EASTGROUP PROPERTIES ANNUAL REPORT
2 0 2 3
DEAR EASTGROUP SHAREHOLDERS, I am pleased to report that 2023 was another
record year for funds from operations (“FFO”) per diluted share (up 11.3%) and releasing
spreads. Despite continued market volatility, we exceeded our expectations and ended
2023 in what we believe to be the strongest position in EastGroup’s history. In 2023,
we once again raised our dividend and ended the year with total annual shareholder
return of almost 28%. We also made strides with our balance sheet in 2023, leaving
EastGroup better positioned than ever to take advantage of market opportunities and
weather economic downturns that may arise.
PROVEN STRATEGY
Our strategy remains straight-
forward and is market-cycle tested.
We develop, acquire and operate
multi-tenant business distribution
parks for customers who are
location-sensitive. Focusing on
the historically high-growth major
Sunbelt metropolitan markets, our
customers primarily lease space
in the 20,000–100,000 square
foot range, and our properties are
designed for users clustered around
major transportation features in
supply constrained submarkets.
EastGroup’s customers primarily
distribute to the metropolitan area
where they lease space instead of
to regional or national areas.
The economic vibrancy and growth
of these metro areas are major
determinants of our customers’
success and, in turn, our financial
results. Historically, we have
focused on and continue to invest
in fast-growing markets across
the Sunbelt that benefit from
strong migration trends and
consumers with increasing levels
of disposable income.
We maintain geographic and tenant
diversity with the goal of stabilizing
our future earnings regardless of
the economic environment. Today,
we have approximately 1,600 leases
in place and the most diversified
rent roll in our sector. Our top 10
tenants represent less than
8% of EastGroup’s rents.
We believe that our “last mile,
shallow bay distribution” niche
uniquely positions EastGroup
among its peers. Typical EastGroup
buildings are 80,000–150,000
square feet at in-fill locations near
transportation hubs and in the
path of population growth, while
most of our institutional industrial
peers develop big box (500,000+
square feet) properties, with few
in-fill projects. We believe we
have built an especially resilient
portfolio, with properties ideally
suited for prospective new users
with growing demand as well as
our traditional users.
Stonefield 35, Austin, Texas
Sacramento
San Francisco
Las
Vegas
Fresno
Denver
Los Angeles
San Diego
Phoenix
Tucson
El Paso
Dallas/
Ft. Worth
San Antonio
Austin
Houston
Nashville
Charlotte
Greenville
Jackson
Atlanta
New Orleans
Tampa
Ft. Myers
Jacksonville
Orlando
Ft. Lauderdale
Miami
STRONG PERFORMANCE
AND ENHANCED
FINANCIAL STRENGTH
We delivered an 11.3% year-over-year
increase in FFO per diluted share,
representing the 13th consecutive
year of FFO per share growth. Portfolio
leasing and occupancy were 98.7%
and 98.2%, respectively, at December
31, 2023. We experienced a 55%
increase in rents for leases (both new
and renewal) executed in 2023 with
straight-lining (average rent over the
life of the lease) and a 38% increase
on a cash basis. This was a record year
for rental rate increases and marks our
ninth consecutive year of double-digit
straight-line rental rate increases.
Given the capital market volatility in
2023, we made a conscious effort to
materially strengthen our balance sheet
in a manner that provides protection
during downturns and allows us to act
swiftly when opportunities arise. For
the year ended December 31, 2023,
our debt-to-EBITDA ratio was 4.2x,
our interest and fixed charge coverage
ratio was 8.4x, and as of December 31,
2023, we had no floating rate debt on
our balance sheet. Moody’s Investors
Service assigned EastGroup an issuer
rating of Baa2 with a stable outlook.
Spanish Ridge, Las Vegas, Nevada
PROPERTY LOCATIONS
Properties Corporate Headquarters Regional Offices
DIVIDENDS
We once again raised our dividend
in 2023, delivering an annualized
dividend yield to our investors of
2.8% on our year-end stock price
of $183.54 per share. EastGroup’s
fourth quarter dividend was our 176th
consecutive quarterly cash distribution
to shareholders. We have raised our
dividend in each of the last 12 years,
marking 31 consecutive years in
which we have either increased
or maintained our dividend.
DISCIPLINED ACQUIRERS;
EXPERIENCED
DEVELOPERS
We are acutely aware of the global
wall of capital that has sought to
invest in U.S. industrial properties
in recent years. With this in mind,
our team is disciplined in evaluating
whether the risk to return favors core
leased acquisitions, vacant building
acquisitions or development to obtain
well located, shallow bay multi-tenant
properties in fast-growing markets.
Fortunately, we are adept across this
spectrum and can take each avenue
depending on what the market allows.
When evaluating new investments, our
team is skilled at sensing and reacting
to where the best risk to return
investment window lies at any point
in time. In the latter half of 2023, due
to the capital market shifts, the risk to
return favored core leased acquisitions
as opposed to development. We were
pleased to be able to acquire newer
fully-leased properties with below
market rents at accretive initial yields,
which also enhanced our longer-term
growth profile.
Our significant development capabil-
ities, however, allow us to avoid
being solely reliant on acquisitions to
achieve profitable growth. EastGroup’s
development program has a long and
successful record of creating value
for our shareholders. We develop
parks with the potential for multiple
buildings where we create and control
a uniform high quality environment
or sense of place. This allows us the
flexibility to serve our customers by
meeting their evolving space needs
$50,000
$40,000
$30,000
$20,000
$10,000
Ft. Lauderdale
3
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6
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TOTAL RETURN PERFORMANCE
EGP FTSE Nareit Equity REITs S&P 500
over time. We have developed over
29 million square feet of quality, state-
of-the-art assets comprising roughly
50% of our portfolio. With our strong
industrial property fundamentals and
leasing success, we began construction
on 11 projects in 2023 comprising
2.4 million square feet. During the
year, we transferred 13 properties
with 2.3 million square feet, which were
100% leased as of December 31, 2023,
into our operating portfolio.
We believe “in-fill” site develop-
ment is another unique competitive
advantage for EastGroup. Many of the
submarkets in which we operate are
supply constrained and have limited
land for new industrial development
or significant cost or zoning barriers
to entry. Given our existing successful
presence in target submarkets, we
aim to leverage our exclusive real-
time market insights before initiating
additional developments in the same
areas. Furthermore, the majority of our
developments are subsequent phases
of existing multi-building industrial
parks, which we believe carry materially
lower risk than traditional ‘edge of
town’ greenfield developments.
Finally, we reduce our risk exposure
by not banking excessive land on
our balance sheet. We work to
minimize the time between closing
and groundbreaking using a “just in
time” delivery approach much like a
manufacturer. For our phased business
park developments, our construction
starts are based on current leasing
activity and interest within a park
rather than a consultant’s market
study. If we have more prospects than
space, we can rely on actual demand
within the park to confidently begin
developing the next building.
We believe our development program
will continue to be a major creator
of shareholder value. We have the
right land, permitted sites, available
capital and an experienced and
proven development team. As always,
however, any future development will
be set by our own leasing activity as
opposed to set targets or simply high-
level market research.
COMMITMENT
TO CORPORATE
RESPONSIBILITY
AND SUSTAINABILITY
As a company, we remain committed
to the highest standards of
governance and ethical conduct.
Continuing to further our corporate
sustainability initiatives remains
an important focus for our Board
and management team. We are
growing our community outreach
and developing properties to
high sustainability standards.
We also continue incorporating
environmentally-friendly features
across our existing portfolio including
energy-efficient improvements and
resource conservation projects. I am
incredibly proud of our progress and
ongoing momentum.
McKinney 121, Dallas, Texas
OUR MOMENTUM IN 2024
I am optimistic as we move into 2024.
Our portfolio is benefitting from
several long-term positive secular
trends such as population migration,
near shoring and onshoring trends,
and continued e-commerce growth.
Our record 2023 FFO performance
also reflects EastGroup’s solid
foundation and proven strategy.
Despite economic uncertainties,
we are maintaining high occupancy
levels with record rent growth and
successfully bringing new investments
online, all while improving an already
strong balance sheet. We believe we
are prepared to weather economic
uncertainties and to move quickly
when the right opportunities arise.
In closing, with our experienced
team, portfolio and strong
balance sheet, I believe we are well
positioned to continue our positive
momentum in 2024 and create value
for our shareholders now and in
the years to come.
MARSHALL A. LOEB
Chief Executive Officer, President
and Director
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED
December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
COMMISSION FILE NUMBER
1-07094
EASTGROUP PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland
(State or other jurisdiction of incorporation or organization)
13-2711135
(I.R.S. Employer Identification No.)
400 W Parkway Place
Suite 100
Ridgeland, Mississippi
(Address of principal executive offices)
39157
(Zip code)
Registrant’s telephone number: (601) 354-3555
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common stock, $0.0001 par value per share
Trading
symbol(s)
EGP
Name of each exchange on which registered
New York Stock Exchange
1
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes ☐ No ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
☒
Accelerated Filer
☐
Non-accelerated Filer
☐
Smaller Reporting Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to
§240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to
the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30,
2023, the last business day of the Registrant’s most recently completed second fiscal quarter: $7,753,608,598.
The number of shares of common stock, $0.0001 par value, outstanding as of February 13, 2024 was 47,956,587.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement relating to its 2024 Annual Meeting of Stockholders are incorporated by reference
into Part III. The Registrant intends to file such Proxy Statement with the Securities and Exchange Commission not later than
120 days after the end of the fiscal year ended December 31, 2023.
2
PART I
Forward-Looking Statements
Item 1.
Business
Item 1A.
Risk Factors
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Unresolved Staff Comments
Cybersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9.
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A.
Controls and Procedures
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16.
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Exhibits and Financial Statement Schedules
Form 10-K Summary
Page
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5
10
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19
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21
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93
3
PART I
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K includes “forward-looking statements” (within the meaning of the federal securities laws,
Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) that reflect EastGroup Properties, Inc.’s (the “Company” or “EastGroup”)
expectations and projections about the Company’s future results, performance, prospects, plans and opportunities. The
Company has attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,”
“expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,”
“goals,” “plans” or variations of such words and similar expressions or the negative of such words, although not all forward-
looking statements contain such words. These forward-looking statements are based on information currently available to the
Company and are subject to a number of known and unknown assumptions, risks, uncertainties and other factors that may cause
the Company’s actual results, performance, plans or achievements to be materially different from any future results,
performance or achievements expressed or implied by these forward-looking statements. These factors include, among other
things, those discussed below. The Company intends for all such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act,
as applicable by law. The Company does not undertake to publicly update or revise any forward-looking statements, whether as
a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required by law.
The following are some, but not all, of the risks, uncertainties and other factors that could cause the Company’s actual results to
differ materially from those presented in the Company’s forward-looking statements (the Company refers to itself as “we,” “us”
or “our” in the following):
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
international, national, regional and local economic conditions;
disruption in supply and delivery chains;
construction costs could increase as a result of inflation impacting the costs to develop properties;
the competitive environment in which the Company operates;
fluctuations of occupancy or rental rates;
potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants, or our ability to
lease space at current or anticipated rents, particularly in light of the impacts of inflation;
potential changes in the law or governmental regulations and interpretations of those laws and regulations,
including changes in real estate laws, real estate investment trust (“REIT”) or corporate income tax laws, potential
changes in zoning laws, or increases in real property tax rates, and any related increased cost of compliance;
our ability to maintain our qualification as a REIT;
acquisition and development risks, including failure of such acquisitions and development projects to perform in
accordance with projections;
natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes;
pandemics, epidemics or other public health emergencies, such as the coronavirus pandemic;
availability of financing and capital, increase in interest rates, and ability to raise equity capital on attractive terms;
financing risks, including the risks that our cash flows from operations may be insufficient to meet required
payments of principal and interest, and we may be unable to refinance our existing debt upon maturity or obtain
new financing on attractive terms or at all;
our ability to retain our credit agency ratings;
our ability to comply with applicable financial covenants;
credit risk in the event of non-performance by the counterparties to our interest rate swaps;
how and when pending forward equity sales may settle;
lack of or insufficient amounts of insurance;
litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;
our ability to attract and retain key personnel;
risks related to the failure, inadequacy or interruption of our data security systems and processes;
potentially catastrophic events such as acts of war, civil unrest and terrorism; and
environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of
contamination of properties presently owned or previously owned by us.
All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within this Annual
Report on Form 10-K for the year ended December 31, 2023.
4
ITEM 1. BUSINESS.
The Company
EastGroup Properties, Inc., which we refer to in this Annual Report as the “Company,” “EastGroup,” “we,” “us” or “our,” is an
internally-managed equity REIT first organized in 1969. EastGroup is focused on the development, acquisition and operation
of industrial properties in major Sunbelt markets throughout the United States, primarily in the states of Florida, Texas,
Arizona, California and North Carolina. EastGroup’s strategy for growth is based on ownership of premier distribution
facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup is a Maryland
corporation, and its common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the symbol
“EGP.” The Company has elected to be taxed and intends to continue to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the “Internal Revenue Code”).
Available Information
The Company maintains a website at www.eastgroup.net. The Company posts its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, including exhibits and amendments to those reports filed or furnished
pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after it electronically files or furnishes such
materials to the Securities and Exchange Commission (the “SEC”). In addition, the Company’s website includes items related
to corporate governance matters, including, among other things, the Company’s corporate governance guidelines, charters of
various committees of the Board of Directors, the Company's whistleblower program, and the Company’s code of ethics and
business conduct applicable to all employees, officers and directors. The Company intends to disclose on its website any
amendment to, or waiver of, any provision of this code of business conduct and ethics applicable to the Company’s directors
and executive officers that would otherwise be required to be disclosed under the rules of the SEC or the New York Stock
Exchange. Copies of these reports and corporate governance documents may be obtained, free of charge, from the Company’s
website. We are providing our website address solely for the information of investors, and the information on our website is
not a part of or incorporated by reference into this annual report on Form 10-K or our other filings with the SEC.
You may also access any materials we file with the SEC through the EDGAR database on the SEC’s website at www.sec.gov.
Administration
EastGroup maintains its principal executive office and headquarters in Ridgeland, Mississippi. The Company also has regional
offices in Atlanta, Dallas and Los Angeles and asset management offices in Orlando, Tampa, Houston and Phoenix. EastGroup
in Jacksonville, Miami, Charlotte, Greenville, San Antonio, Austin and San
has property management offices
Francisco. Offices at these locations allow the Company to provide property management services to 83% of the Company’s
operating portfolio on a square foot basis. In addition, the Company currently provides property administration (accounting of
operations) for its entire portfolio. The regional offices in Georgia, Texas and California provide oversight of the Company’s
development and value-add program. Properties that are either acquired but not stabilized or can be converted to a higher and
better use are considered value-add properties. As of December 31, 2023, EastGroup had 96 full-time employees.
Business Overview
EastGroup’s goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality
business distribution space for location-sensitive customers (primarily in the 20,000 to 100,000 square foot range). The
Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation
features in supply-constrained submarkets in major Sunbelt regions. The Company’s core markets are in the states of Florida,
Texas, Arizona, California and North Carolina.
As of December 31, 2023, EastGroup owned 510 industrial properties in 12 states. As of that same date, the Company’s
portfolio, including development projects and value-add properties in lease-up and under construction, included approximately
59.2 million square feet consisting of 470 business distribution properties containing 53.9 million square feet, 17 bulk
distribution properties containing 4.4 million square feet, and 23 business service properties containing 900,000 square feet.
As of December 31, 2023, EastGroup’s operating portfolio was 98.7% leased to tenants in approximately 1,600 leases, with no
single tenant accounting for more than approximately 1.8% of the Company’s annualized based rent (as defined in Item 2.
Properties) for the year ended December 31, 2023. The properties in the development and value-add program were 18% leased
as of December 31, 2023.
During 2023, EastGroup increased its holdings in real estate properties through its acquisition and development programs. The
Company acquired 987,000 square feet of operating properties and 328.3 acres of land for a total of $235,780,000. Also during
2023, the Company began construction of 11 development projects containing 2.4 million square feet and transferred 13
5
projects, which contain 2.3 million square feet and had costs of $271,568,000 at the date of transfer, from its development and
value-add program to real estate properties.
During 2023, EastGroup sold three operating properties containing 231,000 square feet and 11.9 acres of land, which generated
gross proceeds of $43,150,000.
The Company typically initially funds its development and acquisition programs through its unsecured bank credit facilities; the
total capacity of which was increased in January 2023 by $200,000,000, from $475,000,000 to $675,000,000 (as discussed
under the heading Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K). As market
conditions permit, EastGroup issues equity or employs fixed rate debt, including variable rate debt that has been swapped to an
effectively fixed rate through the use of interest rate swaps, to replace short-term bank borrowings. Moody’s Investors Service
has assigned the Company’s issuer rating of Baa2 with a stable outlook. A security rating is not a recommendation to buy, sell,
or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should
be evaluated independently of any other rating. For future debt issuances, the Company intends to issue primarily unsecured
fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate
swaps. The Company may also access the public debt market in the future as a means to raise capital.
EastGroup holds its properties as long-term investments but may determine to sell certain properties that no longer meet its
investment criteria. The Company may provide financing to a prospective purchaser in connection with such sales of property
if market conditions require. In addition, the Company may provide financing to a partner or co-owner in connection with an
acquisition of real estate in certain situations.
Subject to the requirements necessary to maintain EastGroup’s qualifications as a REIT, the Company may acquire securities of
entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over those
entities.
EastGroup has no present intention of acting as an underwriter of offerings of securities of other issuers. The strategies and
policies set forth above were determined and are subject to review by EastGroup’s Board of Directors, which may change such
strategies or policies based upon its evaluation of the state of the real estate market, the performance of EastGroup’s assets,
capital and credit market conditions, and other relevant factors.
Competition
The market for the leasing of industrial real estate is competitive. We experience competition for tenants from existing
properties in proximity to our buildings as well as from new development. Institutional investors, other REITs and local real
estate operators generally own such properties; however, no single competitor or small group of competitors is dominant in our
current markets. Even so, as a result of competition, we may have to provide concessions, incur charges for tenant
improvements or offer other inducements, all of which may have an adverse impact on our results of operations. The market
for the acquisition of industrial real estate is also competitive. We compete for real property investments with other REITs and
institutional investors such as pension funds and their advisors, private real estate investment funds, insurance company
investment accounts, private investment companies, individuals and other entities engaged in real estate investment activities.
Regulations
Compliance with various governmental regulations has an impact on EastGroup’s business, including EastGroup’s capital
expenditures, earnings and competitive position, which can be material. EastGroup incurs costs to monitor and take actions to
comply with governmental regulations that are applicable to its business, which include, among others, federal securities laws
and regulations, applicable stock exchange requirements, REIT and other tax laws and regulations, environmental and health
and safety laws and regulations, local zoning, usage and other regulations relating to real property, and the Americans with
Disabilities Act of 1990 (“ADA”).
Under various federal, state and local laws, ordinances and regulations, an owner of real estate may be liable for the costs of
removal or remediation of certain hazardous or toxic substances on or in such property. Many such laws impose liability
without regard to whether the owner knows of, or was responsible for, the presence of such hazardous or toxic substances. The
presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to
sell or rent such property or to use such property as collateral in its borrowings. EastGroup’s properties have generally been
subject to Phase I Environmental Site Assessments (“ESAs”) by independent environmental consultants and, as necessary, have
been subjected to Phase II ESAs. These reports have not revealed any potential significant environmental liability. Our
management is not aware of any environmental liability that would have a material adverse effect on EastGroup’s business,
assets, financial position or results of operations.
6
See “Item 1A. Risk Factors” in this Annual Report for a discussion of material risks to EastGroup, including related to
governmental regulations and environmental matters.
Environmental, Social and Governance (“ESG”) Matters
EastGroup’s commitment to ESG initiatives is evidenced by its building standards, corporate policies and procedures and
company culture. At EastGroup, protecting the environment is important to the Company’s employees, customers and
communities. The Company strives to support sustainability through its commitment to build high performance and
environmentally responsible properties. Through EastGroup’s continued efforts, numerous properties have been Leadership in
Energy and Environmental Design (“LEED”), Building Owners and Managers Association 360 and ENERGY STAR®
certified, and while formal certification is not always pursued, the Company builds its development properties with the
intention of meeting LEED certifiable standards. The Company consistently invests in energy-efficient improvements
throughout its portfolio, such as LED lighting, skylights, white reflective roofing, electric vehicle charging stations and smart
sensor irrigation systems. In June 2021, the Company amended and restated its unsecured revolving credit facility, providing
for an incremental reduction in borrowing costs if a certain sustainability-linked metric is achieved. This metric is based on a
target number of newly-constructed buildings with qualifying electric vehicle charging stations as a percentage of total
qualifying buildings for each fiscal year. If the metric is achieved, the applicable interest rate margin on the Company’s
$625,000,000 unsecured credit facility is reduced by one basis point for the following year. For the years ended December 31,
2022 and 2023, the metric was exceeded, which allowed for the interest rate reduction in each of the years subsequent to
achieving the metric. The Company believes that its continued commitment to pursue environmentally conscious performance
creates positive impacts on the environment and long-term value for the Company and its stakeholders.
During 2022, the Company furthered its commitment to ESG initiatives by partnering with a sustainability consulting firm and
beginning to utilize an environmental data management platform, with the goal of more reliably tracking and benchmarking
operational performance. Using the data obtained from these efforts, EastGroup completed its first GRESB Real Estate
Assessment during 2023, which provided the Company with additional insight into its ESG management and performance as
compared to industry peers.
The Company also worked to formalize its approach toward ESG management and risk assessment during 2023 by creating an
environmental management system and implementing an ESG due diligence scorecard for potential building acquisitions,
which includes an assessment of each building’s environmental and resilience characteristics, as well as a physical climate risk
assessment. The Company released a Corporate Green Office Guide during 2022, which contains best environmental practices
for its corporate offices, and it continues to seek additional ways to engage with tenants on environmental matters, including
recycling initiatives, Earth Day celebrations, and other tenant appreciation events at many of its properties.
In addition, EastGroup and its employees are committed to social responsibility and are active participants in the communities
where they live and work. EastGroup’s employees volunteer with numerous charitable organizations, and the Company
coordinates volunteer opportunities for its employees and provides paid time off for volunteering in order to encourage
participation and increase social engagement in all of the communities in which it operates.
EastGroup operates on the premise that good corporate governance is fundamental to the Company’s business and core values,
and the Company believes its corporate governance policies and practices are well aligned with the interests of stakeholders.
The honesty and integrity of the Company’s management and Board of Directors are critical assets in maintaining the trust of
the Company’s investors, employees, customers, vendors and the communities in which the Company operates.
Readers are encouraged to visit the “Priorities” page of the Company’s website and review its latest Environmental, Social &
Governance Reports for more detail regarding EastGroup’s ESG programs and initiatives. Nothing on the Company’s website
or in the referenced reports shall be deemed to be incorporated by reference into this Annual Report on Form 10-K.
Human Capital Matters
We believe our employees are a critical component of the success and sustainability of our Company, and we are committed to
providing a diverse and inclusive work environment that encourages collaboration and teamwork.
• Workforce Diversity: As of December 31, 2023, we employed 96 team members, 99% considered full-time and 1%
part-time, located in 15 offices in Arizona, California, Florida, Georgia, Mississippi, North Carolina, South Carolina
and Texas, and as of such date, none of these employees were members of a union or subject to a collective bargaining
agreement. Our team is comprised of the following types of personnel:
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asset, construction and property managers;
accounting, administrative, human resources and information technology professionals; and
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our corporate leadership team.
Our employee base is gender diverse, with 74% identifying as women as of December 31, 2023 and 64% of new hires
in 2023 identifying as women. The officer group is comprised of 49% women and 51% men. As of December 31,
2023, 15% of our employees self-identified as members of a racial or ethnic minority group. Our Board of Directors is
29% comprised of women, and one of seven Board members is a member of a racial or ethnic minority group. With
96 employees and 7 directors, each team member plays a vital role in the success of the Company.
Employee Tenure: We believe our culture supports our employees and creates a positive, professional environment
that encourages longevity for our team members. We seek to develop leaders and promote from within the
organization when opportunities arise. As of December 31, 2023, the average tenure of our workforce was 9 years,
and 13 years for our officers; 71% of our employees at the manager level and above were promoted from within the
Company. Our voluntary turnover rate was 8%, and there was no involuntary turnover during the year ended
December 31, 2023.
Compensation, Benefits, Health and Safety: We offer a comprehensive employee benefits program and what we
believe are socially-responsible policies and practices in order to support the overall well-being of our employees and
create a safe, professional and inclusive work environment. Some of the benefits we offer include a robust 401(k)
matching program, company-wide equity award program, generous personal leave policy, paid parental leave, flexible
work schedules, paid time off for volunteering, annual health and wellness checkups, employer-paid health insurance
for all full-time employees, tobacco cessation program, athletic club and tuition reimbursement programs, and a
competitive pay structure. All of our employees are eligible for performance-based annual bonuses based on a
percentage of salary.
Training and Development: We have a formal, certificate-based learning program for all employees; learning
objectives include topics such as diversity and inclusion, unconscious bias, anti-harassment, workplace violence &
bullying and data security. All of our employees participate in annual performance reviews and feedback sessions.
Our employees are provided with training, education and peer mentoring programs to further develop their
professional skill set, enhancing the level of service provided to our customers and the quality of information disclosed
to our stakeholders.
Policies: We have various policies and practices in place, including a Code of Ethics and Business Conduct,
Whistleblower Program, Equal Opportunity and Commitment to Diversity, Human Rights Statement, Vendor Code of
Conduct, ADA & Reasonable Accommodation, Commitment to Safety, Community Service, Family Medical Leave,
Maternity and Paternity Leave, Standards of Conduct, Corporate Green Office Guide, Environmental Management
System, Workplace Violence Prevention, Healthy, Wealthy, Wise Benefits Summary, and Cybersecurity.
Company and Board Engagement: We value our employees, and our focus on human capital management and other
socially-responsible initiatives is at the forefront of discussions and decisions with both management and the Board of
Directors. On a regular basis, Company management holds ESG-related discussions with the Board of Directors; in
2023, our management and the Board of Directors formally met to discuss these topics four times. The Nominating
and Corporate Governance Committee of the Board of Directors has direct oversight over ESG and in 2023, met for
two formal discussions on ESG and also received periodic updates from Company management.
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Supplemental U.S. Federal Income Tax Considerations
The following discussion supplements and updates the disclosures under “Certain United States Federal Income Tax
Considerations” in the prospectus dated December 16, 2022, contained in our Registration Statement on Form S-3 filed with the
SEC on December 16, 2022. Capitalized terms herein that are not otherwise defined shall have the same meaning as when used
in such disclosures (as supplemented).
On December 29, 2022, the IRS promulgated final Treasury Regulations under Sections 897, 1441, 1445, and 1446 of the Code
that were, in part, intended to coordinate various withholding regimes for non-U.S. stockholders. The new Treasury Regulations
provide that:
(i) The withholding rules applicable to ordinary REIT dividends paid to a non-U.S. stockholder (generally, a 30%
rate of withholding on gross amounts unless otherwise reduced by treaty or effectively connected with such non-
U.S. stockholder’s trade or business within the U.S. and proper certifications are provided) will apply to (a) that
portion of any distribution paid by us that is not designated as a capital gain dividend, a return of basis or a
distribution in excess of the non-U.S. stockholder’s adjusted basis in its stock that is treated as gain from the
disposition of such stock and (b) any portion of a capital gain dividend paid by us that is not treated as gain
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attributable to the sale or exchange of a U.S. real property interest by reason of the recipient not owning more than
10% of a class of our stock that is regularly traded on an established securities market during the one-year period
ending on the date of the capital gain dividend.
(ii) The withholding rules under FIRPTA will apply to a distribution paid by us in excess of a non-U.S. stockholder’s
adjusted basis in our stock, unless the interest in our stock is not a U.S. real property interest (for example,
because we are a domestically controlled qualified investment entity) or the distribution is paid to a “withholding
qualified holder.” A “withholding qualified holder” means a qualified holder (as defined below) and a foreign
partnership all of the interests of which are held by qualified holders, including through one or more partnerships.
(iii) The withholding rules under FIRPTA will apply to any portion of a capital gain dividend paid to a non-U.S.
stockholder that is attributable to the sale or exchange of a U.S. real property interest, unless it is paid to a
withholding qualified holder.
In the case of FIRPTA withholding under clause (ii) above, the applicable withholding rate is currently 15%, and in the case of
FIRPTA withholding under clause (iii) above the withholding rate is currently 21%. For purposes of FIRPTA withholding
under clause (iii), whether a capital gain dividend is attributable to the sale or exchange of a U.S. real property interest is
determined taking into account the general exception from FIRPTA distribution treatment for distributions paid to certain non-
U.S. stockholders under which any distribution by us to a non-U.S. stockholder with respect to any class of stock which is
regularly traded on an established securities market located in the United States is not treated as gain recognized from the sale
or exchange of a U.S. real property interest if such non-U.S. stockholder did not own more than 10% of such class of stock at
any time during the one-year period ending on the date of such distribution. To the extent inconsistent, these Treasury
Regulations supersede the discussion on withholding contained in the above-referenced disclosures (as supplemented) under the
heading “Taxation of Non-U.S. Shareholders.” However, if, notwithstanding these Treasury Regulations, we encounter
difficulties in properly characterizing a distribution for purposes of the withholding rules, we may decide to withhold on such
distribution at the highest possible U.S. federal withholding rate that we determine could apply.
New Treasury Regulations also provide new guidance regarding qualified foreign pension funds. Accordingly, the discussion
contained in the paragraph under “Certain United States Federal Income Tax Considerations – Taxation of Non-U.S.
Shareholders – Qualified Foreign Pension Funds” is hereby deleted and replaced with the following:
Qualified Foreign Pension Funds. In general, for FIRPTA purposes, and subject to the discussion below regarding
“qualified holders,” neither a “qualified foreign pension fund” (as defined below) nor any entity all of the interests of
which are held by a qualified foreign pension fund is treated as a foreign person, thereby exempting such entities from
tax under FIRPTA. A “qualified foreign pension fund” is an organization or arrangement (i) created or organized in a
foreign country, (ii) established by a foreign country (or one or more political subdivisions thereof) or one or more
employers to provide retirement or pension benefits to current or former employees (including self-employed
individuals) or their designees as a result of, or in consideration for, services rendered, (iii) which does not have a
single participant or beneficiary that has a right to more than 5% of its assets or income, (iv) which is subject to
government regulation and with respect to which annual information about its beneficiaries is provided, or is otherwise
available, to relevant local tax authorities and (v) with respect to which, under its local laws, (A) contributions that
would otherwise be subject to tax are deductible or excluded from its gross income or taxed at a reduced rate, or (B)
taxation of its investment income is deferred, or such income is excluded from its gross income or taxed at a reduced
rate. Under Treasury Regulations, subject to the discussion below regarding “qualified holders,” a “qualified controlled
entity” also is not generally treated as a foreign person for purposes of FIRPTA. A qualified controlled entity generally
includes a trust or corporation organized under the laws of a foreign country all of the interests of which are held by
one or more qualified foreign pension funds either directly or indirectly through one or more qualified controlled
entities.
Treasury Regulations further require that a qualified foreign pension fund or qualified controlled entity will not be
exempt from FIRPTA with respect to dispositions of U.S. real property interests or REIT distributions attributable to
the same unless the qualified foreign pension fund or qualified controlled entity is a “qualified holder.” To be a
qualified holder, a qualified foreign pension fund or qualified controlled entity must satisfy one of two alternative tests
at the time of the disposition of the U.S. real property interest or the REIT distribution. Under the first test, a qualified
foreign pension fund or qualified controlled entity is a qualified holder if it owned no U.S. real property interests as of
the earliest date during an uninterrupted period ending on the date of the disposition or distribution during which it
qualified as a qualified foreign pension fund or qualified controlled entity. Alternatively, if a qualified foreign pension
fund or qualified controlled entity held U.S. real property interests as of the earliest date during the period described in
the preceding sentence, it can be a qualified holder only if it satisfies certain testing period requirements.
