construction of a 271,000-sf industrial building on the site in the fourth quarter.

In Florida, EastGroup anticipates closing on 20 acres in Fort Myers by the third quarter. The land is adjacent to a 10-acre parcel the company bought for development in 2005. Hoster says his company tentatively plans to break ground on the first two Fort Myers buildings in the third quarter.

Hoster says the company's land inventory, including the Fort Myers and Phoenix acquisitions, totals 287 acres that will support about 3.7 million sf of new industrial product. EastGroup's 21.4-million-sf portfolio is 94.4% leased with occupancy at 93.8%, Hoster says.