(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated Filer | ☐ | Non-accelerated Filer | ☐ | |||||||||||||||||||
Smaller Reporting Company | Emerging Growth Company |
Page | ||||||||
Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited) | ||||||||
March 31, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Real estate properties | $ | ||||||||||
Development and value-add properties | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Real estate assets held for sale | |||||||||||
Unconsolidated investment | |||||||||||
Cash | |||||||||||
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 shares; $ | |||||||||||
Excess shares; $ | |||||||||||
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 | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2022 | 2021 | ||||||||||
REVENUES | |||||||||||
Income from real estate operations | $ | ||||||||||
Other revenue | |||||||||||
EXPENSES | |||||||||||
Expenses from real estate operations | |||||||||||
Depreciation and amortization | |||||||||||
General and administrative | |||||||||||
Indirect leasing costs | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||
Interest expense | ( | ( | |||||||||
Gain on sales of real estate investments | |||||||||||
Other | |||||||||||
NET INCOME | |||||||||||
Net income attributable to noncontrolling interest in joint ventures | ( | ( | |||||||||
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||||||||
Other comprehensive income - 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 | |||||||||||
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 | |||||||||||
Common Shares | Additional Paid-In Capital | Distributions in Excess of Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interest in Joint Ventures | Total | ||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2021 | $ | ( | |||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of interest rate swaps | |||||||||||||||||||||||||||||||||||
Common dividends declared – $ share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Withheld satisfy tax withholding obligations in connection with the vesting of restricted stock | ( | ( | |||||||||||||||||||||||||||||||||
Net distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2022 | $ | ( | |||||||||||||||||||||||||||||||||
Common Shares | Additional Paid-In Capital | Distributions in Excess of Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interest in Joint Ventures | Total | ||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2020 | $ | ( | ( | ||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of interest rate swaps | |||||||||||||||||||||||||||||||||||
Common dividends declared – $ share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Withheld satisfy tax withholding obligations in connection with the vesting of restricted stock | ( | ( | |||||||||||||||||||||||||||||||||
Net distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2021 | $ | ( | ( | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
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 | ( | ||||||||||
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 | ( | ( | |||||||||
Real estate improvements | ( | ( | |||||||||
Net proceeds from sales of real estate investments | |||||||||||
Leasing commissions | ( | ( | |||||||||
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 | |||||||||||
Other | ( | ( | |||||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | ( | ||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS | |||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | ||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||||
Cash paid for interest, net of amounts capitalized of $ respectively | $ | ||||||||||
Cash paid for operating lease liabilities | |||||||||||
NON-CASH OPERATING ACTIVITY | |||||||||||
Operating lease liabilities arising from obtaining right of use assets | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Lease income — operating leases | $ | ||||||||||
Variable lease income (1) | |||||||||||
Income from real estate operations | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
Real estate properties: | |||||||||||
Land | $ | ||||||||||
Buildings and building improvements | |||||||||||
Tenant and other improvements | |||||||||||
Right of use assets — Ground leases (operating) (1) | |||||||||||
Development and value-add properties (2) | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
$ |
REAL ESTATE PROPERTY ACQUIRED IN 2022 | Location | Size | Date Acquired | Cost | ||||||||||||||||||||||
(Square feet) | (In thousands) | |||||||||||||||||||||||||
Value-add property acquired (1) | ||||||||||||||||||||||||||
Cypress Preserve 1 & 2 | Houston, TX | $ | ||||||||||||||||||||||||
ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2022 | Cost | |||||||
(In thousands) | ||||||||
Land | $ | |||||||
Buildings and building improvements | ||||||||
Tenant and other improvements | ||||||||
Total real estate properties acquired | ||||||||
In-place lease intangibles (1) | ||||||||
Below market lease intangibles (2) | ( | |||||||
Total assets acquired, net of liabilities assumed | $ |
REAL ESTATE PROPERTIES ACQUIRED IN 2021 | Location | Size | Date Acquired | Cost | ||||||||||||||||||||||
(Square feet) | (In thousands) | |||||||||||||||||||||||||
Operating properties acquired (1) | ||||||||||||||||||||||||||
Southpark Distribution Center 2 | Phoenix, AZ | $ | ||||||||||||||||||||||||
DFW Global Logistics Centre | Dallas, TX | |||||||||||||||||||||||||
Progress Center 3 | Atlanta, GA | |||||||||||||||||||||||||
Texas Avenue | Austin, TX | |||||||||||||||||||||||||
Total operating property acquisitions | ||||||||||||||||||||||||||
Value-add properties acquired (2) | ||||||||||||||||||||||||||
Access Point 1 | Greenville, SC | |||||||||||||||||||||||||
Northpoint 200 | Atlanta, GA | |||||||||||||||||||||||||
Access Point 2 | Greenville, SC | |||||||||||||||||||||||||
Cherokee 75 Business Center 2 | Atlanta, GA | |||||||||||||||||||||||||
Siempre Viva Distribution Center 3-6 | San Diego, CA | |||||||||||||||||||||||||
Total value-add property acquisitions | ||||||||||||||||||||||||||
Total acquired assets | $ |
ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2021 | Cost | |||||||
(In thousands) | ||||||||
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) | ( | |||||||
Total assets acquired, net of liabilities assumed | $ |
REAL ESTATE PROPERTIES SOLD | Location | Size | Date Sold | Net Sales Price | Basis | Recognized Gain | ||||||||||||||||||||||||||||||||
(In square feet) | (In thousands) | |||||||||||||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||||||||
Metro Business Park | Phoenix, AZ | $ | ||||||||||||||||||||||||||||||||||||
Cypress Creek Business Park (1) | Fort Lauderdale, FL | |||||||||||||||||||||||||||||||||||||
Total for 2022 | $ | |||||||||||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||||||||
Jetport Commerce Park | Tampa, FL | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
Leasing costs (principally commissions) | $ | ||||||||||
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) | |||||||||||
Escrow deposits for pending acquisitions | |||||||||||
Prepaid insurance | |||||||||||
Goodwill | |||||||||||
Receivable for tenant improvement cost reimbursements | |||||||||||
Prepaid expenses and other assets | |||||||||||
Total Other assets | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
Unsecured bank credit facilities - variable rate, carrying amount | $ | ||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Unsecured bank credit facilities, net of debt issuance costs | |||||||||||
Unsecured debt - fixed rate, carrying amount (1) | |||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Unsecured debt, net of debt issuance costs | |||||||||||
Secured debt - fixed rate, carrying amount (1) | |||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Secured debt, net of debt issuance costs | |||||||||||
Total debt, net of debt issuance costs | $ |
Years Ending December 31, | (In thousands) | |||||||
2022 - Remainder of year | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 and beyond | ||||||||
Total | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
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 | $ |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
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 below market lease intangibles | ( | ( | |||||||||
Acquired below market lease intangibles, net of accumulated amortization | |||||||||||
Interest rate swap liabilities | |||||||||||
Tenant improvement cost liabilities | |||||||||||
Other liabilities | |||||||||||
Total Other liabilities | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||
Balance at beginning of period | $ | ( | |||||||||
Other comprehensive income - interest rate swaps | |||||||||||
Balance at end of period | $ | ( |
Interest Rate Derivative | Notional Amount as of March 31, 2022 | Notional Amount as of December 31, 2021 | ||||||||||||
(In thousands) | ||||||||||||||