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Treasury Regulations also provide that a foreign partnership all of the interests of which are held by qualified holders,
including through one or more partnerships, may certify its status as such and will not be treated as a foreign person
for purposes of withholding under Section 1445 of the Code (and Section 1446 of the Code, as applicable).
ITEM 1A. RISK FACTORS.
In addition to the other information contained or incorporated by reference in this document, readers should carefully consider
the following risk factors. Any of these risks or the occurrence of any one or more of the uncertainties described below could
have a material adverse effect on the Company’s financial condition and the performance of its business. Additional risks and
uncertainties not presently known to the Company or that the Company currently deems immaterial also may impair its
business operations.
Real Estate Industry Risks
We face risks associated with local real estate conditions in areas where we own properties. We may be adversely affected by
general economic conditions and local real estate conditions. For example, an oversupply of industrial properties in a local area
or a decline in the attractiveness of our properties to tenants would have a negative effect on us. Other factors that may affect
general economic conditions or local real estate conditions include:
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population and demographic trends;
employment and personal income trends;
income and other tax laws;
changes in interest rates and availability and costs of financing;
increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other
factors which may not necessarily be offset by increased rents;
changes in the price of oil;
construction costs; and
weather-related events.
We may be unable to compete for properties and tenants. The real estate business is highly competitive. We compete for
interests in properties with other real estate investors and purchasers, some of whom have greater financial resources, revenues
and geographical diversity than we have. Furthermore, we compete for tenants with other property owners. All of our
industrial properties are subject to significant local competition. We also compete with a wide variety of institutions and other
investors for capital funds necessary to support our investment activities and asset growth.
We are subject to significant regulation that constrains our activities. Local zoning and land use laws, environmental statutes
and other governmental requirements restrict our expansion, rehabilitation and reconstruction activities. These regulations may
prevent us from taking advantage of economic opportunities. Legislation such as the ADA may require us to modify our
properties, and noncompliance could result in the imposition of fines or an award of damages to private litigants. Future
legislation may impose additional requirements. We cannot predict what requirements may be enacted or what changes may be
implemented to existing legislation.
Risks Associated with Our Properties
We may be unable to lease space on favorable terms or at all. When a lease expires, a tenant may elect not to renew it. We
may not be able to re-lease the property on favorable terms, if we are able to re-lease the property at all. The terms of renewal
or re-lease (including the cost of required renovations and/or concessions to tenants) may be less favorable to us than the prior
lease. We also routinely develop properties with no pre-leasing. If we are unable to lease all or a substantial portion of our
properties, or if the rental rates upon such leasing are significantly lower than expected rates, our cash generated before debt
repayments and capital expenditures and our ability to make expected distributions to stockholders may be adversely affected.
We may be affected negatively by tenant bankruptcies and leasing delays. At any time, a tenant may experience a downturn in
its business that may weaken its financial condition. Similarly, a general decline in the economy may result in a decline in the
demand for space at our industrial properties. As a result, our tenants may delay lease commencement, fail to make rental
payments when due, or declare bankruptcy. Any such event could result in the termination of that tenant’s lease and losses to
us, and funds available for distribution to investors may decrease. We receive a substantial portion of our income as rents under
mid-term and long-term leases. If tenants are unable to comply with the terms of their leases for any reason, including because
of rising costs or falling sales, we may deem it advisable to modify lease terms to allow tenants to pay a lower rent or a smaller
share of taxes, insurance and other operating costs. If a tenant becomes insolvent or bankrupt, we cannot be sure that we could
recover the premises from the tenant promptly or from a trustee or debtor-in-possession in any bankruptcy proceeding relating
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to the tenant. We also cannot be sure that we would receive rent in the proceeding sufficient to cover our expenses with respect
to the premises. If a tenant becomes bankrupt, the federal bankruptcy code will apply and, in some instances, may restrict the
amount and recoverability of our claims against the tenant. A tenant’s default on its obligations to us could adversely affect our
financial condition and the cash we have available for distribution.
We face risks associated with our property development. We intend to continue to develop properties where we believe market
conditions warrant such investment. Once made, our investments may not produce results in accordance with our
expectations. Risks associated with our current and future development and construction activities include:
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the availability of favorable financing alternatives;
the risk that we may not be able to obtain land on which to develop or that due to the increased cost of land, our
activities may not be as profitable;
construction costs exceeding original estimates due to rising interest rates and increases in the costs of materials and
labor;
disruption in supply and delivery chains;
construction and lease-up delays resulting in increased debt service, fixed expenses and construction costs;
expenditure of funds and devotion of management’s time to projects that we do not complete;
fluctuations of occupancy and rental rates at newly completed properties, which depend on a number of factors,
including market and economic conditions, resulting in lower than projected rental rates and a corresponding lower
return on our investment; and
complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning,
occupancy and other governmental permits.
We face risks associated with property acquisitions. We acquire individual properties and portfolios of properties and intend to
continue to do so. Our acquisition activities and their success are subject to the following risks:
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when we are able to locate a desired property, competition from other real estate investors may significantly increase
the purchase price;
acquired properties may fail to perform as we project;
the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates;
acquired properties may be located in new markets where we face risks associated with an incomplete knowledge or
understanding of the local market, a limited number of established business relationships in the area and a relative
unfamiliarity with local governmental and permitting procedures;
we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of
properties, into our existing operations, and as a result, our results of operations and financial condition could be
adversely affected; and
we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, to the
transferor with respect to unknown liabilities. As a result, if a claim were asserted against us based upon ownership
of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.
Coverage under our existing insurance policies may be inadequate to cover losses. We generally maintain insurance policies
related to our business, including casualty, general liability and other policies, covering our business operations, employees and
assets as appropriate for the markets where our properties and business operations are located. However, we would be required
to bear all losses that are not adequately covered by insurance. In addition, there may be certain losses that are not generally
insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so,
including losses due to floods, wind, earthquakes, acts of war, acts of terrorism or riots. If an uninsured loss or a loss in excess
of insured limits occurs with respect to one or more of our properties, then we could lose the capital we invested in the
properties, as well as the anticipated future revenue from the properties. In addition, if the damaged properties are subject to
recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged.
We face risks due to lack of geographic and real estate sector diversity. Substantially all of our properties are located in the
Sunbelt region of the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina.
As of December 31, 2023, our largest markets were Houston and Dallas. We owned operating properties totaling 6.8 million
square feet in Houston and 5.4 million square feet in Dallas, which represent 10.7% and 9.6%, respectively, of the Company’s
total Real estate properties based on percentage of total annualized base rent (as defined in Item 2. Properties). A downturn in
general economic conditions and local real estate conditions in these geographic regions, as a result of oversupply of or reduced
demand for industrial properties, local business climate, business layoffs and changing demographics, would have a particularly
strong adverse effect on us. In addition, our investments in real estate assets are concentrated in the industrial distribution
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sector. This concentration may expose us to the risk of economic downturns in this sector to a greater extent than if our
business activities included other sectors of the real estate industry.
We face risks due to the illiquidity of real estate which may limit our ability to vary our portfolio. Real estate investments are
relatively illiquid. Our ability to vary our portfolio in response to changes in economic and other conditions will therefore be
limited. In addition, because of our status as a REIT, the Internal Revenue Code limits our ability to sell our properties. If we
must sell an investment, we cannot ensure that we will be able to dispose of the investment on terms favorable to the Company.
We are subject to environmental laws and regulations. Current and previous real estate owners and operators may be required
under various federal, state and local laws, ordinances and regulations to investigate and clean up hazardous substances released
at the properties they own or operate. They may also be liable to the government or to third parties for substantial property or
natural resource damage, investigation costs and cleanup costs. Such laws often impose liability without regard to whether the
owner or operator knew of, or was responsible for, the release or presence of such hazardous substances. In addition, some
environmental laws create a lien on the contaminated site in favor of the government for damages and costs the government
incurs in connection with the contamination. Contamination may adversely affect the owner’s ability to use, sell or lease real
estate or to borrow using the real estate as collateral. We have no way of determining at this time the magnitude of any
potential liability to which we may be subject arising out of environmental conditions or violations with respect to the
properties we currently or formerly owned. Environmental laws today can impose liability on a previous owner or operator of a
property that owned or operated the property at a time when hazardous or toxic substances were disposed of, released from, or
present at the property. A conveyance of the property, therefore, may not relieve the owner or operator from liability. Although
ESAs have been conducted at our properties to identify potential sources of contamination at the properties, such ESAs do not
reveal all environmental liabilities or compliance concerns that could arise from the properties. Moreover, material
environmental liabilities or compliance concerns may exist, of which we are currently unaware, that in the future may have a
material adverse effect on our business, assets or results of operations.
Climate change and its effects, including compliance with new laws or regulations such as “green” building codes, may
require us to make improvements to our existing properties or result in unanticipated losses that could affect our business and
financial condition. To the extent that climate change causes an increase in catastrophic weather events, such as severe storms,
fires or floods, our properties may be susceptible to an increase in weather-related damage. Even in the absence of direct
physical damage to our properties, the occurrence of any natural disasters or a changing climate in the area of any of our
properties could have a material adverse effect on business, supply chains and the economy generally. Climate change could
cause an increase in property and casualty insurance premiums. The potential impacts of future climate change on our
properties could adversely affect our ability to lease, develop or sell our properties or to borrow using our properties as
collateral. In addition, any proposed legislation enacted to address climate change could increase the costs of energy, utilities
and overall development. The resulting costs of any proposed legislation may adversely affect our financial position, results of
operations and cash flows.
Financing Risks
We face risks associated with the use of debt to fund acquisitions and developments, including refinancing risk. We are subject
to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required
payments of principal and interest. In addition, certain of our debt will have significant outstanding principal balances on their
maturity dates, commonly known as “balloon payments.” Therefore, we will likely need to refinance at least a portion of our
outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or that the terms of any
refinancing will not be as favorable as the terms of the existing debt.
We face risks associated with our dependence on external sources of capital. In order to qualify as a REIT, we are required
each year to distribute to our stockholders at least 90% of our ordinary taxable income, and we are subject to tax on our income
to the extent it is not distributed. Because of this distribution requirement, we may not be able to fund all future capital needs
from cash retained from operations. As a result, to fund capital needs, we rely on third-party sources of capital, which we may
not be able to obtain on favorable terms, if at all. Our access to third-party sources of capital depends upon a number of factors,
including (i) general market conditions; (ii) the market’s perception of our growth potential; (iii) our current and potential future
earnings and cash distributions; and (iv) the market price of our capital stock. Additional debt financing may negatively impact
our financial ratios, such as our debt-to-total market capitalization ratio, our debt-to-EBITDAre ratio and our fixed charge
coverage ratio.
Covenants in our credit agreements could limit our flexibility and adversely affect our financial condition. The terms of our
various credit agreements and other indebtedness require us to comply with a number of customary financial and other
covenants, such as maintaining minimum debt service coverage and leverage ratios and maintaining insurance coverage. These
covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the
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instruments governing the applicable indebtedness even if we had satisfied our payment obligations. If we are unable to
refinance our indebtedness at maturity or meet our payment obligations, the amount of our distributable cash flow and our
financial condition would be adversely affected.
Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable
terms, if at all. Our credit ratings are based on our operating performance, liquidity and leverage ratios, overall financial
position and other factors employed by the credit rating agencies in their rating analysis of us. Our credit ratings can affect the
amount and type of capital we can access, as well as the terms of any financings we may obtain. There can be no assurance that
we will be able to maintain our current credit ratings. In the event our current credit ratings deteriorate, it may be more difficult
or expensive to obtain additional financing or refinance existing obligations and commitments. Also, a downgrade in our credit
ratings would trigger additional costs or other potentially negative consequences under our current and future credit facilities
and debt instruments.
Increases in interest rates would increase our interest expense. At December 31, 2023, we had no variable rate debt
outstanding not protected by interest rate hedge contracts. We may incur variable rate debt in the future. If interest rates
increase, then so would the interest expense on our unhedged variable rate debt, which would adversely affect our financial
condition and results of operations. From time to time, we manage our exposure to interest rate risk with interest rate hedge
contracts that effectively fix or cap a portion of our variable rate debt. In addition, we refinance fixed rate debt at times when
we believe rates and terms are appropriate. Our efforts to manage these exposures may not be successful. Our use of interest
rate hedge contracts to manage risk associated with interest rate volatility may expose us to additional risks, including a risk that
a counterparty to a hedge contract may fail to honor its obligations. Developing an effective interest rate risk strategy is
complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no
assurance that our hedging activities will have the desired beneficial impact on our results of operations or financial condition.
Termination of interest rate hedge contracts typically involves costs, such as transaction fees or breakage costs.
The number of shares of our common stock available for future sale and future offerings of debt or equity securities may be
dilutive to existing stockholders and adversely affect the market price of our common stock. Our ability to execute our business
strategy depends on our access to an appropriate blend of equity and debt financing, including common and preferred stock,
lines of credit and other forms of secured and unsecured debt. We have filed a registration statement with the SEC allowing us
to offer, from time to time, an indefinite amount of equity securities on an as-needed basis, including shares under our Current
2023 ATM Program (as defined below). Sales of a substantial number of shares of our common stock (or the perception that
such sales might occur), the issuance of common stock in connection with acquisitions and other equity issuances may dilute
the holdings of our existing stockholders or reduce the market prices of our securities, or both. Holders of our common stock
are not entitled to preemptive rights or other protections against dilution. Because our decision to issue securities in any future
offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount,
timing or nature of our future offerings. Thus, our stockholders bear the risk of future offerings reducing the market prices of
our securities and diluting their proportionate ownership.
The lack of certain limitations on our debt could result in our becoming more highly leveraged. Our governing documents do
not limit the amount of indebtedness we may incur. Accordingly, we may incur additional debt and would do so, for example,
if it were necessary to maintain our status as a REIT. We might become more highly leveraged as a result, and our financial
condition and cash available for distribution to stockholders might be negatively affected and the risk of default on our
indebtedness could increase.
General Risk Factors
Inflation and related volatility in the economy could negatively impact our tenants, our results of operations and the value of
our publicly-traded equity securities. Inflation and its related impacts, including increased prices for services and goods and
higher interest rates and wages, and any fiscal or other policy interventions by the U.S. government in reaction to such events,
could negatively impact our tenants’ businesses or our results of operations. Most of our leases require the tenants to pay their
pro rata share of operating expenses, including real estate taxes, insurance and common area maintenance, although a limited
number of tenants have capped the amount of these operating expenses they are responsible for under their lease. As a result,
we believe that most of our leases mitigate our exposure to increases in costs and operating expenses resulting from inflation.
However, there can be no assurance that our tenants would be able to absorb these expense increases and be able to continue to
pay us their portion of operating expenses, capital expenditures and rent. In addition, while most of our leases provide for
scheduled rent increases, high levels of inflation could outpace these increases. As a result, our business, financial condition,
results of operations, cash flows, liquidity and ability to satisfy our minimum debt service obligations and to pay dividends and
distributions to shareholders could be adversely affected over time. There is no guarantee that we will be able to mitigate the
effects of inflation and related impacts, and the duration and extent of any prolonged periods of inflation, and any related
adverse effects on our results of operations and financial condition, remain unknown at this time.
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Additionally, inflationary pricing may have a negative effect on the construction costs necessary to complete our development
projects, including, but not limited to, costs of construction materials, labor and services from third-party contractors and
suppliers. Higher construction costs could adversely impact our investments in real estate assets and our expected yields on
development and value-add projects. Although the Company has an obligation to complete development projects currently
under construction, the Company does not have any obligation to start new development projects in the future. EastGroup
evaluates new development projects on a case-by-case basis including many factors such as construction costs, potential yields,
and tenant demand, and no assurance can be given that inflationary pricing will not have a material adverse impact on our
development pipeline and future results.
Inflation may also cause increased volatility in financial markets, which could affect our ability to access the capital markets or
impact the cost or timing at which we are able to do so. To the extent our exposure to increases in interest rates on any of our
debt is not eliminated through interest rate swaps and interest rate protection agreements, such increases will result in higher
debt service costs, which will adversely affect our cash flows. Our exposure to increases in interest rates in the short term
includes our variable-rate borrowings. With the exception of the unsecured bank credit facilities, all of the Company’s debt has
an effectively fixed interest rate. See “Financing Risks – Increases in interest rates would increase our interest expense.”
Increases in interest rates could also increase our debt financing costs over time, either through near-term borrowings on our
existing unsecured bank credit facilities or refinancing of our existing borrowings that may incur incrementally higher interest
rates.
One of the factors that may influence the trading price of our publicly-traded common stock is the interest rate on our debt and
the dividend yield on our common stock relative to market interest rates. As market interest rates rise, unless we eliminate our
exposure to such increases, our borrowing costs may rise and result in less funds being available for distribution. Therefore, we
may not be able to, or we may choose not to, provide a higher distribution rate on our common stock. In addition, fluctuations
in interest rates could adversely affect the market value of our properties. These factors could result in a decline in the market
prices of our common stock. There is no guarantee we will be able to mitigate the impact of inflation.
The market value of our common stock could decrease based on our performance and market perception and conditions. The
market value of our common stock may be affected by the market’s perception of our operating results, growth potential, and
current and future cash dividends and may also be affected by the real estate market value of our underlying assets. The market
price of our common stock may also be influenced by the dividend on our common stock relative to market interest
rates. Rising interest rates may lead potential buyers of our common stock to expect a higher dividend rate, which would
adversely affect the market price of our common stock. In addition, rising interest rates would result in increased expense,
thereby adversely affecting cash flow and our ability to service our indebtedness and pay dividends.
The state of the economy or other adverse changes in general or local economic conditions may adversely affect our operating
results and financial condition. Turmoil in the global financial markets may have an adverse impact on the availability of credit
to businesses generally and could lead to a further weakening of the U.S. and global economies. Currently these conditions
have not impaired our ability to access capital markets and finance our operations. However, our ability to access the capital
markets may be restricted at a time when we would like, or need, to raise financing, which could have an impact on our
flexibility to react to changing economic and business conditions. Furthermore, deteriorating economic conditions including
business layoffs, downsizing, industry slowdowns and other similar factors that affect our customers could negatively impact
commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate
portfolio and in the collateral securing any loan investments we may make. Additionally, an adverse economic situation could
have an impact on our lenders or customers, causing them to fail to meet their obligations to us. No assurances can be given
that the effects of an adverse economic situation will not have a material adverse effect on our business, financial condition and
results of operations.
We may fail to qualify as a REIT. If we fail to qualify as a REIT, we will not be allowed to deduct dividends to stockholders in
computing our taxable income and will be subject to federal income tax at regular corporate rates. In addition, we may be
barred from qualification as a REIT for the four years following disqualification. The additional tax incurred at regular
corporate rates would significantly reduce the cash flow available for distribution to stockholders and for debt service.
Furthermore, we would no longer be required by the Internal Revenue Code to make any dividends to our stockholders as a
condition of REIT qualification. If we were to fail to qualify as a REIT, subject to certain limitations in the Internal Revenue
Code, corporate stockholders may be eligible for the dividends received deduction, and individual, trust and estate stockholders
may be eligible to treat the dividends received from us as qualified dividend income taxable as net capital gains under the
provisions of Section 1(h)(11) of the Internal Revenue Code. However, non-corporate stockholders (including individuals) will
not be able to deduct 20% of certain dividends they receive from us in accordance with Section 199A of the Internal Revenue
Code. The REIT qualification requirements are extremely complex, and interpretation of the U.S. federal income tax laws
governing REIT qualification is limited. Although we believe we have operated and intend to operate in a manner that will
14
continue to qualify us as a REIT, we cannot be certain that we have been or will be successful in continuing to be taxed as a
REIT. In addition, facts and circumstances that may be beyond our control may affect our ability to qualify as a REIT. We
cannot assure you that new legislation, regulations, administrative interpretations or court decisions will not change the tax laws
significantly with respect to our qualification as a REIT or with respect to the federal income tax consequences of
qualification.
Legislative or regulatory action with respect to tax laws and regulations could adversely affect the Company and our
stockholders. We are subject to state and local tax laws and regulations. Changes in state and local tax laws or regulations may
result in an increase in our tax liability. A shortfall in tax revenues for states and municipalities in which we operate may lead to
an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our
assets or income. These increased tax costs could adversely affect our financial condition, results of operations and the amount
of cash available for the payment of dividends. In addition, in recent years, numerous legislative, judicial and administrative
changes have been made to the federal income tax laws applicable to investments in REITs and similar entities. Additional
changes to tax laws are likely to continue to occur in the future, and we cannot assure our stockholders that any such changes
will not adversely affect the taxation of a stockholder. We cannot assure you that future changes to tax laws and regulations will
not have an adverse effect on an investment in our stock.
To maintain our status as a REIT, we limit the amount of shares any one stockholder can own. The Internal Revenue Code
imposes certain limitations on the ownership of the stock of a REIT. For example, not more than 50% in value of our
outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal
Revenue Code) during the last half of any taxable year. To protect our REIT status, our charter prohibits any holder from
acquiring more than 9.8% (in value or in number, whichever is more restrictive) of our outstanding equity stock (defined as all
of our classes of capital stock, except our excess stock (of which there is none outstanding)) unless our Board of Directors
grants a waiver. The ownership limit may limit the opportunity for stockholders to receive a premium for their shares of
common stock that might otherwise exist if an investor were attempting to assemble a block of shares in excess of 9.8% of the
outstanding shares of equity stock or otherwise effect a change in control.
Certain tax and anti-takeover provisions of our charter and bylaws may inhibit a change of our control. Certain provisions
contained in our charter and bylaws and the Maryland General Corporation Law may discourage a third party from making a
tender offer or acquisition proposal to us. If this were to happen, it could delay, deter or prevent a change in control or the
removal of existing management. These provisions also may delay or prevent our stockholders from receiving a premium for
their common shares over then-prevailing market prices. These provisions include:
•
•
•
•
the REIT ownership limit described above;
special meetings of our stockholders may be called only by the chairman of the board, the chief executive officer,
the president, a majority of the board or by stockholders possessing a majority of all the votes entitled to be cast at
the meeting;
our Board of Directors may authorize and issue securities without stockholder approval; and
advance-notice requirements for proposals to be presented at stockholder meetings.
In addition, Maryland law provides protection for Maryland corporations against unsolicited takeovers by limiting, among other
things, the duties of the directors in unsolicited takeover situations and certain “business combinations” and “control share
acquisitions.” Our bylaws contain provisions exempting us from the Maryland Control Share Acquisition Act and the
Maryland Business Combination Act. Our bylaws prohibit the repeal, amendment or alteration of our Maryland Control Share
Acquisition opt out without the approval by the Company’s stockholders; however, there can be no assurance that this provision
will not be amended or eliminated at some time in the future.
The Company faces risks in attracting and retaining key personnel. Many of our senior executives have strong industry
reputations, which aid us in identifying acquisition and development opportunities and negotiating with tenants and sellers of
properties. The loss of the services of these key personnel could affect our operations because of diminished relationships with
existing and prospective tenants, property sellers and industry personnel. In addition, attracting new or replacement personnel
may be difficult in a competitive market.
We have severance and change in control agreements with certain of our officers that may deter changes in control of the
Company. If, within a certain time period (as set in the officer’s agreement) following a change in control, we terminate the
officer’s employment other than for cause, or if the officer elects to terminate his or her employment with us for reasons
specified in the agreement, we will make a severance payment equal to the officer’s average annual compensation times an
amount specified in the officer’s agreement, together with the officer’s base salary and vacation pay that have accrued but are
15
unpaid through the date of termination. These agreements may deter a change in control because of the increased cost for a
third party to acquire control of us.
We rely on information technology in our operations, and any material failure, inadequacy, interruption or cyber-attack of that
technology could harm our business. We rely on information technology networks and systems, including the internet and
third-party cloud-based service providers, to process, transmit and store electronic information, and to manage or support a
variety of business processes, including financial transactions and records, and to maintain personal identifying information and
customer and lease data. We purchase some of our information technology from vendors, on whom our systems depend. We
rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission and
storage of data relating to our business operations (including our financial transactions and records) and confidential customer
data (including individually identifiable information relating to financial accounts). Although we have taken steps to protect the
security of our information systems and the data maintained in those systems, it is possible that our safety and security
measures will not prevent the systems’ improper functioning or damage, or the improper access or disclosure of our business
operations or personally identifiable information such as in the event of cybersecurity incidents. Security breaches, including
physical or electronic break-ins, computer viruses, phishing or spoofing attacks by hackers and similar breaches, can create
system disruptions, shutdowns, misappropriation of assets or unauthorized disclosure of confidential information. In some
cases, it may be difficult to anticipate or immediately detect such incidents and the damage they cause. Any failure to maintain
proper function, security and availability of our information systems could interrupt our operations, damage our reputation,
subject us to liability claims or regulatory penalties and could have a materially adverse effect on our business, financial
condition and results of operations. Additionally, any cybersecurity incident may be costly, notwithstanding any cyber liability
insurance we may carry. See “Item 1C. Cybersecurity” for further discussion.
We may be impacted by changes in U.S. social, political, regulatory and economic conditions or laws and policies. Any
changes to U.S. tax laws, foreign trade, manufacturing, and development and investment in the territories and countries where
our customers operate could adversely affect our operating results and our business.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 1C. CYBERSECURITY.
Cyber Risk Management and Strategy
EastGroup incorporates cybersecurity processes, which include periodic tests of its information security processes and systems
by external firms, into the Company’s overall risk management program. EastGroup has processes and policies regarding
incident response, identity and access management, employee training on cybersecurity matters, device management, and patch
and vulnerability management, among others. We also maintain processes regarding third-party vendor risk management,
including, as appropriate, conducting a review of security ratings of and System and Organization Controls (“SOC”) reports
provided by potential vendors. Additionally, EastGroup works with cybersecurity consulting firms to help manage the
Company’s cybersecurity risks. The cyber consulting firms currently conduct testing of EastGroup’s controls and environment,
including penetration testing, to identify and remediate cybersecurity risks. They also currently provide EastGroup with advice
on technology, infrastructure, management, and productivity in relation to its information technology capabilities, including
conducting phishing exercises with the Company’s employees.
Additionally, EastGroup has information technology general controls in place in support of internal control over financial
reporting. These controls are tested by the Company’s internal audit function and control deficiencies, if any, would be reported
to senior management and the Audit Committee of the Board of Directors.
Governance Related to Cybersecurity Risks
EastGroup’s cybersecurity risk management process is assessed and managed by a cyber risk committee (“Cyber Risk
Committee”), which includes the Company’s Chief Financial Officer (“CFO”), Chief Information Officer (“CIO”) and
members of management within the information technology, finance and accounting, legal and internal audit functions. The
CIO is a Certified Public Accountant (“CPA”), a Certified Information Technology Professional with the American Institute of
CPAs and has 20 years of experience in the areas of cybersecurity and information technology. Collectively, other members of
the Cyber Risk Committee have technical expertise and experience in accounting, financial reporting and auditing, and law and
compliance.
16
The Company’s Board of Directors oversees EastGroup’s risk management process. Specifically, the Board of Directors has
delegated to the Audit Committee, as reflected in the charter of the Audit Committee, responsibility for periodic review and
oversight of the Company’s cybersecurity and other information technology risks, controls and procedures, including the
Company’s plans to mitigate cybersecurity risks and to respond to data breaches. The Audit Committee receives periodic
updates from the Cyber Risk Committee regarding these topics. Both senior management, including members of the Cyber Risk
Committee, and the Audit Committee Chairperson report periodically on cybersecurity risk management to the full Board of
Directors. Additionally, management conducts comprehensive risk surveys annually and presents the results of these surveys to
the Board of Directors for discussion.
ITEM 2. PROPERTIES.
EastGroup owned 510 industrial properties as of December 31, 2023. These properties are located primarily in the Sunbelt
states of Florida, Texas, Arizona, California and North Carolina, and the majority are clustered around major transportation
features in supply constrained submarkets. As of February 13, 2024, EastGroup’s operating portfolio was 97.8% leased and
97.6% occupied by tenants in approximately 1,600 leases, with no single tenant accounting for more than approximately 1.8%
of the Company’s annualized based rent, as defined in the table below. The Company has developed approximately 50% of its
total portfolio (on a square foot basis), which includes real estate properties and development and value-add properties in lease-
up and under construction. The Company’s focus is the ownership of business distribution space (91% of the total portfolio)
with the remainder in bulk distribution space (8%) and business service space (1%). Business distribution space properties are
typically multi-tenant buildings with a building depth of 200 feet or less, clear height of 24-32 feet, office finish of 10-25% and
truck courts with a depth of 100-120 feet. See Consolidated Financial Statement Schedule III – Real Estate Properties and
Accumulated Depreciation for a detailed listing of the Company’s properties.
At December 31, 2023, EastGroup did not own any single property with a book value that was 10% or more of total book value
or with gross revenues that were 10% or more of total gross revenues.
17
The Company’s lease expirations are detailed below:
Years Ending December 31,
2024 (3)
2025
2026
2027
2028
2029
2030
2031
2032
2033 and beyond
Number of Leases
Expiring (1)
Total Area of Leases
Expiring
(in Square Feet) (1)
Annualized Base Rent
of Leases Expiring (1) (2)
% of Total Base Rent of
Leases Expiring (1)
251
312
324
280
227
114
49
32
23
28
5,977,000 $
8,189,000 $
10,014,000 $
9,127,000 $
6,976,000 $
5,214,000 $
2,519,000 $
1,315,000 $
1,738,000 $
3,374,000 $
45,654,000
66,880,000
81,637,000
75,052,000
57,923,000
34,830,000
20,501,000
11,447,000
13,261,000
27,737,000
10.5%
15.4%
18.8%
17.3%
13.3%
8.0%
4.7%
2.6%
3.0%
6.4%
(1) Does not include lease renewal options.
(2) Annualized base rent represents the monthly cash rental rate, excluding tenant expense reimbursements, as of December 31, 2023,
multiplied by 12 months.
(3) Includes month-to-month leases.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened
against the Company or its properties, other than routine litigation arising in the ordinary course and other actions not deemed
to be material. Of these matters, substantially all of which are to be covered by the Company’s liability insurance and which, in
the aggregate, are not expected to have a material adverse effect on the Company’s financial condition or results of operations.
The Company cannot predict the outcome of any litigation with certainty, and some lawsuits, claims or proceedings may be
disposed of unfavorably to the Company, which could materially affect its financial condition or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
18
PART II. OTHER INFORMATION
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
The Company’s shares of common stock are listed for trading on the NYSE under the symbol “EGP.” As of February 13,
2024, there were 397 holders of record of the Company’s 47,956,587 outstanding shares of common stock. The Company
distributed all of its 2023 and 2022 taxable income to its stockholders. We generally pay quarterly cash dividends to holders of
our common stock at the discretion of our Board of Directors. Our future distributions may vary and will be determined by the
Board of Directors based upon the circumstances prevailing at the time, including our financial condition, operating results,
estimated taxable income and REIT distribution requirements, and may be adjusted at the discretion of the Board of Directors.
Accordingly, no significant provisions for income taxes were necessary. The following table summarizes the federal income
tax treatment for all distributions by the Company for the years 2023 and 2022.
