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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
__________________________

FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017                COMMISSION FILE NUMBER 1-07094


EASTGROUP PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND13-2711135
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED
December 31, 2020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
COMMISSION FILE NUMBER
1-07094
egp-20201231_g1.jpg
EASTGROUP PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)

Maryland13-2711135
(State or other jurisdiction(I.R.S. Employer
of incorporation or organization)(I.R.S. Employer Identification No.)
400 W PARKWAY PLACEParkway Place
SUITESuite 100
RIDGELAND, MISSISSIPPIRidgeland,Mississippi39157
(Address of principal executive offices)(Zip code)
Registrant’s telephone number:  (601) 354-3555


SECURITIES REGISTERED PURSUANT TO SECTIONRegistrant’s telephone number: (601) 354-3555

Securities registered pursuant to Section 12(b) OF THE ACT:of the Act:
SHARES OF COMMON STOCK, $.0001 PAR VALUE,
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.0001 par value per shareEGPNew York Stock Exchange
NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION

1

Securities registered pursuant to Section 12(g) OF THE ACT:  NONEof the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   YES (x) NO ( )Yes ☒ No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.   YES ( ) NO (x)Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   YES (x) NO ( )Yes ☒ No ☐

Indicate by check mark whether the registrantRegistrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     YES (x)   NO ( )Yes ☒  No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  (x)


Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.   
Large Accelerated Filer☒Accelerated Filer☐Non-accelerated Filer☐
Large Accelerated Filer (x)Accelerated Filer ( )Non-accelerated Filer ( )
(Do not check if a smaller reporting company)
Smaller Reporting Company ( )☐Emerging Growth Company ( )☐
                   


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ( )☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ( ) NO (x)Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2017,2020, the last business day of the Registrant's most recently completed second fiscal quarter:  $2,789,236,000.$4,560,365,000.

The number of shares of common stock, $.0001$0.0001 par value, outstanding as of February 13, 201816, 2021 was 34,738,860.39,659,603.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement for the 2018relating to its 2021 Annual Meeting of Stockholders are incorporated by reference into Part III.



The Registrant intends to file such Proxy Statement with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year ended December 31, 2020.
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Page
Page
PART I
Business
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Item 1A.1.
5
Item 1A.
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Item 1B.
1114
Item 2.
1114
Item 3.
1115
Item 4.
1115
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
1216
Item 6.
1418
Item 7.
1518
Item 7A.
3639
Item 8.
3739
Item 9.
3740
Item 9A.
3740
Item 9B.
3740
PART III
Item 10.
3841
Item 11.
3841
Item 12.
3941
Item 13.
3941
Item 14.
3941
PART IV
Item 15.
4042
Item 16.
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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect EastGroup Properties, Inc.'s (the “Company” or “EastGroup”) expectations and projections about the Company’s future results, performance, prospects, plans and opportunities. The Company has attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “goals,” “plans” or variations of such words and similar expressions. These forward-looking statements are based on information currently available to the Company and are subject to a number of known and unknown assumptions, risks, uncertainties and other factors that may cause the Company’s actual results, performance, plans or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. The Company intends for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. The Company does not undertake publicly to update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy the Company’s obligations under federal securities laws.

The following are some, but not all, of the risks, uncertainties and other factors that could cause the Company’s actual results to differ materially from those presented in the Company’s forward-looking statements (the Company refers to itself as “we,” “us” or “our” in the following):

•international, national, regional and local economic conditions;
•the duration and extent of the impact of the coronavirus (“COVID-19”) pandemic and any related orders or other formal recommendations for social distancing on our business operations or the business operations of our tenants (including their ability to timely make rent payments) and the economy generally;
•the general level of interest rates and ability to raise equity capital on attractive terms;
•financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest, and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
•the competitive environment in which the Company operates;
•fluctuations of occupancy or rental rates;
•potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants, or our ability to lease space at current or anticipated rents, particularly in light of the significant uncertainty as to the conditions under which current or potential tenants will be able to operate physical locations in the future;
•potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate laws or real estate investment trust (“REIT”) or corporate income tax laws, and potential increases in real property tax rates;
•our ability to maintain our qualification as a REIT;
•acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with projections;
•natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes;
•pandemics, epidemics or other public health emergencies, such as the outbreak of COVID-19;
•the terms of governmental regulations that affect us and interpretations of those regulations, including the costs of compliance with those regulations, changes in real estate and zoning laws and increases in real property tax rates;
•credit risk in the event of non-performance by the counterparties to our interest rate swaps;
•lack of or insufficient amounts of insurance;
•litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;
•our ability to attract and retain key personnel;
•the consequences of future terrorist attacks or civil unrest; and
•environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.

All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within this Annual Report on Form 10-K for the year ended December 31, 2020.

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PART I


ITEM 1.  BUSINESS.


OrganizationThe Company
EastGroup Properties, Inc. (the Company, which we refer to in this Annual Report as the “Company” or EastGroup)“EastGroup,” is an internally-managed equity real estate investment trust (REIT)(“REIT”) first organized in 1969. EastGroup is focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States, primarily in the states of Florida, Texas, Arizona, California and North Carolina. EastGroup’s strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup is a Maryland corporation, and its common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “EGP.”  The Company has elected to be taxed and intends to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the Code), as amended.“Internal Revenue Code”).


Available Information
The Company maintains a website at eastgroup.net.www.eastgroup.net.  The Company posts its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after it electronically files or furnishes such materials to the Securities and Exchange Commission (SEC)(the “SEC”).  In addition, the Company's website includes items related to corporate governance matters, including, among other things, the Company's corporate governance guidelines, charters of various committees of the Board of Directors, and the Company's code of business conduct and ethics applicable to all employees, officers and directors.  The Company intends to disclose on its website any amendment to, or waiver of, any provision of this code of business conduct and ethics applicable to the Company's directors and executive officers that would otherwise be required to be disclosed under the rules of the SEC or the New York Stock Exchange.  Copies of these reports and corporate governance documents may be obtained, free of charge, from the Company's website.  Any shareholderWe are providing our website address solely for the information of investors, and the information on our website is not a part of or incorporated by reference into this annual report on Form 10-K or our other filings with the SEC.

You may also may obtain copies of these documents, free of charge, by sending a request in writing to: Investor Relations, EastGroup Properties, Inc., 400 W. Parkway Place, Suite 100, Ridgeland, MS 39157.access any materials we file with the SEC through the EDGAR database on the SEC's website at www.sec.gov.


Administration
EastGroup maintains its principal executive office and headquarters in Ridgeland, Mississippi.  The Company also has regional offices in Orlando,Atlanta, Dallas and Los Angeles and asset management offices in Charlotte,Orlando, Miami, Houston and Phoenix.  EastGroup has property management offices in Jacksonville, Tampa, Ft. LauderdaleCharlotte and San Antonio.  Offices at these locations allow the Company to provide property management services to all of its Florida, Texas (except Austin and El Paso), Arizona, MississippiNorth Carolina, South Carolina and North CarolinaGeorgia properties, which together account for 78% of the Company’s total portfolio on a square foot basis.  In addition, the Company currently provides property administration (accounting of operations) for its entire portfolio.  The regional offices in Florida,Georgia, Texas and California provide oversight of the Company's development and value-add program.  As of February 13, 2018,16, 2021, EastGroup had 6979 full-time employees and 21 part-time employees.employee.


OperationsBusiness Overview
EastGroup's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitivelocation-sensitive customers primarily(primarily in the 15,000 to 50,00070,000 square foot range.range).  The Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation features in supply-constrained submarkets in major Sunbelt regions. The Company's core markets are in the states of Florida, Texas, Arizona, California and North Carolina.  Over 99%

As of December 31, 2020, EastGroup owned 406 industrial properties and one office building in 11 states. As of that same date, the Company's portfolio, including development projects and value-add properties in lease-up and under construction, included approximately 46.6 million square feet consisting of 369 business distribution buildings containing 41.9 million square feet, 13 bulk distribution buildings containing 3.5 million square feet, and 24 business service buildings containing 1.2 million square feet. As of December 31, 2020, EastGroup's operating portfolio was 98% leased to approximately 1,550 tenants, with no single tenant accounting for more than approximately 1% of the Company’s revenue consists of rentalCompany's income from real estate properties.operations. As of February 16, 2021, the properties which were in the development and value-add program at year-end were approximately 35% leased.


During 2017,2020, EastGroup increased its holdings in real estate properties through its acquisition and development programs.  The Company purchased 840,000509,000 square feet of operating and value-add properties and 90232.6 acres of land for a total of $82$122.2 million.  Also during 2017,2020, the Company began construction of 125 development projects containing 1.3 million851,000 square feet and
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transferred 1218 projects, which contain 2.22.4 million square feet and had costs of $160.1$249.4 million at the date of transfer, from its development and value-add program to real estate properties.    


Typically, theDuring 2020, EastGroup completed dispositions including 126,000 square feet of operating properties, which generated gross proceeds of $21 million.

The Company typically initially funds its development and acquisition programs through its $335$395 million unsecured bank credit facilities.facilities (as discussed under the heading Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K). As market conditions permit, EastGroup issues equity and/or employs fixed-ratefixed rate debt, including variable-ratevariable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace short-term bank borrowings. In May 2017,June 2019, Moody's Investors Service affirmed the Company's issuer rating of Baa2 with a stable outlook. A security rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. For future debt issuances, the Company intends to issue primarily unsecured fixed-ratefixed rate debt, including variable-ratevariable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps. The Company may also access the public debt market in the future as a means to raise capital.


EastGroup holds its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria.  The Company may provide financing to a prospective purchaser in connection with such sales of property if market conditions require.  In addition, the Company may provide financing to a partner or co-owner in connection with an acquisition of real estate in certain situations.




Subject to the requirements necessary to maintain EastGroup’s qualifications as a REIT, the Company may acquire securities of entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over those entities.

The Company intends to continue to qualify as a REIT under the Code.  To maintain its status as a REIT, the Company is required to distribute at least 90% of its ordinary taxable income to its stockholders.  If the Company has a capital gain, it has the option of (i) deferring recognition of the capital gain through a tax-deferred exchange, (ii) declaring and paying a capital gain dividend on any recognized net capital gain resulting in no corporate level tax, or (iii) retaining and paying corporate income tax on its net long-term capital gain, with shareholders reporting their proportional share of the undistributed long-term capital gain and receiving a credit or refund of their share of the tax paid by the Company.

EastGroup has no present intention of acting as an underwriter of offerings of securities of other issuers.  The strategies and policies set forth above were determined and are subject to review by EastGroup's Board of Directors, which may change such strategies or policies based upon its evaluation of the state of the real estate market, the performance of EastGroup's assets, capital and credit market conditions, and other relevant factors.  

Competition
The market for the leasing of industrial real estate is competitive. We experience competition for tenants from existing properties in proximity to our buildings as well as from new development. Institutional investors, other REITs and local real estate operators generally own such properties; however, no single competitor or small group of competitors is dominant in our current markets. Even so, as a result of competition, we may have to provide concessions, incur charges for tenant improvements or offer other inducements, all of which may have an adverse impact on our results of operations. The market for the acquisition of industrial real estate is also competitive. We compete for real property investments with other REITs and institutional investors such as pension funds and their advisors, private real estate investment funds, insurance company investment accounts, private investment companies, individuals and other entities engaged in real estate investment activities.

Regulations
Compliance with various governmental regulations has an impact on EastGroup's business, including EastGroup's capital expenditures, earnings and competitive position, which can be material. EastGroup provides annual reportsincurs costs to monitor and take actions to comply with governmental regulations that are applicable to its stockholders,business, which contain financial statements auditedinclude, among others, federal securities laws and regulations, applicable stock exchange requirements, REIT and other tax laws and regulations, environmental and health and safety laws and regulations, local zoning, usage and other regulations relating to real property, and the Americans with Disabilities Act of 1990 (“ADA”).

The COVID-19 pandemic has impacted all states where EastGroup's customers operate their businesses or where EastGroup's properties are located. EastGroup's business and its customers' businesses have been impacted and may continue to be impacted by measures taken to control the Company’s independent registered public accounting firm.COVID-19 outbreak (including “shelter-in-place” or “stay-at-home” orders, density limitations and social distancing orders, and other mandates issued by local, state or federal authorities).

Environmental Matters
Under various federal, state and local laws, ordinances and regulations, an owner of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on or in such property.  Many such laws impose liability without regard to whether the owner knows of, or was responsible for, the presence of such hazardous or toxic substances.  The presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to use such property as collateral in its borrowings.  EastGroup’s properties have generally been subjectedsubject to Phase I Environmental Site Assessments (ESAs)(“ESAs”) by independent environmental consultants and, as necessary, have
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been subjected to Phase II ESAs.  These reports have not revealed any potential significant environmental liability.  Management of EastGroupOur management is not aware of any environmental liability that would have a material adverse effect on EastGroup’s business, assets, financial position or results of operations.


See “Item 1A. Risk Factors” in this Annual Report for a discussion of material risks to EastGroup, including related to governmental regulations and environmental matters.

Environmental, Social and Governance (“ESG”) Matters
EastGroup's commitment to ESG initiatives is evidenced by its building standards, corporate policies and procedures and positive company culture. At EastGroup, protecting the environment is important to the Company's employees, families, customers and communities.  The Company strives to support sustainability through its commitment to build high performance and environmentally responsible properties.  Through EastGroup’s continued efforts, numerous properties have been Leadership in Energy and Environmental Design (“LEED”) and ENERGY STAR certified, and all of the Company's development properties are built to LEED certifiable standards. The Company is continually investing in energy-efficient improvements throughout its portfolio, such as LED lighting, skylights, white reflective roofing, car charging stations and smart sensor irrigation systems. The Company strives for efficiency in operating properties with innovative solutions that lower operational costs and reduce the environmental footprint. The Company believes its continued commitment to pursue environmentally conscious performance and standards through sustainability best practices creates long-term value for the environment, the Company and its shareholders.

In addition, EastGroup and its employees are committed to social responsibility and are active participants in the communities where they live and work.  EastGroup's employees volunteer for numerous charities, and the Company coordinates volunteer opportunities for its employees and provides paid time off for volunteering in order to encourage participation and increase social engagement in all of the communities in which we operate.

EastGroup operates on the premise that good corporate governance is fundamental to the Company's business and core values, and the Company believes its corporate governance policies and practices are well aligned with the interests of shareholders. The honesty and integrity of the Company's management and Board of Directors are critical assets in maintaining the trust of the Company's investors, employees, customers, vendors and the communities in which the Company operates.

Readers are encouraged to visit our website and review our 2020 Environmental, Social & Governance Report for more detail regarding our ESG programs and initiatives. Nothing on our website or in the referenced report shall be deemed incorporated by reference into this Annual Report on Form 10-K.

Human Capital Matters
We believe our employees are a critical component of the success and sustainability of our Company, and we are committed to providing a diverse and inclusive work environment that encourages collaboration and teamwork.

•Workforce Diversity: As of February 16, 2021, we employed 80 team members located in 12 offices in Arizona, California, Florida, Georgia, Mississippi, North Carolina and Texas. Our team is comprised of asset, construction and property management personnel; accounting, administrative, human resources and information technology personnel; and our corporate leadership team. Our current employee base is 75% comprised of women. The officer group is comprised of 40% women and 60% men. 18% of our employees identify as racial or ethnic minorities. Our Board of Directors includes two women and seven men. With 80 employees and nine directors, each team member plays a vital role in the success of the company.

•Employee Tenure: We believe our culture supports our employees and creates a positive, professional environment that encourages longevity for our team members. The average tenure of our workforce is 10 years, and 12 years for our officers.

•Compensation, Benefits, Health and Safety: EastGroup offers a comprehensive employee benefits program and what we believe are socially-responsible policies and practices in order to support the overall well-being of our employees and create a safe, professional and inclusive work environment. Some of the benefits we offer include a robust 401(k) matching program, generous personal leave policy, flexible work schedules, paid time off for volunteering, annual health and wellness checkups, employer-paid health insurance for all full-time employees, tobacco cessation program, athletic club and tuition reimbursement programs, and a competitive pay structure.

•Training and Development: We have a formal, certificate-based learning program for all employees; learning objectives include topics such as diversity and inclusion, unconscious bias and anti-harassment. Our employees
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are provided with training, education and peer mentoring programs to further develop their professional skill set, enhancing the level of customer service provided to our customers.

•Policies: We have various policies and practices in place, including a Code of Ethics and Business Conduct, Whistleblower Program, Equal Opportunity and Commitment to Diversity, ADA & Reasonable Accommodation, Commitment to Safety, Community Service, Family Medical Leave, Standards of Conduct, Workplace Violence Prevention, Healthy, Wealthy, Wise Benefits Summary, and Cybersecurity.

•Company and Board Engagement: We value our employees, and our focus on human capital management and other socially-responsible initiatives is at the forefront of discussions and decisions with both management and the Board of Directors.


ITEM 1A.  RISK FACTORS.


In addition to the other information contained or incorporated by reference in this document, readers should carefully consider the following risk factors.  Any of these risks or the occurrence of any one or more of the uncertainties described below could have a material adverse effect on the Company's financial condition and the performance of its business. Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial also may impair its business operations.  The Company refers to itself as "we"“we”, "us"“us” or "our"“our” in the following risk factors.


Real Estate Industry Risks
We face risks associated with local real estate conditions in areas where we own properties.  We may be adversely affected by general economic conditions and local real estate conditions.  For example, an oversupply of industrial properties in a local area or a decline in the attractiveness of our properties to tenants would have a negative effect on us.  Other factors that may affect general economic conditions or local real estate conditions include:


•population and demographic trends;
•employment and personal income trends;
•income and other tax laws;
•changes in interest rates and availability and costs of financing;
•increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other factors which may not necessarily be offset by increased rents;
•changes in the price of oil;
•construction costs; and
construction costs.•impacts of the COVID-19 pandemic on our business and tenants.


We may be unable to compete for properties and tenants.  The real estate business is highly competitive.  We compete for interests in properties with other real estate investors and purchasers, some of whom have greater financial resources, revenues and geographical diversity than we have.  Furthermore, we compete for tenants with other property owners.  All of our industrial properties are subject to significant local competition.  We also compete with a wide variety of institutions and other investors for capital funds necessary to support our investment activities and asset growth.


We are subject to significant regulation that constrains our activities.  Local zoning and land use laws, environmental statutes and other governmental requirements restrict our expansion, rehabilitation and reconstruction activities.  These regulations may prevent


us from taking advantage of economic opportunities.  Legislation such as the Americans with Disabilities Act may require us to modify our properties, and noncompliance could result in the imposition of fines or an award of damages to private litigants.  Future legislation may impose additional requirements.  We cannot predict what requirements may be enacted or what changes may be implemented to existing legislation.


Risks Associated with Our Properties
We may be unable to lease space.  space on favorable terms or at all.  When a lease expires, a tenant may elect not to renew it.  We may not be able to re-lease the property on similarfavorable terms, if we are able to re-lease the property at all.  The terms of renewal or re-lease (including the cost of required renovations and/or concessions to tenants) may be less favorable to us than the prior lease.  We also routinely develop properties with no pre-leasing.  If we are unable to lease all or a substantial portion of our properties, or if the rental rates upon such leasing are significantly lower than expected rates, our cash generated before debt repayments and capital expenditures and our ability to make expected distributions to stockholders may be adversely affected.


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We have been and may continue to be affected negatively by tenant bankruptcies and leasing delays.  At any time, a tenant may experience a downturn in its business that may weaken its financial condition.  Similarly, a general decline in the economy may result in a decline in the demand for space at our industrial properties.  As a result, our tenants may delay lease commencement, fail to make rental payments when due, or declare bankruptcy.  Any such event could result in the termination of that tenant’s lease and losses to us, and distributionsfunds available for distribution to investors may decrease.  We receive a substantial portion of our income as rents under mid-term and long-term leases.  If tenants are unable to comply with the terms of their leases for any reason, including because of rising costs or falling sales, we may deem it advisable to modify lease terms to allow tenants to pay a lower rent or a smaller share of taxes, insurance and other operating costs.  If a tenant becomes insolvent or bankrupt, we cannot be sure that we could recover the premises from the tenant promptly or from a trustee or debtor-in-possession in any bankruptcy proceeding relating to the tenant.  We also cannot be sure that we would receive rent in the proceeding sufficient to cover our expenses with respect to the premises.  If a tenant becomes bankrupt, the federal bankruptcy code will apply and, in some instances, may restrict the amount and recoverability of our claims against the tenant.  A tenant’s default on its obligations to us could adversely affect our financial condition and the cash we have available for distribution.


We face risks associated with our property development.  We intend to continue to develop properties where we believe market conditions warrant such investment.  Once made, our investments may not produce results in accordance with our expectations.  Risks associated with our current and future development and construction activities include:


•the availability of favorable financing alternatives;
•the risk that we may not be able to obtain land on which to develop or that due to the increased cost of land, our activities may not be as profitable;
•construction costs exceeding original estimates due to rising interest rates and increases in the costs of materials and labor;
•construction and lease-up delays resulting in increased debt service, fixed expenses and construction costs;
•expenditure of funds and devotion of management's time to projects that we do not complete;
•fluctuations of occupancy and rental rates at newly completed properties, which depend on a number of factors, including market and economic conditions, resulting in lower than projected rental rates and a corresponding lower return on our investment; and
•complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits.


We face risks associated with property acquisitions.  We acquire individual properties and portfolios of properties and intend to continue to do so.  Our acquisition activities and their success are subject to the following risks:


•when we are able to locate a desired property, competition from other real estate investors may significantly increase the purchase price;
•acquired properties may fail to perform as expected;we project;
•the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates;
•acquired properties may be located in new markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures;
•we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and as a result, our results of operations and financial condition could be adversely affected; and


•we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, to the transferor with respect to unknown liabilities. As a result, if a claim were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.


Coverage under our existing insurance policies may be inadequate to cover losses.  We generally maintain insurance policies related to our business, including casualty, general liability and other policies, covering our business operations, employees and assets as appropriate for the markets where our properties and business operations are located.  However, we would be required to bear all losses that are not adequately covered by insurance.  In addition, there may be certain losses that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so, including losses due to floods, wind, earthquakes, acts of war, acts of terrorism or riots.  If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated future revenue from the properties.  In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged.


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We face risks due to lack of geographic and real estate sector diversity.  Substantially all of our properties are located in the Sunbelt region of the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. As of December 31, 2017, we2020, our largest markets were Houston, Dallas and Tampa. We owned operating properties totaling 5.55.8 million square feet in Houston, 4.6 million square feet in Dallas and 4.24.5 million square feet in Tampa, which represent 14.8%13.2%, 10.4% and 11.4%10.3%, respectively, of the Company's total Real estate properties on a square foot basis.  A downturn in general economic conditions and local real estate conditions in these geographic regions, as a result of oversupply of or reduced demand for industrial properties, local business climate, business layoffs and changing demographics, would have a particularly strong adverse effect on us.  OurIn addition, our investments in real estate assets are concentrated in the industrial distribution sector.  This concentration may expose us to the risk of economic downturns in this sector to a greater extent than if our business activities included other sectors of the real estate industry.


We face risks due to the illiquidity of real estate which may limit our ability to vary our portfolio.  Real estate investments are relatively illiquid.  Our ability to vary our portfolio in response to changes in economic and other conditions will therefore be limited.  In addition, because of our status as a REIT, the Internal Revenue Code limits our ability to sell our properties.  If we must sell an investment, we cannot ensure that we will be able to dispose of the investment on terms favorable to the Company.


We are subject to environmental laws and regulations.  Current and previous real estate owners and operators may be required under various federal, state and local laws, ordinances and regulations to investigate and clean up hazardous substances released at the properties they own or operate.  They may also be liable to the government or to third parties for substantial property or natural resource damage, investigation costs and cleanup costs.  Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such hazardous substances.  In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs the government incurs in connection with the contamination.  Contamination may adversely affect the owner’s ability to use, sell or lease real estate or to borrow using the real estate as collateral.  We have no way of determining at this time the magnitude of any potential liability to which we may be subject arising out of environmental conditions or violations with respect to the properties we currently or formerly owned.  Environmental laws today can impose liability on a previous owner or operator of a property that owned or operated the property at a time when hazardous or toxic substances were disposed of, released from, or present at the property.  A conveyance of the property, therefore, may not relieve the owner or operator from liability.  Although ESAs have been conducted at our properties to identify potential sources of contamination at the properties, such ESAs do not reveal all environmental liabilities or compliance concerns that could arise from the properties.  Moreover, material environmental liabilities or compliance concerns may exist, of which we are currently unaware, that in the future may have a material adverse effect on our business, assets or results of operations.


ComplianceClimate change and its effects, including compliance with new laws or regulations related to climate change, including compliance withsuch as “green” building codes, may require us to make improvements to our existing properties.  Proposedproperties or result in unanticipated losses that could affect our business and financial condition. To the extent that climate change causes an increase in catastrophic weather events, such as severe storms, fires or floods, our properties may be susceptible to an increase in weather-related damage.  Even in the absence of direct physical damage to our properties, the occurrence of any natural disasters or a changing climate in the area of any of our properties could have a material adverse effect on business, supply chains and the economy generally. Climate change could cause an increase in property and casualty insurance premiums. The potential impacts of future climate change on our properties could adversely affect our ability to lease, develop or sell our properties or to borrow using our properties as collateral.  In addition, any proposed legislation enacted to address climate change could also increase the costs of energy, utilities and utilities.overall development. The costresulting costs of theany proposed legislation may adversely affect our financial position, results of operations and cash flows.  We may be adversely affected by floods, hurricanes and other climate related events.


Financing Risks
We face risks associated with the use of debt to fund acquisitions and developments, including refinancing risk.  We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest.  In addition, certain of our debt will have significant outstanding principal balances on their maturity dates, commonly known as “balloon payments.”  Therefore, we will likely need to refinance at least a portion of our outstanding debt as it matures.  There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of the existing debt.




We face risks associated with our dependence on external sources of capital.  In order to qualify as a REIT, we are required each year to distribute to our stockholders at least 90% of our ordinary taxable income, and we are subject to tax on our income to the extent it is not distributed.  Because of this distribution requirement, we may not be able to fund all future capital needs from cash retained from operations.  As a result, to fund capital needs, we rely on third-party sources of capital, which we may not be able to obtain on favorable terms, if at all.  Our access to third-party sources of capital depends upon a number of factors, including (i) general market conditions; (ii) the market’s perception of our growth potential; (iii) our current and potential future
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earnings and cash distributions; and (iv) the market price of our capital stock.  Additional debt financing may substantially increase our debt-to-total market capitalization ratio.  Additional equity financing may dilute the holdings of our current stockholders.


Covenants in our credit agreements could limit our flexibility and adversely affect our financial condition.  The terms of our various credit agreements and other indebtedness require us to comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage.  These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we had satisfied our payment obligations.  If we are unable to refinance our indebtedness at maturity or meet our payment obligations, the amount of our distributable cash flow and our financial condition would be adversely affected.


Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable terms, if at all. Our credit ratings are based on our operating performance, liquidity and leverage ratios, overall financial position and other factors employed by the credit rating agencies in their rating analysis of us. Our credit ratings can affect the amount and type of capital we can access, as well as the terms of any financings we may obtain. There can be no assurance that we will be able to maintain our current credit ratings. In the event our current credit ratings deteriorate, it may be more difficult or expensive to obtain additional financing or refinance existing obligations and commitments. Also, a downgrade in our credit ratings would trigger additional costs or other potentially negative consequences under our current and future credit facilities and debt instruments.


Increases in interest rates would increase our interest expense. At December 31, 2017,2020, we had $116.3$125 million of variable-ratevariable rate debt outstanding not protected by interest rate hedge contracts. We may incur additional variable-ratevariable rate debt in the future. If interest rates increase, then so would the interest expense on our unhedged variable-ratevariable rate debt, which would adversely affect our financial condition and results of operations. From time to time, we manage our exposure to interest rate risk with interest rate hedge contracts that effectively fix or cap a portion of our variable-ratevariable rate debt. In addition, we refinance fixed-ratefixed rate debt at times when we believe rates and terms are appropriate. Our efforts to manage these exposures may not be successful. Our use of interest rate hedge contracts to manage risk associated with interest rate volatility may expose us to additional risks, including a risk that a counterparty to a hedge contract may fail to honor its obligations. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial impact on our results of operations or financial condition. Termination of interest rate hedge contracts typically involves costs, such as transaction fees or breakage costs.


AThe lack of any limitationcertain limitations on our debt could result in our becoming more highly leveraged.  Our governing documents do not limit the amount of indebtedness we may incur.  Accordingly, we may incur additional debt and would do so, for example, if it were necessary to maintain our status as a REIT.  We might become more highly leveraged as a result, and our financial condition and cash available for distribution to stockholders might be negatively affected and the risk of default on our indebtedness could increase.


Other Risks
The market value of our common stock could decrease based on our performance and market perception and conditions.  The market value of our common stock may be affected by the market’s perception of our operating results, growth potential, and current and future cash dividends and may also be affected by the real estate market value of our underlying assets.  The market price of our common stock may also be influenced by the dividend on our common stock relative to market interest rates.  Rising interest rates may lead potential buyers of our common stock to expect a higher dividend rate, which would adversely affect the market price of our common stock.  In addition, rising interest rates would result in increased expense, thereby adversely affecting cash flow and our ability to service our indebtedness and pay dividends.


The state of the economy or other adverse changes in general or local economic conditions may adversely affect our operating results and financial condition. Turmoil in the global financial markets may have an adverse impact on the availability of credit to businesses generally and could lead to a further weakening of the U.S. and global economies.  Currently these conditions have not impaired our ability to access credit markets and finance our operations.  However, our ability to access the capital markets may be restricted at a time when we would like, or need, to raise financing, which could have an impact on our flexibility to react to changing economic and business conditions.  Furthermore, deteriorating economic conditions including business layoffs, downsizing, industry slowdowns and other similar factors that affect our customers could continue to negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio and in


the collateral securing any loan investments we may make.  Additionally, an adverse economic situation could have an impact on our lenders or customers, causing them to fail to meet their obligations to us.  No assurances
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can be given that the effects of an adverse economic situation will not have a material adverse effect on our business, financial condition and results of operations.


We may fail to qualify as a REIT. If we fail to qualify as a REIT, we will not be allowed to deduct distributionsdividends to stockholders in computing our taxable income and will be subject to federal income tax at regular corporate rates. In addition, we may be barred from qualification as a REIT for the four years following disqualification. The additional tax incurred at regular corporate rates would significantly reduce the cash flow available for distribution to stockholders and for debt service. Furthermore, we would no longer be required by the Internal Revenue Code to make any distributionsdividends to our stockholders as a condition of REIT qualification. Any distributionsIf we were to stockholders would be taxablefail to qualify as ordinary incomea REIT, subject to certain limitations in the extent of our current and accumulated earnings and profits. Corporate distributees, however,Internal Revenue Code, corporate stockholders may be eligible for the dividends received deduction, onand individual, trust and estate stockholders may be eligible to treat the distributions, subject to limitationsdividends received from us as qualified dividend income taxable as net capital gains under the provisions of Section 1(h)(11) of the Internal Revenue Code. ToHowever, non-corporate stockholders (including individuals) will not be able to deduct 20% of certain dividends they receive from us. The REIT qualification requirements are extremely complex, and interpretation of the U.S. federal income tax laws governing REIT qualification is limited. Although we believe we have operated and intend to operate in a manner that will continue to qualify us as a REIT, we must comply with certain highly technical and complex requirements.  We cannot be certain that we have complied with these requirements because there are few judicial and administrative interpretations of these provisions.been or will be successful in continuing to be taxed as a REIT. In addition, facts and circumstances that may be beyond our control may affect our ability to qualify as a REIT. We cannot assure you that new legislation, regulations, administrative interpretations or court decisions will not change the tax laws significantly with respect to our qualification as a REIT or with respect to the federal income tax consequences of qualification.  We cannot assure you that we will remain qualified as a REIT.


There is a risk of changes in the tax law applicableLegislative or regulatory action with respect to real estate investment trusts.  Since the Internal Revenue Service, the United States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws and regulations interpretations or rulings will be adopted.  Any such legislative action may prospectively or retroactively modify our tax treatment and, therefore, maycould adversely affect taxation of us and/orthe Company and our investors.

stockholders. We face possible adverse changes inare subject to state and local tax laws.  From time to time, changeslaws and regulations. Changes in state and local tax laws or regulations are enacted which may result in an increase in our tax liability. A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition, results of operations and the amount of cash available for the payment of dividends.

In addition, in recent years, numerous legislative, judicial and administrative changes have been made to the federal income tax laws applicable to investments in REITs and similar entities. Additional changes to tax laws are likely to continue to occur in the future, and we cannot assure our stockholders that any such changes will not adversely affect the taxation of a stockholder. We cannot assure you that future changes to tax laws and regulations will not have an adverse effect on an investment in our stock.
To maintain our status as a REIT, we limit the amount of shares any one stockholder can own. The Internal Revenue Code imposes certain limitations on the ownership of the stock of a REIT. For example, not more than 50% in value of our outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code) during the last half of any taxable year. To protect our REIT status, our charter prohibits any holder from acquiring more than 9.8% (in value or in number, whichever is more restrictive) of our outstanding equity stock (defined as all of our classes of capital stock, except our excess stock (of which there is none outstanding)) unless our Board of Directors grants a waiver. The ownership limit may limit the opportunity for stockholders to receive a premium for their shares of common stock that might otherwise exist if an investor were attempting to assemble a block of shares in excess of 9.8% of the outstanding shares of equity stock or otherwise effect a change in control.
Certain tax and anti-takeover provisions of our charter and bylaws may inhibit a change of our control. Certain provisions contained in our charter and bylaws and the Maryland General Corporation Law may discourage a third party from making a tender offer or acquisition proposal to us. If this were to happen, it could delay, deter or prevent a change in control or the removal of existing management. These provisions also may delay or prevent the shareholdersour stockholders from receiving a premium for their common shares over then-prevailing market prices. These provisions include:
•the REIT ownership limit described above;
•special meetings of our stockholders may be called only by the chairman of the board, the chief executive officer, the president, a majority of the board or by stockholders possessing a majority of all the votes entitled to be cast at the meeting;
•our Board of Directors may authorize and issue securities without stockholder approval; and
•advance-notice requirements for proposals to be presented at stockholder meetings.


In addition, Maryland law provides protection for Maryland corporations against unsolicited takeovers by limiting, among other things, the duties of the directors in unsolicited takeover situations.  The duties of directors of Maryland corporations do not require them to (a) accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the corporation to redeem any rights under, or modify or render inapplicable, any stockholders rights plan, (c) make a determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act, or (d) act or fail to act solely because of the effect of the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the stockholders in an acquisition.  Moreover, under Maryland


law the act of a director of a Maryland corporation relating to or affecting an acquisition or potential acquisition of control is not subject to any higher duty or greater scrutiny than is applied to any other act of a director.  Maryland law also contains a statutory presumption that an act of a director of a Maryland corporation satisfies the applicable standards of conduct for directors under Maryland law.

The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in business combinations, including mergers, dispositions of 10 percent or more of its assets,situations and certain issuances of shares of stock“business combinations” and other specified transactions, with an "interested stockholder" or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met.  An interested stockholder is generally a person owning or controlling, directly or indirectly, 10 percent or more of the voting power of the outstanding stock of the Maryland corporation. These provisions of Maryland law do not apply, however, to business combinations that are approved or exempted by a board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our Board of Directors has by resolution exempted business combinations between us and any other person and such resolution may not be revoked, altered or amended without prior stockholder approval.

The Maryland Control Share Acquisition Act provides that "control shares" of a corporation acquired in a "control“control share acquisition" shall have no voting rights except to the extent approved by a vote of two-thirds of the votes eligible to cast on the matter.  "Control Shares" means shares of stock that, if aggregated with all other shares of stock previously acquired by the acquirer, would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of the voting power:  one-tenth or more but less than one-third, one-third or more but less than a majority, or a majority or more of all voting power.  A "control share acquisition" means the acquisition of control shares, subject to certain exceptions.

If voting rights of control shares acquired in a control share acquisition are not approved at a stockholders' meeting, then subject to certain conditions and limitations, the issuer may redeem any or all of the control shares for fair value.  If voting rights of such control shares are approved at a stockholders' meeting and the acquirer becomes entitled to vote a majority of the shares of stock entitled to vote, all other stockholders may exercise appraisal rights.acquisitions.”  Our bylaws contain a provisionprovisions exempting us from the Maryland Control Share Acquisition Act any and all acquisitions by any person of our stock.the
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Maryland Business Combination Act. Our bylaws prohibit the repeal, amendment or alteration of this provisionour Maryland Control Share Acquisition opt out without the approval by the Company’s stockholders; however, there can be no assurance that this provision will not be amended or eliminated at some time in the future.


The Company faces risks in attracting and retaining key personnel.  Many of our senior executives have strong industry reputations, which aid us in identifying acquisition and development opportunities and negotiating with tenants and sellers of properties.  The loss of the services of these key personnel could affect our operations because of diminished relationships with existing and prospective tenants, property sellers and industry personnel.  In addition, attracting new or replacement personnel may be difficult in a competitive market.
 
We have severance and change in control agreements with certain of our officers that may deter changes in control of the Company.  If, within a certain time period (as set in the officer’s agreement) following a change in control, we terminate the officer's employment other than for cause, or if the officer elects to terminate his or her employment with us for reasons specified in the agreement, we will make a severance payment equal to the officer's average annual compensation times an amount specified in the officer's agreement, together with the officer's base salary and vacation pay that have accrued but are unpaid through the date of termination.  These agreements may deter a change in control because of the increased cost for a third party to acquire control of us.


We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business. We rely on information technology networks and systems, including the internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, and maintaining personal identifying information and customer and lease data. We purchase some of our information technology from vendors, on whom our systems depend. We rely on commercially available systems, software, tools and monitoring to provide security for the processing, transmission and storage of confidential customer data, including individually identifiable information relating to financial accounts. Although we have taken steps to protect the security of our information systems and the data maintained in those systems, it is possible that our safety and security measures will not prevent the systems' improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. In some cases, it may be difficult to anticipate or immediately detect such incidents and the damage they cause. Any failure to maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could have a materially adverse effect on our business, financial condition and results of operations.




We may be impacted by changes in U.S. social, political, regulatory and economic conditions or laws and policies. Any changes to U.S. tax laws, foreign trade, manufacturing, and development and investment in the territories and countries where our customers operate could adversely affect our operating results and our business.


Pandemics, such as COVID-19, and mitigation efforts to control the spread of such disease have impacted and are expected to continue to impact our business. Our financial condition, results of operations and cash flows could be adversely affected by factors relating to such pandemics. In March 2020, the World Health Organization characterized the outbreak of COVID-19 as a pandemic. The United States, where EastGroup’s properties are located, has experienced and is continuing to experience widespread infection, and there is uncertainty regarding how long the pandemic will impact the United States and the rest of the world. Unprecedented, extraordinary actions have been taken by federal, state and local governmental authorities to combat the spread of COVID-19, including issuance of “stay-at-home” directives and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. These measures, while intended to protect human life, have led to, and may continue to lead to, reduced economic activity in certain sectors and an increase in unemployment throughout the United States, including in some markets where our properties are located. As a result, there has been, and may continue to be, a period of economic slowdown, the severity and duration of which remains uncertain. Such economic slowdown, among other disruptions caused by the COVID-19 pandemic may adversely impact our financial condition and results of operations and the financial condition and results of operations of our tenants.

Our ability to lease our properties and collect rental revenues and expense reimbursements is dependent upon national, regional and local economic conditions. The potential inability to renew leases, lease vacant space or re-lease space as leases expire on favorable terms, or at all, could cause a decline in our receipt of rental payments. We have been in communication with a portion of our customer base regarding the COVID-19 pandemic and have previously received rent relief requests from a number of our customers. Although we may in the future receive additional rent relief requests, they have largely ended. We have granted rent relief requests from certain of our customers and denied other requests, and we may or may not grant such
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future requests from our customers. Granting rent relief could adversely affect our financial condition, results of operations and cash flows.
Some of our customers are experiencing a deterioration in their financial position, results of operations and cash flows; as a result, some have been unable to pay their rent and expense reimbursements. To date, this has had an immaterial impact on our rent collections. However, if our customers continue to experience such deterioration, this could adversely affect our financial condition, results of operations and cash flows.
Federal, state and local government restrictions associated with the mitigation efforts to prevent the spread of COVID-19 could prevent our customers from accessing their leased space and operating their businesses; such restrictions could also impact our ability to operate our business, which may cause the business and operating results to decline or impact our ability to comply with regulatory obligations leading to reputational harm and regulatory issues or fines. Such restrictions could also inhibit our ability to lease vacant space in our operating portfolio and our development and value-add program. In addition, government restrictions could prevent construction of tenant improvements and development projects, which could delay construction completion and lease commencement dates. In each case, we may experience an adverse impact on our financial condition and results of operations.
The economic uncertainty surrounding the COVID-19 pandemic has caused and may continue to cause disruption and instability in the financial markets and may impact our ability to raise capital from debt and equity markets on favorable terms or at all.
The health and well-being of our customers, employees, directors and other stakeholders is of great importance to us. We are striving to accommodate flexible working arrangements to ensure the health and safety of our team, while continuing to perform our job duties and provide services to our customers and other stakeholders. There are risks associated with remote working arrangements, including, but not limited to, risks related to cyber-security. We are continuing to monitor and adhere to federal, state and local government guidelines regarding our work arrangements with the goal of preventing the spread of COVID-19 to our workforce, our customers and our communities. There are risks and uncertainties related to the health of our employees and directors; any potential deterioration of the health of key personnel could impact our business operations.

The ongoing COVID-19 pandemic and the current economic, financial and capital markets environment present material risks and uncertainties for us. However, the rapid development and fluidity of the situation precludes any prediction as to the ultimate impact COVID-19 will have on our business, financial condition, results of operations and cash flows, which will depend largely on future developments directly or indirectly relating to the duration and scope of the COVID-19 pandemic in the United States. To the extent the COVID-19 pandemic adversely affects our business, financial condition, results of operations and cash flows, it may also have the effect of heightening many of the other risks described in “Item 1A. Risk Factors” in this Annual Report on Form 10-K.

ITEM 1B.  UNRESOLVED STAFF COMMENTS.


None.


ITEM 2.  PROPERTIES.


EastGroup owned 363406 industrial properties and one office building at December 31, 2017.2020.  These properties are located primarily in the Sunbelt states of Florida, Texas, Arizona, California and North Carolina, and the majority are clustered around major transportation features in supply constrained submarkets.  As of February 13, 2018,16, 2021, EastGroup’s portfolio was 96.7%97.9% leased and 96.2% occupied.96.7% occupied by approximately 1,550 tenants, with no single tenant accounting for more than approximately 1% of the Company's income from real estate operations.  The Company has developed approximately 45%46% of its total portfolio (on a square foot basis), includingwhich includes real estate properties and development and value-add properties in lease-up and under construction.  The Company’s focus is the ownership of business distribution space (87%(89% of the total portfolio) with the remainder in bulk distribution space (9%(8%) and business service space (4%(3%).  Business distribution space properties are typically multi-tenant buildings with a building depth of 200 feet or less, clear height of 24-30 feet, office finish of 10-25% and truck courts with a depth of 100-120 feet.  See Consolidated Financial Statement Schedule III – Real Estate Properties and Accumulated Depreciation for a detailed listing of the Company’s properties.


At December 31, 2017,2020, EastGroup did not own any single property with a book value that was 10% or more of total book value or with gross revenues that were 10% or more of total gross revenues.



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The Company's lease expirations excluding month-to-month leases of 373,000 square feet, for the next ten years are detailed below:
Years Ending December 31,Number of Leases ExpiringTotal Area of Leases Expiring
(in Square Feet)
Annualized Current Base Rent of Leases Expiring (1)
% of Total Base Rent of Leases Expiring
  2021 (2)
3396,520,000 $43,528,000 15.9%
20222887,368,000 $46,418,000 16.9%
20232836,554,000 $41,282,000 15.0%
20242397,106,000 $44,575,000 16.3%
20251695,616,000 $37,232,000 13.6%
20261073,805,000 $22,858,000 8.3%
2027512,257,000 $16,071,000 5.9%
2028331,525,000 $6,900,000 2.5%
2029171,045,000 $6,893,000 2.5%
2030 and beyond221,196,000 $8,602,000 3.1%
Years Ending December 31, Number of Leases Expiring 
Total Area of Leases Expiring
(in Square Feet)
 
Annualized Current Base Rent of Leases Expiring (1)
 % of Total Base Rent of Leases Expiring
2018 275 4,111,000
 $24,273,000
 11.6%
2019 289 5,699,000
 $34,637,000
 16.5%
2020 313 6,263,000
 $36,519,000
 17.4%
2021 207 6,324,000
 $36,079,000
 17.2%
2022 149 4,671,000
 $27,920,000
 13.3%
2023 85 2,696,000
 $13,275,000
 6.3%
2024 58 2,736,000
 $15,600,000
 7.4%
2025 17 1,156,000
 $6,184,000
 2.9%
2026 16 724,000
 $4,784,000
 2.3%
2027 and beyond 32 1,481,000
 $8,158,000
 3.9%
(1)Represents the monthly cash rental rates, excluding tenant expense reimbursements, as of December 31, 2017, multiplied by 12 months.


(1)Represents the monthly cash rental rates, excluding tenant expense reimbursements, as of December 31, 2020, multiplied by 12 months.
(2)Includes month-to-month leases.

ITEM 3.  LEGAL PROCEEDINGS.


The Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened against the Company or its properties, other than routine litigation arising in the ordinary course and other actions not deemed to be material. Of these matters, substantially all of business or which is expectedare to be covered by the Company’s liability insurance.insurance and which, in the aggregate, are not expected to have a material adverse effect on the Company's financial condition or results of operations. The Company cannot predict the outcome of any litigation with certainty, and some lawsuits, claims or proceedings may be disposed of unfavorably to the Company, which could materially affect its financial condition or results of operations.


ITEM 4.  MINE SAFETY DISCLOSURES.


Not applicable.




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PART II.  OTHER INFORMATION


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.


The Company’s shares of common stock are listed for trading on the New York Stock ExchangeNYSE under the symbol “EGP.”  The following table shows the high and low share prices for each quarter reported by the New York Stock Exchange during the past two years and the per share distributions paid for each quarter.

Shares of Common Stock Market Prices and Dividends
Quarter Calendar Year 2017 Calendar Year 2016
 High Low Distributions High Low Distributions
First $76.13
 67.69
 $0.62
 $60.46
 49.31
 $0.60
Second 87.40
 73.13
 0.62
 69.35
 58.28
 0.60
Third 91.51
 80.10
 0.64
 76.00
 68.40
 0.62
Fourth 95.03
 86.41
 0.64
 74.71
 63.99
 0.62
   
  
 $2.52
  
  
 $2.44

As of February 13, 2018,16, 2021, there were 467401 holders of record of the Company’s 34,738,860Company's 39,659,603 outstanding shares of common stock. The Company distributed all of its 20172020 and 20162019 taxable income to its stockholders. Accordingly, no significant provisions for income taxes were necessary. The following table summarizes the federal income tax treatment for all distributions by the Company for the years 20172020 and 2016.2019.


Federal Income Tax Treatment of Share Distributions
Years Ended December 31, Years Ended December 31,
2017 201620202019
Common Share Distributions:   Common Share Distributions: (Per share)
Ordinary dividends$2.49146
 2.10494
Ordinary dividends$3.32868 3.14000 
Nondividend distributions0.02686
 0.05202
Nondividend distributions— — 
Unrecaptured Section 1250 capital gain—
 0.12872
Unrecaptured Section 1250 capital gain— — 
Other capital gain0.00168
 0.15432
Other capital gain— — 
Total Common Distributions$2.52000
 2.44000
Total Common Distributions$3.32868 3.14000 
 
Securities Authorized For Issuance Under Equity Compensation Plans
See Item 12 of this Annual Report on Form 10-K, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” for certain information regarding the Company’s equity compensation plans.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers
No
PeriodTotal Number
of Shares Purchased		Average Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
October 1, 2020 through October 31, 2020— $— — — 
November 1, 2020 through November 30, 2020(1)
2,482 141.24 — — 
December 1, 2020 through December 31, 2020— — — — 
Total2,482 $141.24 —  

(1)As permitted under the Company's equity compensation plans, these shares of common stock were purchased by the Company or withheld by the Company to satisfy anythe tax withholding obligations duringfor those employees who elected this option in connection with the three-month period ended December 31, 2017.vesting of shares of restricted stock.

16



Performance Graph
The following graph compares, over the five years ended December 31, 2017,2020, the cumulative total shareholder return on EastGroup’s common stock with the cumulative total return of the Standard & Poor’s 500 Total Return Index (S&P 500 Total Return) and the FTSE Equity REIT index prepared by the National Association of Real Estate Investment Trusts (FTSE NAREITNareit Equity REITs).


The performance graph and related information shall not be deemed “soliciting material” or be deemed to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing, except to the extent that the Company specifically incorporates it by reference into such filing.






 Fiscal years ended December 31,
2012 2013 2014 2015 2016 2017
EastGroup$100.00
 111.69
 126.46
 115.72
 159.16
 196.32
FTSE NAREIT Equity REITs100.00
 102.47
 133.35
 137.62
 149.35
 157.16
S&P 500 Total Return100.00
 132.39
 150.51
 152.59
 170.84
 208.13
egp-20201231_g2.jpg




 Fiscal years ended December 31,
201520162017201820192020
EastGroup$100.00 137.54 169.66 181.42 268.86 286.87 
FTSE Nareit Equity REITs100.00 108.52 114.20 108.92 137.24 126.26 
S&P 500 Total Return100.00 111.96 136.40 130.43 171.50 203.06 

The information above assumes that the value of the investment in shares of EastGroup’s common stock and each index was $100 on December 31, 2012,2015, and that all dividends were reinvested.





17







ITEM 6. SELECTED FINANCIAL DATA.RESERVED.   
The following table sets forth selected consolidated financial data for the Company derived from the audited consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report.