Interest Rate Swap | $ | |||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ |
Derivatives As of March 31, 2022 | Derivatives As of December 31, 2021 | ||||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||
Interest rate swap assets | Other assets | $ | Other assets | $ | |||||||||||||||||||
Interest rate swap liabilities | Other liabilities | Other liabilities |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS | |||||||||||
Interest Rate Swaps: | |||||||||||
Amount of income recognized in Other comprehensive income on derivatives | $ | ||||||||||
Amount of (income) loss reclassified from Accumulated other comprehensive income (loss) into Interest expense | |||||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
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 | |||||||||||
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||||||||
Numerator – net income attributable to common stockholders | $ | ||||||||||
Denominator: | |||||||||||
Weighted average shares outstanding | |||||||||||
Unvested restricted stock | |||||||||||
Weighted average diluted shares outstanding |
Award Activity: | Three Months Ended March 31, 2022 | ||||||||||
Shares | Weighted Average Grant Date Fair Value | ||||||||||
Unvested at beginning of period | $ | ||||||||||
Granted (1) (2) | |||||||||||
Forfeited | |||||||||||
Vested | ( | ||||||||||
Unvested at end of period | $ |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
Carrying Amount (1) | Fair Value | Carrying Amount (1) | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | ||||||||||||||||||||||
Interest rate swap assets | |||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Unsecured bank credit facilities - variable rate (2) | |||||||||||||||||||||||
Unsecured debt (2) | |||||||||||||||||||||||
Secured debt (2) | |||||||||||||||||||||||
Interest rate swap liabilities |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
NET INCOME | $ | 63,604 | 27,357 | ||||||||
Gain on sales of real estate investments | (30,352) | — | |||||||||
Interest income | — | (1) | |||||||||
Other revenue | (22) | (14) | |||||||||
Indirect leasing costs | 175 | 330 | |||||||||
Depreciation and amortization | 36,341 | 30,313 | |||||||||
Company’s share of depreciation from unconsolidated investment | 31 | 34 | |||||||||
Interest expense | 8,110 | 8,276 | |||||||||
General and administrative expense | 4,310 | 4,036 | |||||||||
Noncontrolling interest in PNOI of consolidated joint ventures | (21) | (15) | |||||||||
PROPERTY NET OPERATING INCOME (“PNOI”) | 82,176 | 70,316 | |||||||||
PNOI from 2021 acquisitions | (2,404) | — | |||||||||
PNOI from 2021 and 2022 development and value-add properties | (6,880) | (1,332) | |||||||||
PNOI from 2021 and 2022 operating property dispositions | (8) | (700) | |||||||||
Other PNOI | 11 | (54) | |||||||||
SAME PNOI | 72,895 | 68,230 | |||||||||
Net lease termination fee income from same properties | (227) | (576) | |||||||||
SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS | $ | 72,668 | 67,654 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Income from real estate operations | $ | 112,952 | 97,917 | ||||||||
Expenses from real estate operations | (31,064) | (27,820) | |||||||||
Noncontrolling interest in PNOI of consolidated joint ventures | (21) | (15) | |||||||||
PNOI from 50% owned unconsolidated investment | 309 | 234 | |||||||||
PROPERTY NET OPERATING INCOME (“PNOI”) | $ | 82,176 | 70,316 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands, except per share data) | |||||||||||
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | $ | 63,580 | 27,339 | ||||||||
Depreciation and amortization | 36,341 | 30,313 | |||||||||
Company’s share of depreciation from unconsolidated investment | 31 | 34 | |||||||||
Depreciation and amortization from noncontrolling interest | (3) | — | |||||||||
Gain on sales of real estate investments | (30,352) | — | |||||||||
FUNDS FROM OPERATIONS (“FFO”) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 69,597 | 57,686 | ||||||||
Net income attributable to common stockholders per diluted share | $ | 1.54 | 0.69 | ||||||||
Funds from operations (“FFO”) attributable to common stockholders per diluted share | $ | 1.68 | 1.45 | ||||||||
Diluted shares for earnings per share and funds from operations | 41,359 | 39,765 |
VALUE-ADD PROPERTY ACQUIRED IN 2022 | Location | Size | Date Acquired | Cost | ||||||||||||||||||||||
(Square feet) | (In thousands) | |||||||||||||||||||||||||
Cypress Preserve 1 & 2 | Houston, TX | 516,000 | 03/28/2022 | $ | 54,462 |
Costs Incurred | Anticipated Building Conversion Date | ||||||||||||||||||||||||||||||||||
DEVELOPMENT AND VALUE-ADD PROPERTIES ACTIVITY | Costs Transferred in 2022 (1) | For the Three Months Ended 3/31/2022 | Cumulative as of 3/31/2022 | Projected Total Costs | |||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
LEASE-UP | Building Size (Square feet) | ||||||||||||||||||||||||||||||||||
Access Point 2, Greenville, SC (2) | 159,000 | $ | — | 63 | 11,694 | 13,400 | 05/22 | ||||||||||||||||||||||||||||
Grand Oaks 75 3, Tampa, FL | 136,000 | — | 363 | 10,555 | 12,700 | 06/22 | |||||||||||||||||||||||||||||
Siempre Viva 3-6, San Diego, CA (2) | 547,000 | — | 26 | 132,714 | 135,600 | 06/22 | |||||||||||||||||||||||||||||
Horizon West 2 & 3, Orlando, FL | 210,000 | — | 1,034 | 18,224 | 21,400 | 09/22 | |||||||||||||||||||||||||||||
Cypress Preserve 1 & 2, Houston, TX (2) | 516,000 | — | 53,409 | 53,409 | 57,800 | 03/23 | |||||||||||||||||||||||||||||
Total Lease-Up | 1,568,000 | — | 54,895 | 226,596 | 240,900 | ||||||||||||||||||||||||||||||
UNDER CONSTRUCTION | |||||||||||||||||||||||||||||||||||
CreekView 9 & 10, Dallas, TX | 145,000 | — | 1,881 | 13,217 | 17,200 | 07/22 | |||||||||||||||||||||||||||||
SunCoast 12, Fort Myers, FL | 79,000 | — | 1,319 | 5,497 | 9,300 | 07/22 | |||||||||||||||||||||||||||||
Gateway 3, Miami, FL | 133,000 | — | 2,768 | 15,934 | 19,400 | 08/22 | |||||||||||||||||||||||||||||
Steele Creek 8, Charlotte, NC | 72,000 | — | 3,169 | 5,897 | 8,400 | 08/22 | |||||||||||||||||||||||||||||
Ridgeview 3, San Antonio, TX | 88,000 | — | 1,354 | 7,158 | 9,700 | 10/22 | |||||||||||||||||||||||||||||
World Houston 47, Houston, TX | 139,000 | 4,506 | 1,395 | 5,901 | 19,100 | 12/22 | |||||||||||||||||||||||||||||
Basswood 1 & 2, Fort Worth, TX | 237,000 | — | 2,580 | 17,809 | 22,900 | 01/23 | |||||||||||||||||||||||||||||
Tri-County Crossing 5, San Antonio, TX | 105,000 | — | 1,931 | 7,531 | 10,300 | 04/23 | |||||||||||||||||||||||||||||
Americas Ten 2, El Paso, TX | 168,000 | — | 3,366 | 12,466 | 14,100 | 05/23 | |||||||||||||||||||||||||||||
Grand West Crossing 1, Houston, TX | 121,000 | — | 3,366 | 12,235 | 15,700 | 05/23 | |||||||||||||||||||||||||||||
45 Crossing, Austin, TX | 177,000 | — | 3,811 | 20,871 | 26,200 | 06/23 | |||||||||||||||||||||||||||||
Grand Oaks 75 4, Tampa, FL | 185,000 | — | 5,407 | 11,785 | 17,900 | 06/23 | |||||||||||||||||||||||||||||
Tri-County Crossing 6, San Antonio, TX | 124,000 | — | 2,814 | 6,596 | 9,900 | 06/23 | |||||||||||||||||||||||||||||
LakePort 4 & 5, Dallas, TX | 177,000 | 2,495 | 10,433 | 22,400 | 08/23 | ||||||||||||||||||||||||||||||
McKinney 3 & 4, Dallas, TX | 212,000 | — | 5,191 | 15,629 | 26,300 | 08/23 | |||||||||||||||||||||||||||||
Arlington Tech 3, Fort Worth, TX | 77,000 | 1,980 | 959 | 2,939 | 10,300 | 10/23 | |||||||||||||||||||||||||||||
Horizon West 4, Orlando, FL | 295,000 | 6,176 | 4,423 | 10,599 | 28,700 | 10/23 | |||||||||||||||||||||||||||||
I-20 West Business Center, Atlanta, GA | 155,000 | — | 1,429 | 4,393 | 14,200 | 10/23 | |||||||||||||||||||||||||||||
SunCoast 11, Fort Myers, FL | 79,000 | 1,524 | 1,134 | 2,658 | 9,900 | 10/23 | |||||||||||||||||||||||||||||
Hillside 1, Greenville, SC | 122,000 | 632 | 183 | 815 | 11,600 | 12/23 | |||||||||||||||||||||||||||||
Steele Creek 11 & 12, Charlotte, NC | 241,000 | 2,857 | 284 | 3,141 | 24,300 | 01/24 | |||||||||||||||||||||||||||||
Total Under Construction | 3,131,000 | 17,675 | 51,259 | 193,504 | 347,800 | ||||||||||||||||||||||||||||||
PROSPECTIVE DEVELOPMENT (PRIMARILY LAND) | Estimated Building Size (Square feet) | ||||||||||||||||||||||||||||||||||
Phoenix, AZ | 655,000 | — | 14,511 | 14,511 | |||||||||||||||||||||||||||||||
Fort Myers, FL | 464,000 | (1,524) | 823 | 7,597 | |||||||||||||||||||||||||||||||
Miami, FL | 243,000 | — | 1,002 | 15,333 | |||||||||||||||||||||||||||||||
Orlando, FL | 983,000 | (6,176) | 253 | 20,315 | |||||||||||||||||||||||||||||||
Tampa, FL | 32,000 | — | — | 825 | |||||||||||||||||||||||||||||||
Atlanta, GA | 580,000 | — | 257 | 5,315 | |||||||||||||||||||||||||||||||
Jackson, MS | 28,000 | — | — | 706 | |||||||||||||||||||||||||||||||
Charlotte, NC | 1,146,000 | (2,857) | 293 | 12,540 | |||||||||||||||||||||||||||||||
Greenville, SC | 278,000 | (632) | 84 | 1,188 | |||||||||||||||||||||||||||||||
Austin, TX | 274,000 | — | 907 | 7,338 | |||||||||||||||||||||||||||||||
Dallas, TX | 172,000 | — | 108 | 8,506 | |||||||||||||||||||||||||||||||
Fort Worth, TX | 575,000 | (1,980) | 220 | 13,567 | |||||||||||||||||||||||||||||||