Federal Income Tax Treatment of Share Distributions
Common Share Distributions:
Ordinary dividends
Nondividend distributions
Unrecaptured Section 1250 capital gain
Other capital gain
Total Common Distributions (1)
Years Ended December 31,
2023
2022
(Per share)
$
5.02083
—
—
—
4.53746
—
—
—
$
5.02083
4.53746
(1) Pursuant to Internal Revenue Code of 1986, as amended, Section 857(b)(9), cash distributions made on January 12, 2024 with a
record date of December 29, 2023 were treated as received by shareholders on December 31, 2023 to the extent of 2023
undistributed earnings and profits. Cash distributions made on January 13, 2023 with a record date of December 30, 2022 were
treated as received by shareholders on December 31, 2022 to the extent of 2022 undistributed earnings and profits.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Period
October 1, 2023 through October 31, 2023
November 1, 2023 through November 30, 2023
December 1, 2023 through December 31, 2023 (1)
Total
Total Number
of Shares
Purchased
Weighted
Average Price
Paid Per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs
Maximum Number
of Shares That May
Yet Be Purchased
Under the Plans or
Programs
— $
—
64
64 $
—
—
178.38
178.38
—
—
—
—
—
—
—
(1) As permitted under the Company’s equity compensation plan, these shares were withheld by the Company to satisfy the tax
withholding obligations in connection with the issuance of shares of common stock.
19
Performance Graph
The following graph compares, over the five years ended December 31, 2023, the cumulative total shareholder return on
EastGroup’s common stock with the cumulative total return of the Standard & Poor’s 500 Total Return Index (S&P 500 Total
Return) and the FTSE Equity REIT index prepared by the National Association of Real Estate Investment Trusts (FTSE Nareit
Equity REITs).
The performance graph and related information shall not be deemed “soliciting material” or be deemed to be “filed” with the
SEC, nor shall such information be incorporated by reference into any future filing, except to the extent that the Company
specifically incorporates it by reference into such filing.
EastGroup
FTSE Nareit Equity REITs
S&P 500 Total Return
Fiscal years ended December 31,
2018
2019
2020
2021
2022
2023
$ 100.00
148.20
158.13
266.35
178.27
227.53
100.00
126.00
115.92
166.04
125.58
142.82
100.00
131.49
155.68
200.38
164.09
207.23
The information above assumes that the value of the investment in shares of EastGroup’s common stock and each index was
$100 on December 31, 2018, and that all dividends were reinvested.
ITEM 6. [RESERVED].
Not applicable.
20
Period EndedIndex ValueEastGroupFTSE Nareit Equity REITsS&P 500 Total Return12/31/1812/31/1912/31/2012/31/2112/31/2212/31/23$80$100$120$140$160$180$200$220$240$260$280
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The following discussion and analysis of results of operations and financial condition should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K.
OVERVIEW
EastGroup’s goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality
business distribution space for location-sensitive customers (primarily in the 20,000 to 100,000 square foot range). The
Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation
features in supply-constrained submarkets in major Sunbelt regions. The Company’s core markets are in the states of Florida,
Texas, Arizona, California and North Carolina.
During 2023, economic uncertainty and stock market volatility increased due to a number of factors, including rising inflation,
increasing interest rates and supply chain disruptions. While these factors have not had a significant adverse impact on
EastGroup’s operations to date, they may adversely impact the Company in the future. Most of the Company’s leases require
the tenants to pay their pro rata share of operating expenses, including real estate taxes, insurance and common area
maintenance, thereby reducing the Company’s exposure to increases in operating expenses resulting from inflation or other
factors. Additionally, most of the Company’s leases include scheduled rent increases. In the event inflation causes increases in
the Company’s general and administrative expenses, or higher interest rates increase the Company’s cost of doing business,
such increased costs would not be passed through to tenants and could adversely affect the Company’s results of operations.
The Company continues to monitor these supply chain, inflation and interest rate factors, as well as the uncertainty resulting
from the overall economic environment.
The Company believes its current operating cash flow and unsecured bank credit facilities provide the capacity to fund the
operations of the Company, and the Company also believes it can issue common and/or preferred equity and obtain debt
financing on currently acceptable terms. During 2023, EastGroup issued 4,094,896 shares of common stock through its ATM
programs, providing net proceeds to the Company of $691,478,000. During 2023, the Company closed $100,000,000 of
unsecured debt with an effectively fixed interest rate of 5.27%. Additionally, the Company amended its unsecured bank credit
facilities, effective January 2023, to expand the total capacity on its unsecured bank credit facilities from $475,000,000 to
$675,000,000. EastGroup’s financing and equity issuances are further described in Liquidity and Capital Resources below.
The Company’s primary source of revenue is rental income. During 2023, EastGroup executed leases on 8,129,000 square feet
of operating properties (14.7% of EastGroup’s total square footage of 55,153,000 as of December 31, 2023). For new and
renewal leases signed during 2023, average rental rates increased by 55.0% as compared to the former leases on the same
spaces.
On a diluted per share basis, Net Income Attributable to EastGroup Properties, Inc. Common Stockholders was $4.42 for the
year ended December 31, 2023, compared to $4.36 for 2022, a 1.4% increase. See the Company’s analysis of performance
trends below for further details.
Property Net Operating Income (“PNOI”) Excluding Income from Lease Terminations from same properties (defined as
operating properties owned during the entire current and prior year reporting periods – January 1, 2022 through December 31,
2023), increased 6.6% for 2023 compared to 2022.
EastGroup’s operating portfolio was 98.7% leased at both December 31, 2023 and 2022. Occupancy at the end of 2023 for the
operating portfolio was 98.2% compared to 98.3% at December 31, 2022. As of February 13, 2024, the operating portfolio was
97.8% leased and 97.6% occupied. As of December 31, 2023, leases approximating 10.5% of the operating portfolio, based on
a percentage of annualized based rent, were scheduled to expire in 2024. This percentage was reduced to 9.1% as of
February 13, 2024.
The Company generates new sources of leasing revenue through its acquisitions and also its development and value-add
program. The Company mitigates risks associated with development through a Board-approved maximum level of land held
for development and by adjusting development start dates according to leasing activity.
During the year ended December 31, 2023, EastGroup purchased 328.3 acres of land in seven markets for a total of
$70,664,000. The Company began construction of 11 development projects containing 2,435,000 square feet in eight markets.
Also in 2023, the Company transferred 13 development and value-add projects (2,341,000 square feet) in 10 markets from its
21
development and value-add program to real estate properties, with costs of $271,568,000 at the date of transfer. As of
December 31, 2023, EastGroup’s development and value-add program consisted of 18 projects (4,077,000 square feet) located
in 12 markets. The projected total cost for the development and value-add projects, which were collectively 24% leased as of
February 13, 2024, is $575,700,000, of which $200,776,000 remained to be invested as of December 31, 2023.
During the year ended December 31, 2023, EastGroup acquired 987,000 square feet of operating properties in Dallas, Las
Vegas, Nashville and Greenville for a total of $165,116,000. There were no value-add property acquisitions during the period.
During 2023, EastGroup sold 231,000 square feet of operating properties and 11.9 acres of land, generating gross sales
proceeds of $43,150,000. The Company recognized $17,965,000 in Gain on sales of real estate investments and $446,000 in
gains on sales of non-operating real estate (included in Other on the Consolidated Statements of Income and Comprehensive
Income) during 2023.
The Company typically initially funds its development and acquisition programs through its $675,000,000 unsecured bank
credit facilities (as discussed below in Liquidity and Capital Resources). As market conditions permit, EastGroup issues equity
and/or employs fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of
interest rate swaps, to replace short-term bank borrowings. Moody’s Investors Service has assigned the Company’s issuer
rating of Baa2 with a stable outlook. A security rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of
any other rating. For future debt issuances, the Company intends to issue primarily unsecured fixed rate debt, including
variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps. The Company may
also access the public debt market in the future as a means to raise capital.
EastGroup has one reportable segment – industrial properties, consistent with the Company’s manner of internal reporting,
measurement of operating results and allocation of the Company’s resources. The Company’s chief decision makers use two
primary measures of operating results in making decisions: (1) funds from operations attributable to common stockholders
(“FFO”), and (2) property net operating income (“PNOI”).
FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc.
(“Nareit”). Nareit’s guidance allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges,
on real estate assets incidental to a real estate investment trust's (“REIT’s”) business are excluded from the calculation of FFO.
EastGroup has made the election to exclude activity related to such assets that are incidental to our business.
FFO is calculated as net income (loss) attributable to common stockholders computed in accordance with U.S. generally
accepted accounting principles (“GAAP”), excluding gains and losses from sales of real estate property (including other assets
incidental to the Company’s business) and impairment losses, adjusted for real estate related depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures. FFO is not considered as an alternative to net income
(determined in accordance with GAAP) as an indication of the Company’s financial performance, nor is it a measure of the
Company’s liquidity or indicative of funds available to provide for the Company’s cash needs, including its ability to make
distributions. The Company’s key drivers affecting FFO are changes in PNOI (as discussed below), interest rates, the amount
of leverage the Company employs and general and administrative expenses.
PNOI is defined as Income from real estate operations less Expenses from real estate operations (including market-based
internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-
wholly-owned real estate investments.
EastGroup sometimes refers to PNOI from Same Properties as “Same PNOI”; the Company also presents Same PNOI
Excluding Income from Lease Terminations. Same Properties is defined as operating properties owned during the entire
current period and prior year reporting period. Properties developed or acquired are excluded until held in the operating
portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods
are also excluded. For the year ended December 31, 2023, Same Properties includes properties which were included in the
operating portfolio for the entire period from January 1, 2022 through December 31, 2023. The Company presents Same PNOI
and Same PNOI Excluding Income from Lease Terminations as a property-level supplemental measure of performance used to
evaluate the performance of the Company’s investments in real estate assets and its operating results on a same property basis.
FFO and PNOI are supplemental industry reporting measurements used to evaluate the performance of the Company’s
investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and
amortization in the calculations of PNOI and FFO provides supplemental indicators of the properties’ performance since real
estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be
22
comparable to similarly titled but differently calculated measures for other REITs. Investors should be aware that items
excluded from or added back to FFO are significant components in understanding and assessing the Company’s financial
performance. These non-GAAP figures should not be considered a substitute for, and should only be considered together with
and as a supplement to, the Company’s financial information presented in accordance with GAAP.
The following table presents reconciliations of Net Income to PNOI, Same PNOI and Same PNOI Excluding Income from
Lease Terminations for the three fiscal years ended December 31, 2023, 2022 and 2021.
NET INCOME
Gain on sales of real estate investments
Gain on sales of non-operating real estate
Interest income
Other revenue
Indirect leasing costs
Depreciation and amortization
Company’s share of depreciation from unconsolidated investment
Interest expense
General and administrative expense
Noncontrolling interest in PNOI of consolidated joint ventures
PROPERTY NET OPERATING INCOME (“PNOI”)
PNOI from 2022 and 2023 acquisitions
PNOI from 2022 and 2023 development and value-add properties
PNOI from 2022 and 2023 operating property dispositions
Other PNOI
SAME PNOI
Net lease termination fee income from same properties
SAME PNOI EXCLUDING INCOME FROM LEASE
TERMINATIONS
$
Years Ended December 31,
2023
2022
2021
(In thousands)
200,548
(17,965)
(446)
(879)
(4,412)
582
171,078
124
47,996
16,757
(62)
413,321
(19,165)
(47,739)
(1,813)
166
344,770
(907)
186,274
(40,999)
—
(100)
(208)
546
153,638
124
38,499
16,362
(105)
354,031
(9,471)
(17,918)
(1,753)
324
325,213
(2,708)
157,638
(38,859)
—
(6)
(63)
700
127,099
136
32,945
15,704
(61)
295,233
*
*
*
*
*
*
$
343,863
322,505
*
* Same property metrics are not applicable to the year ended December 31, 2021, as the same property metrics for 2023 and
2022 are based on operating properties owned during the entire current and prior year reporting periods (January 1, 2022
through December 31, 2023).
PNOI was calculated as follows for the three fiscal years ended December 31, 2023, 2022 and 2021.
Income from real estate operations
Expenses from real estate operations
Noncontrolling interest in PNOI of consolidated joint ventures
PNOI from 50% owned unconsolidated investment
PROPERTY NET OPERATING INCOME (“PNOI”)
Years Ended December 31,
2022
2023
2021
(In thousands)
$
566,179
486,817
409,412
(154,030)
(62)
1,234
413,321
$
(133,915)
(105)
1,234
354,031
(115,078)
(61)
960
295,233
Income from real estate operations is comprised of rental income, net of reserves for uncollectible rent, expense reimbursement
pass-through income and other real estate income including lease termination fees. Expenses from real estate operations is
comprised of property taxes, insurance, utilities, repair and maintenance expenses, management fees and other operating
costs. Generally, the Company’s most significant operating expenses are property taxes and insurance. Tenant leases may be
net leases in which the total operating expenses are recoverable, modified gross leases in which some of the operating expenses
are recoverable, or gross leases in which no expenses are recoverable (gross leases represent only a small portion of the
Company’s total leases). Increases in property operating expenses are fully recoverable under net leases and recoverable to a
23
high degree under modified gross leases. Modified gross leases often include base year amounts, and expense increases over
these amounts are recoverable. The Company’s exposure to property operating expenses is primarily due to vacancies and
leases for occupied space that limit the amount of expenses that can be recovered.
The following table presents reconciliations of Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to
FFO Attributable to Common Stockholders for the three fiscal years ended December 31, 2023, 2022 and 2021.
2023
Years Ended December 31,
2022
(In thousands, except per share data)
2021
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC.
COMMON STOCKHOLDERS
Depreciation and amortization
Company’s share of depreciation from unconsolidated investment
Depreciation and amortization from noncontrolling interest
Gain on sales of real estate investments
Gain on sales of non-operating real estate
FUNDS FROM OPERATIONS (“FFO”) ATTRIBUTABLE TO COMMON
STOCKHOLDERS
Gain on involuntary conversion and business interruption claims
FFO ATTRIBUTABLE TO COMMON STOCKHOLDERS —
EXCLUDING GAIN ON INVOLUNTARY CONVERSION AND
BUSINESS INTERRUPTION CLAIMS
Net income attributable to common stockholders per diluted share
$
200,491
171,078
124
(5)
(17,965)
(446)
186,182
153,638
124
(17)
(40,999)
—
157,557
127,099
136
—
(38,859)
—
353,277
298,928
245,933
(4,187)
—
—
$
$
349,090
298,928
245,933
4.42
4.36
3.90
FFO attributable to common stockholders per diluted share
FFO attributable to common stockholders - excluding gain on involuntary
conversion and business interruption claims per diluted share
7.00
6.09
6.09
7.00
7.79
7.70
$
$
Diluted shares for earnings per share and funds from operations
45,331
42,712
40,377
The Company analyzes the following performance trends in evaluating the revenues and expenses of the Company:
•
•
•
•
•
•
Net Income Attributable to EastGroup Properties, Inc. Common Stockholders for the year ended December 31, 2023
was $200,491,000 ($4.43 per basic and $4.42 per diluted share) compared to $186,182,000 ($4.37 per basic and $4.36
per diluted share) for 2022. See Results of Operations for further analysis.
The change in FFO per diluted share represents the increase or decrease in FFO per diluted share from the current year
compared to the prior year. For 2023, FFO was $7.79 per diluted share compared with $7.00 per diluted share for
2022, an increase of 11.3%. FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims was
$7.70 per diluted share for the year ended December 31, 2023 compared to $7.00 per diluted share for 2022, an
increase of 10.0%. FFO increased during the year ended December 31, 2023, as compared to 2022, primarily due to
the increase in PNOI and other revenue, partially offset by the increase in interest expense.
For the year ended December 31, 2023, PNOI increased by $59,290,000, or 16.7%, compared to 2022. PNOI
increased $29,821,000 from newly developed and value-add properties, $19,557,000 from same property operations
and $9,694,000 from 2022 and 2023 acquisitions.
The change in Same PNOI represents the PNOI increase or decrease for the same operating properties owned during
the entire current and prior year reporting periods (January 1, 2022 through December 31, 2023). Same PNOI,
excluding income from lease terminations, increased 6.6% for the year ended December 31, 2023, compared to 2022.
Same property average occupancy represents the average month-end percentage of leased square footage for which the
lease term has commenced as compared to the total leasable square footage for the same operating properties owned
during the entire current and prior year reporting periods (January 1, 2022 through December 31, 2023). Same
property average occupancy for the year ended December 31, 2023 was 98.4% compared to 98.3% for 2022.
The same property average rental rate calculated in accordance with GAAP represents the average annual rental rates
of leases in place for the same operating properties owned during the entire current and prior year reporting periods
(January 1, 2022 through December 31, 2023). The same property average rental rate was $7.58 per square foot for
the year ended December 31, 2023, compared to $7.08 per square foot for the year ended December 31, 2022.
24
•
•
•
•
Occupancy is the percentage of leased square footage for which the lease term has commenced as compared to the
total leasable square footage as of the close of the reporting period. Occupancy at December 31, 2023 was
98.2%. Quarter-end occupancy ranged from 97.7% to 98.3% over the previous four quarters ended December 31,
2022 to September 30, 2023.
Rental rate change represents the rental rate increase or decrease on new and renewal leases compared to the prior
leases on the same space. For the year 2023, rental rate increases on new and renewal leases (14.7% of total square
footage) averaged 55.0%.
Lease termination fee income is included in Income from real estate operations. For the year 2023, lease termination
fee income was $1,020,000 compared to $2,708,000 for 2022.
The Company records reserves for uncollectible rent as reductions to Income from real estate operations; recoveries
for uncollectible rent are recorded as additions to Income from real estate operations. The Company recorded net
reserves for uncollectible rent of $1,516,000 in 2023 compared to $138,000 in 2022. We evaluate the collectability of
rents and other receivables for individual leases at each reporting period based on factors including, among others,
tenant’s payment history, the financial condition of the tenant, business conditions and trends in the industry in which
the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these
factors or others indicates it is not probable we will collect substantially all rent, we recognize an adjustment to rental
revenue. If our judgment or estimation regarding probability of collection changes, we may adjust or record additional
rental revenue in the period such conclusion is reached. The Company followed its normal process for recording
reserves for uncollectible rent during the year ended December 31, 2023.
FINANCIAL CONDITION
EastGroup’s Total Assets were $4,519,213,000 at December 31, 2023, an increase of $483,376,000 from December 31,
2022. Total Liabilities decreased $171,819,000 to $1,910,579,000, and Total Equity increased $655,195,000 to $2,608,634,000
during the same period. The following paragraphs explain these changes in greater detail.
Assets
Real Estate Properties
Real estate properties increased $457,576,000 during the year ended December 31, 2023. The increase was primarily due to:
(i) the transfer of 13 properties from Development and value-add properties to Real estate properties (as detailed under
Development and Value-Add Properties below); (ii) the acquisition of five operating properties; (iii) capital improvements at
the Company’s properties; and (iv) costs incurred on development and value-add projects subsequent to transfer to Real estate
properties discussed below. These increases were partially offset by the sale of three operating properties and the transfer of
one property from Real estate properties to Development and value-add properties.
During 2023, EastGroup acquired the following operating properties:
REAL ESTATE PROPERTIES ACQUIRED IN 2023
Location
Craig Corporate Center
Blue Diamond Business Park
McKinney Logistics Center
Park at Myatt
Pelzer Point Commerce Center 1
Total operating property acquisitions (2)
Las Vegas, NV
Las Vegas, NV
Dallas, TX
Nashville, TN
Greenville, SC
Date
Acquired
04/18/2023
09/05/2023
10/02/2023
11/03/2023
12/21/2023
Size
(Square feet)
156,000
254,000
193,000
171,000
213,000
987,000
Cost (1)
(In thousands)
$
$
34,365
52,973
25,739
30,793
21,246
165,116
(1) Cost is calculated in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 805, Business Combinations, and represents the sum of the purchase price, closing costs and capitalized acquisition costs.
Refer to Notes 1(j) and 2 in the Notes to Consolidated Financial Statements.
(2) Operating properties are defined as stabilized real estate properties (land including buildings and improvements) in the Company’s
operating portfolio; included in Real estate properties on the Consolidated Balance Sheets.
25
During the year ended December 31, 2023, the Company made capital improvements of $53,550,000 on existing and acquired
properties (included in the Capital Expenditures table under Results of Operations). Also, the Company incurred costs of
$15,953,000 on development and value-add projects subsequent to transfer to Real estate properties; the Company records
these expenditures as development and value-add costs on the Consolidated Statements of Cash Flows.
Also, during the year ended December 31, 2023, EastGroup sold 231,000 square feet of operating properties, generating gross
sales proceeds of $38,400,000. The Company recognized $17,965,000 in Gain on sales of real estate investments during the
year ended December 31, 2023.
Development and Value-Add Properties
EastGroup’s investment in Development and value-add properties at December 31, 2023 consisted of properties in lease-up and
under construction of $374,924,000 and prospective development (primarily land) of $264,723,000. The Company’s total
investment in Development and value-add properties at December 31, 2023 was $639,647,000 compared to $538,449,000 at
December 31, 2022. Total capital invested for development and value-add properties during 2023 was $388,213,000, which
primarily consisted of improvement costs of $301,596,000 on development and value-add properties, $70,664,000 for new land
investments, and costs of $15,953,000 on properties subsequent to transfer to Real estate properties. The capitalized costs
incurred on development and value-add projects subsequent to transfer to Real estate properties include capital improvements
at the properties and do not include other capitalized costs associated with development (i.e., interest expense, property taxes
and internal personnel costs).
EastGroup capitalized internal development costs of $10,472,000 during the year ended December 31, 2023, compared to
$9,985,000 during 2022.
There were no value-add acquisitions during the year ended December 31, 2023.
Also during 2023, EastGroup purchased 328.3 acres of development land in seven markets for $70,664,000. Costs associated
with these acquisitions are included in the Development and Value-Add Properties table. These increases were offset by the
transfer of 13 development and value-add projects to Real estate properties with a total investment of $271,568,000 as of the
date of transfer. The Company also transferred one operating property to Development and value-add properties with a total
investment of $4,553,000 as of the date of transfer.
During the year ended December 31, 2023, EastGroup sold 11.9 acres of land, generating gross sales proceeds of $4,750,000.
The Company recognized $446,000 in gains on sales of non-operating real estate (included in Other on the Consolidated
Statements of Income and Comprehensive Income) during the year ended December 31, 2023.
A summary of the Company’s Development and Value-Add Properties for the year ended December 31, 2023 follows:
Actual or Estimated
Building Size
(Square feet)
Cumulative Costs
Incurred as of
12/31/2023
Projected Total
Costs
(In thousands)
Lease-up
Under construction
Total lease-up and under construction
Prospective development (primarily land)
Total Development and value-add properties as of December 31, 2023
14,869,000 $
Total Development and value-add properties transferred to Real estate
properties during the year ended December 31, 2023
(1) Represents cumulative costs at the date of transfer.
180,600
395,100
575,700
1,352,000 $
162,356 $
2,725,000
4,077,000
10,792,000
212,568
374,924 $
264,723
639,647
(1)
2,341,000 $
271,568
Accumulated Depreciation
Accumulated depreciation on real estate, development and value-add properties increased $122,909,000 during 2023 due
primarily to depreciation expense of $141,003,000, partially offset by the sale of three operating properties totaling 231,000
square feet during 2023.
26
Other Assets
Other assets increased $6,995,000 during 2023. See Note 4 in the Notes to Consolidated Financial Statements for further
details.
Liabilities
Unsecured bank credit facilities, net of debt issuance costs decreased $169,974,000 during the year ended December 31, 2023,
mainly due to repayments of $641,624,000 and new debt issuance costs incurred during the year, partially offset by borrowings
of $471,624,000 and the amortization of debt issuance costs during the year. The Company’s credit facilities are described in
greater detail below under Liquidity and Capital Resources.
Unsecured debt, net of debt issuance costs decreased $14,912,000 during the year ended December 31, 2023, primarily due to
the repayment of a $65,000,000 term loan in March, the $50,000,000 principal repayment on its senior unsecured notes in
August and new debt issuance costs incurred during the period. These decreases were partially offset by the closing of a
$100,000,000 senior unsecured term loan in January and the amortization of debt issuance costs. These changes are described in
greater detail below under Liquidity and Capital Resources.
Accounts payable and accrued expenses increased $9,349,000 during 2023. See Note 7 in the Notes to Consolidated Financial
Statements for further details.
Other liabilities increased $5,749,000 during 2023. See Note 8 in the Notes to Consolidated Financial Statements for further
details.
Equity
Additional paid-in capital increased $698,386,000 during the year ended December 31, 2023 primarily due to: (i) the issuance
of common stock under the Company’s continuous common equity offering program (as discussed below under Liquidity and
Capital Resources) and (ii) activity related to stock-based compensation (as discussed in Note 10 in the Notes to Consolidated
Financial Statements). During the year ended December 31, 2023, EastGroup issued 4,094,896 shares of common stock under
its continuous common equity offering program at a weighted average price of $170.77 per share, providing aggregate net
proceeds to the Company of $691,478,000.
During the year ended December 31, 2023, Distributions in excess of earnings increased $31,575,000 as a result of dividends
on common stock of $232,066,000 exceeding Net Income Attributable to EastGroup Properties, Inc. Common Stockholders of
$200,491,000.
Accumulated other comprehensive income decreased $11,483,000 during 2023. The decrease resulted from the change in fair
value of the Company’s interest rate swaps (cash flow hedges) which are further discussed in Notes 11 and 12 in the Notes to
Consolidated Financial Statements.
27
RESULTS OF OPERATIONS
2023 Compared to 2022
Net Income Attributable to EastGroup Properties, Inc. Common Stockholders for the year ended December 31, 2023 was
$200,491,000 ($4.43 per basic and $4.42 per diluted share) compared to $186,182,000 ($4.37 per basic and $4.36 per diluted
share) for the year ended December 31, 2022. The following paragraphs provide further details with respect to these changes:
•
•
•
•
•
PNOI increased by $59,290,000 ($1.31 per diluted share) for 2023 as compared to 2022. PNOI increased
$29,821,000 from newly developed and value-add properties, $19,557,000 from same property operations and
$9,694,000 from 2022 and 2023 acquisitions. For the year 2023, lease termination fee income was $1,020,000
compared to $2,708,000 for 2022. The Company recorded net reserves for uncollectible rent of $1,516,000 in 2023
compared to $138,000 in 2022. Straight-lining of rent increased PNOI by $11,898,000 and $9,991,000 in 2023 and
2022, respectively.
EastGroup recognized Gains on sales of real estate investments of $17,965,000 ($0.40 per diluted share) during 2023
compared to $40,999,000 ($0.96 per diluted share) during 2022. The Company’s sales transactions are described in
Note 2 of the Notes to Consolidated Financial Statements.
Depreciation and amortization expense increased by $17,440,000 ($0.38 per diluted share) during 2023 compared to
2022. The increase is primarily due to the operating properties acquired by the Company in 2022 and 2023 and the
properties transferred from Development and value-add properties in 2022 and 2023, partially offset by operating
properties sold in 2022 and 2023.
Interest expense increased by $9,497,000 ($0.21 per diluted share) during 2023 compared to 2022. See the table below
for details.
During 2023, EastGroup recognized gains on involuntary conversion and business interruption claims of $4,187,000
($0.09 per diluted share). There were no gains on involuntary conversion and business interruption claims during
2022.
EastGroup entered into 91 leases with certain rent concessions on 3,282,000 square feet during 2023 with total rent concessions
of $7,543,000 over the terms of the leases, compared to 114 leases with rent concessions on 4,798,000 square feet with total
rent concessions of $7,378,000 over the terms of the leases in 2022.
The Company’s percentage of leased square footage for the operating portfolio was 98.7% at both December 31, 2023 and
2022. Occupancy at the end of 2023 for the operating portfolio was 98.2% compared to 98.3% at December 31, 2022.
28
Interest Expense increased $9,497,000 for the year ended December 31, 2023 compared to the year ended December 31,
2022. The following table presents the components of Interest Expense for 2023 and 2022:
VARIABLE RATE INTEREST EXPENSE
Unsecured bank credit facilities interest — variable rate
Years Ended December 31,
2023
2022
(In thousands)
Increase
(Decrease)
(excluding amortization of facility fees and debt issuance costs)
(1,437)
4,241
2,804
$
Amortization of facility fees — unsecured bank credit facilities
Amortization of debt issuance costs — unsecured bank credit facilities
Total variable rate interest expense
FIXED RATE INTEREST EXPENSE
Unsecured debt interest (1) (excluding amortization of debt issuance costs)
Secured debt interest (excluding amortization of debt issuance costs)
Amortization of debt issuance costs — unsecured debt
Amortization of debt issuance costs — secured debt
Total fixed rate interest expense
Total interest
1,005
1,003
4,812
713
650
5,604
292
353
(792)
58,428
44,492
13,936
51
909
31
59,419
64,231
89
704
3
45,288
50,892
(38)
205
28
14,131
13,339
(3,842)
9,497
Less capitalized interest
(16,235)
(12,393)
TOTAL INTEREST EXPENSE
$
47,996
38,499
(1) Includes interest on the Company’s unsecured debt with fixed interest rates per the debt agreements or effectively fixed interest
rates due to interest rate swaps, as discussed in Note 12 in the Notes to Consolidated Financial Statements.
EastGroup’s variable rate interest expense decreased by $792,000 for 2023 as compared to 2022 primarily due to a decrease in
average borrowings, partially offset by an increase in the Company’s weighted average variable interest rates on its unsecured
bank credit facilities as shown in the following table:
Average borrowings on unsecured bank credit facilities - variable rate
Weighted average variable interest rates
(excluding amortization of facility fees and debt issuance costs)
Years Ended December 31,
2023
2022
Increase
(Decrease)
(In thousands, except rates of interest)
$
49,384
182,478
(133,094)
5.68%
2.32%
29
The Company’s fixed rate interest expense increased by $14,131,000 for 2023 as compared to 2022 primarily as a result of the
unsecured debt activity described below. The details of the unsecured debt obtained in 2022 and 2023 are shown in the
following table:
NEW UNSECURED DEBT IN 2022 AND 2023
Margin
Effectively
Fixed Interest
Rate
Date
Obtained
Maturity Date
Amount
$100 Million Senior Unsecured Term Loan (1)(2)
$150 Million Senior Unsecured Notes
$50 Million Senior Unsecured Term Loan (1)
$75 Million Senior Unsecured Term Loan (1)
$75 Million Senior Unsecured Notes
$75 Million Senior Unsecured Notes
$100 Million Senior Unsecured Term Loan (1)
Weighted Average Effectively Fixed Interest Rate
and Total Amount for 2022 and 2023
0.95%
Not applicable
0.95%
0.95%
Not applicable
Not applicable
1.35%
2.61%
3.03%
4.09%
4.00%
4.90%
4.95%
5.27%
3.98%
(In thousands)
03/31/2022 09/29/2028 $ 100,000
04/20/2022 04/20/2032 150,000
50,000
08/31/2022 08/30/2024
75,000
08/31/2022 08/31/2027
75,000
10/12/2022 10/12/2033
10/12/2022 10/12/2034
75,000
01/13/2023 01/13/2030 100,000
$ 625,000
(1) The interest rates on these unsecured term loans are comprised of Term Secured Overnight Financing Rate (“SOFR”) plus a
margin which is subject to a pricing grid for changes in the Company’s coverage ratings. The Company entered into interest rate
swap agreements (further described in Note 12) to convert the loans’ Term SOFR rates to effectively fixed interest rates. The
interest rates in the table above are the effectively fixed interest rates for the loans, including the effects of the interest rate
swaps, as of December 31, 2023.
(2) This term loan was amended and refinanced effective September 29, 2023, as detailed below.
The increase in interest expense from the new unsecured debt was partially offset by the repayment of unsecured debt and the
refinance of senior unsecured term loans during 2022 and 2023. In September 2023, the Company refinanced a $100,000,000
senior unsecured term loan, reducing the effectively fixed interest rate by approximately 45 basis points. In March 2022, the
Company refinanced another $100,000,000 senior unsecured term loan, reducing the effectively fixed interest rate by
approximately 60 basis points. The repayments on unsecured debt are shown in the following table:
UNSECURED DEBT REPAID IN 2022 AND 2023
Interest Rate
Date Repaid
Payoff Amount
(In thousands)
$75 Million Senior Unsecured Term Loan
$65 Million Senior Unsecured Term Loan
$50 Million Senior Unsecured Notes
Weighted Average Effectively Fixed Interest Rate and Total Payoff
Amount for 2022 and 2023
3.03%
2.31%
3.80%
2.99%
02/28/2022
$
03/31/2023
08/28/2023
75,000
65,000
50,000
$
190,000
Interest costs during the period of construction of real estate properties are capitalized and offset against interest expense.