 Years Ended December 31,
2017 2016 2015 2014 2013
OPERATING DATA(In thousands, except per share data)
REVENUES         
Income from real estate operations                                                                                       $274,031
 252,961
 234,918
 219,706
 201,849
Other revenue                                                                                       119
 86
 90
 123
 322
 274,150
 253,047
 235,008
 219,829
 202,171
Expenses 
  
  
  
  
Expenses from real estate operations80,108
 74,347
 67,402
 62,797
 57,885
Depreciation and amortization83,874
 77,935
 73,290
 70,314
 65,789
General and administrative14,972
 13,232
 15,091
 12,726
 11,725
Acquisition costs—
 161
 164
 210
 191
 178,954
 165,675
 155,947
 146,047
 135,590
Operating income95,196
 87,372
 79,061
 73,782
 66,581
Other income (expense) 
  
  
  
  
Interest expense(34,775) (35,213) (34,666) (35,486) (35,192)
Gain, net of loss, on sales of real estate investments21,855
 42,170
 2,903
 9,188
 —
Other1,313
 1,765
 1,101
 989
 949
Income from continuing operations83,589
 96,094
 48,399
 48,473
 32,338
Discontinued operations 
  
  
  
  
Income from real estate operations—
 —
 —
 —
 89
Gain on sales of nondepreciable real estate investments—
 —
 —
 —
 —
Gain on sales of real estate investments—
 —
 —
 —
 798
Income from discontinued operations—
 —
 —
 —
 887
Net income83,589
 96,094
 48,399
 48,473
 33,225
  Net income attributable to noncontrolling interest in joint ventures(406) (585) (533) (532) (610)
Net income attributable to EastGroup Properties, Inc. common stockholders83,183
 95,509
 47,866
 47,941
 32,615
Other comprehensive income (loss) - Cash flow hedges3,353
 5,451
 (1,099) (3,986) 2,021
TOTAL COMPREHENSIVE INCOME$86,536
 100,960
 46,767
 43,955
 34,636
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 
  
  
  
  
Income from continuing operations$2.45
 2.93
 1.49
 1.53
 1.05
Income from discontinued operations—
 —
 —
 —
 0.03
Net income attributable to common stockholders$2.45
 2.93
 1.49
 1.53
 1.08
Weighted average shares outstanding33,996
 32,563
 32,091
 31,341
 30,162
DILUTED PER COMMON SHARE DATA FOR NET INCOMEATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 
  
  
  
  
Income from continuing operations$2.44
 2.93
 1.49
 1.52
 1.05
Income from discontinued operations—
 —
 —
 —
 0.03
Net income attributable to common stockholders$2.44
 2.93
 1.49
 1.52
 1.08
Weighted average shares outstanding34,047
 32,628
 32,196
 31,452
 30,269
AMOUNTS ATTRIBUTABLE TO EASTGROUP
PROPERTIES, INC. COMMON STOCKHOLDERS
 
  
  
  
  
Income from continuing operations$83,183
 95,509
 47,866
 47,941
 31,728
Income from discontinued operations—
 —
 —
 —
 887
Net income attributable to common stockholders$83,183
 95,509
 47,866
 47,941
 32,615
OTHER PER SHARE DATA 
  
  
  
  
Book value, at end of year$21.56
 19.13
 17.11
 17.72
 16.61
Common distributions declared2.52
 2.44
 2.34
 2.22
 2.14
Common distributions paid2.52
 2.44
 2.34
 2.22
 2.14
BALANCE SHEET DATA (AT END OF YEAR) 
  
  
  
  
 Real estate investments, at cost (1)
$2,590,083
 2,419,414
 2,232,327
 2,087,821
 1,938,960
 Real estate investments, net of accumulated depreciation (1)
1,840,482
 1,725,164
 1,574,873
 1,487,295
 1,388,847
Total assets1,953,221
 1,825,764
 1,661,904
 1,572,112
 1,468,963
Unsecured bank credit facilities, unsecured debt and secured debt1,108,282
 1,101,333
 1,027,909
 929,465
 889,296
Total liabilities1,202,091
 1,183,898
 1,102,703
 996,497
 950,258
Noncontrolling interest in joint ventures1,658
 4,205
 4,339
 4,486
 4,707
Total stockholders’ equity749,472
 637,661
 554,862
 571,129
 513,998
(1)
Includes mortgage loans receivable and unconsolidated investment. See Notes 3 and 4 in the Notes to Consolidated Financial Statements.




ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
CertainThe following discussion and analysis of results of operations and financial condition should be read in conjunction with the consolidated financial statements containedand notes thereto appearing elsewhere in this report may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as “will,” “anticipates,” “expects,” “believes,” “intends,” “plans,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature.  All statements that address operating performance, events or developments that the Company expects or anticipates will occur in the future, including statements relating to rent and occupancy growth, development activity, the acquisition or sale of properties, general conditions in the geographic areas where the Company operates and the availability of capital, are forward-looking statements.  Forward-looking statements are inherently subject to known and unknown risks and uncertainties, many of which the Company cannot predict, including, without limitation: changes in general economic conditions; the extent of tenant defaults or of any early lease terminations; the Company's ability to lease or re-lease space at current or anticipated rents; the availability of financing; the failure to maintain credit ratings with rating agencies; changes in the supply of and demand for industrial/warehouse properties; increases in interest rate levels; increases in operating costs; natural disasters, terrorism, riots and acts of war, and the Company's ability to obtain adequate insurance; changes in governmental regulation, tax rates and similar matters; and other risks associated with the development and acquisition of properties, including risks that development projects may not be completedAnnual Report on schedule, development or operating costs may be greater than anticipated or acquisitions may not close as scheduled, and those additional factors discussed under “Item 1A. Risk Factors” in Part I of this report.  Although the Company believes the expectations reflected in the forward-looking statements are based upon reasonable assumptions at the time made, the Company can give no assurance that such expectations will be achieved.  The Company assumes no obligation whatsoever to publicly update or revise any forward-looking statements.  See also the information contained in the Company’s reports filed or to be filed from time to time with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Form 10-K.



OVERVIEW
EastGroup’s goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitivelocation-sensitive customers primarily(primarily in the 15,000 to 50,00070,000 square foot range.range).  The Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation features in supply constrainedsupply-constrained submarkets in major Sunbelt regions.  The Company’s core markets are in the states of Florida, Texas, Arizona, California and North Carolina.


Impact of the COVID-19 Pandemic
On March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a pandemic. Global, national and local economies continue to be impacted by the pandemic and the mitigation efforts to combat the spread of COVID-19.

During the course of the COVID-19 pandemic, the United States has experienced, and may continue to experience, significant health, social and economic impacts from COVID-19. EastGroup’s operations, occupancy and rent collections have remained substantially stable during this period. As of February 16, 2021, the Company has received rent relief requests, primarily in the form of payment deferral requests, from approximately 28% of its customers based on rental revenue. These requests have largely ended; for comparison, this is only a slight increase from 26% at the end of April 2020 during the beginning of the pandemic. To date, approximately 18% of these requests have been granted some form of relief, which represents approximately 5% of the Company’s customers on a square foot basis. The Company has executed rent deferral agreements totaling $1.7 million, which represents approximately 0.4% of the Company’s 2020 revenue. The deferrals all relate to 2020 rental income with no future period deferred rents. The terms differ for each deferral agreement, and all deferred rent payments that were due through December 31, 2020 have been collected with the exception of $27,000. As of February 16, 2021, 59% of total deferred rent has been collected. Under modified COVID-19-related guidance provided by the Financial Accounting Standards Board (“FASB”), rental income for the majority of these deferral agreements ($1.4 million of the $1.7 million) qualifies to be recognized as rental income in the periods in which it was charged under the original terms of the leases. When requests were made, they were handled on a case-by-case basis, and the Company’s responses were dependent on its understanding of the financial strength of the customer, the operational and earnings impacts being experienced by the customer, and the customer’s ability or inability to obtain capital through debt or equity issuances, government assistance programs or by other means. As of February 16, 2021, rent payment deferrals representing approximately 0.4% of the Company's 2020 revenue have not been significant; the Company is continuing to actively monitor the evolving COVID-19 situation and its impact on the Company’s cash flows and operations.


18

As of February 16, 2021, the Company’s rent collection and rent payment deferral status was as follows:
Period
% of Rent Collected(1)
% of Uncollected Rent Deferred to Future Period% of Uncollected Rent With No Deferral Agreement
Quarterly
Q1 202099.8%0.0%0.2%
Q2 202099.6%0.3%0.1%
Q3 202099.5%0.2%0.3%
Q4 202099.5%0.1%0.4%
Monthly
October 202099.3%0.2%0.5%
November 202099.4%0.1%0.5%
December 202099.7%0.1%0.2%
January 202199.5%0.0%0.5%
February 2021(2)
95.1%0.0%4.9%
(1)     Customer payments are received daily. The collection information presented is current through February 16, 2021, and the Company anticipates continuing to receive payments which will increase the % of Rent Collected.
(2)     Represents the period of February 1, 2021 through February 16, 2021 and assumes collections from government-related tenants. For comparison, as of February 16, 2021, February rental receipts are slightly higher than the January rental receipts were as of January 16, 2021.

We believe EastGroup’s financial condition and balance sheet remain strong. As of December 31, 2020, the outstanding balance on the Company’s $395 million unsecured revolving credit facilities was $125 million, providing $270 million of available capacity. During 2020, EastGroup has only drawn amounts on its unsecured revolving credit facilities for general corporate purposes in the ordinary course of business. The Company is in compliance with its debt covenants at December 31, 2020 and anticipates remaining in compliance for the foreseeable future. The Company’s recent debt and equity activity is further described under Liquidity and Capital Resources.
The Company has been continuing construction on already-active development and value-add projects. During the second and third quarters of 2020, EastGroup did not begin construction on any new development projects. During the fourth quarter of 2020, the Company started construction on three new development projects. Management will continue to monitor the economic conditions of the Company’s markets to determine whether to begin construction on additional future development projects.

The future impacts of COVID-19 on the Company are largely dependent on the severity and duration of the economic uncertainty and its effect on EastGroup’s customers and cannot be predicted with certainty at this time.

General
The Company believes its current operating cash flow and unsecured bank credit facilities provide the capacity to fund the operations of the Company, and the Company also believes it can issue common and/or preferred equity and obtain debt financing. During 2017,2020, EastGroup obtained unsecured debt totaling $60 million and issued 1,370,457709,924 shares of common stock through its continuous common equity offering program, providing net proceeds to the Company of $109$92.7 million. Also during 2020, the Company closed on a private placement of $175 million of senior unsecured notes with a weighted average fixed interest rate of 2.65% and a $100 million senior unsecured term loan with an effective fixed interest rate of 2.39%. EastGroup's financing and equity issuances are further described in Liquidity and Capital Resources.


The Company’s primary revenue is rental income; as such, EastGroup’s greatest challenge is leasing space.income.  During 2017,2020, EastGroup executed leases expired on 6,475,0008,118,000 square feet (17.3%(18.5% of EastGroup’s total square footage of 37,338,000), and the Company was successful in renewing or re-leasing 85%43,854,000 as of the expiring square feet.  In addition, EastGroup leased 2,120,000 square feet of other vacant space during the year.  During 2017, average rental rates onDecember 31, 2020). For new and renewal leases signed during 2020, average rental rates increased by 16.8%.  21.7% as compared to the former leases on the same spaces.  

Property net operating income (PNOI)Net Operating Income (“PNOI”) Excluding Income from Lease Terminations from same properties defined(defined as operating properties owned during the entire current period and prior year reporting period,periods – January 1, 2019 through December 31, 2020), increased 2.8%2.1% for 20172020 compared to 2016.2019.


19

EastGroup’s totalportfolio was 98.0% leased percentage was 97.0% at December 31, 20172020 compared to 97.3%97.6% at December 31, 2016.2019.  As of February 16, 2021, the portfolio was 97.9% leased and 96.7% occupied. Leases scheduled to expire in 20182021 were 11.0%14.9% of the portfolio on a square foot basis at December 31, 2017.  As2020, and this percentage was reduced to 12.2% as of February 13, 2018, leases scheduled to expire during the remainder of 2018 were 9.6% of the portfolio on a square foot basis.16, 2021.


The Company generates new sources of leasing revenue through its development and acquisition programs.  The Company mitigates risks associated with development through a Board-approved maximum level of land held for development and by adjusting development start dates according to leasing activity.  


During 2017,2020, EastGroup acquired 840,000509,000 square feet of operating and value-add properties in Atlanta, Dallas, Austin and 90Los Angeles and 232.6 acres of land in Orlando, Fort Myers, Atlanta, Dallas and El Paso for a total of $82$122.2 million. The Company began construction of 125 development projects containing 1,339,000851,000 square feet in Austin,Miami, Fort Myers, Charlotte, Dallas San Antonio, Phoenix, Tampa, Orlando, and Charlotte.Phoenix. Also in 2017,2020, the Company transferred 1218 development and value-add properties (2,197,000(2,360,000 square feet) in Tampa, Miami, Orlando, Fort Myers, Charlotte, Dallas, Austin, Houston, San Antonio, Las Vegas Orlando, Tampa, Charlotte and PhoenixSan Diego from its development and value-add program to real estate properties with costs of $160.1$249.4 million


at the date of transfer. As of December 31, 2017,2020, EastGroup's development and value-add program consisted of 18 buildings (2,166,00016 projects (2,741,000 square feet) located in 1110 cities.  The projected total cost for the development and value-add projects, which were collectively 50%35% leased as of February 13, 2018,16, 2021, is $185$291.5 million, of which $54$65.5 million remained to be invested as of December 31, 2017.2020.


During 2017,2020, EastGroup sold 514,000126,000 square feet of operating properties, and 19 acres of land, generating gross sales proceeds of $41.8$21.0 million. The Company recognized $21,855,000$13.1 million in Gain net of loss, on sales of real estate investments and $293,000 in Gain, net of loss, on sales of non-operating real estate (included in Other on the Consolidated Statements of Income and Comprehensive Income) during 2017.2020.


Typically, theThe Company typically initially funds its development and acquisition programs through its $335$395 million unsecured bank credit facilities (as discussed in below under Liquidity and Capital Resources).  As market conditions permit, EastGroup issues equity and/or employs fixed-ratefixed rate debt, including variable-ratevariable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace short-term bank borrowings. In May 2017,June 2019, Moody's Investors Service affirmed the Company's issuer rating of Baa2 with a stable outlook. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. For future debt issuances, the Company intends to issue primarily unsecured fixed-ratefixed rate debt, including variable-ratevariable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps. The Company may also access the public debt market in the future as a means to raise capital.


EastGroup has one reportable segment – industrial properties.  TheseThe Company's properties, are primarily located in major Sunbelt regions of the United States, have similar economic characteristics and also meet the other criteria permitting the properties to beas a result, have been aggregated into one reportable segment.

The Company’s chief decision makers use two primary measures of operating results in making decisions:  (1) property net operating income (PNOI), defined as Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company's share of income and property operating expenses from its less-than-wholly-owned real estate investments, and (2) funds from operations attributable to common stockholders (FFO)(“FFO”), definedand (2) property net operating income (“PNOI”).

FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). In December 2018, Nareit issued the “Nareit Funds from Operations White Paper - 2018 Restatement” (the “2018 White Paper”), which reaffirmed, and in some cases refined, Nareit's prior determinations concerning FFO. The guidance in the 2018 White Paper allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges, on real estate assets incidental to a REIT's business are excluded from the calculation of FFO. EastGroup has made the election to exclude activity related to such assets that are incidental to our business. In 2019, the Company revised prior periods to reflect this guidance.

FFO is calculated as net income (loss) attributable to common stockholders computed in accordance with U.S. generally accepted accounting principles (GAAP)(“GAAP”), excluding gains orand losses from sales of depreciable real estate property (including other assets incidental to the Company’s business) and impairment losses, plusadjusted for real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO is not considered as an alternative to net income (determined in accordance with GAAP) as an indication of the Company’s financial performance, nor is it a measure of the Company’s liquidity or indicative of funds available to provide for the Company’s cash needs, including its ability to make distributions.  The Company’s key drivers affecting FFO are changes in PNOI (as discussed below), interest rates, the amount of leverage the Company employs and general and administrative expenses.  

PNOI is defined as Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments.

20

EastGroup sometimes refers to PNOI from Same Properties as “Same PNOI”; the Company also presents Same PNOI Excluding Income from Lease Terminations. Same Properties is defined as operating properties owned during the entire current period and prior year reporting period. Properties developed or acquired are excluded until held in the operating portfolio for both the current and prior year reporting periods. Properties sold during the current or prior year reporting periods are also excluded. For the year ended December 31, 2020, Same Properties includes properties which were included in the operating portfolio for the entire period from January 1, 2019 through December 31, 2020. The Company calculates FFO based on the National Associationpresents Same PNOI and Same PNOI Excluding Income from Lease Terminations as a property-level supplemental measure of Real Estate Investment Trusts’ (NAREIT) definition.

PNOI is a supplemental industry reporting measurementperformance used to evaluate the performance of the Company’s investments in real estate investments.assets and its operating results on a same property basis. It is calculated on a lease-by-lease basis by averaging the customers’ rent payments over the life of each individual lease.

FFO and PNOI are supplemental industry reporting measurements used to evaluate the performance of the Company’s investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry’s calculationcalculations of PNOI and FFO provides a supplemental indicatorindicators of the properties’ performance since real estate values have historically risen or fallen with market conditions.  PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other real estate investment trusts (REITs)(“REITs”).  The major factors influencing PNOIInvestors should be aware that items excluded from or added back to FFO are occupancy levels, acquisitionssignificant components in understanding and sales, development properties that achieve stabilized operations, rental rate increases or decreases, andassessing the recoverability of operating expenses.  The Company’s success depends largely upon its ability to lease space and to recover from tenants the operating costs associated with those leases.financial performance.


PNOI is comprised of Income from real estate operations, less Expenses from real estate operations plus the Company's share of income and property operating expenses from its less-than-wholly-owned real estate investments.  PNOI was calculated as follows for the three fiscal years ended December 31, 2017, 20162020, 2019 and 2015.2018.
 Years Ended December 31,
202020192018
(In thousands)
Income from real estate operations                       $362,669 330,813 299,018 
Expenses from real estate operations                                (103,368)(93,274)(86,394)
Noncontrolling interest in PNOI of consolidated joint ventures(171)(199)(314)
PNOI from 50% owned unconsolidated investment978 976 869 
PROPERTY NET OPERATING INCOME (“PNOI”)$260,108 238,316 213,179 
 Years Ended December 31,
2017 2016 2015
(In thousands)
Income from real estate operations                                                                                     $274,031
 252,961
 234,918
Expenses from real estate operations                                                                                     (80,108) (74,347) (67,402)
Noncontrolling interest in PNOI of consolidated 80% joint ventures(633) (823) (851)
PNOI from 50% owned unconsolidated investment897
 906
 842
PROPERTY NET OPERATING INCOME (PNOI)                                                                                     $194,187
 178,697
 167,507


Income from real estate operations is comprised of rental income net of reserves for uncollectible rent, expense reimbursement pass-through income and other real estate income including lease termination fees.  Expenses from real estate operations is comprised of property taxes, insurance, utilities, repair and maintenance expenses, management fees and other operating costs and bad debt expense.costs.  Generally, the Company’s most significant operating expenses are property taxes and insurance.  Tenant leases may be net leases in which the total operating expenses are recoverable, modified gross leases in which some of the operating expenses are recoverable, or gross leases in which no expenses are recoverable (gross leases represent only a small portion of the Company’s total leases).  Increases in property


operating expenses are fully recoverable under net leases and recoverable to a high degree under modified gross leases.  Modified gross leases often include base year amounts, and expense increases over these amounts are recoverable.  The Company’s exposure to property operating expenses is primarily due to vacancies and leases for occupied space that limit the amount of expenses that can be recovered.



21

The following table presents reconciliations of Net Income to PNOI, Same PNOI and Same PNOI Excluding Income from Lease Terminations for the three fiscal years ended December 31, 2017, 20162020, 2019 and 2015.2018.
 Years Ended December 31,
202020192018
(In thousands)
NET INCOME                                                                                     $108,391 123,340 88,636 
Gain on sales of real estate investments                          (13,145)(41,068)(14,273)
Gain on sales of non-operating real estate— (83)(86)
Gain on sales of other assets— — (427)
Net loss on other— 884 497 
Interest income                                                                                     (101)(129)(156)
Other revenue                                                                                   (354)(574)(1,374)
Indirect leasing costs661 411 — 
Depreciation and amortization116,359 104,724 91,704 
Company's share of depreciation from unconsolidated investment137 141 128 
Interest expense                                                                                     33,927 34,463 35,106 
General and administrative expense                          14,404 16,406 13,738 
Noncontrolling interest in PNOI of consolidated joint ventures(171)(199)(314)
PROPERTY NET OPERATING INCOME (“PNOI”)                             260,108 238,316 213,179 
PNOI from 2019 and 2020 Acquisitions(8,434)(2,929)*
PNOI from 2019 and 2020 Development and Value-Add Properties(24,050)(8,109)*
PNOI from 2019 and 2020 Operating Property Dispositions(1,081)(4,787)*
Other PNOI257 247 *
SAME PNOI226,800 222,738 *
Net lease termination fee income from same properties(709)(1,258)*
SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS$226,091 221,480 *
 Years Ended December 31,
2017 2016 2015
  (In thousands)  
NET INCOME                                                                                     $83,589
 96,094
 48,399
(Gain) loss on sales of real estate investments                                                                                     (21,855) (42,170) (2,903)
(Gain), net of loss, on sales of non-operating real estate                                                                                  (293) (733) (123)
Interest income                                                                                     (247) (255) (258)
Other income                                                                                     (119) (86) (90)
Interest rate swap ineffectiveness—
 5
 —
Depreciation and amortization83,874
 77,935
 73,290
Company's share of depreciation from unconsolidated investment124
 124
 122
Interest expense                                                                                     34,775
 35,213
 34,666
General and administrative expense                                                                                     14,972
 13,232
 15,091
Acquisition costs   ��                                                                                 —
 161
 164
Noncontrolling interest in PNOI of consolidated 80% joint ventures(633) (823) (851)
PROPERTY NET OPERATING INCOME (PNOI)                                                                                     $194,187
 178,697
 167,507


The Company believes FFO is a meaningful supplemental measure of operating performance* Same property metrics are not applicable to the year ended December 31, 2018, as the same property metrics for equity REITs.  The Company believes excluding depreciation2020 and amortization in the calculation of FFO is appropriate since real estate values have historically increased or decreased2019 are based on market conditions.  FFO is not considered as an alternative to net income (determined in accordance with GAAP) as an indication ofoperating properties owned during the Company’s financial performance, nor is it a measure of the Company’s liquidity or indicative of funds available to provide for the Company’s cash needs, including its ability to make distributions.  In addition, FFO, as reported by the Company, may not be comparable to FFO reported by other REITs that do not define the term in accordance with theentire current NAREIT definition.  The Company’s key drivers affecting FFO are changes in PNOI (as discussed above), interest rates, the amount of leverage the Company employs and general and administrative expenses.  prior year reporting periods (January 1, 2019 through December 31, 2020).


22

The following table presents reconciliations of Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO Attributable to Common Stockholders for the three fiscal years ended December 31, 2017, 20162020, 2019 and 2015.2018.
 Years Ended December 31,
202020192018
(In thousands, except per share data)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS                                 $108,363 121,662 88,506 
Depreciation and amortization116,359 104,724 91,704 
Company's share of depreciation from unconsolidated investment137 141 128 
Depreciation and amortization from noncontrolling interest(142)(186)(182)
Gain on sales of real estate investments                       (13,145)(41,068)(14,273)
Gain on sales of non-operating real estate— (83)(86)
Gain on sales of other assets— — (427)
Noncontrolling interest in gain on sales of real estate investments of consolidated joint ventures— 1,671 — 
FUNDS FROM OPERATIONS (“FFO”) ATTRIBUTABLE TO COMMON STOCKHOLDERS                                                      $211,572 186,861 165,370 
Net income attributable to common stockholders per diluted share$2.76 3.24 2.49 
Funds from operations (“FFO”) attributable to common stockholders
per diluted share		$5.38 4.98 4.66 (1)
Diluted shares for earnings per share and funds from operations39,296 37,527 35,506 
 Years Ended December 31,
2017 2016 2015
(In thousands, except per share data)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS                                                                                     $83,183
 95,509
 47,866
Depreciation and amortization83,874
 77,935
 73,290
Company's share of depreciation from unconsolidated investment124
 124
 122
Depreciation and amortization from noncontrolling interest                                                                                     (224) (214) (206)
(Gain) loss on sales of real estate investments                                                                                     (21,855) (42,170) (2,903)
FUNDS FROM OPERATIONS (FFO) ATTRIBUTABLE TO COMMON STOCKHOLDERS                                                                                     
$145,102
 131,184
 118,169
Net income attributable to common stockholders per diluted share$2.44
 2.93
 1.49
Funds from operations attributable to common stockholders per diluted share4.26
 4.02
 3.67
Diluted shares for earnings per share and funds from operations34,047
 32,628
 32,196


(1)The Company initially reported FFO of $4.67 per share during the year ended December 31, 2018. In connection with the Company's adoption of the Nareit Funds from Operations White Paper - 2018 Restatement, the Company now excludes from FFO the gains and losses on sales of non-operating real estate and assets incidental to the Company’s business.








The Company analyzes the following performance trends in evaluating the progressrevenues and expenses of the Company:
 
•The change in FFO change per share represents the increase or decrease in FFO per share from the current year compared to the prior year.  For 2017,2020, FFO was $4.26$5.38 per share compared with $4.02$4.98 per share for 2016,2019, an increase of 6.0% per share.8.0%.


•For the year ended December 31, 2017,2020, PNOI increased by $15,490,000,$21,792,000, or 8.7%9.1%, compared to 2016.2019. PNOI increased $10,327,000$15,941,000 from newly developed and redevelopedvalue-add properties, $4,765,000$5,505,000 from 2019 and 2020 acquisitions and $4,062,000 from same property operations and $3,355,000 from 2016 and 2017 acquisitions;operations; PNOI decreased $2,767,000$3,706,000 from operating properties sold in 20162019 and 2017.2020.


•The same property net operating income change in Same PNOI represents the PNOI increase or decrease for the same operating properties owned during the entire current period and prior year reporting period.periods (January 1, 2019 through December 31, 2020).  Same PNOI, excluding income from same propertieslease terminations, increased 2.8%2.1% for the year ended December 31, 2017,2020, compared to 2016.2019.


•Same property average occupancy represents the average month-end percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage for the same operating properties owned during the entire current period and prior year reporting period.periods (January 1, 2019 through December 31, 2020). Same property average occupancy was 97.0% for each of the yearyears ended December 31, 2017, was 96.8% compared to 96.5% for 2016.2020 and 2019.


•Occupancy is the percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage as of the close of the reporting period.  Occupancy at December 31, 20172020 was 96.4%97.3%.  Quarter-end occupancy ranged from 94.9%96.4% to 96.8%97.1% over the previous four quarters ended December 31, 20162019 to September 30, 2017.2020.


•Rental rate change represents the rental rate increase or decrease on new and renewal leases compared to the prior leases on the same space.  For the year 2017,2020, rental rate increases on new and renewal leases (20.5%(18.5% of total square footage) averaged 16.8%21.7%.


•Lease termination fee income is included in Income from real estate operations. For the year 2017,2020, lease termination fee income was $468,000$709,000 compared to $812,000$1,336,000 for 2016.  2019.  

23


Bad debt expense is included in Expenses•The Company records reserves for uncollectible rent as reductions to Income from real estate operations.The Company recorded bad debt expensereserves for uncollectible rent of $499,000$2,763,000 in 20172020 compared to $448,000 in 2019. Individual leases are evaluated for collectibility at each reporting period. We evaluate the collectibility of rents and $992,000other receivables at each reporting period based on factors including, among others, tenant's payment history, the financial condition of the tenant, business conditions and trends in 2016.
the industry in which the tenant operates and economic conditions in the geographic area where the property is located. If evaluation of these factors or others indicates it is not probable we will collect substantially all rent we recognize an adjustment to rental revenue. If our judgment or estimation regarding probability of collection changes we may adjust or record additional rental revenue in the period such conclusion is reached. The Company followed its normal process for recording reserves for uncollectible rent during the year ended December 31, 2020 and also evaluated all deferred rent related to the COVID-19 pandemic for collectibility.




CRITICAL ACCOUNTING POLICIES AND ESTIMATES


The Company’s management considers the following accounting policies and estimates to be critical to the reported operations of the Company.


Acquisition and Development of Real Estate Properties
The Company applied the principles of Accounting Standards Codification (ASC) 805, Business Combinations, when accounting for purchases of real estate until its adoption of ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which was effective October 1, 2016. ASU 2017-01 provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the new guidance, companies are required to utilize an initial screening test to determine whether substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. EastGroup has determined that some of its real estate property acquisitions may be considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business.


The Financial Accounting Standards Board (FASB)FASB Codification provides guidance on how to properly determine the allocation of the purchase price among the individual components of both the tangible and intangible assets based on their respectiverelative fair values.  Goodwill for business combinations is recorded when the purchase price exceeds the fair value of the assets and liabilities acquired.  Factors considered by management in allocating the cost of the properties acquired include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.  The allocation to tangible assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. Land is valued using comparable land sales specific to the applicable market, provided by a third-party. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties.  The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates.  




The purchase price is also allocated among the following categories of intangible assets:  the above or below market component of in-place leases, 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 faircurrent market ratesrents over the remaining term of the lease.  The amounts allocated to above and below market leases 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.  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.


The relevance of this accounting policy will fluctuate given the transaction activity during the period.

For properties under development and value-add properties acquired in the development stage, costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are aggregated into the total capitalized costs of the property.  Included in these costs are management’s estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities. The internal costs are allocated to specific development propertiesprojects based on development activity.


The Company reviews its real estate investments for impairment of value whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  If any real estate investment is considered permanently impaired, a loss is recorded to reduce the carrying value of the property to its estimated fair value.  Real estate assets classified as held for sale are reported at the lower of the carrying amount or fair value less estimated costs of sale.  The evaluation of real estate investments involves many subjective assumptions dependent upon future economic events that affect the ultimate value of the property.  Currently, the Company’s management has not identified any impairment charges which should be recorded nor has it recorded any impairment charges in recent years.  In the event of impairment, the property’s basis would be reduced, and the impairment would be recognized as a current period charge on the Consolidated Statements of Income and Comprehensive Income.
24

Valuation of Receivables

The Company is subject to tenant defaults and bankruptcies that could affect the collection of outstanding receivables.  In order to mitigate these risks, the Company performs credit reviews and analyses on prospective tenants before significant leases are executed and on existing tenants before properties are acquired.  On a quarterly basis, the Company evaluates outstanding receivables and estimates the allowance for doubtful accounts.  Management specifically analyzes aged receivables, customer credit-worthiness, historical bad debts and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.  The Company believes its allowance for doubtful accounts is adequate for its outstanding receivables for the periods presented.  In the event the allowance for doubtful accounts is insufficient for an account that is subsequently written off, additional bad debt expense would be recognized as a current period charge on the Consolidated Statements of Income and Comprehensive Income.

Tax Status
EastGroup, a Maryland corporation, has qualified as a real estate investment trust under Sections 856-860 of the Internal Revenue Code and intends to continue to qualify as such.  To maintain its status as a REIT, the Company is required to distribute at least 90% of its ordinary taxable income to its stockholders.  If the Company has a capital gain, it has the option of (i) deferring recognition of the capital gain through a tax-deferred exchange, (ii) declaring and paying a capital gain dividend on any recognized net capital gain resulting in no corporate level tax, or (iii) retaining and paying corporate income tax on its net long-term capital gain, with shareholders reporting their proportional share of the undistributed long-term capital gain and receiving a credit or refund of their share of the tax paid by the Company.  The Company distributed all of its 2017, 2016 and 2015 taxable income to its stockholders.  Accordingly, no significant provisions for income taxes were necessary.


FINANCIAL CONDITION


EastGroup’s Total Assets were $1,953,221,000$2,720,803,000 at December 31, 2017, 2020, an increase of $127,457,000$174,725,000 from December 31, 2016.  2019.  Total Liabilitiesincreased$18,193,000 $106,536,000 to $1,202,091,000,$1,450,285,000, and Total Equityincreased$109,264,000 $68,189,000 to $751,130,000$1,270,518,000 during the same period.  The following paragraphs explain these changes in detail.


Assets

Real Estate Properties
Real estate properties increased $222,386,000$314,930,000 during the year ended December 31, 2017,2020. The increase was primarily due toto: (i) the transfer of 1218 properties from Development, as and value-add properties to Real estate properties (as detailed under Development below; the purchase of the and Value-Add Properties below); (ii) operating properties detailed below;property acquisitions; and


(iii) capital improvements at the Company's properties. These increases were partially offset by the operating property sales discussed below.


During 2017,2020, EastGroup acquired the following operating properties:
REAL ESTATE PROPERTIES ACQUIRED IN 2020LocationSizeDate
Acquired
Cost (1)
  (Square feet) (In thousands)
Wells Point OneAustin, TX50,000 02/28/2020$5,812 
Cherokee 75 Business Center 1Atlanta, GA85,000 12/15/20207,909 
The RockDallas, TX212,000 12/17/202032,519 
Total Real Estate Property Acquisitions 347,000  $46,240 
REAL ESTATE OPERATING PROPERTIES ACQUIRED IN 2017 Location Size 
Date
Acquired
 
Cost (1)
    (Square feet)   (In thousands)
Shiloh 400 Atlanta, GA 238,000
 02/07/2017 $18,712
Broadmoor Commerce Park Atlanta, GA 84,000
 04/26/2017 5,363
Southpark Corporate Center 5-7 Austin, TX 99,000
 05/12/2017 9,590
Hurricane Shoals 1 & 2 Atlanta, GA 260,000
 12/12/2017 17,874
Total Acquisitions   681,000
   $51,539


(1)Total cost of the operating properties acquired was $54,879,000, of which $51,539,000 was allocated to Real estate properties as indicated above. The Company allocated $9,984,000 of the total purchase price to land using third party land valuations for the Atlanta and Austin markets. The market values are considered to be Level 3 inputs as defined by ASC 820, Fair Value Measurement (see Note 18 in the Notes to Consolidated Financial Statements for additional information on ASC 820). Intangibles associated with the purchases of real estate were allocated as follows: $3,610,000 to in-place lease intangibles and $115,000 to above market leases (both included in Other assets on the Consolidated Balance Sheets), and $385,000 to below market leases (included in Other liabilities on the Consolidated Balance Sheets).   

(1)Total cost of the operating properties acquired was $48,656,000, of which $46,240,000 was allocated to Real estate properties as indicated above. The Company allocated $7,385,000 of the total purchase price to land using third party land valuations for the Atlanta, Austin and Dallas markets. The market values are considered to be Level 3 inputs as defined by FASB Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (see Note 18 in the Notes to Consolidated Financial Statements for additional information on ASC 820). Intangibles associated with the purchases of real estate were allocated as follows: $2,624,000 to in-place lease intangibles and $104,000 to above market leases (both included in Other assets on the Consolidated Balance Sheets), and $312,000 to below market leases (included in Other liabilities on the Consolidated Balance Sheets).   

During the year ended December 31, 2017,2020, the Company made capital improvements of $27,471,000$30,255,000 on existing and acquired properties (included in the Capital Expenditures table under Results of Operations).  Also, the Company incurred costs of $12,811,000$5,743,000 on development and value-add projects subsequent to transfer to Real estate properties; the Company records these expenditures as development and value-add costs on the Consolidated Statements of Cash Flows.


EastGroup sold the following operating properties during 2017: Stemmons Circle2020: University Business Center 120 in DallasSanta Barbara and Techway Southwest I-IVCentral Green in Houston. The properties (514,000(126,000 square feet combined) were sold for $38.0$21 million and the Company recognized gains on the sales of $21.9$13.1 million.


Development and Value-Add Properties
EastGroup’s investment in developmentDevelopment and value-add properties at December 31, 20172020 consisted of properties in lease-up and under construction of $130,505,000$225,964,000 and prospective development (primarily land) of $111,509,000.$133,624,000.  The Company’s total investment in developmentDevelopment and value-add properties at December 31, 20172020 was $242,014,000$359,588,000 compared to $293,908,000$419,999,000 at December 31, 2016.2019.  Total capital invested for development and value-add properties during 20172020 was $124,938,000,$195,446,000, which primarily consisted of costs of $93,395,000 and $14,819,000$170,418,000 as detailed in the development activityDevelopment and Value-Add Properties Activity table below, $18,550,000 as detailed in the Development and Value-Add Properties Transferred to the Real Estate Properties Portfolio During 2020 table below and costs of $12,811,000$5,743,000 on development projects subsequent to transfer to Real estate properties. The capitalized costs incurred on development and value-add projects subsequent to transfer to Real estate properties include capital improvements at the properties and do not include other capitalized costs associated with development (i.e., interest expense, property taxes and internal personnel costs).


EastGroup capitalized internal development costs of $4,754,000$6,689,000 during the year ended December 31, 2017,2020, compared to $3,789,000$6,918,000 during 2016.2019.


During 2017,2020, EastGroup acquired one value-add property, Rancho Distribution Center in Los Angeles. The total cost of the Companyproperty acquired Progress Center 1 & 2, a development-stage operating property containing 132,000 square feet, in Atlanta for $10,364,000,was $27,862,000, of which $10,312,000$27,320,000 was allocated to Development and value-add properties.  The
25

Company allocated $1,297,000$16,180,000 of the total purchase price to land using third party land valuations for the AtlantaLos Angeles market. The market values are considered to be Level 3 inputs as defined by ASC 820, Fair Value Measurement (see Note 18 in the Notes to Consolidated Financial Statements for additional information on ASC 820). Intangibles associated with the purchase of real estate were allocated as follows:  $52,000$633,000 to in-place lease intangibles (included in Other assets on the Consolidated Balance Sheets) and $91,000 to below market leases (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. Costs associated with the development-stage operatingvalue-add property acquisitions,acquisition, except for the amounts allocated to in-placethe acquired lease intangibles, are included in the development activityDevelopment and Value-Add Properties Activity table below.

During 2017,Also during 2020, EastGroup purchased 88232.6 acres of development land in San Antonio, Austin,Orlando, Fort Myers, Atlanta, Dallas and CharlotteEl Paso for $12,226,000.$45,687,000.  Costs associated with these acquisitions are included in the development activityDevelopment and Value-Add Properties Activity table. These increases were offset by the sale of 19 acres of land for $3,778,000 and the transfer of 1218 development projects to Real estate properties during 20172020 with a total investment of $160,108,000$249,379,000 as of the date of transfer.





DEVELOPMENT AND
VALUE-ADD PROPERTIES ACTIVITY		 Costs Incurred 
Costs
Transferred
 in 2020 (1)
For the
Year Ended
12/31/20		Cumulative
as of
12/31/20
Projected
Total Costs (2)
Anticipated Building Conversion Date
 (In thousands)
LEASE-UPBuilding Size (Square feet)    
Gilbert Crossroads A & B, Phoenix, AZ140,000 $— 2,818 16,768 17,500 01/21
Rancho Distribution Center, Los Angeles, CA (3)
162,000 — 27,325 27,325 29,400 03/21
CreekView 121 7 & 8, Dallas, TX137,000 — 9,760 16,559 18,500 04/21
Hurricane Shoals 3, Atlanta, GA101,000 — 2,182 8,811 10,800 04/21
World Houston 44, Houston, TX134,000 — 3,336 8,126 9,100 05/21
Gateway 4, Miami, FL197,000 14,895 7,152 22,047 26,000 06/21
Interstate Commons 2, Phoenix, AZ (3)
142,000 — 2,359 12,241 12,500 06/21
Tri-County Crossing 3 & 4, San Antonio, TX203,000 — 5,711 14,409 16,100 06/21
Northwest Crossing 1-3, Houston, TX278,000 — 10,787 22,322 25,900 09/21
Ridgeview 1 & 2, San Antonio, TX226,000 — 10,562 17,093 19,000 10/21
Settlers Crossing 3 & 4, Austin, TX173,000 — 9,415 17,504 19,400 10/21
SunCoast 7, Ft. Myers, FL77,000 3,232 4,141 7,373 8,700 11/21
LakePort 1-3, Dallas, TX194,000 — 11,719 19,781 22,500 12/21
     Total Lease-Up2,164,000 18,127 107,267 210,359 235,400 
UNDER CONSTRUCTION     
Gilbert Crossroads C & D, Phoenix, AZ178,000 4,974 1,643 6,617 21,400 06/22
Steele Creek X, Charlotte, NC162,000 3,291 943 4,234 12,600 07/22
Basswood 1 & 2, Dallas, TX237,000 4,580 174 4,754 22,100 10/22
     Total Under Construction577,000 12,845 2,760 15,605 56,100 
PROSPECTIVE DEVELOPMENT (PRIMARILY LAND)Estimated Building Size (Square feet)    
Phoenix, AZ— (4,974)601 — 
Ft. Myers, FL622,000 (3,232)3,595 7,866 
Miami, FL376,000 (14,895)1,006 20,296 
Orlando, FL1,488,000 — 26,603 27,678 
Tampa, FL (4)
349,000 — (78)5,723 
Atlanta, GA120,000 — 1,392 1,392 
Jackson, MS28,000 — — 706 
Charlotte, NC313,000 (3,291)289 4,325 
Dallas, TX1,353,000 (4,580)22,420 37,428 
El Paso, TX168,000 — 2,587 2,587 
Houston, TX1,223,000 — 1,310 20,758 
San Antonio, TX366,000 — 666 4,865 
     Total Prospective Development6,406,000 (30,972)60,391 133,624 
 Total Development and Value-Add Properties9,147,000 $— 170,418 359,588 
The Development and Value-Add Properties Activity table is continued on the following page.
26

DEVELOPMENT ACTIVITY   Costs Incurred    
   
Costs
Transferred
 in 2017 (1)
 
For the
Year Ended
12/31/17
 
Cumulative
as of
12/31/17
 
Estimated
Total Costs (2)
 Anticipated Building Conversion Date
    (In thousands)  
LEASE-UP Building Size (Square feet)          
Alamo Ridge IV, San Antonio, TX 97,000
 $—
 2,152
 7,097
 8,300
 03/18
Weston, Ft. Lauderdale, FL (3)
 134,000
 —
 1,239
 15,520
 16,000
 03/18
Oak Creek VII, Tampa, FL 116,000
 2,153
 3,978
 6,131
 7,500
 04/18
Progress Center 1 & 2, Atlanta, GA (4)
 132,000
 —
 10,333
 10,333
 11,100
 04/18
Eisenhauer Point 3, San Antonio, TX 71,000
 —
 3,411
 6,159
 6,800
 06/18
SunCoast 4, Ft. Myers, FL 93,000
 —
 2,865
 9,120
 10,000
 06/18
Steele Creek VII, Charlotte, NC 120,000
 2,393
 5,404
 7,797
 8,600
 09/18
Horizon XII, Orlando, FL 140,000
 3,825
 7,405
 11,230
 12,100
 12/18
Total Lease-Up 903,000
 8,371
 36,787
 73,387
 80,400
  
UNDER CONSTRUCTION            
Country Club V, Tucson, AZ 300,000
 —
 10,656
 13,951
 24,200
 04/18
Kyrene 202 III, IV & V, Phoenix, AZ 166,000
 2,280
 9,263
 11,543
 13,800
 02/19
CreekView 121 3 & 4, Dallas, TX 158,000
 3,701
 6,610
 10,311
 14,200
 03/19
Eisenhauer Point 5, San Antonio, TX 98,000
 1,253
 4,551
 5,804
 7,500
 03/19
Eisenhauer Point 6, San Antonio, TX 85,000
 878
 3,172
 4,050
 5,200
 03/19
Horizon X, Orlando, FL 104,000
 2,101
 1,449
 3,550
 8,000
 04/19
Falcon Field, Phoenix, AZ 96,000
 1,733
 1,214
 2,947
 9,000
 05/19
Airport Commerce Center 3, Charlotte, NC 96,000
 1,653
 80
 1,733
 7,300
 07/19
Settlers Crossing 1, Austin, TX 77,000
 1,494
 62
 1,556
 7,400
 10/19
Settlers Crossing 2, Austin, TX 83,000
 1,606
 67
 1,673
 8,000
 10/19
Total Under Construction 1,263,000
 16,699
 37,124
 57,118
 104,600
  
PROSPECTIVE DEVELOPMENT (PRIMARILY LAND) Estimated Building Size (Square feet)          
Phoenix, AZ —
 (4,013) 120
 —
    
Tucson, AZ (5)
 —
 —
 (417) —
    
Ft. Myers, FL 570,000
 —
 469
 14,112
    
Miami, FL 850,000
 —
 3,632
 30,876
    
Orlando, FL 418,000
 (5,926) 917
 11,120
    
Tampa, FL 32,000
 (2,153) 32
 1,560
    
Atlanta, GA 196,000
 —
 1,207
 1,207
    
Jackson, MS 28,000
 —
 —
 706
    
Charlotte, NC 655,000
 (4,046) 1,472
 6,729
    
Austin, TX 180,000
 (3,100) 6,120
 3,020
    
Dallas, TX 491,000
 (3,701) 975
 9,596
    
El Paso, TX (6)
 —
 —
 (2,444) —
    
Houston, TX (7)
 1,476,000
 —
 (184) 21,190
    
San Antonio, TX 965,000
 (2,131) 7,585
 11,393
    
Total Prospective Development 5,861,000
 (25,070) 19,484
 111,509
    
  8,027,000
 $—
 93,395
 242,014
    
COMPLETED DEVELOPMENT AND TRANSFERRED TO REAL ESTATE PROPERTIES DURING 2017 Building Size (Square feet)         Building Conversion Date
Eisenhauer Point 1 & 2, San Antonio, TX 201,000
 $—
 19
 15,795
   01/17
South 35th Avenue, Phoenix, AZ (8)
 125,000
 —
 —
 1,664
   01/17
Alamo Ridge III, San Antonio, TX 135,000
 —
 28
 10,587
   02/17
Parc North 1-4, Dallas, TX (9)
 446,000
 —
 132
 32,252
   02/17
Madison IV & V, Tampa, FL 145,000
 —
 549
 8,074
   03/17
Jones Corporate Park, Las Vegas, NV (10)
 416,000
 —
 275
 39,815
   04/17
Steele Creek VI, Charlotte, NC 137,000
 —
 519
 7,525
   04/17
Ten Sky Harbor, Phoenix, AZ 64,000
 —
 100
 5,365
   04/17
Horizon V, Orlando, FL 141,000
 —
 4,814
 9,249
   05/17
Horizon VII, Orlando, FL 109,000
 —
 1,375
 8,266
   06/17
Eisenhauer Point 4, San Antonio, TX 85,000
 —
 2,544
 5,197
   07/17
CreekView 121 1 & 2, Dallas, TX 193,000
 —
 4,464
 16,319
   08/17
Total Transferred to Real Estate Properties 2,197,000
 $—
 14,819
 160,108
 
(11) 
  
DEVELOPMENT AND VALUE-ADD PROPERTIES TRANSFERRED TO THE REAL ESTATE PROPERTIES PORTFOLIO DURING 2020 Costs Incurred 
Costs
Transferred
 in 2020 (1)
For the
Year Ended
12/31/20		Cumulative
as of
12/31/20
Building Size (Square feet)(In thousands)Building Conversion Date
  
Logistics Center 6 & 7, Dallas, TX (3)
142,000 $— 19 15,754 01/20
Settlers Crossing 1, Austin, TX77,000 — — 9,259 01/20
Settlers Crossing 2, Austin, TX83,000 — — 8,475 01/20
Parc North 5, Dallas, TX100,000 — 20 8,709 02/20
Airport Commerce Center 3, Charlotte, NC96,000 — 335 8,891 03/20
Horizon VIII & IX, Orlando, FL216,000 — 887 17,488 04/20
Ten West Crossing 8, Houston, TX132,000 — 67 9,831 04/20
Tri-County Crossing 1 & 2, San Antonio, TX203,000 — 189 15,575 04/20
SunCoast 8, Ft. Myers, FL77,000 — 3,665 8,149 05/20
CreekView 121 5 & 6, Dallas, TX139,000 — 2,112 15,263 06/20
Parc North 6, Dallas, TX96,000 — 2,451 10,741 07/20
SunCoast 6, Ft. Myers, FL81,000 — 445 8,379 07/20
Arlington Tech Centre 1 & 2, Dallas, TX (3)
151,000 — 578 13,855 08/20
Gateway 5, Miami, FL187,000 — 1,664 24,769 08/20
Steele Creek IX, Charlotte, NC125,000 — 1,986 11,106 08/20
Grand Oaks 75 2, Tampa, FL (3)
150,000 — 1,777 14,892 09/20
Rocky Point 2, San Diego, CA (3)
109,000 — 583 19,858 09/20
Southwest Commerce Center, Las Vegas, NV (3)
196,000 — 1,772 28,385 10/20
Total Transferred to Real Estate Properties2,360,000 $— 18,550 249,379 (5)




Footnotes(1)Represents costs transferred from Prospective Development (primarily land) to Under Construction during the period. Negative amounts represent land inventory costs transferred to Under Construction.
(2)Included in these costs are development obligations of $33.0 million and tenant improvement obligations of $4.9 million on properties under development.
(3)Represents value-add projects acquired by EastGroup.
(4)Negative amount represents land inventory transferred to Real Estate Properties for trailer storage expansion.
(5)Represents cumulative costs at the Development Activity table are on the following page.date of transfer.


(1)Represents costs transferred from Prospective Development (primarily land) to Under Construction during the period. Negative amounts represent land inventory costs transferred to Under Construction.
(2)Included in these costs are development obligations of $29.0 million and tenant improvement obligations of $5.8 million on properties under development.
(3)This project was acquired by EastGroup on 11/1/16 and underwent redevelopment.
(4)This project was acquired by EastGroup on 12/12/17 during the lease-up phase.
(5)Negative amount represents land inventory costs transferred to Real Estate Properties for storage yard and parking lot expansion.
(6)Negative amount represents land sold on 11/3/17.
(7)Negative amount represents West Road retention ponds and infrastructure conveyed to West Harris County Municipal Utility District.
(8)This property was redeveloped from a manufacturing building to a multi-tenant distribution building.
(9)This project was acquired by EastGroup on 7/8/16 during the lease-up phase.
(10)This project was acquired by EastGroup on 11/15/16 during the lease-up phase.
(11)Represents cumulative costs at the date of transfer.



Accumulated Depreciation
Accumulated depreciation on real estate, development and developmentvalue-add properties increased$55,351,000 $84,189,000 during 20172020 due primarily to depreciation expense of $69,010,000,$96,290,000, offset by the sale of 514,000126,000 square feet of operating properties during the period.2020.




27

Other Assets
Other assetsincreased$12,474,000 $4,957,000 during 2017.2020.  A summary of Other assets follows:
 December 31,
20202019
(In thousands)
Leasing costs (principally commissions)$95,914 89,191 
Accumulated amortization of leasing costs(38,371)(34,963)
Leasing costs (principally commissions), net of accumulated amortization57,543 54,228 
Acquired in-place lease intangibles28,107 28,834 
Accumulated amortization of acquired in-place lease intangibles(13,554)(11,918)
Acquired in-place lease intangibles, net of accumulated amortization14,553 16,916 
Acquired above market lease intangibles1,825 1,721 
Accumulated amortization of acquired above market lease intangibles(1,231)(1,007)
Acquired above market lease intangibles, net of accumulated amortization594 714 
Straight-line rents receivable43,079 40,369 
Accounts receivable6,256 5,581 
Mortgage loans receivable— 1,679 
Interest rate swap assets— 3,485 
Right of use assets – Office leases (operating)2,131 2,115 
Receivable for common stock offerings1,942 — 
Goodwill990 990 
Prepaid expenses and other assets22,491 18,545 
 Total Other assets
$149,579 144,622 
 December 31,
2017 2016
(In thousands)
Leasing costs (principally commissions)$72,722
 65,521
Accumulated amortization of leasing costs(27,973) (26,340)
Leasing costs (principally commissions), net of accumulated amortization44,749
 39,181
    
Straight-line rents receivable31,609
 28,369
Allowance for doubtful accounts on straight-line rents receivable(48) (76)
Straight-line rents receivable, net of allowance for doubtful accounts31,561
 28,293
    
Accounts receivable6,004
 6,824
Allowance for doubtful accounts on accounts receivable(577) (809)
Accounts receivable, net of allowance for doubtful accounts5,427
 6,015
    
Acquired in-place lease intangibles20,690
 21,231
Accumulated amortization of acquired in-place lease intangibles(8,974) (8,642)
Acquired in-place lease intangibles, net of accumulated amortization11,716
 12,589
    
Acquired above market lease intangibles1,550
 1,594
Accumulated amortization of acquired above market lease intangibles(794) (736)
Acquired above market lease intangibles, net of accumulated amortization756
 858
    
Mortgage loans receivable4,581
 4,752
Interest rate swap assets6,034
 4,546
Goodwill990
 990
Prepaid expenses and other assets11,490
 7,606
 Total Other assets
$117,304
 104,830









Liabilities
Unsecured bank credit facilitiesincreased$4,719,000 $12,800,000 during 2017,2020, mainly due to proceedsborrowings of $391,617,000 exceeding repayments of $387,298,000$625,387,000 and the amortization of debt issuance costs during the period, partially offset by repayments of $613,097,000 and new debt issuance costs incurred during the period. The Company’s credit facilities are described in greater detail below under Liquidity and Capital Resources.