Houston, TX | 1,154,000 | (4,506) | 685 | 21,012 | |||||||||||||||||||||||||||||||
San Antonio, TX | 55,000 | — | 13 | 731 | |||||||||||||||||||||||||||||||
Total Prospective Development | 6,639,000 | (17,675) | 19,156 | 129,484 | |||||||||||||||||||||||||||||||
11,338,000 | $ | — | 125,310 | 549,584 | |||||||||||||||||||||||||||||||
The Development and Value-Add Properties Activity table is continued on the following page. | |||||||||||||||||||||||||||||||||||
Costs Incurred | |||||||||||||||||||||||||||||||||||
DEVELOPMENT AND VALUE-ADD PROPERTIES TRANSFERRED TO REAL ESTATE PROPERTIES DURING 2022 | Costs Transferred in 2022 (1) | For the Three Months Ended 3/31/2022 | Cumulative as of 3/31/2022 | Building Conversion Date | |||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Building Size (Square feet) | |||||||||||||||||||||||||||||||||||
Access Point 1, Greenville, SC (2) | 156,000 | $ | — | 7 | 12,529 | 01/22 | |||||||||||||||||||||||||||||
Speed Distribution Center, San Diego, CA | 519,000 | — | 2,884 | 70,702 | 03/22 | ||||||||||||||||||||||||||||||
Total Transferred to Real Estate Properties | 675,000 | $ | — | 2,891 | 83,231 | (3) |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
Leasing costs (principally commissions) | $ | 124,493 | 116,772 | ||||||||
Accumulated amortization of leasing costs | (43,320) | (42,193) | |||||||||
Leasing costs (principally commissions), net of accumulated amortization | 81,173 | 74,579 | |||||||||
Acquired in-place lease intangibles | 32,362 | 31,561 | |||||||||
Accumulated amortization of acquired in-place lease intangibles | (14,277) | (13,038) | |||||||||
Acquired in-place lease intangibles, net of accumulated amortization | 18,085 | 18,523 | |||||||||
Acquired above market lease intangibles | 841 | 885 | |||||||||
Accumulated amortization of acquired above market lease intangibles | (499) | (508) | |||||||||
Acquired above market lease intangibles, net of accumulated amortization | 342 | 377 | |||||||||
Straight-line rents receivable | 54,248 | 51,970 | |||||||||
Accounts receivable | 3,892 | 7,133 | |||||||||
Interest rate swap assets | 17,130 | 2,237 | |||||||||
Right of use assets — Office leases (operating) | 1,861 | 1,984 | |||||||||
Escrow deposits for pending acquisitions | 7,275 | 3,050 | |||||||||
Prepaid insurance | 7,858 | 7,793 | |||||||||
Goodwill | 990 | 990 | |||||||||
Receivable for tenant improvement cost reimbursements | 140 | 7,680 | |||||||||
Prepaid expenses and other assets | 12,535 | 5,904 | |||||||||
Total Other assets | $ | 205,529 | 182,220 |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
Property taxes payable | $ | 18,755 | 4,494 | ||||||||
Development costs payable | 18,820 | 17,529 | |||||||||
Retainage payable | 13,779 | 10,576 | |||||||||
Real estate improvements and capitalized leasing costs payable | 7,920 | 5,798 | |||||||||
Interest payable | 8,876 | 6,547 | |||||||||
Dividends payable | 46,784 | 46,864 | |||||||||
Book overdraft (1) | 4,499 | 4,845 | |||||||||
Other payables and accrued expenses | 7,275 | 13,107 | |||||||||
Total Accounts payable and accrued expenses | $ | 126,708 | 109,760 |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
Security deposits | $ | 30,057 | 28,343 | ||||||||
Prepaid rent and other deferred income | 15,083 | 16,401 | |||||||||
Operating lease liabilities — Ground leases | 20,814 | 22,898 | |||||||||
Operating lease liabilities — Office leases | 1,909 | 2,032 | |||||||||
Acquired below market lease intangibles | 8,819 | 8,124 | |||||||||
Accumulated amortization of below market lease intangibles | (3,324) | (2,707) | |||||||||
Acquired below market lease intangibles, net of accumulated amortization | 5,495 | 5,417 | |||||||||
Interest rate swap liabilities | — | 935 | |||||||||
Tenant improvement cost liabilities | 2,248 | 2,796 | |||||||||
Other liabilities | 3,516 | 3,516 | |||||||||
Total Other liabilities | $ | 79,122 | 82,338 |
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | Increase (Decrease) | |||||||||||||||
(In thousands) | |||||||||||||||||
VARIABLE RATE INTEREST EXPENSE | |||||||||||||||||
Unsecured bank credit facilities interest - variable rate (excluding amortization of facility fees and debt issuance costs) | $ | 566 | 375 | 191 | |||||||||||||
Amortization of facility fees - unsecured bank credit facilities | 176 | 194 | (18) | ||||||||||||||
Amortization of debt issuance costs - unsecured bank credit facilities | 163 | 140 | 23 | ||||||||||||||
Total variable rate interest expense | 905 | 709 | 196 | ||||||||||||||
FIXED RATE INTEREST EXPENSE | |||||||||||||||||
Unsecured debt interest (1) (excluding amortization of debt issuance costs) | 9,281 | 8,861 | 420 | ||||||||||||||
Secured debt interest (excluding amortization of debt issuance costs) | 21 | 742 | (721) | ||||||||||||||
Amortization of debt issuance costs - unsecured debt | 146 | 137 | 9 | ||||||||||||||
Amortization of debt issuance costs - secured debt | 1 | 64 | (63) | ||||||||||||||
Total fixed rate interest expense | 9,449 | 9,804 | (355) | ||||||||||||||
Total interest | 10,354 | 10,513 | (159) | ||||||||||||||
Less capitalized interest | (2,244) | (2,237) | (7) | ||||||||||||||
TOTAL INTEREST EXPENSE | $ | 8,110 | 8,276 | (166) |
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | Increase (Decrease) | |||||||||||||||
(In thousands, except rates of interest) | |||||||||||||||||
Average borrowings on unsecured bank credit facilities - variable rate | $ | 244,405 | 134,812 | 109,593 | |||||||||||||
Weighted average variable interest rates (excluding amortization of facility fees and debt issuance costs) | 0.94 | % | 1.13 | % |
NEW UNSECURED DEBT IN 2021 AND 2022 | Effective Interest Rate | Date Obtained | Maturity Date | Amount | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
$50 Million Senior Unsecured Term Loan (1) | 1.55% | 03/18/2021 | 03/18/2025 | $ | 50,000 | |||||||||||||||||||||
$125 Million Senior Unsecured Notes | 2.74% | 06/10/2021 | 06/10/2031 | 125,000 | ||||||||||||||||||||||
$100 Million Senior Unsecured Term Loan (2) | 3.06% | 03/31/2022 | 09/29/2028 | 100,000 | ||||||||||||||||||||||
Weighted Average/Total Amount for 2021 and 2022 | 2.64% | $ | 275,000 |
UNSECURED DEBT REPAID IN 2021 AND 2022 | Interest Rate | Date Repaid | Payoff Amount | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
$40 Million Senior Unsecured Term Loan | 2.34% | 07/30/2021 | $ | 40,000 | ||||||||||||||||
$75 Million Senior Unsecured Term Loan | 3.03% | 02/28/2022 | 75,000 | |||||||||||||||||
Weighted Average/Total Amount for 2021 and 2022 | 2.79% | $ | 115,000 |
SECURED DEBT REPAID IN 2021 | Interest Rate | Date Repaid | Payoff Amount | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
Colorado Crossing Distribution Center, Interstate Warehouse 1-3, Rojas Commerce Park, Steele Creek Commerce Park 1 & 2, Venture Warehouses and World Houston Int’l Business Ctr 3, 4 & 6-9 | 4.75% | 03/08/2021 | $ | 40,841 | ||||||||||||||||
Arion Business Park 18, Beltway Crossing Business Park 6 & 7, Commerce Park Center 2 & 3, Concord Distribution Center, Interstate Warehouse 5-7, Lakeview Business Center, Ridge Creek Distribution Center 2, Southridge Commerce Park 4 & 5 and World Houston Int’l Business Ctr 32 | 4.09% | 10/07/2021 | 33,090 | |||||||||||||||||
Weighted Average/Total Amount for 2021 | 4.45% | $ | 73,931 |
Three Months Ended March 31, | |||||||||||||||||
Estimated Useful Life | 2022 | 2021 | |||||||||||||||
(In thousands) | |||||||||||||||||
Upgrade on Acquisitions | 40 yrs | $ | 278 | 45 | |||||||||||||
Tenant Improvements: | |||||||||||||||||
New Tenants | Lease Life | 3,456 | 2,642 | ||||||||||||||
Renewal Tenants | Lease Life | 710 | 677 | ||||||||||||||
Other: | |||||||||||||||||
Building Improvements | 5-40 yrs | 2,569 | 1,783 | ||||||||||||||
Roofs | 5-15 yrs | 1,151 | 3,015 | ||||||||||||||
Parking Lots | 3-5 yrs | 236 | 262 | ||||||||||||||
Other | 5 yrs | 326 | 161 | ||||||||||||||
Total Real Estate Improvements (1) | $ | 8,726 | 8,585 |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In thousands) | ||||||||||||||
Total Real Estate Improvements | $ | 8,726 | 8,585 | |||||||||||
Change in Real Estate Property Payables | (192) | 292 | ||||||||||||
Change in Construction in Progress | 1,306 | 251 | ||||||||||||
Real estate improvements on the Consolidated Statements of Cash Flows | $ | 9,840 | 9,128 |
Three Months Ended March 31, | |||||||||||||||||
Estimated Useful Life | 2022 | 2021 | |||||||||||||||
(In thousands) | |||||||||||||||||
Development and Value-Add | Lease Life | $ | 4,286 | 2,828 | |||||||||||||
New Tenants | Lease Life | 3,586 | 4,347 | ||||||||||||||
Renewal Tenants | Lease Life | 3,401 | 1,954 | ||||||||||||||
Total Capitalized Leasing Costs (1) | $ | 11,273 | 9,129 | ||||||||||||||
Amortization of Leasing Costs | $ | 4,484 | 3,735 |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
(In thousands) | ||||||||||||||
Total Capitalized Leasing Costs | $ | 11,273 | 9,129 | |||||||||||