Capitalized interest increased by $3,842,000 for 2023 as compared to 2022, due to increased borrowing rates and changes in
development spending.
30
Real Estate Improvements
Real estate improvements for EastGroup’s operating properties for the years ended December 31, 2023 and 2022 were as
follows:
Estimated
Useful Life
Years Ended December 31,
2023
2022
(In thousands)
Upgrade on acquisitions
40 yrs
$
1,892
618
Tenant improvements:
New tenants
Renewal tenants
Other:
Building improvements
Roofs
Parking lots
Other
Total real estate improvements (1)
Lease Life
Lease Life
5-40 yrs
5-15 yrs
3-5 yrs
5 yrs
16,352
3,503
8,085
17,386
4,824
1,508
13,224
3,687
9,853
6,611
3,482
1,969
$
53,550
39,444
(1) Reconciliation of Total real estate improvements to Real estate improvements on the Consolidated Statements of Cash Flows:
Total real estate improvements
Change in real estate property payables
Change in construction in progress
$
Real estate improvements on the Consolidated Statements of Cash Flows
$
Years Ended December 31,
2023
2022
(In thousands)
53,550
(527)
(1,907)
51,116
39,444
197
1,210
40,851
Capitalized Leasing Costs
The Company’s leasing costs (principally commissions) are capitalized and included in Other assets. The costs are amortized
over the terms of the associated leases, and the amortization is included in Depreciation and amortization expense. Capitalized
leasing costs for the years ended December 31, 2023 and 2022 were as follows:
Estimated
Useful Life
Years Ended December 31,
2023
2022
Development and value-add
Lease Life
$
New tenants
Renewal tenants
Total capitalized leasing costs (1)
Amortization of leasing costs
Lease Life
Lease Life
$
$
(In thousands)
9,597
9,379
12,696
31,672
22,133
14,366
10,392
12,095
36,853
18,950
(1) Reconciliation of Total capitalized leasing costs to Leasing commissions on the Consolidated Statements of Cash Flows:
Total capitalized leasing costs
Change in leasing commissions payables
Leasing commissions on the
Consolidated Statements of Cash Flows
Years Ended December 31,
2023
2022
(In thousands)
31,672
332
36,853
419
32,004
37,272
$
$
2022 Compared to 2021
A discussion of changes in the Company’s results of operations between 2022 and 2021 has been omitted from this Form 10-K
and can be found in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”
31
under the heading “2022 Compared to 2021” in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2022, filed with the SEC on February 15, 2023, and is incorporated herein by reference.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $338,202,000 for the year ended December 31, 2023. The primary other sources
of cash were from proceeds from common stock offerings; borrowings on unsecured bank credit facilities; proceeds from
unsecured debt; and net proceeds from sales of real estate investments. The Company distributed $225,625,000 in common
stock dividends during 2023. Other primary uses of cash were for repayments on unsecured bank credit facilities and unsecured
debt; the construction and development of properties; purchases of real estate; capital improvements at various properties; and
leasing commissions.
The Company anticipates that its current cash balance, operating cash flows, borrowings under its unsecured bank credit
facilities, proceeds from new debt and/or proceeds from the issuance of equity instruments will be adequate for (i) operating
and administrative expenses, (ii) normal repair and maintenance expenses at its properties, (iii) debt service obligations, (iv)
maintaining compliance with its debt covenants, (v) distributions to stockholders, (vi) capital improvements, (vii) purchases of
properties, (viii) development, and (ix) any other normal business activities of the Company, both in the short-term and long-
term. The Company expects liquidity sources and needs in future years to be consistent in nature with those for the year ended
December 31, 2023.
As of December 31, 2023, the Company was contractually obligated to pay the dividend declared in December 2023, which
was paid in January 2024. An amount for dividends payable of $62,393,000 was included in Accounts payable and accrued
expenses at December 31, 2023, which includes dividends payable on unvested restricted stock of $1,921,000, which are
subject to continued service and will be paid upon vesting in future periods.
The following table summarizes certain information with respect to our indebtedness outstanding as of December 31, 2023:
UNSECURED DEBT (FIXED RATE) (1)
August 30, 2024
December 13, 2024
December 15, 2024
Year 2025
Year 2026
Year 2027
Year 2028
Year 2029 and beyond
Total Unsecured Debt (Fixed Rate) (1)
Weighted Average
Interest Rate
Principal Payments
Maturing
(In thousands)
4.09%
3.46%
3.48%
3.13%
2.57%
2.74%
3.10%
3.66%
3.37%
$
50,000
60,000
60,000
145,000
140,000
175,000
160,000
890,000
$
1,680,000
(1) These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.
The Company’s $625,000,000 unsecured bank credit facility, which was increased in January 2023 by $200,000,000 from
$425,000,000, is with a group of 11 banks and has a maturity date of July 30, 2025. The credit facility contains options for two
six-month extensions (at the Company’s election) and an additional $125,000,000 accordion (with agreement by all parties).
The interest rate on each tranche is reset on a monthly basis and as of December 31, 2023, was SOFR plus 76.5 basis points
with an annual facility fee of 15 basis points. As of December 31, 2023, the Company had no variable rate borrowings on this
unsecured bank credit facility and an interest rate of 6.130%. The Company has two standby letters of credit totaling
$2,655,000 pledged on this facility, which reduces borrowing capacity under the credit facility.
The Company's $50,000,000 unsecured bank credit facility has a maturity date of July 30, 2025, or such later date as designated
by the bank; the Company also has two six-month extensions available if the extension options in the $625,000,000 facility are
exercised. The interest rate is reset on a daily basis and as of December 31, 2023, was SOFR plus 77.5 basis points with an
annual facility fee of 15 basis points. As of December 31, 2023, the interest rate was 6.255% with no outstanding balance.
32
For both facilities, the margin and facility fee are subject to changes in the Company’s credit ratings. Although the Company’s
current credit rating is Baa2, given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is
based on the BBB+/Baa1 credit ratings level. This favorable pricing level will be retained provided that the Company’s
consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%. The $625,000,000 facility also
includes a sustainability-linked pricing component pursuant to which the applicable interest rate margin is reduced by one basis
point if the Company meets a certain sustainability performance target. This sustainability metric is evaluated annually and was
achieved for the years ended December 31, 2023 and 2022, which allowed for the interest rate reduction in each of the years
subsequent to achieving the metric. The margin was effectively reduced on this unsecured bank credit facility by one basis
point, from 77.5 to 76.5 basis points.
The Company’s unsecured bank credit facilities have certain restrictive covenants, such as maintaining minimum debt service
coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial
debt covenants at December 31, 2023.
As market conditions permit, EastGroup issues equity and/or employs fixed rate debt, including variable rate debt that has been
swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank borrowings. The
Company believes its current operating cash flow and unsecured bank credit facilities provide the capacity to fund the
operations of the Company. The Company also believes it can obtain debt financing and issue common and/or preferred equity.
For future debt issuances, the Company intends to issue primarily unsecured fixed rate debt, including variable rate debt that
has been swapped to an effectively fixed rate through the use of interest rate swaps. The Company may also access the public
debt market in the future as a means to raise capital.
In January 2023, the Company closed a $100,000,000 senior unsecured term loan with a seven-year term and interest only
payments, which bears interest at the annual rate of SOFR plus an applicable margin (1.35% as of December 31, 2023) based
on the Company’s senior unsecured long-term debt rating. The Company also entered into an interest rate swap agreement to
convert the loan’s SOFR rate component to a fixed interest rate for the entire term of the loan providing a total effectively fixed
interest rate of 5.27%.
On March 31, 2023, EastGroup repaid a $65,000,000 senior unsecured term loan with a total effectively fixed interest rate of
2.31%. The loan, which was scheduled to mature on April 1, 2023, was repaid with no penalty.
In August 2023, the Company made a $50,000,000 principal repayment on senior unsecured notes with a fixed interest rate of
3.80%.
In September 2023, EastGroup repaid a mortgage loan with a balance of $1,905,000, an interest rate of 3.85% and an original
maturity date of November 30, 2026. The Company had no remaining secured debt as of December 31, 2023.
Also in September 2023, the Company closed on the refinance of a $100,000,000 senior unsecured term loan with five years
remaining. The amended term loan provides for interest only payments currently at an interest rate of SOFR plus 95 basis
points, based on the Company’s current credit ratings and consolidated leverage ratio, which is a 45 basis point reduction in the
credit spread compared to the original term loan. The Company has an interest rate swap agreement which converts the loan’s
SOFR rate component to a fixed interest rate for the entire term of the loan, providing a total effectively fixed interest rate of
2.61%.
As of December 31, 2023, EastGroup had total immediate liquidity of approximately $712,608,000, comprised of $40,263,000
of cash and cash equivalents and $672,345,000 of immediate availability on our unsecured credit facilities.
On October 25, 2023, we established an at-the-market common stock offering program pursuant to which we are able to sell
from time to time shares of our common stock having an aggregate gross sales price of up to $750,000,000, (the “Current 2023
ATM Program”). The Current 2023 ATM Program replaced our previous $750,000,000 ATM program (the “Prior ATM
Program”), which was established on December 16, 2022, under which we had sold shares of our common stock having an
aggregate gross sales price of $464,305,000 through October 25, 2023.
In connection with the Current 2023 ATM program, we may sell shares of our common stock through sales agents or through
certain financial institutions acting as forward purchasers whereby, at our discretion, the forward counterparties may borrow
from third parties and subsequently sell shares of our common stock. The use of a forward equity sale agreement allows us to
lock in a share price on the sale of shares of our common stock but defer settling and receiving the proceeds from the sale of
shares until a later date. Additionally, the forward price that we expect to receive upon settlement of an agreement will be
33
subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward
purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.
During the year ended December 31, 2023, we sold a total of 4,094,896 shares of our common stock under our ATM programs
at a weighted average price of $170.77 per share, for gross proceeds of $699,304,000, and net proceeds of $691,478,000, after
deducting offering-related costs.
During the year ended December 31, 2023, we entered into forward equity sale agreements with certain financial institutions
acting as forward purchasers under our Current 2023 ATM program with respect to 406,041 shares of common stock at a
weighted average initial forward price of $183.92 per share. We did not receive any proceeds from the sale of common shares
by the forward purchasers at the time we entered into forward equity sale agreements. As of December 31, 2023, we had not
settled any of the outstanding forward equity sale agreements by issuing shares of our common stock.
Subsequent to December 31, 2023, the Company partially settled the aforementioned outstanding forward equity sale
agreements by issuing 272,342 shares of our common stock in exchange for net proceeds of $49,364,000, based on a weighted
average forward price of $181.26 per share at settlement. As of February 14, 2024, the date of this Annual Report on Form 10-
K, the remaining 133,699 shares of common stock, or approximately $24,333,000 of net proceeds, based on a forward price of
$182.00 per share, are available for settlement prior to December 2024.
As of February 14, 2024, approximately $440,322,000 of common stock remains available to be sold under the Current 2023
ATM Program. Future sales, if any, will depend on a variety of factors, including among others, market conditions, the trading
price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding
available to us.
EastGroup’s other material cash requirements from known contractual and other obligations as of December 31, 2023 were as
follows:
Real estate property obligations (2)
Development and value-add obligations (3)
Tenant improvements obligations (4)
Total
Cash
Requirements (1)
(In thousands)
$
18,347
131,213
22,128
$
171,688
(1) Cash requirement due in less than one year; there were no related long-term cash requirements.
(2) Represents commitments on real estate properties, except for tenant improvement allowance obligations.
(3) Represents commitments on properties in the Company’s development and value-add program, except for tenant improvement
allowance obligations.
(4) Represents tenant improvement allowance obligations.
The Company has no material off-balance sheet arrangements that have had or are reasonably likely to have a material current
or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources.
34
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company’s management considers the following accounting policies and estimates to be critical to the reported operations
of the Company.
Acquisition and Development of Real Estate Properties
The FASB Codification provides guidance on how to properly determine the allocation of the purchase price among the
individual components of both the tangible and intangible assets based on their relative fair values. Factors considered by
management in allocating the cost of the properties acquired include an estimate of carrying costs during the expected lease-up
periods considering current market conditions and costs to execute similar leases. The allocation to tangible assets (land,
building and improvements) is based upon management’s determination of the value of the property as if it were vacant using
discounted cash flow models. Land is valued using comparable land sales specific to the applicable market, provided by a third
party. The Company determines whether any financing assumed is above or below market based upon comparison to similar
financing terms for similar properties. The cost of the properties acquired may be adjusted based on indebtedness assumed
from the seller that is determined to be above or below market rates.
The purchase price is also allocated among the following categories of intangible assets: the above or below market component
of in-place leases and the value of in-place leases at the time of the acquisition. The value allocable to the above or below
market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the
risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease
over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current market rents over the
remaining term of the lease. The amounts allocated to above and below market lease intangibles are included in Other assets
and Other liabilities, respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining
terms of the respective leases. In-place lease intangibles are valued based upon management’s assessment of factors such as an
estimate of foregone rents and avoided leasing costs during the expected lease-up periods considering current market conditions
and costs to execute similar leases. These intangible assets are included in Other assets on the Consolidated Balance Sheets and
are amortized over the remaining term of the existing lease.
The significance of this accounting policy will fluctuate given the transaction activity during the period.
For properties under development and value-add properties acquired in the development stage, costs associated with
development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are
aggregated into the total capitalized costs of the property. Included in these costs are management’s estimates for the portions
of internal costs (primarily personnel costs) deemed related to such development activities. The internal costs are allocated to
specific development projects based on development activity.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1(p) in the Notes to Consolidated Financial Statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is exposed to interest rate changes primarily as a result of its unsecured bank credit facilities and long-term debt
maturities. This debt is used to maintain liquidity and fund capital expenditures and expansion of the Company’s real estate
investment portfolio and operations. The Company’s objective for interest rate risk management is to limit the impact of
interest rate changes on earnings and cash flows and to lower its overall borrowing costs. The Company has two variable rate
unsecured bank credit facilities as discussed under the heading Liquidity and Capital Resources in Part II, Item 7 of this Annual
Report on Form 10-K. As market conditions permit, EastGroup issues equity and/or employs fixed rate debt, including variable
rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank
borrowings. The Company’s interest rate swaps are discussed in Note 12 in the Notes to Consolidated Financial Statements.
35
The table below presents the principal payments due and weighted average interest rates, which include the impact of interest
rate swaps, for both the fixed rate and variable rate debt as of December 31, 2023.
Unsecured bank credit
facilities — variable
rate (in thousands)
Weighted average
interest rate
Unsecured debt — fixed
rate (in thousands)
Weighted average
interest rate
2024
2025
2026
2027
2028
Thereafter
Total
Fair Value
$
—
—
—
6.19%
(1)
(3)
—
—
—
—
—
—
—
—
—
6.19%
(2)
—
$ 170,000
145,000
140,000
175,000
160,000
890,000
1,680,000
1,548,655
(4)
3.65%
3.13%
2.57%
2.74%
3.10%
3.66%
3.37%
(1) The variable rate unsecured bank credit facilities mature in July 2025, and as of December 31, 2023, the Company had no
borrowings on both the $625,000,000 unsecured bank credit facility and the $50,000,000 unsecured bank credit facility. These
balances fluctuate based on Company operations and capital activity, as discussed in Liquidity and Capital Resources.
(2) The fair value of the Company’s variable rate debt is estimated by discounting expected cash flows at current market rates,
excluding the effects of debt issuance costs.
(3) Represents the weighted average interest rate for the Company’s variable rate unsecured bank credit facilities as of
December 31, 2023.
(4) The fair value of the Company’s fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate
through the use of interest rate swaps, is estimated by discounting expected cash flows at the rates currently offered to the
Company for debt of the same remaining maturities, as advised by the Company’s bankers, excluding the effects of debt issuance
costs.
As the table above incorporates only those exposures that existed as of December 31, 2023, it does not consider those exposures
or positions that could arise after that date. Assuming there was a $100,000,000 balance on the unsecured bank credit facilities,
and if interest rates changed by 10%, or approximately 62 basis points, interest expense and cash flows would increase or
decrease by approximately $620,000 annually.This does not include variable rate debt that has been effectively fixed through
the use of interest rate swaps.
Most of the Company’s leases include scheduled rent increases. Additionally, most of the Company’s leases require the tenants
to pay their pro rata share of operating expenses, including real estate taxes, insurance and common area maintenance, thereby
reducing the Company’s exposure to increases in operating expenses resulting from inflation or other factors. In the event
inflation causes increases in the Company’s general and administrative expenses or the level of interest rates, such increased
costs would not be passed through to tenants and could adversely affect the Company’s results of operations.
EastGroup’s financial results are affected by general economic conditions in the markets in which the Company’s properties are
located. The state of the economy, or other adverse changes in general or local economic conditions could result in the
inability of some of the Company’s existing tenants to make lease payments and may therefore increase the reserves for
uncollectible rent. It may also impact the Company’s ability to (i) renew leases or re-lease space as leases expire, or (ii) lease
development space. In addition, an economic downturn or recession, could also lead to an increase in overall vacancy rates or a
decline in rents the Company can charge to re-lease properties upon expiration of current leases. In all of these cases,
EastGroup’s cash flows would be adversely affected.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this Item 8 is hereby incorporated by reference to the Company’s Consolidated Financial
Statements beginning on page 39 of this Annual Report on Form 10-K. There were no material retrospective changes to the
Consolidated Statements of Income and Comprehensive Income in any quarters in the two most recent fiscal years that would
require disclosure of supplementary financial data.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
36
ITEM 9A. CONTROLS AND PROCEDURES.
(i) Disclosure Controls and Procedures.
The Company carried out an evaluation, under the supervision and with the participation of the Company’s management,
including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation
of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, the Company’s disclosure
controls and procedures were effective in timely alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.
(ii) Internal Control Over Financial Reporting.
(a)
Management’s report on internal control over financial reporting.
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Exchange Act Rule 13a-15(f). EastGroup’s Management Report on Internal Control Over Financial Reporting is set
forth in Part IV, Item 15 of this Form 10-K on page 44 and is incorporated herein by reference.
(b) Report of the independent registered public accounting firm.
The report of KPMG LLP, the Company’s independent registered public accounting firm, on the Company’s internal control
over financial reporting is set forth in Part IV, Item 15 of this Form 10-K on page 45 and is incorporated herein by reference.
(c) Changes in internal control over financial reporting.
There was no change in the Company’s internal control over financial reporting during the Company’s fourth fiscal quarter
ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
ITEM 9B. OTHER INFORMATION.
Not applicable.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information required by Item 10 will be included in the Company’s definitive proxy statement to be filed with the SEC
relating to the Company’s 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 will be included in the Company’s definitive proxy statement to be filed with the SEC
relating to the Company’s 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The information required by Item 12 will be included in the Company’s definitive proxy statement to be filed with the SEC
relating to the Company’s 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
37
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by Item 13 will be included in the Company’s definitive proxy statement to be filed with the SEC
relating to the Company’s 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Our independent registered public accounting firm is KPMG LLP, Jackson, MS, Auditor Firm ID: 185.
The information required by Item 14 will be included in the Company’s definitive proxy statement to be filed with the SEC
relating to the Company’s 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
38
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Financial Statements
The following documents are filed as part of this Annual Report on Form 10-K:
Report of Independent Registered Public Accounting Firm
Management Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets – December 31, 2023 and 2022
Consolidated Statements of Income and Comprehensive Income – Years ended December 31, 2023,
2022 and 2021
Consolidated Statements of Changes in Equity – Years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows – Years ended December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
Financial Statement Schedules
The following documents are filed as part of this Annual Report on Form 10-K:
Schedule III – Real Estate Properties and Accumulated Depreciation
Page
42
44
45
46
47
48
49
50
Page
75
All other schedules for which provision is made in the applicable accounting regulations of the SEC are not
required under the related instructions or are inapplicable, and therefore have been omitted, or the required
information is included in the Notes to Consolidated Financial Statements.
39
Exhibits
The following exhibits are included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023:
Exhibit Number
3.1
3.2
4.1
10.1*
10.2*
10.3*
10.4*
10.5
10.6
10.7
10.8
10.9*
10.10*
10.11*
10.12
10.13
21.1
23.1
Description
Articles of Amendment and Restatement of EastGroup Properties, Inc. (incorporated by reference to
Exhibit 3.1 of the Company’s Current Report on Form 8-K filed May 28, 2021).
Amended and Restated Bylaws of EastGroup Properties, Inc. (incorporated by reference to Exhibit 3.2 of
the Company’s Current Report on Form 8-K filed May 28, 2021).
Description of Securities (incorporated by reference to exhibit 4.1 to the Company’s Annual Report on
Form 10-K filed February 16, 2022).
EastGroup Properties, Inc. 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the
Company’s Form 8-K filed May 26, 2023).
Form of Severance and Change in Control Agreement entered into by and between the Company and each
of Marshall A. Loeb, Brent W. Wood and John F. Coleman (incorporated by reference to Exhibit 10.1 to
the Company’s Current Report on Form 8-K filed May 18, 2016).
Form of Severance and Change in Control Agreement by and between the Company and each of Ryan M.
Collins and R. Reid Dunbar (incorporated by reference to Exhibit 10.2 to the Company’s Current Report
on Form 8-K filed May 18, 2016).
EastGroup Properties, Inc. Director Compensation Program Including the Independent Director
Compensation Policy, as amended and restated as of May 25, 2023, pursuant to the 2023 Equity Incentive
Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed
July 26, 2023).
Note Purchase Agreement, dated as of August 28, 2013, by and among EastGroup Properties, L.P., the
Company and each of the Purchasers of the Notes party thereto (incorporated by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K filed August 30, 2013).
Fifth Amended and Restated Credit Agreement, dated as of June 29, 2021 among EastGroup Properties,
L.P.; the Company; PNC Bank, National Association, as Administrative Agent; Regions Bank, as
Syndication Agent, Wells Fargo Bank, National Association, Bank of America, N.A. and U.S. Bank
National Association, as Co-Documentation Agents; PNC Capital Markets LLC as Sustainability Agent;
PNC Capital Markets LLC and Regions Capital Markets, as Joint Lead Arrangers and Joint Bookrunners
and the Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Company’s Current Report
on Form 8-K filed July 1, 2021).
First Amendment to Fifth Amended and Restated Credit Agreement, dated as of January 10, 2023 among
EastGroup Properties, L.P.; the Company; PNC Bank, National Association, as Administrative Agent;
Regions Bank, as Syndication Agent, Wells Fargo Bank, National Association, Bank of America, N.A.,
U.S. Bank National Association and TD Bank, N.A. as Co-Documentation Agents; PNC Capital Markets
LLC as Sustainability Agent; PNC Capital Markets LLC and Regions Capital Markets, as Joint Lead
Arrangers and Joint Bookrunners and the Lenders party thereto (incorporated by reference to Exhibit 10.1
of the Company’s Current Report on Form 8-K filed January 13, 2023).
Note Purchase Agreement, dated as of August 17, 2020, among EastGroup Properties, L.P., the Company
and the purchasers of the notes party thereto (including the form of the 2.61% Series A Senior Notes due
October 14, 2030 and the 2.71% Series B Senior Notes due October 14, 2032) (incorporated by reference
to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 21, 2020).
Form of Indemnification Agreement entered into by and between the Company and each of its directors
and executive officers (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed October 28, 2020).
Form of First Amendment to the Severance and Change in Control Agreement, entered into by and
between the Company and each of R. Reid Dunbar and Ryan M. Collins (incorporated by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed October 28, 2020).
Form of Severance and Change in Control Agreement, entered into by and between the Company and
Staci H. Tyler (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-
Q filed October 28, 2020).
Note Purchase Agreement, dated as of February 3, 2022, among EastGroup Properties, L.P., the Company
and the purchasers of the notes party thereto (including the form of the 3.03% Senior Notes due April 20,
2032) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed
February 8, 2022).
Note Purchase Agreement, dated as of August 16, 2022, among EastGroup Properties, L.P., the Company
and the purchasers of the notes party thereto (including the forms of the 4.90% Series A Senior Notes due
2033 and the 4.95% Series B Senior Notes due 2034) (incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed August 19, 2022).
Subsidiaries of the Company (filed herewith).
Consent of KPMG LLP (filed herewith).
40
Exhibit Number
Description
24.1
31.1
31.2
32.1
32.2
97.1*
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
Powers of attorney (included on signature page hereto).
Rule 13a-14(a)/15d-14(a) Certifications (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) of
Marshall A. Loeb, Chief Executive Officer (filed herewith).
Rule 13a-14(a)/15d-14(a) Certifications (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) of
Brent W. Wood, Chief Financial Officer (filed herewith).
Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) of Marshall A.
Loeb, Chief Executive Officer (furnished herewith).
Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) of Brent W.
Wood, Chief Financial Officer (furnished herewith).
EastGroup Properties, Inc. Compensation Recovery Policy (filed herewith).
Inline XBRL Taxonomy Extension Schema Document (filed herewith).
Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension
information contained in Exhibits 101.*) (filed herewith).
*
Indicates a management contract or any compensatory plan, contract or arrangement.
41
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS
EASTGROUP PROPERTIES, INC.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of EastGroup Properties, Inc. and subsidiaries (the Company)
as of December 31, 2023 and 2022, the related consolidated statements of income and comprehensive income, changes in
equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and
financial statement schedule III (collectively, the consolidated financial statements). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and
the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in
conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated February 14, 2024 expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Estimated relative fair value assigned to land in an asset acquisition
As discussed in Note 1(j) to the consolidated financial statements, the Company acquired $165,116,000 of assets, net of
liabilities assumed, related to real estate property acquisitions during 2023 that were accounted for as asset acquisitions, of
which $44,676,000 of the acquisition cost was allocated to land. The acquisition cost in an asset acquisition is allocated among
the individual components of both tangible and intangible assets and liabilities acquired based on their relative fair values.
We identified the estimated fair value of land as a critical audit matter. Specifically, evaluating the relevance of comparable
land sales used in the Company’s determination of the estimated fair value involved subjective auditor judgment. Professionals
with specialized skills and knowledge were utilized to evaluate the relevance of a selection of the comparable land sales.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested
the operating effectiveness over the Company’s control to review identified publicly available comparable land sales used to
estimate fair value of land in an asset acquisition. We evaluated the Company’s estimate of fair value of land by comparing to
42
our independently established ranges of comparable land sales developed using publicly available market data and involved
valuation professionals with specialized skills and knowledge who assisted in this evaluation for a selection of acquisitions.
/s/ KPMG LLP
We have served as the Company’s auditor since 1970.
Jackson, Mississippi
February 14, 2024
43
MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
EastGroup’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management,
including the Chief Executive Officer and Chief Financial Officer, EastGroup conducted an evaluation of the effectiveness of
internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission. The design of any system of internal control over
financial reporting is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions. Based on EastGroup’s evaluation
under the framework in Internal Control – Integrated Framework (2013), management concluded that our internal control over
financial reporting was effective as of December 31, 2023.
/s/ EASTGROUP PROPERTIES, INC.
Ridgeland, Mississippi
February 14, 2024
44
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS
EASTGROUP PROPERTIES, INC.:
Opinion on Internal Control Over Financial Reporting
We have audited EastGroup Properties, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated
statements of income and comprehensive income, changes in equity, and cash flows for each of the years in the three-year
period ended December 31, 2023, and the related notes and financial statement schedule III (collectively, the consolidated
financial statements), and our report dated February 14, 2024 expressed an unqualified opinion on those consolidated financial
statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Jackson, Mississippi
February 14, 2024
/s/ KPMG LLP
45
December 31,
2023
2022
(In thousands, except share and per
share data)
$
4,853,548
4,395,972
639,647
538,449
5,493,195
4,934,421
(1,273,723)
(1,150,814)
4,219,472
3,783,607
7,539
40,263
251,939
7,230
56
244,944
$
4,519,213
4,035,837
$
(1,520)
168,454
1,676,347
1,691,259
—
146,337
89,415
2,031
136,988
83,666
1,910,579
2,082,398
5
—
4
—
2,949,907
2,251,521
(366,473)
(334,898)
24,888
36,371
2,608,327
1,952,998
307
2,608,634
$
4,519,213
441
1,953,439
4,035,837
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
Real estate properties
Development and value-add properties
Less accumulated depreciation
Unconsolidated investment
Cash and cash equivalents
Other assets
TOTAL ASSETS
LIABILITIES AND EQUITY
LIABILITIES
Unsecured bank credit facilities, net of debt issuance costs
Unsecured debt, net of debt issuance costs
Secured debt, net of debt issuance costs
Accounts payable and accrued expenses
Other liabilities
Total Liabilities
EQUITY
Stockholders’ Equity:
Common stock; $0.0001 par value; 70,000,000 shares authorized;
47,700,432 shares issued and outstanding at December 31, 2023 and
43,575,539 at December 31, 2022
Excess shares; $0.0001 par value; 30,000,000 shares authorized;
zero shares issued
Additional paid-in capital
Distributions in excess of earnings
Accumulated other comprehensive income
Total Stockholders’ Equity
Noncontrolling interest in joint ventures
Total Equity
TOTAL LIABILITIES AND EQUITY
See accompanying Notes to Consolidated Financial Statements.
46
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended December 31,
2023
2022
2021
(In thousands, except per share data)
REVENUES
Income from real estate operations
$
566,179
486,817
409,412
Other revenue
EXPENSES
Expenses from real estate operations
Depreciation and amortization
General and administrative
Indirect leasing costs
4,412
208
63
570,591
487,025
409,475
154,030
171,078
16,757
582
133,915
153,638
16,362
546
115,078
127,099
15,704
700
342,447
304,461
258,581
OTHER INCOME (EXPENSE)
Interest expense
(47,996)
(38,499)
(32,945)
Gain on sales of real estate investments
Other
NET INCOME
17,965
2,435
40,999
1,210
38,859
830
200,548
186,274
157,638
Net income attributable to noncontrolling interest in joint ventures
(57)
(92)
(81)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON
STOCKHOLDERS
Other comprehensive income (loss) – interest rate swaps
TOTAL COMPREHENSIVE INCOME
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO
EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Net income attributable to common stockholders
Weighted average shares outstanding — Basic
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO
EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Net income attributable to common stockholders
Weighted average shares outstanding — Diluted
200,491
186,182
(11,483)
35,069
157,557
12,054
$
189,008
221,251
169,611
$
$
4.43
45,224
4.37
42,599
3.91
40,255
4.42
45,331
4.36
42,712
3.90
40,377
See accompanying Notes to Consolidated Financial Statements.