Unsecured debt increased $60,223,000$169,593,000 during 2017,2020, primarily due to the closing of $60a $100 million senior unsecured term loan in March, closing the private placement of $175 million of senior unsecured private placement notes in December 2017,October and the amortization of debt issuance costs. These increases were offset by a $30 million principal repayment on $100 million of senior unsecured notes in August, the repayment of a $75 million senior unsecured term loan in December and new debt issuance costs incurred during the period. The borrowings and repayments on Unsecured debt are described in greater detail below under Liquidity and Capital Resources.
 
Secured debt decreased $57,993,000$54,100,000 during the year ended December 31, 2017.2020.  The decrease primarily resulted from the repayment of onea mortgage loan with a principal balance of $45,069,000,$45,871,000 in October, regularly scheduled principal payments of $13,139,000$8,436,000 and amortization of premiums on Secured debt, offset by the amortization of debt issuance costs during the period.








28

Accounts payable and accrued expenses increased $12,266,000 decreased $22,451,000 during 2017.2020.  A summary of the Company’s Accounts payable and accrued expenses follows:
 December 31,
20202019
(In thousands)
Property taxes payable                                                            $3,524 2,696 
Development costs payable                                                            6,427 11,766 
Real estate improvements and capitalized leasing costs payable5,692 4,636 
Interest payable                                                            6,537 6,370 
Dividends payable32,677 30,714 
Book overdraft (1)
5,176 25,771 
Other payables and accrued expenses                                                            9,540 10,071 
 Total Accounts payable and accrued expenses
$69,573 92,024 
 December 31,
2017 2016
(In thousands)
Property taxes payable                                                            $12,081
 14,186
Development costs payable                                                            9,699
 9,844
Real estate improvements and capitalized leasing costs payable3,957
 2,304
Interest payable                                                            3,744
 3,822
Dividends payable on unvested restricted stock1,365
 1,530
Book overdraft (1)
20,902
 14,452
Other payables and accrued expenses                                                            13,219
 6,563
 Total Accounts payable and accrued expenses
$64,967
 52,701


(1)Represents unfunded outstanding checks forwritten 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. See Note 1(p)
in the Notes to Consolidated Financial Statements.


Other liabilitiesdecreased$1,022,000 increased $694,000 during 2017.2020.  A summary of the Company’s Other liabilities follows:
 December 31,
20202019
(In thousands)
Security deposits                                                            $22,140 20,351 
Prepaid rent and other deferred income14,694 13,855 
Operating lease liabilities — Ground leases11,199 12,048 
Operating lease liabilities — Office leases2,167 2,141 
Acquired below-market lease intangibles9,019 8,616 
Accumulated amortization of acquired below-market lease intangibles(6,168)(4,494)
Acquired below-market lease intangibles, net of accumulated amortization2,851 4,122 
Interest rate swap liabilities10,752 678 
Prepaid tenant improvement reimbursements364 56 
Other liabilities                                                            5,650 15,872 
 Total Other liabilities
$69,817 69,123 
 December 31,
2017 2016
(In thousands)
Security deposits                                                            $16,668
 14,782
Prepaid rent and other deferred income9,352
 9,795
    
Acquired below market lease intangibles4,135
 4,012
Accumulated amortization of acquired below market lease intangibles(2,147) (1,662)
Acquired below market lease intangibles, net of accumulated amortization1,988
 2,350
    
Interest rate swap liabilities695
 2,578
Prepaid tenant improvement reimbursements124
 343
Other liabilities                                                            15
 16
 Total Other liabilities
$28,842
 29,864



Equity
Additional paid-in capitalincreased$111,835,000 $95,998,000 during 20172020 primarily due to the issuance of common stock under the Company's continuous common equity offering program (as discussed in below under Liquidity and Capital Resources) and stock-based compensation (as discussed in Note 11 in the Notes to Consolidated Financial Statements). EastGroup issued 1,370,457709,924 shares of common stock under its continuous common equity offering program with net proceeds to the Company of $109,207,000.  $92,663,000.




During 2017, 2020, Distributions in excess of earnings increased $3,377,000$13,365,000 as a result of dividends on common stock of $86,560,000$121,728,000 exceeding Net Income Attributable to EastGroup Properties, Inc. Common Stockholders of $83,183,000.$108,363,000.


Accumulated other comprehensive income increased $3,353,000(loss) decreased $13,559,000 during 2017.2020. The increasedecrease resulted from the change in fair value of the Company's interest rate swaps (cash flow hedges) which are further discussed in Notes 12 and 13 in the Notes to Consolidated Financial Statements.

29


RESULTS OF OPERATIONS


20172020 Compared to 20162019
Net Income Attributable to EastGroup Properties, Inc. Common Stockholders for 20172020 was $83,183,000 ($2.45$108,363,000 ($2.77 per basic and $2.44$2.76 per diluted share) compared to $95,509,000 ($2.93$121,662,000 ($3.25 per basic and diluted share) for 2016. PNOI increased by $15,490,000 ($.45$3.24 per diluted share) for 20172019. The following paragraphs explain the change:

•PNOI increased by $21,792,000 ($0.55 per diluted share) for 2020 as compared to 2016.  2019.  PNOI increased $15,941,000 from newly developed and value-add properties, $5,505,000 from 2019 and 2020 acquisitions and $4,062,000 from same property operations; PNOI decreased $3,706,000 from operating properties sold in 2019 and 2020. For the year 2020, lease termination fee income was $709,000 compared to $1,336,000 for 2019.  The Company recorded reserves for uncollectible rent of $2,763,000 in 2020 and $448,000 in 2019. Straight-lining of rent increased PNOI by $4,888,000 and $4,985,000 in 2020 and 2019, respectively.

•EastGroup recognized net gains on sales of real estate investments and non-operating real estate of $22,148,000$13,145,000 ($.650.33 per diluted share) compared to $42,903,000$41,068,000 ($1.311.09 per diluted share) during 2016. In addition, 2019.

•Depreciation and amortization expense increased by $5,939,000$11,635,000 ($.170.30 per diluted share), and General and administrative expense increased by $1,740,000 ($.05 per share) during 20172020 compared to 2016.2019.


PNOI increased by $15,490,000, or 8.7%, for 2017 compared to 2016. PNOI increased $10,327,000 from newly developed and redeveloped properties, $4,765,000 from same property operations and $3,355,000 from 2016 and 2017 acquisitions; PNOI decreased $2,767,000 from operating properties sold in 2016 and 2017. For the year 2017, lease termination fee income was $468,000 compared to $812,000 for 2016.  The Company recorded net bad debt expense of $499,000 in 2017 and $992,000 in 2016. Straight-lining of rent increased Income from real estate operations by $3,723,000 and $2,839,000 in 2017 and 2016, respectively.

The Company signed 138EastGroup entered into 179 leases with certain free rent concessions on 3,919,0004,965,000 square feet during 20172020 with total free rent concessions of $5,672,000$7,548,000 over the lives of the leases, compared to 143160 leases with free rent concessions on 4,176,0004,281,000 square feet with total free rent concessions of $5,286,000$6,114,000 over the lives of the leases in 2016.2019.


The Company’s percentage of leased square footage was 97.0%98.0% at December 31, 2017,2020, compared to 97.3%97.6% at December 31, 2016.2019.  Occupancy at the end of 20172020 was 96.4%97.3% compared to 96.8%97.1% at the end of 2016.December 31, 2019.


Same property average occupancy represents the average month-end percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage for the same operating properties owned during the entire current period and prior year reporting period.periods (January 1, 2019 through December 31, 2020). Same property average occupancy for the year ended December 31, 2017,2020, was 96.8%97.0% compared to 96.5%97.0% for 2016.2019.


The same property average rental rate calculated in accordance with GAAP represents the average annual rental rates of leases in place for the same operating properties owned during the entire current period and prior year reporting period.periods (January 1, 2019 through December 31, 2020). The same property average rental rate was $5.79$6.09 per square foot for the year ended December 31, 2017,2020, compared to $5.57$5.95 per square foot for 2016.2019.








































30

Interest Expense decreased $438,000$536,000 for 2017the year ended December 31, 2020 compared to 2016.2019.  The following table presents the components of Interest Expense for 20172020 and 2016:2019:
 Years Ended December 31,
20202019Increase (Decrease)
(In thousands)
VARIABLE RATE INTEREST EXPENSE   
Unsecured bank credit facilities interest - variable rate
(excluding amortization of facility fees and debt issuance costs)
$1,620 5,756 (4,136)
Amortization of facility fees - unsecured bank credit facilities790 790 — 
Amortization of debt issuance costs - unsecured bank credit facilities561 556 5 
   Total variable rate interest expense2,971 7,102 (4,131)
FIXED RATE INTEREST EXPENSE   
Unsecured debt interest (1) (excluding amortization of debt issuance costs)
34,536 28,039 6,497 
Secured debt interest (excluding amortization of debt issuance costs)
5,214 6,987 (1,773)
Amortization of debt issuance costs - unsecured debt624 539 85 
Amortization of debt issuance costs - secured debt233 249 (16)
   Total fixed rate interest expense40,607 35,814 4,793 
Total interest                                                                                 43,578 42,916 662 
Less capitalized interest                                                                                 (9,651)(8,453)(1,198)
TOTAL INTEREST EXPENSE $33,927 34,463 (536)
 Years Ended December 31,
2017 2016 Increase (Decrease)
(In thousands)
VARIABLE RATE INTEREST EXPENSE 
  
  
Unsecured bank credit facilities interest - variable rate
(excluding amortization of facility fees and debt issuance costs)                                                                                                                                                   
$2,379
 1,583
 796
Amortization of facility fees - unsecured bank credit facilities                                                                  670
 670
 —
Amortization of debt issuance costs - unsecured bank credit facilities                                                                  451
 450
 1
   Total variable rate interest expense                                                                                 3,500
 2,703
 797
FIXED RATE INTEREST EXPENSE 
  
  
Unsecured bank credit facilities interest - fixed rate (1)
(excluding amortization of facility fees and debt issuance costs)                                                                                                                                            
1,616
 614
 1,002
Unsecured debt interest (1) (excluding amortization of debt issuance costs)
22,425
 19,245
 3,180
Secured debt interest (excluding amortization of debt issuance costs)
12,201
 16,907
 (4,706)
Amortization of debt issuance costs - unsecured debt479
 700
 (221)
Amortization of debt issuance costs - secured debt                                                                                 319
 384
 (65)
   Total fixed rate interest expense                                                                                 37,040
 37,850
 (810)
Total interest                                                                                 40,540
 40,553
 (13)
Less capitalized interest                                                                                 (5,765) (5,340) (425)
TOTAL INTEREST EXPENSE $34,775
 35,213
 (438)


(1)Includes interest on the Company's unsecured debt with fixed interest rates per the debt agreements or effectively fixed interest rates due to interest rate swaps, as discussed in Note 13 in the Notes to Consolidated Financial Statements.
(1)Includes interest on the Company's unsecured bank credit facilities and unsecured debt with fixed interest rates per the debt agreements or effectively fixed interest rates due to interest rate swaps, as discussed in Note 13 in the Notes to Consolidated Financial Statements.


EastGroup's variable rate interest expense increaseddecreased by $797,000$4,131,000 for 20172020 as compared to 20162019 primarily due to increasesdecreases in the Company's weighted average interest rate and average borrowings on its unsecured bank credit facilities as shown in the following table:
 Years Ended December 31,
 20202019Increase
(Decrease)
 (In thousands, except rates of interest)
Average borrowings on unsecured bank credit facilities - variable rate$87,095 172,175 (85,080)
Weighted average variable interest rates 
(excluding amortization of facility fees and debt issuance costs) 
1.86 %3.34 % 


31

  Years Ended December 31,
  2017 2016 
Increase
(Decrease)
  (In thousands, except rates of interest)
Average borrowings on unsecured bank credit facilities - variable rate $114,751
 106,352
 8,399
Weighted average variable interest rates 
(excluding amortization of facility fees and debt issuance costs) 
 2.07% 1.49%  

The Company's fixed rate interest expense decreasedincreased by $810,000$4,793,000 for 20172020 as compared to 20162019 as a result of the unsecured debt and secured debt described below.

Interest expense from fixed rate unsecured bank credit facilities anddebt increased by $6,497,000 during 2020 as compared to 2019 as a result of the Company's unsecured debt activity described below. The details of the unsecured debt obtained in 2019 and 2020 are shown in the following table:

Secured
NEW UNSECURED DEBT IN 2019 and 2020Effective Interest RateDate ObtainedMaturity DateAmount
(In thousands)
$80 Million Senior Unsecured Notes4.27%03/28/201903/28/2029$80,000 
$35 Million Senior Unsecured Notes3.54%08/15/201908/15/203135,000 
$75 Million Senior Unsecured Notes3.47%08/19/201908/19/202975,000 
$100 Million Senior Unsecured Term Loan (1)
2.75%10/10/201910/10/2026100,000 
$100 Million Senior Unsecured Term Loan (2)
2.39%03/25/202003/25/2027100,000 
$100 Million Senior Unsecured Notes2.61%10/14/202010/14/2030100,000 
$75 Million Senior Unsecured Notes2.71%10/14/202010/14/203275,000 
Weighted Average/Total Amount for 2019 and 20203.02%$565,000 

(1)The interest rate on this unsecured term loan is comprised of LIBOR plus 150 basis points subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company a weighted average effective interest rate on the term loan of 2.75% as of December 31, 2020. See Note 13 in the Notes to Consolidated Financial Statements for additional information on the interest rate swaps.
(2)The interest rate on this unsecured term loan is comprised of LIBOR plus 145 basis points subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company a weighted average effective interest rate on the term loan of 2.39% as of December 31, 2020. See Note 13 in the Notes to Consolidated Financial Statements for additional information on the interest rate swaps.

The increase in interest expense from the new unsecured debt was partially offset by the repayment of the following unsecured loans during 2019 and 2020:
UNSECURED DEBT REPAID IN 2019 AND 2020Interest RateDate RepaidPayoff Amount
(In thousands)
$75 Million Senior Unsecured Term Loan2.85%07/31/2019$75,000 
$30 Million Senior Unsecured Notes3.80%08/28/202030,000 
$75 Million Senior Unsecured Term Loan3.45%12/21/202075,000 
   Weighted Average/Total Amount for 2019 and 20203.26%$180,000 

The increase in interest expense from unsecured debt was partially offset by a decease in secured debt interest expense, which decreased by $4,706,000$1,773,000 in 20172020 as compared to 20162019 as a result of regularly scheduled principal payments and debt repayments. Regularly scheduled principal payments on secured debt were $13,139,000$8,436,000 during 20172020 and $17,037,000$9,821,000 in 2016.2019. The details of the secured debt repaid in 20162019 and 20172020 are shown in the following table:

SECURED DEBT REPAID IN 2019 and 2020Interest RateDate RepaidPayoff Amount
(In thousands)
Dominguez, Industry I & III, Kingsview, Shaw, Walnut and Washington7.50%04/05/2019$45,725 
Blue Heron II5.39%12/16/201947 
40th Avenue, Beltway Crossing V, Centennial Park, Executive Airport, Interchange Park I, Ocean View, Wetmore 5-8 and World Houston 26, 28, 29 & 304.39%10/07/202045,871 
   Weighted Average/Total Amount for 2019 and 20205.94%$91,643 

SECURED DEBT REPAID IN 2016 AND 2017 Interest Rate Date Repaid Payoff Amount
      (In thousands)
Huntwood and Wiegman I 5.68% 08/05/2016 $24,543
Alamo Downs, Arion 1-15 & 17, Rampart I-IV, Santan 10 I and
World Houston 16		 5.97% 09/06/2016 51,194
   Weighted Average/Total Amount for 2016 5.88%   $75,737
Arion 16, Broadway VI, Chino, East University I & II, Northpark I-IV, Santan 10 II, 55th Avenue and World Houston 1 & 2, 21 & 23
 5.57% 08/07/2017 $45,069
   Weighted Average/Total Amount for 2016 and 2017 5.76%   $120,806


EastGroup did not obtain any new secured debt during 20162019 or 2017.2020.

The decrease in secured debt interest expense was partially offset by increases in interest expense from fixed rate unsecured bank credit facilities and unsecured debt. The Company's interest expense from fixed rate unsecured bank credit facilities increased by $1,002,000 during 2017 as compared to 2016. In August 2016, EastGroup repaid (with no penalty) an $80 million unsecured term loan with an effectively fixed interest rate of 2.770% and an original maturity date of August 15, 2018. On the same day, the Company borrowed $80 million through its $300 million unsecured bank credit facility; the maturity date for the credit facility is July 30, 2019. The Company re-designated the interest rate swap that was previously applied to the $80 million unsecured term loan to the $80 million unsecured bank credit facility borrowing. The $80 million unsecured bank credit facility draw has an effectively fixed interest rate of 2.020% through the interest rate swap's maturity date of August 15, 2018.

The Company's interest expense from unsecured debt increased by $3,180,000 during 2017 as compared to 2016 as a result of the Company's unsecured debt activity described below. The details of the unsecured debt obtained in 2016 and 2017 are shown in the following table:
32
NEW UNSECURED DEBT IN 2016 and 2017 Effective Interest Rate Date Obtained Maturity Date Amount
        (In thousands)
$65 Million Unsecured Term Loan (1)
 2.863% 04/01/2016 04/01/2023 $65,000
$40 Million Unsecured Term Loan (2)
 2.335% 07/29/2016 07/30/2021 40,000
$60 Million Senior Unsecured Notes 3.480% 12/15/2016 12/15/2024 60,000
$40 Million Senior Unsecured Notes 3.750% 12/15/2016 12/15/2026 40,000
   Weighted Average/Total Amount for 2016 3.114%     $205,000
$60 Million Senior Unsecured Notes 3.460% 12/13/2017 12/13/2024 $60,000
   Weighted Average/Total Amount for 2016 and 2017 3.192%     $265,000


(1)The interest rate on this unsecured term loan is comprised of LIBOR plus 165 basis points subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company a weighted average effective interest rate on the term loan of 2.863% as of December 31, 2017. See Note 13 in the Notes to Consolidated Financial Statements for additional information on the interest rate swaps.
(2)The interest rate on this unsecured term loan is comprised of LIBOR plus 110 basis points subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company a weighted average effective interest rate on the term loan of 2.335% as of December 31, 2017. See Note 13 in the Notes to Consolidated Financial Statements for additional information on the interest rate swaps.

Additionally, in December 2017, the Company refinanced a $75 million unsecured term loan, resulting in a 30 basis point reduction in the loan's interest rate. The loan, which has a maturity date of December 20, 2020, now has an effectively fixed interest rate of 3.452%.

Interest costs during the period of construction of real estate properties are capitalized and offset against interest expense. Capitalized interest increased by $425,000$1,198,000 for 20172020 as compared to 2016.2019. The increase is due to changes in development spending and borrowing rates.


Depreciation and amortization expense increased $5,939,000$11,635,000 for 20172020 compared to 20162019 primarily due to the operating properties acquired by the Company during 20162019 and 20172020 and the properties transferred from Development and value-add properties in 20162019 and 2017,2020, partially offset by operating properties sold in 20162019 and 2017.  2020.  




Gain net of loss, on sales of real estate investments, which includes gains and losses on the sales of operating properties, decreased $20,315,000$27,923,000 for 20172020 as compared to 2016. Gain, net of loss, on sales of non-operating real estate (included in Other on the Consolidated Statements of Income and Comprehensive Income) decreased $440,000 for 2017 as compared to 2016.2019. The Company's 20162019 and 20172020 sales transactions are described below in Real Estate Sold and Held for Sale/Discontinued Operations.


Real Estate Improvements
Real estate improvements for EastGroup’s operating properties for the years ended December 31, 2017 and 2016 were as follows:
 
Estimated
Useful Life
 Years Ended December 31,
 2017 2016
  (In thousands)
Upgrade on Acquisitions                                               40 yrs $161
 394
Tenant Improvements:   
  
New Tenants                                               Lease Life 11,413
 9,976
Renewal Tenants                                               Lease Life 3,357
 2,748
Other:   
  
Building Improvements                                               5-40 yrs 3,362
 5,113
Roofs                                               5-15 yrs 6,197
 2,785
Parking Lots                                               3-5 yrs 1,880
 1,377
Other                                               5 yrs 1,101
 764
Total Real Estate Improvements (1)
  $27,471
 23,157

(1)Reconciliation of Total Real Estate Improvements to Real Estate Improvements on the Consolidated Statements of Cash Flows:
  Years Ended December 31,
 2017 2016
 (In thousands)
Total Real Estate Improvements $27,471
 23,157
Change in Real Estate Property Payables (1,313) 621
Real Estate Improvements on the Consolidated Statements of Cash Flows $26,158
 23,778

Capitalized Leasing Costs
The Company’s leasing costs (principally commissions) are capitalized and included in Other assets. The costs are amortized over the terms of the associated leases and are included in Depreciation and amortization expense.  Capitalized leasing costs for the years ended December 31, 2017 and 2016 were as follows:
 
Estimated
Useful Life
 Years Ended December 31,
 2017 2016
  (In thousands)
Development                                               Lease Life $5,571
 4,217
New Tenants                                               Lease Life 5,782
 5,273
Renewal Tenants                                               Lease Life 4,907
 4,978
Total Capitalized Leasing Costs  $16,260
 14,468
Amortization of Leasing Costs  $10,329
 9,932

Real Estate Sold and Held for Sale/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.  

In accordance with FASB Accounting Standards Update (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 did not classify any properties as held for sale as of December 31, 2017 and 2016.

The Company does not consider its sales in 2016 and 2017 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.

In 2017, Eastgroup sold Stemmons Circle and Techway Southwest I-IV. The properties, which contain 514,000 square feet and are located in Houston and Dallas, were sold for $38.0 million and the Company recognized net gains on the sales of $21.9 million. The Company also sold 19 acres of land in El Paso and Dallas for $3,778,000 and recognized net gains of $293,000.

During 2016, EastGroup sold the following operating properties: Northwest Point Distribution and Service Centers, North Stemmons II and III, America Plaza, Lockwood Distribution Center, West Loop Distribution Center 1 & 2, two of its four Interstate Commons Distribution Center buildings, Castilian Research Center and Memphis I. The properties, which contain 1,256,000 square feet and are located in Houston, Dallas, Phoenix, Santa Barbara and Memphis, were sold for $75.7 million and the Company recognized net gains on the sales of $42.2 million. The Company also sold 25 acres of land in Dallas, Orlando and Houston for $5.4 million and recognized net gains on sales of $733,000.

The gains and losses on the sales of land are included in Other on the Consolidated Statements of Income and Comprehensive Income, and the gains and losses on the sales of operating properties are included in Gain, net of loss, on sales of real estate investments. See Notes 1(f) and 2 in the Notes to Consolidated Financial Statements for more information related to discontinued operations and gains and losses on sales of real estate investments.  


2016 Compared to 2015
Net Income Attributable to EastGroup Properties, Inc. Common Stockholders for 2016 was $95,509,000 ($2.93 per basic and diluted share) compared to $47,866,000 ($1.49 per basic and diluted share) for 2015.  EastGroup recognized Gain, net of loss, on sales of real estate investments of $42,170,000 during 2016 and $2,903,000 during 2015.

PNOI increased by $11,190,000, or 6.7%, for 2016 compared to 2015. PNOI increased $7,345,000 from newly developed and redeveloped properties, $4,943,000 from same property operations and $2,488,000 from 2015 and 2016 acquisitions; PNOI decreased $3,447,000 from properties sold in 2015 and 2016. For the year 2016, lease termination fee income was $812,000 compared to $225,000 for 2015.  The Company recorded net bad debt expense of $992,000 in 2016 and $747,000 in 2015. Straight-lining of rent increased Income from real estate operations by $2,839,000 and $1,889,000 in 2016 and 2015, respectively.

The Company signed 143 leases with certain free rent concessions on 4,176,000 square feet during 2016 with total free rent concessions of $5,286,000 over the lives of the leases, compared to 164 leases with free rent concessions on 3,678,000 square feet with total free rent concessions of $4,024,000 over the lives of the leases in 2015.

The Company’s percentage of leased square footage was 97.3% at December 31, 2016, compared to 97.2% at December 31, 2015.  Occupancy at the end of 2016 was 96.8% compared to 96.1% at the end of 2015.

Same property average occupancy for the year ended December 31, 2016, was 96.4% compared to 96.1% for 2015. The same property average rental rate was $5.61 per square foot for the year ended December 31, 2016, compared to $5.26 per square foot for 2015.










Interest expense increased $547,000 in 2016 compared to 2015.  The following table presents the components of Interest expense for 2016 and 2015:
 Years Ended December 31,
2016 2015 Increase (Decrease)
(In thousands)
VARIABLE RATE INTEREST EXPENSE 
  
  
Unsecured bank credit facilities interest - variable rate
(excluding amortization of facility fees and debt issuance costs)                                                                                                                                                   
$1,583
 1,420
 163
Amortization of facility fees - unsecured bank credit facilities                                                                  670
 608
 62
Amortization of debt issuance costs - unsecured bank credit facilities                                                                  450
 493
 (43)
   Total variable rate interest expense                                                                                 2,703
 2,521
 182
FIXED RATE INTEREST EXPENSE 
  
  
Unsecured bank credit facilities interest - fixed rate (1)
(excluding amortization of facility fees and debt issuance costs)                                                                                                                                            
614
 —
 614
Unsecured debt interest (1) (excluding amortization of debt issuance costs)
19,245
 15,498
 3,747
Secured debt interest (excluding amortization of debt issuance costs)
16,907
 21,061
 (4,154)
Amortization of debt issuance costs - unsecured debt700
 422
 278
Amortization of debt issuance costs - secured debt                                                                                 384
 421
 (37)
   Total fixed rate interest expense                                                                                 37,850
 37,402
 448
Total interest                                                                                 40,553
 39,923
 630
Less capitalized interest                                                                                 (5,340) (5,257) (83)
TOTAL INTEREST EXPENSE $35,213
 34,666
 547

(1)Includes interest on the Company's unsecured bank credit facilities and unsecured debt with fixed interest rates per the debt agreements or effectively fixed interest rates due to interest rate swaps, as discussed in Note 13 in the Notes to Consolidated Financial Statements.

The Company's fixed rate interest expense increased by $448,000 for 2016 as compared to 2015 as a result of the fixed rate unsecured bank credit facilities, unsecured debt and secured debt activity described below.

EastGroup's unsecured debt interest increased by $3,747,000 in 2016 as compared to 2015 as a result of the unsecured debt activity described below. The details of the new unsecured debt in 2015 and 2016 are shown in the following table:
NEW UNSECURED DEBT IN 2015 and 2016 Effective Interest Rate Date Obtained Maturity Date Amount
        (In thousands)
$75 Million Unsecured Term Loan (1)
 3.031% 03/02/2015 02/28/2022 $75,000
$25 Million Senior Unsecured Notes 3.970% 10/01/2015 10/01/2025 25,000
$50 Million Senior Unsecured Notes 3.990% 10/07/2015 10/07/2025 50,000
   Weighted Average/Total Amount for 2015 3.507%     $150,000
$65 Million Unsecured Term Loan (2)
 2.863% 04/01/2016 04/01/2023 $65,000
$40 Million Unsecured Term Loan (3)
 2.335% 07/29/2016 07/30/2021 40,000
$60 Million Senior Unsecured Notes 3.480% 12/15/2016 12/15/2024 60,000
$40 Million Senior Unsecured Notes 3.750% 12/15/2016 12/15/2026 40,000
   Weighted Average/Total Amount for 2016 3.114%     $205,000
   Weighted Average/Total Amount for 2015 and 2016 3.280%     $355,000

(1)The interest rate on this unsecured term loan is comprised of LIBOR plus 140 basis points subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company a weighted average effective interest rate on the term loan of 3.031% as of December 31, 2016. See Note 13 in the Notes to Consolidated Financial Statements for additional information on the interest rate swaps.
(2)The interest rate on this unsecured term loan is comprised of LIBOR plus 165 basis points subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company a weighted average effective interest rate on the term loan of 2.863% as of December 31, 2016. See Note 13 in the Notes to Consolidated Financial Statements for additional information on the interest rate swaps.
(3)The interest rate on this unsecured term loan is comprised of LIBOR plus 110 basis points subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company a weighted average effective interest rate on the term loan of 2.335% as of December 31, 2016. See Note 13 in the Notes to Consolidated Financial Statements for additional information on the interest rate swaps.



In August 2016, EastGroup repaid (with no penalty) an $80 million unsecured term loan with an effectively fixed interest rate of 2.770% and an original maturity date of August 15, 2018. On the same day, the Company borrowed $80 million through its $300 million unsecured bank credit facility; the maturity date for the credit facility is July 30, 2019. The Company re-designated the interest rate swap that was previously applied to the $80 million unsecured term loan to the $80 million unsecured bank credit facility borrowing. The $80 million unsecured bank credit facility draw has an effectively fixed interest rate of 2.020% through the interest rate swap's maturity date of August 15, 2018.

Secured debt interest decreased by $4,154,000 in 2016 as compared to 2015 as a result of regularly scheduled principal payments and debt repayments. Regularly scheduled principal payments on secured debt were $17,037,000 during 2016 and $20,484,000 in 2015. The details of the secured debt repaid in 2015 and 2016 are shown in the following table:
SECURED DEBT REPAID IN 2015 AND 2016 Interest Rate Date Repaid Payoff Amount
      (In thousands)
Beltway II-IV, Commerce Park I, Eastlake, Fairgrounds, Nations Ford,
Techway Southwest III, Wetmore 1-4 and World Houston 15 & 22		 5.50% 03/06/2015 $57,450
Country Club I, Lake Pointe, Techway Southwest II and
World Houston 19 & 20		 4.98% 11/06/2015 24,403
   Weighted Average/Total Amount for 2015 5.34%   $81,853
Huntwood and Wiegman I 5.68% 08/05/2016 $24,543
Alamo Downs, Arion 1-15 & 17, Rampart I-IV, Santan 10 I and
World Houston 16		 5.97% 09/06/2016 51,194
   Weighted Average/Total Amount for 2016 5.88%   $75,737
   Weighted Average/Total Amount for 2015 and 2016 5.60%   $157,590

EastGroup did not obtain any new secured debt during 2015 and 2016.

EastGroup's variable rate interest expense increased by $182,000 for 2016 as compared to 2015 primarily due to an increase in the Company's weighted average interest rate on unsecured bank credit facilities borrowings, offset by a decrease in average unsecured bank credit facilities borrowings as shown in the following table:
  Years Ended December 31,
  2016 2015 
Increase
(Decrease)
  (In thousands, except rates of interest)
Average borrowings on unsecured bank credit facilities - variable rate $106,352
 109,777
 (3,425)
Weighted average variable interest rates 
(excluding amortization of facility fees and debt issuance costs) 
 1.49% 1.29%  

Interest costs during the period of construction of real estate properties are capitalized and offset against interest expense. Capitalized interest increased $83,000 for 2016 as compared to 2015.

Depreciation and amortization expense increased $4,645,000 for 2016 compared to 2015 primarily due to the operating properties acquired by the Company in 2015 and 2016 and the properties transferred from Development in 2015 and 2016, partially offset by operating properties sold in 2015 and 2016.

Gain, net of loss, on sales of real estate investments, which includes gains on the sales of operating properties, increased $39,267,000 for 2016 as compared to 2015. Gain, net of loss, on sales of non-operating real estate (included in Other on the Consolidated Statements of Income and Comprehensive Income) increased $610,000 for 2016 as compared to 2015. The Company's 2015 and 2016 sales transactions are described below in Real Estate Sold and Held for Sale/Discontinued Operations.










Real Estate Improvements
Real Estate Improvementsestate improvements for EastGroup’s operating properties for the years ended December 31, 20162020 and 20152019 were as follows:
 Estimated
Useful Life		Years Ended December 31,
20202019
 (In thousands)
Upgrade on Acquisitions                                               40 yrs$298 1,863 
Tenant Improvements:   
New Tenants                                               Lease Life11,811 13,113 
Renewal Tenants                                               Lease Life3,284 3,908 
Other:   
Building Improvements                                               5-40 yrs4,962 5,304 
Roofs                                               5-15 yrs8,529 12,179 
Parking Lots                                               3-5 yrs568 1,455 
Other                                               5 yrs803 834 
Total Real Estate Improvements (1)
 $30,255 38,656 
 
Estimated
Useful Life
 Years Ended December 31,
 2016 2015
  (In thousands)
Upgrade on Acquisitions                                               40 yrs $394
 5
Tenant Improvements:     
New Tenants                                               Lease Life 9,976
 10,100
Renewal Tenants                                      ��        Lease Life 2,748
 1,936
Other:   
  
Building Improvements                                               5-40 yrs 5,113
 4,599
Roofs                                               5-15 yrs 2,785
 7,562
Parking Lots                                               3-5 yrs 1,377
 808
Other                                               5 yrs 764
 768
Total Real Estate Improvements (1)
  $23,157
 25,778


(1)Reconciliation of Total Real Estate Improvements to Real Estate Improvements on the Consolidated Statements of Cash Flows:
(1)Reconciliation of Total Real Estate Improvements to Real Estate Improvements on the Consolidated Statements of Cash Flows:
 Years Ended December 31, Years Ended December 31,
2016 201520202019
(In thousands)(In thousands)
Total Real Estate Improvements $23,157
 25,778
Total Real Estate Improvements$30,255 38,656 
Change in Real Estate Property Payables 621
 (716)Change in Real Estate Property Payables(373)(876)
Change in Construction in ProgressChange in Construction in Progress3,249 (5)
Real Estate Improvements on the Consolidated Statements of Cash Flows $23,778
 25,062
Real Estate Improvements on the Consolidated Statements of Cash Flows
$33,131 37,775 


Capitalized Leasing Costs
The Company’s leasing costs (principally commissions) are capitalized and included in Other assets. The costs are amortized over the terms of the associated leases, and arethe amortization is included in Depreciation and amortization expense.  Capitalized leasing costs for the years ended December 31, 20162020 and 20152019 were as follows:
 Estimated
Useful Life		Years Ended December 31,
20202019
 (In thousands)
Development and Value-Add                                               Lease Life$5,223 8,065 
New Tenants                                               Lease Life5,732 5,900 
Renewal Tenants                                               Lease Life7,244 5,069 
Total Capitalized Leasing Costs $18,199 19,034 
Amortization of Leasing Costs $14,449 13,167 


33
 
Estimated
Useful Life
 Years Ended December 31,
 2016 2015
  (In thousands)
Development                                               Lease Life $4,217
 3,824
New Tenants                                               Lease Life 5,273
 3,893
Renewal Tenants                                               Lease Life 4,978
 3,773
Total Capitalized Leasing Costs  $14,468
 11,490
Amortization of Leasing Costs  $9,932
 9,038


Real Estate Sold and Held for Sale/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 December 31, 20162020 and 2015.2019.


In accordance with FASB Accounting Standards Update (“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 does not consider its sales in 20152019 and 20162020 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.


During 2016,EastGroup sold the following operating properties during 2020: University Business Center 120 in Santa Barbara and Central Green in Houston. The properties (126,000 square feet combined) were sold for $21.0 million and the Company recognized gains on the sales of $13.1 million.

In 2019, EastGroup sold the following operating properties: Northwest Point Distribution and Service Centers, North Stemmons II and III, America Plaza, LockwoodWorld Houston 5 in Houston, Altamonte Commerce Center in Orlando, Southpointe Distribution Center West Loop Distribution Center 1 & 2, twoin Tucson and three of its four Interstate Commons DistributionUniversity Business Center buildings Castilian Research Center and Memphis I.in Santa Barbara, California. The properties which contain 1,256,000(617,000 square feet and are located in Houston, Dallas, Phoenix, Santa Barbara and Memphis,combined) were sold for $75.7$68.5 million and the Company recognized net gains on the sales of $42.2$41.1 million. The Company also sold 25 acres(through eminent domain procedures) a small parcel of land (0.2 acres) adjacent to its Siempre Viva Distribution Center 1 in Dallas, OrlandoSan Diego for $185,000 and Houston for $5.4 million and recognized net gains on sales of $733,000.



During 2015, EastGroup sold one operating property, the last of its three Ambassador Row Warehouses in Dallas containing 185,000 square feet, for $5.3 million andCompany recognized a gain on the sale of $2.9 million. The Company also sold a small parcel of land in New Orleans for $170,000 and recognized a gain of $123,000.$83,000.


The gains and losses on the sales of land are included in Other on the Consolidated Statements of Income and Comprehensive Income, and the gains and losses on the sales of operating properties are included in Gain net of loss, on sales of real estate investments. See Notes 1(f) and 2 in the Notes to Consolidated Financial Statements for more information related to discontinued operations and gains and losses on sales of real estate investments.  



2019 Compared to 2018
A discussion of changes in the Company's results of operations between 2019 and 2018 has been omitted from this Form 10-K and can be found in “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” under “2019 Compared to 2018” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.


RECENT ACCOUNTING PRONOUNCEMENTS


EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that the following ASUs apply to the Company.


In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The FASB issued further guidance in ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, that provides clarifying guidance in certain narrow areas and adds some practical expedients. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The effective date of ASU 2014-09 was extended by one year by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The new standard was effective for the Company on January 1, 2018, and the Company is using the modified retrospective approach upon adoption. The Company has made significant progress in evaluating the effect of ASU 2014-09 on its consolidated financial statements and related disclosures beginning with the Form 10-Q for the period ending March 31, 2018. The Company has completed its inventory of its sources of revenue and does not believe there will be a material financial statement impact or that its pattern of revenue recognition will be materially impacted by the adoption of ASU 2014-09.

In JanuaryJune 2016, the FASB issued ASU 2016-01, 2016-13, Financial Instruments - Overall (Subtopic 825-10)— Credit Losses (Topic 326): Recognition and Measurement of Credit Losses on Financial Assets Instruments, and subsequently issued ASU 2018-19, Codification Improvements to Topic 326, Financial Liabilities,whichInstruments — Credit Losses in November 2018. The ASUs amend guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires public businessan entity to reflect its current estimate of all expected credit losses. For available for sale debt securities (EastGroup does not currently hold any and does not intend to hold any in the future), credit losses should be measured in a similar manner to current GAAP; however, Topic 326 requires that credit losses be presented as an allowance rather than a write-down. The ASUs affect entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation ofholding financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized costs on the balance sheet. EastGroup adopted ASU 2016-01are effective January 1, 2018. The Company does not anticipate the adoption of ASU 2016-01 will have a material impact on the Company's financial condition or results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The Company is a lessee on a limited number of leases, including office and ground leases, and while the adoption of ASU 2016-02 will impact the Company's accounting for office and ground leases, the Company anticipates the impact will not be material to its overall financial condition and results of operations. Lessor accounting is largely unchanged under ASU 2016-02. The Company's primary revenue is rental income; as such, the Company is a lessor on a significant number of leases. The Company is continuing to evaluate the potential impacts of the ASU and believes it will continue to account for its leases in substantially the same manner. The most significant changes for the Company related to lessor accounting include bifurcating its revenue into lease and non-lease components and the new standard's narrow definition of initial direct costs for leases. The new definition will result in certain costs (primarily legal costs related to lease negotiations) being expensed rather than capitalized upon adoption of the new standard. Public business entities are required to apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. EastGroup plans to adopt ASU 2016-02 effective January 1, 2019. The Company is continuing the process of evaluating and quantifying the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures beginning with the Form 10-Q for the period ending March 31, 2019.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU is intended to improve the accounting for share-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment awards are simplified with the ASU, including income tax consequences, classification of awards as equity or liabilities and classification on the Consolidated Statements of Cash Flows. ASU 2016-09 is effective for public business entities for annual periods beginning after December 15, 2016, and interim periods within those fiscal years; early adoption is permitted. EastGroup


adopted ASU 2016-09 effective January 1, 2017. As a result, the Company elected to reverse compensation cost of any forfeited awards when they occur and will continue to classify the cash flows resulting from remitting cash to the tax authorities for the payment of taxes on the vesting of share-based payment awards as a financing activity on the Consolidated Statements of Cash Flows. In addition, upon vesting of share-based payments, the Company will withhold up to the maximum individual statutory tax rate and classify the entire award as equity. The adoption of ASU 2016-09 did not have a material impact on the Company's financial condition or results of operations.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses certain cash flow issues, including how debt prepayments or debt extinguishment costs and distributions received from equity method investees are presented. ASU 2016-15 is effective for public business entities for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, and the Company has adopted ASU 2016-15 effective January 1, 2017. The adoption of ASU 2016-15 did not have a material impact on the Company's financial condition or results of operations.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU is intended to provide a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the new guidance, companies are required to utilize an initial screening test to determine whether substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. The Company has determined that some of its real estate property acquisitions may be considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business. EastGroup adopted ASU 2017-01 for transactions beginning on October 1, 2016. As a result, the Company has capitalized acquisition costs related to its 2017 and fourth quarter 2016 acquisitions as they were determined not to be acquisitions of a business.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the measurement of goodwill impairment by eliminating the requirement of performing a hypothetical purchase price allocation to measure goodwill impairment. The Company adopted ASU 2017-04 effective January 1, 2017, and is applying the new guidance for goodwill impairment tests with measurement dates after January 1, 2017. The adoption of ASU 2017-04 did not have a material impact on the Company's financial condition or results of operations.
In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies what constitutes a modification of a share-based payment award. The ASU is intended to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. ASU 2017-09 is effective for public entities for annual periods beginning after December 15, 2017,2019, and interim periods within those fiscal years. The Company adopted ASU 2017-09
34

2016-13 and ASU 2018-19 on January 1, 2018,2020, and it does not anticipate that the adoption of ASU 2017-09 willdid not have a material impact on its financial condition, or results of operations as the Company does not expect to have any modifications to share-based payment awards. However, if the Company does have a modification to an award in the future, it will follow the guidance in ASU 2017-09.or disclosures.

In August 2017,2018, the FASB issued ASU 2017-12, Derivatives and Hedging2018-13, Fair Value Measurement (Topic 815)820): Targeted ImprovementsDisclosure Framework - Changes to Accountingthe Disclosure Requirements for Hedging Activities.Fair Value Measurement. The ASU is intended to better align a company's financial reporting for hedging activities withimprove the economic objectiveseffectiveness of those activities. The transition method is a modified retrospective approach that will require the Company to recognize the cumulative effect of initially applying thefair value measurement disclosures. ASU as an adjustment to Accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year the entity adopts the ASU. The primary provision in the ASU that will require an adjustment to beginning retained earnings is the change in timing and income statement presentation for ineffectiveness related to cash flow and net investment hedges. As a result of the transition guidance in the ASU, cumulative ineffectiveness that has previously been recognized on cash flow and net investment hedges that are still outstanding and designated as of the date of adoption will be adjusted and removed from beginning retained earnings and placed in Accumulated other comprehensive income. ASU 2017-122018-13 is effective for public businessall entities for annual periods beginning after December 15, 2018,2019, and interim periods within those fiscal years. Early adoption is permitted; however, theThe Company plans to adoptadopted ASU 2017-122018-13 on January 1, 2019. While the Company continues to assess all potential impacts of ASU 2017-12, it does not expect2020, and the adoption todid not have a material impact on the Company'sits financial condition, or results of operations.operations or disclosures.




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. During the three months ended March 31, 2020, 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.

LIQUIDITY AND CAPITAL RESOURCES


Net cash provided by operating activities was $155,014,000$196,285,000 for the year ended December 31, 2017.2020.  The primary other sources of cash were from borrowings on unsecured bank credit facilities; proceeds from unsecured debt; proceeds from common stock offerings; proceeds from unsecured debt; and net proceeds from sales of real estate investments and non-operating real estate.investments.  The Company distributed $86,725,000$119,765,000 in common stock dividends during 2017.2020.  Other primary uses of cash were for repayments on unsecured bank credit facilities, unsecured debt and secured debt; the construction and development of properties; purchases of real estate; and capital improvements at various properties.


Total debt at December 31, 20172020 and 20162019 is detailed below.  The Company’s unsecured bank credit facilities and unsecured debt instruments have certain restrictive covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its debt covenants at December 31, 20172020 and 2016.2019.
 December 31,
20202019
(In thousands)
Unsecured bank credit facilities - variable rate, carrying amount$125,000 112,710 
Unamortized debt issuance costs(806)(1,316)
Unsecured bank credit facilities124,194 111,394 
Unsecured debt - fixed rate, carrying amount (1)
1,110,000 940,000 
Unamortized debt issuance costs(2,292)(1,885)
Unsecured debt1,107,708 938,115 
Secured debt - fixed rate, carrying amount (1)
79,096 133,422 
Unamortized debt issuance costs(103)(329)
Secured debt78,993 133,093 
Total debt                                                      $1,310,895 1,182,602 
 December 31,
2017 2016
(In thousands)
Unsecured bank credit facilities - variable rate, carrying amount$116,339
 112,020
Unsecured bank credit facilities - fixed rate, carrying amount (1)
80,000
 80,000
Unamortized debt issuance costs(630) (1,030)
Unsecured bank credit facilities195,709
 190,990
    
Unsecured debt - fixed rate, carrying amount (1)
715,000
 655,000
Unamortized debt issuance costs(1,939) (2,162)
Unsecured debt713,061
 652,838
    
Secured debt - fixed rate, carrying amount (1)
200,354
 258,594
Unamortized debt issuance costs(842) (1,089)
Secured debt199,512
 257,505
    
Total debt                                                      $1,108,282
 1,101,333


(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.

(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.
EastGroup
The Company has a $300$350 million unsecured revolvingbank credit facility with a group of nine banks that matures inbanks; the facility has a maturity date of July 2019.30, 2022. The credit facility contains options for a one-year extensiontwo six-month extensions (at the Company's election) and a $150 million expansionaccordion (with agreement by all parties). The interest rate on each tranche is usually reset on a monthly basis and as of
35

December 31, 2017,2020, was LIBOR plus 100 basis points with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company's credit ratings. The Company has designated an interest rate swap to an $80 million unsecured bank credit facility draw that effectively fixes the interest rate on the $80 million draw to 2.020% through the interest rate swap's maturity date of August 15, 2018. As of December 31, 2017, EastGroup2020, the Company had an additional $110,000,000$125,000,000 of variable rate borrowings outstanding on this unsecured  bank credit facility with a weighted average interest rate of 2.528%1.152%. The Company has a standby letter of credit of $674,000 pledged on this facility.

The Company also has a $35$45 million unsecured revolvingbank credit facility that matures inwith a maturity date of July 2019. This credit facility automatically extends for one year30, 2022, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension optionoptions in the $300$350 million revolving credit facility isare exercised. The interest rate is reset on a daily basis and as of December 31, 2017,2020, was LIBOR plus 100 basis points with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company's credit ratings. AtAs of December 31, 2017,2020, the interest rate was 2.564% on a balance of $6,339,000.1.144% with no outstanding balance.


As market conditions permit, EastGroup issues equity and/or employs fixed-ratefixed rate debt, including variable-ratevariable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank borrowings.  The Company believes its current operating cash flow and unsecured bank credit facilities provide the capacity to fund the operations of the Company.  The Company also believes it can obtain debt financing and issue common and/or preferred equity. For future debt issuances, the Company intends to issue primarily unsecured fixed-ratefixed rate debt, including variable-ratevariable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps. The Company may also access the public debt market in the future as a means to raise capital.




In August 2017, EastGroup repaid (with no penalty)March 2020, the Company closed a mortgage$100 million senior unsecured term loan with a balanceseven-year term and interest only payments. It bears interest at the annual rate of $45.1 million,LIBOR plus an applicable margin (1.45% as of December 31, 2020) 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 5.57% and an original maturity datethe loan providing a total effective fixed interest rate of September 5, 2017. The loan was collateralized by 1.4 million square feet of operating properties.2.39%.


In December 2017,July 2020, the Company closed $60and a group of lenders agreed to terms on the private placement of $175 million of senior unsecured private placement notes with an insurance company.a weighted average fixed interest rate of 2.65%. The notes have$100 million note has a seven-year10-year term and a fixed interest rate of 3.46% with semi-annual2.61%, and the $75 million note has a 12-year term and a fixed interest rate of 2.71%. These maturity dates complement the Company's existing debt maturity schedule. The notes dated August 17, 2020, were issued and sold on October 14, 2020 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.


Also in December,In August 2020, the Company refinancedmade a required $30 million principal repayment on $100 million of senior unsecured notes with a fixed interest rate of 3.80%.

In October 2020, EastGroup repaid (with no penalty) a mortgage loan with a balance of $45.9 million, an interest rate of 4.39% and an original maturity date of January 5, 2021.

In December 2020, the Company repaid a $75 million unsecured term loan resulting in a 30 basis point reduction in the loan's interest rate. The loan, which has aat maturity date of December 20, 2020, now haswith an effectively fixed interest rate of 3.452%3.45%.
In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee (“ARRC”) which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to USD-LIBOR in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. In November 2020, the Intercontinental Exchange (“ICE”) Benchmark Administration Limited (“IBA”), the administrator of LIBOR, announced that it would consult on its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023.

The refinancingCompany is not able to predict when LIBOR will providecease to be available or when there will be sufficient liquidity in the SOFR markets. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a net annual savingssudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

36

The Company’s unsecured bank credit facilities, senior unsecured term loans and interest rate swap contracts are indexed to LIBOR.  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 tied 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 the end of 2021, 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 CompanyLIBOR administrator.  In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.

Each of approximately $170,000.

In connection with EastGroup's continuous equity program,the Company’s contracts, which are indexed to LIBOR, include provisions for a replacement rate which will be substantially equivalent to the all-in LIBOR-based interest rate in effect prior to its replacement.  Therefore, the Company hasbelieves the transition will not have a material impact on our consolidated financial statements.   

On December 20, 2019, EastGroup entered into sales agency financing agreements with various sales agents undereach of BNY Mellon Capital Markets, LLC; BofA Securities, Inc.; BTIG, LLC; Jefferies LLC; Raymond James & Associates, Inc.; Regions Securities LLC; and Wells Fargo Securities, LLC in connection with the establishment of a continuous common equity offering program pursuant to which the Company may issue and sell up to 10,000,000 shares of its common stock with an aggregate gross sales price of up to $750,000,000 from time to time in transactions that are deemed to be "at the market" offerings as defined in Rule 415 of the Securities Act of 1933. The1933, as amended, or certain other transactions (the “ATM Program”). As of February 17, 2021, the Company previously sold an aggregate of 3,598,660709,924 shares of common stock with gross proceeds of $93,938,000 under the sales agency financing agreements and, as of February 14, 2018,ATM Program; therefore, under the ATM Program, EastGroup may offer and sell an additional 6,401,340 shares of its common stock having an aggregate offering price of up to $656,062,000 through the sales agents.


During 2017, the Companyyear ended December 31, 2020, EastGroup issued and sold 1,370,457709,924 shares of common stock under its continuous equity programATM Program at an average price of $80.71$132.32 per share with gross proceeds to the Company of $110,606,000.$93,938,000. The Company incurred offering-related costs of $1,399,000$1,275,000 during the year, resulting in net proceeds to the Company of $109,207,000.$92,663,000.