Change in Leasing Commissions Payables | (1,929) | (2,442) | ||||||||||||
Leasing commissions on the Consolidated Statements of Cash Flows | $ | 9,344 | 6,687 |
REAL ESTATE PROPERTIES SOLD | Location | Size | Date Sold | Net Sales Price | Basis | Recognized Gain | ||||||||||||||||||||||||||||||||
(In square feet) | (In thousands) | |||||||||||||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||||||||
Metro Business Park | Phoenix, AZ | 189,000 | 01/06/2022 | $ | 32,851 | 5,880 | 26,971 | |||||||||||||||||||||||||||||||
Cypress Creek Business Park (1) | Fort Lauderdale, FL | 56,000 | 03/31/2022 | 5,282 | 1,901 | 3,381 | ||||||||||||||||||||||||||||||||
Total for 2022 | 245,000 | $ | 38,133 | 7,781 | 30,352 | |||||||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||||||||
Jetport Commerce Park | Tampa, FL | 284,000 | 11/09/2021 | $ | 44,260 | 5,401 | 38,859 |
March 31, 2022 | December 31, 2021 | ||||||||||
(In thousands) | |||||||||||
Unsecured bank credit facilities - variable rate, carrying amount (1) | $ | 197,313 | 209,210 | ||||||||
Unamortized debt issuance costs | (1,996) | (2,144) | |||||||||
Unsecured bank credit facilities, net of debt issuance costs | 195,317 | 207,066 | |||||||||
Unsecured debt - fixed rate, carrying amount (2) | 1,270,000 | 1,245,000 | |||||||||
Unamortized debt issuance costs | (2,916) | (2,430) | |||||||||
Unsecured debt, net of debt issuance costs | 1,267,084 | 1,242,570 | |||||||||
Secured debt - fixed rate, carrying amount (2) | 2,128 | 2,156 | |||||||||
Unamortized debt issuance costs | (13) | (14) | |||||||||
Secured debt, net of debt issuance costs | 2,115 | 2,142 | |||||||||
Total debt, net of debt issuance costs | $ | 1,464,516 | 1,451,778 |
April – December 2022 | 2023 | 2024 | 2025 | 2026 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||||||||||||||||||||
Unsecured bank credit facilities - variable rate (in thousands) | $ | — | — | — | 197,313 | (1) | — | — | 197,313 | 197,280 | (2) | |||||||||||||||||||||||||||||||||||||||
Weighted average interest rate | — | — | — | 1.17 | % | (3) | — | — | 1.17 | % | ||||||||||||||||||||||||||||||||||||||||
Unsecured debt - fixed rate (in thousands) | $ | — | 115,000 | 120,000 | 145,000 | 140,000 | 750,000 | 1,270,000 | 1,251,686 | (4) | ||||||||||||||||||||||||||||||||||||||||
Weighted average interest rate | — | 2.96 | % | 3.47 | % | 3.12 | % | 2.57 | % | 3.00 | % | 3.01 | % | |||||||||||||||||||||||||||||||||||||
Secured debt - fixed rate (in thousands) | $ | 87 | 119 | 122 | 128 | 1,672 | — | 2,128 | 2,170 | (4) | ||||||||||||||||||||||||||||||||||||||||
Weighted average interest rate | 3.85 | % | 3.85 | % | 3.85 | % | 3.85 | % | 3.85 | % | — | 3.85 | % |
Period | Total Number of Shares Purchased | 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 | ||||||||||||||||||||||
January 1, 2022 through January 31, 2022 (1) | 19,690 | $ | 227.85 | — | — | |||||||||||||||||||||
February 1, 2022 through February 28, 2022 (1) | 14,561 | 190.89 | — | — | ||||||||||||||||||||||
March 1, 2022 through March 31, 2022 | — | — | — | — | ||||||||||||||||||||||
Total | 34,251 | $ | 212.14 | — |
The following exhibits are included in or incorporated by reference into, this Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022: |
Exhibit Number | Description | ||||
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). | |||||
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). | |||||
101.1.SCH | Inline XBRL Taxonomy Extension Schema Document (filed herewith). | ||||
101.2.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith). | ||||
101.3.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith). | ||||
101.4.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith). | ||||
101.5.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith). | ||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) (filed herewith). |
EASTGROUP PROPERTIES, INC. | |||||
/s/ STACI H. TYLER | |||||
Staci H. Tyler | |||||
Senior Vice President, Chief Accounting Officer and Secretary | |||||
/s/ BRENT W. WOOD | |||||
Brent W. Wood | |||||
Executive Vice President, Chief Financial Officer and Treasurer |
/s/ MARSHALL A. LOEB | |||||
MARSHALL A. LOEB | |||||
Chief Executive Officer | |||||
April 27, 2022 |
/s/ BRENT W. WOOD | |||||
BRENT W. WOOD | |||||
Chief Financial Officer | |||||
April 27, 2022 |
/s/ MARSHALL A. LOEB | |||||
MARSHALL A. LOEB | |||||
Chief Executive Officer | |||||
April 27, 2022 |
/s/ BRENT W. WOOD | |||||
BRENT W. WOOD | |||||
Chief Financial Officer | |||||
April 27, 2022 |
7
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CONSOLIDATED BALANCE SHEETS - Unaudited - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
||
---|---|---|---|---|
ASSETS | ||||
Real estate properties | $ 3,637,496,000 | $ 3,546,711,000 | ||
Development and value-add properties | [1] | 549,584,000 | 504,614,000 | |
Real estate, development and value-add properties | 4,187,080,000 | 4,051,325,000 | ||
Less accumulated depreciation | (1,061,190,000) | (1,035,617,000) | ||
Real estate, net | 3,125,890,000 | 3,015,708,000 | ||
Real Estate Held-for-sale | 0 | 5,695,000 | ||
Unconsolidated investment | 7,598,000 | 7,320,000 | ||
Cash | 5,718,000 | 4,393,000 | ||
Other Assets | 205,529,000 | 182,220,000 | ||
TOTAL ASSETS | 3,344,735,000 | 3,215,336,000 | ||
LIABILITIES | ||||
Unsecured bank credit facilities, net of debt issuance costs | 195,317,000 | 207,066,000 | ||
Unsecured debt, net of debt issuance costs | 1,267,084,000 | 1,242,570,000 | ||
Secured debt, net of debt issuance costs | 2,115,000 | 2,142,000 | ||
Accounts payable and accrued expenses | 126,708,000 | 109,760,000 | ||
Other liabilities | 79,122,000 | 82,338,000 | ||
Total Liabilities | 1,670,346,000 | 1,643,876,000 | ||
STOCKHOLDERS' EQUITY | ||||
Common shares; $.0001 par value; 70,000,000 shares authorized; 41,680,414 shares issued and outstanding at March 31, 2022 and 41,268,846 at December 31, 2021 | 4,000 | 4,000 | ||
Excess shares; $.0001 par value; 30,000,000 shares authorized; no shares issued | 0 | 0 | ||
Additional paid-in capital | 1,956,328,000 | 1,886,820,000 | ||
Distributions in excess of earnings | (300,429,000) | (318,056,000) | ||
Accumulated Other Comprehensive Income | 17,130,000 | 1,302,000 | ||
Total Stockholders' Equity | 1,673,033,000 | 1,570,070,000 | ||
Noncontrolling interest in joint ventures | 1,356,000 | 1,390,000 | ||
Total Equity | 1,674,389,000 | 1,571,460,000 | ||
TOTAL LIABILITIES AND EQUITY | $ 3,344,735,000 | $ 3,215,336,000 | ||
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Common shares, authorized | 70,000,000 | 70,000,000 | ||
Common shares, issued | 41,680,414 | 41,268,846 | ||
Common shares, outstanding | 41,680,414 | 41,268,846 | ||
Excess shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Excess shares, authorized | 30,000,000 | 30,000,000 | ||
Excess shares, issued | 0 | 0 | ||
|
BASIS OF PRESENTATION |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited financial statements of EastGroup Properties, Inc. (“EastGroup” or “the Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The financial statements should be read in conjunction with the financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2021 and the notes thereto. Certain reclassifications have been made in the 2021 consolidated financial statements to conform to the 2022 presentation. |
PRINCIPLES OF CONSOLIDATION |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and its investment in any joint ventures in which the Company has a controlling interest. As of March 31, 2022 and December 31, 2021, EastGroup held a controlling interest in two joint venture arrangements. In 2019, the Company acquired 6.5 acres of land in San Diego, known by the Company as the Miramar land. Also in 2019, the Company acquired 41.6 acres of land in San Diego, known by the Company as the Otay Mesa land. During the year ended December 31, 2021, EastGroup began construction of Speed Distribution Center, a 519,000 square foot building on the Otay Mesa land, which was completed and transferred to the Company’s operating portfolio during the three months ended March 31, 2022. As of both March 31, 2022 and December 31, 2021, EastGroup had a 95% controlling interest in the Miramar land and a 99% controlling interest in Speed Distribution Center. The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements. 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.
|
USE OF ESTIMATES |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Use of estimates [Abstract] | |
USE OF ESTIMATES | 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.
|
LEASE REVENUE |
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Lease Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease, Lease Income [Text Block] | LEASE REVENUE The Company’s primary revenue is rental income from business distribution space. The table below presents the components of Income from real estate operations for the three months ended March 31, 2022 and 2021:
(1)Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.