47
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
BALANCE, DECEMBER 31, 2020
$
4
1,610,053
(329,667)
(10,752)
880
1,270,518
Common
Shares
Additional
Paid-In
Capital
Distributions
In Excess
Of Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interest in
Joint Ventures
Total
(In thousands, except share and per share data)
BALANCE, DECEMBER 31, 2021
4
1,886,820
(318,056)
Net income
Net unrealized change in fair value of interest rate
swaps
Common dividends declared – $3.58 per share
Stock-based compensation, net of forfeitures
Issuance of 1,551,181 shares of common stock,
common stock offering, net of expenses
Withheld 30,252 shares of common stock to satisfy
tax withholding obligations in connection with
the vesting of restricted stock
Contributions from noncontrolling interest
Net distributions to noncontrolling interest
—
—
—
—
—
—
—
—
—
—
—
9,847
271,155
(4,240)
—
5
Net income
Net unrealized change in fair value of interest rate
swaps
Common dividends declared – $4.70 per share
Stock-based compensation, net of forfeitures
Issuance of 393,406 shares of common stock,
common stock offering, net of expenses
Issuance of 1,868,809 shares of common stock, net
of expenses in the purchase of real estate
Withheld 34,251 shares of common stock to satisfy
tax withholding obligations in connection with
the vesting of restricted stock
Withheld 770 shares of common stock to satisfy
tax withholding obligations in connection with
the issuance of common stock
Net distributions to noncontrolling interest
Purchase of noncontrolling interest in joint venture
—
—
—
—
—
—
—
—
—
—
—
—
—
10,802
75,375
303,682
(7,265)
(111)
—
(17,782)
157,557
—
—
12,054
(145,946)
—
—
—
—
—
186,182
—
—
—
—
—
—
1,302
—
—
35,069
(203,024)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
81
—
—
—
—
157,638
12,054
(145,946)
9,847
271,155
—
584
(155)
(4,240)
584
(150)
1,390
1,571,460
92
—
—
—
—
—
186,274
35,069
(203,024)
10,802
75,375
303,682
—
(7,265)
—
(220)
(821)
(111)
(220)
(18,603)
BALANCE, DECEMBER 31, 2022
4
2,251,521
(334,898)
36,371
441
1,953,439
Net income
Net unrealized change in fair value of interest rate
swaps
Common dividends declared – $5.04 per share
Stock-based compensation, net of forfeitures
Issuance of 4,094,896 shares of common stock,
common stock offering, net of expenses
Withheld 31,254 shares of common stock to satisfy
tax withholding obligations in connection with
the vesting of restricted stock
Withheld 184 shares of common stock to satisfy
tax withholding obligations in connection with
the issuance of common stock
Net distributions to noncontrolling interest
—
—
—
—
1
—
—
—
—
—
—
11,777
691,477
(4,836)
(32)
—
200,491
—
—
(11,483)
(232,066)
—
—
—
—
—
—
—
—
—
—
—
57
—
—
—
—
200,548
(11,483)
(232,066)
11,777
691,478
—
(4,836)
—
(191)
(32)
(191)
BALANCE, DECEMBER 31, 2023
$
5
2,949,907
(366,473)
24,888
307
2,608,634
See accompanying Notes to Consolidated Financial Statements.
48
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Stock-based compensation expense
Gain on sales of real estate investments
Gain on sales of non-operating real estate
Gain on involuntary conversion and business interruption claims
Changes in operating assets and liabilities:
Accrued income and other assets
Accounts payable, accrued expenses and prepaid rent
Other
NET CASH PROVIDED BY OPERATING ACTIVITIES
INVESTING ACTIVITIES
Development and value-add properties
Purchases of real estate
Real estate improvements
Net proceeds from sales of real estate investments and non-operating real estate
Leasing commissions
Proceeds from involuntary conversion on real estate assets
Changes in accrued development costs
Changes in other assets and other liabilities
NET CASH USED IN INVESTING ACTIVITIES
FINANCING ACTIVITIES
Proceeds from unsecured bank credit facilities
Repayments on unsecured bank credit facilities
Proceeds from unsecured debt
Repayments on unsecured debt
Repayments on secured debt
Debt issuance costs
Distributions paid to stockholders (not including dividends accrued)
Proceeds from common stock offerings
Common stock offering related costs
Other
NET CASH PROVIDED BY FINANCING ACTIVITIES
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest, net of amounts capitalized of $16,235, $12,393, and
$9,028 for 2023, 2022 and 2021, respectively
Cash paid for operating lease liabilities
Common stock issued in the purchase of real estate
Debt assumed in the purchase of real estate
NON-CASH OPERATING ACTIVITY
$
$
2023
Years Ended December 31,
2022
(In thousands)
2021
$
200,548
186,274
157,638
171,078
8,965
(17,965)
(446)
(4,187)
(15,415)
(5,922)
1,546
338,202
(388,213)
(165,116)
(51,116)
41,539
(32,004)
5,029
12,163
7,660
(570,058)
471,624
(641,624)
100,000
(115,000)
(1,970)
(1,818)
(225,625)
692,312
(834)
(5,002)
272,063
40,207
56
40,263
47,228
2,042
—
—
153,638
8,292
(40,999)
—
—
(9,291)
17,176
1,411
316,501
(494,073)
(2,049)
(40,851)
51,006
(37,272)
—
4,211
(2,120)
(521,148)
942,173
(981,383)
525,000
(75,000)
(60,096)
(2,067)
(193,936)
75,622
(247)
(29,756)
200,310
(4,337)
4,393
56
34,110
1,793
303,682
60,000
127,099
7,511
(38,859)
—
—
(11,572)
13,298
1,377
256,492
(418,855)
(108,149)
(36,665)
44,260
(33,301)
—
21,678
1,769
(529,263)
625,520
(541,310)
175,000
(40,000)
(76,920)
(2,678)
(131,759)
273,409
(312)
(3,807)
277,143
4,372
21
4,393
31,658
1,707
—
—
Operating lease liabilities arising from obtaining right of use assets
$
2,379
559
13,056
See accompanying Notes to Consolidated Financial Statements.
49
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023, 2022 and 2021
(1) SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of Consolidation
The consolidated financial statements include the accounts of EastGroup Properties, Inc. (“EastGroup” or “the Company”), its
wholly owned subsidiaries and the investee of any joint ventures in which the Company has a controlling interest. The
Company records 100% of the assets, liabilities, revenues and expenses of the properties held in joint ventures with the
noncontrolling interests provided for in accordance with the joint venture agreements.
As of December 31, 2023, 2022 and 2021, EastGroup had a 95% controlling interest in a joint venture arrangement owning 6.5
acres of land in San Diego, known by the Company as the Miramar land. During the year ended December 31, 2023,
EastGroup acquired 29.3 acres of land in Denver, known by the Company as Arista 36 Business Park Land. A joint venture
was formed through which EastGroup owns a 99.5% controlling interest in the property. As of December 31, 2023, EastGroup
continued to hold a controlling interest in these two joint venture arrangements.
During the year ended December 31, 2022, EastGroup acquired the 1% noncontrolling interest in Speed Distribution Center, a
519,000 square foot building in San Diego, in which the Company held a 99% controlling interest. The Company continues to
control and own 100% of the property.
The equity method of accounting is used for the Company’s 50% undivided tenant-in-common interest in Industry Distribution
Center II. All significant intercompany transactions and accounts have been eliminated in consolidation.
(b) Income Taxes
EastGroup, a Maryland corporation, has qualified as a real estate investment trust (“REIT”) under Sections 856-860 of the
Internal Revenue Code and intends to continue to qualify as such. To maintain its status as a REIT, the Company is required to,
among other things, distribute at least 90% of its ordinary taxable income to its stockholders. If the Company has a capital
gain, it has the option of (i) deferring recognition of the capital gain through a tax-deferred exchange, (ii) declaring and paying a
capital gain dividend on any recognized net capital gain resulting in no corporate level tax, or (iii) retaining and paying
corporate income tax on its net long-term capital gain, with the shareholders reporting their proportional share of the
undistributed long-term capital gain and receiving a credit or refund of their share of the tax paid by the Company. The
Company distributed all of its 2023, 2022 and 2021 taxable income to its stockholders. Accordingly, no significant provisions
for income taxes were necessary. The Company’s income tax treatment of share distributions is based on its taxable income,
calculated in accordance with the Internal Revenue Code, which differs from U.S. generally accepted accounting principles
(“GAAP”). The following table summarizes the federal income tax treatment for all distributions by the Company for the years
ended 2023, 2022 and 2021.
Federal Income Tax Treatment of Share Distributions
Common Share Distributions:
Ordinary dividends
Nondividend distributions
Unrecaptured Section 1250 capital gain
Other capital gain
Years Ended December 31,
2023
2022
(Per share)
2021
$
5.02083
4.53746
3.61656
—
—
—
—
—
—
—
—
—
Total Common Share Distributions (1)
$
5.02083
4.53746
3.61656
(1) Pursuant to Internal Revenue Code of 1986, as amended, Section 857(b)(9), cash distributions made on January 12, 2024 with a
record date of December 29, 2023 were treated as received by shareholders on December 31, 2023 to the extent of 2023
undistributed earnings and profits. Cash distributions made on January 13, 2023 with a record date of December 30, 2022 were
treated as received by shareholders on December 31, 2022 to the extent of 2022 undistributed earnings and profits. Cash
distributions made on January 15, 2022 with a record date of December 31, 2021 were treated as received by shareholders on
December 31, 2021 to the extent of 2021 undistributed earnings and profits.
EastGroup applies the principles of Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC”
740, Income Taxes, when evaluating and accounting for uncertainty in income taxes. With few exceptions, the Company’s
50
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2019 and earlier tax years are closed for examination by U.S. federal, state and local tax authorities. In accordance with the
provisions of ASC 740, the Company had no significant uncertain tax positions as of December 31, 2023 and 2022.
(c) Income Recognition
The Company’s primary source of revenue is rental income from business distribution space. Minimum rental income from real
estate operations is recognized on a straight-line basis. The straight-line rent calculation on leases includes the effects of rent
concessions and scheduled rent increases, and the calculated straight-line rent income is recognized over the terms of the
individual leases. The Company maintains allowances for doubtful accounts receivable, including straight-line rents receivable,
based upon estimates determined by management. Management specifically analyzes aged receivables, customer credit-
worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Reserves for
uncollectible accounts are recorded as a reduction to revenue. Revenue is recognized on payments received from tenants for
early terminations after all criteria have been met in accordance with ASC 842, Leases.
The Company’s primary source of revenue is rental income from business distribution space; as such, the Company is a lessor
on a significant number of leases. The Company applies the principles of ASC 842, Leases. Initial indirect costs (primarily
legal costs related to lease negotiations) are expensed rather than capitalized. EastGroup recorded Indirect leasing costs of
$582,000, $546,000 and $700,000 on the Consolidated Statements of Income and Comprehensive Income during the years
ended December 31, 2023, 2022 and 2021, respectively.
As permitted by ASC 842, Leases, EastGroup made an accounting policy election by class of underlying asset to not separate
non-lease components (such as common area maintenance) of a contract from the lease component to which they relate when
specific criteria are met. The Company believes its leases meet the criteria.
The table below presents the components of Income from real estate operations for the years ended December 31, 2023, 2022
and 2021:
Lease income — operating leases
Variable lease income (1)
Income from real estate operations
2023
Years Ended December 31,
2022
(In thousands)
2021
$
$
424,063
142,116
566,179
364,957
121,860
486,817
306,658
102,754
409,412
(1) Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.
Future Minimum Rental Receipts Under Non-Cancelable Leases
The Company’s leases with its customers may include various provisions such as scheduled rent increases, renewal options and
termination options. The majority of the Company’s leases include defined rent increases rather than variable payments based
on an index or unknown rate. In calculating the disclosures presented below, the Company included the fixed, non-cancelable
terms of the leases. The following schedule indicates approximate future minimum rental receipts under non-cancelable leases
for real estate properties by year as of December 31, 2023:
Years Ending December 31,
2024
2025
2026
2027
2028
Thereafter
Total minimum receipts
$
(In thousands)
439,737
399,694
334,605
248,466
182,399
419,378
$
2,024,279
The Company recognizes gains on sales of real estate in accordance with the principles set forth in the Codification. For each
transaction, the Company evaluates whether the guidance in ASC 606, Revenue from Contracts with Customers, or ASC 610,
Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets, is applicable. Upon closing of real estate
transactions, the provisions of the Codification require consideration of whether the seller has a controlling financial interest in
the entity that holds the nonfinancial asset after the transaction. In addition, the seller evaluates whether a contract exists under
ASC 606 and whether the counterparty obtained control of each nonfinancial asset that is sold. If a contract exists and the
51
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
counterparty obtained control of each nonfinancial asset, the seller derecognizes the assets at the close of the transaction with
resulting gains or losses reflected on the Consolidated Statements of Income and Comprehensive Income.
(d) Real Estate Properties
EastGroup has one reportable segment – industrial properties, consistent with the Company’s manner of internal reporting,
measurement of operating results and allocation of the Company’s resources.
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future undiscounted net cash flows (including estimated future expenditures necessary to
substantially complete the asset) expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated
future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair
value of the asset. During the years ended December 31, 2023, 2022 and 2021, the Company did not identify any impairment
charges which should be recorded.
Depreciation of buildings and other improvements is computed using the straight-line method over estimated useful lives of
generally 40 years for buildings and 3 to 15 years for improvements. Building improvements are capitalized, while
maintenance and repair expenses are charged to expense as incurred. Significant renovations and improvements that improve
or extend the useful life of the assets are capitalized. Depreciation expense was $141,003,000, $125,199,000 and $104,910,000
for 2023, 2022 and 2021, respectively.
(e) Development and Value-Add Properties
Development and value-add properties consists of properties in lease-up and under construction and prospective development
(primarily land). Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to
a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add
properties: (1) Less than 75% leased as of the acquisition date (or will be less than 75% occupied within one year of acquisition
date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property.
Costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated
with development) are aggregated into the total capitalized costs of the property. Included in these costs are management’s
estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities. The
internal costs are allocated to specific development projects based on development activity. As the property becomes occupied,
depreciation commences on the occupied portion of the building, and costs are capitalized only for the portion of the building
that remains vacant. The Company transfers properties from Development and value-add properties to Real estate properties
as follows: (i) for development properties, at the earlier of 90% occupancy or one year after completion of the shell
construction, and (ii) for value-add properties, at the earlier of 90% occupancy or one year after acquisition. Upon the earlier of
90% occupancy or one year after completion/value-add acquisition date of the shell construction, capitalization of development
costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire
property (excluding the land).
(f) Real Estate Sold and Held for Sale
The Company considers a real estate property to be held for sale when it meets the criteria established under ASC 360,
Property, Plant and Equipment, including when it is probable that the property will be sold within a year. Real estate properties
held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated
while they are held for sale. The Company did not classify any properties as held for sale as of December 31, 2023 or 2022.
In accordance with ASC 360 and ASC 205, Presentation of Financial Statements, the Company would report a disposal of a
component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic
shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of
components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by
sale or other than by sale. In addition, the Company would provide additional disclosures about both discontinued operations
and the disposal of an individually significant component of an entity that does not qualify for discontinued operations
presentation in the financial statements. EastGroup performs an analysis of properties sold to determine whether the sales
qualify for discontinued operations presentation.
During the year ended December 31, 2023, the Company sold two land parcels and three operating properties. During the year
ended December 31, 2022, the Company sold three operating properties. The results of operations and gains and losses on sales
for the properties sold are reported in continuing operations on the Consolidated Statements of Income and Comprehensive
Income. The gains and losses on sales of operating properties are included in Gain on sales of real estate investments. The gains
52
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
and losses on sales of non-operating real estate are included in Other on the Consolidated Statements of Income and
Comprehensive Income.
The Company did not consider its sales in 2022 or 2023 to be disposals of a component of an entity or a group of components
of an entity representing a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.
These sales are discussed further in Note 2.
(g) Derivative Instruments and Hedging Activities
EastGroup applies ASC 815, Derivatives and Hedging, which requires all entities with derivative instruments to disclose
information regarding how and why the entity uses derivative instruments and how derivative instruments and related hedged
items affect the entity’s financial position, financial performance and cash flows. See Note 12 for a discussion of the
Company’s derivative instruments and hedging activities.
(h) Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash
equivalents. The carrying amounts approximate fair value due to the short maturity of those instruments.
(i) Amortization
Debt origination costs are deferred and amortized over the term of each loan using the effective interest method, and the
amortization is included in Interest Expense. Amortization of debt issuance costs was $1,943,000, $1,357,000 and $1,296,000
for 2023, 2022 and 2021, respectively. Amortization of facility fees was $1,005,000, $713,000 and $751,000 for 2023, 2022
and 2021, respectively.
Leasing costs are deferred and amortized using the straight-line method over the term of the lease. The related amortization
expense is included in Depreciation and amortization. Leasing costs amortization expense was $22,133,000, $18,950,000 and
$16,209,000 for 2023, 2022 and 2021, respectively.
Amortization expense for in-place lease intangibles is disclosed below in Real Estate Property Acquisitions and Acquired
Intangibles.
(j) Real Estate Property Acquisitions and Acquired Intangibles
Upon acquisition of real estate properties, EastGroup applies the principles of ASC 805, Business Combinations. The FASB
Codification provides a framework for determining whether transactions should be accounted for as acquisitions of assets or
businesses. Under the guidance, companies are required to utilize an initial screening test to determine whether substantially all
of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets;
if so, the set is not a business. Criteria considered in grouping similar assets include geographic location, market and
operational risks and the physical characteristics of the assets. EastGroup determined that its real estate property acquisitions in
2023, 2022 and 2021 are considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not
considered to be acquisitions of a business. As a result, the Company has capitalized acquisition costs related to its 2023, 2022
and 2021 acquisitions.
The FASB Codification also provides guidance on how to properly determine the allocation of the purchase price among the
individual components of both the tangible and intangible assets based on their relative fair values. The allocation to tangible
assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were
vacant using discounted cash flow models. Land is valued using comparable land sales specific to the applicable market,
provided by a third-party. The Company determines whether any financing assumed is above or below market based upon
comparison to similar financing terms for similar properties. The cost of the properties acquired may be adjusted based on
indebtedness assumed from the seller that is determined to be above or below market rates.
The purchase price is also allocated among the following categories of intangible assets: the above or below market component
of in-place leases and the value of in-place leases at the time of the acquisition. The value allocable to the above or below
market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the
risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease
over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current market rents over the
remaining term of the lease. The amounts allocated to above and below market lease intangibles are included in Other assets
and Other liabilities, respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining
terms of the respective leases. In-place lease intangibles are valued based upon management’s assessment of factors such as an
estimate of foregone rents and avoided leasing costs during the expected lease-up periods considering current market conditions
53
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
and costs to execute similar leases. These intangible assets are included in Other assets on the Consolidated Balance Sheets and
are amortized over the remaining term of the existing lease.
Amortization of above and below market lease intangibles, which increased rental income by $2,483,000, $2,565,000 and
$1,048,000 in 2023, 2022 and 2021, respectively, is included in Income from real estate operations. Amortization expense for
in-place lease intangibles, which was $7,942,000, $9,489,000 and $5,980,000 for 2023, 2022 and 2021, respectively, is
included in Depreciation and amortization.
Projected amortization of in-place lease intangibles for the next five years as of December 31, 2023 is as follows:
Years Ending December 31,
(In thousands)
2024
2025
2026
2027
2028
Thereafter
$
6,611
5,421
3,656
1,837
887
1,793
Total projected amortization of in-place lease intangibles
$
20,205
EastGroup acquired real estate properties during 2023, 2022 and 2021 as discussed in Note 2. The following table summarizes
the allocation of the total consideration for the acquired assets and assumed liabilities in connection with the real estate property
acquisitions during the years ended December 31, 2023, 2022 and 2021.
ACQUIRED ASSETS AND ASSUMED LIABILITIES
2023
2022
2021
Costs Incurred During the Years Ended December 31,
Land
Buildings and building improvements
Tenant and other improvements
Right of use assets — Ground leases (operating)
Total real estate properties acquired
In-place lease intangibles (1)
Above market lease intangibles (1)
Below market lease intangibles (2)
Operating lease liabilities — Ground leases (3)
$
44,676
111,082
4,346
—
160,104
7,242
—
(In thousands)
127,402
335,335
11,502
—
474,239
11,871
—
(2,230)
(4,059)
—
—
Total assets acquired, net of liabilities assumed
$
165,116
482,051
42,554
225,645
4,907
12,708
285,814
9,949
6
(3,836)
(12,708)
279,225
(1)
In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance
Sheets. These costs are amortized over the remaining terms of the associated leases in place at the time of acquisition.
(2) Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets. These costs are amortized
over the remaining terms of the associated leases in place at the time of acquisition.
(3) Operating lease liabilities — Ground leases are included in Other liabilities on the Consolidated Balance Sheets.
The leases in the properties acquired during 2023, 2022 and 2021 had a weighted average remaining lease term at acquisition of
approximately 8.0 years, 3.9 years and 2.9 years, respectively.
The Company periodically reviews the recoverability of goodwill (at least annually) and the recoverability of other intangibles
(on a quarterly basis) for possible impairment. No impairment of goodwill and other intangibles existed during the years
ended December 31, 2023, 2022 and 2021.
(k) Stock-Based Compensation
EastGroup applies the provisions of ASC 718, Compensation – Stock Compensation, to account for its stock-based
compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized
in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The cost
for market-based awards and awards that only require service are expensed on a straight-line basis over the requisite service
54
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
periods. The cost for performance-based awards is determined using the graded vesting attribution method which recognizes
each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. This
method accelerates the expensing of the award compared to the straight-line method. For awards with a performance condition,
compensation expense is recognized when the performance condition is considered probable of achievement.
The total compensation expense for service and performance based awards is based upon the fair market value of the shares on
the grant date. The grant date fair value for awards that have been granted and are subject to a future market condition (total
shareholder return) are determined using a Monte Carlo simulation pricing model developed to specifically accommodate the
unique features of the awards.
During the restricted period for awards no longer subject to contingencies, the Company accrues dividends and holds the
certificates for the shares; however, the employee can vote the shares. Share certificates and dividends are delivered to the
employee as they vest. Forfeitures of awards are recognized as they occur.
(l) Equity Offerings
Underwriting commissions and offering costs incurred in connection with common stock offerings and at-the-market equity
offering programs have been reflected as a reduction of additional paid-in capital.
Under relevant accounting guidance, sales of common stock under forward equity sale agreements (as discussed in Note 9
Common Stock Activity) are not deemed to be liabilities, and furthermore, meet the derivatives and hedging guidance scope
exception to be accounted for as equity instruments based on the following assessment: (i) none of the agreements’ exercise
contingencies were based on observable markets or indices besides those related to the market for our own stock price and
operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.
(m) Earnings per Share
The Company applies ASC 260, Earnings Per Share, which requires companies to present basic and diluted earnings per share
(“EPS”). Basic EPS represents the amount of earnings for the period attributable to each share of common stock outstanding
during the reporting period. The Company’s basic EPS is calculated by dividing Net Income Attributable to EastGroup
Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding. The weighted average
number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of
common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until
the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested.
Diluted EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the
reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive
potential common shares outstanding during the reporting period. The Company calculates diluted EPS by dividing Net Income
Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares
outstanding plus the effect of any dilutive securities including shares issuable under forward equity sale agreements and
unvested restricted stock using the treasury stock method. Any anti-dilutive securities are excluded from the diluted EPS
calculation. See Note 13 Earnings per Share for details.
(n) Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and to disclose material
contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
(o) Risks and Uncertainties
The state of the overall economy can significantly impact the Company’s operational performance and thus impact its financial
position. Should EastGroup experience a significant decline in operational performance, it may affect the Company’s ability to
make distributions to its shareholders, service debt or meet other financial obligations.
(p) Recent Accounting Pronouncements
EastGroup has evaluated all FASB Accounting Standards Updates (“ASU”) recently released by the FASB through the date the
financial statements were issued and determined that the following ASUs apply to the Company.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures. The primary provision of the ASU is to require disclosure of incremental segment information, such as significant
segment expenses regularly provided to the Company’s chief decision makers, the title and position of such individuals, and the
manner in which the individuals use such information in assessing segment performance and the allocation of resources.
55
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EastGroup has one reportable segment – industrial properties, consistent with the Company’s manner of internal reporting,
measurement of operating results and allocation of the Company’s resources. Entities with a single reportable segment are
required to provide the disclosures required by the amendment and existing segment disclosure requirements in accordance with
Topic 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years
beginning after December 15, 2024, with early adoption permitted. Amendments should be applied retrospectively to all prior
periods presented in the financial statements. EastGroup does not expect the adoption to have a material impact on its financial
condition, results of operations or disclosures.
(q) Classification of Book Overdraft on Consolidated Statements of Cash Flows
The Company classifies changes in book overdraft in which the bank has not advanced cash to the Company to cover
outstanding checks as an operating activity. Such amounts are included in Accounts payable, accrued expenses and prepaid
rent in the Operating Activities section on the Consolidated Statements of Cash Flows.
(r) Reclassifications
Certain reclassifications have been made in the 2022 and 2021 consolidated financial statements to conform to the 2023
presentation.
(2) REAL ESTATE PROPERTIES AND DEVELOPMENT AND VALUE-ADD PROPERTIES
The Company’s Real estate properties and Development and value-add properties at December 31, 2023 and 2022 were as
follows:
December 31,
2023
2022
(In thousands)
Real estate properties:
Land
$
814,364
730,445
Buildings and building improvements
3,336,615
3,012,319
Tenant and other improvements
Right of use assets — Ground leases (operating) (1)
Development and value-add properties (2)
Less accumulated depreciation
684,573
17,996
639,647
633,817
19,391
538,449
5,493,195
4,934,421
(1,273,723)
(1,150,814)
$
4,219,472
3,783,607
(1) See Ground Leases discussion below for information regarding the Company’s right of use assets for ground leases.
(2) Value-add properties are defined in Note 1(e).
56
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of real estate properties acquired for the years ended December 31, 2023, 2022 and 2021 follows:
REAL ESTATE PROPERTIES ACQUIRED
Location
(Unaudited)
Size
(Square feet)
Date Acquired
Cost (1)
(In thousands)
2023
OPERATING PROPERTIES ACQUIRED (2)
Craig Corporate Center
Blue Diamond Business Park
McKinney Logistics Center
Park at Myatt
Pelzer Point Commerce Center 1
Total operating property acquisitions
Total value-add property acquisitions
Total acquired assets in 2023 (5)
2022
OPERATING PROPERTIES ACQUIRED (2)
Cebrian Distribution Center and Reed Distribution Center (3)
6th Street Business Center, Benicia Distribution
Center 1-5, Ettie Business Center, Laura
Alice Business Center, Preston
Distribution Center, Sinclair Distribution
Center, Transit Distribution Center and
Whipple Business Center (3)
Total operating property acquisitions
VALUE-ADD PROPERTIES ACQUIRED (4)
Cypress Preserve 1 & 2
Zephyr Distribution Center
Mesa Gateway Commerce Center
Access Point 3
Total value-add property acquisitions
Total acquired assets in 2022 (5)
2021
OPERATING PROPERTIES ACQUIRED (2)
Southpark Distribution Center 2
DFW Global Logistics Centre
Progress Center 3
Texas Avenue
Total operating property acquisitions
VALUE-ADD PROPERTIES ACQUIRED (4)
Access Point 1
Northpoint 200
Access Point 2
Cherokee 75 Business Center 2
Siempre Viva Distribution Center 3-6
Total value-add property acquisitions
Total acquired assets in 2021 (5)
Las Vegas, NV
Las Vegas, NV
Dallas, TX
Nashville, TN
Greenville, SC
04/18/2023
09/05/2023
10/02/2023
11/03/2023
12/21/2023
156,000
254,000
193,000
171,000
213,000
987,000
—
987,000
$
$
34,365
52,973
25,739
30,793
21,246
165,116
—
165,116
Sacramento, CA
329,000
06/01/2022
$
49,726
San Francisco, CA
Houston, TX
San Francisco, CA
Phoenix, AZ
Greenville, SC
Phoenix, AZ
Dallas, TX
Atlanta, GA
Austin, TX
Greenville, SC
Atlanta, GA
Greenville, SC
Atlanta, GA
San Diego, CA
06/01/2022
03/28/2022
04/08/2022
04/15/2022
07/12/2022
06/10/2021
08/26/2021
09/23/2021
10/15/2021
01/15/2021
01/21/2021
05/19/2021
06/17/2021
12/01/2021
1,377,000
1,706,000
516,000
82,000
147,000
299,000
1,044,000
2,750,000
79,000
611,000
50,000
20,000
760,000
156,000
79,000
159,000
105,000
547,000
1,046,000
1,806,000
$
$
$
309,404
359,130
54,462
29,017
18,315
21,127
122,921
482,051
9,177
89,829
5,000
4,143
108,149
10,501
6,516
10,743
8,837
134,479
171,076
279,225
(1) Cost is calculated in accordance with FASB ASC 805, Business Combinations, and represents the sum of the purchase price, closing costs
and capitalized acquisition costs.
(2) Operating properties are defined as stabilized real estate properties (land including buildings and improvements) in the Company’s
operating portfolio; included in Real estate properties on the Consolidated Balance Sheets.
(3) The Company acquired these operating properties along with two land parcels, also in Sacramento, CA and San Francisco, CA, in
connection with its acquisition of Tulloch Corporation in June 2022. Size and cost are presented on an aggregate basis for the properties
located in Sacramento, CA and San Francisco, CA, respectively. In consideration for this acquisition, the Company assumed a
$60,000,000 loan and issued 1,868,809 shares of the Company’s common stock. The acquisition date fair value of the loan assumed was
$60,000,000, and the acquisition date fair value of the common shares, which was based on the closing share price on the acquisition date,
was $303,756,000.
(4) Value-add properties are defined in Note 1(e).
(5) Excludes acquired development land as detailed below.
57
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Also during 2023, EastGroup purchased 328.3 acres of development land in seven markets for $70,664,000. During 2022,
EastGroup purchased 456.3 acres of development land in 10 markets for $123,717,000. During 2021, EastGroup purchased
365.8 acres of development land in five markets for $41,065,000.
Sales of Real Estate
The Company sold operating properties during 2023, 2022 and 2021 as shown in the table below. The results of operations and
gains and losses on sales for the properties sold during the periods presented are reported in continuing operations on the
Consolidated Statements of Income and Comprehensive Income. The gains and losses on sales of operating properties are
included in Gain on sales of real estate investments. The Company did not consider its sales in 2023, 2022 or 2021 to be
disposals of a component of an entity or a group of components of an entity representing a strategic shift that has (or will have)
a major effect on the entity’s operations and financial results.
A summary of Gain on sales of real estate investments for the years ended December 31, 2023, 2022 and 2021 follows:
REAL ESTATE PROPERTIES SOLD
Location
(Unaudited)
Size
(Square feet)
Date Sold
Net Sales
Price
Recognized
Gain
Basis
(In thousands)
2023
World Houston 23
Ettie Business Center
Los Angeles Corporate Center
Total for 2023
2022
Metro Business Park
Cypress Creek Business Park (1)
World Houston 15 East
Total for 2022
2021
Jetport Commerce Park
Houston, TX
San Francisco, CA
Los Angeles, CA
125,000 03/31/2023
29,000 11/20/2023
77,000 12/29/2023
231,000
Phoenix, AZ
Fort Lauderdale, FL
Houston, TX
189,000 01/06/2022
56,000 03/31/2022
42,000 05/11/2022
287,000
$
9,327
11,638
16,006
$ 36,971
$ 32,851
5,282
12,873
$ 51,006
4,518
8,845
5,643
19,006
5,880
1,901
2,226
10,007
4,809
2,793
10,363
17,965
26,971
3,381
10,647
40,999
Tampa, FL
284,000 11/09/2021
$ 44,260
5,401
38,859
(1) Cypress Creek Business Park is located on a ground lease. In conjunction with the sale of the property, the Company fully
amortized the associated right-of-use asset and liability of $1,745,000.
The table above includes sales of operating properties. During the year ended December 31, 2023, the Company also sold 11.9
acres of land in Houston and Fort Worth for $4,750,000 and recognized gains on the sales of $446,000. The Company did not
sell any land during the years ended December 31, 2022 or 2021. The gains on sales of non-operating real estate are included in
Other on the Consolidated Statements of Income and Comprehensive Income.
Development and Value-Add Properties
As of December 31, 2023, the Company’s development and value-add program consisted of projects in lease-up, under
construction and prospective development (primarily land), as detailed in the table below. Costs incurred include capitalization
of interest costs during the period of construction. The interest costs capitalized on development projects for 2023 were
$16,235,000 compared to $12,393,000 for 2022 and $9,028,000 for 2021. In addition, EastGroup capitalized internal
development costs of $10,472,000 during the year ended December 31, 2023, compared to $9,985,000 during 2022 and
$7,713,000 in 2021.