37

Contractual Obligations
EastGroup’s fixed, non-cancelable obligations as of December 31, 20172020 were as follows:
 Payments Due by Period
TotalLess Than
1 Year		1-3 Years3-5 YearsMore Than
5 Years
(In thousands)
Unsecured Bank Credit Facilities (1) (2)
$125,000 — 125,000 — — 
Interest on Unsecured Bank Credit Facilities (3)
3,577 2,230 1,347 — — 
Unsecured Debt (1)
1,110,000 40,000 190,000 215,000 665,000 
Interest on Unsecured Debt215,969 35,024 63,001 52,292 65,652 
Secured Debt (1) 
79,096 44,285 32,889 250 1,672 
Interest on Secured Debt2,921 2,451 269 139 62 
Dividends Payable (4)
31,244 31,244 — — — 
Operating Lease Obligations:    
Office Leases1,720 473 757 442 48 
Ground Leases21,489 975 1,955 2,007 16,552 
Real Estate Property Obligations (5)
5,992 5,992 — — — 
Development and Value-Add Obligations (6)
33,026 33,026 — — — 
Tenant Improvements (7)
12,962 12,962 — — — 
Purchase Obligations33,550 33,550 — — — 
Total$1,676,546 242,212 415,218 270,130 748,986 
 Payments Due by Period
Total 
Less Than
1 Year
 1-3 Years 3-5 Years 
More Than
5 Years
(In thousands)
Unsecured Bank Credit Facilities (1) (2)
$196,339
 —
 196,339
 —
 —
Interest on Unsecured Bank Credit Facilities (3)
8,905
 5,382
 3,523
 —
 —
Unsecured Debt (1)
715,000
 50,000
 180,000
 115,000
 370,000
Interest on Unsecured Debt120,729
 24,139
 40,986
 29,517
 26,087
Secured Debt (1) 
200,354
 11,314
 64,665
 122,332
 2,043
Interest on Secured Debt26,467
 10,116
 13,264
 2,809
 278
Operating Lease Obligations:

  
  
  
  
Office Leases1,864
 349
 706
 809
 —
Ground Leases13,534
 761
 1,522
 1,522
 9,729
Real Estate Property Obligations (4)
2,402
 2,402
 —
 —
 —
Development Obligations (5)
29,024
 29,024
 —
 —
 —
Tenant Improvements (6)
13,231
 13,231
 —
 —
 —
Purchase Obligations3,368
 3,206
 162
 —
 —
Total$1,331,217
 149,924
 501,167
 271,989
 408,137


(1)These amounts are included on the Consolidated Balance Sheets net of unamortized debt issuance costs.
(2)The Company’s balances under its unsecured bank credit facilities change depending on the Company’s cash needs and, as such, both the principal amounts and the interest rates are subject to variability.  At December 31, 2017, the weighted average interest rate was 2.530% on the $116,339,000 of variable-rate debt that matures in July 2019. Unsecured bank credit facilities also included $80,000,000 of debt with an effectively fixed interest rate of 2.020% due to an interest rate swap that matures on August 15, 2018. The $300 million unsecured credit facility has options for a one-year extension (at the Company's election) and a $150 million expansion (with agreement by all parties). The $35 million unsecured credit facility automatically extends for one year if the extension option in the $300 million revolving facility is exercised. As of December 31, 2017, the interest rate on the $300 million facility was LIBOR plus 100 basis points (weighted average interest rate of 2.528%) with an annual facility fee of 20 basis points, and the interest rate on the $35 million facility, which resets on a daily basis, was LIBOR plus 100 basis points (2.564%) with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company's credit ratings.
(3)Represents an estimate of interest due on the Company's unsecured bank credit facilities based on the outstanding unsecured credit facilities as of December 31, 2017 and interest rates and maturity dates on the facilities as of December 31, 2017 as discussed in note 2 above.
(4)Represents commitments on real estate properties, except for tenant improvement obligations.
(5)Represents commitments on properties under development, except for tenant improvement obligations.
(6)Represents tenant improvement allowance obligations.

(1)These amounts are included on the Consolidated Balance Sheets net of unamortized debt issuance costs.

(2)The Company’s balances under its unsecured bank credit facilities change depending on the Company’s cash needs and, as such, both the principal amounts and the interest rates are subject to variability.  At December 31, 2020, the weighted average interest rate was 1.152% on the $125,000,000 of variable rate debt that matures in July 2022. The $350 million unsecured credit facility has options for two six-month extensions (at the Company's election) and a $150 million accordion (with agreement by all parties). The $45 million unsecured credit facility automatically extends for two six-month terms if the extension options in the $350 million revolving facility are exercised. As of December 31, 2020, the interest rate on the $350 million facility was LIBOR plus 100 basis points (weighted average interest rate of 1.152%) with an annual facility fee of 20 basis points, and the interest rate on the $45 million facility, which resets on a daily basis, was LIBOR plus 100 basis points (1.144%) with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company's credit ratings.
(3)Represents an estimate of interest due on the Company's unsecured bank credit facilities based on the outstanding unsecured credit facilities as of December 31, 2020 and interest rates and maturity dates on the facilities as of December 31, 2020 as discussed in note 2 above.
(4)Represents dividends declared during December 2020, which were paid in January 2021. Dividends Payable excludes dividends payable on unvested restricted stock of $1,433,000, which are subject to continued service and will be paid upon vesting in future periods.
(5)Represents commitments on real estate properties, except for tenant improvement obligations.
(6)Represents commitments on properties in the Company's development and value-add program, except for tenant improvement obligations.
(7)Represents tenant improvement allowance obligations.

The Company anticipates that its current cash balance, operating cash flows, borrowings under its unsecured bank credit facilities, proceeds from new debt and/or proceeds from the issuance of equity instruments will be adequate for (i) operating and administrative expenses, (ii) normal repair and maintenance expenses at its properties, (iii) debt service obligations, (iv) maintaining compliance with its debt covenants, (v) distributions to stockholders, (vi) capital improvements, (vii) purchases of properties, (viii) development, and (ix) any other normal business activities of the Company, both in the short-term and long-term.long-term, including after taking into account the effects of the COVID-19 pandemic.


Off-Balance Sheet Arrangements
The Company has no material off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


INFLATION AND OTHER ECONOMIC CONSIDERATIONS


Most of the Company's leases include scheduled rent increases.  Additionally, most of the Company's leases require the tenants to pay their pro rata share of operating expenses, including real estate taxes, insurance and common area maintenance, thereby reducing the Company's exposure to increases in operating expenses resulting from inflation.inflation or other factors.  In the event
38

inflation causes increases in the Company’s general and administrative expenses or the level of interest rates, such increased costs would not be passed through to tenants and could adversely affect the Company’s results of operations.


EastGroup's financial results are affected by general economic conditions in the markets in which the Company's properties are located.  The state of the economy, or other adverse changes in general or local economic conditions resulting from the ongoing COVID-19 pandemic or general economic conditions, could result in the inability of some of the Company's existing tenants to make lease payments and may therefore increase bad debt expense.the reserves for uncollectible rent.  It may also impact the Company’s ability to (i) renew leases or re-lease space as leases expire, or (ii) lease development space.  In addition, an economic downturn or recession, including but not limited to the ongoing COVID-19 pandemic, could also lead to an increase in overall vacancy rates or a decline in rents the Company can charge to re-lease properties upon expiration of current leases.  In all of these cases, EastGroup’s cash flows would be adversely affected.



ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


The Company is exposed to interest rate changes primarily as a result of its unsecured bank credit facilities and long-term debt maturities.  This debt is used to maintain liquidity and fund capital expenditures and expansion of the Company’s real estate investment portfolio and operations.  The Company’s objective for interest rate risk management is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. The Company has two variable rate unsecured bank credit facilities as discussed under the heading Liquidity and Capital Resources.in Part II, Item 7 of this Annual Report on Form 10-K. As market conditions permit, EastGroup issues equity and/or employs fixed-ratefixed rate debt, including variable-ratevariable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank borrowings. The Company's interest rate swaps are discussed in Note 13 in the Notes to Consolidated Financial Statements. The table below presents the principal payments due and weighted average interest rates, which include the impact of interest rate swaps, for both the fixed-ratefixed rate and variable-ratevariable rate debt as of December 31, 2017.2020.
 20212022202320242025ThereafterTotalFair Value
Unsecured bank credit facilities - variable
rate (in thousands)
$— 125,000 (1)— — — — 125,000 
124,820 (2)
Weighted average
interest rate
— 1.15%(3)— — — — 1.15% 
Unsecured debt - fixed
    rate (in thousands) 
$40,000 75,000 115,000 120,000 95,000 665,000 1,110,000 
1,141,803 (4)
Weighted average
interest rate
2.34%3.03%2.96%3.47%3.94%3.14%3.19% 
Secured debt - fixed
    rate (in thousands) 
$44,285 32,770 119 122 128 1,672 79,096 
80,435 (4)
Weighted average
interest rate
4.71%4.09%3.85%3.85%3.85%3.85%4.43% 
 2018 2019 2020 2021 2022 Thereafter Total Fair Value
Unsecured bank credit facilities - variable
rate (in thousands)
$—
 116,339
(1) 
—
 —
 —
 —
 116,339
 
116,277 (2)
Weighted average
interest rate
—
 2.53%
(3) 
—
 —
 —
 —
 2.53%  
Unsecured bank credit facilities - fixed rate
(in thousands)
$—
 80,000
 —
 —
 —
 —
 80,000
 
80,003 (4)
Weighted average
interest rate
—
 2.02% —
 —
 —
 —
 2.02%  
Unsecured debt - fixed
    rate (in thousands) 
$50,000
 75,000
 105,000
 40,000
 75,000
 370,000
 715,000
 
703,871 (4)
Weighted average
interest rate
3.91% 2.85% 3.55% 2.34% 3.03% 3.56% 3.38%  
Secured debt - fixed
    rate (in thousands) 
$11,314
 55,569
 9,096
 89,563
 32,769
 2,043
 200,354
 
206,408 (4)
Weighted average
interest rate
5.21% 7.01% 4.43% 4.55% 4.09% 3.85% 5.18%  


(1)The variable-rate unsecured bank credit facilities mature in July 2019 and as of December 31, 2017, have balances of $110,000,000 (excluding the $80,000,000 draw with an effectively fixed rate due to an interest rate swap, as shown in the table above) on the $300 million unsecured bank credit facility and $6,339,000 on the $35 million unsecured bank credit facility.
(2)The fair value of the Company’s variable-rate debt is estimated by discounting expected cash flows at current market rates, excluding the effects of debt issuance costs.
(3)Represents the weighted average interest rate for the Company's variable rate unsecured bank credit facilities as of December 31, 2017.
(4)The fair value of the Company’s fixed-rate debt, including variable-rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers, excluding the effects of debt issuance costs.

(1)The variable rate unsecured bank credit facilities mature in July 2022 and as of December 31, 2020, have balances of $125,000,000 on the $350 million unsecured bank credit facility and $0 on the $45 million unsecured bank credit facility.

(2)The fair value of the Company’s variable rate debt is estimated by discounting expected cash flows at current market rates, excluding the effects of debt issuance costs.
(3)Represents the weighted average interest rate for the Company's variable rate unsecured bank credit facilities as of December 31, 2020.
(4)The fair value of the Company’s fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers, excluding the effects of debt issuance costs.

As the table above incorporates only those exposures that existed as of December 31, 2017,2020, it does not consider those exposures or positions that could arise after that date.  If the weighted average interest rate on the variable-ratevariable rate unsecured bank credit facilities, as shown above, changes by 10%, or approximately 2512 basis points, interest expense and cash flows would increase or decrease by approximately $294,000$144,000 annually. This does not include variable-ratevariable rate debt that has been effectively fixed through the use of interest rate swaps.



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


The Registrant's Consolidated Balance Sheets as of December 31, 2017 and 2016, and its Consolidated Statements of Income and Comprehensive Income, Changes in Equity and Cash Flows and Notesinformation required by this Item 8 is hereby incorporated by reference to the Company’s Consolidated Financial Statements for the years ended December 31, 2017, 2016 and 2015 and the Report of Independent Registered Public Accounting Firm thereon are included under Item 15beginning on page 42 of this report and are incorporated herein by reference.  Unaudited quarterly results of operations included in the Notes to Consolidated Financial Statements are also incorporated herein by reference.Annual Report on Form 10-K.


39


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.


None.



ITEM 9A.  CONTROLS AND PROCEDURES.


(i)Disclosure Controls and Procedures.

(i)Disclosure Controls and Procedures.

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2017,2020, the Company’s disclosure controls and procedures were effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.


(ii)Internal Control Over Financial Reporting.
(ii)Internal Control Over Financial Reporting.
(a)Management's annual report on internal control over financial reporting.
 
(a) Management's annual report on internal control over financial reporting.
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).  EastGroup’s Management Report on Internal Control Over Financial Reporting is set forth in Part IV, Item 15 of this Form 10-K on page 4347 and is incorporated herein by reference.

(b)Report of the independent registered public accounting firm.


(b)Report of the independent registered public accounting firm.

The report of KPMG LLP, the Company's independent registered public accounting firm, on the Company's internal control over financial reporting is set forth in Part IV, Item 15 of this Form 10-K on page 4448 and is incorporated herein by reference.


(c)Changes in internal control over financial reporting.

(c)Changes in internal control over financial reporting.

There was no change in the Company's internal control over financial reporting during the Company's fourth fiscal quarter ended December 31, 20172020 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.



ITEM 9B.  OTHER INFORMATION.


Not applicable.






40

PART III


ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.


The following table sets forth information regarding the Company’s executive officers and directors.
NamePosition
D. Pike AloianDirector since 1999; Partner in Almanac Realty Investors, LLC (real estate advisory and investment management services)
H.C. Bailey, Jr.Director since 1980; Chairman and President of H.C. Bailey Company (real estate development and investment)
H. Eric Bolton, Jr.Director since 2013; Chairman and Chief Executive Officer of Mid-America Apartment Communities, Inc.
Donald F. ColleranDirector since 2017; Executive Vice President, Chief Sales Officer of FedEx Corporation
Hayden C. Eaves IIIDirector since 2002; President of Hayden Holdings, Inc. (real estate investment)
Fredric H. GouldDirector since 1998; Chairman of the General Partner of Gould Investors L.P., Member of the Board of Directors of BRT Realty Trust and Vice-Chairman of One Liberty Properties, Inc.
Mary E. McCormickDirector since 2005; Director of Xenia Hotels and Resorts (lodging real estate investment trust (REIT)); Senior Lecturer at The Ohio State University, Fisher College of Business
Leland R. SpeedDirector since 1978; Chairman Emeritus of the Board of the Company since 2016; Chairman of the Board of the Company from 1983 to 2015
David H. Hoster IIDirector since 1993; Chairman of the Board of the Company since 2016; President of the Company from 1993 to 2015; Chief Executive Officer of the Company from 1997 to 2015
Marshall A. LoebDirector, President and Chief Executive Officer of the Company
Brent W. WoodExecutive Vice President, Chief Financial Officer and Treasurer of the Company
John F. ColemanExecutive Vice President of the Company
Ryan M. CollinsSenior Vice President of the Company
Bruce CorkernSenior Vice President, Chief Accounting Officer and Secretary of the Company
R. Reid DunbarSenior Vice President of the Company

All other information required by Item 10 of Part III regardingwill be included in the Company’s executive officersdefinitive proxy statement to be filed with the SEC relating to the Company’s 2021 Annual Meeting of Stockholders and directors is incorporated herein by reference from the sections entitled "Corporate Governance and Board Matters" and “Executive Officers” in the Company's definitive Proxy Statement ("2018 Proxy Statement") to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, for EastGroup's Annual Meeting of Stockholders to be held on May 24, 2018.  The 2018 Proxy Statement will be filed within 120 days after the end of the Company's fiscal year ended December 31, 2017.reference.


The information regarding compliance with Section 16(a) of the Exchange Act is incorporated herein by reference from the subsection entitled "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's 2018 Proxy Statement.

Information regarding EastGroup's code of business conduct and ethics found in the subsection captioned "Available Information" in Item 1 of Part I hereof is also incorporated herein by reference into this Item 10.

The information regarding the Company's audit committee, its members and the audit committee financial experts is incorporated herein by reference from the subsection entitled "Committees and Meeting Data” in the Company's 2018 Proxy Statement.

ITEM 11.  EXECUTIVE COMPENSATION.


The information required by Item 11 will be included under the following captions in the Company's 2018 Proxy StatementCompany’s definitive proxy statement to be filed with the SEC relating to the Company’s 2021 Annual Meeting of Stockholders and is incorporated herein by reference: "Compensation Discussion and Analysis," "Summary Compensation Table," "Grants of Plan-Based Awards in 2017," "Outstanding Equity Awards at 2017 Fiscal Year-End," "Option Exercises and Stock Vested in 2017," "Potential Payments upon Termination or Change in Control," "Compensation of Directors" and "Compensation Committee Interlocks."  The information included under the heading "Report of the Compensation Committee" in the Company's 2018 Proxy Statement is incorporated herein by reference; however, this information shall not be deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.reference.




ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.


Information regarding security ownershipThe information required by Item 12 will be included in the Company’s definitive proxy statement to be filed with the SEC relating to the Company’s 2021 Annual Meeting of certain beneficial ownersStockholders and management is incorporated herein by reference from the subsections entitled “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management and Directors” in the Company’s 2018 Proxy Statement.reference.


The following table summarizes the Company’s equity compensation plan information as of December 31, 2017.
Equity Compensation Plan Information
Plan category
(a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(b)
Weighted-average exercise price of outstanding options,
warrants and rights
(c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders—
—
1,671,981
Equity compensation plans not approved by security holders—
—
—
Total—
—
1,671,981

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.


The information regarding transactionsrequired by Item 13 will be included in the Company’s definitive proxy statement to be filed with related partiesthe SEC relating to the Company’s 2021 Annual Meeting of Stockholders and director independence is incorporated herein by reference from the subsection entitled "Independent Directors" and the section entitled “Certain Transactions and Relationships” in the Company's 2018 Proxy Statement.reference.


ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.


The information regarding principal auditor feesrequired by Item 14 will be included in the Company’s definitive proxy statement to be filed with the SEC relating to the Company’s 2021 Annual Meeting of Stockholders and services is incorporated herein by reference from the section entitled "Auditor Fees and Services" in the Company's 2018 Proxy Statement.

reference.


41

PART IV


ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
Financial StatementsPage
The following documents are filed as part of this Annual Report on Form 10-K:
Page
(1)Consolidated Financial Statements:
4245
4347
4448
4549
4650
4751
4852
4953
(2)Consolidated Financial Statement Schedules:SchedulesPage
The following documents are filed as part of this Annual Report on Form 10-K:
7382
Schedule IV – Mortgage Loans on Real Estate
87
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange CommissionSEC are not required under the related instructions or are inapplicable, and therefore have been omitted, or the required information is included in the Notes to Consolidated Financial Statements.

























42

(3)ExhibitsExhibits:
The following exhibits are filed withincluded in this Annual Report on Form 10-K or incorporated by reference tofor the listed document previously filed with the SEC:fiscal year ended December 31, 2020:
Exhibit NumberDescription
(3)
Articles of Incorporation and Bylaws
(a)Articles of Incorporation (incorporatedEastGroup Properties, Inc. (incorporated by reference to Appendix B to the Company'sCompany’s Definitive Proxy Statement for its Annual Meeting of Stockholders held on June 5, 1997)Form DEF 14A (File No. 001-07094) filed April 4, 1997).
(b)
Amended and Restated Bylaws of EastGroup Properties, Inc. (incorporated(incorporated by reference to Exhibit 3.1 to the Company'sCompany’s Current Report on Form 8-K (File No. 001-07094) filed March 3, 2017)2017).
(10)Material Contracts (*Indicates management or compensatory agreement):
(a)Form
Description of Severance and Change in Control Agreement that the Company has entered into with Marshall A. Loeb, Brent W. Wood and John F. Coleman (incorporatedSecurities (incorporated by reference to Exhibit 10(a)4.1 to the Company'sCompany’s Annual Report on Form 8-K10-K (File No. 001-07094) filed May 18, 2016)February 13, 2020).*
(b)Form of Severance and Change in Control Agreement that the Company has entered into with Ryan M. Collins, C. Bruce Corkern and R. Reid Dunbar (incorporated by reference to Exhibit 10(b) to the Company's Form 8-K filed May 18, 2016).*
(c)Third Amended and Restated Credit Agreement Dated January 2, 2013 among EastGroup Properties, L.P.; EastGroup Properties, Inc.; PNC Bank, National Association, as Administrative Agent; Regions Bank and SunTrust Bank as Co-Syndication Agents; U.S. Bank National Association and Wells Fargo Bank, National Association as Co-Documentation Agents; PNC Capital Markets LLC, as Sole Lead Arranger and Sole Bookrunner; and the Lenders thereunder (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed January 8, 2013).
(d)First Amendment to Third Amended and Restated Credit Agreement, dated as of August 9, 2013, among EastGroup Properties, L.P., EastGroup Properties, Inc. and PNC Bank, National Association, as administrative agent, and each of the financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed August 30, 2013).


(e)Second Amendment to Third Amended and Restated Credit Agreement dated as of July 30, 2015 by and among EastGroup Properties, L.P.; EastGroup Properties, Inc.; PNC Bank, National Association, as Administrative Agent; and each of the financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed August 4, 2015).
(f)EastGroup Properties, Inc. 2013 Equity Incentive Plan, as amended and restated as of March 3, 2017 (incorporated(incorporated by reference to Exhibit 10.1 to the Company's Form 8-K (File No. 001-07094) filed March 3, 2017)2017).*
Form of Severance and Change in Control Agreement entered into by and between the Company and each of Marshall A. Loeb, Brent W. Wood and John F. Coleman (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-07094) filed May 18, 2016).
Form of Severance and Change in Control Agreement by and between the Company and each of Ryan M. Collins and R. Reid Dunbar (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-07094) filed May 18, 2016).
EastGroup Properties, Inc. Director Compensation Program (filed herewith)Including the Independent Director Compensation Policy pursuant to the 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10(g) to the Company’s Annual Report on Form 10-K (File No. 001-07094) filed February 14, 2018).*
(h)
Note Purchase Agreement, dated as of August 28, 2013, by and among EastGroup Properties, L.P., the Company and each of the Purchasers of the Notes party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-07094) filed August 30, 2013).
Fourth Amended and Restated Credit Agreement, dated as of June 14, 2018, by and among EastGroup Properties, Inc.L.P.; the Company; PNC Bank, National Association, as Administrative Agent; Regions Bank as Syndication Agent; U.S. Bank National Association, Wells Fargo Bank, National Association and Bank of America, N.A., as Co-Documentation Agents; PNC Capital Markets LLC and Regions Capital Markets, as Joint Lead Arrangers and Joint Bookrunners; and the Lenders thereunder (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-07094) filed June 14, 2018).
Note Purchase Agreement, dated as of August 17, 2020, among EastGroup Properties, L.P., the Company and the purchasers of the notes party thereto (including the form of the 3.80%2.61% Series A Senior Notes due October 14, 2030 and the 2.71% Series B Senior Notes due October 14, 2032) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-07094) filed August 28, 2025) (incorporated21, 2020).
Form of Indemnification Agreement entered into by and between the Company and each of its directors and executive officers (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 8-K10-Q (File No. 001-07094) filed August 30, 2013)October 28, 2020).
(i)Amended
Form of First Amendment to the Severance and Restated Sales Agency FinancingChange in Control Agreement, dated March 6, 2017entered into by and between EastGroup Properties, Inc.the Company and BNY Mellon Capital Markets, LLCeach of R. Reid Dunbar and Ryan M. Collins (incorporated by reference to Exhibit 1.110.2 to the Company's Quarterly Report on Form 8-K10-Q (File No. 001-07094) filed March 10, 2017)October 28, 2020).
(j)Amended
Form of Severance and Restated Sales Agency FinancingChange in Control Agreement, dated March 6, 2017entered into by and between EastGroup Properties, Inc.the Company and Merrill Lynch, Pierce, Fenner & Smith IncorporatedStaci H. Tyler (incorporated by reference to Exhibit 1.210.3 to the Company's Quarterly Report on Form 8-K10-Q (File No. 001-07094) filed March 10, 2017)October 28, 2020).
(k)Amended and Restated Sales Agency Financing Agreement dated March 6, 2017 between EastGroup Properties, Inc. and Raymond James & Associates, Inc. (incorporated by reference to Exhibit 1.3 to the Company's Form 8-K filed March 10, 2017).
(l)Sales Agency Financing Agreement dated March 6, 2017 between EastGroup Properties, Inc. and Jefferies LLC (incorporated by reference to Exhibit 1.4 to the Company's Form 8-K filed March 10, 2017).
Statement
Subsidiaries of computation of ratio of earnings to combined fixed charges and preferred stock distributions (filed herewith)the Company (filed herewith).
Subsidiaries of EastGroup Properties, Inc. (filed herewith).
(23)
Consent of KPMG LLP (filed herewith)(filed herewith).
Powers of attorney (filed herewith)(included on signature page hereto).
(31)
Rule 13a-14(a)/15d-14(a) Certifications (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
(a)
 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).
(32)
Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
(a)
 of Marshall A. Loeb, Chief Executive Officer (furnished herewith).
43

Exhibit NumberDescription
Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) of Brent W. Wood, Chief Financial Officer (furnished herewith).
101.SCH
Inline XBRL Taxonomy Extension Schema Document (filed herewith)
(99)101.CALMaterial United States Federal Income Tax Considerations (incorporated by reference to Exhibit 99.1 to the Company's Form 8-K
Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed February 14, 2018).herewith)
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
(101)101.LABThe following materials from EastGroup Properties, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted
Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.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 XBRL (eXtensible Business Reporting Language): (i) consolidated balance sheets, (ii) consolidated statements of income and comprehensive income, (iii) consolidated statements of changes in equity, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements.Exhibits 101.*) (filed herewith)

(b)Exhibits

*    Indicates a management contract or any compensatory plan, contract or arrangement.
The exhibits required to be filed with this Report pursuant to Item 601 of Regulation S-K are listed under “Exhibits” in Part IV, Item 15(a)(3) of this Report and are incorporated herein by reference.
44

(c)Financial Statement Schedules


The Financial Statement Schedules required to be filed with this Report are listed under “Consolidated Financial Statement Schedules” in Part IV, Item 15(a)(2) of this Report, and are incorporated herein by reference.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


TO THE STOCKHOLDERS AND BOARD OF DIRECTORS
EASTGROUP PROPERTIES, INC.:


Opinion on the Consolidated Financial Statements


We have audited the accompanying consolidated balance sheets of EastGroup Properties, Inc. and subsidiaries (the "Company")Company) as of December 31, 20172020 and 2016,2019, the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2017,2020, and the related notes and financial statement schedulesschedule III and IV (collectively, the "consolidatedconsolidated financial statements")statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172020 and 2016,2019, and the results of theirits operations and theirits cash flows for each of the years in the three-year period ended December 31, 2017,2020, in conformity with U.S. generally accepted accounting principles.


We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB")(PCAOB), the Company’s internal control over financial reporting as of December 31, 2017,2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 14, 201817, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.


Basis for Opinion


These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.



Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the estimated fair value assigned to land in an asset acquisition

As discussed in Note 1(j) to the consolidated financial statements, the Company acquired $76,518,000 of real estate properties and development and value-add properties during 2020 that were accounted for as asset acquisitions, of which $23,565,000 of the total purchase price was allocated to land. The purchase price in an asset acquisition is allocated among the individual components of both the tangible and intangible assets and liabilities acquired based on their relative fair values.
We identified the evaluation of the estimated fair value of land as a critical audit matter. Specifically, evaluating the relevance of comparable land sales used in the Company’s determination of the estimated fair value involved subjective auditor judgment. Professionals with specialized skills and knowledge were required to evaluate the relevance of the comparable land sales.

45

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness over the Company's control to identify and select publicly available comparable land sales within the Company’s process to estimate fair value of land in an asset acquisition. We involved valuation professionals with specialized skills and knowledge who assisted in evaluating the Company’s estimate of fair value of land by comparing to our independently established ranges of comparable land sales developed using publicly available market data.
/s/ KPMG LLP
(Signed) KPMG LLP
We have served as the Company's auditor since 1970.
Jackson, Mississippi
February 14, 201817, 2021




46

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING


EastGroup’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).  Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, EastGroup conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The design of any system of internal control over financial reporting is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Based on EastGroup’s evaluation under the framework in Internal Control – Integrated Framework (2013), management concluded that our internal control over financial reporting was effective as of December 31, 2017.
2020.
/s/ EASTGROUP PROPERTIES, INC.
Ridgeland, Mississippi
February 14, 201817, 2021




47

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


TO THE STOCKHOLDERS AND BOARD OF DIRECTORS
EASTGROUP PROPERTIES, INC.:




Opinion on Internal Control Over Financial Reporting


We have audited EastGroup Properties, Inc. and subsidiaries’ (the "Company")Company) internal control over financial reporting as of December 31, 2017,2020, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2020, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.


We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB")(PCAOB), the consolidated balance sheets of the Company as of December 31, 20172020 and 2016, and2019, the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2017,2020, and the related notes and financial statement schedulesschedule III and IV (collectively, the "consolidatedconsolidated financial statements")statements), and our report dated February 14, 201817, 2021 expressed an unqualified opinion on those consolidated financial statements.


Basis for Opinion


The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


Definition and Limitations of Internal Control Over Financial Reporting


A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



(Signed)/s/ KPMG LLP
Jackson, Mississippi
February 14, 201817, 2021

48

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 December 31,
20202019
(In thousands, except share and per share data)
ASSETS  
  Real estate properties $3,159,497 2,844,567 
  Development and value-add properties359,588 419,999 
 3,519,085 3,264,566 
      Less accumulated depreciation (955,328)(871,139)
 2,563,757 2,393,427 
  Unconsolidated investment 7,446 7,805 
  Cash 21 224 
  Other assets 149,579 144,622 
      TOTAL ASSETS $2,720,803 2,546,078 
LIABILITIES AND EQUITY  
LIABILITIES  
  Unsecured bank credit facilities$124,194 111,394 
  Unsecured debt1,107,708 938,115 
  Secured debt 78,993 133,093 
  Accounts payable and accrued expenses 69,573 92,024 
  Other liabilities 69,817 69,123 
Total Liabilities1,450,285 1,343,749 
EQUITY  
Stockholders’ Equity:  
  Common stock; $0.0001 par value; 70,000,000 shares authorized;
    39,676,828 shares issued and outstanding at December 31, 2020 and
    38,925,953 at December 31, 2019 		4 4 
  Excess shares; $0.0001 par value; 30,000,000 shares authorized;
    no shares issued		0 0 
  Additional paid-in capital1,610,053 1,514,055 
  Distributions in excess of earnings (329,667)(316,302)
  Accumulated other comprehensive income (loss)(10,752)2,807 
Total Stockholders’ Equity1,269,638 1,200,564 
Noncontrolling interest in joint ventures880 1,765 
Total Equity1,270,518 1,202,329 
      TOTAL LIABILITIES AND EQUITY $2,720,803 2,546,078 
 December 31,
2017 2016
(In thousands, except share and per share data)
ASSETS   
  Real estate properties $2,335,459
 2,113,073
  Development 242,014
 293,908
 2,577,473
 2,406,981
      Less accumulated depreciation (749,601) (694,250)
 1,827,872
 1,712,731
  Unconsolidated investment 8,029
 7,681
  Cash 16
 522
  Other assets 117,304
 104,830
      TOTAL ASSETS $1,953,221
 1,825,764
LIABILITIES AND EQUITY 
  
LIABILITIES 
  
  Unsecured bank credit facilities$195,709
 190,990
  Unsecured debt713,061
 652,838
  Secured debt 199,512
 257,505
  Accounts payable and accrued expenses 64,967
 52,701
  Other liabilities 28,842
 29,864
Total Liabilities1,202,091
 1,183,898
EQUITY 
  
Stockholders’ Equity: 
  
  Common shares; $.0001 par value; 70,000,000 shares authorized;
    34,758,167 shares issued and outstanding at December 31, 2017 and
    33,332,213 at December 31, 2016 
3
 3
  Excess shares; $.0001 par value; 30,000,000 shares authorized;
    no shares issued
—
 —
  Additional paid-in capital1,061,153
 949,318
  Distributions in excess of earnings (317,032) (313,655)
  Accumulated other comprehensive income5,348
 1,995
Total Stockholders’ Equity749,472
 637,661
Noncontrolling interest in joint ventures1,658
 4,205
Total Equity751,130
 641,866
      TOTAL LIABILITIES AND EQUITY $1,953,221
 1,825,764


See accompanying Notes to Consolidated Financial Statements.



49

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended December 31, Years Ended December 31,
2017 2016 2015202020192018
(In thousands, except per share data)(In thousands, except per share data)
REVENUES     REVENUES   
Income from real estate operations $274,031
 252,961
 234,918
 Income from real estate operations $362,669 330,813 299,018 
Other revenue 119
 86
 90
 Other revenue 354 574 1,374 
274,150
 253,047
 235,008
 363,023 331,387 300,392 
EXPENSES 
  
  EXPENSES  
Expenses from real estate operations 80,108
 74,347
 67,402
 Expenses from real estate operations 103,368 93,274 86,394 
Depreciation and amortization 83,874
 77,935
 73,290
 Depreciation and amortization 116,359 104,724 91,704 
General and administrative 14,972
 13,232
 15,091
 General and administrative 14,404 16,406 13,738 
Acquisition costs —
 161
 164
Indirect leasing costs Indirect leasing costs661 411 0 
178,954
 165,675
 155,947
OPERATING INCOME 95,196
 87,372
 79,061
234,792 214,815 191,836 
OTHER INCOME (EXPENSE) 
  
  
OTHER INCOME (EXPENSE)   
Interest expense (34,775) (35,213) (34,666) Interest expense (33,927)(34,463)(35,106)
Gain, net of loss, on sales of real estate investments 21,855
 42,170
 2,903
Gain on sales of real estate investments Gain on sales of real estate investments 13,145 41,068 14,273 
Other 1,313
 1,765
 1,101
 Other 942 163 913 
NET INCOME 83,589
 96,094
 48,399
NET INCOME 108,391 123,340 88,636 
Net income attributable to noncontrolling interest in joint ventures(406) (585) (533)Net income attributable to noncontrolling interest in joint ventures(28)(1,678)(130)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 83,183
 95,509
 47,866
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 108,363 121,662 88,506 
Other comprehensive income (loss) - cash flow hedges3,353
 5,451
 (1,099)
Other comprehensive income (loss) – cash flow hedgesOther comprehensive income (loss) – cash flow hedges(13,559)(3,894)1,353 
TOTAL COMPREHENSIVE INCOME$86,536
 100,960
 46,767
TOTAL COMPREHENSIVE INCOME$94,804 117,768 89,859 
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 
  
  
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS   
Net income attributable to common stockholders $2.45
 2.93
 1.49
Weighted average shares outstanding �� 33,996
 32,563
 32,091
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS 
  
  
Net income attributable to common stockholders $2.44
 2.93
 1.49
 Net income attributable to common stockholders$2.77 3.25 2.50 
Weighted average shares outstanding 34,047
 32,628
 32,196
 Weighted average shares outstanding 39,185 37,442 35,439 
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERSDILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS   
Net income attributable to common stockholders Net income attributable to common stockholders $2.76 3.24 2.49 
Weighted average shares outstanding Weighted average shares outstanding 39,296 37,527 35,506 


See accompanying Notes to Consolidated Financial Statements.

50

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Common
Stock		Additional
Paid-In
Capital		Distributions
In Excess
Of Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Noncontrolling
Interest in
Joint Ventures		Total
(In thousands, except share and per share data)
Balance, December 31, 2017$3 1,061,153 (317,032)5,348 1,658 751,130 
Net income0 0 88,506 0 130 88,636 
Net unrealized change in fair value of cash flow hedges0 0 0 1,353 0 1,353 
Common dividends declared – $2.72 per share0 0 (97,667)0 0 (97,667)
Stock-based compensation, net of forfeitures0 6,103 0 0 0 6,103 
Issuance of 1,706,474 shares of common stock, common stock offering, net of expenses1 157,318 0 0 0 157,319 
Issuance of 1,844 shares of common stock,
    dividend reinvestment plan		0 164 0 0 0 164 
Withheld 23,824 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock0 (2,055)0 0 0 (2,055)
Purchase of noncontrolling interest in joint venture0 (136)0 0 0 (136)
Contributions from noncontrolling interest0 0 0 0 50 50 
Distributions to noncontrolling interest0 0 0 0 (194)(194)
Balance, December 31, 20184 1,222,547 (326,193)6,701 1,644 904,703 
Net income0 0 121,662 0 1,678 123,340 
Net unrealized change in fair value of cash flow hedges0 0 0 (3,894)0 (3,894)
Common dividends declared – $2.94 per share0 0 (111,771)0 0 (111,771)
Stock-based compensation, net of forfeitures0 9,374 0 0 0 9,374 
Issuance of 2,388,342 shares of common stock, common stock offering, net of expenses0 284,710 0 0 0 284,710 
Issuance of 1,893 shares of common stock,
    dividend reinvestment plan		0 212 0 0 0 212 
Withheld 28,955 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock0 (2,788)0 0 0 (2,788)
Contributions from noncontrolling interest0 0 0 0 821 821 
Distributions to noncontrolling interest0 0 0 0 (2,378)(2,378)
Balance, December 31, 20194 1,514,055 (316,302)2,807 1,765 1,202,329 
Net income0 0 108,363 0 28 108,391 
Net unrealized change in fair value of cash flow hedges0 0 0 (13,559)0 (13,559)
Common dividends declared – $3.08 per share0 0 (121,728)0 0 (121,728)
Stock-based compensation, net of forfeitures0 8,502 0 0 0 8,502 
Issuance of 709,924 shares of common stock, common stock offering, net of expenses0 92,663 0 0 0 92,663 
Withheld 36,445 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock0 (4,939)0 0 0 (4,939)
Contributions from noncontrolling interest0 0 0 0 20 20 
Distributions to noncontrolling interest0 0 0 0 (115)(115)
Sale of noncontrolling interest in joint venture0 (228)0 0 (818)(1,046)
Balance, December 31, 2020$4 1,610,053 (329,667)(10,752)880 1,270,518 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Distributions
In Excess
Of Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Noncontrolling
Interest in
Joint Ventures
 Total
(In thousands, except share and per share data)
Balance, December 31, 2014$3
 874,335
 (300,852) (2,357) 4,486
 575,615
Net income—
 —
 47,866
 —
 533
 48,399
Net unrealized change in fair value of cash flow hedges—
 —
 —
 (1,099) —
 (1,099)
Common dividends declared – $2.34 per share—
 —
 (75,906) —
 —
 (75,906)
Stock-based compensation, net of forfeitures—
 8,423
 —
 —
 —
 8,423
Issuance of 106,751 shares of common stock,
    common stock offering, net of expenses
—
 6,233
 —
 —
 —
 6,233
Issuance of 4,536 shares of common stock,
dividend reinvestment plan		—
 257
 —
 —
 —
 257
Withheld 32,409 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock—
 (2,041) —
 —
 —
 (2,041)
Distributions to noncontrolling interest—
 —
 —
 —
 (680) (680)
Balance, December 31, 20153
 887,207
 (328,892) (3,456) 4,339
 559,201
Net income—
 —
 95,509
 —
 585
 96,094
Net unrealized change in fair value of cash flow hedges—
 —
 —
 5,451
 —
 5,451
Common dividends declared – $2.44 per share—
 —
 (80,272) —
 —
 (80,272)
Stock-based compensation, net of forfeitures—
 5,831
 —
 —
 —
 5,831
Issuance of 875,052 shares of common stock, common stock offering, net of expenses—
 59,283
 —
 —
 —
 59,283
Issuance of 3,326 shares of common stock,
    dividend reinvestment plan
—
 228
 —
 —
 —
 228
Withheld 57,316 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock—
 (3,231) —
 —
 —
 (3,231)
Distributions to noncontrolling interest—
 —
 —
 —
 (719) (719)
Balance, December 31, 20163
 949,318
 (313,655) 1,995
 4,205
 641,866
Net income—
 —
 83,183
 —
 406
 83,589
Net unrealized change in fair value of cash flow hedges—
 —
 —
 3,353
 —
 3,353
Common dividends declared – $2.52 per share—
 —
 (86,560) —
 —
 (86,560)
Stock-based compensation, net of forfeitures—
 7,012
 —
 —
 —
 7,012
Issuance of 1,370,457 shares of common stock, common stock offering, net of expenses—
 109,207
 —
 —
 —
 109,207
Issuance of 2,744 shares of common stock,
    dividend reinvestment plan
—
 228
 —
 —
 —
 228
Withheld 33,695 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock—
 (2,505) —
 —
 —
 (2,505)
Purchase of noncontrolling interest in joint venture—
 (2,107) —
 —
 (2,597) (4,704)
Distributions to noncontrolling interest—
 —
 —
 —
 (478) (478)
Contributions from noncontrolling interest—
 —
 —
 —
 122
 122
Balance, December 31, 2017$3
 1,061,153
 (317,032) 5,348
 1,658
 751,130


See accompanying Notes to Consolidated Financial Statements.

51

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31,
202020192018
(In thousands)
OPERATING ACTIVITIES   
Net income$108,391 123,340 88,636 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization116,359 104,724 91,704 
Stock-based compensation expense6,579 6,838 5,283 
Gain on sales of real estate investments and non-operating real estate(13,145)(41,151)(14,359)
Gain on casualties and involuntary conversion on real estate assets(161)(180)(1,245)
Changes in operating assets and liabilities: 
Accrued income and other assets(4,615)(5,558)(4,091)
Accounts payable, accrued expenses and prepaid rent(18,851)6,514 (2,682)
Other                                                                                                    1,728 1,385 1,485 
NET CASH PROVIDED BY OPERATING ACTIVITIES196,285 195,912 164,731 
INVESTING ACTIVITIES   
Development and value-add properties(195,446)(318,288)(167,667)
Purchases of real estate(49,199)(142,712)(57,152)
Real estate improvements(33,131)(37,775)(37,502)
Net proceeds from sales of real estate investments and non-operating real estate                                                    21,565 66,737 24,508 
Proceeds from casualties and involuntary conversion on real estate assets242 723 1,635 
Repayments on mortgage loans receivable1,679 915 1,987 
Changes in accrued development costs(5,339)(3,644)5,711 
Changes in other assets and other liabilities(28,627)(9,293)(12,955)
NET CASH USED IN INVESTING ACTIVITIES(288,256)(443,337)(241,435)
FINANCING ACTIVITIES   
Proceeds from unsecured bank credit facilities625,387 932,658 448,100 
Repayments on unsecured bank credit facilities(613,097)(1,015,678)(448,709)
Proceeds from unsecured debt275,000 290,000 60,000 
Repayments on unsecured debt(105,000)(75,000)(50,000)
Repayments on secured debt(54,306)(55,593)(11,289)
Debt issuance costs(1,090)(893)(1,922)
Distributions paid to stockholders (not including dividends accrued)(119,765)(108,795)(71,294)
Proceeds from common stock offerings90,721 284,710 157,319 
Proceeds from dividend reinvestment plan0 212 221 
Other                                                                                                    (6,082)(4,346)(5,364)
NET CASH PROVIDED BY FINANCING ACTIVITIES91,768 247,275 77,062 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(203)(150)358 
    CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
224 374 16 
    CASH AND CASH EQUIVALENTS AT END OF YEAR
$21 224 374 
SUPPLEMENTAL CASH FLOW INFORMATION   
Cash paid for interest, net of amount capitalized of $9,651, $8,453, and $6,334 for 2020, 2019 and 2018, respectively$32,362 30,839 33,458 
Cash paid for operating lease liabilities1,476 1,314 0 
NON-CASH OPERATING ACTIVITY
Operating lease liabilities arising from obtaining right of use assets$495 15,435 0 
 Years Ended December 31,
2017 2016 2015
(In thousands)
OPERATING ACTIVITIES     
Net income                                                                                                    $83,589
 96,094
 48,399
Adjustments to reconcile net income to net cash provided by operating activities: 
  
  
Depreciation and amortization                                                                                        83,874
 77,935
 73,290
Stock-based compensation expense                                                                                                    5,521
 4,590
 6,733
Gain, net of loss, on sales of real estate investments and non-operating real estate(22,148) (42,903) (3,026)
Changes in operating assets and liabilities: 
    
Accrued income and other assets                                                                                                    (5,034) (2,883) (2,118)
Accounts payable, accrued expenses and prepaid rent                                                                                                    8,333
 5,736
 6,928
Other                                                                                                    879
 295
 (157)
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                                                                    155,014
 138,864
 130,049
INVESTING ACTIVITIES 
  
  
Real estate development                                                                                                    (124,938) (203,765) (95,032)
Purchases of real estate                                                                                                    (55,195) (27,668) (31,574)
Real estate improvements                                                                                                    (26,158) (23,778) (25,062)
Net proceeds from sales of real estate investments and non-operating real estate                                                    42,710
 78,780
 5,156
Repayments on mortgage loans receivable                                                                                                    171
 123
 116
Changes in accrued development costs                                                                                                    (144) 3,629
 (1,705)
Changes in other assets and other liabilities                                                                                                    (15,872) (13,793) (8,317)
NET CASH USED IN INVESTING ACTIVITIES                                                                                                    (179,426) (186,472) (156,418)
FINANCING ACTIVITIES 
  
  
Proceeds from unsecured bank credit facilities                                                                                                   391,617
 608,349
 420,104
Repayments on unsecured bank credit facilities                                                                                                     (387,298) (567,165) (368,669)
Proceeds from unsecured debt                                                                                                     60,000
 205,000
 150,000
Repayments on unsecured debt                                                                                                     —
 (80,000) —
Repayments on secured debt                                                                                                     (58,209) (92,773) (102,337)
Debt issuance costs                                                                                                    (380) (1,487) (1,952)
Distributions paid to stockholders (not including dividends accrued on unvested restricted stock)                                                                                                    (86,725) (80,899) (75,845)
Proceeds from common stock offerings                                                                                                    109,207
 59,283
 6,233
Proceeds from dividend reinvestment plan                                                                                                    228
 236
 256
Other                                                                                                    (4,534) (2,462) (1,384)
NET CASH PROVIDED BY FINANCING ACTIVITIES23,906
 48,082
 26,406
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(506) 474
 37
    CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
522
 48
 11
    CASH AND CASH EQUIVALENTS AT END OF YEAR
$16
 522
 48
SUPPLEMENTAL CASH FLOW INFORMATION 
  
  
Cash paid for interest, net of amount capitalized of $5,765, $5,340, and
     $5,257 for 2017, 2016 and 2015, respectively                                                                                                    
$33,634
 33,595
 33,164


See accompanying Notes to Consolidated Financial Statements.
52
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



DECEMBER 31, 2017, 20162020, 2019 and 20152018


(1)SIGNIFICANT ACCOUNTING POLICIES

(1)SIGNIFICANT ACCOUNTING POLICIES
(a)Principles of Consolidation

(a)Principles of Consolidation
The consolidated financial statements include the accounts of EastGroup Properties, Inc. ("EastGroup"(“EastGroup” or "the Company"“the Company”), its wholly owned subsidiaries and its investment in any joint ventures in which the Company has a controlling interest.


At December 31, 2015, EastGroup had a controlling interest in two joint ventures, the 80% owned University Business Center and the 80% owned Castilian Research Center. During the second quarter of 2016, Castilian Research Center was sold, and the joint venture was subsequently terminated. At December 31, 2016, the Company had a controlling interest in one joint venture, the 80% owned University Business Center. During the fourth quarter of 2017, EastGroup closed the acquisition of the 20% noncontrolling interest in two of the four University Business Center buildings; the Company now owns 100% of University Business Center 125 and 175. As of December 31, 2017,2018, EastGroup had an 80% controlling interest in University Business Center 120 and 130.130 through a joint venture partnership. During the fourth quarter of 2019, the Company, along with the noncontrolling interest partner, sold University Business Center 130 and as of December 31, 2019, EastGroup had an 80% controlling interest in University Business Center 120. During the fourth quarter of 2020, the Company sold its 80% controlling interest in University Business Center 120 and the joint venture partnership was dissolved.


Also during 2019, EastGroup entered into 2 joint venture arrangements. On May 31, 2019, the Company acquired 6.5 acres of land in San Diego, known by the Company as the Miramar Land. In the second quarter of 2019, a joint venture was formed through which EastGroup owns a 95% controlling interest in this property.  Also, on December 31, 2019, the Company acquired 41.6 acres of land in San Diego, known by the Company as the Otay Mesa Land, with the same noncontrolling interest partner with EastGroup owning a 99% controlling interest in the property.

As of December 31, 2020 and 2019, EastGroup had a 95% controlling interest in the Miramar Land and a 99% controlling interest in the Otay Mesa Land.

The Company records 100% of the assets, liabilities, revenues and expenses of the buildingsproperties 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.


(b)Income Taxes
(b)Income Taxes
EastGroup, a Maryland corporation, has qualified as a real estate investment trust (REIT)(“REIT”) under Sections 856-860 of the Internal Revenue Code and intends to continue to qualify as such.  To maintain its status as a REIT, the Company is required to, among other things, distribute at least 90% of its ordinary taxable income to its stockholders.  If the Company has a capital gain, it has the option of (i) deferring recognition of the capital gain through a tax-deferred exchange, (ii) declaring and paying a capital gain dividend on any recognized net capital gain resulting in no corporate level tax, or (iii) retaining and paying corporate income tax on its net long-term capital gain, with the shareholders reporting their proportional share of the undistributed long-term capital gain and receiving a credit or refund of their share of the tax paid by the Company.  The Company distributed all of its 2017, 20162020, 2019 and 20152018 taxable income to its stockholders.  Accordingly, no significant provisions for income taxes were necessary.  The following table summarizes the federal income tax treatment for all distributions by the Company for the years ended 2017, 20162020, 2019 and 2015.2018.


Federal Income Tax Treatment of Share Distributions
 Years Ended December 31,
 202020192018
Common Share Distributions: (Per share)
Ordinary dividends$3.32868 3.14000 2.14305 
Nondividend distributions0 0 0 
Unrecaptured Section 1250 capital gain0 0 0 
Other capital gain0 0 0 
Total Common Share Distributions                                      $3.32868 3.14000 2.14305 
 Years Ended December 31,
 2017 2016 2015
Common Share Distributions:     
Ordinary dividends                           $2.49146
 2.10494
 2.24258
Nondividend distributions0.02686
 0.05202
 0.02774
Unrecaptured Section 1250 capital gain                                                       —
 0.12872
 0.06968
Other capital gain                                             0.00168
 0.15432
 —
Total Common Share Distributions                                      $2.52000
 2.44000
 2.34000


EastGroup applies the principles of Financial Accounting Standards Board (FASB)(“FASB”) Accounting Standards Codification (ASC)(“ASC”) 740, Income Taxes, when evaluating and accounting for uncertainty in income taxes.  With few exceptions, the Company’s 20132016 and earlier tax years are closed for examination by U.S. federal, state and local tax authorities.  In accordance with the provisions of ASC 740, the Company had no significant uncertain tax positions as of December 31, 20172020 and 2016.2019.


53
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s income may differ for tax and financial reporting purposes principally because of (1)(i) the timing of the deduction for the provision for possible losses and losses on investments, (2)(ii) the timing of the recognition of gains or losses from the sale of investments, (3)(iii) different income recognition methods for rental income, (iv) different depreciation methods and lives, (4)(v) real estate properties having a different basis for tax and financial reporting purposes, (5)(vi) mortgage loans having a different basis for tax and financial reporting purposes, thereby producing different gains upon collection of these loans, and (6)(vii) differences in book and tax allowances and timing for stock-based compensation expense.