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REAL ESTATE PROPERTIES |
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Real Estate Investment Property, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Properties | 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 three month periods ended March 31, 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 $29,392,000 and $25,147,000 for the three months ended March 31, 2022 and 2021, respectively. The Company’s Real estate properties and Development and value-add properties at March 31, 2022 and December 31, 2021 were as follows:
(1)EastGroup applies the principles of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases, and its related Accounting Standards Updates (“ASUs”) to account for its ground leases, which are classified as operating leases. The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets. (2)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% occupied 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.
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DEVELOPMENT AND VALUE-ADD PROPERTIES |
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DEVELOPMENT [Abstract] | |
Development | DEVELOPMENT AND VALUE-ADD PROPERTIES 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. 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 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).
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REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES |
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Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Property Acquisitions and Acquired Intangibles | REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES Upon acquisition of real estate properties, EastGroup applies the principles of FASB 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. EastGroup determined that its real estate property acquisitions in 2021 and the first three months of 2022 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 capitalized acquisition costs related to its 2021 and 2022 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 respective 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, the value of in-place leases, and the value of customer relationships. 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. The total amount of intangible assets is further allocated to in-place lease values and customer relationship values based upon management’s assessment of their respective values. Factors considered by management in the allocation include 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, or the anticipated life of the customer relationship, as applicable. Amortization expense for in-place lease intangibles was $2,465,000 and $1,431,000 for the three months ended March 31, 2022 and 2021, respectively. Amortization of above and below market lease intangibles increased rental income by $845,000 and $229,000 for the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022, EastGroup acquired the following properties:
(1)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% occupied 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. The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisition identified in the table above which was acquired during the three months ended March 31, 2022.
(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 lives 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 lives of the associated leases in place at the time of acquisition. The leases in the properties acquired during the three months ended March 31, 2022 had a weighted average remaining lease term at acquisition of approximately 4.6 years. During 2021, EastGroup acquired the following properties:
(1)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. (2)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% occupied 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. The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisitions identified in the table above which were acquired during the year ended December 31, 2021.
(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 lives 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 lives 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 the year ended December 31, 2021 had a weighted average remaining lease term at acquisition of approximately 2.9 years. 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 or other intangibles existed during the three month periods ended March 31, 2022 and 2021.
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REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS |
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Real Estate Sold and Held For Sale and Discontinued Operations | 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 March 31, 2022. As of December 31, 2021, the Company owned one operating property that was classified as held for sale on the December 31, 2021 Consolidated Balance Sheet. The property was sold, and a gain on the sale was recorded in the three months ended March 31, 2022. In accordance with FASB ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, 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. The Company sold operating properties during the three months ended March 31, 2022, as shown in the table below. 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 are included in Gain on sales of real estate investments. The Company did not consider its sales in 2022 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 three months ended March 31, 2022 and the year ended December 31, 2021 follows:
(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 Company had no sales during the three months ended March 31, 2021.
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Other Assets | OTHER ASSETS A summary of the Company’s Other assets follows:
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure | DEBT The Company’s debt is detailed below:
(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps. Until June 29, 2021, EastGroup had $350 million and $45 million unsecured bank credit facilities with margins over London Interbank Offered Rate (“LIBOR”) of 100 basis points, facility fees of 20 basis points and maturity dates of July 30, 2022. The Company amended and restated these credit facilities on June 29, 2021, expanding their capacities to $425 million and $50 million, respectively, as detailed below. The $425 million unsecured bank credit facility is with a group of nine 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 a $325 million accordion (with agreement by all parties). The interest rate on each tranche is reset on a monthly basis and as of March 31, 2022, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of March 31, 2022, the Company had $183,000,000 of variable rate borrowings on this unsecured bank credit facility with a weighted average interest rate of 1.168%. The Company's $50 million 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 $425 million facility are exercised. The interest rate is reset on a daily basis and as of March 31, 2022, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of March 31, 2022, the interest rate was 1.227% on a balance of $14,313,000. 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 facilities also include a sustainability-linked pricing component pursuant to which the applicable interest margin will be reduced by one basis point if the Company meets certain sustainability performance targets. In February 2022, EastGroup repaid a $75 million unsecured term loan at maturity with an effectively fixed interest rate of 3.03%. In March 2022, the Company closed a $100 million senior unsecured term loan with a 6.5 year term and interest only payments, which bears interest at an annual rate of the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin (1.30% as of March 31, 2022) 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 LIBOR rate component to a fixed interest rate for the entire term of the loan providing a total effectively fixed interest rate of 3.06%. Also during March 2022, the Company closed on the refinance of a $100 million senior unsecured term loan with 5 years remaining. The amended term loan provides for interest only payments currently at an interest rate of SOFR plus 85 basis points, based on the Company’s current credit ratings and consolidated leverage ratio, which is a 60 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 1.80%. Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs and Secured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs), as of March 31, 2022, are as follows:
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses | ACCOUNTS PAYABLE AND ACCRUED EXPENSES A summary of the Company’s Accounts payable and accrued expenses follows:
(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.
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OTHER LIABILITIES |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities | OTHER LIABILITIES A summary of the Company’s Other liabilities follows:
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COMPREHENSIVE INCOME |
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COMPREHENSIVE INCOME [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | 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) are presented in the Company’s Consolidated Statement of Changes in Equity and are summarized below. See Note 14 for information regarding the Company’s interest rate swaps.
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 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 March 31, 2022, the Company had five 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’ LIBOR or SOFR rate components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly effective. The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Other comprehensive income 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 $2,352,000 will be reclassified from Other comprehensive income 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 Overnight Index Swap (“OIS”) rates. Uncollateralized or partially-collateralized trades are discounted at OIS rates, but include appropriate economic adjustments for funding costs (i.e., a LIBOR-OIS basis adjustment to approximate uncollateralized cost of funds) and credit risk. The Company calculates its derivative valuations using mid-market prices. In July 2017, the Financial Conduct Authority announced it intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021. In March 2021, the ICE Benchmark Administration, the administrator of LIBOR, announced its intention to cease publication of certain LIBOR settings after 2021, while continuing to publish overnight and one-, three-, six-, and twelve-month U.S. dollar LIBOR rates through June 30, 2023. While this announcement extended the transition period to June 2023, the United States Federal Reserve Board and other regulatory bodies concurrently issued guidance encouraging banks and other financial market participants to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate as soon as practicable and in any event no later than December 31, 2021. 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, has recommended that SOFR plus a recommended spread adjustment as its preferred alternative to USD-LIBOR. There are significant differences between LIBOR and SOFR, such as LIBOR being an unsecured lending rate while SOFR is a secured rate, and SOFR is an overnight rate while LIBOR reflects term rates at different maturities. We expect that all LIBOR settings relevant to us will cease to be published or will no longer be representative after June 30, 2023. As a result, any of our LIBOR-based borrowings that extend beyond such date will need to be converted to a replacement rate. Certain risks may arise in connection with transitioning contracts to SOFR or any other alternative variable rate, including any resulting value transfer that may occur. The value of loans, securities, or derivative instruments tied to LIBOR could also be impacted. During the three months ended March 31, 2022, the Company entered into a new term loan and related swap which are both indexed to SOFR. Also, during the three months ended March 31, 2022, EastGroup refinanced an existing term loan modifying the index from LIBOR to SOFR, and concurrently amended the related swap to reference SOFR rather than LIBOR. The Company’s unsecured bank credit facilities and three of its senior unsecured term loans and interest rate swap contracts are indexed to LIBOR and include provisions for a replacement rate which we believe will be substantially equivalent to the all-in LIBOR-based interest rate in effect prior to its replacement. Therefore, management believes the transition will not have a material impact on the Company’s consolidated financial statements. The Company is continuously monitoring and evaluating the related risks, which include interest on loans and amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans or derivative instruments indexed to LIBOR could also be impacted if LIBOR is limited or discontinued as interest rates may be adversely affected. While we expect LIBOR to be available in substantially its current form until June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. 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 preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. As of March 31, 2022 and December 31, 2021, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:
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 March 31, 2022 and December 31, 2021. See Note 17 for additional information on the fair value of the Company’s interest rate swaps.
The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021:
See Note 13 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. If the Company breached any of these provisions it would be required to settle its obligations under the agreements at their termination value of $17,248,000 as of March 31, 2022.