Total capital invested for development and value-add properties during 2023 was $388,213,000, which primarily consisted of
improvement costs of $301,596,000 on development and value-add properties, $70,664,000 for new land investments, and costs
of $15,953,000 on properties subsequent to transfer to Real estate properties. The capitalized costs incurred on development
and value-add projects subsequent to transfer to Real estate properties include capital improvements at the properties and do
not include other capitalized costs associated with development (i.e., interest expense, property taxes and internal personnel
costs).
58
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the Company’s Development and Value-Add Properties for the year ended December 31, 2023 follows:
Lease-up
Under construction
Total lease-up and under construction
Prospective development (primarily land)
Total Development and value-add properties as of December 31, 2023
Total Development and value-add properties transferred to Real estate
properties during the year ended December 31, 2023
(1) Represents cumulative costs at the date of transfer.
(Unaudited)
Actual or Estimated
Building Size
(Square feet)
Cumulative Costs
Incurred as of
12/31/2023
(Unaudited)
Projected Total
Costs
1,352,000 $
2,725,000
4,077,000
10,792,000
14,869,000 $
180,600
395,100
575,700
(In thousands)
162,356 $
212,568
374,924 $
264,723
639,647
(1)
2,341,000 $
271,568
Ground Leases
As of December 31, 2023 and 2022, the Company operated one property in Florida, four properties in Texas and one property
in Arizona that are subject to ground leases. The ground leases have terms of 40 to 50 years, expiration dates of August 2031 to
October 2058, and renewal options of 15 to 35 years, except for the one lease in Arizona which is automatically and perpetually
renewed annually. The Company has included renewal options in the lease terms for calculating the ground lease assets and
liabilities as the Company is reasonably certain it will exercise these options. With the renewal options included, expiration
dates range from August 2051 to January 2070. Total ground lease expenditures for the years ended December 31, 2023, 2022
and 2021 were $1,758,000, $1,755,000 and $1,354,000, respectively. Payments are subject to increases at 3 to 10 year intervals
based upon the agreed or appraised fair market value of the leased premises on the adjustment date or the Consumer Price Index
percentage increase since the base rent date. These future changes in payments will be considered variable payments and will
not impact the assessment of the asset or liability unless there is a significant event that triggers reassessment, such as
amendment with a change in the terms of the lease. The weighted-average remaining lease term as of December 31, 2023, for
the ground leases is 35 years.
EastGroup applies ASC 842, Leases, for its ground leases, which are classified as operating leases. There were no new ground
leases in 2023 or 2022. As of December 31, 2023 and 2022, the unamortized balances of the Company’s right of use assets for
its ground leases were $17,996,000 and $19,391,000, respectively. The right of use assets for ground leases are included in
Real estate properties on the Consolidated Balance Sheets.
The following schedule indicates approximate future minimum ground lease payments for these properties by year as of
December 31, 2023:
Future Minimum Ground Lease Payments as of December 31, 2023
Years Ending December 31,
(In thousands)
2024
2025
2026
2027
2028
Thereafter
Total minimum payments
Imputed interest (1)
Total ground lease liabilities
$
$
1,496
1,531
1,567
1,567
1,573
50,298
58,032
(39,274)
18,758
(1) As the Company’s leases do not provide an implicit rate, in order to calculate the present value of the remaining ground lease
payments, the Company used its incremental borrowing rate, adjusted for a number of factors, including the long-term nature of
the ground leases, the Company’s estimated borrowing costs, and the estimated fair value of the underlying land, to determine the
imputed interest for its ground leases.
59
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(3) UNCONSOLIDATED INVESTMENT
The Company owns a 50% undivided tenant-in-common interest in Industry Distribution Center II, a 309,000 square foot
warehouse distribution building in the City of Industry (Los Angeles), California. The building was constructed in 1998 and is
100% leased through December 2026 to a single tenant who owns the other 50% interest in the property. This investment is
accounted for under the equity method of accounting and had a carrying value of $7,539,000 at December 31, 2023, and
$7,230,000 at December 31, 2022.
(4) OTHER ASSETS
A summary of the Company’s Other assets follows:
December 31,
2023
2022
(In thousands)
Leasing costs (principally commissions)
$
158,741
Accumulated amortization of leasing costs
Leasing costs (principally commissions), net of accumulated amortization
Acquired in-place lease intangibles
Accumulated amortization of acquired in-place lease intangibles
Acquired in-place lease intangibles, net of accumulated amortization
Acquired above market lease intangibles
Accumulated amortization of acquired above market lease intangibles
Acquired above market lease intangibles, net of accumulated amortization
Straight-line rents receivable
Accounts receivable
Interest rate swap assets
Right of use assets - Office leases (operating)
Goodwill
Escrow deposits and prepaid costs for pending transactions
Prepaid insurance
Receivable for insurance proceeds
Prepaid expenses and other assets
(57,646)
101,095
39,600
(19,395)
20,205
482
(318)
164
72,360
9,984
27,366
2,828
990
745
7,208
1,425
7,569
Total Other assets
$
251,939
(5) UNSECURED BANK CREDIT FACILITIES
The Company’s borrowings on unsecured bank credit facilities are detailed below:
140,273
(48,249)
92,024
37,181
(16,276)
20,905
496
(251)
245
61,452
9,568
38,352
2,050
990
2,522
2,681
2,828
11,327
244,944
Unsecured bank credit facilities — variable rate, carrying amount
Unamortized debt issuance costs
Unsecured bank credit facilities, net of debt issuance costs
60
December 31,
2023
2022
(In thousands)
$
$
—
(1,520)
(1,520)
170,000
(1,546)
168,454
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Until January 10, 2023, EastGroup had $425,000,000 and $50,000,000 unsecured bank credit facilities with margins over
London Interbank Offered Rate (“LIBOR”) of 77.5 basis points, facility fees of 15 basis points and maturity dates of July 30,
2025. The Company amended and restated these credit facilities effective January 10, 2023, expanding the total capacity on its
unsecured bank credit facilities from $475,000,000 to $675,000,000 and replacing LIBOR with Secured Overnight Financing
Rate (“SOFR”) as the benchmark interest rate.
The Company’s $625,000,000 unsecured bank credit facility, which was increased in January 2023 by $200,000,000 from
$425,000,000, is with a group of 11 banks and has a maturity date of July 30, 2025. The credit facility contains options for two
six-month extensions (at the Company’s election) and an additional $125,000,000 accordion (with agreement by all parties).
The interest rate on each tranche is reset on a monthly basis and as of December 31, 2023, was SOFR plus 76.5 basis points
with an annual facility fee of 15 basis points. As of December 31, 2023, the Company had no variable rate borrowings on this
unsecured bank credit facility and an interest rate of 6.130%. The Company has two standby letters of credit totaling
$2,655,000 pledged on this facility, which reduces borrowing capacity under the credit facility.
The Company’s $50,000,000 unsecured bank credit facility has a maturity date of July 30, 2025, or such later date as designated
by the bank; the Company also has two six-month extensions available if the extension options in the $625,000,000 facility are
exercised. The interest rate is reset on a daily basis and as of December 31, 2023, was SOFR plus 77.5 basis points with an
annual facility fee of 15 basis points. As of December 31, 2023, the interest rate was 6.255% with no outstanding balance.
For both facilities, the margin and facility fee are subject to changes in the Company’s credit ratings. Although the Company’s
current credit rating is Baa2, given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is
based on the BBB+/Baa1 credit ratings level. This favorable pricing level will be retained provided that the Company’s
consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%. The $625,000,000 facility also
includes a sustainability-linked pricing component pursuant to which the applicable interest rate margin is reduced by one basis
point if the Company meets a certain sustainability performance target. This sustainability metric is evaluated annually and was
achieved for the years ended December 31, 2023 and 2022, which allowed for the interest rate reduction in each of the years
subsequent to achieving the metric. The margin was effectively reduced on this unsecured bank credit facility by one basis
point, from 77.5 to 76.5 basis points.
Average unsecured bank credit facilities borrowings were $49,384,000 in 2023, $182,478,000 in 2022 and $95,629,000 in
2021, with weighted average interest rates (excluding amortization of facility fees and debt issuance costs) of 5.68% in 2023,
2.32% in 2022 and 1.01% in 2021. Amortization of facility fees was $1,005,000, $713,000 and $751,000 for 2023, 2022 and
2021, respectively. Amortization of debt issuance costs for the Company’s unsecured bank credit facilities was $1,003,000,
$650,000 and $606,000 for 2023, 2022 and 2021, respectively.
The Company’s unsecured bank credit facilities have certain restrictive covenants, such as maintaining minimum debt service
coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial
debt covenants at December 31, 2023.
(6) UNSECURED DEBT
The Company’s unsecured debt is detailed below:
Unsecured debt - fixed rate, carrying amount (1)
Unamortized debt issuance costs
Unsecured debt, net of debt issuance costs
December 31,
2023
2022
(In thousands)
$
1,680,000
1,695,000
(3,653)
(3,741)
$
1,676,347
1,691,259
(1) These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.
61
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the carrying amount of Unsecured debt follows:
Margin
Interest Rate Maturity Date
2023
2022
(In thousands)
Balance at December 31,
04/01/2023
$
$65 Million Unsecured Term Loan (1)
$50 Million Senior Unsecured Notes
$50 Million Unsecured Term Loan (2)
$60 Million Senior Unsecured Notes
$60 Million Senior Unsecured Notes
$50 Million Unsecured Term Loan (2)
$20 Million Senior Unsecured Notes
$25 Million Senior Unsecured Notes
$50 Million Senior Unsecured Notes
$100 Million Unsecured Term Loan (2)
$40 Million Senior Unsecured Notes
$100 Million Unsecured Term Loan (2) (3)
$75 Million Unsecured Term Loan (2)
$60 Million Senior Unsecured Notes
$100 Million Unsecured Term Loan (2) (4)
$80 Million Senior Unsecured Notes
$75 Million Senior Unsecured Notes
$100 Million Unsecured Term Loan (2)
$100 Million Senior Unsecured Notes
$125 Million Senior Unsecured Notes
$35 Million Senior Unsecured Notes
$150 Million Senior Unsecured Notes
$75 Million Senior Unsecured Notes
$75 Million Senior Unsecured Notes
$75 Million Senior Unsecured Notes
1.10%
Not applicable
0.95%
Not applicable
Not applicable
1.10%
Not applicable
Not applicable
Not applicable
0.95%
Not applicable
0.95%
0.95%
Not applicable
0.95%
Not applicable
Not applicable
1.35%
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
2.31%
3.80%
4.09%
3.46%
3.48%
1.58%
3.80%
3.97%
3.99%
2.10%
3.75%
1.80%
4.00%
3.93%
2.61%
4.27%
3.47%
5.27%
2.61%
2.74%
3.54%
3.03%
2.71%
4.90%
4.95%
08/28/2023
08/30/2024
12/13/2024
12/15/2024
03/18/2025
08/28/2025
10/01/2025
10/07/2025
10/10/2026
12/15/2026
03/25/2027
08/31/2027
04/10/2028
09/29/2028
03/28/2029
08/19/2029
01/13/2030
10/14/2030
06/10/2031
08/15/2031
04/20/2032
10/14/2032
10/12/2033
10/12/2034
—
—
50,000
60,000
60,000
50,000
20,000
25,000
50,000
100,000
40,000
100,000
75,000
60,000
65,000
50,000
50,000
60,000
60,000
50,000
20,000
25,000
50,000
100,000
40,000
100,000
75,000
60,000
100,000
100,000
80,000
75,000
100,000
100,000
125,000
35,000
150,000
75,000
75,000
75,000
80,000
75,000
—
100,000
125,000
35,000
150,000
75,000
75,000
75,000
$ 1,680,000
1,695,000
(1) The interest rates on this unsecured term loan was comprised of LIBOR plus a margin which is subject to a pricing grid for
changes in the Company’s coverage ratings. The Company entered into interest rate swap agreements (further described in Note
12) to convert the loan's LIBOR rates to an effectively fixed interest rate. The interest rate in the table above is the effectively
fixed interest rates for the loan, including the effects of the interest rate swaps, as of March 31, 2023, the payoff date.
(2) The interest rates on these unsecured term loans are comprised of Term SOFR plus a margin which is subject to a pricing grid
for changes in the Company’s coverage ratings. The Company entered into interest rate swap agreements (further described in
Note 12) to convert the loans’ Term SOFR rates to effectively fixed interest rates. The interest rates in the table above are the
effectively fixed interest rates for the loans, including the effects of the interest rate swaps, as of December 31, 2023.
(3) This term loan was amended and refinanced effective March 25, 2022. The margin was reduced by approximately 60 basis
points, changing the effectively fixed rate from 2.39% to 1.80%, and LIBOR was replaced with Term SOFR.
(4) This term loan was refinanced effective September 29, 2023. The margin was reduced by approximately 45 basis points,
changing the effectively fixed rate from 3.06% to 2.61%.
In January 2023, the Company closed a $100,000,000 senior unsecured term loan with a term of seven years and interest only
payments, which bears interest at the annual rate of SOFR plus an applicable margin (1.35% as of December 31, 2023) based
on the Company’s senior unsecured long-term debt rating. The Company also entered into an interest rate swap agreement to
convert the loan’s SOFR rate component to a fixed interest rate for the entire term of the loan providing a total effectively fixed
interest rate of 5.27%.
On March 31, 2023, EastGroup repaid a $65,000,000 senior unsecured term loan with a total effectively fixed interest rate of
2.31%. The loan, which was scheduled to mature on April 1, 2023, was repaid with no penalty.
62
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In August 2023, the Company made a scheduled $50,000,000 principal repayment on its senior unsecured notes with a fixed
interest rate of 3.80%.
In September 2023, the Company closed on the refinance of a $100,000,000 senior unsecured term loan with five years
remaining. The amended term loan provides for interest only payments currently at an interest rate of SOFR plus 95 basis
points, based on the Company’s current credit ratings and consolidated leverage ratio, which is a 45 basis point reduction in the
credit spread compared to the original term loan. The Company has an interest rate swap agreement which converts the loan’s
SOFR rate component to a fixed interest rate for the entire term of the loan, providing a total effectively fixed interest rate of
2.61%.
During the year ended December 31, 2022, EastGroup closed on a total of $525,000,000 of new unsecured debt with a weighted
average effectively fixed interest rate of 3.82%. The Company refinanced a $100,000,000 unsecured term loan, reducing the
interest rate by 60 basis points. EastGroup also repaid a $75,000,000 unsecured term loan with an effectively fixed interest rate
of 3.03%.
During the year ended December 31, 2021, EastGroup closed on a total of $175,000,000 of new unsecured debt with a weighted
average effectively fixed interest rate of 2.40%, refinanced a $100,000,000 unsecured term loan reducing the interest rate by 65
basis points, and repaid a $40,000,000 unsecured term loan with an effectively fixed interest rate of 2.34%.
The Company’s unsecured debt instruments have certain restrictive covenants, such as maintaining debt service coverage and
leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial debt covenants
at December 31, 2023 and 2022.
The Company currently intends to repay its debt obligations, both in the short-term and long-term, through its operating cash
flows, borrowings under its unsecured bank credit facilities, proceeds from new debt (primarily unsecured), and/or proceeds
from the issuance of equity instruments.
Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs (not including
Unsecured bank credit facilities, net of debt issuance costs), as of December 31, 2023 are as follows:
Years Ending December 31,
2024
2025
2026
2027
2028
Thereafter
(In thousands)
$
170,000
145,000
140,000
175,000
160,000
890,000
Total unsecured debt, before amortization of debt issuance costs
$
1,680,000
63
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(7) ACCOUNTS PAYABLE AND ACCRUED EXPENSES
A summary of the Company’s Accounts payable and accrued expenses follows:
Property taxes payable
$
Development costs payable
Retainage payable
Real estate improvements and capitalized leasing costs payable
Interest payable
Dividends payable
Book overdraft (1)
Other payables and accrued expenses
Total Accounts payable and accrued expenses
December 31,
2023
2022
(In thousands)
9,508
29,487
14,992
5,275
8,493
62,393
—
16,189
6,823
21,305
11,011
5,182
9,597
55,952
13,370
13,748
$
146,337
136,988
(1) Represents checks written before the end of the period which have not cleared the bank; therefore, the bank has not yet advanced
cash to the Company. When the checks clear the bank, they will be funded through the Company’s working cash line of credit,
which is included in the Company’s Unsecured bank credit facilities. See Note 1(q).
(8) OTHER LIABILITIES
A summary of the Company’s Other liabilities follows:
Security deposits
Prepaid rent and other deferred income
Operating lease liabilities — Ground leases
Operating lease liabilities — Office leases
Acquired below-market lease intangibles
Accumulated amortization of acquired below-market lease intangibles
Acquired below-market lease intangibles, net of accumulated amortization
Interest rate swap liabilities
Other liabilities
Total Other liabilities
December 31,
2023
2022
(In thousands)
$
37,102
20,070
18,758
2,882
11,451
(5,006)
6,445
2,478
1,680
$
89,415
34,272
17,004
19,906
2,139
10,735
(3,957)
6,778
1,981
1,586
83,666
64
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(9) COMMON STOCK ACTIVITY
The following table presents the common stock activity for the three years ended December 31, 2023:
Shares outstanding at beginning of year
43,575,539
41,268,846
39,676,828
Common stock offerings
4,094,896
393,406
1,551,181
Years Ended December 31,
2023
2022
2021
Common Stock (in shares)
Common stock issued in the purchase of real estate
—
1,868,809
Incentive restricted stock granted
Incentive restricted stock forfeited
Director common stock awarded
Director restricted stock granted
Employee common stock awarded
Stock withheld for tax obligations
57,741
(1,015)
—
4,134
575
71,217
—
161
5,696
2,425
—
66,623
—
4,466
—
—
(31,438)
(35,021)
(30,252)
Shares outstanding at end of year
47,700,432
43,575,539
41,268,846
On October 25, 2023, we established an at-the-market common stock offering program (“ATM program”) pursuant to which
we are able to sell from time to time shares of our common stock having an aggregate gross sales price of up to $750,000,000
(the “Current 2023 ATM Program”). The Current 2023 ATM Program replaces our previous $750,000,000 ATM program (the
“Prior ATM Program”), which was established on December 16, 2022, under which we had sold shares of our common stock
having an aggregate gross sales price of $464,305,000 through October 25, 2023. In addition, we previously established a
$750,000,000 ATM program on December 20, 2019, under which we had sold shares of our common stock having an aggregate
gross sales price of $444,533,000 through December 16, 2022.
In connection with the Current 2023 ATM program, we may sell shares of our common stock through sales agents or through
certain financial institutions acting as forward purchasers whereby, at our discretion, the forward counterparties may borrow
from third parties and subsequently sell shares of our common stock. The use of a forward equity sale agreement allows us to
lock in a share price on the sale of shares of our common stock but defer settling and receiving the proceeds from the sale of
shares until a later date. Additionally, the forward price that we expect to receive upon settlement of an agreement will be
subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward
purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.
The following table presents the common stock issuance activity pursuant to the Company's ATM programs for the years ended
December 31, 2023, 2022 and 2021:
Years Ended December 31,
2023
2022
2021
Common Stock
Issued (1)
(In shares)
Weighted
Average Price
Net Proceeds
(Per share)
(In thousands)
4,094,896 $
170.77 $
691,478
393,406
1,551,181
194.17
176.77
75,375
271,155
(1) Excludes shares of common stock sold on a forward basis as described in the following paragraph.
During the year ended December 31, 2023, we entered into forward equity sale agreements with certain financial institutions
acting as forward purchasers under our Current 2023 ATM program with respect to 406,041 shares of common stock at a
weighted average initial forward price of $183.92 per share. We did not receive any proceeds from the sale of common shares
by the forward purchasers at the time we entered into forward equity sale agreements. As of December 31, 2023, we had not
settled any of the outstanding forward equity sale agreements by issuing shares of our common stock. During the years ended
December 31, 2022 and December 31, 2021, we did not enter into any forward equity sale agreements under our ATM
programs.
65
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023, approximately $440,322,000 of common stock remains available to be sold under the Current 2023
ATM Program. Future sales, if any, will depend on a variety of factors, including among others, market conditions, the trading
price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding
available to us.
(10) STOCK-BASED COMPENSATION
Equity Incentive Plan
In April 2013, the Board of Directors adopted the EastGroup Properties, Inc. 2013 Equity Incentive Plan (the “2013 Equity
Plan”) upon the recommendation of the Compensation Committee of the Company's Board of Directors (the “Committee”); the
2013 Equity Plan was approved by the Company’s stockholders and became effective May 29, 2013. The 2013 Equity Plan
was further amended by the Board of Directors in March 2017. The 2013 Equity Plan permitted the grant of awards to
employees and directors with respect to 2,000,000 shares of common stock.
In April 2023, the Board of Directors adopted the EastGroup Properties, Inc. 2023 Equity Incentive Plan (the “2023 Equity
Plan”) upon the recommendation of the Committee; the 2023 Equity Plan was approved by the Company’s stockholders and
became effective May 25, 2023. The 2023 Equity Plan permits the grant of awards to employees and directors with respect to
1,500,000 shares of common stock.
There were 1,484,116 shares available for grant under the 2023 Equity Plan as of December 31, 2023, and there were 1,422,437
and 1,477,241 shares available for grant under the 2013 Equity Plan as of December 31, 2022 and 2021, respectively.
Typically, the Company issues new shares to fulfill stock grants.
Employee Equity Awards
The Company’s restricted stock program is designed to provide incentives for management to achieve goals established by the
Committee. The awards act as a retention device, as they vest over time, allowing participants to benefit from dividends on
shares as well as potential stock appreciation. Equity awards align management’s interests with the long-term interests of
shareholders.
The Committee approves long-term and annual equity compensation awards for the Company’s executive officers. The vesting
periods of the Company’s restricted stock plans vary, as determined by the Committee. Restricted stock is granted to executive
officers subject to both continued service and the satisfaction of certain annual performance goals and multi-year market
conditions as determined by the Committee.
Long-term equity compensation awards
The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming
three-year period and the employee’s continued service as of the vesting dates. The total shareholder return component is
subject to bright-line tests that compare the Company’s total shareholder return to the Nareit Equity Index and to the member
companies of the Nareit industrial index.
The following table summarizes the assumptions used in the Monte Carlo simulation pricing model used to determine the grant
date fair value of the multi-year market conditions component of the long-term compensation awards for 2023, 2022 and 2021:
Valuation date
Risk-free interest rate
Expected share price volatility for the Company
Expected share price volatility for peer group companies - low end of range
Expected share price volatility for peer group companies - high end of range
Expected dividend yield
Number of simulation paths
Grant date fair value (in thousands)
2023 Award
2022 Award
2021 Award
3/2/2023
3/3/2022
2/25/2021
4.68 %
31.01 %
27.31 %
51.26 %
3.02 %
1.64 %
30.01 %
26.32 %
50.10 %
2.27 %
0.39 %
30.51 %
26.87 %
54.25 %
2.27 %
1,000,000
4,885
$
1,000,000
2,912
1,000,000
2,941
The risk-free interest rate is based on zero coupon risk-free rates matching the three-year time period of the market performance
period. The expected share price volatilities are based on a mix of the historical and implied volatilities of the Company and the
66
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
peer group companies. The expected dividend yield is based on the expected annual cash dividend as of the valuation date
divided by the Company’s stock price on the valuation date. These market based awards are expensed on a straight-line basis
over the requisite service period (75% vests at the end of the three-year performance period and 25% vests the following year).
The following table presents the total shareholder return component of the long-term compensation awards for the four years
ended December 31, 2023:
2023 Award
2022 Award
2021 Award
2020 Award
Grant date
Performance period
3/2/2023
3/3/2022
2/25/2021
3/6/2020
1/1/23 - 12/31/25 1/1/22 - 12/31/24 1/1/21 - 12/31/23 1/1/20 - 12/31/22
Range of earnable shares - low end of range
Range of earnable shares - high end of range
Shares determined
—
44,725
—
27,212
—
36,400
N/A (1)
N/A (1)
N/A (1)
—
25,261
21,050
(1) The performance conditions for this award have not yet been satisfied and the number of shares have not yet been determined.
The long term awards subject only to continuing employment are expensed on a straight-line basis over the requisite service
period (25% vests in each of the following four years). The following table presents the service only component of the long-
term compensation awards for the four years ended December 31, 2023:
Grant date
Shares granted
Grant date share price
2023 Award
2022 Award
2021 Award
2020 Award
3/2/2023
3/3/2022
2/25/2021
3/6/2020
9,583
165.83
$
5,830
193.54
7,801
138.93
7,217
131.36
Annual equity compensation awards
The annual equity compensation awards include components based on certain annual Company performance measures and
individual annual performance goals over the upcoming year. The certain Company performance measures for 2023 are: (i)
funds from operations “FFO” per share, (ii) cash same property net operating income change, (iii) debt-to-EBITDAre ratio, and
(iv) fixed charge coverage. The Company begins recognizing expense for its estimate of the shares that could be earned
pursuant to these awards on the grant date; the expense is adjusted to estimated performance levels during the performance
period and to actual upon the determination of the awards. The shares are expensed using the graded vesting attribution method
which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite
service period (34% vests at the end of the one year performance period and 33% vests in each of the following two years).
The following table presents the Company performance measures component of the annual equity compensation awards for the
three years ended December 31, 2023:
Grant date
Performance period
Range of earnable shares - low end of range
Range of earnable shares - high end of range
Shares determined
Grant date share price
2023 Award
2022 Award
2021 Award
3/2/2023
3/3/2022
2/25/2021
1/1/23 - 12/31/23 1/1/22 - 12/31/22 1/1/21 - 12/31/21
—
21,438
N/A (1)
$
165.83
—
13,289
12,761
193.54
—
19,052
18,798
138.93
(1) The performance conditions for this award have not yet been satisfied and the number of shares have not yet been determined.
Any shares issued pursuant to the individual annual performance goals are determined by the Committee in its discretion
following the performance period. The Company begins recognizing the expense for the shares on the grant date and expenses
on a straight-line basis over the remaining service period (34% vests at the end of the one year performance period and 33%
vests in each of the following two years).
67
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the individual performance goals component of the annual equity compensation awards for the
three years ended December 31, 2023:
Grant date
Performance period
Range of earnable shares - low end of range
Range of earnable shares - high end of range
Shares determined
Grant date share price
2023 Award
2022 Award
2021 Award
N/A (1)
2/15/2023
2/16/2022
1/1/23 - 12/31/23 1/1/22 - 12/31/22 1/1/21 - 12/31/21
—
5,358
N/A (1)
N/A (1)
—
3,323
3,022
$
168.90
—
4,756
4,374
190.89
(1) The performance conditions for this award have not yet been satisfied and the grant date and number of shares have not yet
been determined.
Equity compensation is also awarded to the Company’s non-executive officers, which are subject to service only conditions and
expensed on a straight-line basis over the requisite service period (20% vests in each of the following five years). The total
compensation expense is based upon the fair market value of the shares on the grant date. The following table presents the
compensation awards to non-executive officers for the three years ended December 31, 2023:
Grant date
Shares granted
Grant date share price
2023 Award
2022 Award
2021 Award
6/20/2023
6/20/2022
7/7/2021
11,325
172.70
$
11,225
148.48
9,200
168.35
The Committee has adopted an Equity Award Retirement Policy (the “retirement policy”) which allows for accelerated vesting
of unvested shares for retirement-eligible employees (defined as employees who meet certain age and years of service
requirements). In order to qualify for accelerated vesting upon retirement, the eligible employees must provide required
notification under the retirement policy and must retire from the Company. The Company has adjusted its stock-based
compensation expense to accelerate the recognition of expense for retirement-eligible employees.
Stock-based compensation cost for employees was $11,013,000, $10,236,000 and $9,136,000 for 2023, 2022 and 2021,
respectively, of which $2,812,000, $2,510,000 and $2,336,000 were capitalized as part of the Company’s development costs for
the respective years. As of December 31, 2023, there was $4,219,000 of unrecognized compensation cost related to unvested
restricted stock compensation for employees and directors that is expected to be recognized over a weighted average period of
2.8 years.
During the restricted period for awards no longer subject to contingencies, dividends are accrued based upon the number of
shares expected to be awarded. As of December 31, 2023, 2022 and 2021, accrued dividends on unvested restricted stock were
$1,921,000, $1,610,000 and $1,585,000, respectively. Of the shares that vested in 2023, 2022 and 2021, 31,254 shares, 34,251
shares and 30,252 shares, respectively, were withheld by the Company to satisfy the tax obligations for those employees who
elected this option as permitted under the applicable equity plan.
68
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to employees with the related
weighted average grant date fair value share prices for 2023, 2022 and 2021. As of the grant dates, the aggregate fair value of
shares that were granted during 2023, 2022 and 2021 was $8,562,000, $8,654,000 and $7,682,000, respectively. As of the
vesting dates, the aggregate fair value of shares that vested during 2023, 2022 and 2021 was $11,304,000, $17,124,000 and
$10,322,000, respectively.
Restricted Stock Activity:
Shares
Years Ended December 31,
2023
2022
2021
Weighted
Average
Grant Date
Fair Value
Shares
Weighted
Average
Grant Date
Fair Value
Shares
Weighted
Average
Grant Date
Fair Value
Unvested at beginning of year
Granted (1) (2)
Forfeited
Vested
Unvested at end of year
96,708 $
131.79
106,056 $
116.37
113,125 $
100.86
57,741
(1,015)
(73,152)
80,282
148.28
144.79
120.87
153.43
71,217
121.52
66,623
115.30
—
(80,565)
96,708
—
102.42
131.79
—
(73,692)
106,056
—
91.59
116.37
(1) Includes shares granted in prior years for which performance conditions have been satisfied and the number of shares have been
determined.
(2) Does not include the restricted shares that may be earned if the performance goals established in 2021 and 2022 for long-term
performance and in 2023 for annual and long-term performance are achieved. Depending on the actual level of achievement of the
goals at the end of the open performance periods, the number of shares earned could range from zero to 135,133.
Following is a vesting schedule of the total unvested shares for employees as of December 31, 2023:
Unvested Shares Vesting Schedule
Number of Shares
2024
2025
2026
2027
2028
Total Unvested Shares
41,741
19,510
9,983
6,783
2,265
80,282
Directors Equity Awards
The Board of Directors has adopted a policy under the 2023 Equity Plan pursuant to which awards will be made to non-
employee Directors. The current policy provides that the Company shall automatically award an annual restricted share award
to each non-employee Director who has been elected or re-elected as a member of the Board of Directors at the Annual
Meeting. The number of shares shall be equal to $110,000 divided by the fair market value of a share on the date of such
election. If a non-employee Director is elected or appointed to the Board of Directors other than at an Annual Meeting of the
Company, the annual restricted share award shall be pro rated. The restricted shares vest in full on the earlier of the one-year
anniversary of the date of grant or the next annual meeting of shareholders following the date of grant, subject to the non-
employee director’s continued service on the Board through such vesting date, subject to certain exceptions. The shares are
expensed on a straight-line basis over the service period. The policy also provides that each new non-employee Director
appointed or elected will receive an automatic award of restricted shares of Common Stock on the effective date of election or
appointment equal to $25,000 divided by the fair market value of the Company’s Common Stock on such date. These restricted
shares will vest 25% per year over a four-year period upon the performance of future service as a Director, subject to certain
exceptions. The shares are expensed on a straight-line basis over the service period.
Directors were granted 4,134 shares and 5,568 shares of common stock as annual restricted share awards during 2023 and 2022,
respectively. Directors were issued 4,466 shares of common stock as annual retainer awards during 2021.
Stock-based compensation expense for directors was $764,000, $566,000 and $711,000 for 2023, 2022 and 2021, respectively.