(c)Income Recognition
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(c)Income Recognition
The Company’s primary revenue is rental income from business distribution space. Minimum rental income from real estate operations is recognized on a straight-line basis.  The straight-line rent calculation on leases includes the effects of rent concessions and scheduled rent increases, and the calculated straight-line rent income is recognized over the lives of the individual leases.  The Company maintains allowances for doubtful accounts receivable, including straight-line rents receivable, based upon estimates determined by management.  Management specifically analyzes aged receivables, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.

Revenue is recognized on payments received from tenants for early terminations after all criteria have been met in accordance with ASC 840, Leases.Leases, prior to January 1, 2019, and in accordance with ASC 842, Leases, subsequently.


In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), and in subsequent periods, issued ASU 2018-10, 2018-11, and 2018-20, all of which relate to the new lease accounting guidance. The Company adopted the new lease accounting guidance effective January 1, 2019, and has applied its provisions on a prospective basis. Lessor accounting is largely unchanged under ASU 2016-02. The Company’s primary revenue is rental income; as such, the Company is a lessor on a significant number of leases. The Company is continuing to account for its leases in substantially the same manner. The most significant changes for the Company related to lessor accounting include: (i) the new standard’s narrow definition of initial direct costs for leases, and (ii) the guidance applicable to recording uncollectible rents, as discussed in the following paragraphs.

The new standard’s narrow definition of initial direct costs for leases — The new definition of initial direct costs results in certain costs (primarily legal costs related to lease negotiations) being expensed rather than capitalized upon adoption of the new standard. EastGroup recorded Indirect leasing costs of $661,000 and $411,000 on the Consolidated Statements of Income and Comprehensive Income during the years ended December 31, 2020 and 2019, respectively.

The guidance applicable to recording uncollectible rents — Upon adoption of the lease accounting guidance, reserves for uncollectible accounts are recorded as a reduction to revenue. Prior to adoption, reserves for uncollectible accounts were recorded as bad debt expenses. The standard also provides guidance related to calculating the reserves; however, those changes did not impact the Company.

EastGroup elected the practical expedient permitting lessors to make an accounting policy election by class of underlying asset to not separate non-lease components (such as common area maintenance) of a contract from the lease component to which they relate when specific criteria are met. The Company believes its leases meet the criteria.

The Company has applied the provisions of the new lease accounting standard and provided the required disclosures in the notes to the consolidated financial statements.

The table below presents the components of Income from real estate operations for the years ended December 31, 2020 and 2019:
Years Ended December 31,
20202019
(In thousands)
Lease income — operating leases$271,094 248,237 
Variable lease income (1)
91,575 82,576 
Income from real estate operations$362,669 330,813 

(1)Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.

In April 2020, the FASB issued FASB Staff Question-and-Answer (“Q&A”)-Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic to clarify whether lease concessions related to the effects of the COVID-19 pandemic require the application of lease modification guidance under FASB ASC 842, Leases. Under ASC 842,
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EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

an entity must determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if the lease concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework. The Q&A provides a practical expedient for entities to make an election to account for certain lease concessions consistent with how those concessions would be accounted for outside of the lease modification framework. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The FASB staff provided two possible methods to account for deferral of payments with no substantive changes to the consideration in the original contract: (a) account for the concessions as if no changes to the lease contract were made and, (b) account for the deferred payments as variable lease payments. The Company has elected the practical expedient provided by the FASB staff and is accounting for lease concessions meeting the criterion as if no changes to the lease contract were made. For the year ended December 31, 2020, the Company recognized approximately $1,483,000 in Income from real estate operations from lease concessions under this election.

Future Minimum Rental Receipts Under Non-Cancelable Leases
The Company’s leases with its customers may include various provisions such as scheduled rent increases, renewal options and termination options. The majority of the Company’s leases include defined rent increases rather than variable payments based on an index or unknown rate. In calculating the disclosures presented below, the Company included the fixed, non-cancelable terms of the leases. The following schedule indicates approximate future minimum rental receipts under non-cancelable leases for real estate properties by year as of December 31, 2020:
Years Ending December 31,(In thousands)
2021$272,402 
2022235,872 
2023192,444 
2024148,871 
2025104,511 
Thereafter                                                  166,467 
   Total minimum receipts                                                  $1,120,567 
The Company recognizes gains on sales of real estate in accordance with the principles set forth in the Codification. For each transaction, the Company evaluates whether the guidance in ASC 360, Property, Plant606, Revenue from Contracts with Customers, or ASC 610, Other Income - Gains and Equipment.Losses from the Derecognition of Nonfinancial Assets, is applicable. Upon closing of real estate transactions, the provisions of ASC 360the Codification require consideration forof whether the transferseller has a controlling financial interest in the entity that holds the nonfinancial asset after the transaction. In addition, the seller evaluates whether a contract exists under ASC 606 and whether the counterparty obtained control of rightseach nonfinancial asset that is sold. If a contract exists and the counterparty obtained control of ownership toeach nonfinancial asset, the purchaser, receiptseller derecognizes the assets at the close of an adequate cash down payment from the purchaser, adequate continuing investment bytransaction with resulting gains or losses reflected on the purchaserConsolidated Statements of Income and no substantial continuing involvement by the Company.  If the requirements for recognizing gains have not been met, the sale and related costs are recorded, but the gain is deferred and recognized by a method other than the full accrual method.Comprehensive Income.


The Company recognizes interest income on mortgage loans on the accrual method unless a significant uncertainty of collection exists.  If a significant uncertainty exists, interest income is recognized as collected.  If applicable, discounts on mortgage loans receivable are amortized over the lives of the loans using a method that does not differ materially from the interest method.  The Company evaluates the collectibility of both interest and principal on each of its loans to determine whether the loans are impaired.  A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms.  When a loan is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the loan’s effective interest rate or to the fair value of the underlying collateral (if the loan is collateralized) less costs to sell.  As of During the years ended December 31, 20172020 and 2016,2019, there was no significant uncertainty of collection; therefore, interest income was recognized.  As of December 31, 2017 and 2016,2019, the Company determined that no allowance for collectibility of the mortgage loans receivable was necessary. The Company's mortgage loans receivable was fully collected during the year ended December 31, 2020.
 
(d)Real Estate Properties
(d)Real Estate Properties
EastGroup has one1 reportable segment–industrial properties.  These properties are concentratedprimarily located in major Sunbelt marketsregions of the United States, primarily in the states of Florida, Texas, Arizona, California and North Carolina,States. The Company's properties have similar economic characteristics and also meet the other criteria that permit the properties to beas a result, have been aggregated into one reportable segment.


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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.  As of During the years ended December 31, 20172020 and 2016,2019, 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 $69,010,000, $63,793,000$96,290,000, $86,590,000 and $59,882,000$76,007,000 for 2017, 20162020, 2019 and 2015,2018, respectively.


(e)Development
(e)Development and Value-Add Properties
For properties under development and value-add properties (defined in Note 2) acquired in the development stage, costs associated with development (i.e., land, construction costs, interest expense, property taxes and other direct and indirect 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 propertiesprojects 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.  WhenThe Company transfers properties from the property becomes 80% occupied or one year after completion of the shell construction (whichever comes first), capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases.  The properties are then transferredvalue-add program to Real estate properties, and depreciation commences on the entire property (excluding the land).

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Effective January 1, 2018, the Company is implementing an accounting policy change and will begin transferring as follows: (i) for development properties, from Development to Real estate properties at the earlier of 90% occupancy or one year after completion of the shell construction.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).


(f)Real Estate Held for Sale
(f)Real Estate 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.  


In accordance with FASB Accounting Standards Update (ASU)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.


(g)Derivative Instruments and Hedging Activities
(g)Derivative Instruments and Hedging Activities
EastGroup applies ASC 815, Derivatives and Hedging, which requires all entities with derivative instruments to disclose information regarding how and why the entity uses derivative instruments and how derivative instruments and related hedged items affect the entity’s financial position, financial performance and cash flows. See Note 13 for a discussion of the Company's derivative instruments and hedging activities.


(h)Cash Equivalents
(h)Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
 
(i)Amortization
(i)Amortization
Debt origination costs are deferred and amortized over the term of each loan using the effective interest method. Amortization of debt issuance costs was $1,250,000, $1,534,000$1,418,000, $1,344,000 and $1,336,000$1,352,000 for 2017, 20162020, 2019 and 2015,2018, respectively. Amortization of facility fees was $670,000, $670,000$790,000, $790,000 and $608,000$736,000 for 2017, 20162020, 2019 and 2015,2018, respectively. 
 
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Leasing costs are deferred and amortized using the straight-line method over the term of the lease.  Leasing costs paid during the period are included in Changes in other assets and other liabilities in the Investing Activities section on the Consolidated Statements of Cash Flows.  Leasing costs amortization expense was $10,329,000, $9,932,000$14,449,000, $13,167,000 and $9,038,000$11,493,000 for 2017, 20162020, 2019 and 2015,2018, respectively.  


Amortization expense for in-place lease intangibles is disclosed below in Real Estate Property Acquisitions and Acquired Intangibles.


(j)Real Estate Property Acquisitions and Acquired Intangibles
(j)Real Estate Property Acquisitions and Acquired Intangibles
Upon acquisition of real estate properties, EastGroup applies the principles of ASC 805, Business Combinations. Prior to the Company's adoption of ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, effective October 1, 2016, acquisition-related costs were recognized as expenses in the periods in which the costs were incurred and the services were received.

As discussed in Note 1(o), beginning with acquisitions after October 1, 2016, the Company follows the guidance in ASU 2017-01, whichThe FASB Codification provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the new guidance, companies are required to utilize an initial screening test to determine whether substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. EastGroup has determined that its real estate property acquisitions in 20172020, 2019 and the fourth quarter of 20162018 are considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business. As a result, the Company has capitalized acquisition costs related to its 20172020, 2019 and fourth quarter 20162018 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 respectiverelative fair values.  GoodwillIf applicable, goodwill for business combinations is recorded when the purchase price exceeds the fair value of the assets and liabilities acquired.  Factors considered by management
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


in allocating the cost of the properties acquired include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.  The allocation to tangible assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. Land is valued using comparable land sales specific to the applicable market, provided by a third-party. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties.  The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates.  


The purchase price is also allocated among the following categories of intangible assets:  the above or below market component of in-place leases, 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 faircurrent market ratesrents over the remaining term of the lease.  The amounts allocated to above and below market leases 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.  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 of above and below market leases increased rental income by $529,000, $488,000$1,451,000, $1,229,000 and $448,000$667,000 in 2017, 20162020, 2019 and 2015,2018, respectively.  Amortization expense for in-place lease intangibles was $4,535,000, $4,210,000$5,620,000, $4,967,000 and $4,370,000$4,204,000 for 2017, 20162020, 2019 and 2015,2018, respectively.  


Projected amortization of in-place lease intangibles for the next five years as of December 31, 20172020 is as follows:
Years Ending December 31,(In thousands)
2021$4,467 
20223,143 
20232,567 
20241,956 
20251,309 
Years Ending December 31, (In thousands)
2018 $3,576
2019 2,555
2020 1,911
2021 1,482
2022 893


During 2017,2020, the Company acquired the following operating properties: Shiloh 400, Broadmoor Commerce ParkWells Point One in Austin; Cherokee 75 Business Center 1 in Atlanta; and Hurricane Shoals 1 & 2The Rock in Atlanta and Southpark Corporate Center 5-7 in Austin.Dallas. The Company also acquired one development stagevalue-add property, ProgressRancho Distribution Center 1 & 2 in Atlanta.Los Angeles. At the time of acquisition, ProgressRancho Distribution Center 1 & 2 was classified in the lease-up phase of development.phase. The total cost for
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EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the properties acquired by the Company was $65,243,000,$76,518,000, of which $51,539,000$46,240,000 was allocated to Real estate propertiesand $10,312,000$27,320,000 was allocated to Development and value-add properties. EastGroup allocated $11,281,000$23,565,000 of the total purchase price to land using third party land valuations for the Atlanta, Austin, Dallas and AustinLos Angeles markets. The market values are considered to be Level 3 inputs as defined by ASC 820, Fair Value Measurement (see Note 18 for additional information on ASC 820). Intangibles associated with the purchase of real estate were allocated as follows: $3,662,000$3,257,000 to in-place lease intangibles and $115,000$104,000 to above market leases (included(both included in Other assets on the Consolidated Balance Sheets), and $385,000$403,000 to below market leases (included in Other liabilitieson the Consolidated Balance Sheets). These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition.


During 2016,2019, the Company acquired the following development-stageoperating properties: Parc NorthAirways Business Center in Ft. Worth (Dallas), Weston CommerceDenver; 385 Business Park in Weston (South Florida),Greenville; Grand Oaks 75 Business Center 1 in Tampa; and Jones Corporate ParkSiempre Viva Distribution Center 2 and Rocky Point Distribution Center 1 in San Diego. The Company also acquired the following value-add properties: Logistics Center 6 & 7 and Arlington Tech Centre 1 & 2 in Dallas; Grand Oaks 75 Business Center 2 in Tampa; Interstate Commons Distribution Center 2 in Phoenix; Southwest Commerce Center in Las Vegas.Vegas; and Rocky Point Distribution Center 2 in San Diego. At the time of acquisition, thethese value-add properties were classified as under construction or in the lease-up phase of development.

Also in 2016,or under construction phase. The total cost for the properties acquired by the Company acquired Flagler Center, a three-building business distribution complex in Jacksonville, Florida.

The properties purchased in 2016 were acquired for a total cost of $112,158,000,was $205,841,000, of which $22,228,000$105,301,000 was allocated to Real estate properties and $84,490,000$92,268,000 was allocated to Development and value-add properties. EastGroup allocated $29,164,000$46,778,000 of the total purchase price to land using third party land valuations for the Denver, Greenville, Tampa, Dallas, South Florida,Phoenix, Las Vegas and JacksonvilleSan Diego markets. Logistics Center 6 & 7 is located on land under a ground lease; therefore, no value was allocated to land for this transaction. The market values are considered to be Level 3 inputs as defined by ASC 820, Fair Value Measurement (see Note 18 for additional information on ASC 820). Intangibles associated with the purchase of real estate were allocated as follows: $10,020,000 to in-place lease intangibles and $344,000 to above market leases and $2,092,000 to below market leases. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition.

Also during 2019, EastGroup acquired 6.5 acres of operating land in San Diego for $13,386,000. In connection with the acquisition, the Company allocated value to land and below market leases. EastGroup recorded land of $13,979,000 based on third party land valuations for the San Diego market. The market values are considered to be Level 3 inputs as defined by ASC 820, Fair Value Measurement. This land, which is included in Real estate properties on the Consolidated Balance Sheets, is currently leased to a tenant that operates a parking lot on the site. The Company recorded $593,000 to below market leases in connection with this land acquisition. These costs are amortized over the remaining life of the associated lease in place at the time of acquisition.

EastGroup also acquired 41.6 acres of operating land in San Diego for $15,282,000. This land is included in Real estate properties on the Consolidated Balance Sheets. During 2019 and 2020, this land parcel was leased (on a month-to-month basis) to various tenants operating outdoor storage on the site.

During 2019, EastGroup also acquired a small parcel of land (0.5 acres) adjacent to its Yosemite Distribution Center in Milpitas (San Francisco), California, for $472,000. This land is included in Real estate properties on the Consolidated Balance Sheets.

During 2018, the Company acquired the following operating properties: Gwinnett 316 in Atlanta; Eucalyptus Distribution Center in Chino (Los Angeles); Allen Station I & II in Dallas; and Greenhill Distribution Center in Austin. The Company also acquired one value-add property, Siempre Viva Distribution Center in San Diego. At the time of acquisition, Siempre Viva was classified in the lease-up phase. The total cost for the properties acquired by the Company was $71,086,000, of which $54,537,000 was allocated to Real estate properties and $13,934,000was allocated to Development and value-add properties. EastGroup allocated $23,263,000 of the total purchase price to land using third party land valuations for the Atlanta, Dallas, Austin, San Diego and Chino (Los Angeles) markets. The market values are considered to be Level 3 inputs as defined by ASC 820.820, Fair Value Measurement (see Note 18 for additional information on ASC 820). Intangibles associated with the purchase of real estate were allocated as follows: $5,941,000$4,350,000 to in-place lease intangibles, $393,000$21,000 to above market leases and $894,000$1,756,000 to below market leases.
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


During 2015, These costs are amortized over the Company acquired Southpark Corporate Center and Springdale Business Center, both in Austin, Texas, for a total cost of $31,574,000, of which $28,648,000 was allocated to Real estate properties.  The Company allocated $5,494,000remaining lives of the total purchase price to land using third party land valuations forassociated leases in place at the Austin market.  The market values are considered to be Level 3 inputs as defined by ASC 820.  Intangibles associated with the purchasetime of real estate were allocated as follows: $3,453,000 to in-place lease intangibles and $527,000 to below market leases. acquisition.


The Company periodically reviews the recoverability of goodwill (at least annually) and the recoverability of other intangibles (on a quarterly basis) for possible impairment.  In management’s opinion, no impairment of goodwill and other intangibles existed at December 31, 20172020 and 2016.2019.


(k)Stock-Based Compensation
(k)Stock-Based Compensation
In May 2004, the stockholders of the Company approved the EastGroup Properties, Inc. 2004 Equity Incentive Plan ("(“the 2004 Plan"Plan”), which was further amended by the Board of Directors in September 2005 and December 2006.  This plan authorized the
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EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

issuance of common stock to employees in the form of options, stock appreciation rights, restricted stock, deferred stock units, performance shares, bonus stock or stock in lieu of cash compensation.


In April 2013, the Board of Directors adopted the EastGroup Properties, Inc. 2013 Equity Incentive Plan (the “2013 Equity Plan”) upon the recommendation of the Compensation Committee; the 2013 Equity Plan was approved by the Company's stockholders and became effective May 29, 2013. The 2013 Equity Plan was further amended by the Board of Directors in March 2017. The 2013 Equity Plan replaced the 2004 Plan and the 2005 Directors Equity Incentive Plan. Typically, the Company issues new shares to fulfill stock grants or upon the exercise of stock options.


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.  


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 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.


(l)Earnings Per Share
(l)Earnings Per Share
The Company applies ASC 260, Earnings Per Share, which requires companies to present basic and diluted earnings per share (EPS)(“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.


(m)Use of Estimates
(m)Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP)(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, and liabilities, and revenues and expenses
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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.


(n)Risks and Uncertainties
(n)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, as discussed below, 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.


(o)Recent Accounting Pronouncements
On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. The United States, which is where EastGroup’s properties are located, has experienced widespread infection, and there is uncertainty regarding how long the pandemic will impact the United States and the rest of the world. Unprecedented, extraordinary actions have been taken by federal, state and local governmental authorities to combat the spread of COVID-19, including issuance of “stay-at-home” directives and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail
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EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
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or cease normal operations. These measures, while intended to protect human life, have led to, and may continue to lead to, reduced economic activity in certain sectors and an increase in unemployment throughout the United States, including some markets where the Company’s properties are located. As a result, there has been, and may continue to be, a period of economic slowdown, the severity of which is uncertain. Such economic slowdown, among other disruptions caused by the COVID-19 pandemic may adversely impact EastGroup’s financial condition and results of operations and the financial condition and results of operations of the Company’s tenants.

EastGroup’s ability to lease its properties and collect rental revenues and expense reimbursements is dependent upon national, regional and local economic conditions. The potential inability to renew leases, lease vacant space or re-lease space as leases expire on favorable terms, or at all, could cause a decline in the Company’s receipt of rental payments. The Company has been in communication with a portion of its customer base regarding rent relief requests and has executed rent deferral agreements totaling $1.7 million, all of which were applicable to periods through December 31, 2020. The majority of these deferral agreements ($1.4 million of the $1.7 million) qualify under modified COVID-19-related guidance provided by the FASB for rental income to be recognized in the periods in which they were charged under the original terms of the leases. When requests were made, they were handled on a case-by-case basis, and the Company’s responses were largely dependent on its understanding of the financial strength of the customer, the operational and earnings impacts being experienced by the customer, and the customer’s ability or inability to obtain capital through debt or equity issuances, government assistance programs or by other means.
Some of the Company’s customers are experiencing a deterioration in their financial position, results of operations and cash flows; as a result, they may not be able to pay their rent and expense reimbursements, which could adversely affect EastGroup’s financial condition, results of operations and cash flows.
Federal, state and local government restrictions associated with the mitigation efforts to prevent the spread of COVID-19 could prevent EastGroup’s customers from accessing their leased space and operating their businesses; such restrictions could also impact the Company’s ability to operate its business, which may cause the business and operating results to decline or impact the Company’s ability to comply with regulatory obligations leading to reputational harm and regulatory issues or fines. Such restrictions could also inhibit the Company’s ability to lease vacant space in its operating portfolio and its development and value-add program. In addition, government restrictions could prevent construction of tenant improvements and development projects, which could delay construction completion and lease commencement dates. In each case, EastGroup may experience an adverse impact on its financial condition and results of operations.
The economic uncertainty surrounding the COVID-19 pandemic has caused and may continue to cause disruption and instability in the financial markets and may impact EastGroup’s ability to raise capital from debt and equity markets on favorable terms or at all.
The health and well-being of EastGroup’s customers, employees, directors and other stakeholders is of great importance to the Company. The Company is striving to accommodate flexible working arrangements for its employees to ensure the health and safety of its team, while employees are continuing to perform job duties and provide services to the Company’s customers and other stakeholders. There are risks associated with remote working arrangements, including, but not limited to, risks related to cyber-security. EastGroup is continuing to monitor and adhere to federal, state and local government guidelines regarding its work arrangements with the goal of preventing the spread of COVID-19 to the Company’s workforce, customers and communities. There are risks and uncertainties related to the health of the Company’s employees and directors; any potential deterioration of the health of key personnel could impact EastGroup’s business operations.

The ongoing COVID-19 pandemic and the current economic, financial and capital markets environment present material risks and uncertainties for the Company. However, the rapid development and fluidity of the situation precludes any prediction as to the ultimate impact COVID-19 will have on EastGroup’s business, financial condition, results of operations and cash flows, which will depend largely on future developments directly or indirectly relating to the duration and scope of the COVID-19 pandemic in the United States.

(o)Recent Accounting Pronouncements
EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that the following ASUs apply to the Company.


In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The FASB issued further guidance in ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, that provides clarifying guidance in certain narrow areas and adds some practical expedients. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The effective date of ASU 2014-09 was extended by one year by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The new standard was effective for the Company on January 1, 2018, and the Company is using the modified retrospective approach upon adoption. The Company has made significant progress in evaluating the effect of ASU 2014-09 on its consolidated financial statements and related disclosures beginning with the Form 10-Q for the period ending March 31, 2018. The Company has completed its inventory of its sources of revenue and does not believe there will be a material financial statement impact or that its pattern of revenue recognition will be materially impacted by the adoption of ASU 2014-09.

In JanuaryJune 2016, the FASB issued ASU 2016-01, 2016-13, Financial Instruments - Overall (Subtopic 825-10)— Credit Losses (Topic 326): Recognition and Measurement of Credit Losses on Financial Assets Instruments, and subsequently issued ASU 2018-19, Codification Improvements to Topic 326, Financial Liabilities,which requires public business entities to use the exit price notion when measuring the fair value of financial instrumentsInstruments — Credit Losses in November 2018. The ASUs amend guidance on reporting credit losses for disclosure purposes, requires separate presentation of financial assets held at amortized cost basis and financial liabilities by measurement category and form of financial asset, andavailable for sale debt securities. For assets held at amortized cost, Topic 326 eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized costs on the balance sheet. EastGroup adopted ASU 2016-01 effective January 1, 2018. The Company does not anticipate the adoption of ASU 2016-01 will have a material impact on the Company's financial condition or results of operations.probable

60
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The Company is a lessee on a limited number of leases, including office and ground leases, and while the adoption of ASU 2016-02 will impact the Company's accounting for office and ground leases, the Company anticipates the impact will not be material to its overall financial condition and results of operations. Lessor accounting is largely unchanged under ASU 2016-02. The Company's primary revenue is rental income; as such, the Company is a lessor on a significant number of leases. The Company is continuing to evaluate the potential impacts of the ASU and believes it will continue to account for its leases in substantially the same manner. The most significant changes for the Company related to lessor accounting include bifurcating its revenue into lease and non-lease components and the new standard's narrow definition of initial direct costs for leases. The new definition will result in certain costs (primarily legal costs related to lease negotiations) being expensed rather than capitalized upon adoption of the new standard. Public business entities are required to apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. EastGroup plans to adopt ASU 2016-02 effective January 1, 2019. The Company is continuing the process of evaluating and quantifying the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures beginning with the Form 10-Q for the period ending March 31, 2019.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU is intended to improve the accounting for share-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment awards are simplified with the ASU, including income tax consequences, classification of awards as equity or liabilities and classification on the Consolidated Statements of Cash Flows. ASU 2016-09 is effective for public business entities for annual periods beginning after December 15, 2016, and interim periods within those fiscal years; early adoption is permitted. EastGroup adopted ASU 2016-09 effective January 1, 2017. As a result, the Company elected to reverse compensation cost of any forfeited awards when they occur and will continue to classify the cash flows resulting from remitting cash to the tax authorities for the payment of taxes on the vesting of share-based payment awards as a financing activity on the Consolidated Statements of Cash
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Flows. In addition, upon vestinginitial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of share-based payments,all expected credit losses. For available for sale debt securities (EastGroup does not currently hold any and does not intend to hold any in the Company will withhold upfuture), credit losses should be measured in a similar manner to the maximum individual statutory tax ratecurrent GAAP; however, Topic 326 requires that credit losses be presented as an allowance rather than a write-down. The ASUs affect entities holding financial assets and classify the entire award as equity. The adoption of ASU 2016-09 did not have a material impact on the Company's financial condition or results of operations.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses certain cash flow issues, including how debt prepayments or debt extinguishment costs and distributions received from equity method investees are presented. ASU 2016-15 is effective for public business entities for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, and the Company has adopted ASU 2016-15 effective January 1, 2017. The adoption of ASU 2016-15 did not have a material impact on the Company's financial condition or results of operations.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU is intended to provide a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the new guidance, companies are required to utilize an initial screening test to determine whether substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. The Company has determined that some of its real estate property acquisitions may be considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business. EastGroup adopted ASU 2017-01 for transactions beginning on October 1, 2016. As a result, the Company has capitalized acquisition costs related to its 2017 and fourth quarter 2016 acquisitions as they were determined not to be acquisitions of a business.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the measurement of goodwill impairment by eliminating the requirement of performing a hypothetical purchase price allocation to measure goodwill impairment. The Company adopted ASU 2017-04 effective January 1, 2017, and is applying the new guidance for goodwill impairment tests with measurement dates after January 1, 2017. The adoption of ASU 2017-04 did not have a material impact on the Company's financial condition or results of operations.
In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies what constitutes a modification of a share-based payment award. The ASU is intended to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. ASU 2017-09 is effective for public entities for annual periods beginning after December 15, 2017,2019, and interim periods within those fiscal years. The Company adopted ASU 2017-092016-13 and ASU 2018-19 on January 1, 2018,2020, and it does not anticipate that the adoption of ASU 2017-09 willdid not have a material impact on its financial condition, or results of operations as the Company does not expect to have any modifications to share-based payment awards. However, if the Company does have a modification to an award in the future, it will follow the guidance in ASU 2017-09.or disclosures.
In August 2017,2018, the FASB issued ASU 2017-12, Derivatives and Hedging2018-13, Fair Value Measurement (Topic 815)820): Targeted ImprovementsDisclosure Framework - Changes to Accountingthe Disclosure Requirements for Hedging Activities.Fair Value Measurement. The ASU is intended to better align a company's financial reporting for hedging activities withimprove the economic objectiveseffectiveness of those activities. The transition method is a modified retrospective approach that will require the Company to recognize the cumulative effect of initially applying thefair value measurement disclosures. ASU as an adjustment to Accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year the entity adopts the ASU. The primary provision in the ASU that will require an adjustment to beginning retained earnings is the change in timing and income statement presentation for ineffectiveness related to cash flow and net investment hedges. As a result of the transition guidance in the ASU, cumulative ineffectiveness that has previously been recognized on cash flow and net investment hedges that are still outstanding and designated as of the date of adoption will be adjusted and removed from beginning retained earnings and placed in Accumulated other comprehensive income. ASU 2017-122018-13 is effective for public businessall entities for annual periods beginning after December 15, 2018,2019, and interim periods within those fiscal years. Early adoption is permitted; however, theThe Company plans to adoptadopted ASU 2017-122018-13 on January 1, 2019. While the Company continues to assess all potential impacts of ASU 2017-12, it does not expect2020, and the adoption todid not have a material impact on the Company'sits financial condition, or results of operations.operations or disclosures.
(p)Classification of Book Overdraft on Consolidated Statements of Cash Flows
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. During the three months ended March 31, 2020, 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.
(p)Classification of Book Overdraft on Consolidated Statements of Cash Flows
The Company classifies changes in book overdraft in which the bank has not advanced cash to the Company to cover outstanding checks as an operating activity. Such amounts are included in Accounts payable, accrued expenses and prepaid rent in the Operating Activities section on the Consolidated Statements of Cash Flows.

(q)Reclassifications
Certain reclassifications have been made in the 2016 and 2015 consolidated financial statements to conform to the 2017 presentation.


EASTGROUP(2)REAL ESTATE PROPERTIES INC. AND SUBSIDIARIESDEVELOPMENT AND VALUE-ADD PROPERTIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(2)REAL ESTATE PROPERTIES

The Company’s Real estate properties and Development and value-add properties at December 31, 20172020 and 20162019 were as follows:
 December 31,
20202019
(In thousands)
Real estate properties:  
   Land                                                                  $502,739 452,698 
   Buildings and building improvements                                                                  2,120,731 1,907,963 
   Tenant and other improvements                                                                  524,954 471,909 
   Right of use assets — Ground leases (operating) (1)
11,073 11,997 
Development and value-add properties (2)                                                              
359,588 419,999 
 3,519,085 3,264,566 
   Less accumulated depreciation                                                                  (955,328)(871,139)
 $2,563,757 2,393,427 
 December 31,
2017 2016
(In thousands)
Real estate properties:   
   Land                                                                  $345,424
 308,931
   Buildings and building improvements                                                                  1,587,130
 1,435,309
   Tenant and other improvements                                                                  402,905
 368,833
Development                                                                  242,014
 293,908
 2,577,473
 2,406,981
   Less accumulated depreciation                                                                  (749,601) (694,250)
 $1,827,872
 1,712,731


(1)See Ground Leases discussion below for information regarding the Company's right of use assets for ground leases.
(2)Value-add properties are defined 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.


EastGroup acquired operating properties during 2017, 20162020, 2019 and 20152018 as discussed in Note 1(j).


In 2017, Eastgroup sold Stemmons Circle and Techway Southwest I-IV.

In 2016, theThe Company sold operating properties during 2020, 2019 and 2018 as shown in the following operating properties: Northwest Point Distribution and Service Centers, North Stemmons II and III, America Plaza, Lockwood Distribution Center, West Loop Distribution Center 1 & 2, two of its four Interstate Commons Distribution Center buildings, Castilian Research Center and Memphis I.

In 2015, the Company sold one operating property, the last of its three Ambassador Row Warehouses.
table below. The results of operations and gains and losses on sales for the properties sold during the periods presented are reported in continuing operations on the
61
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Income and Comprehensive Income. The gains and losses on sales are included in Gain net of loss, on sales of real estate investments.


The Company did not classify any properties as held for sale as of December 31, 20172020 and 2016.2019.


























EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Sales of Real Estate
A summary of Gain net of loss, on sales of real estate investments for the years ended December 31, 2017, 20162020, 2019 and 20152018 follows:

Real Estate PropertiesLocation
Size
(in Square Feet)
Date SoldNet Sales PriceBasisRecognized Gain
    (In thousands)
2020
University Business Center 120 (1)
Santa Barbara, CA46,000 12/01/2020$10,342 4,007 6,335 
Central GreenHouston, TX80,000 12/23/202010,168 3,358 6,810 
Total for 2020$20,510 7,365 13,145 
2019
World Houston 5Houston, TX51,000 01/29/2019$3,679 1,354 2,325 
Altamonte Commerce CenterOrlando, FL186,000 05/20/201914,423 5,342 9,081 
University Business Center 130 (2)
Santa Barbara, CA40,000 11/07/201911,083 2,729 8,354 
Southpointe Distribution CenterTucson, AZ207,000 12/03/201913,699 2,281 11,418 
University Business Center 125 & 175Santa Barbara, CA133,000 12/11/201923,675 13,785 9,890 
Total for 2019$66,559 25,491 41,068 
2018
World Houston 18Houston, TX33,000 01/26/2018$2,289 1,211 1,078 
56 Commerce ParkTampa, FL181,000 03/20/201812,032 2,888 9,144 
35th Avenue Distribution CenterPhoenix, AZ125,000 07/26/20187,683 3,632 4,051 
Total for 2018$22,004 7,731 14,273 

Real Estate Properties Location 
Size
(in Square Feet)
 Date Sold Net Sales Price Basis Recognized Gain
        (In thousands)
2017            
Stemmons Circle Dallas, TX 99,000
 05/12/2017 $5,051
 1,329
 3,722
Techway Southwest I-IV Houston, TX 415,000
 06/19/2017 32,506
 14,373
 18,133
Total for 2017       $37,557
 15,702
 21,855
2016            
Northwest Point Distribution
and Service Centers		 Houston, TX 232,000
 02/12/2016 $15,189
 5,080
 10,109
North Stemmons III Dallas, TX 60,000
 03/04/2016 3,131
 1,908
 1,223
North Stemmons II Dallas, TX 26,000
 04/12/2016 1,203
 765
 438
Lockwood Distribution Center Houston, TX 392,000
 04/18/2016 14,024
 4,154
 9,870
West Loop Distribution Center 1 & 2 Houston, TX 161,000
 04/19/2016 13,154
 3,564
 9,590
America Plaza Houston, TX 121,000
 04/28/2016 7,938
 3,378
 4,560
Interstate Commons Distribution
Center 1 & 2		 Phoenix, AZ 142,000
 05/31/2016 9,906
 3,568
 6,338
Castilian Research Center (1)
 Santa Barbara, CA 30,000
 06/28/2016 7,698
 7,513
 185
Memphis I Memphis, TN 92,000
 12/16/2016 1,482
 1,625
 (143)
Total for 2016       $73,725
 31,555
 42,170
2015            
Ambassador Row Warehouse Dallas, TX 185,000
 04/13/2015 $4,998
 2,095
 2,903
(1)EastGroup owned 80% of University Business Center 120 through a joint venture partnership. EastGroup sold its 80% share of the joint venture, and the partnership was dissolved. The information shown for this transaction represents EastGroup's 80% ownership.

(1)EastGroup owned 80% of Castilian Research Center through a joint venture. The information shown for this transaction also includes the 20% attributable to the Company's noncontrolling interest partner.

(2)EastGroup owned 80% of University Business Center 130 through a joint venture partnership. The information shown for this transaction also includes the 20% attributable to the Company's noncontrolling interest partner.

The table above includes sales of operating properties;properties. During 2020, there were no land sales; however, the Company also sold parcels of land during the years presented.2019 and 2018. During the year ended December 31, 2017,2019, the Company sold parcels(through eminent domain procedures) a small parcel of land (0.2 acres) in El Paso and DallasSan Diego for total gross proceeds of $3,778,000$185,000 and recognized a net gain on the sale of $293,000.$83,000. During the year ended December 31, 2016,2018, EastGroup sold parcelsa parcel of land in Houston Dallas and Orlando for $5,400,000$2,577,000 and recognized a gain on the sale of $733,000. During the year ended December 31, 2015, the Company sold a small parcel of land in New Orleans for $170,000 and recognized a gain of $123,000.$86,000. The net gains on sales of land are included in Other on the Consolidated Statements of Income and Comprehensive Income.


Development and Value-Add Properties
The Company’s development and value-add program as of December 31, 2017,2020, was comprised of the properties detailed in the table below.  Costs incurred include capitalization of interest costs during the period of construction.  The interest costs capitalized on development propertiesprojects for 20172020 were $5,765,000$9,651,000 compared to $5,340,000$8,453,000 for 20162019 and $5,257,000$6,334,000 for 2015.2018. In addition, EastGroup capitalized internal development costs of $4,754,000$6,689,000 during the year ended December 31, 2017,2020, compared to $3,789,000$6,918,000 during 20162019 and $4,467,000$4,696,000 in 2015.2018.


Total capital invested for development and value-add properties during 20172020 was $124,938,000,$195,446,000, which primarily consisted of costs of $93,395,000 and $14,819,000$170,418,000 as detailed in the Development and Value-Add Properties Activity table below, $18,550,000 as detailed in the Development and Value-Add Properties Transferred to the Real Estate Properties Portfolio During 2020 table below and costs of $12,811,000$5,743,000 on development propertiesprojects subsequent to transfer to Real estate properties. The capitalized costs incurred on development propertiesprojects subsequent to transfer to Real estate properties include capital improvements at the properties and do not include other capitalized costs associated with development (i.e., interest expense, property taxes and internal personnel costs).


62
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




DEVELOPMENT AND
VALUE-ADD PROPERTIES ACTIVITY		 Costs Incurred Anticipated Building Conversion Date
Costs
Transferred
 in 2020 (1)
For the
Year Ended
12/31/20		Cumulative
as of
12/31/20
Projected
Total Costs (2)
 (In thousands)
(Unaudited)(Unaudited)(Unaudited)
LEASE-UPBuilding Size (Square feet)    
Gilbert Crossroads A & B, Phoenix, AZ140,000 $0 2,818 16,768 17,500 01/21
Rancho Distribution Center, Los Angeles, CA (3)
162,000 0 27,325 27,325 29,400 03/21
CreekView 121 7 & 8, Dallas, TX137,000 0 9,760 16,559 18,500 04/21
Hurricane Shoals 3, Atlanta, GA101,000 0 2,182 8,811 10,800 04/21
World Houston 44, Houston, TX134,000 0 3,336 8,126 9,100 05/21
Gateway 4, Miami, FL197,000 14,895 7,152 22,047 26,000 06/21
Interstate Commons 2, Phoenix, AZ (3)
142,000 0 2,359 12,241 12,500 06/21
Tri-County Crossing 3 & 4, San Antonio, TX203,000 0 5,711 14,409 16,100 06/21
Northwest Crossing 1-3, Houston, TX278,000 0 10,787 22,322 25,900 09/21
Ridgeview 1 & 2, San Antonio, TX226,000 0 10,562 17,093 19,000 10/21
Settlers Crossing 3 & 4, Austin, TX173,000 0 9,415 17,504 19,400 10/21
SunCoast 7, Ft. Myers, FL77,000 3,232 4,141 7,373 8,700 11/21
LakePort 1-3, Dallas, TX194,000 0 11,719 19,781 22,500 12/21
Total Lease-Up2,164,000 18,127 107,267 210,359 235,400 
UNDER CONSTRUCTION     
Gilbert Crossroads C & D, Phoenix, AZ178,000 4,974 1,643 6,617 21,400 06/22
Steele Creek X, Charlotte, NC162,000 3,291 943 4,234 12,600 07/22
Basswood 1 & 2, Dallas, TX237,000 4,580 174 4,754 22,100 10/22
Total Under Construction577,000 12,845 2,760 15,605 56,100 
PROSPECTIVE DEVELOPMENT (PRIMARILY LAND)Estimated Building Size (Square feet)    
Phoenix, AZ0 (4,974)601 0 
Ft. Myers, FL622,000 (3,232)3,595 7,866 
Miami, FL376,000 (14,895)1,006 20,296 
Orlando, FL1,488,000 0 26,603 27,678 
Tampa, FL (4)
349,000 0 (78)5,723 
Atlanta, GA120,000 0 1,392 1,392 
Jackson, MS28,000 0 0 706 
Charlotte, NC313,000 (3,291)289 4,325 
Dallas, TX1,353,000 (4,580)22,420 37,428 
El Paso, TX168,000 0 2,587 2,587 
Houston, TX1,223,000 0 1,310 20,758 
San Antonio, TX366,000 0 666 4,865 
Total Prospective Development6,406,000 (30,972)60,391 133,624 
Total Development and Value-Add Properties9,147,000 $0 170,418 359,588 
The Development and Value-Add Properties Activity table is continued on the following page.
63
DEVELOPMENT ACTIVITY   Costs Incurred   Anticipated Building Conversion Date
   
Costs
Transferred
 in 2017 (1)
 
For the
Year Ended
12/31/17
 
Cumulative
as of
12/31/17
 
Estimated
Total Costs (2)
 
    (In thousands)  
  (Unaudited)       (Unaudited) (Unaudited)
LEASE-UP Building Size (Square feet)          
Alamo Ridge IV, San Antonio, TX 97,000
 $—
 2,152
 7,097
 8,300
 03/18
Weston, Ft. Lauderdale, FL (3)
 134,000
 —
 1,239
 15,520
 16,000
 03/18
Oak Creek VII, Tampa, FL 116,000
 2,153
 3,978
 6,131
 7,500
 04/18
Progress Center 1 & 2, Atlanta, GA (4)
 132,000
 —
 10,333
 10,333
 11,100
 04/18
Eisenhauer Point 3, San Antonio, TX 71,000
 —
 3,411
 6,159
 6,800
 06/18
SunCoast 4, Ft. Myers, FL 93,000
 —
 2,865
 9,120
 10,000
 06/18
Steele Creek VII, Charlotte, NC 120,000
 2,393
 5,404
 7,797
 8,600
 09/18
Horizon XII, Orlando, FL 140,000
 3,825
 7,405
 11,230
 12,100
 12/18
Total Lease-Up 903,000
 8,371
 36,787
 73,387
 80,400
  
UNDER CONSTRUCTION  
  
  
  
  
  
Country Club V, Tucson, AZ 300,000
 —
 10,656
 13,951
 24,200
 04/18
Kyrene 202 III, IV & V, Phoenix, AZ 166,000
 2,280
 9,263
 11,543
 13,800
 02/19
CreekView 121 3 & 4, Dallas, TX 158,000
 3,701
 6,610
 10,311
 14,200
 03/19
Eisenhauer Point 5, San Antonio, TX 98,000
 1,253
 4,551
 5,804
 7,500
 03/19
Eisenhauer Point 6, San Antonio, TX 85,000
 878
 3,172
 4,050
 5,200
 03/19
Horizon X, Orlando, FL 104,000
 2,101
 1,449
 3,550
 8,000
 04/19
Falcon Field, Phoenix, AZ 96,000
 1,733
 1,214
 2,947
 9,000
 05/19
Airport Commerce Center 3, Charlotte, NC 96,000
 1,653
 80
 1,733
 7,300
 07/19
Settlers Crossing 1, Austin, TX 77,000
 1,494
 62
 1,556
 7,400
 10/19
Settlers Crossing 2, Austin, TX 83,000
 1,606
 67
 1,673
 8,000
 10/19
Total Under Construction 1,263,000
 16,699
 37,124
 57,118
 104,600
  
PROSPECTIVE DEVELOPMENT (PRIMARILY LAND) Estimated Building Size (Square feet)  
  
  
  
  
Phoenix, AZ —
 (4,013) 120
 —
    
Tucson, AZ (5)
 —
 —
 (417) —
    
Ft. Myers, FL 570,000
 —
 469
 14,112
    
Miami, FL 850,000
 —
 3,632
 30,876
    
Orlando, FL 418,000
 (5,926) 917
 11,120
    
Tampa, FL 32,000
 (2,153) 32
 1,560
    
Atlanta, GA 196,000
 —
 1,207
 1,207
    
Jackson, MS 28,000
 —
 —
 706
    
Charlotte, NC 655,000
 (4,046) 1,472
 6,729
    
Austin, TX 180,000
 (3,100) 6,120
 3,020
    
Dallas, TX 491,000
 (3,701) 975
 9,596
    
El Paso, TX (6)
 —
 —
 (2,444) —
    
Houston, TX (7)
 1,476,000
 —
 (184) 21,190
    
San Antonio, TX 965,000
 (2,131) 7,585
 11,393
    
Total Prospective Development 5,861,000
 (25,070) 19,484
 111,509
    
  8,027,000
 $—
 93,395
 242,014
    
COMPLETED DEVELOPMENT AND TRANSFERRED TO REAL ESTATE PROPERTIES DURING 2017 Building Size (Square feet)  
  
  
  
 Building Conversion Date
Eisenhauer Point 1 & 2, San Antonio, TX 201,000
 $—
 19
 15,795
   01/17
South 35th Avenue, Phoenix, AZ (8)
 125,000
 —
 —
 1,664
  ��01/17
Alamo Ridge III, San Antonio, TX 135,000
 —
 28
 10,587
   02/17
Parc North 1-4, Dallas, TX (9)
 446,000
 —
 132
 32,252
   02/17
Madison IV & V, Tampa, FL 145,000
 —
 549
 8,074
   03/17
Jones Corporate Park, Las Vegas, NV (10)
 416,000
 —
 275
 39,815
   04/17
Steele Creek VI, Charlotte, NC 137,000
 —
 519
 7,525
   04/17
Ten Sky Harbor, Phoenix, AZ 64,000
 —
 100
 5,365
   04/17
Horizon V, Orlando, FL 141,000
 —
 4,814
 9,249
   05/17
Horizon VII, Orlando, FL 109,000
 —
 1,375
 8,266
   06/17
Eisenhauer Point 4, San Antonio, TX 85,000
 —
 2,544
 5,197
   07/17
CreekView 121 1 & 2, Dallas, TX 193,000
 —
 4,464
 16,319
   08/17
Total Transferred to Real Estate Properties 2,197,000
 $—
 14,819
 160,108
 
(11) 
  


Footnotes for the Development Activity table are on the following page.
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



DEVELOPMENT AND VALUE-ADD PROPERTIES TRANSFERRED TO THE REAL ESTATE PROPERTIES PORTFOLIO DURING 2020 Costs Incurred 
Costs
Transferred
 in 2020 (1)
For the
Year Ended
12/31/20		Cumulative
as of
12/31/20
(Unaudited)(In thousands)(Unaudited)
Building Size (Square feet)Building Conversion Date
 
Logistics Center 6 & 7, Dallas, TX (3)
142,000 $0 19 15,754 01/20
Settlers Crossing 1, Austin, TX77,000 0 0 9,259 01/20
Settlers Crossing 2, Austin, TX83,000 0 0 8,475 01/20
Parc North 5, Dallas, TX100,000 0 20 8,709 02/20
Airport Commerce Center 3, Charlotte, NC96,000 0 335 8,891 03/20
Horizon VIII & IX, Orlando, FL216,000 0 887 17,488 04/20
Ten West Crossing 8, Houston, TX132,000 0 67 9,831 04/20
Tri-County Crossing 1 & 2, San Antonio, TX203,000 0 189 15,575 04/20
SunCoast 8, Ft. Myers, FL77,000 0 3,665 8,149 05/20
CreekView 121 5 & 6, Dallas, TX139,000 0 2,112 15,263 06/20
Parc North 6, Dallas, TX96,000 0 2,451 10,741 07/20
SunCoast 6, Ft. Myers, FL81,000 0 445 8,379 07/20
Arlington Tech Centre 1 & 2, Dallas, TX (3)
151,000 0 578 13,855 08/20
Gateway 5, Miami, FL187,000 0 1,664 24,769 08/20
Steele Creek IX, Charlotte, NC125,000 0 1,986 11,106 08/20
Grand Oaks 75 2, Tampa, FL (3)
150,000 0 1,777 14,892 09/20
Rocky Point 2, San Diego, CA (3)
109,000 0 583 19,858 09/20
Southwest Commerce Center, Las Vegas, NV (3)
196,000 0 1,772 28,385 10/20
Total Transferred to Real Estate Properties2,360,000 $0 18,550 249,379 (5)

(1)Represents costs transferred from Prospective Development (primarily land) to Under Construction during the period. Negative amounts represent land inventory costs transferred to Under Construction.
(2)Included in these costs are development obligations of $29.0 million and tenant improvement obligations of $5.8 million on properties under development.
(3)This project was acquired by EastGroup on 11/1/16 and underwent redevelopment.
(4)This project was acquired by EastGroup on 12/12/17 during the lease-up phase.
(5)Negative amount represents land inventory costs transferred to Real Estate Properties for storage yard and parking lot expansion.
(6)Negative amount represents land sold on 11/3/17.
(7)Negative amount represents West Road retention ponds and infrastructure conveyed to West Harris County Municipal Utility District.
(8)This property was redeveloped from a manufacturing building to a multi-tenant distribution building.
(9)This project was acquired by EastGroup on 7/8/16 during the lease-up phase.
(10)This project was acquired by EastGroup on 11/15/16 during the lease-up phase.
(11)Represents cumulative costs at the date of transfer.




Future Minimum Rental Receipts(1)Represents costs transferred from Prospective Development (primarily land) to Under Non-CancelableConstruction during the period. Negative amounts represent land inventory costs transferred to Under Construction.
(2)Included in these costs are development obligations of $33.0 million and tenant improvement obligations of $4.9 million on properties under development.
(3)Represents value-add projects acquired by EastGroup.
(4)Negative amount represents land inventory transferred to Real Estate Properties for trailer storage expansion.
(5)Represents cumulative costs at the date of transfer.


Ground Leases
On January 1, 2019, EastGroup adopted the principles of FASB ASC 842, Leases, and its related ASUs. In connection with the adoption, the Company recorded right of use assets for its ground leases, which are classified as operating leases, using the effective date transition option; under this option, prior years are not restated. As of January 1, 2019, the Company recorded right of use assets for its ground leases of $10,226,000. In April 2019, the Company acquired Logistics Center 6 & 7 in Dallas, which is located on land under a ground lease. The following schedule indicates approximate future minimum rental receipts under non-cancelableCompany recorded a right of use asset of $2,679,000 in connection with this acquisition. There were no new ground leases for real estate properties by year asin 2020. As of December 31, 2017:2020 and 2019, the unamortized balances of the Company’s right of use assets for its ground leases were $11,073,000 and $11,997,000, respectively. The right of use assets for ground leases are included in Real estate properties on the Consolidated Balance Sheets.
Years Ending December 31, (In thousands)
2018 $204,614
2019 177,110
2020 139,791
2021 100,559
2022 74,092
Thereafter                                                   147,960
   Total minimum receipts                                                   $844,126
Ground Leases
As of December 31, 2017,2020 and 2019, the Company owned twooperated 2 properties in Florida, two3 properties in Texas and one1 property in Arizona that are subject to ground leases.  These leases have terms of 40 to 50 years, expiration dates of August 2031 to November 2037,October 2058, and renewal options of 15 to 35 years, except for the one lease in Arizona which is automatically and perpetually renewed annually.  The Company has included renewal options in the lease terms for calculating the ground lease assets and liabilities as the Company is reasonably certain it will exercise these options. Total ground lease expenditures for the years ended December 31, 2017, 20162020, 2019 and 20152018 were $760,000, $756,000$1,051,000, $966,000 and $756,000,$783,000, respectively.  Payments are subject to increases at 3 to 10 year intervals based upon the agreed or appraised fair market value of the leased premises on the adjustment date or the Consumer Price Index percentage increase since the base rent date.  These future changes in payments will be considered variable payments and will not impact the assessment of the asset or liability unless there is a significant event that triggers reassessment, such as amendment with a change in the terms of the lease. The weighted-average remaining lease term as of December 31, 2020, for the ground leases is 42 years.