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | 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 dilutive effect of unvested restricted stock. The dilutive effect of unvested restricted stock is determined using the treasury stock method. Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:
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STOCK-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | 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 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. The Compensation Committee of the Company’s Board of Directors (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. The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming -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 Company begins recognizing expense for these awards based on the grant date fair value of the awards which is determined using a simulation pricing model developed to specifically accommodate the unique features of the award. 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 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 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 2022 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 -year performance period and 33% vests in each of the following two years). 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 will expense on a straight-line basis over the remaining service period (34% vests at the end of the -year performance period and 33% vests in each of the following two years). Equity compensation is also awarded to the Company’s non-executive officers and directors, which are subject to service only conditions and expensed on a straight-line basis over the required service period. The total compensation expense is based upon the fair market value of the shares on the grant date. 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 $2,561,000 for the three months ended March 31, 2022, of which $691,000 was capitalized as part of the Company’s development costs. For the three months ended March 31, 2021, stock-based compensation cost for employees was $2,144,000, of which $550,000 was capitalized as part of the Company’s development costs. Stock-based compensation expense for directors was $33,000 for the three months ended March 31, 2022, and $3,000 for the same period in 2021. Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices. Of the shares that vested in the three months ended March 31, 2022, the Company withheld 34,251 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the grant dates, the fair value of shares that were granted during the three months ended March 31, 2022 was $7,013,000. As of the vesting dates, the aggregate fair value of shares that vested during the three months ended March 31, 2022 was $17,124,000.
(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 2020 and 2021 for long-term performance and in 2022 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 105,485.
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | 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 March 31, 2022 and December 31, 2021.
(1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below. (2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 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 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, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 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. Secured debt: The fair value of the Company’s secured 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, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps.
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RISKS AND UNCERTAINTIES |
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Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | 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 due to the current coronavirus (“COVID-19”) pandemic or other general economic conditions, it may affect the Company’s ability to make distributions to its shareholders, service debt, or meet other financial obligations. Although COVID-19 has had an overall minimal impact on the Company in 2020, 2021 and during the first three months of 2022, EastGroup remains unable to predict any future impact that it may have on its business, financial condition, results of operations and cash flows.
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LEGAL MATTERS (Notes) |
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Mar. 31, 2022 | |
LEGAL MATTERS [Abstract] | |
Legal Matters and Contingencies [Text Block] | LEGAL MATTERSThe 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. |
RECENT ACCOUNTING PRONOUNCEMENTS |
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Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | RECENT ACCOUNTING PRONOUNCEMENTS EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, applies to the Company. See Note 14 in the Notes to Consolidated Financial Statements for the Company’s evaluation of ASU 2020-04. |
SUBSEQUENT EVENTS (Notes) |
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Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS In January 2022, the Company and a group of lenders agreed to terms on the private placement of $150 million of senior unsecured notes with a fixed interest rate of 3.03% and a 10-year term. The notes were issued and sold on April 20, 2022 and require interest-only payments. The notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Subsequent to March 31, 2022, the Company closed on the acquisition of 25.8 acres of development land in Houston, known by the Company as Cypress Preserve Land, for approximately $7.8 million. Also subsequent to March 31, 2022, the Company acquired Zephyr Distribution Center, a multi-tenant distribution building in the Hayward submarket of San Francisco containing 82,000 square feet, for $28.5 million. The building is currently in the lease-up phase of the development and value-add portfolio. In April 2022, EastGroup closed on the acquisition of Mesa Gateway Commerce Park in Phoenix, Arizona for $18.3 million. This recently constructed 147,000 square foot building is currently in the lease-up phase of the development and value-add portfolio.
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and its investment in any joint ventures in which the Company has a controlling interest. As of March 31, 2022 and December 31, 2021, EastGroup held a controlling interest in two joint venture arrangements. In 2019, the Company acquired 6.5 acres of land in San Diego, known by the Company as the Miramar land. Also in 2019, the Company acquired 41.6 acres of land in San Diego, known by the Company as the Otay Mesa land. During the year ended December 31, 2021, EastGroup began construction of Speed Distribution Center, a 519,000 square foot building on the Otay Mesa land, which was completed and transferred to the Company’s operating portfolio during the three months ended March 31, 2022. As of both March 31, 2022 and December 31, 2021, EastGroup had a 95% controlling interest in the Miramar land and a 99% controlling interest in Speed Distribution Center. The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements. 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.
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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. |
Discontinued Operations | 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 March 31, 2022. As of December 31, 2021, the Company owned one operating property that was classified as held for sale on the December 31, 2021 Consolidated Balance Sheet. The property was sold, and a gain on the sale was recorded in the three months ended March 31, 2022. In accordance with FASB ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, 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. |
Real Estate Property Acquisitions and Acquired Intangibles [Policy Text Block] | Upon acquisition of real estate properties, EastGroup applies the principles of FASB 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. EastGroup determined that its real estate property acquisitions in 2021 and the first three months of 2022 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 capitalized acquisition costs related to its 2021 and 2022 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 respective 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, the value of in-place leases, and the value of customer relationships. 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. The total amount of intangible assets is further allocated to in-place lease values and customer relationship values based upon management’s assessment of their respective values. Factors considered by management in the allocation include 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, or the anticipated life of the customer relationship, as applicable.
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Earnings Per Share, Policy [Policy Text Block] | 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 dilutive effect of unvested restricted stock. The dilutive effect of unvested restricted stock is determined using the treasury stock method.
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Share-based Payment Arrangement [Policy Text Block] | 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 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. The Compensation Committee of the Company’s Board of Directors (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. The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming -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 Company begins recognizing expense for these awards based on the grant date fair value of the awards which is determined using a simulation pricing model developed to specifically accommodate the unique features of the award. 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 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 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 2022 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 -year performance period and 33% vests in each of the following two years). 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 will expense on a straight-line basis over the remaining service period (34% vests at the end of the -year performance period and 33% vests in each of the following two years). Equity compensation is also awarded to the Company’s non-executive officers and directors, which are subject to service only conditions and expensed on a straight-line basis over the required service period. The total compensation expense is based upon the fair market value of the shares on the grant date. 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.
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Fair Value Measurement, Policy [Policy Text Block] | 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). |
Real Estate Properties | 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 three month periods ended March 31, 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 $29,392,000 and $25,147,000 for the three months ended March 31, 2022 and 2021, respectively.
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Development | 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. 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 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). |
Risks and Uncertainties | 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 due to the current coronavirus (“COVID-19”) pandemic or other general economic conditions, it may affect the Company’s ability to make distributions to its shareholders, service debt, or meet other financial obligations. Although COVID-19 has had an overall minimal impact on the Company in 2020, 2021 and during the first three months of 2022, EastGroup remains unable to predict any future impact that it may have on its business, financial condition, results of operations and cash flows.
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New Accounting Pronouncements, Policy | RECENT ACCOUNTING PRONOUNCEMENTS EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, applies to the Company. See Note 14 in the Notes to Consolidated Financial Statements for the Company’s evaluation of ASU 2020-04. |
Derivatives, Policy | 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.
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LEASE REVENUE (Tables) |
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Operating Lease, Lease Income [Table Text Block] | The table below presents the components of Income from real estate operations for the three months ended March 31, 2022 and 2021:
(1)Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.
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REAL ESTATE PROPERTIES (Tables) |
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Schedule of Real Estate Properties | The Company’s Real estate properties and Development and value-add properties at March 31, 2022 and December 31, 2021 were as follows:
(1)EastGroup applies the principles of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases, and its related Accounting Standards Updates (“ASUs”) to account for its ground leases, which are classified as operating leases. The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets. (2)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% occupied 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.
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REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES (Tables) |
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Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Properties Acquired [Table] | During the three months ended March 31, 2022, EastGroup acquired the following properties:
(1)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% occupied 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.
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During 2021, EastGroup acquired the following properties:
(1)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. (2)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% occupied 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.
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Acquired Assets and Assumed Liabilities [Table] | The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisition identified in the table above which was acquired during the three months ended March 31, 2022.
(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 lives 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 lives of the associated leases in place at the time of acquisition.
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The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisitions identified in the table above which were acquired during the year ended December 31, 2021.
(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 lives 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 lives 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.
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REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS (Tables) |
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Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate properties sold [Table] | A summary of Gain on sales of real estate investments for the three months ended March 31, 2022 and the year ended December 31, 2021 follows:
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OTHER ASSETS (Tables) |
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Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | A summary of the Company’s Other assets follows:
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DEBT (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long term debt, by type [Table Text Block] | The Company’s debt is detailed below:
(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.
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Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs and Secured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs), as of March 31, 2022, are as follows:
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accounts Payable and Accrued Expenses | A summary of the Company’s Accounts payable and accrued expenses follows:
(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.
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OTHER LIABILITIES (Tables) |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of other liabilities | A summary of the Company’s Other liabilities follows:
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COMPREHENSIVE INCOME (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of Accumulated other comprehensive income (loss) are presented in the Company’s Consolidated Statement of Changes in Equity and are summarized below. See Note 14 for information regarding the Company’s interest rate swaps.
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments [Table Text Block] | As of March 31, 2022 and December 31, 2021, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | 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 March 31, 2022 and December 31, 2021. See Note 17 for additional information on the fair value of the Company’s interest rate swaps.
