Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 1-07094 | |
Entity Registrant Name | EASTGROUP PROPERTIES, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 13-2711135 | |
Entity Address, Address Line One | 400 W Parkway Place | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Ridgeland, | |
Entity Address, State or Province | MS | |
Entity Address, Postal Zip Code | 39157 | |
City Area Code | 601 | |
Local Phone Number | 354-3555 | |
Title of 12(b) Security | Common stock, $0.0001 par value per share | |
Trading Symbol | EGP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,680,414 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0000049600 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS - U
CONSOLIDATED BALANCE SHEETS - Unaudited - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
ASSETS | |||
Real estate properties | $ 3,637,496,000 | $ 3,546,711,000 | |
Development and value-add properties | [1] | 549,584,000 | 504,614,000 |
Real estate, development and value-add properties | 4,187,080,000 | 4,051,325,000 | |
Less accumulated depreciation | (1,061,190,000) | (1,035,617,000) | |
Real estate, net | 3,125,890,000 | 3,015,708,000 | |
Real Estate Held-for-sale | 0 | 5,695,000 | |
Unconsolidated investment | 7,598,000 | 7,320,000 | |
Cash | 5,718,000 | 4,393,000 | |
Other Assets | 205,529,000 | 182,220,000 | |
TOTAL ASSETS | 3,344,735,000 | 3,215,336,000 | |
LIABILITIES | |||
Unsecured bank credit facilities, net of debt issuance costs | 195,317,000 | 207,066,000 | |
Unsecured debt, net of debt issuance costs | 1,267,084,000 | 1,242,570,000 | |
Secured debt, net of debt issuance costs | 2,115,000 | 2,142,000 | |
Accounts payable and accrued expenses | 126,708,000 | 109,760,000 | |
Other liabilities | 79,122,000 | 82,338,000 | |
Total Liabilities | 1,670,346,000 | 1,643,876,000 | |
STOCKHOLDERS' EQUITY | |||
Common shares; $.0001 par value; 70,000,000 shares authorized; 41,680,414 shares issued and outstanding at March 31, 2022 and 41,268,846 at December 31, 2021 | 4,000 | 4,000 | |
Excess shares; $.0001 par value; 30,000,000 shares authorized; no shares issued | 0 | 0 | |
Additional paid-in capital | 1,956,328,000 | 1,886,820,000 | |
Distributions in excess of earnings | (300,429,000) | (318,056,000) | |
Accumulated Other Comprehensive Income | 17,130,000 | 1,302,000 | |
Total Stockholders' Equity | 1,673,033,000 | 1,570,070,000 | |
Noncontrolling interest in joint ventures | 1,356,000 | 1,390,000 | |
Total Equity | 1,674,389,000 | 1,571,460,000 | |
TOTAL LIABILITIES AND EQUITY | $ 3,344,735,000 | $ 3,215,336,000 | |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Common shares, authorized | 70,000,000 | 70,000,000 | |
Common shares, issued | 41,680,414 | 41,268,846 | |
Common shares, outstanding | 41,680,414 | 41,268,846 | |
Excess shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Excess shares, authorized | 30,000,000 | 30,000,000 | |
Excess shares, issued | 0 | 0 | |
[1] | Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - Unaudited - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
REVENUES | ||
Income from real estate operations | $ 112,952,000 | $ 97,917,000 |
Other revenue | 22,000 | 14,000 |
Revenues | 112,974,000 | 97,931,000 |
EXPENSES | ||
Expenses from real estate operations | 31,064,000 | 27,820,000 |
Depreciation and amortization | 36,341,000 | 30,313,000 |
General and administrative | 4,310,000 | 4,036,000 |
Indirect leasing costs | 175,000 | 330,000 |
Expenses | 71,890,000 | 62,499,000 |
OTHER INCOME (EXPENSE) | ||
Interest expense | (8,110,000) | (8,276,000) |
Gains on sales of real estate investments | 30,352,000 | 0 |
Other | 278,000 | 201,000 |
Net Income | 63,604,000 | 27,357,000 |
Net income attributable to noncontrolling interest in joint ventures | (24,000) | (18,000) |
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | 63,580,000 | 27,339,000 |
Other comprehensive income - interest rate swaps | 15,828,000 | 8,214,000 |
TOTAL COMPREHENSIVE INCOME | $ 79,408,000 | $ 35,553,000 |
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | ||
Net income attributable to common stockholders | $ 1.54 | $ 0.69 |
Weighted average shares outstanding (in shares) | 41,246 | 39,673 |
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | ||
Net income attributable to common stockholders | $ 1.54 | $ 0.69 |
Weighted average shares outstanding (in shares) | 41,359 | 39,765 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - Unaudited - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-in Capital | Distributions In Excess Of Earnings | Accumulated Other Comprehensive Income / (Loss) | Noncontrolling Interest in Joint Ventures |
BALANCE at Dec. 31, 2020 | $ 1,270,518 | $ 4 | $ 1,610,053 | $ (329,667) | $ (10,752) | $ 880 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 27,357 | 0 | 0 | 27,339 | 0 | 18 |
Other comprehensive income - interest rate swaps | 8,214 | 0 | 0 | 0 | 8,214 | 0 |