64
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following schedule indicates approximate future minimum ground lease payments for these properties by year as of December 31, 2017:2020:


Future Minimum Ground Lease Payments as of December 31, 2020
Years Ending December 31,(In thousands)
2021$970 
2022970 
2023975 
2024999 
2025999 
Thereafter                                                  37,917 
   Total minimum payments                                                  42,830 
Imputed interest (1)
(31,631)
   Total ground leases                                                  $11,199 

(1)As the Company’s leases do not provide an implicit rate, in order to calculate the present value of the remaining ground lease payments, the Company used its incremental borrowing rate, adjusted for a number of factors, including the long-term nature of the ground leases, the Company’s estimated borrowing costs, and the estimated fair value of the underlying land, to determine the imputed interest for its ground leases. The Company elected to use the portfolio approach as all of its ground leases in place as of January 1, 2019, have similar characteristics and determined 7.3% as the appropriate rate as of January 1, 2019, for all leases in place at that time. For the ground lease obtained during April 2019, the Company used its incremental borrowing rate, adjusted for the factors discussed above, which was determined to be 8.0%.


(3)UNCONSOLIDATED INVESTMENT
Years Ending December 31, (In thousands)
2018 $761
2019 761
2020 761
2021 761
2022 761
Thereafter                                                   9,729
   Total minimum payments                                                   $13,534

(3)UNCONSOLIDATED INVESTMENT


The Company owns a 50% undivided tenant-in-common interest in Industry Distribution Center II, a 309,000 square foot warehouse distribution building in the City of Industry (Los Angeles), California.  The building was constructed in 1998 and is 100% leased through December 20182021 to a single tenant who owns the other 50% interest in the property.  This investment is accounted for under the equity method of accounting and had a carrying value of $8,029,000$7,446,000 at December 31, 2017,2020, and $7,681,000$7,805,000 at December 31, 2016.2019.  

(4)MORTGAGE LOANS RECEIVABLE

As of December 31, 2019, the Company had one mortgage loan receivable which was classified as a first mortgage loan with an effective interest rate of 5.15% and a maturity date in December 2022. The Company's mortgage loan receivable was fully collected during the year ended December 31, 2020. Mortgage loans receivable are included in Other assets on the Consolidated Balance Sheets. See Note 5 for a summary of Other assets.   

65
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(5)OTHER ASSETS



(4)MORTGAGE LOANS RECEIVABLE

As of December 31, 2016, the Company had two mortgage loans receivable, both of which were classified as first mortgage loans, with effective interest rates of 5.25% and maturity dates in October 2017. During 2017, the loan agreements were amended and restated. As of December 31, 2017, EastGroup had two mortgage loans receivable, both of which were classified as first mortgage loans, with effective interest rates of 5.15% and maturity dates in December 2022. Mortgage loans receivable are included in Other assets on the Consolidated Balance Sheets. See Note 5 for a summary of Other assets.   

(5)OTHER ASSETS

A summary of the Company’s Other assets follows:
December 31, December 31,
2017 201620202019
(In thousands)(In thousands)
Leasing costs (principally commissions) $72,722
 65,521
Leasing costs (principally commissions) $95,914 89,191 
Accumulated amortization of leasing costs (27,973) (26,340)Accumulated amortization of leasing costs (38,371)(34,963)
Leasing costs (principally commissions), net of accumulated amortization44,749
 39,181
Leasing costs (principally commissions), net of accumulated amortization57,543 54,228 
   
Straight-line rents receivable 31,609
 28,369
Allowance for doubtful accounts on straight-line rents receivable(48) (76)
Straight-line rents receivable, net of allowance for doubtful accounts31,561
 28,293
   
Accounts receivable 6,004
 6,824
Allowance for doubtful accounts on accounts receivable(577) (809)
Accounts receivable, net of allowance for doubtful accounts5,427
 6,015
   
Acquired in-place lease intangibles 20,690
 21,231
Acquired in-place lease intangibles 28,107 28,834 
Accumulated amortization of acquired in-place lease intangibles(8,974) (8,642)Accumulated amortization of acquired in-place lease intangibles(13,554)(11,918)
Acquired in-place lease intangibles, net of accumulated amortization11,716
 12,589
Acquired in-place lease intangibles, net of accumulated amortization14,553 16,916 
   
Acquired above market lease intangibles 1,550
 1,594
Acquired above market lease intangibles 1,825 1,721 
Accumulated amortization of acquired above market lease intangibles(794) (736)Accumulated amortization of acquired above market lease intangibles(1,231)(1,007)
Acquired above market lease intangibles, net of accumulated amortization756
 858
Acquired above market lease intangibles, net of accumulated amortization594 714 
   
Straight-line rents receivable Straight-line rents receivable 43,079 40,369 
Accounts receivable Accounts receivable 6,256 5,581 
Mortgage loans receivable 4,581
 4,752
Mortgage loans receivable 0 1,679 
Interest rate swap assets6,034
 4,546
Interest rate swap assets0 3,485 
Right of use assets - Office leases (operating)Right of use assets - Office leases (operating)2,131 2,115 
Receivable for common stock offeringsReceivable for common stock offerings1,942 0 
Goodwill 990
 990
Goodwill 990 990 
Prepaid expenses and other assets 11,490
 7,606
Prepaid expenses and other assets 22,491 18,545 
Total Other assets
$117,304
 104,830
Total Other assets
$149,579 144,622 


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(6)UNSECURED BANK CREDIT FACILITIES

(6)UNSECURED BANK CREDIT FACILITIES


EastGroupThe Company has a $300$350 million unsecured revolvingbank credit facility with a group of nine banks that matures in9 banks; the facility has a maturity date of July 2019.30, 2022. The credit facility contains options for a one-year extensiontwo six-month extensions (at the Company's election) and a $150 million expansionaccordion (with agreement by all parties). The interest rate on each tranche is usually reset on a monthly basis and as of December 31, 2017,2020, was LIBOR plus 100 basis points with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company's credit ratings. The Company has designated an interest rate swap to an $80 million unsecured bank credit facility draw that effectively fixes the interest rate on the $80 million draw to 2.020% through the interest rate swap's maturity date of August 15, 2018.  As of December 31, 2017, EastGroup2020, the Company had an additional $110,000,000$125,000,000 of variable rate borrowings outstanding on this unsecured bank credit facility with a weighted average interest rate of 2.528%1.152%. The Company has a standby letter of credit of $674,000 pledged on this facility.

The Company also has a $35$45 million unsecured revolvingbank credit facility that matures inwith a maturity date of July 2019. This credit facility automatically extends for one year30, 2022, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension optionoptions in the $300$350 million revolving credit facility isare exercised. The interest rate is reset on a daily basis and as of December 31, 2017,2020, was LIBOR plus 100 basis points with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company's credit ratings. AtAs of December 31, 2017,2020, the interest rate was 2.564% on a balance of $6,339,000.1.144% with 0 outstanding balance.


Average unsecured bank credit facilities borrowings were $114,751,000$87,095,000 in 2017, $106,352,0002020, $172,175,000 in 20162019 and $109,777,000$141,223,000 in 2015,2018, with weighted average interest rates (excluding amortization of facility fees and debt issuance costs) of 2.07%1.86% in 2017, 1.49%2020, 3.34% in 20162019 and 1.29%2.64% in 2015.2018.  Amortization of facility fees was $670,000, $670,000$790,000, $790,000 and $608,000$736,000 for 2017, 20162020, 2019 and 2015,2018, respectively.  Amortization of debt issuance costs for the Company's unsecured bank credit facilities was $451,000, $450,000$561,000, $556,000 and $493,000$508,000 for 2017, 20162020, 2019 and 2015,2018, respectively.


66
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s unsecured bank credit facilities have certain restrictive covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial debt covenants at December 31, 2017.2020.


See Note 7 for a detail of the outstanding balances of the Company's Unsecured bank credit facilities as of December 31, 20172020 and 2016.2019.


(7)UNSECURED AND SECURED DEBT

(7)UNSECURED AND SECURED DEBT

The Company's debt is detailed below. EastGroup presents debt issuance costs as reductions of Unsecured bank credit facilities, Unsecured debt and Secured debt on the Consolidated Balance Sheets as detailed below.
December 31,
 20202019
 (In thousands)
Unsecured bank credit facilities - variable rate, carrying amount$125,000 112,710 
Unamortized debt issuance costs(806)(1,316)
Unsecured bank credit facilities124,194 111,394 
Unsecured debt - fixed rate, carrying amount (1)
1,110,000 940,000 
Unamortized debt issuance costs(2,292)(1,885)
Unsecured debt1,107,708 938,115 
Secured debt - fixed rate, carrying amount (1)
79,096 133,422 
Unamortized debt issuance costs(103)(329)
Secured debt78,993 133,093 
Total debt$1,310,895 1,182,602 

(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.


























67
 December 31,
2017		 December 31,
2016
 (In thousands)
Unsecured bank credit facilities - variable rate, carrying amount$116,339
 112,020
Unsecured bank credit facilities - fixed rate, carrying amount (1)
80,000
 80,000
Unamortized debt issuance costs(630) (1,030)
Unsecured bank credit facilities195,709
 190,990
    
Unsecured debt - fixed rate, carrying amount (1)
715,000
 655,000
Unamortized debt issuance costs(1,939) (2,162)
Unsecured debt713,061
 652,838
    
Secured debt - fixed rate, carrying amount (1)
200,354
 258,594
Unamortized debt issuance costs(842) (1,089)
Secured debt199,512
 257,505
    
Total debt$1,108,282
 1,101,333

(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





A summary of the carrying amount of Unsecured debt follows:
Balance at December 31,
Margin Above LIBORInterest RateMaturity Date20202019
(In thousands)
$75 Million Unsecured Term Loan (1)
1.10%3.45%12/20/2020$0 75,000 
$40 Million Unsecured Term Loan (1)
1.10%2.34%07/30/202140,000 40,000 
$75 Million Unsecured Term Loan (1)
1.40%3.03%02/28/202275,000 75,000 
$65 Million Unsecured Term Loan (1)
1.10%2.31%04/01/202365,000 65,000 
$100 Million Senior Unsecured Notes:
     $30 Million NotesNot applicable3.80%08/28/20200 30,000 
     $50 Million NotesNot applicable3.80%08/28/202350,000 50,000 
     $20 Million NotesNot applicable3.80%08/28/202520,000 20,000 
$60 Million Senior Unsecured NotesNot applicable3.46%12/13/202460,000 60,000 
$100 Million Senior Unsecured Notes:
     $60 Million NotesNot applicable3.48%12/15/202460,000 60,000 
     $40 Million NotesNot applicable3.75%12/15/202640,000 40,000 
$25 Million Senior Unsecured NotesNot applicable3.97%10/01/202525,000 25,000 
$50 Million Senior Unsecured NotesNot applicable3.99%10/07/202550,000 50,000 
$60 Million Senior Unsecured NotesNot applicable3.93%04/10/202860,000 60,000 
$80 Million Senior Unsecured NotesNot applicable4.27%03/28/202980,000 80,000 
$35 Million Senior Unsecured NotesNot applicable3.54%08/15/203135,000 35,000 
$75 Million Senior Unsecured NotesNot applicable3.47%08/19/202975,000 75,000 
$100 Million Unsecured Term Loan (1)
1.50%2.75%10/10/2026100,000 100,000 
$100 Million Unsecured Term Loan (1)
1.45%2.39%03/25/2027100,000 0 
$100 Million Senior Unsecured NotesNot applicable2.61%10/14/2030100,000 0 
$75 Million Senior Unsecured NotesNot applicable2.71%10/14/203275,000 0 
$1,110,000 940,000 

(1)The interest rates on these unsecured term loans are comprised of LIBOR plus a margin which is subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into interest rate swap agreements (further described in Note 13) to convert the loans' LIBOR rates to effectively fixed interest rates. The interest rates in the table above are the effectively fixed interest rates for the loans, including the effects of the interest rate swaps, as of December 31, 2020.

In March 2020, the Company closed a $100 million senior unsecured term loan with a seven-year term and interest only payments. It bears interest at the annual rate of LIBOR plus an applicable margin (1.45% as of December 31, 2020) 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 effective fixed interest rate of 2.39%.

In July 2020, the Company and a group of lenders agreed to terms on the private placement of $175 million of senior unsecured notes with a weighted average fixed interest rate of 2.65%. The $100 million note has a 10-year term and a fixed interest rate of 2.61%, and the $75 million note has a 12-year term and a fixed interest rate of 2.71%. These maturity dates complement the Company's existing debt maturity schedule. The notes dated August 17, 2020, were issued and sold on October 14, 2020 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.

In August 2020, the Company made a required $30 million principal repayment on $100 million of senior unsecured notes with a fixed interest rate of 3.80%.

In December 2020, the Company repaid a $75 million unsecured term loan at maturity with an effectively fixed interest rate of 3.45%.

68
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Balance at December 31,
 Margin Above LIBORInterest Rate Maturity Date 2017 2016
      (In thousands)
$50 Million Unsecured Term LoanNot applicable3.910% 12/21/2018 $50,000
 50,000
$75 Million Unsecured Term Loan (1)
1.150%2.846% 07/31/2019 75,000
 75,000
$75 Million Unsecured Term Loan (1)
1.100%3.452% 12/20/2020 75,000
 75,000
$40 Million Unsecured Term Loan (1)
1.100%2.335% 07/30/2021 40,000
 40,000
$75 Million Unsecured Term Loan (1)
1.400%3.031% 02/28/2022 75,000
 75,000
$65 Million Unsecured Term Loan (1)
1.650%2.863% 04/01/2023 65,000
 65,000
$100 Million Senior Unsecured Notes:        
     $30 Million NotesNot applicable3.800% 08/28/2020 30,000
 30,000
     $50 Million NotesNot applicable3.800% 08/28/2023 50,000
 50,000
     $20 Million NotesNot applicable3.800% 08/28/2025 20,000
 20,000
$60 Million Senior Unsecured NotesNot applicable3.460% 12/13/2024 60,000
 —
$100 Million Senior Unsecured Notes:        
     $60 Million NotesNot applicable3.480% 12/15/2024 60,000
 60,000
     $40 Million NotesNot applicable3.750% 12/15/2026 40,000
 40,000
$25 Million Senior Unsecured NotesNot applicable3.970% 10/01/2025 25,000
 25,000
$50 Million Senior Unsecured NotesNot applicable3.990% 10/07/2025 50,000
 50,000
      $715,000
 655,000

(1)The interest rates on these unsecured term loans are comprised of LIBOR plus a margin which is subject to a pricing grid for changes in the Company's coverage ratings. The Company entered into interest rate swap agreements (further described in Note 13) to convert the loans' LIBOR rates to effectively fixed interest rates. The interest rates in the table above are the effectively fixed interest rates for the loans, including the effects of the interest rate swaps, as of December 31, 2017.

The Company’s unsecured debt instruments have certain restrictive covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial debt covenants at December 31, 2017.2020.
 
A summary of the carrying amount of Secured debt follows: 
Interest RateMonthly
Principal & Interest
Payment		Maturity
Date		Carrying Amount
of Securing
Real Estate at
December 31, 2020		Balance at December 31,
Property20202019
    (In thousands)
40th Avenue, Beltway Crossing V, Centennial Park,
Executive Airport, Interchange Park I, Ocean View, Wetmore 5-8 and World Houston 26, 28, 29 & 30
4.39%463,778 Repaid$0 0 48,772 
Colorado Crossing, Interstate I-III, Rojas, Steele
Creek 1 & 2, Venture and World Houston 3-9 (1)
4.75%420,045 06/05/202147,774 41,610 44,596 
Arion 18, Beltway Crossing VI & VII, Commerce
Park II & III, Concord, Interstate V-VII, Lakeview, Ridge Creek II, Southridge IV & V and World Houston 32
4.09%329,796 01/05/202252,034 35,220 37,682 
Ramona3.85%16,287 11/30/20268,697 2,266 2,372 
    $108,505 79,096 133,422 
  Interest Rate 
Monthly
P&I
Payment
 
Maturity
Date
 
Carrying Amount
of Securing
Real Estate at
December 31, 2017
 Balance at December 31,
Property     2017 2016
        (In thousands)
Arion 16, Broadway VI, Chino, East
University I & II, Northpark, Santan 10 II, 55th Avenue and World Houston 1 & 2, 21 & 23
 5.57% 518,885
 Repaid $—
 —
 47,496
Dominguez, Industry I & III, Kingsview, Shaw,
Walnut and Washington
 7.50% 539,747
 05/05/2019 45,886
 49,580
 52,231
Blue Heron II  5.39% 16,176
 02/29/2020 4,425
 409
 576
40th Avenue, Beltway Crossing V, Centennial Park,
Executive Airport, Interchange Park I, Ocean View, Wetmore 5-8 and World Houston 26, 28, 29 & 30
 4.39% 463,778
 01/05/2021 67,796
 55,317
 58,380
Colorado Crossing, Interstate I-III, Rojas, Steele
Creek 1 & 2, Venture and World Houston 3-9
 4.75% 420,045
 06/05/2021 56,000
 50,161
 52,752
Arion 18, Beltway Crossing VI & VII, Commerce
Park II & III, Concord, Interstate V-VII, Lakeview, Ridge Creek II, Southridge IV & V and World Houston 32
 4.09% 329,796
 01/05/2022 56,440
 42,315
 44,493
Ramona 3.85% 16,287
 11/30/2026 9,027
 2,572
 2,666
     
   $239,574
 200,354
 258,594


(1)During 2019, the Company executed a collateral release for World Houston 5; this property was sold during 2019 and is no longer considered to be collateral securing this loan.
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSIn October 2020, EastGroup repaid (with no penalty) a mortgage loan with a balance of $45.9 million, an interest rate of 4.39% and an original maturity date of January 5, 2021.




The Company currently intends to repay its debt obligations, both in the short-term and long-term, through its operating cash flows, borrowings under its unsecured bank credit facilities, proceeds from new debt (primarily unsecured), and/or proceeds from the issuance of equity instruments.
 
PrincipalScheduled principal payments on long-term debt, including Unsecured debt and Secured debt (not including Unsecured bank credit facilities), due during the next five years as of December 31, 20172020 are as follows: 
Years Ending December 31,(In thousands)
2021$84,285 
2022107,770 
2023115,119 
2024120,122 
202595,128 

69
Years Ending December 31, (In thousands)
2018 $61,314
2019 130,569
2020 114,096
2021 129,563
2022 107,769

(8)ACCOUNTS PAYABLE AND ACCRUED EXPENSES

A summary of the Company’s Accounts payable and accrued expenses follows:
 December 31,
2017 2016
(In thousands)
Property taxes payable                                                    $12,081
 14,186
Development costs payable 9,699
 9,844
Real estate improvements and capitalized leasing costs payable3,957
 2,304
Interest payable                              3,744
 3,822
Dividends payable on unvested restricted stock1,365
 1,530
Book overdraft (1)
20,902
 14,452
Other payables and accrued expenses                   13,219
 6,563
 Total Accounts payable and accrued expenses
$64,967
 52,701

(1) Represents unfunded outstanding checks for which the bank has not advanced cash to the Company. See Note 1(p).

(9)OTHER LIABILITIES

A summary of the Company’s Other liabilities follows:
 December 31,
2017 2016
(In thousands)
Security deposits                                                 $16,668
 14,782
Prepaid rent and other deferred income9,352
 9,795
    
Acquired below-market lease intangibles4,135
 4,012
Accumulated amortization of below-market lease intangibles(2,147) (1,662)
Acquired below-market lease intangibles, net of accumulated amortization1,988
 2,350
    
Interest rate swap liabilities695
 2,578
Prepaid tenant improvement reimbursements124
 343
Other liabilities                                  15
 16
 Total Other liabilities
$28,842
 29,864

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




(10)COMMON STOCK ACTIVITY

(8)ACCOUNTS PAYABLE AND ACCRUED EXPENSES

A summary of the Company’s Accounts payable and accrued expenses follows:
 December 31,
20202019
(In thousands)
Property taxes payable                                                    $3,524 2,696 
Development costs payable 6,427 11,766 
Real estate improvements and capitalized leasing costs payable5,692 4,636 
Interest payable                              6,537 6,370 
Dividends payable32,677 30,714 
Book overdraft (1)
5,176 25,771 
Other payables and accrued expenses                   9,540 10,071 
 Total Accounts payable and accrued expenses
$69,573 92,024 

(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. See Note 1(p).


(9)OTHER LIABILITIES

A summary of the Company’s Other liabilities follows:
 December 31,
20202019
(In thousands)
Security deposits                                                 $22,140 20,351 
Prepaid rent and other deferred income14,694 13,855 
Operating lease liabilities — Ground leases11,199 12,048 
Operating lease liabilities — Office leases2,167 2,141 
Acquired below-market lease intangibles9,019 8,616 
Accumulated amortization of acquired below-market lease intangibles(6,168)(4,494)
Acquired below-market lease intangibles, net of accumulated amortization2,851 4,122 
Interest rate swap liabilities10,752 678 
Prepaid tenant improvement reimbursements364 56 
Other liabilities                                  5,650 15,872 
 Total Other liabilities
$69,817 69,123 


70
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(10)COMMON STOCK ACTIVITY

The following table presents the common stock activity for the three years ended December 31, 2017:2020:
 Years Ended December 31,
202020192018
Common Stock (in shares)
Shares outstanding at beginning of year38,925,953 36,501,356 34,758,167 
Common stock offerings                                                            709,924 2,388,342 1,706,474 
Dividend reinvestment plan                                                            0 1,893 1,844 
Incentive restricted stock granted                                                            69,446 59,943 50,217 
Incentive restricted stock forfeited                                                            (440)(3,010)0 
Director common stock awarded                                                            8,182 6,384 8,478 
Director restricted stock granted208 0 0 
Restricted stock withheld for tax obligations(36,445)(28,955)(23,824)
Shares outstanding at end of year                                                            39,676,828 38,925,953 36,501,356 
 Years Ended December 31,
2017 2016 2015
Common Shares
Shares outstanding at beginning of year33,332,213
 32,421,460
 32,232,587
Common stock offerings                                                            1,370,457
 875,052
 106,751
Dividend reinvestment plan                                                            2,744
 3,326
 4,536
Incentive restricted stock granted                                                            93,285
 80,529
 100,622
Incentive restricted stock forfeited                                                            (16,000) (910) —
Director common stock awarded                                                            8,881
 10,072
 9,373
Director restricted stock granted282
 —
 —
Restricted stock withheld for tax obligations(33,695) (57,316) (32,409)
Shares outstanding at end of year                                                            34,758,167
 33,332,213
 32,421,460


Common Stock Issuances
The following table presents the common stock issuance activity for the three years ended December 31, 2017:2020:
Years Ended December 31,Number of Shares of
Common Stock Issued		Net Proceeds
(In thousands)
2020709,924 $92,663 
20192,388,342 284,710 
20181,706,474 157,319 
Years Ended December 31, 
Number of
Common Shares Issued
 Net Proceeds
    (In thousands)
2017 1,370,457
 $109,207
2016 875,052
 59,283
2015 106,751
 6,233


Dividend Reinvestment Plan
The Company hashad a dividend reinvestment plan that allowsallowed stockholders to reinvest cash distributions in new shares of the Company. On December 12, 2019, the dividend reinvestment plan was terminated and any unsold shares pursuant to the plan were deregistered.


(11)STOCK-BASED COMPENSATION

The Company(11)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.


Equity Incentive Plan
In May 2004, the stockholders of the Company approved the EastGroup Properties, Inc. 2004 Equity Incentive Plan (the “2004 Plan”) that authorized the issuance of up to 1,900,000 shares of common stock to employees in the form of options, stock appreciation rights, restricted stock, deferred stock units, performance shares, bonus stock or stock in lieu of cash compensation.  The 2004 Plan was further amended by the Board of Directors in September 2005 and December 2006.    


In April 2013, the Board of Directors adopted the EastGroup Properties, Inc. 2013 Equity Incentive Plan (the “2013 Equity Plan”) upon the recommendation of the Compensation Committee; the 2013 Equity Plan was approved by the Company's stockholders and became effective May 29, 2013. The 2013 Equity Plan was further amended by the Board of Directors in March 2017. The 2013 Equity Plan replaced the 2004 Plan and the 2005 Directors Equity Incentive Plan. The 2013 Equity Plan permits the grant of awards to employees and directors with respect to 2,000,000 shares of common stock.
There were 1,671,981, 1,752,3451,527,382, 1,583,223 and 1,802,0001,629,281 total shares available for grant under the 2013 Equity Plan as of December 31, 2017, 20162020, 2019 and 2015,2018, respectively. Typically, the Company issues new shares to fulfill stock grants.
71
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-based compensation cost for employees was $6,309,000, $5,184,000$7,605,000, $8,647,000 and $7,891,000$5,322,000 for 2017, 20162020, 2019 and 2015,2018, respectively, of which $1,458,000, $1,183,000$1,923,000, $2,536,000 and $1,672,000$1,173,000 were capitalized as part of the Company’s development costs for the respective years.


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Employee Equity Awards
The Company's restricted stock program is designed to provide incentives for management to achieve goals established by the Compensation Committee of the Company's Board of Directors (the Committee)“Committee”). The awards act as a retention device, as they vest over time, allowing participants to benefit from dividends on shares as well as potential stock appreciation. Equity awards align management's interests with the long-term interests of shareholders.  The vesting periods of the Company’s restricted stock plans vary, as determined by the Compensation 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 Compensation Committee.  Restricted stock is granted to non-executive officers subject only to continued service.  The cost for market-based awards and awards that only require service is amortized on a straight-line basis over the requisite service periods. The total compensation expense for service and performance based awards is based upon the fair market value of the shares on the grant date.  


In March 2017, the Committee evaluated the Company's performance compared to certain annual performance measures (primarily funds from operations (FFO) per share and total shareholder return) for the year ended December 31, 2016.  Based on the evaluation, 36,571 shares were awarded to the Company’s executive officers at the grant date (March 2, 2017) fair value of $74.80 per share.  These shares vested 20% on the date shares were determined and awarded and will vest 20% per year on January 1 in years 2018, 2019, 2020 and 2021.  The shares are being expensed on a straight-line basis over the remaining service period.

Also in March 2017, the Committee evaluated the Company’s total shareholder return, both on an absolute basis for 2016 as well as on a relative basis compared to the NAREIT Equity Index, NAREIT Industrial Index and Russell 2000 Index for the five-year period ended December 31, 2016.  Based on the evaluation, 33,289 shares were awarded to the Company’s executive officers at the grant date (March 2, 2017) fair value of $74.80 per share.  These shares vested 25% on the date shares were determined and awarded and will vest 25% per year on January 1 in years 2018, 2019 and 2020.  The shares are being expensed on a straight-line basis over the remaining service period.

Notwithstanding the foregoing, the shares issued to the Company’s former Chief Financial Officer under these plans became fully vested on the grant date of the awards in the first quarter of 2017.

In the second quarter of 2017, the Committee approved an equity compensation plan for certain of its executive officers based upon certain annual performance measures for 2017, including FFO per share, same property net operating income change, general and administrative costs, and fixed charge coverage. During the first quarter of 2018, the Committee will measure the Company's performance for 2017 against bright-line tests established by the Committee on the grant date of May 10, 2017.  The number of shares that may be earned for the achievement of the annual performance measures could range from zero to 21,096.  These shares, which have a grant date fair value of $78.18, would vest 20% on the date shares are determined and 20% per year on each January 1 for the subsequent four years. On the grant date of May 10, 2017, the Company began recognizing expense for its estimate of the shares that may be earned pursuant to these awards; the shares are being 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.

Also in the second quarter of 2017, the Committee approved an equity compensation plan for certain of its executive officers based upon the achievement of individual goals for each of the officers included in the plan.  Any shares issued pursuant to the individual goals in this compensation plan will be determined by the Committee in its discretion and issued in the first quarter of 2018.  The number of shares to be issued on the grant date for the achievement of individual goals could range from zero to 5,274.  These shares would vest 20% on the date shares are determined and awarded and 20% per year on each January 1 for the subsequent four years. The Company will begin recognizing the expense for any shares awarded on the grant date in the first quarter of 2018, and the shares will be expensed on a straight-line basis over the remaining service period.

Also in the second quarter of 2017, the Committee approved a long-term equity compensation plan for certain of the Company’s executive officers that includes three3 components based on total shareholder return and one1 component based only on continued service as of the vesting dates.


The three long-term equity compensation plan components based on total shareholder return are subject to bright-line tests that will compare the Company's total shareholder return to the NAREITNareit Equity Index and to the Company'smember companies of the Nareit industrial REIT peer group.index. The first plan will measuremeasured the bright-line tests over the one-year period endingended December 31, 2017. During the first quarter of 2018, the Committee will measuremeasured the Company's performance for the one-year1-year period against bright-line tests established by the Committee on the grant date of May 10, 2017.  The number of shares to be earneddetermined on the measurement date could range from zero to 4,730.was 4,257.  These shares would vestvested 100% on March 1, 2018, the date the earned shares arewere determined. On the grant date of May 10, 2017, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award.
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The second plan will measuremeasured the bright-line tests over the two-year period endingended December 31, 2018. During the first quarter of 2019, the Committee will measuremeasured the Company'sCompany’s performance for the two-year2-year period against bright-line tests established by the Committee on the grant date of May 10, 2017.  The number of shares to be earneddetermined on the measurement date could range from zero towas 9,460.  These shares would vestvested 100% on February 14, 2019, the date the earned shares arewere determined. On the grant date of May 10, 2017, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award.


The third plan will measuremeasured the bright-line tests over the three-year3-year period endingended December 31, 2019. During the first quarter of 2020, the Committee will measuremeasured the Company'sCompany’s performance for the three-year period against bright-line tests established by the Committee on the grant date of May 10, 2017.  The number of shares to be earneddetermined on the measurement date could range from zero towas 18,917.  These shares would vestvested 75% on February 13, 2020, the date the earned shares arewere determined, in the first quarter of 2020 and 25% on January 1, 2021. On the grant date of May 10, 2017, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award.


The component of the long-term equity compensation plan based only on continued service as of the vesting dates was awarded on May 10, 2017. On that date, 5,406 shares were granted to certain executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $78.18 per share, will vestvested 25% in the first quarter of 2018 and 25% on each January 1 in yearsof 2019, 2020 and 2021. The shares are beingwere expensed on a straight-line basis over the remaining service period.


Also duringIn the second quarter of 2017, 5,1692018, the Committee approved a long-term equity compensation plan for the Company’s executive officers that includes 1 component based on total shareholder return and 1 component based only on continued service as of the vesting dates.

The component of the long-term equity compensation plan based on total shareholder return is subject to bright-line tests that will compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The plan will measure the bright-line tests over the 3-year period ended December 31, 2020. During the first quarter of 2021, the Committee will measure the Company’s performance for the three-year period against bright-line tests established by the Committee on the grant date of June 1, 2018.  The number of shares to be earned on the measurement date could range from 0 to 27,087.  These shares would vest 75% on the date the earned shares are determined in the first quarter
72
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of 2021 and 25% on January 1, 2022. On the grant date of June 1, 2018, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award.

The component of the long-term equity compensation plan based only on continued service as of the vesting dates was awarded on June 1, 2018. On that date, 7,884 shares were granted to certainthe Company’s executive officers subject only to continued service as of the vesting dates. These shares, which have a weighted average grant date fair value of $81.27 per share,$95.19, vested 20%25% in the first quarter of each of 2019, 2020 and 2021 and will vest 25% on January 1, 2018, and will vest 20% per year on January 1 in years 2019, 2020, 2021 and 2022. The shares are being expensed on a straight-line basis over the remaining service period.


In the first quarter of 2019, the Committee approved an equity compensation award (the “2019 Annual Grant”) for the Company’s executive officers based upon certain annual performance measures for 2019; the 2019 Annual Grant is comprised of 3 components.

The first component of the 2019 Annual Grant is based upon the following Company performance measures for 2019: (i) same property net operating income change, (ii) debt-to EBITDAre ratio, and (iii) fixed charge coverage. On February 13, 2020, the Committee measured the Company’s performance for 2019 against bright-line tests established by the Committee on the grant date of March 7, 2019 and determined that 9,162 shares were earned. These shares, which have a grant date fair value of $105.97, vested 20% on the date shares were determined, 20% on January 1, 2021 and will vest 20% per year on each January 1 for the subsequent three years. On the grant date of March 7, 2019, the Company began recognizing expense for its estimate of the shares that may be earned pursuant to these awards; the shares are being 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.

The second component of the 2019 Annual Grant is based upon the Company’s funds from operations (“FFO”) per share for 2019. On February 13, 2020, the Committee measured the Company’s performance for 2019 against bright-line tests established by the Committee on the grant date of August 28, 2019 and determined that 15,990 shares were earned. These shares, which have a grant date fair value of $122.61, vested 20% on the date shares were determined, 20% on January 1, 2021 and will vest 20% per year on each January 1 of 2022, 2023 and 2024. On the grant date of August 28, 2019, the Company began recognizing expense for its estimate of the shares that may be earned pursuant to these awards; the shares are being 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.

The third component of the 2019 Annual Grant is based upon the achievement of individual goals for each of the officers to whom shares were granted. On February 13, 2020, the Committee evaluated the performance of the officers and, in its discretion, awarded 5,860 shares with a grant date fair value of $141.63. These shares vested 20% on the date shares were determined and awarded and 20% on January 1, 2021 and will vest 20% per year on each January 1 of 2022, 2023 and 2024. The Company began recognizing the expense for the shares awarded on the grant date of February 13, 2020, and the shares will be expensed on a straight-line basis over the remaining service period. 

Also duringin the first quarter of 2019, the Committee approved a long-term equity compensation award for the Company’s executive officers that includes 1 component based on total shareholder return and 1 component based only on continued service as of the vesting dates.

The component of the long-term equity compensation award based on total shareholder return is subject to bright-line tests that will compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The award will measure the bright-line tests over the 3-year period ending December 31, 2021. During the first quarter of 2022, the Committee will measure the Company’s performance for the three-year period against bright-line tests established by the Committee on the grant date of March 7, 2019.  The aggregate number of shares to be earned on the measurement date could range from 0 to 33,442.  These shares would vest 75% on the date the earned shares are determined in the first quarter of 2022 and 25% on January 1, 2023. On the grant date of March 7, 2019, the Company began recognizing expense for this award based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award.

The component of the long-term equity compensation award based only on continued service as of the vesting dates was awarded on March 7, 2019. On that date, an aggregate of 9,947 shares were granted to the Company’s executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $105.97, vested 25% in the first quarter of 2020, 25% on January 1, 2021 and will vest 25% on each January 1 of 2022 and 2023. The shares are being expensed on a straight-line basis over the remaining service period.
73
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In the first quarter of 2020, the Committee approved an equity compensation plan (the “2020 Annual Grant”) for the Company’s executive officers based upon certain annual performance measures for 2020; the plan is comprised of 2 components.

The first component of the 2020 Annual Grant is based upon the following Company performance measures for 2020: (i) FFO per share, (ii) same property net operating income change, (iii) debt-to EBITDAre ratio, and (iv) fixed charge coverage. During the first quarter of 2021, the Committee will measure the Company’s performance for 2020 against bright-line tests established by the Committee on the grant date of March 6, 2020. The number of shares that may be earned for the achievement of the annual performance measures could range from 0 to 19,282. These shares, which have a grant date fair value of $131.36, would vest 34% on the date shares are determined and 33% per year on each January 1 in years 2022 and 2023. On the grant date of March 6, 2020, the Company began recognizing expense for its estimate of the shares that may be earned pursuant to these awards; the shares are being 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.

The second component of the 2020 Annual Grant is based upon the achievement of individual goals for each of the officers included in the plan. Any shares issued pursuant to the individual goals in this compensation plan will be determined by the Committee in its discretion and issued in the first quarter of 2021. The number of shares to be issued on the grant date for the achievement of individual goals could range from 0 to 4,812. These shares would vest 34% on the date shares are determined and awarded and 33% per year on each January 1 in years 2022 and 2023. The Company will begin recognizing the expense for any shares awarded on the grant date in the first quarter of 2021, and the shares will be expensed on a straight-line basis over the remaining service period. 

Also in the first quarter of 2020, the Committee approved a long-term equity compensation plan for the Company’s executive officers that includes 1 component based on total shareholder return and 1 component based only on continued service as of the vesting dates.

The component of the long-term equity compensation plan based on total shareholder return is subject to bright-line tests that will compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The plan will measure the bright-line tests over the 3-year period ending December 31, 2022. During the first quarter of 2023, the Committee will measure the Company’s performance for the three-year period against bright-line tests established by the Committee on the grant date of March 6, 2020.  The aggregate number of shares to be earned on the measurement date could range from 0 to 25,261.  These shares would vest 75% on the date the earned shares are determined in the first quarter of 2023 and 25% on January 1, 2024. On the grant date of March 6, 2020, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award.

The component of the long-term equity compensation plan based only on continued service as of the vesting dates was awarded on March 6, 2020. On that date, an aggregate of 7,217 shares were granted to the Company’s executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $131.36, will vest 25% in the first quarter of 2021 and 25% on each January 1 for the subsequent three years. The shares are being expensed on a straight-line basis over the remaining service period.

During the second quarter of 2017, 12,8502020, 12,300 shares were granted to certain non-executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $84.57 per share,$105.30, vested 20% on January 1, 2018,2021 and will vest 20% per year on each January 1 in years 2019, 2020, 2021of 2022, 2023, 2024 and 2022. 2025. The shares are being expensed on a straight-line basis over the remaining service period.


During the fourth quarter of 2019, the Committee adopted the 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.

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.  For shares subject to contingencies, dividends are accrued based upon the number of shares expected to be awarded.  Share certificates and dividends are delivered to the employee as they vest.  As of December 31, 2017,2020, there was $5,988,000$5,004,000 of unrecognized compensation cost related to unvested
74
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

restricted stock compensation for employees and directors that is expected to be recognized over a weighted average period of 2.7 years.
 
Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to employees with the related weighted average grant date fair value share prices for 2017, 20162020, 2019 and 2015.2018. Of the shares that vested in 2017, 20162020, 2019 and 2015, 33,6952018, 36,445 shares, 57,31628,955 shares and 32,40923,824 shares, respectively, were withheld by the Company to satisfy the tax obligations for those employees who elected this option as permitted under the applicable equity plan. As of the grant date, the fair value of shares that were granted during 2017, 20162020, 2019 and 20152018 was $7,155,000, $4,736,000$7,028,000, $5,672,000 and $6,145,000,$4,223,000, respectively. As of the vesting date, the fair value of shares that vested during 2017, 20162020, 2019 and 20152018 was $6,441,000, $10,013,000$11,754,000, $6,662,000 and $6,664,000,$5,142,000, respectively.
Restricted Stock Activity:Years Ended December 31,
202020192018
 
Shares
Weighted Average
Grant Date
Fair Value
 
Shares
Weighted Average
Grant Date
Fair Value
 
Shares
Weighted Average
Grant Date
Fair Value
Unvested at beginning of year130,884 $82.78 143,314 $70.26 152,644 $63.18 
Granted (1)
69,446 101.19 59,943 94.62 50,217 84.09 
Forfeited (440)112.14 (3,010)86.19 0 0 
Vested (86,765)73.80 (69,363)66.99 (59,547)63.77 
Unvested at end of year 113,125 100.86 130,884 82.78 143,314 70.26 
Restricted Stock Activity:Years Ended December 31,
2017 2016 2015
 
Shares
 
Weighted Average
Grant Date
Fair Value
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Unvested at beginning of year162,087
 $51.97
 260,698
 $52.68
 265,911
 $49.79
Granted (1)
93,285
 76.70
 80,529
 58.81
 100,622
 61.07
Forfeited (16,000) 36.98
 (910) 52.89
 —
 —
Vested (86,728) 61.62
 (178,230) 56.09
 (105,835) 53.40
Unvested at end of year 152,644
 63.18
 162,087
 51.97
 260,698
 52.68


(1) Does not include the restricted shares that may be earned if the performance goals established in 20172018 and 2019 for long-term performance and in 2020 for annual and long-term performance periods 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 zero0 to 59,477.109,884.
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Following is a vesting schedule of the total unvested shares as of December 31, 2017:2020:
Unvested Shares Vesting ScheduleNumber of Shares
202144,807 
202231,870 
202322,089 
202411,899 
20252,460 
Total Unvested Shares                                                  113,125 
Unvested Shares Vesting Schedule Number of Shares
2018 50,158
2019 44,235
2020 41,064
2021 13,584
2022 3,603
Total Unvested Shares                                                   152,644


Directors Equity Awards
The Company has a directors equity plan that was approved by stockholders and adopted in 2013 (the "2013 Equity Plan"). The Board of Directors has adopted a policy under the 2013 Equity Plan pursuant to which awards will be made to non-employee Directors. The current policy provides that the Company shall automatically award an annual retainer share award to each non-employee Director who has been elected or reelected as a member of the Board of Directors at the Annual Meeting. The number of shares shall be equal to $80,000$100,000 divided by the fair market value of a share on the date of such election. If a non-employee Director is elected or appointed to the Board of Directors other than at an Annual Meeting of the Company, the annual retainer share award shall be pro rated. The policy also provides that each new non-employee Director appointed or elected will receive an automatic award of restricted shares of Common Stock on the effective date of election or appointment equal to $25,000$25,000 divided by the fair market value of the Company's Common Stock on such date. These restricted shares will vest over a four-year4-year period upon the performance of future service as a Director, subject to certain exceptions.


Directors were issued 8,8818,182 shares, 10,0726,384 shares and 9,3738,478 shares of common stock as annual retainer awards for 2017, 20162020, 2019 and 2015,2018, respectively.


During the third quarter of 2020, 208 shares were granted to a newly elected non-employee Director subject only to continued service as of the vesting date. The shares, which have a grant date fair value of $120.39 per share, will vest 25% per year on July 13 in years 2021, 2022, 2023 and 2024. The shares are being expensed on a straight-line basis over the remaining service period.

75
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the third quarter of 2017, 282 shares were granted to a newly elected non-employee Director subject only to continued service as of the vesting date. The shares, which have a grant date fair value of $88.86 per share, vested 25% on each of September 8, 2018, 2019 and 2020, and will vest 25% per year on September 8, in years 2018, 2019, 2020 and 2021. The shares are being expensed on a straight-line basis over the remaining service period.


During 2013, 417 shares were granted to a newly elected non-employee Director subject only to continued service as of the vesting date. The shares, which have a grant date fair value of $59.97 per share, vested 25% on each of December 6, 2014, 2015, 2016 and 2017.

As of the vesting date, the fair value of shares that vested during 2017, 20162020, 2019 and 20152018 was $9,000, $8,000$9,000 and $6,000,$7,000, respectively.  Stock-based compensation expense for directors was $670,000, $589,000$897,000, $727,000 and $514,000$1,134,000 for 2017, 20162020, 2019 and 2015,2018, respectively.  


(12)COMPREHENSIVE INCOME

(12)COMPREHENSIVE INCOME

Total Comprehensive Income is comprised of net income plus all other changes in equity from non-owner sources and is presented on the Consolidated Statements of Income and Comprehensive Income.  The components of Accumulated other comprehensive income (loss)for 2017, 20162020, 2019 and 20152018 are presented in the Company’s Consolidated Statements of Changes in Equity and are summarized below.  See Note 13 for information regarding the Company’s interest rate swaps.
Years Ended December 31,
 202020192018
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):(In thousands)
Balance at beginning of year $2,807 6,701 5,348 
    Change in fair value of interest rate swaps - cash flow hedges(13,559)(3,894)1,353 
Balance at end of year $(10,752)2,807 6,701 

(13)DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 Years Ended December 31,
 2017 2016 2015
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):(In thousands)
Balance at beginning of year $1,995
 (3,456) (2,357)
    Change in fair value of interest rate swaps - cash flow hedges3,353
 5,451
 (1,099)
Balance at end of year $5,348
 1,995
 (3,456)

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(13)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-ratevariable rate amounts from a counterparty in exchange for the Company making fixed-ratefixed rate payments over the life of the agreements without exchange of the underlying notional amount. 


As of December 31, 2017,2020, EastGroup had seven5 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 rate components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly effective.


The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in Other comprehensive income (loss) and is subsequently reclassified into earnings through interest expense as interest payments are made in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives, which is immaterial for the periods reported, is recognized directly in earnings (included in Other on the Consolidated Statements of Income and Comprehensive Income).


Amounts reported in OtherAccumulated other comprehensive income (loss) related to derivatives will be reclassified to Interest expense as interest payments are made or received on the Company's variable-ratevariable rate debt. The Company estimates the swap interest receiptsthat an additional $4,026,000 will be $617,000 reclassified from Accumulated other comprehensive income (loss) as an increase to Interest expense over the next twelve months. These receipts approximate the expected cash interest receipts due from counterparties for the swaps. Since the interest payments and receipts on the swaps in combination with the associated debt have been effectively fixed, this estimate is not in addition to the Company's total expected combined interest payments or expense for 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 values using mid-market prices.

76
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. In November 2020, the Intercontinental Exchange (“ICE”) Benchmark Administration Limited (“IBA”), the administrator of LIBOR, announced that it would consult on its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023.

The Company is not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form. The Company has material contracts that are indexed to USD-LIBOR and is monitoring this activity and evaluating the related risks.

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. During 2020, 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 December 31, 20172020 and 2016,2019, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:
Interest Rate DerivativeNotional Amount as of December 31, 2020Notional Amount as of December 31, 2019
(In thousands)
Interest Rate Swap$75,000$75,000
Interest Rate Swap$65,000$65,000
Interest Rate Swap0$60,000
Interest Rate Swap$40,000$40,000
Interest Rate Swap0$15,000
Interest Rate Swap$100,000$100,000
Interest Rate Swap$100,0000
Interest Rate Derivative Notional Amount as of December 31, 2017 Notional Amount as of December 31, 2016
  (In thousands)
Interest Rate Swap $80,000 $80,000
Interest Rate Swap $75,000 $75,000
Interest Rate Swap $75,000 $75,000
Interest Rate Swap $65,000 $65,000
Interest Rate Swap $60,000 $60,000
Interest Rate Swap $40,000 $40,000
Interest Rate Swap $15,000 $15,000


The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of December 31, 20172020 and 2016.2019. See Note 18 for additional information on the fair value of the Company's interest rate swaps.
Derivatives
As of December 31, 2020		Derivatives
As of December 31, 2019
Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
(In thousands)
Derivatives designated as cash flow hedges:
    Interest rate swap assetsOther assets$0 Other assets$3,485 
    Interest rate swap liabilitiesOther liabilities10,752 Other liabilities678 


77
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



 
Derivatives
As of December 31, 2017
 
Derivatives
As of December 31, 2016
 Balance Sheet Location Fair Value Balance Sheet Location Fair Value
 (In thousands)
Derivatives designated as cash flow hedges:       
    Interest rate swap assetsOther assets $6,034
 Other assets $4,546
    Interest rate swap liabilitiesOther liabilities 695
 Other liabilities 2,578

The table below presents the effect of the Company's derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2017, 20162020, 2019 and 2015:2018:
Years Ended December 31,
 202020192018
 (In thousands)
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS  
Interest Rate Swaps:
Amount of income (loss) recognized in Other comprehensive income (loss) on derivatives                                                                                            
$(17,364)(1,975)2,757 
Amount of (income) loss reclassified from Accumulated other comprehensive income (loss) into Interest expense
3,805 (1,919)(1,404)
 Years Ended December 31,
 2017 2016 2015
 (In thousands)
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS     
Interest Rate Swaps:     
Amount of income (loss) recognized in Other comprehensive income (loss) on derivatives                                                                                                  
$1,437
 1,410
 (5,374)
Amount of loss reclassified from Accumulated other comprehensive income (loss) into Interest expense                                                                                               
1,916
 4,041
 4,275


See Note 12 for additional information on the Company's Accumulated other comprehensive income (loss) resulting from its interest rate swaps.


Derivative financial agreements expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements. The Company believes it minimizes the credit risk by transacting with financial institutions the Company regards as credit-worthy.


The Company has an agreement with its derivative counterparties containing a provision stating that the Company could be declared in default on its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender.

As of December 31, 2017, the fair value of derivatives in an asset position related to these agreements was $6,034,000, and the fair value of derivatives in a liability position related to these agreements was $695,000. As of December 31, 2017, the Company has not posted any collateral related to these arrangements. If the Company had breached any of the contractualthese provisions of the derivative contract, it could have beenwould be required to settle its obligations under the agreements at their termination value. The swap termination value of derivatives in an asset position was an asset in the amount$10,928,000 as of $6,084,000, and the swap termination value of derivatives in a liability position was a liability in the amount of $717,000.December 31, 2020.

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(14)EARNINGS PER SHARE

(14)EARNINGS PER SHARE

The Company applies ASC 260, Earnings Per Share, which requires companies to present basic and diluted EPS.  Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:
2017 2016 2015 202020192018
(In thousands)(In thousands)
BASIC EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO
EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
     BASIC EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO
EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS		   
Numerator – net income attributable to common stockholders$83,183
 95,509
 47,866
 Numerator – net income attributable to common stockholders$108,363 121,662 88,506 
Denominator – weighted average shares outstanding33,996
 32,563
 32,091
 Denominator – weighted average shares outstanding39,185 37,442 35,439 
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE
TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
     DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE
TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
Numerator – net income attributable to common stockholders$83,183
 95,509
 47,866
 Numerator – net income attributable to common stockholders$108,363 121,662 88,506 
Denominator:     Denominator:
Weighted average shares outstanding 33,996
 32,563
 32,091
 Weighted average shares outstanding 39,185 37,442 35,439 
Unvested restricted stock 51
 65
 105
 Unvested restricted stock 111 85 67 
Total Shares 34,047
 32,628
 32,196
 Total Shares 39,296 37,527 35,506 
 

(15)QUARTERLY RESULTS OF OPERATIONS – UNAUDITED












78
 2017 Quarter Ended 2016 Quarter Ended
Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31
(In thousands, except per share data)
Revenues$66,409
 90,004
 69,001
 71,944
 73,189
 93,279
 64,043
 66,614
Expenses(53,436) (53,027) (53,029) (54,277) (51,359) (49,186) (49,243) (51,243)
Net Income12,973
 36,977
 15,972
 17,667
 21,830
 44,093
 14,800
 15,371
Net income attributable to
noncontrolling interest in joint ventures
(154) (87) (88) (77) (119) (180) (139) (147)
Net income attributable to EastGroup
Properties, Inc. common stockholders
$12,819
 36,890
 15,884
 17,590
 21,711
 43,913
 14,661
 15,224
BASIC PER SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS (1)
 
  
  
  
  
  
  
  
Net income attributable to common
stockholders
$0.38
 1.09
 0.46
 0.51
 0.67
 1.36
 0.45
 0.46
Weighted average shares outstanding33,361
 33,987
 34,215
 34,406
 32,254
 32,376
 32,741
 32,874
DILUTED PER SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS (1)
 
  
  
  
  
  
  
  
Net income attributable to common
stockholders
$0.38
 1.08
 0.46
 0.51
 0.67
 1.35
 0.45
 0.46
Weighted average shares outstanding33,409
 34,040
 34,290
 34,505
 32,307
 32,440
 32,823
 32,964

(1)The above quarterly earnings per share calculations are based on the weighted average number of common shares outstanding during each quarter for basic earnings per share and the weighted average number of outstanding common shares and common share equivalents during each quarter for diluted earnings per share.  The annual earnings per share calculations in the Consolidated Statements of Income and Comprehensive Income are based on the weighted average number of common shares outstanding during each year for basic earnings per share and the weighted average number of outstanding common shares and common share equivalents during each year for diluted earnings per share.  The sum of quarterly financial data may vary from the annual data due to rounding.