69
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to directors with the related
weighted average grant date fair value share prices for 2023, 2022 and 2021. As of the grant dates, the aggregate fair value of
shares that were granted during 2023, 2022 and 2021 was $661,000, $906,000 and zero, respectively. As of the vesting dates,
the fair value of shares that vested during 2023, 2022 and 2021 was $904,000, $8,000 and $21,000, respectively.
Restricted Stock Activity:
Shares
Years Ended December 31,
2023
2022
2021
Weighted
Average
Grant Date
Fair Value
Shares
Weighted
Average
Grant Date
Fair Value
Shares
Weighted
Average
Grant Date
Fair Value
Unvested at beginning of year
5,800 $
158.31
156 $
120.39
278 $
112.45
Granted
Forfeited
Vested
Unvested at end of year
4,134
—
(5,652)
4,282
159.79
—
158.00
160.15
5,696
—
(52)
5,800
159.00
—
120.39
158.31
—
—
—
—
(122)
156
102.30
120.39
(11) COMPREHENSIVE INCOME
Total Comprehensive Income is comprised of net income plus all other changes in equity from non-owner sources and is
presented on the Consolidated Statements of Income and Comprehensive Income. The components of Accumulated other
comprehensive income (loss) for 2023, 2022 and 2021 are presented in the Company’s Consolidated Statements of Changes in
Equity and are summarized below. See Note 12 for information regarding the Company’s interest rate swaps.
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Balance at beginning of year
Other comprehensive income (loss) - interest rate swaps
Balance at end of year
Years Ended December 31,
2023
2022
2021
(In thousands)
$
$
36,371
(11,483)
24,888
1,302
35,069
36,371
(10,752)
12,054
1,302
(12) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company
principally manages its exposures to a wide variety of business and operational risks through management of its core business
activities. The Company manages economic risk, including interest rate, liquidity and credit risk primarily by managing the
amount, sources and duration of its debt funding and, to a limited extent, the use of derivative instruments.
Specifically, the Company has entered into derivative instruments to manage exposures that arise from business activities that
result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The
Company’s derivative instruments, described below, are used to manage differences in the amount, timing and duration of the
Company’s known or expected cash payments principally related to certain of the Company’s borrowings.
The Company’s objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using
interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a
counterparty in exchange for the Company making fixed rate payments over the life of the agreements without exchange of the
underlying notional amount.
As of December 31, 2023, EastGroup had seven interest rate swaps outstanding, all of which are used to hedge the variable cash
flows associated with unsecured loans. All of the Company’s interest rate swaps convert the related loans’ SOFR rate
components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly
effective.
70
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Other comprehensive
income (loss) and are subsequently reclassified into earnings through Interest expense as interest payments are made or received
on the Company’s variable rate debt in the period that the hedged forecasted transaction affects earnings. The Company
estimates that an additional $14,556,000 will be reclassified from Other comprehensive income (loss) as a decrease to Interest
expense over the next twelve months.
The Company’s valuation methodology for over-the-counter (“OTC”) derivatives is to discount cash flows based on SOFR
market data. Uncollateralized or partially-collateralized trades include appropriate economic adjustments for funding costs and
credit risk. The Company calculates its derivative valuations using mid-market prices.
On June 30, 2023, LIBOR’s administrator, ICE Benchmark Administration (IBA) ceased publication of the different tenors of
USD LIBOR. This cessation follows an announcement by the IBA’s regulator, the Financial Conduct Authority, in March 2021
that LIBOR would no longer be a representative rate beyond this date. In the U.S., the Alternative Reference Rates Committee,
which was convened by the Federal Reserve Board and the Federal Reserve Bank of New York, recommended SOFR plus a
recommended spread adjustment as its preferred alternative to USD-LIBOR. As a result, all of the Company’s remaining
borrowings which were LIBOR-based have been amended to modify the index from LIBOR to SOFR. Concurrently, the related
swaps were amended to reference SOFR rather than LIBOR. The transition did not have a material impact on the Company’s
consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform related activities that
impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as
reference rate reform activities occur. The Company elected to apply the hedge accounting expedients related to probability and
the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged
transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserved the
presentation of derivatives consistent with past presentation. In December 2022, the FASB issued ASU 2022-06, Deferral of
the Sunset Date of Topic 848, which was issued to defer the sunset date of Topic 848 to December 31, 2024. ASU 2022-06 is
effective immediately for all companies. ASU 2022-06 had no impact on the Company’s consolidated financial statements for
the year ended December 31, 2023.
As of December 31, 2023 and 2022, the Company had the following outstanding interest rate derivatives that are designated as
cash flow hedges of interest rate risk:
Interest Rate Derivative
Notional Amount as of December 31, 2023
Notional Amount as of December 31, 2022
(In thousands)
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
Interest Rate Swap
—
$100,000
$100,000
$50,000
$100,000
$75,000
$50,000
$100,000
$65,000
$100,000
$100,000
$50,000
$100,000
$75,000
$50,000
$100,000
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the
Consolidated Balance Sheets as of December 31, 2023 and 2022. See Note 16 for additional information on the fair value of
the Company’s interest rate swaps.
Derivatives
As of December 31, 2023
Derivatives
As of December 31, 2022
Balance Sheet Location
Fair Value
Balance Sheet Location
Fair Value
(In thousands)
Derivatives designated as cash flow hedges:
Interest rate swap assets
Interest rate swap liabilities
Other assets
Other liabilities
$
27,366 Other assets
2,478 Other liabilities
$
38,352
1,981
71
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of
Income and Comprehensive Income for the years ended December 31, 2023, 2022 and 2021:
Years Ended December 31,
2023
2022
2021
(In thousands)
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS
Interest Rate Swaps:
Amount of income recognized in Other comprehensive income (loss) on
derivatives
Amount of (income) loss reclassified from Accumulated other
comprehensive income (loss) into Interest expense
$
6,319
37,563
7,747
(17,802)
(2,494)
4,307
See Note 11 for additional information on the Company’s Accumulated other comprehensive income (loss) resulting from its
interest rate swaps.
Derivative financial agreements expose the Company to credit risk in the event of non-performance by the counterparties under
the terms of the interest rate hedge agreements. The Company believes it minimizes the credit risk by transacting with financial
institutions the Company regards as credit-worthy.
The Company has an agreement with its derivative counterparties containing a provision stating that the Company could be
declared in default on its derivative obligations if the Company defaults on any of its indebtedness, including default where
repayment of the indebtedness has not been accelerated by the lender. As of December 31, 2023, we had not posted any
collateral related to these agreements and were not in breach of any of the provisions of these agreements. If the Company had
breached any of these provisions, it would be required to settle its obligations under the agreements at their termination value.
(13) EARNINGS PER SHARE
Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:
BASIC EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO
EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Numerator – net income attributable to common stockholders
Denominator – weighted average shares outstanding - Basic
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE
TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Years Ended December 31,
2023
2022
2021
(In thousands)
$ 200,491
45,224
186,182
42,599
157,557
40,255
Numerator – net income attributable to common stockholders
$ 200,491
186,182
157,557
Denominator:
Weighted average shares outstanding - Basic
Effect of dilutive securities
Diluted weighted average shares outstanding - Diluted
(14) DEFINED CONTRIBUTION PLAN
45,224
107
45,331
42,599
113
42,712
40,255
122
40,377
EastGroup maintains a 401(k) plan for its employees. The Company makes matching contributions of 50% of the employee’s
contribution (limited to 10% of compensation as defined by the plan) and may also make annual discretionary
contributions. The Company’s total expense for this plan was $1,246,000, $1,158,000 and $1,106,000 for 2023, 2022 and
2021, respectively.
72
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(15) LEGAL MATTERS
The Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened
against the Company or its properties, other than routine litigation arising in the ordinary course of business.
(16) FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for
using fair value to measure financial assets and liabilities. The Codification requires disclosure of the level within the fair value
hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical
assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar
instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the
market (Level 3).
The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in
accordance with ASC 820 at December 31, 2023 and 2022.
December 31,
2023
2022
Carrying Amount (1)
Fair Value
Carrying Amount (1)
Fair Value
(In thousands)
$
40,263
27,366
40,263
27,366
56
38,352
56
38,352
Financial Assets:
Cash and cash equivalents
Interest rate swap assets
Financial Liabilities:
Unsecured bank credit facilities - variable rate (2)
Unsecured debt (2)
Interest rate swap liabilities
—
—
1,680,000
1,548,655
2,478
2,478
170,000
1,695,000
1,981
169,684
1,548,221
1,981
(1) Carrying amounts shown in the table are included in the Consolidated Balance Sheets under the indicated captions, except as
indicated in the notes below.
(2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Notes 5 and 6 for additional information).
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when
purchased to be cash equivalents. The carrying amounts approximate fair value due to the short maturity of those instruments.
Interest rate swap assets (included in Other assets on the Consolidated Balance Sheets): The instruments are recorded at fair
value based on models using inputs, such as interest rate yield curves, and LIBOR or SOFR swap curves, observable for
substantially the full term of the contract (Level 2 input). See Note 12 for additional information on the Company’s interest rate
swaps.
Unsecured bank credit facilities: The fair value of the Company’s unsecured bank credit facilities is estimated by discounting
expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs.
Unsecured debt: The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates
currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2
input), excluding the effects of debt issuance costs.
Interest rate swap liabilities (included in Other liabilities on the Consolidated Balance Sheets): The instruments are recorded
at fair value based on models using inputs, such as interest rate yield curves, and LIBOR or SOFR swap curves, observable for
substantially the full term of the contract (Level 2 input). See Note 12 for additional information on the Company’s interest rate
swaps.
73
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(17) SUBSEQUENT EVENTS
Subsequent to December 31, 2023, EastGroup partially settled the outstanding forward equity sale agreements under our
Current 2023 ATM program by issuing 272,342 shares of common stock in exchange for net proceeds of $49,364,000, based on
a weighted average forward price of $181.26 per share at settlement.
In January 2024, the Company acquired Brightstar Land, which contains 34.3 acres of development land in Atlanta for
approximately $3,200,000. This site will accommodate the planned future development of two buildings containing
approximately 314,000 square feet.
Also in January 2024, EastGroup acquired Spanish Ridge Industrial Park in Las Vegas, which includes three recently developed
business distribution buildings totaling 231,000 square feet, for approximately $55,000,000. The buildings are currently 100%
leased.
74
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
Description
Real Estate Properties (c):
Industrial:
FLORIDA
Tampa
Westport Commerce Center
$
Benjamin Distribution Center 1 & 2
Benjamin Distribution Center 3
Palm River Center
Palm River North 1 & 3
Palm River North 2
Palm River South 1
Palm River South 2
Walden Distribution Center 1
Walden Distribution Center 2
Oak Creek Distribution Center 1
Oak Creek Distribution Center 2
Oak Creek Distribution Center 3
Oak Creek Distribution Center 4
Oak Creek Distribution Center 5
Oak Creek Distribution Center 6
Oak Creek Distribution Center 7
Oak Creek Distribution Center 8
Oak Creek Distribution Center 9
Oak Creek Distribution Center A
Oak Creek Distribution Center B
Oak Creek Distribution Center C Land
Airport Commerce Center
Westlake Distribution Center
Expressway Commerce Center 1
Expressway Commerce Center 2
980
843
407
1,190
1,005
634
655
655
337
465
1,109
647
439
682
724
642
740
843
618
185
227
355
1,257
1,333
915
1,013
3,800
3,963
1,503
4,625
4,688
4,418
3,187
—
3,318
3,738
6,126
3,603
—
6,472
—
—
—
—
—
—
—
—
4,012
6,998
5,346
3,247
8,244
6,111
2,312
8,485
8,177
4,932
4,340
5,378
5,201
5,507
8,035
5,802
3,503
7,541
5,891
5,675
6,467
6,100
5,032
1,552
1,592
1,291
5,221
9,943
7,126
4,475
980
883
407
1,190
1,005
634
655
655
337
465
1,109
647
556
682
916
812
740
1,051
781
185
227
355
1,257
1,333
915
1,013
4,444
2,188
809
3,860
3,489
514
1,153
5,378
1,883
1,769
1,909
2,199
3,620
1,069
6,083
5,845
6,467
6,308
5,195
1,552
1,592
1,291
1,209
2,945
1,780
1,228
75
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,224
6,994
2,719
9,675
9,182
5,566
4,995
6,033
5,538
5,972
9,144
6,449
4,059
8,223
6,807
6,487
7,207
7,151
5,813
1,737
1,819
1,646
6,478
11,276
8,041
5,488
5,821
4,715
1,862
6,160
5,669
3,859
2,426
3,046
2,952
3,769
5,375
3,659
1,718
4,148
3,206
3,024
1,431
1,657
2,235
737
763
79
3,511
7,142
4,512
2,773
1994
1997
1999
1983/87
1996
1988
1997/98
1990/97/98
1998
1997/98
2000
2000
1997/98
1998
1998
2003
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
1998
1998
2002
2003
2000
1999
2005
2006
2001
1998
1998
2001
2007
2001
2007
2008
2017
2015
2009
2008
2008
n/a
1998
1998/99
2004
2001
Description
Silo Bend Distribution Center
Tampa East Distribution Center
Tampa West Distribution Center
Madison Distribution Center
Madison Distribution Center 2 & 3
Madison Distribution Center 4 & 5
Grand Oaks 75 Business Center 1
Grand Oaks 75 Business Center 2
Grand Oaks 75 Business Center 3
Grand Oaks 75 Business Center 4
Orlando
Chancellor Center
Exchange Distribution Center 1
Exchange Distribution Center 2
Exchange Distribution Center 3
Sunbelt Distribution Center
John Young Commerce Center 1
John Young Commerce Center 2
Sunport Center 1
Sunport Center 2
Sunport Center 3
Sunport Center 4
Sunport Center 5
Sunport Center 6
Southridge Commerce Park 1
Southridge Commerce Park 2
Southridge Commerce Park 3
Southridge Commerce Park 4
Southridge Commerce Park 5
Southridge Commerce Park 6
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
4,131
791
2,139
495
624
565
3,572
2,589
1,767
2,334
291
603
300
320
1,472
497
512
555
597
642
642
750
672
373
342
547
506
382
571
27,497
4,758
8,502
2,779
—
—
12,979
10,226
—
—
1,711
2,414
945
997
5,745
2,444
3,613
1,977
3,271
3,121
2,917
2,509
—
—
—
—
—
—
—
6,251
808
2,057
575
7,309
8,462
373
2,379
9,890
16,976
592
2,733
538
547
7,173
1,812
736
1,276
2,288
1,320
2,339
4,104
3,781
5,574
4,865
5,859
5,051
4,832
6,252
4,132
791
2,140
495
624
565
3,572
2,589
1,770
2,338
291
603
300
320
33,747
5,566
10,558
3,354
7,309
8,462
13,352
12,605
9,887
16,972
2,303
5,147
1,483
1,544
1,472
12,918
4,256
4,349
3,253
5,559
4,441
5,256
6,613
3,781
5,574
4,865
5,859
5,051
4,832
6,252
497
512
555
597
642
642
750
672
373
342
547
506
382
571
76
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
37,879
6,357
12,698
3,849
7,933
9,027
16,924
15,194
11,657
19,310
2,594
5,750
1,783
1,864
12,986
2,357
4,019
1,376
2,107
2,451
2,212
1,765
760
432
1,713
4,058
1,078
1,081
2011
2011
2011
2012
2012
2012
2019
2019
2019
2019
1987/90
1984
1975/93/94
2007
2015
2016
2017
2019
2021
2022
1996/97
1996/97
1994
2002
2002
1975
1976
1980
1974/87/97/9
8
14,390
10,489
1989/97/98
4,753
4,861
3,808
6,156
5,083
5,898
7,363
4,453
5,947
5,207
6,406
5,557
5,214
6,823
3,009
3,247
2,197
4,282
3,059
3,547
3,629
2,029
3,604
2,846
3,078
2,679
2,786
2,988
1997/98
1997/98
1998
1999
1999
1999
1999
1999
1999
2003
2003
2003
2003
2003
2003
1999
1999
2001
2002
2004
2005
2006
2006
2007
2007
2006
2006
2007
Description
Southridge Commerce Park 7
Southridge Commerce Park 8
Southridge Commerce Park 9
Southridge Commerce Park 10
Southridge Commerce Park 11
Southridge Commerce Park 12
Horizon Commerce Park 1
Horizon Commerce Park 2
Horizon Commerce Park 3
Horizon Commerce Park 4
Horizon Commerce Park 5
Horizon Commerce Park 6
Horizon Commerce Park 7
Horizon Commerce Park 8 & 9
Horizon Commerce Park 10
Horizon Commerce Park 11
Horizon Commerce Park 12
Horizon West 1
Horizon West 2 & 3
Horizon West 4
Jacksonville
Deerwood Distribution Center
Phillips Distribution Center
Lake Pointe Business Park
Ellis Distribution Center
Westside Distribution Center
Beach Commerce Center
Interstate Distribution Center
Flagler Center
Ft. Lauderdale/Palm Beach area
Linpro Commerce Center
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
520
531
468
414
513
2,025
991
1,111
991
1,097
1,108
1,099
962
1,590
846
1,101
1,416
1,326
2,895
4,047
1,147
1,375
3,442
540
2,011
476
1,879
7,317
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,799
2,961
6,450
7,513
15,374
1,899
5,700
14,912
6,976
6,739
6,486
4,937
5,975
17,364
6,927
7,763
6,652
8,626
8,642
11,231
7,669
16,652
6,623
9,892
10,636
11,076
16,024
23,956
6,765
6,154
11,873
4,477
11,524
1,121
2,454
1,312
520
531
468
414
513
2,025
991
1,111
991
1,097
1,108
1,099
962
1,590
846
1,101
1,416
1,326
2,895
4,047
1,147
1,375
3,442
540
2,011
476
1,879
7,317
6,976
6,739
6,486
4,937
5,975
17,364
6,927
7,763
6,652
8,626
8,642
11,231
7,669
16,652
6,623
9,892
10,636
11,076
16,024
23,956
8,564
9,115
18,323
11,990
26,898
3,020
8,154
16,224
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7,496
7,270
6,954
5,351
6,488
19,389
7,918
8,874
7,643
9,723
9,750
12,330
8,631
18,242
7,469
10,993
12,052
12,402
18,919
28,003
9,711
10,490
21,765
12,530
28,909
3,496
10,033
23,541
3,516
2,885
2,828
1,663
2,163
7,435
2,303
2,476
1,797
2,641
2,159
2,066
2,156
2,325
1,262
1,616
2,391
209
1,385
677
5,386
6,597
14,976
6,771
2003
2003
2003
2003
2003
2005
2008
2008
2008
2008
2008
2008
2008
2008
2009
2009
2009
2020
2020
2020
1989
1994
1993
1997
2008
2008
2012
2012
2012
2008
2014
2014
2016
2015
2017
2019
2017
2019
2018
2019
2017
2023
2021
2022
1978
1984/95
1986/87
1977
16,934
1997/2008
1984/85
1,887
5,506
3,984
2000
2005
2000
1990
2016
1997 & 2005
613
2,243
4,305
616
6,545
—
7,161
5,224
1996
1986
77
Description
Lockhart Distribution Center
Interstate Commerce Center
Executive Airport Distribution Ctr
Sample 95 Business Park
Blue Heron Distribution Center
Blue Heron Distribution Center 2
Blue Heron Distribution Center 3
Weston Commerce Park
Fort Myers
SunCoast Commerce Center 1
SunCoast Commerce Center 2
SunCoast Commerce Center 3
SunCoast Commerce Center 4
SunCoast Commerce Center 5
SunCoast Commerce Center 6
SunCoast Commerce Center 7
SunCoast Commerce Center 8
SunCoast Commerce Center 10
SunCoast Commerce Center 11
SunCoast Commerce Center 12
Miami
Gateway Commerce Park 1
Gateway Commerce Park 3
Gateway Commerce Park 4
Gateway Commerce Park 5
CALIFORNIA
San Francisco area
Wiegman Distribution Center 1
Wiegman Distribution Center 2
Huntwood Distribution Center
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
—
485
1,991
2,202
975
1,385
450
4,163
911
911
1,720
1,733
1,511
1,537
1,533
1,533
732
785
785
5,746
5,491
4,711
5,746
2,197
2,579
3,842
3,489
2,652
4,857
8,785
3,626
4,222
—
9,951
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,788
4,316
15,368
—
485
1,991
2,202
975
1,385
450
4,163
928
928
1,763
1,762
1,594
1,594
1,533
1,533
732
785
785
5,746
3,176
4,711
5,357
2,308
2,579
3,842
3,596
2,208
6,633
5,199
3,219
2,267
2,995
2,014
5,431
5,533
7,292
7,705
6,880
7,139
7,175
6,851
12,565
9,038
7,831
17,785
13,086
19,502
18,255
3,338
867
4,450
78
7,085
4,860
11,490
13,984
6,845
6,489
2,995
11,965
5,414
5,516
7,249
7,676
6,797
7,082
7,175
6,851
12,565
9,038
7,831
17,785
15,401
19,502
18,644
12,015
5,183
19,818
2,794
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,879
5,345
13,481
16,186
7,820
7,874
3,445
16,128
6,342
6,444
9,012
9,438
8,391
8,676
8,708
8,384
13,297
9,823
8,616
23,531
18,577
24,213
24,001
14,323
7,762
23,660
5,738
3,294
6,653
1997
1998
2001
10,309
1996/98
1986
1988
2004/06
1990/99
4,806
4,093
1,458
2,583
2,312
2,582
3,156
1,846
1,506
1,197
686
1,096
24
299
290
3,719
724
1,692
3,576
8,405
1,520
14,420
1999
2004
2004
2016
2005
2005
2006
2006
2006
2006
2006
2006
2020
2020
2020
2016
2016
2016
2016
1996
2012
1996
1986
1988
2009
1998
2008
2007
2008
2017
2019
2019
2020
2020
2023
2023
2022
2018
2022
2020
2019
1986/87
1998
1988
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
893
259
1,438
6,632
7,027
2,136
3,191
3,161
1,174
7,261
12,488
21,317
17,984
18,033
2,004
7,058
9,513
36,362
36,679
9,792
12,993
16,885
2,437
33,833
27,259
10,635
15,344
10,602
11,392
11,498
643
2,006
1,606
2,885
1,636
2,544
3,761
10,230
—
1,674
16,180
2,573
8,025
4,103
5,274
4,900
10,175
5,751
12,373
3,012
3,465
11,140
1,023
2,691
7
—
523
14
—
34
—
934
462
2
500
411
934
792
4,140
1,276
3,153
1,612
2,151
755
893
731
1,438
6,632
7,027
2,136
3,191
3,161
1,174
7,261
12,488
21,317
17,984
18,033
11,392
643
2,006
1,606
2,885
1,636
2,544
3,761
5,056
10,230
(140)
682
803
—
1,674
16,180
3,027
9,277
9,520
36,362
37,202
9,806
12,993
16,919
2,437
34,767
27,721
10,637
15,844
11,013
12,432
3,365
12,165
5,379
8,427
6,512
12,326
6,506
17,429
2,872
4,147
11,943
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,920
10,008
10,958
42,994
44,229
11,942
16,184
20,080
3,611
42,028
40,209
31,954
33,828
29,046
23,824
4,008
14,171
6,985
11,312
8,148
14,870
10,267
27,659
2,872
5,821
28,123
2,288
5,978
406
1,733
1,671
459
685
759
129
1,520
1,214
566
754
762
2,133
2,557
8,049
3,585
6,197
3,996
10,346
1,463
12,503
2,859
2,515
1,257
1997
1999
2022
2022
2022
2022
2022
2022
2022
2022
2022
2022
2022
2022
2018
1996
1996
1999
1996
1997
1998
2014
1998
2007
1998
2020
1978
1974/87
1966
2005
2001
1998
1979
2007
2000
1998
1983
1971
1986
1991
1988
1980
1977
1999
1966/90
1996/97
1980
1984
1959
1992
1999
2006
2,465
11,627
8,598
2,465
20,225
—
22,690
14,823
1998
1978/81/87
Description
San Clemente Distribution Center
Yosemite Distribution Center
6th Street Business Center
Benicia Distribution Center 1
Benicia Distribution Center 2
Benicia Distribution Center 3
Benicia Distribution Center 4
Benicia Distribution Center 5
Laura Alice Business Center
Preston Distribution Center
Sinclair Distribution Center
Transit Distribution Center
Whipple Business Center
Zephyr Distribution Center
Los Angeles area
Eucalyptus Distribution Center
Kingsview Industrial Center
Dominguez Distribution Center
Main Street Distribution Center
Walnut Business Center
Washington Distribution Center
Chino Distribution Center
Ramona Distribution Center
Industry Distribution Center 1
Industry Distribution Center 3
Chestnut Business Center
Rancho Distribution Center
Fresno
Shaw Commerce Center
San Diego
Eastlake Distribution Center
3,046
6,888
3,935
3,046
10,823
—
13,869
6,736
1997
1989
79
Description
Miramar Land
Ocean View Corporate Center
Rocky Point Distribution Center 1
Rocky Point Distribution Center 2
Siempre Viva Distribution Center 1
Siempre Viva Distribution Center 2
Siempre Viva Distribution Center 3-6
Speed Distribution Center
Sacramento
Cebrian Distribution Center
Reed Distribution Center
TENNESSEE
Nashville
Park at Myatt
TEXAS
Dallas
Allen Station 1 & 2
Interstate Warehouse 1 & 2
Interstate Warehouse 3
Interstate Warehouse 4
Interstate Warehouse 5, 6, & 7
LakePort 1-3
LakePort 4 & 5
Logistics Center 6 & 7
Venture Warehouses
ParkView Commerce Center 1-3
Shady Trail Distribution Center
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Buildings and
Improvements
—
7,105
13,388
11,614
9,211
5,694
100,861
Land
13,980
6,577
8,857
7,623
4,628
2,868
31,815
15,282
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
29
13,981
1,981
17
1,423
368
125
612
6,577
8,857
7,623
4,628
2,877
31,815
15,114
28
9,086
13,405
13,037
9,579
5,810
101,473
57,315
13,714
28,554
—
—
—
—
—
—
14,009
15,663
22,262
20,660
14,207
8,687
—
133,288
—
72,429
—
—
16,074
33,201
4
4,447
2,478
1,435
1,469
785
6,700
2,968
700
1,386
2019
2010
2019
2019
2018
2019
2021
2019
2022
2022
n/a
2005
2019
2019
2003
2002
2001-2003
2022
1975
1990
—
57,147
2,360
4,647
13,488
28,195
226
359
2,360
4,647
2,463
27,813
—
2,463
27,813
—
30,276
170
2023
2022
5,815
1,746
519
416
1,824
2,984
2,716
—
1,452
2,663
635
17,612
4,941
2,008
2,481
4,106
—
—
12,605
3,762
—
3,621
2,190
4,145
1,693
927
2,869
22,641
21,536
3,219
3,249
19,198
1,593
5,815
1,746
519
416
1,824
2,984
2,716
—
1,452
2,663
635
19,802
9,086
3,701
3,408
6,975
22,641
21,536
15,824
7,011
19,198
5,214
—
—
—
—
—
—
—
1,634
—
—
—
—
—
—
25,617
10,832
4,220
3,824
8,799
25,625
24,252
17,458
8,463
21,861
5,849
44,166
72,115
18,214
4,684
8,015
2,881
2,182
4,700
3,133
454
2,777
6,172
5,542
3,322
15,763
23,294
4,468
2018
1988
2000
2004
2009
2018
2018
2019
1988
2014
2003
2012
2013
2015
2001
1978
1979
2002
1979/80/81
2020
2023
2018
1979
2015
1998
1986/87/97/9
8
1999-2001/0
3/04/08
2017
Valwood Distribution Center
4,361
34,405
5,400
4,361
39,805
Northfield Distribution Center
CreekView 1 & 2
12,470
3,275
50,713
—
8,932
12,471
14,939
3,275
59,644
14,939
80
Description
CreekView 3 & 4
CreekView 5 & 6
CreekView 7 & 8
CreekView 9 & 10
The Rock at Star Business Park
DFW Global Logistics Centre
McKinney 3 & 4
McKinney Logistics Center
Fort Worth
Arlington Tech Centre 1 & 2
Arlington Tech Centre 3
Basswood 1 & 2
Parc North 1-4
Parc North 5
Parc North 6
Houston
World Houston Int’l Business Ctr 1 & 2
World Houston Int’l Business Ctr 3 & 4
World Houston Int’l Business Ctr 6
World Houston Int’l Business Ctr 7 & 8
World Houston Int’l Business Ctr 9
World Houston Int’l Business Ctr 10
World Houston Int’l Business Ctr 11
World Houston Int’l Business Ctr 12
World Houston Int’l Business Ctr 13
World Houston Int’l Business Ctr 14
World Houston Int’l Business Ctr 15
World Houston Int’l Business Ctr 16
World Houston Int’l Business Ctr 17
World Houston Int’l Business Ctr 19
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
2,600
2,682
2,640
3,985
5,296
—
4,228
6,899
2,510
1,725
4,086
4,615
1,286
1,233
660
820
425
680
800
933
638
340
282
722
249
519
373
373
—
—
—
—
27,223
86,564
—
18,216
10,096
—
—
26,358
—
—
5,893
5,130
2,423
4,584
4,355
4,779
3,764
2,419
2,569
2,629
—
4,248
1,945
2,256
2,600
2,681
2,640
3,987
5,296
—
4,228
6,899
2,515
1,725
4,087
4,615
1,286
1,233
660
707
425
680
800
933
638
340
282
722
249
519
373
373
13,669
12,910
15,290
12,277
295
1,049