Common dividends declared | (31,672) | 0 | 0 | (31,672) | 0 | 0 |
Stock-based compensation, net of forfeitures | 2,147 | 0 | 2,147 | 0 | 0 | 0 |
Issuance of common stock, common stock offering, net of expenses | 44,485 | 0 | 44,485 | 0 | 0 | 0 |
Withheld shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock | (4,240) | 0 | (4,240) | 0 | 0 | 0 |
Net distributions to noncontrolling interest | (11) | 0 | 0 | 0 | 0 | (11) |
BALANCE at Mar. 31, 2021 | $ 1,316,798 | 4 | 1,652,445 | (334,000) | (2,538) | 887 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common dividends declared - per share (in dollars per share) | $ 0.79 | |||||
Issuance of shares of common stock, common stock offering, net of expenses | 317,538 | |||||
Shares withheld for tax obligations | 30,252 | |||||
BALANCE at Dec. 31, 2021 | $ 1,571,460 | 4 | 1,886,820 | (318,056) | 1,302 | 1,390 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 63,604 | 0 | 0 | 63,580 | 0 | 24 |
Other comprehensive income - interest rate swaps | 15,828 | 0 | 0 | 0 | 15,828 | 0 |
Common dividends declared | (45,953) | 0 | 0 | (45,953) | 0 | 0 |
Stock-based compensation, net of forfeitures | 2,594 | 0 | 2,594 | 0 | 0 | 0 |
Issuance of common stock, common stock offering, net of expenses | 74,179 | 0 | 74,179 | 0 | 0 | 0 |
Withheld shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock | (7,265) | 0 | (7,265) | 0 | 0 | 0 |
Net distributions to noncontrolling interest | (58) | 0 | 0 | 0 | 0 | (58) |
BALANCE at Mar. 31, 2022 | $ 1,674,389 | $ 4 | $ 1,956,328 | $ (300,429) | $ 17,130 | $ 1,356 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common dividends declared - per share (in dollars per share) | $ 1.10 | |||||
Issuance of shares of common stock, common stock offering, net of expenses | 385,538 | |||||
Shares withheld for tax obligations | 34,251 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
OPERATING ACTIVITIES | ||
Net Income | $ 63,604 | $ 27,357 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 36,341 | 30,313 |
Stock-based compensation expense | 1,903 | 1,597 |
Gain on sales of real estate investments | (30,352) | 0 |
Changes in operating assets and liabilities: | ||
Accrued income and other assets | 1,372 | 577 |
Accounts payable, accrued expenses and prepaid rent | 9,380 | 18,842 |
Other | 16 | 136 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 82,264 | 78,822 |
INVESTING ACTIVITIES | ||
Development and value-add properties | (127,112) | (47,539) |
Real estate improvements | (9,840) | (9,128) |
Net proceeds from sales of real estate investments | 38,133 | 0 |
Leasing commissions | (9,344) | (6,687) |
Changes in accrued development costs | 4,494 | 870 |
Changes in other assets and other liabilities | (10,476) | (1,435) |
NET CASH USED IN INVESTING ACTIVITIES | (114,145) | (63,919) |
FINANCING ACTIVITIES | ||
Proceeds from unsecured bank credit facilities | 217,290 | 96,798 |
Repayments on unsecured bank credit facilities | (229,187) | (129,480) |
Proceeds from unsecured debt | 100,000 | 50,000 |
Repayments of unsecured debt | (75,000) | 0 |
Repayments on secured debt | (23) | (42,263) |
Debt issuance costs | (648) | (223) |
Distributions paid to stockholders (not including dividends accrued) | (46,033) | (31,863) |
Proceeds from common stock offerings | 74,179 | 46,427 |
Other | (7,372) | (4,252) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 33,206 | (14,856) |
INCREASE IN CASH AND CASH EQUIVALENTS | 1,325 | 47 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,393 | 21 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 5,718 | 68 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest, net of amounts capitalized of $2,244 and $2,237 for 2022 and 2021, respectively | 5,476 | 6,503 |
Cash paid for operating lease liabilities | 515 | 375 |
Interest capitalized | 2,244 | 2,237 |
NON-CASH OPERATING ACTIVITY | ||
Operating lease liabilities arising from obtaining right of use assets | $ 0 | $ 348 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited financial statements of EastGroup Properties, Inc. (“EastGroup” or “the Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The financial statements should be read in conjunction with the financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2021 and the notes thereto. Certain reclassifications have been made in the 2021 consolidated financial statements to conform to the 2022 presentation. |
PRINCIPLES OF CONSOLIDATION