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(15)QUARTERLY RESULTS OF OPERATIONS – UNAUDITED
(16)DEFINED CONTRIBUTION PLAN

 2020 Quarter Ended2019 Quarter Ended
Mar 31Jun 30Sep 30Dec 31Mar 31Jun 30Sep 30Dec 31
(In thousands, except per share data)
Revenues$88,865 89,945 92,256 106,044 81,365 91,425 84,180 116,532 
Expenses(65,567)(66,458)(67,845)(68,849)(58,831)(64,476)(61,605)(65,250)
Net income23,298 23,487 24,411 37,195 22,534 26,949 22,575 51,282 
Net income attributable to
noncontrolling interest in joint ventures
(1)(3)(10)(14)(5)4 (4)(1,673)
Net income attributable to EastGroup
Properties, Inc. common stockholders
$23,297 23,484 24,401 37,181 22,529 26,953 22,571 49,609 
BASIC PER SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS (1)
        
Net income attributable to common
stockholders
$0.60 0.60 0.62 0.94 0.62 0.73 0.60 1.29 
Weighted average shares outstanding38,882 39,007 39,338 39,507 36,465 36,944 37,771 38,561 
DILUTED PER SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS (1)
        
Net income attributable to common
stockholders
$0.60 0.60 0.62 0.94 0.62 0.73 0.60 1.28 
Weighted average shares outstanding38,961 39,077 39,450 39,653 36,526 37,019 37,869 38,687 

(1)The above quarterly earnings per share calculations are based on the weighted average number of shares of common stock outstanding during each quarter for basic earnings per share and the weighted average number of outstanding shares of common stock and common stock share equivalents during each quarter for diluted earnings per share.  The annual earnings per share calculations in the Consolidated Statements of Income and Comprehensive Income are based on the weighted average number of shares of common stock outstanding during each year for basic earnings per share and the weighted average number of outstanding shares of common stock and common stock share equivalents during each year for diluted earnings per share.  The sum of quarterly financial data may vary from the annual data due to rounding.


(16)DEFINED CONTRIBUTION PLAN

EastGroup maintains a 401(k) plan for its employees.  The Company makes matching contributions of 50% of the employee’s contribution (limited to 10% of compensation as defined by the plan) and may also make annual discretionary contributions.  The Company’s total expense for this plan was $672,000, $675,000$851,000, $786,000 and $585,000$769,000 for 2017, 20162020, 2019 and 2015,2018, respectively.


(17)LEGAL MATTERS

(17)LEGAL MATTERS

The Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened against the Company or its properties, other than routine litigation arising in the ordinary course of businessbusiness.
As previously reported in the Company’s annual reports on Form 10-K for the years ended December 31, 2019 and 2018, and the Company’s quarterly reports on Form 10-Q for whichthe quarters ended March 31, June 30 and September 30, 2020 and 2019, the Company is adequately insured.had been involved in pending litigation related to an action against the Company and certain of its officers in connection with the Company’s November 2016 purchase of a land parcel, alleging breach of contract and other claims in law and in equity. The Company asserted numerous affirmative defenses. In an effort to resolve the litigation, EastGroup made an initial settlement offer for $497,000, which was reserved in the Company’s financial statements as of December 31, 2018. During the year ended December 31, 2019, the parties came to a mediated resolution of the matter and it was resolved; losses related to the matter are included in Other on the Consolidated Statements of Income and Comprehensive Income. Even though the matter was settled, the case was dismissed, and releases exchanged among all parties, the Plaintiff filed an appeal of the

79
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
(18)FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

order in the Florida Court of Appeal compelling him to comply with the settlement. The Court has since dismissed the appeal. All monies due under the settlement have been paid to the Plaintiff’s lawyers and were accounted for as stated above.
(18)FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC 820, Fair Value Measurements and Disclosures,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 820at December 31, 20172020 and 2016.2019.
 December 31,
20202019
Carrying
Amount (1)
Fair
Value
Carrying
Amount (1)
Fair
Value
(In thousands)
Financial Assets:    
Cash and cash equivalents$21 21 224 224 
   Mortgage loans receivable                                         0 0 1,679 1,703 
   Interest rate swap assets0 0 3,485 3,485 
Financial Liabilities:    
 Unsecured bank credit facilities - variable rate (2)
125,000 124,820 112,710 113,174 
Unsecured debt (2)
1,110,000 1,141,803 940,000 959,177 
Secured debt (2)
79,096 80,435 133,422 136,107 
Interest rate swap liabilities10,752 10,752 678 678 
 December 31,
2017 2016
Carrying
Amount (1)
 
Fair
Value
 
Carrying
Amount (1)
 
Fair
Value
(In thousands)
Financial Assets:       
Cash and cash equivalents$16
 16
 522
 522
   Mortgage loans receivable                                         4,581
 4,569
 4,752
 4,747
   Interest rate swap assets6,034
 6,034
 4,546
 4,546
Financial Liabilities: 
  
  
  
 Unsecured bank credit facilities - variable rate (2)
116,339
 116,277
 112,020
 111,923
Unsecured bank credit facilities - fixed rate (2)
80,000
 80,003
 80,000
 79,998
Unsecured debt (2)
715,000
 703,871
 655,000
 623,147
  Secured debt (2)
200,354
 206,408
 258,594
 266,585
   Interest rate swap liabilities695
 695
 2,578
 2,578


(1)Carrying amounts shown in the table are included in the Consolidated Balance Sheets under the indicated captions, except as indicated in the notes below.
(1)Carrying amounts shown in the table are included in the Consolidated Balance Sheets under the indicated captions, except as indicated in the notes below.
(2)Carrying amounts and fair values shown in the table exclude debt issuance costs (see Notes 6 and 7 for additional information).

(2)Carrying amounts and fair values shown in the table exclude debt issuance costs (see Notes 6 and 7 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.
Mortgage loans receivable (included in Other assets on the Consolidated Balance Sheets):  The fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities (Level 2 input).
Interest rate swap assets (included in Other assets on the Consolidated BalancesBalance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 13 for additional information on the Company's interest rate swaps.
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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 swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 13 for additional information on the Company's interest rate swaps.

80
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
(19)SUBSEQUENT EVENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On

(19)SUBSEQUENT EVENTS

In January 26, 2018,2021, EastGroup closed the sale of World Houston 18,acquired Access Business Park 1, a 33,000recently constructed 156,000 square foot non-EastGroup developed, single-tenantdistribution building in Houston,Greenville, South Carolina, for $2.5$10.3 million. The transaction generated

Also in January 2021, EastGroup acquired Northpoint 200, a gain on sale which will be recognizedrecently constructed distribution facility in the first quarter of 2018.Atlanta containing 79,000 square feet, for $6.5 million.


Subsequent to December 31, 2017, the Company executed a commitment letter for $60 million of senior unsecured private placement notes with an insurance company. The notes, which are expected to close in April 2018, have a 10-year term and a fixed interest rate of 3.93% with semi-annual interest 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.
















81
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
Real Estate Properties (c):                    
Industrial:                    
FLORIDA                    
Tampa                    
56th Street Commerce Park $—
 843
 3,567
 4,527
 843
 8,094
 8,937
 6,129
 1993 1981/86/97
Jetport Commerce Park —
 1,575
 6,591
 5,899
 1,575
 12,490
 14,065
 8,545
 1993-99 1974-85
Westport Commerce Center —
 980
 3,800
 2,765
 980
 6,565
 7,545
 4,628
 1994 1983/87
Benjamin Distribution Center I & II —
 843
 3,963
 1,572
 883
 5,495
 6,378
 3,788
 1997 1996
Benjamin Distribution Center III —
 407
 1,503
 650
 407
 2,153
 2,560
 1,559
 1999 1988
Palm River Center —
 1,190
 4,625
 2,585
 1,190
 7,210
 8,400
 4,763
 1997/98 1990/97/98
Palm River North I & III —
 1,005
 4,688
 2,404
 1,005
 7,092
 8,097
 4,234
 1998 2000
Palm River North II —
 634
 4,418
 399
 634
 4,817
 5,451
 3,399
 1997/98 1999
Palm River South I —
 655
 3,187
 655
 655
 3,842
 4,497
 1,823
 2000 2005
Palm River South II —
 655
 —
 4,417
 655
 4,417
 5,072
 2,140
 2000 2006
Walden Distribution Center I —
 337
 3,318
 625
 337
 3,943
 4,280
 2,111
 1997/98 2001
Walden Distribution Center II —
 465
 3,738
 1,479
 465
 5,217
 5,682
 2,788
 1998 1998
Oak Creek Distribution Center I —
 1,109
 6,126
 1,374
 1,109
 7,500
 8,609
 4,020
 1998 1998
Oak Creek Distribution Center II —
 647
 3,603
 1,670
 647
 5,273
 5,920
 2,514
 2003 2001
Oak Creek Distribution Center III —
 439
 —
 3,196
 556
 3,079
 3,635
 1,171
 2005 2007
Oak Creek Distribution Center IV —
 682
 6,472
 773
 682
 7,245
 7,927
 2,750
 2005 2001
Oak Creek Distribution Center V —
 724
 —
 5,853
 916
 5,661
 6,577
 2,260
 2005 2007
Oak Creek Distribution Center VI —
 642
 —
 5,241
 812
 5,071
 5,883
 1,655
 2005 2008
Oak Creek Distribution Center VIII —
 843
 —
 6,230
 1,051
 6,022
 7,073
 425
 2005 2015
Oak Creek Distribution Center IX —
 618
 —
 4,963
 781
 4,800
 5,581
 1,341
 2005 2009
Oak Creek Distribution Center A —
 185
 —
 1,493
 185
 1,493
 1,678
 477
 2005 2008
Oak Creek Distribution Center B —
 227
 —
 1,549
 227
 1,549
 1,776
 498
 2005 2008
Airport Commerce Center —
 1,257
 4,012
 937
 1,257
 4,949
 6,206
 2,725
 1998 1998
Westlake Distribution Center —
 1,333
 6,998
 2,367
 1,333
 9,365
 10,698
 5,409
 1998 1998/99
Expressway Commerce Center I —
 915
 5,346
 1,372
 915
 6,718
 7,633
 3,334
 2002 2004
Expressway Commerce Center II —
 1,013
 3,247
 462
 1,013
 3,709
 4,722
 1,934
 2003 2001
Silo Bend Distribution Center —
 4,131
 27,497
 1,635
 4,132
 29,131
 33,263
 6,071
 2011 1987/90



SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Real Estate Properties (c):          
Industrial:          
FLORIDA          
Tampa          
Jetport Commerce Park$0 1,575 6,591 6,961 1,575 13,552 15,127 9,751 1993-991974-85
Westport Commerce Center0 980 3,800 3,044 980 6,844 7,824 5,145 19941983/87
Benjamin Distribution Center I & II0 843 3,963 1,995 883 5,918 6,801 4,302 19971996
Benjamin Distribution Center III0 407 1,503 670 407 2,173 2,580 1,684 19991988
Palm River Center0 1,190 4,625 3,001 1,190 7,626 8,816 5,507 1997/981990/97/98
Palm River North I & III0 1,005 4,688 3,427 1,005 8,115 9,120 4,899 19982000
Palm River North II0 634 4,418 454 634 4,872 5,506 3,627 1997/981999
Palm River South I0 655 3,187 691 655 3,878 4,533 2,117 20002005
Palm River South II0 655 0 4,648 655 4,648 5,303 2,428 20002006
Walden Distribution Center I0 337 3,318 696 337 4,014 4,351 2,420 1997/982001
Walden Distribution Center II0 465 3,738 1,492 465 5,230 5,695 3,321 19981998
Oak Creek Distribution Center I0 1,109 6,126 1,487 1,109 7,613 8,722 4,714 19981998
Oak Creek Distribution Center II0 647 3,603 1,817 647 5,420 6,067 3,077 20032001
Oak Creek Distribution Center III0 439 0 3,242 556 3,125 3,681 1,422 20052007
Oak Creek Distribution Center IV0 682 6,472 864 682 7,336 8,018 3,535 20052001
Oak Creek Distribution Center V0 724 0 6,007 916 5,815 6,731 2,754 20052007
Oak Creek Distribution Center VI0 642 0 5,663 812 5,493 6,305 2,302 20052008
Oak Creek Distribution Center VII0 740 0 6,399 740 6,399 7,139 681 20052017
Oak Creek Distribution Center VIII0 843 0 6,302 1,051 6,094 7,145 1,055 20052015
Oak Creek Distribution Center IX0 618 0 5,161 781 4,998 5,779 1,769 20052009
Oak Creek Distribution Center A0 185 0 1,498 185 1,498 1,683 601 20052008
Oak Creek Distribution Center B0 227 0 1,555 227 1,555 1,782 625 20052008
Oak Creek Distribution Center C Land0 355 0 379 355 379 734 0 2005n/a
Airport Commerce Center0 1,257 4,012 1,062 1,257 5,074 6,331 3,114 19981998
Westlake Distribution Center0 1,333 6,998 2,664 1,333 9,662 10,995 6,293 19981998/99
Expressway Commerce Center I0 915 5,346 1,675 915 7,021 7,936 3,918 20022004
82

SCHEDULE IIISCHEDULE IIISCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATIONREAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATIONREAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
DECEMBER 31, 2020 (In thousands, except footnotes)
DECEMBER 31, 2020 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year ConstructedDescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
Land Buildings and Improvements Land Buildings and Improvements Total LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Expressway Commerce Center IIExpressway Commerce Center II0 1,013 3,247 1,065 1,013 4,312 5,325 2,307 20032001
Silo Bend Distribution CenterSilo Bend Distribution Center0 4,131 27,497 4,666 4,132 32,162 36,294 9,176 20111987/90
Tampa East Distribution Center —
 791
 4,758
 513
 791
 5,271
 6,062
 1,271
 2011 1984Tampa East Distribution Center0 791 4,758 721 791 5,479 6,270 1,824 20111984
Tampa West Distribution Center —
 2,139
 8,502
 1,145
 2,140
 9,646
 11,786
 2,250
 2011 1975/93/94Tampa West Distribution Center0 2,139 8,502 1,276 2,140 9,777 11,917 3,092 20111975/93/94
Madison Distribution Center —
 495
 2,779
 428
 495
 3,207
 3,702
 774
 2012 2007Madison Distribution Center0 495 2,779 466 495 3,245 3,740 1,100 20122007
Madison Distribution Center II & III —
 624
 —
 7,004
 624
 7,004
 7,628
 632
 2012 2015Madison Distribution Center II & III0 624 0 7,029 624 7,029 7,653 1,475 20122015
Madison Distribution Center IV & V —
 565
 —
 8,202
 565
 8,202
 8,767
 271
 2012 2016Madison Distribution Center IV & V0 565 0 8,232 565 8,232 8,797 1,546 20122016
Grand Oaks 75 Business Center IGrand Oaks 75 Business Center I0 3,572 12,979 102 3,572 13,081 16,653 626 20192017
Grand Oaks 75 Business Center IIGrand Oaks 75 Business Center II0 2,589 10,226 2,325 2,589 12,551 15,140 239 20192019
Orlando  
  
  
  
  
  
  
  
    Orlando          
Chancellor Center —
 291
 1,711
 476
 291
 2,187
 2,478
 1,272
 1996/97 1996/97Chancellor Center0 291 1,711 513 291 2,224 2,515 1,485 1996/971996/97
Exchange Distribution Center I —
 603
 2,414
 2,275
 603
 4,689
 5,292
 3,314
 1994 1975Exchange Distribution Center I0 603 2,414 2,400 603 4,814 5,417 3,659 19941975
Exchange Distribution Center II —
 300
 945
 454
 300
 1,399
 1,699
 810
 2002 1976Exchange Distribution Center II0 300 945 482 300 1,427 1,727 950 20021976
Exchange Distribution Center III —
 320
 997
 403
 320
 1,400
 1,720
 903
 2002 1980Exchange Distribution Center III0 320 997 408 320 1,405 1,725 997 20021980
Sunbelt Distribution Center —
 1,472
 5,745
 5,901
 1,472
 11,646
 13,118
 8,622
 1989/97/98 1974/87/97/98Sunbelt Distribution Center0 1,472 5,745 6,109 1,472 11,854 13,326 9,525 1989/97/981974/87/97/98
John Young Commerce Center I —
 497
 2,444
 1,291
 497
 3,735
 4,232
 2,082
 1997/98 1997/98John Young Commerce Center I0 497 2,444 1,601 497 4,045 4,542 2,543 1997/981997/98
John Young Commerce Center II —
 512
 3,613
 529
 512
 4,142
 4,654
 2,632
 1998 1999John Young Commerce Center II0 512 3,613 576 512 4,189 4,701 2,943 19981999
Altamonte Commerce Center I —
 1,498
 2,661
 2,675
 1,498
 5,336
 6,834
 3,856
 1999 1980/82
Altamonte Commerce Center II —
 745
 2,618
 1,252
 745
 3,870
 4,615
 2,212
 2003 1975
Sunport Center I —
 555
 1,977
 1,011
 555
 2,988
 3,543
 1,516
 1999 1999Sunport Center I0 555 1,977 1,077 555 3,054 3,609 1,832 19991999
Sunport Center II —
 597
 3,271
 1,872
 597
 5,143
 5,740
 3,379
 1999 2001Sunport Center II0 597 3,271 2,250 597 5,521 6,118 3,846 19992001
Sunport Center III —
 642
 3,121
 1,032
 642
 4,153
 4,795
 2,194
 1999 2002Sunport Center III0 642 3,121 1,268 642 4,389 5,031 2,611 19992002
Sunport Center IV —
 642
 2,917
 1,804
 642
 4,721
 5,363
 2,324
 1999 2004Sunport Center IV0 642 2,917 1,843 642 4,760 5,402 2,982 19992004
Sunport Center V —
 750
 2,509
 2,385
 750
 4,894
 5,644
 2,694
 1999 2005Sunport Center V0 750 2,509 2,478 750 4,987 5,737 3,068 19992005
Sunport Center VI —
 672
 —
 3,486
 672
 3,486
 4,158
 1,358
 1999 2006Sunport Center VI0 672 0 3,750 672 3,750 4,422 1,691 19992006
Southridge Commerce Park I —
 373
 —
 4,829
 373
 4,829
 5,202
 2,805
 2003 2006Southridge Commerce Park I0 373 0 5,237 373 5,237 5,610 3,218 20032006
Southridge Commerce Park II —
 342
 —
 4,424
 342
 4,424
 4,766
 2,195
 2003 2007Southridge Commerce Park II0 342 0 4,532 342 4,532 4,874 2,496 20032007
Southridge Commerce Park III —
 547
 —
 5,543
 547
 5,543
 6,090
 2,118
 2003 2007Southridge Commerce Park III0 547 0 5,756 547 5,756 6,303 2,634 20032007
Southridge Commerce Park IV (h) 2,798
 506
 —
 4,632
 506
 4,632
 5,138
 1,842
 2003 2006
Southridge Commerce Park V (h) 2,660
 382
 —
 4,502
 382
 4,502
 4,884
 2,056
 2003 2006
Southridge Commerce Park IV (f)Southridge Commerce Park IV (f)2,393 506 0 4,919 506 4,919 5,425 2,209 20032006
Southridge Commerce Park V (f)Southridge Commerce Park V (f)2,175 382 0 4,548 382 4,548 4,930 2,404 20032006
Southridge Commerce Park VI —
 571
 —
 5,284
 571
 5,284
 5,855
 1,879
 2003 2007Southridge Commerce Park VI0 571 0 5,396 571 5,396 5,967 2,382 20032007
Southridge Commerce Park VII —
 520
 —
 6,715
 520
 6,715
 7,235
 2,354
 2003 2008Southridge Commerce Park VII0 520 0 6,787 520 6,787 7,307 2,964 20032008
Southridge Commerce Park VIII —
 531
 —
 6,345
 531
 6,345
 6,876
 1,902
 2003 2008
Southridge Commerce Park IX —
 468
 —
 6,453
 468
 6,453
 6,921
 1,415
 2003 2012
Southridge Commerce Park X —
 414
 —
 4,867
 414
 4,867
 5,281
 794
 2003 2012
83

SCHEDULE IIISCHEDULE IIISCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATIONREAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATIONREAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
DECEMBER 31, 2020 (In thousands, except footnotes)
DECEMBER 31, 2020 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year ConstructedDescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
Land Buildings and Improvements Land Buildings and Improvements Total LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Southridge Commerce Park VIIISouthridge Commerce Park VIII0 531 0 6,369 531 6,369 6,900 2,359 20032008
Southridge Commerce Park IXSouthridge Commerce Park IX0 468 0 6,462 468 6,462 6,930 2,244 20032012
Southridge Commerce Park XSouthridge Commerce Park X0 414 0 4,879 414 4,879 5,293 1,357 20032012
Southridge Commerce Park XI —
 513
 —
 5,927
 513
 5,927
 6,440
 1,123
 2003 2012Southridge Commerce Park XI0 513 0 5,939 513 5,939 6,452 1,788 20032012
Southridge Commerce Park XII —
 2,025
 —
 16,896
 2,025
 16,896
 18,921
 4,715
 2005 2008Southridge Commerce Park XII0 2,025 0 17,189 2,025 17,189 19,214 6,003 20052008
Horizon Commerce Park I —
 991
 —
 6,519
 991
 6,519
 7,510
 898
 2008 2014Horizon Commerce Park I0 991 0 6,586 991 6,586 7,577 1,650 20082014
Horizon Commerce Park II —
 1,111
 —
 7,197
 1,111
 7,197
 8,308
 796
 2008 2014Horizon Commerce Park II0 1,111 0 7,249 1,111 7,249 8,360 1,666 20082014
Horizon Commerce Park III —
 991
 —
 6,471
 991
 6,471
 7,462
 490
 2008 2016Horizon Commerce Park III0 991 0 6,541 991 6,541 7,532 1,259 20082016
Horizon Commerce Park IV —
 1,097
 —
 8,549
 1,097
 8,549
 9,646
 663
 2008 2015Horizon Commerce Park IV0 1,097 0 8,595 1,097 8,595 9,692 1,677 20082015
Horizon Commerce Park V —
 1,108
 —
 8,590
 1,108
 8,590
 9,698
 209
 2008 2017Horizon Commerce Park V0 1,108 0 8,604 1,108 8,604 9,712 1,182 20082017
Horizon Commerce Park VIHorizon Commerce Park VI0 1,099 0 11,131 1,099 11,131 12,230 900 20082019
Horizon Commerce Park VII —
 962
 —
 7,468
 961
 7,469
 8,430
 233
 2008 2017Horizon Commerce Park VII0 962 0 7,639 962 7,639 8,601 1,319 20082017
Horizon Commerce Park VIII & IXHorizon Commerce Park VIII & IX0 1,590 0 16,628 1,590 16,628 18,218 532 20082019
Horizon Commerce Park XHorizon Commerce Park X0 846 0 6,601 846 6,601 7,447 752 20092018
Horizon Commerce Park XIHorizon Commerce Park XI0 1,101 0 9,877 1,101 9,877 10,978 569 20092019
Horizon Commerce Park XIIHorizon Commerce Park XII0 1,416 0 10,581 1,416 10,581 11,997 1,118 20092017
Jacksonville  
  
  
  
  
  
  
  
    Jacksonville          
Deerwood Distribution Center —
 1,147
 1,799
 3,389
 1,147
 5,188
 6,335
 3,181
 1989 1978Deerwood Distribution Center0 1,147 1,799 6,558 1,147 8,357 9,504 3,895 19891978
Phillips Distribution Center —
 1,375
 2,961
 4,414
 1,375
 7,375
 8,750
 5,373
 1994 1984/95Phillips Distribution Center0 1,375 2,961 5,085 1,375 8,046 9,421 5,815 19941984/95
Lake Pointe Business Park —
 3,442
 6,450
 8,272
 3,442
 14,722
 18,164
 11,091
 1993 1986/87Lake Pointe Business Park0 3,442 6,450 9,930 3,442 16,380 19,822 12,840 19931986/87
Ellis Distribution Center —
 540
 7,513
 1,752
 540
 9,265
 9,805
 4,770
 1997 1977Ellis Distribution Center0 540 7,513 4,399 540 11,912 12,452 5,706 19971977
Westside Distribution Center —
 2,011
 15,374
 8,211
 2,011
 23,585
 25,596
 12,109
 1997/2008 1984/85Westside Distribution Center0 2,011 15,374 9,896 2,011 25,270 27,281 14,506 1997/20081984/85
Beach Commerce Center —
 476
 1,899
 678
 476
 2,577
 3,053
 1,385
 2000 2000Beach Commerce Center0 476 1,899 888 476 2,787 3,263 1,617 20002000
Interstate Distribution Center —
 1,879
 5,700
 1,808
 1,879
 7,508
 9,387
 4,012
 2005 1990Interstate Distribution Center0 1,879 5,700 2,274 1,879 7,974 9,853 4,798 20051990
Flagler Center —
 7,317
 14,912
 28
 7,317
 14,940
 22,257
 675
 2016 1997/2005Flagler Center0 7,317 14,912 1,012 7,317 15,924 23,241 2,245 20161997 & 2005
Ft. Lauderdale/Palm Beach area                 Ft. Lauderdale/Palm Beach area
Linpro Commerce Center —
 613
 2,243
 3,049
 616
 5,289
 5,905
 3,382
 1996 1986Linpro Commerce Center0 613 2,243 3,623 616 5,863 6,479 4,026 19961986
Cypress Creek Business Park —
 —
 2,465
 1,892
 —
 4,357
 4,357
 3,001
 1997 1986Cypress Creek Business Park0 0 2,465 2,604 0 5,069 5,069 3,520 19971986
Lockhart Distribution Center —
 —
 3,489
 2,935
 —
 6,424
 6,424
 4,291
 1997 1986Lockhart Distribution Center0 0 3,489 3,150 0 6,639 6,639 4,949 19971986
Interstate Commerce Center —
 485
 2,652
 836
 485
 3,488
 3,973
 2,308
 1998 1988Interstate Commerce Center0 485 2,652 1,851 485 4,503 4,988 2,579 19981988
Executive Airport Distribution Ctr (f) 6,915
 1,991
 4,857
 5,265
 1,991
 10,122
 12,113
 4,879
 2001 2004/06
Sample 95 Business Park —
 2,202
 8,785
 3,524
 2,202
 12,309
 14,511
 7,917
 1996/98 1990/99
Blue Heron Distribution Center —
 975
 3,626
 1,961
 975
 5,587
 6,562
 3,572
 1999 1986
Blue Heron Distribution Center II 409
 1,385
 4,222
 1,333
 1,385
 5,555
 6,940
 2,515
 2004 1988
Blue Heron Distribution Center III —
 450
 —
 2,683
 450
 2,683
 3,133
 904
 2004 2009
                 
Executive Airport Distribution CtrExecutive Airport Distribution Ctr0 1,991 4,857 5,981 1,991 10,838 12,829 5,613 20012004/06
84

SCHEDULE IIISCHEDULE IIISCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATIONREAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATIONREAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
DECEMBER 31, 2020 (In thousands, except footnotes)
DECEMBER 31, 2020 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year ConstructedDescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
Land Buildings and Improvements Land Buildings and Improvements Total LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Sample 95 Business ParkSample 95 Business Park0 2,202 8,785 4,323 2,202 13,108 15,310 8,623 1996/981990/99
Blue Heron Distribution CenterBlue Heron Distribution Center0 975 3,626 2,655 975 6,281 7,256 4,048 19991986
Blue Heron Distribution Center IIBlue Heron Distribution Center II0 1,385 4,222 2,154 1,385 6,376 7,761 3,369 20041988
Blue Heron Distribution Center IIIBlue Heron Distribution Center III0 450 0 2,843 450 2,843 3,293 1,187 20042009
Weston Commerce ParkWeston Commerce Park0 4,163 9,951 1,738 4,163 11,689 15,852 1,535 20161998
Ft. Myers                 Ft. Myers
SunCoast Commerce Center I
 —
 911
 —
 4,809
 928
 4,792
 5,720
 1,754
 2005 2008
SunCoast Commerce Center I
0 911 0 4,841 928 4,824 5,752 2,066 20052008
SunCoast Commerce Center II —
 911
 —
 4,993
 928
 4,976
 5,904
 2,005
 2005 2007SunCoast Commerce Center II0 911 0 5,030 928 5,013 5,941 2,314 20052007
SunCoast Commerce Center III —
 1,720
 —
 6,665
 1,763
 6,622
 8,385
 2,216
 2006 2008SunCoast Commerce Center III0 1,720 0 6,714 1,763 6,671 8,434 2,754 20062008
SunCoast Commerce Center IVSunCoast Commerce Center IV0 1,733 0 7,548 1,762 7,519 9,281 983 20062017
SunCoast Commerce Center VSunCoast Commerce Center V0 1,511 0 6,724 1,594 6,641 8,235 512 20062019
SunCoast Commerce Center VISunCoast Commerce Center VI0 1,537 0 7,063 1,594 7,006 8,600 244 20062019
SunCoast Commerce Center VIIISunCoast Commerce Center VIII0 1,533 0 6,782 1,533 6,782 8,315 196 20062020
MiamiMiami
Gateway Commerce Park 1Gateway Commerce Park 10 5,746 0 18,955 5,746 18,955 24,701 1,357 20162018
Gateway Commerce Park 5Gateway Commerce Park 50 5,746 0 19,329 5,357 19,718 25,075 900 20162019
CALIFORNIA                 CALIFORNIA
San Francisco area                 San Francisco area
Wiegman Distribution Center I
 —
 2,197
 8,788
 2,105
 2,308
 10,782
 13,090
 6,211
 1996 1986/87
Wiegman Distribution Center I
0 2,197 8,788 2,514 2,308 11,191 13,499 7,250 19961986/87
Wiegman Distribution Center II
 —
 2,579
 4,316
 152
 2,579
 4,468
 7,047
 695
 2012 1998
Wiegman Distribution Center II
0 2,579 4,316 152 2,579 4,468 7,047 1,071 20121998
Huntwood Distribution Center —
 3,842
 15,368
 3,109
 3,842
 18,477
 22,319
 10,819
 1996 1988Huntwood Distribution Center0 3,842 15,368 3,711 3,842 19,079 22,921 12,547 19961988
San Clemente Distribution Center —
 893
 2,004
 932
 893
 2,936
 3,829
 1,846
 1997 1978San Clemente Distribution Center0 893 2,004 944 893 2,948 3,841 2,088 19971978
Yosemite Distribution Center —
 259
 7,058
 1,344
 259
 8,402
 8,661
 4,670
 1999 1974/87Yosemite Distribution Center0 259 7,058 2,036 731 8,622 9,353 5,452 19991974/87
Los Angeles area                 Los Angeles area
Kingsview Industrial Center (e)
 2,455
 643
 2,573
 892
 643
 3,465
 4,108
 1,949
 1996 1980
Dominguez Distribution Center (e) 6,693
 2,006
 8,025
 1,170
 2,006
 9,195
 11,201
 5,525
 1996 1977
Eucalyptus Distribution CenterEucalyptus Distribution Center0 11,392 11,498 194 11,392 11,692 23,084 1,043 20181988
Kingsview Industrial CenterKingsview Industrial Center0 643 2,573 883 643 3,456 4,099 2,329 19961980
Dominguez Distribution CenterDominguez Distribution Center0 2,006 8,025 1,170 2,006 9,195 11,201 6,120 19961977
Main Street Distribution Center —
 1,606
 4,103
 831
 1,606
 4,934
 6,540
 2,757
 1999 1999Main Street Distribution Center0 1,606 4,103 869 1,606 4,972 6,578 3,119 19991999
Walnut Business Center (e) 6,352
 2,885
 5,274
 2,471
 2,885
 7,745
 10,630
 4,113
 1996 1966/90
Washington Distribution Center (e) 4,321
 1,636
 4,900
 695
 1,636
 5,595
 7,231
 3,133
 1997 1996/97
Chino Distribution Center —
 2,544
 10,175
 1,623
 2,544
 11,798
 14,342
 7,929
 1998 1980
Ramona Distribution Center 2,572
 3,761
 5,751
 3
 3,761
 5,754
 9,515
 488
 2014 1984
Industry Distribution Center I (e) 16,148
 10,230
 12,373
 4,418
 10,230
 16,791
 27,021
 8,796
 1998 1959
Industry Distribution Center III (e) 1,706
 —
 3,012
 (157) —
 2,855
 2,855
 2,855
 2007 1992
Chestnut Business Center —
 1,674
 3,465
 284
 1,674
 3,749
 5,423
 1,902
 1998 1999
Los Angeles Corporate Center —
 1,363
 5,453
 3,214
 1,363
 8,667
 10,030
 5,807
 1996 1986
Santa Barbara  
  
  
  
  
  
  
  
    
University Business Center
 —
 5,517
 22,067
 8,225
 5,520
 30,289
 35,809
 17,119
 1996 1987/88
Fresno                 
Shaw Commerce Center (e)
 11,905
 2,465
 11,627
 5,830
 2,465
 17,457
 19,922
 10,711
 1998 1978/81/87
                 
Walnut Business CenterWalnut Business Center0 2,885 5,274 2,590 2,885 7,864 10,749 5,143 19961966/90
Washington Distribution CenterWashington Distribution Center0 1,636 4,900 751 1,636 5,651 7,287 3,579 19971996/97
85

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
San Diego                    
     Eastlake Distribution Center
 —
 3,046
 6,888
 1,786
 3,046
 8,674
 11,720
 5,279
 1997 1989
Ocean View Corporate Center (f) 8,358
 6,577
 7,105
 957
 6,577
 8,062
 14,639
 2,638
 2010 2005
TEXAS                    
Dallas                    
Interstate Warehouse I & II (g) 5,447
 1,746
 4,941
 3,628
 1,746
 8,569
 10,315
 6,223
 1988 1978
Interstate Warehouse III (g) 2,163
 519
 2,008
 1,570
 519
 3,578
 4,097
 2,082
 2000 1979
Interstate Warehouse IV —
 416
 2,481
 535
 416
 3,016
 3,432
 1,541
 2004 2002
Interstate Warehouse V, VI, & VII (h) 4,424
 1,824
 4,106
 2,190
 1,824
 6,296
 8,120
 2,974
 2009 1979/80/81
Venture Warehouses (g) 4,155
 1,452
 3,762
 2,654
 1,452
 6,416
 7,868
 5,126
 1988 1979
ParkView Commerce Center 1-3 —
 2,663
 —
 18,452
 2,663
 18,452
 21,115
 998
 2014 2015
Shady Trail Distribution Center —
 635
 3,621
 1,255
 635
 4,876
 5,511
 2,397
 2003 1998
Valwood Distribution Center —
 4,361
 34,405
 3,027
 4,361
 37,432
 41,793
 7,806
 2012 1986/87/97/98
Northfield Distribution Center —
 12,470
 50,713
 2,973
 12,470
 53,686
 66,156
 11,119
 2013 1999-2001/03/04/08
Parc North 1-4 —
 4,615
 26,358
 4,482
 4,615
 30,840
 35,455
 998
 2016 2016
CreekView 121 1 & 2 —
 3,275
 —
 14,568
 3,275
 14,568
 17,843
 310
 2015/16 2017
Houston                    
World Houston Int'l Business Ctr 1 & 2 —
 660
 5,893
 2,066
 660
 7,959
 8,619
 4,714
 1998 1996
World Houston Int'l Business Ctr 3, 4 & 5 (g) 4,730
 1,025
 6,413
 1,518
 1,025
 7,931
 8,956
 4,700
 1998 1998
World Houston Int'l Business Ctr 6 (g) 1,850
 425
 2,423
 655
 425
 3,078
 3,503
 1,833
 1998 1998
World Houston Int'l Business Ctr 7 & 8 (g) 5,392
 680
 4,584
 4,947
 680
 9,531
 10,211
 5,580
 1998 1998
World Houston Int'l Business Ctr 9 (g) 3,750
 800
 4,355
 1,945
 800
 6,300
 7,100
 2,986
 1998 1998
World Houston Int'l Business Ctr 10 —
 933
 4,779
 599
 933
 5,378
 6,311
 2,601
 2001 1999
World Houston Int'l Business Ctr 11 —
 638
 3,764
 1,316
 638
 5,080
 5,718
 2,771
 1999 1999
World Houston Int'l Business Ctr 12 —
 340
 2,419
 383
 340
 2,802
 3,142
 1,608
 2000 2002
World Houston Int'l Business Ctr 13 —
 282
 2,569
 417
 282
 2,986
 3,268
 1,923
 2000 2002
World Houston Int'l Business Ctr 14 —
 722
 2,629
 1,027
 722
 3,656
 4,378
 1,782
 2000 2003
World Houston Int'l Business Ctr 15 —
 731
 —
 6,266
 731
 6,266
 6,997
 3,237
 2000 2007
World Houston Int'l Business Ctr 16 —
 519
 4,248
 1,493
 519
 5,741
 6,260
 3,175
 2000 2005
World Houston Int'l Business Ctr 17 —
 373
 1,945
 799
 373
 2,744
 3,117
 1,382
 2000 2004


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Chino Distribution Center0 2,544 10,175 1,623 2,544 11,798 14,342 9,244 19981980
Ramona Distribution Center2,266 3,761 5,751 160 3,761 5,911 9,672 975 20141984
Industry Distribution Center I0 10,230 12,373 4,866 10,230 17,239 27,469 10,711 19981959
Industry Distribution Center III0 0 3,012 (157)0 2,855 2,855 2,855 20071992
Chestnut Business Center0 1,674 3,465 361 1,674 3,826 5,500 2,217 19981999
Los Angeles Corporate Center0 1,363 5,453 3,627 1,363 9,080 10,443 6,534 19961986
Fresno
     Shaw Commerce Center
0 2,465 11,627 7,579 2,465 19,206 21,671 12,781 19981978/81/87
San Diego
Eastlake Distribution Center0 3,046 6,888 2,089 3,046 8,977 12,023 5,902 19971989
Miramar Land0 13,980 0 1 13,981 0 13,981 0 2019n/a
Ocean View Corporate Center0 6,577 7,105 1,596 6,577 8,701 15,278 3,456 20102005
Otay Mesa Land0 15,282 0 12 15,294 0 15,294 0 2019n/a
Rocky Point Distribution Center I0 8,857 13,388 1 8,857 13,389 22,246 666 20192019
Rocky Point Distribution Center II0 7,623 11,614 846 7,623 12,460 20,083 127 20192019
Siempre Viva Distribution Center I0 4,628 9,211 368 4,628 9,579 14,207 640 20182003
Siempre Viva Distribution Center II0 2,868 5,694 125 2,877 5,810 8,687 232 20192002
TEXAS
Dallas
Allen Station 1 & 20 5,815 17,612 1,142 5,815 18,754 24,569 1,817 20182001
Arlington Tech Centre 1 & 20 2,510 10,096 1,890 2,515 11,981 14,496 140 20192019
Interstate Warehouse I & II (e)4,636 1,746 4,941 3,830 1,746 8,771 10,517 7,270 19881978
Interstate Warehouse III (e)1,852 519 2,008 1,674 519 3,682 4,201 2,649 20001979
Interstate Warehouse IV0 416 2,481 732 416 3,213 3,629 1,829 20042002
Interstate Warehouse V, VI, & VII (f)3,796 1,824 4,106 2,674 1,824 6,780 8,604 4,024 20091979/80/81
Logistics Center 6 & 70 0 12,605 3,178 0 15,783 15,783 832 20192018
Venture Warehouses (e)3,513 1,452 3,762 2,755 1,452 6,517 7,969 5,667 19881979
ParkView Commerce Center 1-30 2,663 0 18,906 2,663 18,906 21,569 3,473 20142015
Shady Trail Distribution Center0 635 3,621 1,408 635 5,029 5,664 2,913 20031998
Valwood Distribution Center0 4,361 34,405 4,433 4,361 38,838 43,199 11,872 20121986/87/97/98
86

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
World Houston Int'l Business Ctr 18 —
 323
 1,512
 259
 323
 1,771
 2,094
 883
 2005 1995
World Houston Int'l Business Ctr 19 —
 373
 2,256
 1,126
 373
 3,382
 3,755
 1,946
 2000 2004
World Houston Int'l Business Ctr 20 —
 1,008
 1,948
 2,060
 1,008
 4,008
 5,016
 1,976
 2000 2004
World Houston Int'l Business Ctr 21 —
 436
 —
 3,942
 436
 3,942
 4,378
 1,492
 2000/03 2006
World Houston Int'l Business Ctr 22 —
 436
 —
 4,542
 436
 4,542
 4,978
 2,111
 2000 2007
World Houston Int'l Business Ctr 23 —
 910
 —
 7,347
 910
 7,347
 8,257
 2,989
 2000 2007
World Houston Int'l Business Ctr 24 —
 837
 —
 5,883
 837
 5,883
 6,720
 2,354
 2005 2008
World Houston Int'l Business Ctr 25 —
 508
 —
 3,882
 508
 3,882
 4,390
 1,454
 2005 2008
World Houston Int'l Business Ctr 26 (f) 2,077
 445
 —
 3,194
 445
 3,194
 3,639
 1,124
 2005 2008
World Houston Int'l Business Ctr 27 —
 837
 —
 5,004
 837
 5,004
 5,841
 1,782
 2005 2008
World Houston Int'l Business Ctr 28 (f) 2,977
 550
 —
 4,665
 550
 4,665
 5,215
 1,559
 2005 2009
World Houston Int'l Business Ctr 29 (f) 2,810
 782
 —
 4,141
 974
 3,949
 4,923
 1,247
 2007 2009
World Houston Int'l Business Ctr 30 (f) 3,870
 981
 —
 5,798
 1,222
 5,557
 6,779
 2,079
 2007 2009
World Houston Int'l Business Ctr 31A —
 684
 —
 4,087
 684
 4,087
 4,771
 1,567
 2008 2011
World Houston Int'l Business Ctr 31B —
 546
 —
 3,539
 546
 3,539
 4,085
 1,069
 2008 2012
World Houston Int'l Business Ctr 32 (h) 3,747
 1,225
 —
 5,655
 1,526
 5,354
 6,880
 1,244
 2007 2012
World Houston Int'l Business Ctr 33 —
 1,166
 —
 7,867
 1,166
 7,867
 9,033
 1,401
 2011 2013
World Houston Int'l Business Ctr 34 —
 439
 —
 3,373
 439
 3,373
 3,812
 683
 2005 2012
World Houston Int'l Business Ctr 35 —
 340
 —
 2,475
 340
 2,475
 2,815
 419
 2005 2012
World Houston Int'l Business Ctr 36 —
 684
 —
 4,882
 684
 4,882
 5,566
 913
 2011 2013
World Houston Int'l Business Ctr 37 —
 759
 —
 6,400
 759
 6,400
 7,159
 1,144
 2011 2013
World Houston Int'l Business Ctr 38 —
 1,053
 —
 7,320
 1,053
 7,320
 8,373
 1,346
 2011 2013
World Houston Int'l Business Ctr 39 —
 620
 —
 5,202
 620
 5,202
 5,822
 611
 2011 2014
World Houston Int'l Business Ctr 40 —
 1,072
 —
 9,347
 1,072
 9,347
 10,419
 1,028
 2011 2014
World Houston Int'l Business Ctr 41 —
 649
 —
 5,950
 649
 5,950
 6,599
 572
 2011 2014
World Houston Int'l Business Ctr 42 —
 571
 —
 4,814
 571
 4,814
 5,385
 409
 2011 2015
Central Green Distribution Center —
 566
 4,031
 794
 566
 4,825
 5,391
 2,356
 1999 1998
Glenmont Business Park —
 936
 6,161
 2,958
 936
 9,119
 10,055
 5,416
 1998 1999/2000
Beltway Crossing Business Park I —
 458
 5,712
 2,737
 458
 8,449
 8,907
 4,436
 2002 2001
Beltway Crossing Business Park II —
 415
 —
 2,997
 415
 2,997
 3,412
 1,268
 2005 2007
Beltway Crossing Business Park III —
 460
 —
 3,124
 460
 3,124
 3,584
 1,371
 2005 2008


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Northfield Distribution Center0 12,470 50,713 6,974 12,471 57,686 70,157 16,967 20131999-2001/03/04/08
Parc North 1-40 4,615 26,358 6,197 4,615 32,555 37,170 5,060 20162016
Parc North 50 1,286 0 7,829 1,286 7,829 9,115 414 20162019
Parc North 60 1,233 0 9,536 1,233 9,536 10,769 299 20162019
CreekView 121 1 & 20 3,275 0 14,614 3,275 14,614 17,889 2,502 20152017
CreekView 121 3 & 40 2,600 0 13,518 2,600 13,518 16,118 1,526 20152018
CreekView 121 5 & 60 2,682 0 12,831 2,681 12,832 15,513 483 20162020
The Rock at Star Business Park0 5,296 27,223 0 5,296 27,223 32,519 112 20202019
Houston
World Houston Int'l Business Ctr 1 & 20 660 5,893 2,496 660 8,389 9,049 5,479 19981996
World Houston Int'l Business Ctr 3 & 4 (e)2,841 820 5,130 495 707 5,738 6,445 3,703 19981998
World Houston Int'l Business Ctr 6 (e)1,550 425 2,423 669 425 3,092 3,517 2,130 19981998
World Houston Int'l Business Ctr 7 & 8 (e)4,583 680 4,584 5,134 680 9,718 10,398 6,638 19981998
World Houston Int'l Business Ctr 9 (e)3,224 800 4,355 2,159 800 6,514 7,314 3,685 19981998
World Houston Int'l Business Ctr 100 933 4,779 880 933 5,659 6,592 3,116 20011999
World Houston Int'l Business Ctr 110 638 3,764 1,799 638 5,563 6,201 3,248 19991999
World Houston Int'l Business Ctr 120 340 2,419 383 340 2,802 3,142 1,794 20002002
World Houston Int'l Business Ctr 130 282 2,569 773 282 3,342 3,624 2,200 20002002
World Houston Int'l Business Ctr 140 722 2,629 1,329 722 3,958 4,680 2,372 20002003
World Houston Int'l Business Ctr 150 731 0 6,284 731 6,284 7,015 3,710 20002007
World Houston Int'l Business Ctr 160 519 4,248 1,806 519 6,054 6,573 3,430 20002005
World Houston Int'l Business Ctr 170 373 1,945 848 373 2,793 3,166 1,611 20002004
World Houston Int'l Business Ctr 190 373 2,256 1,327 373 3,583 3,956 2,110 20002004
World Houston Int'l Business Ctr 200 1,008 1,948 2,201 1,008 4,149 5,157 2,443 20002004
World Houston Int'l Business Ctr 210 436 0 4,126 436 4,126 4,562 1,884 2000/032006
World Houston Int'l Business Ctr 220 436 0 4,638 436 4,638 5,074 2,383 20002007
World Houston Int'l Business Ctr 230 910 0 7,418 910 7,418 8,328 3,539 20002007
World Houston Int'l Business Ctr 240 837 0 6,142 838 6,141 6,979 2,844 20052008
World Houston Int'l Business Ctr 250 508 0 4,486 508 4,486 4,994 1,951 20052008
World Houston Int'l Business Ctr 260 445 0 3,267 445 3,267 3,712 1,343 20052008
87

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
Beltway Crossing Business Park IV —
 460
 —
 3,056
 460
 3,056
 3,516
 1,327
 2005 2008
Beltway Crossing Business Park V (f) 3,358
 701
 —
 5,181
 701
 5,181
 5,882
 2,026
 2005 2008
Beltway Crossing Business Park VI (h) 3,751
 618
 —
 6,268
 618
 6,268
 6,886
 1,911
 2005 2008
Beltway Crossing Business Park VII (h) 3,663
 765
 —
 5,961
 765
 5,961
 6,726
 2,381
 2005 2009
Beltway Crossing Business Park VIII —
 721
 —
 5,219
 721
 5,219
 5,940
 1,407
 2005 2011
Beltway Crossing Business Park IX —
 418
 —
 2,114
 418
 2,114
 2,532
 460
 2007 2012
Beltway Crossing Business Park X —
 733
 —
 3,871
 733
 3,871
 4,604
 773
 2007 2012
Beltway Crossing Business Park XI —
 690
 —
 4,101
 690
 4,101
 4,791
 681
 2007 2013
West Road Business Park I —
 621
 —
 4,031
 541
 4,111
 4,652
 593
 2012 2014
West Road Business Park II —
 981
 —
 4,819
 854
 4,946
 5,800
 611
 2012 2014
West Road Business Park III —
 597
 —
 4,222
 520
 4,299
 4,819
 222
 2012 2015
West Road Business Park IV —
 621
 —
 4,622
 541
 4,702
 5,243
 414
 2012 2015
Ten West Crossing 1 —
 566
 —
 2,997
 566
 2,997
 3,563
 548
 2012 2013
Ten West Crossing 2 —
 829
 —
 4,385
 833
 4,381
 5,214
 978
 2012 2013
Ten West Crossing 3 —
 609
 —
 4,362
 613
 4,358
 4,971
 913
 2012 2013
Ten West Crossing 4 —
 694
 —
 4,512
 699
 4,507
 5,206
 876
 2012 2014
Ten West Crossing 5 —
 933
 —
 5,872
 940
 5,865
 6,805
 823
 2012 2014
Ten West Crossing 6 —
 640
 —
 4,402
 644
 4,398
 5,042
 525
 2012 2014
Ten West Crossing 7 —
 584
 —
 5,320
 588
 5,316
 5,904
 335
 2012 2015
El Paso  
  
  
  
  
  
  
  
    
     Butterfield Trail
 —
 —
 20,725
 8,756
 —
 29,481
 29,481
 18,626
 1997/2000 1987/95
Rojas Commerce Park (g) 4,106
 900
 3,659
 3,216
 900
 6,875
 7,775
 5,090
 1999 1986
Americas Ten Business Center I —
 526
 2,778
 1,241
 526
 4,019
 4,545
 2,303
 2001 2003
San Antonio                    
Alamo Downs Distribution Center —
 1,342
 6,338
 1,554
 1,342
 7,892
 9,234
 4,328
 2004 1986/2002
Arion Business Park 1-13, 15 —
 4,143
 31,432
 6,640
 4,143
 38,072
 42,215
 17,801
 2005 1988-2000/06
Arion Business Park 14 —
 423
 —
 3,460
 423
 3,460
 3,883
 1,411
 2005 2006
Arion Business Park 16 —
 427
 —
 3,699
 427
 3,699
 4,126
 1,341
 2005 2007
Arion Business Park 17 —
 616
 —
 4,143
 616
 4,143
 4,759
 2,248
 2005 2007
Arion Business Park 18 (h) 1,520
 418
 —
 2,373
 418
 2,373
 2,791
 1,059
 2005 2008
Wetmore Business Center 1-4 —
 1,494
 10,804
 3,543
 1,494
 14,347
 15,841
 7,214
 2005 1998/99