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021:
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EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:
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STOCK-BASED COMPENSATION (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of total shares granted, forfeited and delivered | Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices. Of the shares that vested in the three months ended March 31, 2022, the Company withheld 34,251 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the grant dates, the fair value of shares that were granted during the three months ended March 31, 2022 was $7,013,000. As of the vesting dates, the aggregate fair value of shares that vested during the three months ended March 31, 2022 was $17,124,000.
(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 2020 and 2021 for long-term performance and in 2022 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 105,485.
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amounts and fair value of financial instruments | The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at March 31, 2022 and December 31, 2021.
(1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below. (2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 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 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, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 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. Secured debt: The fair value of the Company’s secured 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, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps.
|
LEASE REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|||
Lease Revenue [Line Items] | ||||
Lease income - operating leases | $ 84,945 | $ 73,382 | ||
Variable lease income | [1] | 28,007 | 24,535 | |
Income from real estate operations | $ 112,952 | $ 97,917 | ||
|
REAL ESTATE PROPERTIES (Details) |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2022
USD ($)
Integer
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|||||
Real Estate Properties [Line Items] | |||||||
Number of Reporting Units | Integer | 1 | ||||||
Depreciation Expense During the Period | $ 29,392,000 | $ 25,147,000 | |||||
Maximum occupancy at acquisition date that defines an investment property as value-add | 75.00% | ||||||
Minimum percentage of acquisition cost used in redevelopment costs that defines an investment property as value-add | 20.00% | ||||||
Real Estate Properties | |||||||
Land | $ 560,512,000 | $ 544,505,000 | |||||
Building and building improvements | 2,473,788,000 | 2,408,944,000 | |||||
Tenant and other improvements | 582,708,000 | 570,627,000 | |||||
Right of use assets - Ground leases (operating) | [1] | 20,488,000 | 22,635,000 | ||||
Development and value-add properties | [2] | 549,584,000 | 504,614,000 | ||||
Real estate, development and value-add properties | 4,187,080,000 | 4,051,325,000 | |||||
Less accumulated depreciation | (1,061,190,000) | (1,035,617,000) | |||||
Real estate, net | $ 3,125,890,000 | $ 3,015,708,000 | |||||
Building [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 40 years | ||||||
Minimum [Member] | Improvements [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 3 years | ||||||
Maximum [Member] | Improvements [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 15 years | ||||||
|
REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS (Details) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022
USD ($)
ft²
|
Dec. 31, 2021
USD ($)
ft²
|
|
Real Estate Properties Sold [Line Items] | ||
Right of use liability, ground lease | $ 20,814 | $ 22,898 |
2022 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 245,000 | |
Net sales price | $ 38,133 | |
Basis | 7,781 | |
Recognized gain | $ 30,352 | |
Metro Business Park | 2022 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 189,000 | |
Date sold | Jan. 06, 2022 | |
Net sales price | $ 32,851 | |
Basis | 5,880 | |
Recognized gain | $ 26,971 | |
Cypress Creek Business Park | 2022 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 56,000 | |
Date sold | Mar. 31, 2022 | |
Net sales price | $ 5,282 | |
Basis | 1,901 | |
Recognized gain | 3,381 | |
Right of use asset, ground lease | 1,745 | |
Right of use liability, ground lease | $ 1,745 | |
Jetport Commerce Park | 2021 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 284,000 | |
Date sold | Nov. 09, 2021 | |
Net sales price | $ 44,260 | |
Basis | 5,401 | |
Recognized gain | $ 38,859 |
OTHER ASSETS (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Assets Components [Abstract] | ||
Leasing costs (principally commissions) | $ 124,493 | $ 116,772 |
Accumulated amortization of leasing costs | (43,320) | (42,193) |
Leasing costs (principally commissions), net of accumulated amortization | 81,173 | 74,579 |
Acquired in-place lease intangibles | 32,362 | 31,561 |
Accumulated amortization of acquired in-place lease intangibles | (14,277) | (13,038) |
Acquired in-place lease intangibles, net of accumulated amortization | 18,085 | 18,523 |
Acquired above market lease intangibles | 841 | 885 |
Accumulated amortization of acquired above market lease intangibles | (499) | (508) |
Acquired above market lease intangibles, net of accumulated amortization | 342 | 377 |
Straight-line rents receivable | 54,248 | 51,970 |
Accounts receivable | 3,892 | 7,133 |
Interest rate swap assets | 17,130 | 2,237 |
Right of use assets - Office leases (operating) | 1,861 | 1,984 |
Receivable for common stock offerings | 7,275 | 3,050 |
Prepaid Insurance | 7,858 | 7,793 |
Goodwill | 990 | 990 |
Receivable for tenant improvement cost reimbursements | 140 | 7,680 |
Prepaid expenses and other assets | 12,535 | 5,904 |
Total Other Assets | $ 205,529 | $ 182,220 |
DEBT (Details) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022
USD ($)
basisPoints
Integer
|
Dec. 31, 2021
USD ($)
|
|||
Secured and Unsecured Debt [Line Items] | ||||
Moody's Credit Rating | Baa2 | |||
Unsecured bank credit facilities | $ 195,317,000 | $ 207,066,000 | ||
Secured Debt | 2,115,000 | 2,142,000 | ||
Unsecured Debt | 1,267,084,000 | 1,242,570,000 | ||
Total debt | 1,464,516,000 | 1,451,778,000 | ||
Secured and unsecured debt, net of debt issuance costs [Member] | ||||
Payments of principal over future years [Abstract] | ||||
2022 - Remainder of year | 87,000 | |||
2023 | 115,119,000 | |||
2024 | 120,122,000 | |||
2025 | 145,128,000 | |||
2026 | 141,672,000 | |||
2027 and beyond | 750,000,000 | |||
Total | $ 1,272,128,000 | |||
$75 million unsecured term loan (repaid in 2022) [Member] | ||||
Secured and Unsecured Debt [Line Items] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 3.03% | |||
Unsecured debt, carrying amount repaid | $ 75,000,000 | |||
$100 million senior unsecured term loan (refinanced in 2022) | ||||
Secured and Unsecured Debt [Line Items] | ||||
Basis point reduction in credit spread | basisPoints | 60 | |||
Debt instrument, basis spread above variable rate | basisPoints | 85 | |||
Debt Instrument, Term | 5 years | |||
Fixed interest rate | 1.80% | |||
Unsecured debt, carrying amount | $ 100,000,000 | |||
$100 million senior unsecured term loan (new in 2022) | ||||
Secured and Unsecured Debt [Line Items] | ||||
Debt Instrument, Term | 6 years 6 months | |||
Debt Instrument, Interest Rate, Effective Percentage | 3.06% | |||
Debt Instrument, Basis Spread on Variable Rate | 1.30% | |||
Unsecured debt, carrying amount | $ 100,000,000 | |||
Unsecured bank credit facilities | ||||
Secured and Unsecured Debt [Line Items] | ||||
Unsecured bank credit facilities - variable rate, carrying amount | 197,313,000 | 209,210,000 | ||
Unsecured bank credit facilities | 195,317,000 | 207,066,000 | ||
Unamortized debt issuance costs | (1,996,000) | (2,144,000) | ||
Unsecured Debt [Member] | ||||
Secured and Unsecured Debt [Line Items] | ||||
Unamortized debt issuance costs | (2,916,000) | (2,430,000) | ||
Unsecured debt, carrying amount | [1] | 1,270,000,000 | 1,245,000,000 | |
Unsecured Debt | 1,267,084,000 | 1,242,570,000 | ||
Secured Debt [Member] | ||||
Secured and Unsecured Debt [Line Items] | ||||
Secured debt-fixed rate, carrying amount | [1] | 2,128,000 | 2,156,000 | |
Secured Debt | 2,115,000 | 2,142,000 | ||
Unamortized debt issuance costs | (13,000) | $ (14,000) | ||
Nine bank group unsecured revolving credit facility [Member] | Former credit facility obtained in 2018 - $350 million [Member] | ||||
Secured and Unsecured Debt [Line Items] | ||||
Line of Credit Facility, Borrowing Capacity | $ 350,000,000 | |||
Debt instrument, basis spread above variable rate | 100 | |||
Line of credit, facility fee (in basis points) | 20 | |||
Debt Instrument, Maturity Date, Description | July 30, 2022 | |||
Nine bank group unsecured revolving credit facility [Member] | Bank credit facility obtained in 2021 - $425 million | ||||
Secured and Unsecured Debt [Line Items] | ||||
Line of Credit Facility, Interest Rate at Period End | 1.168% | |||
Line of Credit Facility, Borrowing Capacity | $ 425,000,000 | |||
Number of banks included in the unsecured revolving credit facility | Integer | 9 | |||
Debt instrument, basis spread above variable rate | 77.5 | |||
Line of credit, facility fee (in basis points) | 15 | |||
Debt Instrument, Maturity Date, Description | July 30, 2025 | |||
Extension option on credit facility | two six-month extensions | |||
Line of credit facility, accordion | $ 325,000,000 | |||
Unsecured bank credit facilities - variable rate, carrying amount | $ 183,000,000 | |||
Nine bank group unsecured revolving credit facility [Member] | Bank credit facilities obtained in 2021 - $425 and $50 million | ||||
Secured and Unsecured Debt [Line Items] | ||||
Sustainability performance linked basis point reduction (in basis points) | 1 | |||
Initial pricing basis for credit facilities | BBB+/Baa1 | |||