PRINCIPLES OF CONSOLIDATION | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and its investment in any joint ventures in which the Company has a controlling interest. As of March 31, 2022 and December 31, 2021, EastGroup held a controlling interest in two joint venture arrangements. In 2019, the Company acquired 6.5 acres of land in San Diego, known by the Company as the Miramar land. Also in 2019, the Company acquired 41.6 acres of land in San Diego, known by the Company as the Otay Mesa land. During the year ended December 31, 2021, EastGroup began construction of Speed Distribution Center, a 519,000 square foot building on the Otay Mesa land, which was completed and transferred to the Company’s operating portfolio during the three months ended March 31, 2022. As of both March 31, 2022 and December 31, 2021, EastGroup had a 95% controlling interest in the Miramar land and a 99% controlling interest in Speed Distribution Center. The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements. The equity method of accounting is used for the Company’s 50% undivided tenant-in-common interest in Industry Distribution Center II. All significant intercompany transactions and accounts have been eliminated in consolidation. |
USE OF ESTIMATES
USE OF ESTIMATES | 3 Months Ended |
Mar. 31, 2022 | |
Use of estimates [Abstract] | |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and to disclose material contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. |
LEASE REVENUE
LEASE REVENUE | 3 Months Ended |
Mar. 31, 2022 | |
Lease Revenue [Abstract] | |
Operating Lease, Lease Income [Text Block] | LEASE REVENUE The Company’s primary revenue is rental income from business distribution space. The table below presents the components of Income from real estate operations for the three months ended March 31, 2022 and 2021: Three Months Ended 2022 2021 (In thousands) Lease income — operating leases $ 84,945 73,382 Variable lease income (1) 28,007 24,535 Income from real estate operations $ 112,952 97,917 (1) Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. |
REAL ESTATE PROPERTIES
REAL ESTATE PROPERTIES | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate Investment Property, Net [Abstract] | |
Real Estate Properties | REAL ESTATE PROPERTIES EastGroup has one reportable segment – industrial properties, consistent with the Company’s manner of internal reporting, measurement of operating results and allocation of the Company’s resources. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows (including estimated future expenditures necessary to substantially complete the asset) expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the three month periods ended March 31, 2022 and 2021, the Company did not identify any impairment charges which should be recorded. Depreciation of buildings and other improvements is computed using the straight-line method over estimated useful lives of generally 40 years for buildings and 3 to 15 years for improvements. Building improvements are capitalized, while maintenance and repair expenses are charged to expense as incurred. Significant renovations and improvements that improve or extend the useful life of the assets are capitalized. Depreciation expense was $29,392,000 and $25,147,000 for the three months ended March 31, 2022 and 2021, respectively. The Company’s Real estate properties and Development and value-add properties at March 31, 2022 and December 31, 2021 were as follows: March 31, December 31, (In thousands) Real estate properties: Land $ 560,512 544,505 Buildings and building improvements 2,473,788 2,408,944 Tenant and other improvements 582,708 570,627 Right of use assets — Ground leases (operating) (1) 20,488 22,635 Development and value-add properties (2) 549,584 504,614 4,187,080 4,051,325 Less accumulated depreciation (1,061,190) (1,035,617) $ 3,125,890 3,015,708 (1) EastGroup applies the principles of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases, and its related Accounting Standards Updates (“ASUs”) to account for its ground leases, which are classified as operating leases. The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets. (2) Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. |
DEVELOPMENT AND VALUE-ADD PROPE
DEVELOPMENT AND VALUE-ADD PROPERTIES | 3 Months Ended |
Mar. 31, 2022 | |
DEVELOPMENT [Abstract] | |
Development | DEVELOPMENT AND VALUE-ADD PROPERTIES For properties under development and value-add properties acquired in the development stage, costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are aggregated into the total capitalized costs of the property. Included in these costs are management’s estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities. The internal costs are allocated to specific development projects based on development activity. As the property becomes occupied, depreciation commences on the occupied portion of the building, and costs are capitalized only for the portion of the building that remains vacant. The Company transfers properties from the development and value-add program to Real estate properties as follows: (i) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (ii) for value-add properties, at the earlier of 90% occupancy or one year after acquisition. Upon the earlier of 90% occupancy or one year after completion of the shell construction, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land). |
REAL ESTATE PROPERTY ACQUISITIO
REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES | 3 Months Ended |