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
World Houston Int'l Business Ctr 270 837 0 5,153 838 5,152 5,990 2,368 20052008
World Houston Int'l Business Ctr 280 550 0 4,665 550 4,665 5,215 2,196 20052009
World Houston Int'l Business Ctr 290 782 0 4,179 974 3,987 4,961 1,571 20072009
World Houston Int'l Business Ctr 300 981 0 5,983 1,222 5,742 6,964 2,572 20072009
World Houston Int'l Business Ctr 31A0 684 0 4,092 684 4,092 4,776 1,917 20082011
World Houston Int'l Business Ctr 31B0 546 0 3,555 546 3,555 4,101 1,487 20082012
World Houston Int'l Business Ctr 32 (f)3,035 1,225 0 5,655 1,526 5,354 6,880 1,721 20072012
World Houston Int'l Business Ctr 330 1,166 0 7,867 1,166 7,867 9,033 2,259 20112013
World Houston Int'l Business Ctr 340 439 0 3,440 439 3,440 3,879 1,038 20052012
World Houston Int'l Business Ctr 350 340 0 2,580 340 2,580 2,920 632 20052012
World Houston Int'l Business Ctr 360 684 0 4,882 684 4,882 5,566 1,552 20112013
World Houston Int'l Business Ctr 370 759 0 6,423 759 6,423 7,182 2,020 20112013
World Houston Int'l Business Ctr 380 1,053 0 7,324 1,053 7,324 8,377 2,311 20112013
World Houston Int'l Business Ctr 390 620 0 5,203 621 5,202 5,823 1,258 20112014
World Houston Int'l Business Ctr 400 1,072 0 9,359 1,072 9,359 10,431 1,974 20112014
World Houston Int'l Business Ctr 410 649 0 5,961 649 5,961 6,610 1,326 20112014
World Houston Int'l Business Ctr 420 571 0 4,814 571 4,814 5,385 907 20112015
World Houston Int'l Business Ctr 430 443 0 6,109 443 6,109 6,552 315 20112019
World Houston Int'l Business Ctr 450 3,243 0 13,711 3,243 13,711 16,954 516 20152019
Glenmont Business Park0 936 6,161 3,042 937 9,202 10,139 6,226 19981999/2000
Beltway Crossing Business Park I0 458 5,712 3,149 458 8,861 9,319 5,320 20022001
Beltway Crossing Business Park II0 415 0 3,138 415 3,138 3,553 1,489 20052007
Beltway Crossing Business Park III0 460 0 3,280 460 3,280 3,740 1,595 20052008
Beltway Crossing Business Park IV0 460 0 3,260 460 3,260 3,720 1,520 20052008
Beltway Crossing Business Park V0 701 0 5,267 701 5,267 5,968 2,552 20052008
Beltway Crossing Business Park VI (f)3,134 618 0 6,486 618 6,486 7,104 2,473 20052008
Beltway Crossing Business Park VII (f)3,001 765 0 6,037 765 6,037 6,802 2,806 20052009
Beltway Crossing Business Park VIII0 721 0 5,610 721 5,610 6,331 2,290 20052011
Beltway Crossing Business Park IX0 418 0 2,141 418 2,141 2,559 691 20072012
Beltway Crossing Business Park X0 733 0 3,912 733 3,912 4,645 1,233 20072012
88

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
Wetmore Business Center 5 (f) 2,281
 412
 —
 3,584
 412
 3,584
 3,996
 1,636
 2006 2008
Wetmore Business Center 6 (f) 2,463
 505
 —
 3,809
 505
 3,809
 4,314
 1,417
 2006 2008
Wetmore Business Center 7 (f) 2,538
 546
 —
 3,899
 546
 3,899
 4,445
 1,213
 2006 2008
Wetmore Business Center 8 (f) 4,987
 1,056
 —
 7,680
 1,056
 7,680
 8,736
 2,625
 2006 2008
Fairgrounds Business Park —
 1,644
 8,209
 2,229
 1,644
 10,438
 12,082
 5,110
 2007 1985/86
Rittiman Distribution Center —
 1,083
 6,649
 337
 1,083
 6,986
 8,069
 1,379
 2011 2000
Thousand Oaks Distribution Center 1 —
 607
 —
 4,292
 607
 4,292
 4,899
 1,230
 2008 2012
Thousand Oaks Distribution Center 2 —
 794
 —
 4,719
 794
 4,719
 5,513
 1,125
 2008 2012
Thousand Oaks Distribution Center 3 —
 772
 —
 4,457
 772
 4,457
 5,229
 938
 2008 2013
Thousand Oaks Distribution Center 4 —
 753
 —
 4,688
 753
 4,688
 5,441
 363
 2013 2015
Alamo Ridge Business Park I —
 623
 —
 7,984
 623
 7,984
 8,607
 881
 2007 2015
Alamo Ridge Business Park II —
 402
 —
 5,347
 402
 5,347
 5,749
 391
 2007 2015
Alamo Ridge Business Park III —
 907
 —
 10,123
 907
 10,123
 11,030
 329
 2007 2017
Eisenhauer Point Business Park 1 & 2 —
 1,881
 —
 14,642
 1,881
 14,642
 16,523
 712
 2015 2016
Eisenhauer Point Business Park 4 —
 555
 —
 4,816
 555
 4,816
 5,371
 93
 2015 2017
Austin                    
Colorado Crossing Distribution Center (g) 12,913
 4,602
 19,757
 94
 4,602
 19,851
 24,453
 3,821
 2014 2009
Southpark Corporate Center 3 & 4 —
 2,670
 14,756
 912
 2,670
 15,668
 18,338
 2,326
 2015 1995
Southpark Corporate Center 5-7 —
 1,301
 7,589
 786
 1,301
 8,375
 9,676
 270
 2017 1995
Springdale Business Center —
 2,824
 8,398
 324
 2,824
 8,722
 11,546
 986
 2015 2000
ARIZONA                    
Phoenix area                    
Broadway Industrial Park I —
 837
 3,349
 1,063
 837
 4,412
 5,249
 2,794
 1996 1971
Broadway Industrial Park II —
 455
 482
 306
 455
 788
 1,243
 441
 1999 1971
Broadway Industrial Park III —
 775
 1,742
 523
 775
 2,265
 3,040
 1,398
 2000 1983
Broadway Industrial Park IV —
 380
 1,652
 783
 380
 2,435
 2,815
 1,591
 2000 1986
Broadway Industrial Park V —
 353
 1,090
 146
 353
 1,236
 1,589
 691
 2002 1980
Broadway Industrial Park VI —
 599
 1,855
 738
 599
 2,593
 3,192
 1,585
 2002 1979
Broadway Industrial Park VII —
 450
 650
 243
 450
 893
 1,343
 224
 2011 1999
Kyrene Distribution Center —
 1,490
 4,453
 1,863
 1,490
 6,316
 7,806
 3,857
 1999 1981/2001
Southpark Distribution Center —
 918
 2,738
 1,934
 918
 4,672
 5,590
 1,820
 2001 2000


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Beltway Crossing Business Park XI0 690 0 4,141 690 4,141 4,831 1,171 20072013
West Road Business Park I0 621 0 4,103 541 4,183 4,724 1,168 20122014
West Road Business Park II0 981 0 4,819 854 4,946 5,800 1,156 20122014
West Road Business Park III0 597 0 4,222 520 4,299 4,819 695 20122015
West Road Business Park IV0 621 0 4,623 541 4,703 5,244 1,181 20122015
West Road Business Park V0 484 0 4,372 421 4,435 4,856 560 20122018
Ten West Crossing 10 566 0 3,041 566 3,041 3,607 909 20122013
Ten West Crossing 20 829 0 4,496 833 4,492 5,325 1,656 20122013
Ten West Crossing 30 609 0 4,535 613 4,531 5,144 1,436 20122013
Ten West Crossing 40 694 0 4,569 699 4,564 5,263 1,477 20122014
Ten West Crossing 50 933 0 5,872 940 5,865 6,805 1,575 20122014
Ten West Crossing 60 640 0 4,660 644 4,656 5,300 1,131 20122014
Ten West Crossing 70 584 0 5,321 589 5,316 5,905 1,148 20122015
Ten West Crossing 80 1,126 0 8,710 1,135 8,701 9,836 488 20122019
El Paso          
     Butterfield Trail
0 0 20,725 9,763 0 30,488 30,488 21,485 1997/20001987/95
Rojas Commerce Park (e)3,759 900 3,659 3,968 900 7,627 8,527 5,751 19991986
Americas Ten Business Center I0 526 2,778 1,741 526 4,519 5,045 2,563 20012003
San Antonio
Alamo Downs Distribution Center0 1,342 6,338 1,856 1,342 8,194 9,536 4,989 20041986/2002
Arion Business Park 1-13, 150 4,143 31,432 9,939 4,143 41,371 45,514 21,759 20051988-2000/06
Arion Business Park 140 423 0 4,011 423 4,011 4,434 1,726 20052006
Arion Business Park 160 427 0 3,715 427 3,715 4,142 1,690 20052007
Arion Business Park 170 616 0 4,404 616 4,404 5,020 2,674 20052007
Arion Business Park 18 (f)1,244 418 0 2,402 418 2,402 2,820 1,224 20052008
Wetmore Business Center 1-40 1,494 10,804 3,781 1,494 14,585 16,079 8,495 20051998/99
Wetmore Business Center 50 412 0 3,870 412 3,870 4,282 1,963 20062008
Wetmore Business Center 60 505 0 4,035 505 4,035 4,540 1,789 20062008
Wetmore Business Center 70 546 0 5,089 546 5,089 5,635 1,885 20062008
Wetmore Business Center 80 1,056 0 8,366 1,056 8,366 9,422 3,488 20062008
Fairgrounds Business Park0 1,644 8,209 2,515 1,644 10,724 12,368 5,957 20071985/86
89

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
Santan 10 Distribution Center I —
 846
 2,647
 658
 846
 3,305
 4,151
 1,472
 2001 2005
Santan 10 Distribution Center II —
 1,088
 —
 5,163
 1,088
 5,163
 6,251
 2,238
 2004 2007
Chandler Freeways —
 1,525
 —
 7,381
 1,525
 7,381
 8,906
 1,124
 2012 2013
Kyrene 202 Business Park I —
 653
 —
 5,777
 653
 5,777
 6,430
 592
 2011 2014
Kyrene 202 Business Park II —
 387
 —
 3,414
 387
 3,414
 3,801
 352
 2011 2014
Kyrene 202 Business Park VI —
 936
 —
 8,290
 936
 8,290
 9,226
 371
 2011 2015
Metro Business Park —
 1,927
 7,708
 7,139
 1,927
 14,847
 16,774
 10,251
 1996 1977/79
35th Avenue Distribution Center —
 418
 2,381
 2,118
 418
 4,499
 4,917
 1,487
 1997 1967
51st Avenue Distribution Center —
 300
 2,029
 995
 300
 3,024
 3,324
 1,944
 1998 1987
East University Distribution Center I and II —
 1,120
 4,482
 1,799
 1,120
 6,281
 7,401
 4,120
 1998 1987/89
East University Distribution Center III —
 444
 698
 422
 443
 1,121
 1,564
 336
 2010 1981
55th Avenue Distribution Center —
 912
 3,717
 1,116
 917
 4,828
 5,745
 3,267
 1998 1987
Interstate Commons Distribution Center I —
 311
 1,416
 720
 311
 2,136
 2,447
 1,308
 1999 1988
Interstate Commons Distribution Center III —
 242
 —
 3,079
 242
 3,079
 3,321
 1,035
 2000 2008
Airport Commons Distribution Center —
 1,000
 1,510
 1,485
 1,000
 2,995
 3,995
 1,838
 2003 1971
40th Avenue Distribution Center (f) 3,860
 703
 —
 6,059
 703
 6,059
 6,762
 2,078
 2004 2008
Sky Harbor Business Park —
 5,839
 —
 21,754
 5,839
 21,754
 27,593
 7,186
 2006 2008
Sky Harbor Business Park 6 —
 807
 —
 2,177
 807
 2,177
 2,984
 183
 2014 2015
Ten Sky Harbor Business Center —
 1,568
 —
 5,009
 1,569
 5,008
 6,577
 82
 2015 2016
Tucson                    
     Country Club Commerce Center I
 —
 506
 3,564
 2,173
 693
 5,550
 6,243
 2,660
 1997/2003 1994/2003
Country Club Commerce Center II —
 442
 3,381
 304
 709
 3,418
 4,127
 1,212
 2007 2000
Country Club Commerce Center III & IV —
 1,407
 —
 11,833
 1,575
 11,665
 13,240
 4,279
 2007 2009
Airport Distribution Center —
 1,403
 4,672
 1,619
 1,403
 6,291
 7,694
 3,827
 1998/2000 1995
Southpointe Distribution Center —
 —
 3,982
 2,950
 —
 6,932
 6,932
 4,450
 1999 1989
Benan Distribution Center —
 707
 1,842
 648
 707
 2,490
 3,197
 1,424
 2005 2001
                     


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Rittiman Distribution Center0 1,083 6,649 603 1,083 7,252 8,335 1,971 20112000
Thousand Oaks Distribution Center 10 607 0 4,518 607 4,518 5,125 1,806 20082012
Thousand Oaks Distribution Center 20 794 0 4,816 794 4,816 5,610 1,626 20082012
Thousand Oaks Distribution Center 30 772 0 4,651 772 4,651 5,423 1,500 20082013
Thousand Oaks Distribution Center 40 753 0 4,744 753 4,744 5,497 925 20132015
Alamo Ridge Business Park I0 623 0 8,306 623 8,306 8,929 2,358 20072015
Alamo Ridge Business Park II0 402 0 5,368 402 5,368 5,770 1,093 20072015
Alamo Ridge Business Park III0 907 0 10,144 907 10,144 11,051 1,418 20072017
Alamo Ridge Business Park IV0 354 0 7,479 355 7,478 7,833 1,850 20072017
Eisenhauer Point Business Park 1 & 20 1,881 0 14,726 1,881 14,726 16,607 2,741 20152016
Eisenhauer Point Business Park 30 577 0 6,109 577 6,109 6,686 1,044 20152017
Eisenhauer Point Business Park 40 555 0 4,832 555 4,832 5,387 677 20152017
Eisenhauer Point Business Park 50 818 0 7,015 818 7,015 7,833 1,091 20152018
Eisenhauer Point Business Park 60 569 0 4,869 569 4,869 5,438 396 20152018
Eisenhauer Point Business Park 7 & 80 1,000 0 22,243 2,593 20,650 23,243 1,285 20162019
Eisenhauer Point Business Park 90 632 0 5,729 632 5,729 6,361 235 20162019
Tri-County Crossing 1 & 20 1,623 0 14,816 1,623 14,816 16,439 848 20172019
Austin
Colorado Crossing Distribution Center (e)10,881 4,602 19,757 325 4,594 20,090 24,684 6,362 20142009
Greenhill Distribution Center0 802 3,273 243 802 3,516 4,318 252 20181999
Settlers Crossing 10 1,211 0 8,207 1,211 8,207 9,418 415 20172019
Settlers Crossing 20 1,306 0 7,549 1,306 7,549 8,855 579 20172019
Southpark Corporate Center 3 & 40 2,670 14,756 1,904 2,670 16,660 19,330 4,283 20151995
Southpark Corporate Center 5-70 1,301 7,589 1,185 1,301 8,774 10,075 1,365 20171995
Springdale Business Center0 2,824 8,398 561 2,824 8,959 11,783 2,035 20152000
Wells Point One0 907 4,904 311 907 5,215 6,122 276 20202001
ARIZONA
Phoenix area
Broadway Industrial Park I0 837 3,349 2,869 837 6,218 7,055 3,173 19961971
Broadway Industrial Park II0 455 482 390 455 872 1,327 546 19991971
90

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
NORTH CAROLINA  
  
  
  
  
  
  
  
    
Charlotte area  
  
  
  
  
  
  
  
    
NorthPark Business Park —
 2,758
 15,932
 4,645
 2,758
 20,577
 23,335
 9,459
 2006 1987-89
Lindbergh Business Park —
 470
 3,401
 482
 470
 3,883
 4,353
 1,601
 2007 2001/03
Commerce Park Center I —
 765
 4,303
 842
 765
 5,145
 5,910
 1,999
 2007 1983
Commerce Park Center II (h) 1,221
 335
 1,603
 304
 335
 1,907
 2,242
 626
 2010 1987
Commerce Park Center III (h) 2,034
 558
 2,225
 952
 558
 3,177
 3,735
 971
 2010 1981
Nations Ford Business Park —
 3,924
 16,171
 3,441
 3,924
 19,612
 23,536
 8,884
 2007 1989/94
Airport Commerce Center —
 1,454
 10,136
 2,260
 1,454
 12,396
 13,850
 4,260
 2008 2001/02
Interchange Park I (f) 5,442
 986
 7,949
 598
 986
 8,547
 9,533
 2,759
 2008 1989
Interchange Park II —
 746
 1,456
 55
 746
 1,511
 2,257
 224
 2013 2000
Ridge Creek Distribution Center I —
 1,284
 13,163
 976
 1,284
 14,139
 15,423
 4,157
 2008 2006
Ridge Creek Distribution Center II (h) 9,067
 3,033
 11,497
 2,116
 3,033
 13,613
 16,646
 2,699
 2011 2003
Ridge Creek Distribution Center III —
 2,459
 11,147
 538
 2,459
 11,685
 14,144
 1,474
 2014 2013
Lakeview Business Center (h) 4,017
 1,392
 5,068
 916
 1,392
 5,984
 7,376
 1,492
 2011 1996
Steele Creek Commerce Park I (g) 2,803
 993
 —
 4,315
 1,010
 4,298
 5,308
 770
 2013 2014
Steele Creek Commerce Park II (g) 2,852
 941
 —
 4,459
 957
 4,443
 5,400
 775
 2013 2014
Steele Creek Commerce Park III —
 1,464
 —
 6,412
 1,469
 6,407
 7,876
 889
 2013 2014
Steele Creek Commerce Park IV —
 684
 —
 3,945
 687
 3,942
 4,629
 467
 2013 2015
Steele Creek Commerce Park VI —
 867
 —
 6,974
 869
 6,972
 7,841
 227
 2013/14 2016
Waterford Distribution Center —
 654
 3,392
 655
 654
 4,047
 4,701
 1,276
 2008 2000
                     


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Broadway Industrial Park III0 775 1,742 1,054 775 2,796 3,571 1,509 20001983
Broadway Industrial Park IV0 380 1,652 1,163 380 2,815 3,195 1,755 20001986
Broadway Industrial Park V0 353 1,090 871 353 1,961 2,314 977 20021980
Broadway Industrial Park VI0 599 1,855 802 599 2,657 3,256 1,826 20021979
Broadway Industrial Park VII0 450 650 288 450 938 1,388 336 20111999
Kyrene Distribution Center0 1,490 4,453 2,096 1,490 6,549 8,039 4,379 19991981/2001
Falcon Field Business Center0 1,312 0 8,009 1,312 8,009 9,321 585 20152018
Southpark Distribution Center0 918 2,738 2,005 918 4,743 5,661 2,707 20012000
Santan 10 Distribution Center I0 846 2,647 692 846 3,339 4,185 1,780 20012005
Santan 10 Distribution Center II0 1,088 0 5,352 1,088 5,352 6,440 2,616 20042007
Chandler Freeways0 1,525 0 7,381 1,525 7,381 8,906 2,036 20122013
Kyrene 202 Business Park I0 653 0 5,777 653 5,777 6,430 1,263 20112014
Kyrene 202 Business Park II0 387 0 3,414 387 3,414 3,801 715 20112014
Kyrene 202 Business Park III, IV, & V0 1,244 0 11,878 1,244 11,878 13,122 1,197 20112018
Kyrene 202 Business Park VI0 936 0 8,333 936 8,333 9,269 1,607 20112015
Metro Business Park0 1,927 7,708 8,323 1,927 16,031 17,958 11,910 19961977/79
51st Avenue Distribution Center0 300 2,029 1,215 300 3,244 3,544 2,296 19981987
East University Distribution Center I and II0 1,120 4,482 2,045 1,120 6,527 7,647 4,891 19981987/89
East University Distribution Center III0 444 698 461 444 1,159 1,603 554 20101981
55th Avenue Distribution Center0 912 3,717 1,168 917 4,880 5,797 3,839 19981987
Interstate Commons Distribution Center I0 311 1,416 1,101 311 2,517 2,828 1,655 19991988
Interstate Commons Distribution Center III0 242 0 3,112 242 3,112 3,354 1,296 20002008
Airport Commons Distribution Center0 1,000 1,510 1,780 1,000 3,290 4,290 2,285 20031971
40th Avenue Distribution Center0 703 0 6,061 703 6,061 6,764 2,541 20042008
Sky Harbor Business Park0 5,839 0 22,044 5,839 22,044 27,883 8,971 20062008
Sky Harbor Business Park 60 807 0 2,136 807 2,136 2,943 427 20142015
Ten Sky Harbor Business Center0 1,568 0 5,132 1,569 5,131 6,700 825 20152016
Tucson
     Country Club Commerce Center I
0 506 3,564 3,916 693 7,293 7,986 3,612 1997/20031994/2003
Country Club Commerce Center II0 442 3,381 1,065 709 4,179 4,888 1,579 20072000
91

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
GEORGIA                    
Atlanta                    
Shiloh 400 Business Center I & II —
 3,092
 14,216
 1,488
 3,092
 15,704
 18,796
 672
 2017 2008
Broadmoor Commerce Park I —
 1,307
 3,560
 496
 1,307
 4,056
 5,363
 228
 2017 1999
Hurricane Shoals I & II —
 4,284
 12,449
 1,141
 4,284
 13,590
 17,874
 40
 2017 2017
LOUISIANA                    
New Orleans                    
     Elmwood Business Park
 —
 2,861
 6,337
 5,026
 2,861
 11,363
 14,224
 7,841
 1997 1979
Riverbend Business Park —
 2,557
 17,623
 8,471
 2,557
 26,094
 28,651
 14,573
 1997 1984
COLORADO                    
Denver                    
Rampart Distribution Center I —
 1,023
 3,861
 2,093
 1,023
 5,954
 6,977
 4,309
 1988 1987
Rampart Distribution Center II —
 230
 2,977
 1,173
 230
 4,150
 4,380
 2,782
 1996/97 1996/97
Rampart Distribution Center III —
 1,098
 3,884
 1,931
 1,098
 5,815
 6,913
 3,092
 1997/98 1999
Rampart Distribution Center IV —
 590
 —
 8,322
 590
 8,322
 8,912
 623
 2012 2014
Concord Distribution Center (h) 3,413
 1,051
 4,773
 443
 1,051
 5,216
 6,267
 1,996
 2007 2000
Centennial Park (f) 3,381
 750
 3,319
 1,853
 750
 5,172
 5,922
 1,822
 2007 1990
NEVADA                    
Las Vegas                    
     Arville Distribution Center —
 4,933
 5,094
 424
 4,933
 5,518
 10,451
 1,823
 2009 1997
Jones Corporate Park —
 13,068
 26,325
 1,682
 13,068
 28,007
 41,075
 746
 2016 2016
MISSISSIPPI                    
Jackson area                    
     Interchange Business Park —
 343
 5,007
 3,984
 343
 8,991
 9,334
 5,589
 1997 1981
     Tower Automotive —
 —
 9,958
 1,937
 17
 11,878
 11,895
 4,926
 2001 2002
     Metro Airport Commerce Center I —
 303
 1,479
 1,134
 303
 2,613
 2,916
 1,576
 2001 2003
  200,354
 343,254
 1,030,428
 961,777
 345,424
 1,990,035
 2,335,459
 749,275
    


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Country Club Commerce Center III & IV0 1,407 0 12,253 1,575 12,085 13,660 5,243 20072009
Country Club Commerce Center V0 2,885 0 21,438 2,886 21,437 24,323 1,730 20162018
Airport Distribution Center0 1,403 4,672 1,834 1,403 6,506 7,909 4,319 1998/20001995
Benan Distribution Center0 707 1,842 737 707 2,579 3,286 1,596 20052001
NORTH CAROLINA          
Charlotte area          
NorthPark Business Park0 2,758 15,932 5,206 2,758 21,138 23,896 11,494 20061987-89
Lindbergh Business Park0 470 3,401 827 470 4,228 4,698 2,033 20072001/03
Commerce Park Center I0 765 4,303 1,072 765 5,375 6,140 2,563 20071983
Commerce Park Center II (f)1,038 335 1,603 415 335 2,018 2,353 829 20101987
Commerce Park Center III (f)1,739 558 2,225 1,159 558 3,384 3,942 1,352 20101981
Nations Ford Business Park0 3,924 16,171 5,349 3,924 21,520 25,444 10,954 20071989/94
Airport Commerce Center0 1,454 10,136 2,729 1,454 12,865 14,319 5,737 20082001/02
Airport Commerce Center III0 855 0 8,038 855 8,038 8,893 549 20082019
Interchange Park I0 986 7,949 701 986 8,650 9,636 3,466 20081989
Interchange Park II0 746 1,456 351 746 1,807 2,553 373 20132000
Ridge Creek Distribution Center I0 1,284 13,163 1,167 1,284 14,330 15,614 5,273 20082006
Ridge Creek Distribution Center II (f)7,370 3,033 11,497 2,175 3,033 13,672 16,705 4,182 20112003
Ridge Creek Distribution Center III0 2,459 11,147 782 2,459 11,929 14,388 2,551 20142013
Lakeview Business Center (f)3,257 1,392 5,068 922 1,392 5,990 7,382 2,132 20111996
Steele Creek Commerce Park I (e)2,365 993 0 4,372 1,010 4,355 5,365 1,385 20132014
Steele Creek Commerce Park II (e)2,406 941 0 4,517 957 4,501 5,458 1,381 20132014
Steele Creek Commerce Park III0 1,464 0 6,607 1,469 6,602 8,071 1,779 20132014
Steele Creek Commerce Park IV0 684 0 4,021 687 4,018 4,705 1,119 20132015
Steele Creek Commerce Park V0 610 0 5,239 631 5,218 5,849 301 2013/14/152019
Steele Creek Commerce Park VI0 867 0 7,148 919 7,096 8,015 1,238 2013/142016
Steele Creek Commerce Park VII0 1,207 0 7,988 1,253 7,942 9,195 935 2013/14/152017
Steele Creek Commerce Park IX0 949 0 10,165 1,090 10,024 11,114 265 20162019
Waterford Distribution Center0 654 3,392 918 654 4,310 4,964 1,707 20082000
92

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
 Land Buildings and Improvements  Land Buildings and Improvements Total 
Industrial Development (d):  
  
  
  
  
  
  
  
    
FLORIDA  
  
  
  
  
  
  
  
    
Oak Creek Distribution Center VII —
 740
 —
 5,391
 740
 5,391
 6,131
 —
 2005 2017
Oak Creek Distribution Center land —
 486
 —
 1,074
 707
 853
 1,560
 —
 2005 n/a
Horizon Commerce Park X —
 846
 —
 2,704
 846
 2,704
 3,550
 —
 2009 n/a
Horizon Commerce Park XII —
 1,416
 —
 9,814
 1,416
 9,814
 11,230
 14
 2008 2017
Horizon Commerce Park land —
 4,439
 —
 6,681
 4,440
 6,680
 11,120
 —
 2008/09 n/a
SunCoast Commerce Center IV —
 1,733
 —
 7,387
 1,762
 7,358
 9,120
 56
 2006 2017
SunCoast Commerce Center land —
 9,159
 —
 4,953
 9,343
 4,769
 14,112
 —
 2006 n/a
Weston Commerce Park —
 4,163
 9,951
 1,406
 4,163
 11,357
 15,520
 231
 2016 1998
Gateway Commerce Park land —
 26,728
 —
 4,148
 26,878
 3,998
 30,876
 —
 2016 n/a
TEXAS                    
CreekView 121 3 & 4 —
 2,600
 —
 7,711
 2,600
 7,711
 10,311
 —
 2015/16 n/a
CreekView 121 land —
 5,322
 —
 1,203
 5,322
 1,203
 6,525
 —
 2015/16 n/a
Parc North land —
 2,519
 —
 552
 2,519
 552
 3,071
 —
 2016 n/a
World Houston Int'l Business Ctr land —
 2,989
 —
 2,119
 3,723
 1,385
 5,108
 —
 2007 n/a
World Houston Int'l Business Ctr land - 2011 expansion —
 1,636
 —
 4,320
 2,920
 3,036
 5,956
 —
 2011 n/a
World Houston Int'l Business Ctr land - 2015 expansion —
 6,040
 —
 1,132
 6,041
 1,131
 7,172
 —
 2015 n/a
Ten West Crossing land —
 1,126
 —
 806
 1,135
 797
 1,932
 —
 2012 n/a
West Road Business Park land —
 484
 —
 538
 421
 601
 1,022
 —
 2012 n/a
Alamo Ridge Business Park IV —
 354
 —
 6,743
 355
 6,742
 7,097
 23
 2007 2017
Eisenhauer Point Business Park 3 —
 577
 —
 5,582
 578
 5,581
 6,159
 —
 2015 2017
Eisenhauer Point Business Park 5 —
 818
 —
 4,986
 818
 4,986
 5,804
 —
 2015 n/a
Eisenhauer Point Business Park 6 —
 569
 —
 3,481
 569
 3,481
 4,050
 —
 2015 n/a
Eisenhauer Point Business Park land phase 2 —
 3,225
 —
 2,507
 3,225
 2,507
 5,732
 —
 2016 n/a
Tri-County Crossing land —
 5,260
 —
 402
 5,260
 402
 5,662
 —
 2017 n/a
Settlers Crossing 1 —
 1,211
 —
 345
 1,211
 345
 1,556
 —
 2017 n/a
Settlers Crossing 2 —
 1,306
 —
 367
 1,306
 367
 1,673
 —
 2017 n/a
Settlers Crossing land —
 2,774
 —
 246
 2,774
 246
 3,020
 —
 2017 n/a
                     


SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
SOUTH CAROLINA
Greenville
385 Business Park0 1,308 10,822 526 1,308 11,348 12,656 691 20192019
GEORGIA
Atlanta
Shiloh 400 Business Center I & II0 3,092 14,216 2,462 3,092 16,678 19,770 2,984 20172008
Broadmoor Commerce Park I0 1,307 3,560 1,250 1,307 4,810 6,117 969 20171999
Broadmoor Commerce Park II0 519 0 7,392 519 7,392 7,911 459 20172018
Gwinnett 3160 4,284 12,449 4,014 4,284 16,463 20,747 1,886 20172017
Hurricane Shoals I & II0 1,297 9,015 289 1,297 9,304 10,601 1,437 20172017
Progress Center I & II0 531 3,617 21 531 3,638 4,169 282 20181990
Cherokee 75 Business Center I0 1,183 6,727 0 1,183 6,727 7,910 21 20202020
LOUISIANA
New Orleans
     Elmwood Business Park
0 2,861 6,337 6,516 2,861 12,853 15,714 9,224 19971979
Riverbend Business Park0 2,557 17,623 10,028 2,557 27,651 30,208 18,015 19971984
COLORADO
Denver
Airways Business Center0 6,137 39,637 205 6,137 39,842 45,979 2,158 20192007/08
Rampart Distribution Center I0 1,023 3,861 2,542 1,023 6,403 7,426 5,162 19881987
Rampart Distribution Center II0 230 2,977 1,659 230 4,636 4,866 3,252 1996/971997
Rampart Distribution Center III0 1,098 3,884 2,832 1,098 6,716 7,814 3,970 1997/981999
Rampart Distribution Center IV0 590 0 8,340 590 8,340 8,930 1,668 20122014
Concord Distribution Center (f)3,038 1,051 4,773 1,061 1,051 5,834 6,885 2,442 20072000
Centennial Park0 750 3,319 2,169 750 5,488 6,238 2,259 20071990
NEVADA
Las Vegas
     Arville Distribution Center0 4,933 5,094 476 4,933 5,570 10,503 2,249 20091997
Jones Corporate Park0 13,068 26,325 1,913 13,068 28,238 41,306 3,707 20162016
Southwest Commerce Center0 9,008 16,576 2,903 9,008 19,479 28,487 367 20192019
MISSISSIPPI
Jackson area
     Interchange Business Park0 343 5,007 5,299 343 10,306 10,649 6,796 19971981
     Tower Automotive0 0 9,958 1,959 17 11,900 11,917 5,912 20012002
93

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2017 (In thousands, except footnotes)
Description Encumbrances Initial Cost to the Company 
Costs
Capitalized Subsequent to Acquisition
 Gross Amount Carried at Close of Period Accumulated Depreciation Year Acquired Year Constructed
    Land Buildings and Improvements   Land Buildings and Improvements Total      
ARIZONA                    
Kyrene 202 Business Park 3, 4 & 5 —
 1,244
 —
 10,299
 1,244
 10,299
 11,543
 —
 2011 n/a
Falcon Field Business Center —
 1,312
 —
 1,635
 1,312
 1,635
 2,947
 —
 2015 n/a
Country Club Commerce Center V —
 2,885
 —
 11,066
 2,886
 11,065
 13,951
 —
 2016 n/a
NORTH CAROLINA                    
Steele Creek Commerce Park VII —
 1,207
 —
 6,590
 1,209
 6,588
 7,797
 —
 2013/14/15 2017
Airport Commerce Center III —
 855
 —
 878
 855
 878
 1,733
 —
 2008 n/a
Steele Creek Commerce Park land —
 3,318
 —
 1,250
 3,330
 1,238
 4,568
 —
 2013-2016 n/a
Steele Creek Commerce Park land Phase 4 —
 1,866
 —
 294
 1,866
 294
 2,160
 —
 2016/17 n/a
GEORGIA                    
Progress Center I & II —
 1,297
 9,015
 21
 1,297
 9,036
 10,333
 2
 2017 2017
Broadmoor Commerce Park land —
 519
 —
 186
 519
 186
 705
 —
 2017 n/a
Progress Center land —
 497
 —
 5
 497
 5
 502
 —
 2017 n/a
MISSISSIPPI                    
     Metro Airport Commerce Center II land
 —
 307
 —
 399
 307
 399
 706
 —
 2001 n/a
  —
 103,827
 18,966
 119,221
 106,394
 135,620
 242,014
 326
    
Total real estate owned (a)(b) $200,354
 447,081
 1,049,394
 1,080,998
 451,818
 2,125,655
 2,577,473
 749,601
    
See accompanying Report of Independent Registered Public Accounting Firm.
  
    
SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
     Metro Airport Commerce Center I0 303 1,479 1,256 303 2,735 3,038 1,734 20012003
RIGHT OF USE ASSETS, NET - GROUND LEASES (OPERATING)— — — — — — 11,073 — n/an/a
 79,096 498,608 1,232,994 1,416,822 502,739 2,645,685 3,159,497 954,573   

94




SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
Development and Value-Add Properties (d):          
CALIFORNIA
Rancho Distribution Center0 16,180 11,140 5 16,180 11,145 27,325 156 20202006
FLORIDA          
Suncoast Commerce Center 70 1,533 0 5,840 1,533 5,840 7,373 0 20062020
Suncoast Commerce Center Land0 6,547 0 1,319 6,630 1,236 7,866 0 2006/2020n/a
Gateway Commerce Park 40 4,711 0 17,336 4,711 17,336 22,047 0 20162020
Gateway Commerce Park Land0 11,065 0 9,231 11,065 9,231 20,296 0 2016n/a
Horizon Commerce Park Land0 650 0 426 650 426 1,076 0 2008/09n/a
Horizon West Land0 20,528 0 6,074 20,530 6,072 26,602 0 2020n/a
Grand Oaks 75 Land0 4,101 0 797 4,109 789 4,898 0 2019n/a
Oak Creek Distribution Center Land0 106 0 719 352 473 825 0 2005n/a
TEXAS
Arlington Tech Centre Land0 1,725 0 127 1,725 127 1,852 0 2020n/a
Basswood 1 & 20 4,086 0 668 4,087 667 4,754 0 2019n/a
Basswood Land0 11,680 0 1,018 11,681 1,017 12,698 0 2019n/a
CreekView 121 7 & 80 2,640 0 13,919 2,640 13,919 16,559 44 20162020
CreekView Phase 3 Land0 3,985 0 207 3,985 207 4,192 0 2020n/a
LakePort 24990 2,984 0 16,797 2,984 16,797 19,781 0 20182020
LakePort 2499 Land0 2,716 0 3,602 2,716 3,602 6,318 0 2018n/a
McKinney Land0 12,239 0 129 12,239 129 12,368 0 2020n/a
Grand West Crossing Land0 8,757 0 1,717 8,750 1,724 10,474 0 2019n/a
Lee Road Land0 2,689 0 0 1,960 729 2,689 0 2007n/a
Northwest Crossing 1-30 5,665 0 16,657 5,665 16,657 22,322 21 20192020
World Houston Int'l Business Ctr 440 653 0 7,473 653 7,473 8,126 0 20112020
World Houston Int'l Business Ctr land - 2011 expansion0 1,636 0 1,876 1,824 1,688 3,512 0 2011n/a
World Houston Int'l Business Ctr land - 2015 expansion0 2,798 0 1,285 2,798 1,285 4,083 0 2015n/a
Americas Ten 2 Land0 2,516 0 71 2,516 71 2,587 0 2020n/a
Ridgeview 1 & 20 2,004 0 15,089 2,004 15,089 17,093 13 20182020
Ridgeview Land0 1,269 0 713 1,269 713 1,982 0 2018n/a
Tri-County Crossing 3 and 40 1,733 0 12,676 1,733 12,676 14,409 9 20172020
Tri-County Crossing Land0 1,904 0 979 1,904 979 2,883 0 2017n/a
Settlers Crossing 3 & 40 2,774 0 14,730 2,774 14,730 17,504 40 20172020
95

SCHEDULE III
REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2020 (In thousands, except footnotes)
DescriptionEncumbrancesInitial Cost to the CompanyCosts
Capitalized Subsequent to Acquisition		Gross Amount Carried at Close of PeriodAccumulated DepreciationYear AcquiredYear Constructed
LandBuildings and ImprovementsLandBuildings and ImprovementsTotal
ARIZONA
Gilbert Crossroads A & B0 2,825 0 13,943 2,825 13,943 16,768 294 20182020
Gilbert Crossroads C & D0 3,602 0 3,015 3,602 3,015 6,617 0 2018n/a
Interstate Commons Distribution Center II0 2,298 7,088 2,855 2,298 9,943 12,241 178 20191988/2001
NORTH CAROLINA
Steele Creek Commerce Park X0 1,221 0 3,013 1,509 2,725 4,234 0 2016n/a
Steele Creek Commerce Park Land0 2,410 0 1,915 2,539 1,786 4,325 0 2016/17n/a
GEORGIA
Hurricane Shoals 30 497 0 8,314 644 8,167 8,811 0 20172020
Blairs Bridge Land0 1,381 0 11 1,381 11 1,392 0 2020n/a
MISSISSIPPI
     Metro Airport Commerce Center II land
0 307 0 399 307 399 706 0 2001n/a
 0 156,415 18,228 184,945 156,772 202,816 359,588 755   
Total real estate owned (a)(b)$79,096 655,023 1,251,222 1,601,767 659,511 2,848,501 3,519,085 955,328   
See accompanying Report of Independent Registered Public Accounting Firm.
   


96

(a)  Changes in Real Estate Properties and Development and Value-Add Properties follow:
Years Ended December 31,
202020192018
(In thousands)
Balance at beginning of year $3,264,566 2,817,145 2,578,748 
Purchases of real estate properties 46,240 135,033 54,537 
Development of real estate properties and value-add properties195,446 318,288 167,667 
Improvements to real estate properties33,522 37,558 36,921 
Right-of-use assets, net – ground leases(924)11,997 0 
Carrying amount of investments sold (17,182)(51,662)(18,372)
Write-off of improvements (2,583)(3,793)(2,356)
Balance at end of year (1) 
$3,519,085 3,264,566 2,817,145 
 Years Ended December 31,
2017 2016 2015
(In thousands)
Balance at beginning of year $2,406,981
 2,219,448
 2,074,946
Purchases of real estate properties 51,802
 22,228
 28,648
Development of real estate properties124,938
 203,765
 95,032
Improvements to real estate properties27,471
 23,157
 25,778
Carrying amount of investments sold (32,787) (61,121) (4,750)
Write-off of improvements (932) (496) (206)
Balance at end of year (1) 
$2,577,473
 2,406,981
 2,219,448


(1)Includes 20% noncontrolling interest in University Business Center of $3,217,000 and $6,853,000 at December 31, 2017 and 2016, respectively.

(1)Includes noncontrolling interest in joint ventures of $852,000 and $3,148,000 at December 31, 2020 and 2019, respectively.

Changes in the accumulated depreciation on real estate properties follow:
 Years Ended December 31,
2017 2016 2015
(In thousands)
Balance at beginning of year $694,250
 657,454
 600,526
Depreciation expense 69,010
 63,793
 59,882
Accumulated depreciation on assets sold (12,735) (26,501) (2,748)
Other (924) (496) (206)
Balance at end of year $749,601
 694,250
 657,454
(b)The estimated aggregate cost of real estate properties at December 31, 2017 for federal income tax purposes was approximately $2,536,820,000 before estimated accumulated tax depreciation of $518,257,000.  The federal income tax return for the year ended December 31, 2017, has not been filed and accordingly, this estimate is based on preliminary data.

(c)
The Company computes depreciation using the straight-line method over the estimated useful lives of the buildings (generally 40 years) and improvements (generally 3 to 15 years).   

(d)
The Company transfers development projects to Real estate properties the earlier of 80% occupancy or one year after completion of the shell construction. Effective January 1, 2018, the Company is implementing an accounting policy change and will begin transferring properties from Development to Real estate properties at the earlier of 90% occupancy or one year after completion of the shell construction.

(e)EastGroup has a $49,580,000 non-recourse first mortgage loan with an insurance company secured by Dominguez, Industry I & III, Kingsview, Shaw, Walnut and Washington.  

(f)EastGroup has a $55,317,000 non-recourse first mortgage loan with an insurance company secured by 40th Avenue, Beltway Crossing V, Centennial Park, Executive Airport, Interchange Park I, Ocean View, Wetmore 5-8 and World Houston 26, 28, 29 & 30.

(g)EastGroup has a $50,161,000 non-recourse first mortgage loan with an insurance company secured by Colorado Crossing, Interstate I-III, Rojas, Steele Creek 1 & 2, Venture and World Houston 3-9.

(h)EastGroup has a $42,315,000 non-recourse first mortgage loan with an insurance company secured by Arion 18, Beltway Crossing VI & VII, Commerce Park II & III, Concord, Interstate V-VII, Lakeview, Ridge Creek II, Southridge IV & V and World Houston 32.




SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
December 31, 2017

 Number of Loans 
Interest
Rate
  Maturity Date 
Periodic
Payment Terms
First mortgage loans:        
JCB Limited - California1 5.15%  December 2022 Principal and interest due monthly
JCB Limited - California1 5.15%  December 2022 Principal and interest due monthly
Total mortgage loans (a)2  
     

 
Face Amount
of Mortgages
Dec. 31, 2017
 
Carrying
Amount of
Mortgages
 
Principal
Amount of Loans
Subject to Delinquent
Principal or Interest (b)
 (In thousands)
First mortgage loans:     
JCB Limited - California$1,826
 1,826
 —
JCB Limited - California2,755
 2,755
 —
Total mortgage loans$4,581
 4,581 (c)(d) —
Years Ended December 31,
202020192018
(In thousands)
Balance at beginning of year $871,139 814,915 749,601 
Depreciation expense 96,290 86,590 76,007 
Accumulated depreciation on assets sold (9,599)(27,030)(8,670)
Other (2,502)(3,336)(2,023)
Balance at end of year $955,328 871,139 814,915 
  

(a)Reference is made to allowance for possible losses on mortgage loans receivable in the Notes to Consolidated Financial Statements.
(b)Interest in arrears for three months or less is disregarded in computing principal amount of loans subject to delinquent interest.
(c)Changes in mortgage loans follow:
 Years Ended December 31,
2017 2016 2015
(In thousands)
Balance at beginning of year$4,752
 4,875
 4,991
Payments on mortgage loans receivable(171) (123) (116)
Balance at end of year$4,581
 4,752
 4,875
(d)  (b)The estimated aggregate cost of real estate properties at December 31, 2020 for federal income tax purposes iswas approximately $4.58 million.$3,464,143,000 before estimated accumulated tax depreciation of $688,740,000.  The federal income tax return for the year ended December 31, 2017,2020, has not been filed and accordingly, the income tax basis of mortgage loans as of December 31, 2017,this estimate is based on preliminary data.



(c)The Company computes depreciation using the straight-line method over the estimated useful lives of the buildings (generally 40 years) and improvements (generally 3 to 15 years).   



(d)The Company transfers properties from the development and value-add program to Real estate properties as follows: (i) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (ii) for value-add properties, at the earlier of 90% occupancy or one year after acquisition. Upon the earlier of 90% occupancy or one year after completion of the shell construction, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land).



(e)EastGroup has a $41,610,000 non-recourse first mortgage loan with an insurance company secured by Colorado Crossing, Interstate I-III, Rojas, Steele Creek 1 & 2, Venture and World Houston 3-4 and 6-9.



(f)EastGroup has a $35,220,000 non-recourse first mortgage loan with an insurance company secured by Arion 18, Beltway Crossing VI & VII, Commerce Park II & III, Concord, Interstate V-VII, Lakeview, Ridge Creek II, Southridge IV & V and World Houston 32.



97



ITEM 16.  FORM 10-K SUMMARY.



None.


See accompanying Report of Independent Registered Public Accounting Firm.
98



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EASTGROUP PROPERTIES, INC.
By: /s/ MARSHALL A. LOEB 
Marshall A. Loeb, Chief Executive Officer, President &and Director
February 14, 201817, 2021


We, the undersigned officers and directors of EastGroup Properties, Inc., hereby severally constitute and appoint Brent W. Wood as our true and lawful attorney, with full power to sign for us and in our names in the capacities indicated below, any and all amendments to this Annual Report on Form 10-K and generally to do all such things in our name and behalf in such capacity to enable EastGroup Properties, Inc. to comply with the applicable provisions of the Securities Exchange Act of 1934, as amended, and we hereby ratify and confirm our signatures as they may be signed by our said attorney to any and all such amendments.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
* /s/ D. Pike Aloian* /s/ H. C. Bailey, Jr.
D. Pike Aloian, DirectorH. C. Bailey, Jr., Director
February 14, 201817, 2021February 14, 201817, 2021
* /s/ H. Eric Bolton, Jr.* /s/ Donald F. Colleran
H. Eric Bolton, Jr., DirectorDonald F. Colleran, Director
February 14, 201817, 2021February 14, 201817, 2021
* /s/ Hayden C. Eaves III* /s/ Mary Elizabeth McCormick
Hayden C. Eaves III, DirectorFredric H. Gould, Director
February 14, 2018February 14, 2018
* * 
Mary Elizabeth McCormick, DirectorLeland R. Speed, Chairman Emeritus of the Board
February 14, 201817, 2021February 14, 201817, 2021
* /s/ BRENT W. WOOD Katherine M. Sandstrom/s/ David H. Hoster II
Katherine M. Sandstrom, DirectorDavid H. Hoster II, Chairman of the Board* By Brent W. Wood, Attorney-in-fact
February 14, 201817, 2021February 14, 201817, 2021
 

99

/s/ MARSHALL A. LOEB
Marshall A. Loeb, Chief Executive Officer,
President &and Director
(Principal Executive Officer)
February 14, 201817, 2021
/s/ BRUCE CORKERN 
Bruce Corkern, Sr. Vice-President, Chief Accounting Officer
and Secretary
(Principal Accounting Officer)
February 14, 2018
/s/ BRENT W. WOOD 
Brent W. Wood, Executive Vice-President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)
February 14, 2018



EXHIBIT INDEX
(3)Exhibits:

The following exhibits are filed with this Form 10-K or incorporated by reference to the listed document previously filed with the SEC:

Number/s/ STACI H. TYLERDescription
(3)Staci H. Tyler, Senior Vice-President, Chief Accounting OfficerArticles of Incorporation and Bylaws
(a)and SecretaryArticles of Incorporation (incorporated by reference to Appendix B to the Company's Proxy Statement for its Annual Meeting of Stockholders held on June 5, 1997).
(b)(Principal Accounting Officer)Amended and Restated Bylaws of EastGroup Properties, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed March 3, 2017).
February 17, 2021
(10)Material Contracts (*Indicates management or compensatory agreement):
(a)/s/ BRENT W. WOOD Form of Severance and Change in Control Agreement that the Company has entered into with Marshall A. Loeb,
Brent W. Wood, and John F. Coleman (incorporated by reference to Exhibit 10(a) to the Company's Form 8-K filed May 18, 2016).*Executive Vice-President,
(b)Chief Financial Officer and TreasurerForm of Severance and Change in Control Agreement that the Company has entered into with Ryan M. Collins, C. Bruce Corkern and R. Reid Dunbar (incorporated by reference to Exhibit 10(b) to the Company's Form 8-K filed May 18, 2016).*
(c)(Principal Financial Officer)Third Amended and Restated Credit Agreement Dated January 2, 2013 among EastGroup Properties, L.P.; EastGroup Properties, Inc.; PNC Bank, National Association, as Administrative Agent; Regions Bank and SunTrust Bank as Co-Syndication Agents; U.S. Bank National Association and Wells Fargo Bank, National Association as Co-Documentation Agents; PNC Capital Markets LLC, as Sole Lead Arranger and Sole Bookrunner; and the Lenders thereunder (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed January 8, 2013).
(d)February 17, 2021First Amendment to Third Amended and Restated Credit Agreement, dated as of August 9, 2013, among EastGroup Properties, L.P., EastGroup Properties, Inc. and PNC Bank, National Association, as administrative agent, and each of the financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed August 30, 2013).
(e)Second Amendment to Third Amended and Restated Credit Agreement dated as of July 30, 2015 by and among EastGroup Properties, L.P.; EastGroup Properties, Inc.; PNC Bank, National Association, as Administrative Agent; and each of the financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed August 4, 2015).
(f)EastGroup Properties, Inc. 2013 Equity Incentive Plan, as amended and restated as of March 3, 2017 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed March 3, 2017).*
(g)
EastGroup Properties, Inc. Director Compensation Program (filed herewith).*
(h)Note Purchase Agreement, dated as of August 28, 2013, among EastGroup Properties, L.P., EastGroup Properties, Inc. and the purchasers of the notes party thereto (including the form of the 3.80% Senior Notes due August 28, 2025) (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed August 30, 2013).
(i)Amended and Restated Sales Agency Financing Agreement dated March 6, 2017 between EastGroup Properties, Inc. and BNY Mellon Capital Markets, LLC (incorporated by reference to Exhibit 1.1 to the Company's Form 8-K filed March 10, 2017).
(j)Amended and Restated Sales Agency Financing Agreement dated March 6, 2017 between EastGroup Properties, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 1.2 to the Company's Form 8-K filed March 10, 2017).
(k)Amended and Restated Sales Agency Financing Agreement dated March 6, 2017 between EastGroup Properties, Inc. and Raymond James & Associates, Inc. (incorporated by reference to Exhibit 1.3 to the Company's Form 8-K filed March 10, 2017).
(l)Sales Agency Financing Agreement dated March 6, 2017 between EastGroup Properties, Inc. and Jefferies LLC (incorporated by reference to Exhibit 1.4 to the Company's Form 8-K filed March 10, 2017).
(12)
Statement of computation of ratio of earnings to combined fixed charges and preferred stock distributions (filed herewith).



100
(21)
Subsidiaries of EastGroup Properties, Inc. (filed herewith).
(23)
Consent of KPMG LLP (filed herewith).
(24)
Powers of attorney (filed herewith).
(31)Rule 13a-14(a)/15d-14(a) Certifications (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)
(a)
Marshall A. Loeb, Chief Executive Officer
(b)
Brent W. Wood, Chief Financial Officer
(32)Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
(a)
Marshall A. Loeb, Chief Executive Officer
(b)
Brent W. Wood, Chief Financial Officer
(99)Material United States Federal Income Tax Considerations (incorporated by reference to Exhibit 99.1 to the Company's Form 8-K filed February 14, 2018).
(101)The following materials from EastGroup Properties, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) consolidated balance sheets, (ii) consolidated statements of income and comprehensive income, (iii) consolidated statements of changes in equity, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements.






90