Line of credit facility covenant terms, consolidated leverage ratio | 32.50% | |||
Pnc Na Unsecured revolving credit facility [Member] | Former credit facility obtained in 2018 - $45 million [Member] | ||||
Secured and Unsecured Debt [Line Items] | ||||
Line of Credit Facility, Borrowing Capacity | $ 45,000,000 | |||
Debt instrument, basis spread above variable rate | 100 | |||
Line of credit, facility fee (in basis points) | 20 | |||
Debt Instrument, Maturity Date, Description | July 30, 2022 | |||
Pnc Na Unsecured revolving credit facility [Member] | Bank credit facility obtained in 2021 - $50 million | ||||
Secured and Unsecured Debt [Line Items] | ||||
Line of Credit Facility, Interest Rate at Period End | 1.227% | |||
Line of Credit Facility, Borrowing Capacity | $ 50,000,000 | |||
Debt instrument, basis spread above variable rate | 77.5 | |||
Line of credit, facility fee (in basis points) | 15 | |||
Debt Instrument, Maturity Date, Description | July 30, 2025 | |||
Extension option on credit facility | two six-month extensions | |||
Unsecured bank credit facilities - variable rate, carrying amount | $ 14,313,000 | |||
|
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
||
---|---|---|---|---|
Accounts Payable and Accrued Expenses [Abstract] | ||||
Property taxes payable | $ 18,755 | $ 4,494 | ||
Development costs payable | 18,820 | 17,529 | ||
Retainage payable | 13,779 | 10,576 | ||
Real estate improvements and capitalized leasing costs payable | 7,920 | 5,798 | ||
Interest payable | 8,876 | 6,547 | ||
Dividends payable | 46,784 | 46,864 | ||
Book Overdraft | [1] | 4,499 | 4,845 | |
Other payables and accrued expenses | 7,275 | 13,107 | ||
Total accounts payable and accrued expenses | $ 126,708 | $ 109,760 | ||
|
OTHER LIABILITIES (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Liabilities, Unclassified [Abstract] | ||
Security deposits | $ 30,057 | $ 28,343 |
Prepaid rent and other deferred income | 15,083 | 16,401 |
Operating lease liabilities - Ground leases | 20,814 | 22,898 |
Operating lease liabilities - Office leases | 1,909 | 2,032 |
Acquired below market lease intangibles | 8,819 | 8,124 |
Accumulated amortization of acquired below market lease intangibles | (3,324) | (2,707) |
Acquired below market lease intangibles, net of accumulated amortization | 5,495 | 5,417 |
Interest rate swap liabilities | 0 | 935 |
Tenant improvement cost liabilities | 2,248 | 2,796 |
Other liabilities | 3,516 | 3,516 |
Total Other Liabilities | $ 79,122 | $ 82,338 |
COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
COMPREHENSIVE INCOME [Abstract] | ||
Balance at Beginning of Period | $ 1,302 | $ (10,752) |
Other comprehensive income (loss) - interest rate swaps | 15,828 | 8,214 |
Balance at End of Period | $ 17,130 | $ (2,538) |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
Integer
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Derivative [Line Items] | |||
Number of interest rate swaps | Integer | 5 | ||
Interest Rate Cash Flow Hedge Assets at Fair Value | $ 17,130,000 | $ 2,237,000 | |
Interest rate cash flow hedge liabilities at fair value | 0 | 935,000 | |
Swap termination value | $ 17,248,000 | ||
Remaining loans indexed to LIBOR | Integer | 3 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | |||
Derivative [Line Items] | |||
Cash flow hedge amount to be reclassified to Interest Expense in next 12 months | $ 2,352,000 | ||
Amount of income (loss) recognized in Other comprehensive income on derivatives | 14,952,000 | $ 7,163,000 | |
Amount of (income) loss reclassified from Accumulated other comprehensive income into interest expense | 876,000 | $ 1,051,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | |||
Derivative [Line Items] | |||
Interest Rate Cash Flow Hedge Assets at Fair Value | 17,130,000 | 2,237,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Liabilities [Member] | |||
Derivative [Line Items] | |||
Interest rate cash flow hedge liabilities at fair value | 0 | 935,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $75 million interest rate swap executed in 2015 [Member] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 0 | 75,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $65 million interest rate swap executed in 2016 [Member] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 65,000,000 | 65,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap (2019) [Domain] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 100,000,000 | 100,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap (2020) [Member] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 100,000,000 | 100,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $50 million interest rate swap executed in 2021 | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 50,000,000 | 50,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap executed in 2022 | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | $ 100,000,000 | $ 0 |
EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
BASIC EPS COMPUTATION FOR NET INCOME AVAILABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS [Abstract] | ||
Net income attributable to common stockholders | $ 63,580 | $ 27,339 |
Weighted average shares outstanding (in shares) | 41,246 | 39,673 |
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | ||
Net Income Available to Common Stockholders | $ 63,580 | $ 27,339 |
Weighted average shares outstanding (in shares) | 41,246 | 39,673 |
Unvested restricted stock | 113 | 92 |
Weighted average diluted shares outstanding | 41,359 | 39,765 |
STOCK-BASED COMPENSATION (Details) - USD ($) |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Payment Arrangement, Expense | $ (2,594,000) | $ (2,147,000) | |||||
Shares withheld for tax obligations | 34,251 | 30,252 | |||||
Award Recipient Type Director [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Payment Arrangement, Expense | $ 33,000 | $ 3,000 | |||||
Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value of shares vested as of the vesting date | $ 17,124,000 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 105,485 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 85,767 | 106,212 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value (in shares) | $ 129.68 | $ 116.38 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | [1],[2] | 60,120 | |||||
Grant date fair value of shares issued (in dollars per share) | [1],[2] | $ 116.65 | |||||
Forfeited (in shares) | 0 | ||||||
Forfeited (per share) | $ 0 | ||||||
Vested (in shares) | (80,565) | ||||||
Vested (per share) | $ 102.42 | ||||||
Fair value of shares granted, as of the grant dates | $ 7,013,000 | ||||||
Restricted Stock [Member] | Award Recipient Type Employee [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Payment Arrangement, Expense | 2,561,000 | 2,144,000 | |||||
Stock-based compensation costs capitalized as development costs | $ 691,000 | $ 550,000 | |||||
Company performance based award | Executive Officer [Member] | End of one-year performance period | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 34.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||||||
Company performance based award | Executive Officer [Member] | Each of the following two years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | ||||||
Individual performance based award | Executive Officer [Member] | End of one-year performance period | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 34.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||||||
Individual performance based award | Executive Officer [Member] | Each of the following two years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | ||||||
Total shareholder return | Executive Officer [Member] | Following year after performance period | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | ||||||
Total shareholder return | Executive Officer [Member] | End of three-year performance period | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 75.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||||
Continuing employement awards | Executive Officer [Member] | Each year of 4-year service period | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||||||
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
||
---|---|---|---|---|
Fair Value [Member] | ||||
Financial Assets [Abstract] | ||||
Cash and Cash Equivalents, Fair Value Disclosure | $ 5,718 | $ 4,393 | ||
Interest rate swap assets | 17,130 | 2,237 | ||
Financial Liabilities [Abstract] | ||||
Unsecured bank credit facilities - variable rate | 197,280 | 209,202 | ||
Unsecured debt Fair Value Disclosure | 1,251,686 | 1,267,702 | ||
Secured debt | 2,170 | 2,269 | ||
Interest rate swap liabilities | 0 | 935 | ||
Carrying Amount [Member] | ||||
Financial Assets [Abstract] | ||||
Cash and Cash Equivalents, at Carrying Value | [1] | 5,718 | 4,393 | |
Interest rate swap assets | [1] | 17,130 | 2,237 | |
Financial Liabilities [Abstract] | ||||
Unsecured bank credit facilities - variable rate | [1] | 197,313 | 209,210 | |
Unsecured debt Fair Value Disclosure | [1] | 1,270,000 | 1,245,000 | |
Secured debt | [1] | 2,128 | 2,156 | |
Interest rate swap liabilities | [1] | $ 0 | $ 935 | |
|
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] $ in Thousands |
1 Months Ended |
---|---|
Apr. 27, 2022
USD ($)
ft²
a
| |
$150 million senior unsecured note (2022) | |
Subsequent Event [Line Items] | |
Debt Instrument, Face Amount | $ 150,000 |
Debt Instrument, Interest Rate, Stated Percentage | 3.03% |
Long-term Debt, Term | 10 years |
Cypress Preserve Land | |
Subsequent Event [Line Items] | |
Payments to Acquire Land | $ 7,800 |
Acres of real estate investment property | a | 25.8 |
Zephyr Distribution Center | |
Subsequent Event [Line Items] | |
Area of real estate property | ft² | 82,000 |
Payments to Acquire Real Estate | $ 28,500 |
Mesa Gateway Commerce Park | |
Subsequent Event [Line Items] | |
Area of real estate property | ft² | 147,000 |
Payments to Acquire Real Estate | $ 18,300 |