Mar. 31, 2022 | |
Asset Acquisition [Abstract] | |
Real Estate Property Acquisitions and Acquired Intangibles | REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES Upon acquisition of real estate properties, EastGroup applies the principles of FASB ASC 805, Business Combinations. The FASB Codification provides a framework for determining whether transactions should be accounted for as acquisitions of assets or businesses. Under the guidance, companies are required to utilize an initial screening test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. EastGroup determined that its real estate property acquisitions in 2021 and the first three months of 2022 are considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business. As a result, the Company capitalized acquisition costs related to its 2021 and 2022 acquisitions. The FASB Codification also provides guidance on how to properly determine the allocation of the purchase price among the individual components of both the tangible and intangible assets based on their respective fair values. The allocation to tangible assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. Land is valued using comparable land sales specific to the applicable market, provided by a third party. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties. The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates. The purchase price is also allocated among the following categories of intangible assets: the above or below market component of in-place leases, the value of in-place leases, and the value of customer relationships. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current market rents over the remaining term of the lease. The amounts allocated to above and below market lease intangibles are included in Other assets and Other liabilities , respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining terms of the respective leases. The total amount of intangible assets is further allocated to in-place lease values and customer relationship values based upon management’s assessment of their respective values. Factors considered by management in the allocation include an estimate of foregone rents and avoided leasing costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. These intangible assets are included in Other assets on the Consolidated Balance Sheets and are amortized over the remaining term of the existing lease, or the anticipated life of the customer relationship, as applicable. Amortization expense for in-place lease intangibles was $2,465,000 and $1,431,000 for the three months ended March 31, 2022 and 2021, respectively. Amortization of above and below market lease intangibles increased rental income by $845,000 and $229,000 for the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022, EastGroup acquired the following properties: REAL ESTATE PROPERTY ACQUIRED IN 2022 Location Size Date Cost (Square feet) (In thousands) Value-add property acquired (1) Cypress Preserve 1 & 2 Houston, TX 516,000 03/28/2022 $ 54,462 (1) Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisition identified in the table above which was acquired during the three months ended March 31, 2022. ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2022 Cost (In thousands) Land $ 9,952 Buildings and building improvements 42,059 Tenant and other improvements 1,382 Total real estate properties acquired 53,393 In-place lease intangibles (1) 2,027 Below market lease intangibles (2) (958) Total assets acquired, net of liabilities assumed $ 54,462 (1) In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. (2) Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. The leases in the properties acquired during the three months ended March 31, 2022 had a weighted average remaining lease term at acquisition of approximately 4.6 years. During 2021, EastGroup acquired the following properties: REAL ESTATE PROPERTIES ACQUIRED IN 2021 Location Size Date Cost (Square feet) (In thousands) Operating properties acquired (1) Southpark Distribution Center 2 Phoenix, AZ 79,000 06/10/2021 $ 9,177 DFW Global Logistics Centre Dallas, TX 611,000 08/26/2021 89,829 Progress Center 3 Atlanta, GA 50,000 09/23/2021 5,000 Texas Avenue Austin, TX 20,000 10/15/2021 4,143 Total operating property acquisitions 760,000 108,149 Value-add properties acquired (2) Access Point 1 Greenville, SC 156,000 01/15/2021 10,501 Northpoint 200 Atlanta, GA 79,000 01/21/2021 6,516 Access Point 2 Greenville, SC 159,000 05/19/2021 10,743 Cherokee 75 Business Center 2 Atlanta, GA 105,000 06/17/2021 8,837 Siempre Viva Distribution Center 3-6 San Diego, CA 547,000 12/01/2021 134,479 Total value-add property acquisitions 1,046,000 171,076 Total acquired assets 1,806,000 $ 279,225 (1) Operating properties are defined as stabilized real estate properties (land including buildings and improvements) in the Company’s operating portfolio; included in Real estate properties on the Consolidated Balance Sheets. (2) Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisitions identified in the table above which were acquired during the year ended December 31, 2021. ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2021 Cost (In thousands) Land $ 42,554 Buildings and building improvements 225,645 Tenant and other improvements 4,907 Right of use assets — Ground leases (operating) 12,708 Total real estate properties acquired 285,814 In-place lease intangibles (1) 9,949 Above market lease intangibles (1) 6 Below market lease intangibles (2) (3,836) Operating lease liabilities — Ground leases (3) (12,708) Total assets acquired, net of liabilities assumed $ 279,225 (1) In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. (2) Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. (3) Operating lease liabilities - Ground leases are included in Other liabilities on the Consolidated Balance Sheets. The leases in the properties acquired during the year ended December 31, 2021 had a weighted average remaining lease term at acquisition of approximately 2.9 years. The Company periodically reviews the recoverability of goodwill (at least annually) and the recoverability of other intangibles (on a quarterly basis) for possible impairment. No impairment of goodwill or other intangibles existed during the three month periods ended March 31, 2022 and 2021. |
REAL ESTATE SOLD AND HELD FOR S
REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Real Estate Sold and Held For Sale and Discontinued Operations | REAL ESTATE SOLD AND HELD FOR SALE The Company considers a real estate property to be held for sale when it meets the criteria established under ASC 360, Property, Plant and Equipment, including when it is probable that the property will be sold within a year. Real estate properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The Company did not classify any properties as held for sale as of March 31, 2022. As of December 31, 2021, the Company owned one operating property that was classified as held for sale on the December 31, 2021 Consolidated Balance Sheet. The property was sold, and a gain on the sale was recorded in the three months ended March 31, 2022. In accordance with FASB ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, the Company would report a disposal of a component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale. In addition, the Company would provide additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. EastGroup performs an analysis of properties sold to determine whether the sales qualify for discontinued operations presentation. The Company sold operating properties during the three months ended March 31, 2022, as shown in the table below. The results of operations and gains and losses on sales for the properties sold are reported in continuing operations on the Consolidated Statements of Income and Comprehensive Income. The gains and losses on sales are included in Gain on sales of real estate investments. The Company did not consider its sales in 2022 to be disposals of a component of an entity or a group of components of an entity representing a strategic shift that has (or will have) a major effect on the entity’s operations and financial results. A summary of Gain on sales of real estate investments for the three months ended March 31, 2022 and the year ended December 31, 2021 follows: REAL ESTATE PROPERTIES SOLD Location Size Date Sold Net Sales Price Basis Recognized Gain (In square feet) (In thousands) 2022 Metro Business Park Phoenix, AZ 189,000 01/06/2022 $ 32,851 5,880 26,971 Cypress Creek Business Park (1) Fort Lauderdale, FL 56,000 03/31/2022 5,282 1,901 3,381 Total for 2022 245,000 $ 38,133 7,781 30,352 2021 Jetport Commerce Park Tampa, FL 284,000 11/09/2021 $ 44,260 5,401 38,859 (1) Cypress Creek Business Park is located on a ground lease. In conjunction with the sale of the property, the Company fully amortized the associated right-of-use asset and liability of $1,745,000. |
OTHER ASSETS
OTHER ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Other Assets [Abstract] | |
Other Assets | OTHER ASSETS A summary of the Company’s Other assets follows: March 31, December 31, (In thousands) Leasing costs (principally commissions) $ 124,493 116,772 Accumulated amortization of leasing costs (43,320) (42,193) Leasing costs (principally commissions), net of accumulated amortization 81,173 74,579 Acquired in-place lease intangibles 32,362 31,561 Accumulated amortization of acquired in-place lease intangibles (14,277) (13,038) Acquired in-place lease intangibles, net of accumulated amortization 18,085 18,523 Acquired above market lease intangibles 841 885 Accumulated amortization of acquired above market lease intangibles (499) (508) Acquired above market lease intangibles, net of accumulated amortization 342 377 Straight-line rents receivable 54,248 51,970 Accounts receivable 3,892 7,133 Interest rate swap