22,694
37
3,409
8,403
20,376
7,923
8,047
9,622
3,426
1,404
1,003
5,642
3,118
1,270
1,820
854
1,140
1,642
2,802
2,150
1,116
1,384
81
13,669
12,911
15,290
12,275
27,518
87,613
22,694
18,253
13,500
8,403
20,375
34,281
8,047
9,622
9,319
6,647
3,426
10,226
7,473
6,049
5,584
3,273
3,709
4,271
2,802
6,398
3,061
3,640
—
—
—
—
—
10,886
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
16,269
15,592
17,930
16,262
32,814
98,499
26,922
25,152
16,015
10,128
24,462
38,896
9,333
10,855
9,979
7,354
3,851
10,906
8,273
6,982
6,222
3,613
3,991
4,993
3,051
6,917
3,434
4,013
3,707
2,446
2,206
606
5,038
7,335
900
197
2,033
128
1,138
9,198
1,613
1,639
5,605
4,189
2,255
7,466
4,366
3,618
3,706
1,903
2,566
2,905
1,664
3,941
1,741
2,443
2015
2016
2016
2020
2020
2021
2020
2023
2019
2020
2019
2016
2016
2016
1998
1998
1998
1998
1998
2001
1999
2000
2000
2000
2000
2000
2000
2000
2018
2020
2020
2022
2019
2014/15
2022
2022
2019
2023
2022
2016
2019
2019
1996
1998
1998
1998
1998
1999
1999
2002
2002
2003
2007
2005
2004
2004
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Description
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
World Houston Int’l Business Ctr 20
1,008
1,948
World Houston Int’l Business Ctr 21
World Houston Int’l Business Ctr 22
World Houston Int’l Business Ctr 24
World Houston Int’l Business Ctr 25
World Houston Int’l Business Ctr 26
World Houston Int’l Business Ctr 27
World Houston Int’l Business Ctr 28
World Houston Int’l Business Ctr 29
World Houston Int’l Business Ctr 30
World Houston Int’l Business Ctr 31
World Houston Int’l Business Ctr 31B
World Houston Int’l Business Ctr 32
World Houston Int’l Business Ctr 33
World Houston Int’l Business Ctr 34
World Houston Int’l Business Ctr 35
World Houston Int’l Business Ctr 36
World Houston Int’l Business Ctr 37
World Houston Int’l Business Ctr 38
World Houston Int’l Business Ctr 39
World Houston Int’l Business Ctr 40
World Houston Int’l Business Ctr 41
World Houston Int’l Business Ctr 42
World Houston Int’l Business Ctr 43
World Houston Int’l Business Ctr 44
World Houston Int’l Business Ctr 45
World Houston Int'l Business Ctr 47
Glenmont Business Park
Beltway Crossing Business Park 1
Beltway Crossing Business Park 2
436
436
837
508
445
837
550
782
981
684
546
1,225
1,166
439
340
684
759
1,053
620
1,072
649
571
443
653
3,243
2,798
936
458
415
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,161
5,712
—
2,218
4,190
4,697
6,535
4,636
3,495
5,485
4,825
4,162
6,128
4,778
3,739
5,663
8,228
3,490
2,610
5,078
6,786
7,881
5,310
9,426
6,111
4,814
6,137
8,546
13,745
14,438
3,717
3,456
3,264
82
Gross Amount Carried at
Close of Period
Land
1,008
436
436
838
508
445
838
550
974
1,222
684
546
1,526
1,166
439
340
684
759
1,053
621
1,072
649
571
443
653
3,243
2,798
937
458
415
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
4,166
4,190
4,697
6,534
4,636
3,495
5,484
4,825
3,970
5,887
4,778
3,739
5,362
8,228
3,490
2,610
5,078
6,786
7,881
5,309
9,426
6,111
4,814
6,137
8,546
13,745
14,438
9,877
9,168
3,264
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,174
4,626
5,133
7,372
5,144
3,940
6,322
5,375
4,944
7,109
5,462
4,285
6,888
9,394
3,929
2,950
5,762
7,545
8,934
5,930
10,498
6,760
5,385
6,580
9,199
16,988
17,236
10,814
9,626
3,679
2,955
2,408
2,734
3,572
2,426
1,585
3,022
2,643
1,865
3,054
2,244
1,744
2,198
3,076
1,320
867
2,010
2,625
3,031
1,661
2,967
1,904
1,335
1,145
1,081
1,963
521
6,837
6,149
1,787
2000
2000/03
2000
2005
2005
2005
2005
2005
2007
2007
2008
2008
2007
2011
2005
2005
2011
2011
2011
2011
2011
2011
2011
2011
2011
2015
2015
1998
2002
2005
2004
2006
2007
2008
2008
2008
2008
2009
2009
2009
2011
2012
2012
2013
2012
2012
2013
2013
2013
2014
2014
2014
2015
2019
2020
2019
2022
1999/2000
2001
2007
Description
Beltway Crossing Business Park 3
Beltway Crossing Business Park 4
Beltway Crossing Business Park 5
Beltway Crossing Business Park 6
Beltway Crossing Business Park 7
Beltway Crossing Business Park 8
Beltway Crossing Business Park 9
Beltway Crossing Business Park 10
Beltway Crossing Business Park 11
West Road Business Park 1
West Road Business Park 2
West Road Business Park 3
West Road Business Park 4
West Road Business Park 5
Ten West Crossing 1
Ten West Crossing 2
Ten West Crossing 3
Ten West Crossing 4
Ten West Crossing 5
Ten West Crossing 6
Ten West Crossing 7
Ten West Crossing 8
Northwest Crossing 1-3
Grand West Crossing 1
Cypress Preserve 1 & 2
El Paso
Butterfield Trail
Rojas Commerce Park
Americas Ten Business Center 1
Americas Ten Business Center 2
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
460
460
701
618
765
721
418
733
690
621
981
597
621
484
566
829
609
694
933
640
584
1,126
5,665
2,733
9,952
—
900
526
2,516
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
43,457
20,725
3,659
2,778
—
3,409
3,413
5,361
6,444
6,321
5,799
2,118
4,132
4,575
4,248
4,955
4,301
4,730
4,379
3,166
4,534
4,571
4,569
5,991
4,741
5,492
9,554
20,342
10,968
1,993
11,032
4,114
1,687
460
460
701
618
765
721
418
733
690
541
854
520
541
421
566
833
613
699
940
644
589
1,135
5,665
2,726
9,952
—
900
526
11,867
2,518
83
3,409
3,413
5,361
6,444
6,321
5,799
2,118
4,132
4,575
4,328
5,082
4,378
4,810
4,442
3,166
4,530
4,567
4,564
5,984
4,737
5,487
9,545
20,342
10,975
45,450
31,757
7,773
4,465
11,865
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,869
3,873
6,062
7,062
7,086
6,520
2,536
4,865
5,265
4,869
5,936
4,898
5,351
4,863
3,732
5,363
5,180
5,263
6,924
5,381
6,076
10,680
26,007
13,701
55,402
1,893
1,872
3,008
2,994
3,186
2,905
815
1,535
1,578
1,492
1,654
1,190
1,625
1,175
1,254
2,108
1,833
1,801
2,103
1,640
1,947
2,010
2,249
304
2,587
2005
2005
2005
2005
2005
2005
2007
2007
2007
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012
2012
2019
2019
2022
2008
2008
2008
2008
2009
2011
2012
2012
2013
2014
2014
2015
2015
2018
2013
2013
2013
2014
2014
2014
2015
2019
2020
2022
2019
2,682
34,439
24,208
1997/2000
1987/95
—
—
—
8,673
4,991
14,383
6,289
2,866
583
1999
2001
2020
1986
2003
2022
Description
San Antonio
Alamo Downs Distribution Center
Arion Business Park 1-13, 15
Arion Business Park 14
Arion Business Park 16
Arion Business Park 17
Arion Business Park 18
Wetmore Business Center 1-4
Wetmore Business Center 5
Wetmore Business Center 6
Wetmore Business Center 7
Wetmore Business Center 8
Fairgrounds Business Park
Rittiman Distribution Center
Thousand Oaks Distribution Center 1
Thousand Oaks Distribution Center 2
Thousand Oaks Distribution Center 3
Thousand Oaks Distribution Center 4
Alamo Ridge Business Park 1
Alamo Ridge Business Park 2
Alamo Ridge Business Park 3
Alamo Ridge Business Park 4
Eisenhauer Point Business Park 1 & 2
Eisenhauer Point Business Park 3
Eisenhauer Point Business Park 4
Eisenhauer Point Business Park 5
Eisenhauer Point Business Park 6
Eisenhauer Point Business Park 7 & 8
Eisenhauer Point Business Park 9
Tri-County Crossing 1 & 2
Tri-County Crossing 3 & 4
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
1,342
4,143
423
427
616
418
6,338
31,432
—
—
—
—
1,494
10,804
412
505
546
1,056
1,644
1,083
607
794
772
753
623
402
907
354
1,881
577
555
818
569
1,000
632
1,623
1,733
—
—
—
—
8,209
6,649
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,309
1,342
11,647
11,501
4,143
42,933
423
427
616
418
3,988
3,838
4,564
2,470
1,494
15,459
412
505
546
1,056
1,644
1,083
607
794
772
753
623
402
907
355
1,881
577
555
818
569
2,593
632
1,623
1,733
3,898
4,258
5,359
8,462
11,179
7,682
5,687
4,867
4,728
4,771
8,527
5,368
10,144
7,816
14,801
6,139
4,832
7,047
4,869
20,650
5,729
14,864
14,519
3,988
3,838
4,564
2,470
4,655
3,898
4,258
5,359
8,462
2,970
1,033
5,687
4,867
4,728
4,771
8,527
5,368
10,144
7,817
14,801
6,139
4,832
7,047
4,869
22,243
5,729
14,864
14,519
84
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,989
47,076
4,411
4,265
5,180
2,888
16,953
4,310
4,763
5,905
9,518
12,823
8,765
6,294
5,661
5,500
5,524
9,150
5,770
11,051
8,171
16,682
6,716
5,387
7,865
5,438
23,243
6,361
16,487
16,252
5,836
2004
1986/2002
25,527
2005
1988-2000/06
2,237
2,010
3,006
1,381
9,662
2,296
2,253
2,819
4,473
6,701
2,670
2,365
1,985
1,941
1,763
3,430
1,796
2,510
2,635
4,488
1,978
1,270
1,857
910
4,153
861
3,386
2,336
2005
2005
2005
2005
2005
2006
2006
2006
2006
2007
2011
2008
2008
2008
2013
2007
2007
2007
2007
2015
2015
2015
2015
2015
2016
2016
2017
2017
2006
2007
2007
2008
1998/99
2008
2008
2008
2008
1985/86
2000
2012
2012
2013
2015
2015
2015
2017
2017
2016
2017
2017
2018
2018
2019
2019
2019
2020
Description
Tri-County Crossing 5
Tri-County Crossing 6
Ridgeview 1 & 2
Ridgeview 3
Austin
45 Crossing
Colorado Crossing Distribution Center
Greenhill Distribution Center
Settlers Crossing 1
Settlers Crossing 2
Settlers Crossing 3 & 4
Southpark Corporate Center 3 & 4
Southpark Corporate Center 5-7
Springdale Business Center
Wells Point One
ARIZONA
Phoenix area
Broadway Industrial Park 1
Broadway Industrial Park 2
Broadway Industrial Park 3
Broadway Industrial Park 4
Broadway Industrial Park 5
Broadway Industrial Park 6
Broadway Industrial Park 7
Kyrene Distribution Center
Falcon Field Business Center
Southpark Distribution Center
Southpark Distribution Center 2
Santan 10 Distribution Center 1
Santan 10 Distribution Center 2
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
871
1,033
2,004
839
10,028
4,602
802
1,211
1,306
2,774
2,670
1,301
2,824
907
837
455
775
380
353
599
450
1,490
1,312
918
1,785
846
1,088
—
—
—
—
—
19,757
3,273
—
—
—
14,756
7,589
8,398
4,904
3,349
482
1,742
1,652
1,090
1,855
650
4,453
—
2,738
6,882
2,647
—
10,411
9,555
18,889
8,564
15,331
21,872
3,683
8,208
7,554
17,331
16,721
9,422
10,427
5,862
6,432
912
2,917
2,812
1,940
3,450
1,020
7,398
8,010
4,743
8,482
3,358
5,533
10,411
9,555
18,889
8,564
871
1,033
2,004
839
15,331
10,028
4,596
802
1,211
1,306
2,774
2,670
1,301
2,824
907
837
455
775
380
353
599
450
1,490
1,312
918
1,785
846
1,088
2,109
410
8,208
7,554
17,331
1,965
1,833
2,029
958
3,083
430
1,175
1,160
850
1,595
370
2,945
8,010
2,005
1,600
711
5,533
85
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,282
10,588
20,893
9,403
25,359
26,468
4,485
9,419
8,860
20,105
19,391
10,723
13,251
6,769
7,269
1,367
3,692
3,192
2,293
4,049
1,470
8,888
9,322
5,661
10,267
4,204
6,621
609
554
2,701
442
639
8,809
765
1,721
1,866
2,217
6,145
2,312
3,111
1,225
4,820
632
1,903
2,008
1,344
2,072
462
5,013
1,966
3,390
695
2,085
3,074
2017
2017
2018
2018
2021
2014
2018
2017
2017
2017
2015
2017
2015
2020
1996
1999
2000
2000
2002
2002
2011
1999
2015
2001
2021
2001
2004
2022
2022
2020
2022
2022
2009
1999
2019
2019
2020
1995
1995
2000
2001
1971
1971
1983
1986
1980
1979
1999
1981/2001
2018
2000
1995
2005
2007
Description
Chandler Freeways
Kyrene 202 Business Park 1
Kyrene 202 Business Park 2
Kyrene 202 Business Park 3, 4 & 5
Kyrene 202 Business Park 6
51st Avenue Distribution Center
East University Distribution Center 1 & 2
East University Distribution Center 3
55th Avenue Distribution Center
Interstate Commons Distribution Center 1
Interstate Commons Distribution Center 2
Interstate Commons Distribution Center 3
Airport Commons Distribution Center
40th Avenue Distribution Center
Sky Harbor Business Park
Sky Harbor Business Park 6
Ten Sky Harbor Business Center
Gilbert Crossroads A & B
Gilbert Crossroads C & D
Mesa Gateway Commerce Center
Tucson
Country Club Commerce Center 1
Country Club Commerce Center 2
Country Club Commerce Center 3 & 4
Country Club Commerce Center 5
Airport Distribution Center
Benan Distribution Center
NORTH CAROLINA
Charlotte area
NorthPark Business Park
Lindbergh Business Park
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
1,525
653
387
1,244
936
300
1,120
444
912
311
2,298
242
1,000
703
5,839
807
1,568
2,825
3,602
3,514
506
442
1,407
2,885
1,403
707
—
—
—
—
—
2,029
4,482
698
3,717
1,416
7,088
—
1,510
—
—
—
—
—
—
14,801
3,564
3,381
—
—
4,672
1,842
7,512
5,875
3,452
1,525
653
387
7,512
5,875
3,452
12,004
1,244
12,004
8,415
1,678
2,126
587
2,214
1,277
3,008
3,314
1,987
6,402
23,880
2,165
5,236
14,145
19,874
3,246
4,485
1,429
12,632
21,848
1,880
928
936
300
1,120
444
917
311
2,298
242
1,000
703
5,839
807
1,569
2,825
3,602
3,514
693
709
1,575
2,886
1,403
707
8,415
3,707
6,608
1,285
5,926
2,693
10,096
3,314
3,497
6,402
23,880
2,165
5,235
14,145
19,874
18,047
7,862
4,543
12,464
21,847
6,552
2,770
2,758
470
15,932
3,401
6,448
1,156
2,758
470
22,380
4,557
86
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
9,037
6,528
3,839
13,248
9,351
4,007
7,728
1,729
6,843
3,004
12,394
3,556
4,497
7,105
29,719
2,972
6,804
16,970
23,476
21,561
8,555
5,252
14,039
24,733
7,955
3,477
2,636
1,794
1,080
2,531
2,558
2,568
5,561
699
4,615
1,886
1,571
1,570
2,646
3,035
10,752
590
1,578
2,314
2,187
587
2012
2011
2011
2011
2011
1998
1998
2010
1998
1999
2019
2000
2003
2004
2006
2014
2015
2018
2018
2022
2013
2014
2014
2018
2015
1987
1987/89
1981
1987
1988
1988/2001
2008
1971
2008
2008
2015
2016
2020
2021
2022
4,683
1997/2003
1994/2003
1,974
6,123
3,776
2007
2007
2016
4,646
1998/2000
1,804
2005
2000
2009
2018
1995
2001
25,138
5,027
13,276
2,416
2006
2007
1987-89
2001/03
Description
Commerce Park Center 1
Commerce Park Center 2
Commerce Park Center 3
Nations Ford Business Park
Airport Commerce Center
Airport Commerce Center 3
Interchange Park 1
Interchange Park 2
Ridge Creek Distribution Center 1
Ridge Creek Distribution Center 2
Ridge Creek Distribution Center 3
Lakeview Business Center
Steele Creek 1
Steele Creek 2
Steele Creek 3
Steele Creek 4
Steele Creek 5
Steele Creek 6
Steele Creek 7
Steele Creek 8
Steele Creek 9
Steele Creek 10
Steele Creek 11 & 12
Waterford Distribution Center
SOUTH CAROLINA
Greenville
385 Business Park
Access Point 1
Access Point 2
Access Point 3
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
765
335
558
3,924
1,454
855
986
746
1,284
3,033
2,459
1,392
993
941
1,464
684
610
867
1,207
544
949
1,221
1,866
654
1,308
884
1,010
1,335
4,303
1,603
2,225
16,171
10,136
—
7,949
1,456
13,163
11,497
11,147
5,068
—
—
—
—
—
—
—
—
—
—
—
3,392
10,822
9,606
9,604
19,339
5,455
2,171
3,457
22,812
13,131
8,045
8,721
1,866
14,634
13,677
11,970
6,686
4,355
4,763
7,273
4,175
5,218
7,339
8,324
7,644
10,061
10,113
24,793
4,364
11,351
12,142
11,331
23,016
765
335
558
3,924
1,454
855
986
746
1,284
3,033
2,459
1,392
1,010
957
1,469
687
631
919
1,253
673
1,090
1,509
1,866
654
1,308
893
1,012
1,335
1,152
568
1,232
6,641
2,995
8,045
772
410
1,471
2,180
823
1,618
4,372
4,779
7,278
4,178
5,239
7,391
8,370
7,773
10,202
10,401
24,793
972
529
2,545
1,729
3,677
87
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,220
2,506
4,015
26,736
14,585
8,900
9,707
2,612
15,918
16,710
14,429
8,078
5,365
5,720
8,742
4,862
5,849
8,258
9,577
8,317
11,151
11,622
26,659
5,018
12,659
13,035
12,343
24,351
3,022
1,036
1,786
13,177
6,919
1,782
4,105
677
6,452
5,688
3,554
2,703
1,854
1,893
2,422
1,480
2007
2010
2010
2007
2008
2008
2008
2013
2008
2011
2014
2011
2013
2013
2013
2013
924
2013/14/15
1,929
2013/14
2,002
2013/14/15
359
2016/17
1,784
774
441
2,097
2,029
1,384
761
753
2016
2016
2016/17
2008
2019
2021
2021
2022
1983
1987
1981
1989/94
2001/02
2019
1989
2000
2006
2003
2013
1996
2014
2014
2014
2015
2019
2016
2017
2022
2019
2021
2023
2000
2019
2021
2021
2022
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Description
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
Pelzer Point Commerce Center 1
1,308
19,433
—
1,308
19,433
—
20,741
—
2023
2021
GEORGIA
Atlanta
Shiloh 400 Business Center 1 & 2
Broadmoor Commerce Park 1
Broadmoor Commerce Park 2
Hurricane Shoals 1 & 2
Hurricane Shoals 3
Progress Center 1 & 2
Progress Center 3
Gwinnett 316
Cherokee 75 Business Center 1
Cherokee 75 Business Center 2
Northpoint 200
I-20 West Business Center
LOUISIANA
New Orleans
Elmwood Business Park
Riverbend Business Park
COLORADO
Denver
Airways Business Center
Rampart Distribution Center 1
Rampart Distribution Center 2
Rampart Distribution Center 3
Rampart Distribution Center 4
Concord Distribution Center
Centennial Park
NEVADA
Las Vegas
3,092
1,307
519
4,284
497
1,297
465
531
1,183
1,336
1,102
1,670
14,216
3,560
—
12,449
—
9,015
4,285
3,617
6,727
7,495
5,140
—
3,123
1,282
7,409
4,274
9,842
420
15
21
18
490
648
13,405
3,064
1,307
519
4,284
644
1,297
465
531
1,183
1,337
1,104
1,647
17,367
4,842
7,409
16,723
9,695
9,435
4,300
3,638
6,745
7,984
5,786
13,428
2,861
2,557
6,337
17,623
6,496
12,261
2,861
2,557
12,833
29,884
6,137
1,023
230
1,098
590
1,051
750
39,637
3,861
2,977
3,884
—
4,773
3,319
1,599
2,611
1,581
2,827
8,346
1,284
2,156
6,137
1,023
230
1,098
590
1,051
750
41,236
6,472
4,558
6,711
8,346
6,057
5,475
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
20,431
6,149
7,928
21,007
10,339
10,732
4,765
4,169
7,928
9,321
6,890
15,075
4,778
1,493
1,465
4,183
1,007
2,817
307
589
780
621
781
214
15,694
32,441
10,114
20,198
2017
2017
2017
2017
2017
2017
2021
2018
2020
2021
2021
2021
1997
1997
2008
1999
2018
2017
2020
2017
2008
1990
2020
2021
2021
2023
1979
1984
47,373
7,495
4,788
7,809
8,936
7,108
6,225
6,011
5,626
3,681
4,668
2,514
3,074
2,674
2019
1988
1996/97
1997/98
2012
2007
2007
2007/08
1987
1997
1999
2014
2000
1990
Arville Distribution Center
4,933
5,094
1,250
4,933
6,344
—
11,277
2,910
2009
1997
88
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
13,068
9,008
20,093
13,913
343
—
303
Buildings and
Improvements
26,325
16,576
31,119
18,848
5,007
9,958
1,479
Costs
Capitalized
Subsequent to
Acquisition
2,408
4,206
9
63
5,848
1,959
1,265
Gross Amount Carried at
Close of Period
Land
13,068
9,008
20,093
13,913
343
17
303
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
28,733
20,782
31,128
18,911
10,855
11,900
2,744
—
—
—
—
—
—
—
41,801
29,790
51,221
32,824
11,198
11,917
3,047
6,400
2,970
285
390
8,233
6,902
1,893
2016
2019
2023
2023
1997
2001
2001
2016
2019
2022
2018
1981
2002
2003
812,194
1,916,485
2,106,873
814,364
4,021,188
17,996
4,853,548
1,273,108
Description
Jones Corporate Park
Southwest Commerce Center
Blue Diamond Business Park
Craig Corporate Center
MISSISSIPPI
Jackson area
Interchange Business Park
Tower Automotive
Metro Airport Commerce Center 1
89
Description
Development and Value-Add Properties (d):
CALIFORNIA
Hercules Land
Reed Land
FLORIDA
Oak Creek Distribution Center Land
Horizon Commerce Park Land
Gateway Commerce Park 2
Gateway Commerce Park Land
SunCoast Commerce Center 9
SunCoast Commerce Land
Horizon West 6
Horizon West 10
Horizon West Land
Gateway South Dade 1 & 2
Gateway South Dade Land
MCO Logistics Center
Lakeside Station Land
Crossroads Logistics Park Land
TEXAS
World Houston Golf Course Land
Ridgeview Land
Basswood 3-5
Basswood Land
Grand West Crossing Land
McKinney 1 & 2
McKinney Land
Stonefield 35 1-3
Texas Avenue Land
Springwood Business Park 1 & 2
Heritage Grove Land
Cypress Preserve Land
Eisenhauer Point Business Park 10-12
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Initial Cost to the Company
Land
Buildings and
Improvements
Costs
Capitalized
Subsequent to
Acquisition
Gross Amount Carried at
Close of Period
Land
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
3,561
3,040
106
650
3,224
2,350
1,011
961
1,188
4,904
6,168
6,700
9,089
6,769
6,847
15,146
1,636
430
5,671
4,738
6,024
3,419
4,593
6,031
4,143
6,208
15,295
14,724
4,894
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
567
474
426
18,901
3,147
13,012
953
7,897
35,562
7,261
15,040
6,931
10,726
459
1,474
2,582
393
32,162
2,614
2,720
18,965
3
28,283
2,136
25,006
1,661
2,066
14,352
—
568
720
426
18,901
5,462
13,012
3,309
7,897
35,563
7,262
15,040
6,931
10,728
464
1,475
2,770
393
32,163
2,614
2,720
18,965
3
28,237
2,154
25,012
1,718
2,066
14,352
3,561
3,041
352
650
3,224
4,665
1,011
3,317
1,188
4,905
6,169
6,700
9,089
6,771
6,852
15,147
1,824
430
5,672
4,738
6,024
3,419
4,593
5,985
4,161
6,214
15,352
14,724
4,894
90
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,561
3,608
826
1,076
22,125
7,812
14,023
4,270
9,085
40,467
13,430
21,740
16,020
17,497
7,311
16,621
4,406
823
37,834
7,352
8,744
22,384
4,596
34,268
6,297
31,220
17,013
16,790
19,246
—
—
—
—
267
—
—
—
—
194
—
—
—
—
—
—
—
—
—
—
—
—
—
81
—
33
—
—
—
2022
2022
2005
2008/09
2016
2016
2020
2020
2020
2020
2020
2022
2022
2022
2023
2023
2011
2018
2019
2019
2019
2020
2020
2021
2021
2021
2022
2022
2022
n/a
n/a
n/a
n/a
2023
n/a
n/a
n/a
n/a
2023
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2023
n/a
2023
n/a
2023
n/a
n/a
n/a
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023 (In thousands, except footnotes)
Description
Eisenhauer Point 13-14 Land
Cameron Land
Northeast Trade Center Land
Denton 35 Exchange 1 & 2
Basswood North Land
COLORADO
Arista 36 Business Park 1-3
ARIZONA
Gateway Interchange Land
NORTH CAROLINA
Skyway Logistics Park 1 & 2
Skyway Logistics Park Land
SOUTH CAROLINA
Hillside 1
Hillside Land
Hillside 4 Land
Pelzer Point Commerce Center 2 Land
GEORGIA
Cass White 1 & 2
Riverside Parkway 1 & 2
Braselton Commerce Center 3
Braselton Land
Greenway Land
MISSISSIPPI
Initial Cost to the Company
Land
2,742
30,776
6,177
5,690
23,996
5,878
18,318
3,744
8,294
498
1,095
1,280
1,103
2,923
1,955
1,425
4,048
5,785
Buildings and
Improvements
—
—
—
—
—
—
—
—
—
—
—
—
1,097
—
—
—
—
—
Buildings and
Improvements
Right of Use
Assets (e)
Total
Accumulated
Depreciation
Year
Acquired
Year
Constructed
Gross Amount Carried at
Close of Period
Costs
Capitalized
Subsequent to
Acquisition
461
1,966
2,292
1,173
379
Land
2,746
30,772
6,177
5,690
23,996
457
1,970
2,292
1,173
379
—
—
—
—
—
3,203
32,742
8,469
6,863
24,375
8,883
5,878
8,883
—
14,761
—
—
—
—
—
—
2022
2022
2023
2023
2023
2023
3,027
18,319
3,026
—
21,345
—
2022/2023
5,416
2,996
11,395
4,330
242
3
24,671
23,970
7,414
672
2,383
3,744
8,293
499
1,096
1,280
1,103
2,923
1,958
1,575
4,057
5,785
5,416
2,997
11,394
4,329
242
1,100
24,671
23,967
7,264
663
2,383
—
—
—
—
—
—
—
—
—
—
—
—
—
9,160
11,290
11,893
5,425
1,522
2,203
27,594
25,925
8,839
4,720
8,168
705
639,647
—
—
40
—
—
—
—
—
—
—
—
—
615
2021
2021
2021
2021
2022
2023
2021
2021
2022
2022
2022
2001
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2023
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Metro Airport Commerce Center 2 Land
307
275,554
—
1,097
398
307
398
362,996
280,870
358,777
Total real estate owned (a)(b)
$ 1,087,748
1,917,582
2,469,869
1,095,234
4,379,965
17,996
5,493,195
1,273,723
91
(a) Changes in Real Estate Properties and Development and Value-Add Properties follow:
Balance at beginning of year
Purchases of real estate properties
Development of real estate properties and value-add properties
Improvements to real estate properties
Right-of-use assets, net – ground leases
Real estate assets held for sale
Carrying amount of investments sold
Write-off of improvements
Balance at end of year (1)
Years Ended December 31,
2023
2022
2021
(In thousands)
$
4,934,421
4,051,325
3,519,085
160,105
388,213
51,643
353,221
506,154
40,654
(1,395)
(3,244)
—
(33,022)
(6,770)
—
(9,811)
(3,878)
104,205
415,260
36,692
11,562
(18,233)
(15,288)
(1,958)
$
5,493,195
4,934,421
4,051,325
(1) Includes noncontrolling interest in joint ventures of $774,000, $700,000 and $1,379,000 at December 31, 2023, 2022
and 2021, respectively.
Changes in the accumulated depreciation on real estate properties follow:
Balance at beginning of year
Depreciation expense
Real estate assets held for sale
Accumulated depreciation on assets sold
Other
Balance at end of year
Years Ended December 31,
2023
2022
2021
(In thousands)
$
1,150,814
1,035,617
141,003
125,199
—
(11,759)
(6,335)
—
(6,068)
(3,934)
955,328
104,910
(12,538)
(10,178)
(1,905)
$
1,273,723
1,150,814
1,035,617
(b) The estimated aggregate cost of real estate properties at December 31, 2023 for federal income tax purposes was
approximately $5,124,320,000 before estimated accumulated tax depreciation of $959,555,000. The federal income tax
return for the year ended December 31, 2023, has not been filed and accordingly, this estimate is based on preliminary data.
(c) The Company computes depreciation using the straight-line method over the estimated useful lives of the buildings
(generally 40 years) and improvements (generally 3 to 15 years).
(d) The Company transfers properties from the development and value-add program to Real estate properties as follows: (i) for
development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (ii) for
value-add properties, at the earlier of 90% occupancy or one year after acquisition. Upon the earlier of 90% occupancy or
one year after completion of the shell construction, capitalization of development costs, including interest expense, property
taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land).
(e) The right of use assets for ground leases, net of accumulated amortization, are included in Real Estate Properties on the
Consolidated Balance Sheets.
92
ITEM 16. FORM 10-K SUMMARY.
None.
93
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
EASTGROUP PROPERTIES, INC.
By: /s/ MARSHALL A. LOEB
Marshall A. Loeb, Chief Executive Officer, President and Director
February 14, 2024
We, the undersigned officers and directors of EastGroup Properties, Inc., hereby severally constitute and appoint Brent W.
Wood as our true and lawful attorney, with full power to sign for us and in our names in the capacities indicated below, any and
all amendments to this Annual Report on Form 10-K and generally to do all such things in our name and behalf in such capacity
to enable EastGroup Properties, Inc. to comply with the applicable provisions of the Securities Exchange Act of 1934, as
amended, and we hereby ratify and confirm our signatures as they may be signed by our said attorney to any and all such
amendments.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ D. Pike Aloian
D. Pike Aloian, Director
February 14, 2024
/s/ Donald F. Colleran
Donald F. Colleran, Director
February 14, 2024
/s/ H. Eric Bolton, Jr.
H. Eric Bolton, Jr., Director
February 14, 2024
/s/ David M. Fields
David M. Fields, Director
February 14, 2024
/s/ Mary Elizabeth McCormick
Mary Elizabeth McCormick, Director
February 14, 2024
/s/ Katherine M. Sandstrom
Katherine M. Sandstrom, Director
February 14, 2024
94
/s/ MARSHALL A. LOEB
Marshall A. Loeb, Chief Executive Officer,
President and Director
(Principal Executive Officer)
February 14, 2024
/s/ STACI H. TYLER
Staci H. Tyler, Senior Vice-President, Chief Accounting
Officer, Chief Administrative Officer and Secretary
(Principal Accounting Officer)
February 14, 2024
/s/ BRENT W. WOOD
Brent W. Wood, Executive Vice-President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)
February 14, 2024
95
Our company leaders from the corporate and regional offices attend an annual in-person meeting to share updates
and ideas and to collectively maintain our proven track record and plan for the future of EastGroup Properties.
BOARD OF DIRECTORS
EXECUTIVE OFFICERS
D. Pike Aloian
Managing Director of Neuberger Berman
H. Eric Bolton, Jr.
Chief Executive Officer of Mid-America
Apartment Communities, Inc.
Donald F. Colleran
Chairman of the Board
Former President and Chief Executive Officer
of FedEx Express
David M. Fields
Executive Vice President, Chief Administrative
Officer and General Counsel of Sunset
Development Company
Marshall A. Loeb
Chief Executive Officer, President
and Director
Mary E. McCormick
Former Executive Director of the Center
for Real Estate at The Ohio State University
Katherine M. Sandstrom
Former Senior Managing Director
at Heitman LLC
Marshall A. Loeb
Chief Executive Officer, President
and Director
Brent W. Wood
Executive Vice President,
Chief Financial Officer and Treasurer
John F. Coleman
Executive Vice President
Ryan M. Collins
Senior Vice President
R. Reid Dunbar
Senior Vice President
Staci H. Tyler
Senior Vice President, Chief Accounting
Officer, Chief Administrative Officer
and Secretary
CORPORATE HEADQUARTERS
400 West Parkway Place | Suite 100 | Ridgeland, MS 39157 | 601.354.3555
Regional Offices
6565 N. MacArthur Boulevard | Suite 255 | Irving, TX 75039 | 972.386.8700
10250 Constellation Boulevard | Suite 2300 | Los Angeles, CA 90067 | 323.457.0648
3495 Piedmont Road, NE, Building 11 | Suite 350 | Atlanta, GA 30305 | 404.301.2670
www.eastgroup.net
Hillside Commerce Park, Greenville, South Carolina