assets 17,130 2,237 Right of use assets — Office leases (operating) 1,861 1,984 Escrow deposits for pending acquisitions 7,275 3,050 Prepaid insurance 7,858 7,793 Goodwill 990 990 Receivable for tenant improvement cost reimbursements 140 7,680 Prepaid expenses and other assets 12,535 5,904 Total Other assets $ 205,529 182,220 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | DEBT The Company’s debt is detailed below: March 31, December 31, (In thousands) Unsecured bank credit facilities - variable rate, carrying amount $ 197,313 209,210 Unamortized debt issuance costs (1,996) (2,144) Unsecured bank credit facilities, net of debt issuance costs 195,317 207,066 Unsecured debt - fixed rate, carrying amount (1) 1,270,000 1,245,000 Unamortized debt issuance costs (2,916) (2,430) Unsecured debt, net of debt issuance costs 1,267,084 1,242,570 Secured debt - fixed rate, carrying amount (1) 2,128 2,156 Unamortized debt issuance costs (13) (14) Secured debt, net of debt issuance costs 2,115 2,142 Total debt, net of debt issuance costs $ 1,464,516 1,451,778 (1) These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps. Until June 29, 2021, EastGroup had $350 million and $45 million unsecured bank credit facilities with margins over London Interbank Offered Rate (“LIBOR”) of 100 basis points, facility fees of 20 basis points and maturity dates of July 30, 2022. The Company amended and restated these credit facilities on June 29, 2021, expanding their capacities to $425 million and $50 million, respectively, as detailed below. The $425 million unsecured bank credit facility is with a group of nine banks and has a maturity date of July 30, 2025. The credit facility contains options for two six-month extensions (at the Company's election) and a $325 million accordion (with agreement by all parties). The interest rate on each tranche is reset on a monthly basis and as of March 31, 2022, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of March 31, 2022, the Company had $183,000,000 of variable rate borrowings on this unsecured bank credit facility with a weighted average interest rate of 1.168%. The Company's $50 million unsecured bank credit facility has a maturity date of July 30, 2025, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension options in the $425 million facility are exercised. The interest rate is reset on a daily basis and as of March 31, 2022, was LIBOR plus 77.5 basis points with an annual facility fee of 15 basis points. As of March 31, 2022, the interest rate was 1.227% on a balance of $14,313,000. For both facilities, the margin and facility fee are subject to changes in the Company's credit ratings. Although the Company’s current credit rating is Baa2, given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is based on the BBB+/Baa1 credit ratings level. This favorable pricing level will be retained provided that the Company’s consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%. The facilities also include a sustainability-linked pricing component pursuant to which the applicable interest margin will be reduced by one basis point if the Company meets certain sustainability performance targets. In February 2022, EastGroup repaid a $75 million unsecured term loan at maturity with an effectively fixed interest rate of 3.03%. In March 2022, the Company closed a $100 million senior unsecured term loan with a 6.5 year term and interest only payments, which bears interest at an annual rate of the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin (1.30% as of March 31, 2022) based on the Company’s senior unsecured long-term debt rating. The Company also entered into an interest rate swap agreement to convert the loan’s LIBOR rate component to a fixed interest rate for the entire term of the loan providing a total effectively fixed interest rate of 3.06%. Also during March 2022, the Company closed on the refinance of a $100 million senior unsecured term loan with 5 years remaining. The amended term loan provides for interest only payments currently at an interest rate of SOFR plus 85 basis points, based on the Company’s current credit ratings and consolidated leverage ratio, which is a 60 basis point reduction in the credit spread compared to the original term loan. The Company has an interest rate swap agreement which converts the loan’s SOFR rate component to a fixed interest rate for the entire term of the loan, providing a total effectively fixed interest rate of 1.80%. Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs and Secured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs ), as of March 31, 2022, are as follows: Years Ending December 31, (In thousands) 2022 - Remainder of year $ 87 2023 115,119 2024 120,122 2025 145,128 2026 141,672 2027 and beyond 750,000 Total $ 1,272,128 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | ACCOUNTS PAYABLE AND ACCRUED EXPENSES A summary of the Company’s Accounts payable and accrued expenses follows: March 31, December 31, (In thousands) Property taxes payable $ 18,755 4,494 Development costs payable 18,820 17,529 Retainage payable 13,779 10,576 Real estate improvements and capitalized leasing costs payable 7,920 5,798 Interest payable 8,876 6,547 Dividends payable 46,784 46,864 Book overdraft (1) 4,499 4,845 Other payables and accrued expenses 7,275 13,107 Total Accounts payable and accrued expenses $ 126,708 109,760 (1) Represents checks written before the end of the period which have not cleared the bank; therefore, the bank has not yet advanced cash to the Company. When the checks clear the bank, they will be funded through the Company’s working cash line of credit, which is included in the Company’s Unsecured bank credit facilities. |
OTHER LIABILITIES
OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | OTHER LIABILITIES A summary of the Company’s Other liabilities follows: March 31, December 31, (In thousands) Security deposits $ 30,057 28,343 Prepaid rent and other deferred income 15,083 16,401 Operating lease liabilities — Ground leases 20,814 22,898 Operating lease liabilities — Office leases 1,909 2,032 Acquired below market lease intangibles 8,819 8,124 Accumulated amortization of below market lease intangibles (3,324) (2,707) Acquired below market lease intangibles, net of accumulated amortization 5,495 5,417 Interest rate swap liabilities — 935 Tenant improvement cost liabilities 2,248 2,796 Other liabilities 3,516 3,516 Total Other liabilities $ 79,122 82,338 |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2022 | |
COMPREHENSIVE INCOME [Abstract] | |
Comprehensive Income (Loss) Note [Text Block] | COMPREHENSIVE INCOME Total Comprehensive Income is comprised of net income plus all other changes in equity from non-owner sources and is presented on the Consolidated Statements of Income and Comprehensive Income. The components of Accumulated other comprehensive income (loss) are presented in the Company’s Consolidated Statement of Changes in Equity and are summarized below. See Note 14 for information regarding the Company’s interest rate swaps. Three Months Ended 2022 2021 (In thousands) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): Balance at beginning of period $ 1,302 (10,752) Other comprehensive income - interest rate swaps 15,828 8,214 Balance at end of period $ 17,130 (2,538) |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2022 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risk, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and, to a limited extent, the use of derivative instruments. Specifically, the Company has entered into derivative instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative instruments, described below, are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to certain of the Company’s borrowings. The Company’s objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of March 31, 2022, the Company had five interest rate swaps outstanding, all of which are used to hedge the variable cash flows associated with unsecured loans. All of the Company’s interest rate swaps convert the related loans’ LIBOR or SOFR rate components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly effective. The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Other comprehensive income and are subsequently reclassified into earnings through Interest expense as interest payments are made or received on the Company’s variable-rate debt in the period that the hedged forecasted transaction affects earnings. The Company estimates that an additional $2,352,000 will be reclassified from Other comprehensive income as a decrease to Interest expense over the next twelve months. The Company’s valuation methodology for over-the-counter (“OTC”) derivatives is to discount cash flows based on Overnight Index Swap (“OIS”) rates. Uncollateralized or partially-collateralized trades are discounted at OIS rates, but include appropriate economic adjustments for funding costs (i.e., a LIBOR-OIS basis adjustment to approximate uncollateralized cost of funds) and credit risk. The Company calculates its derivative valuations using mid-market prices. In July 2017, the Financial Conduct Authority announced it intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021. In March 2021, the ICE Benchmark Administration, the administrator of LIBOR, announced its intention to cease publication of certain LIBOR settings after 2021, while continuing to publish overnight and one-, three-, six-, and twelve-month U.S. dollar LIBOR rates through June 30, 2023. While this announcement extended the transition period to June 2023, the United States Federal Reserve Board and other regulatory bodies concurrently issued guidance encouraging banks and other financial market participants to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate as soon as practicable and in any event no later than December 31, 2021. In the U.S., the Alternative Reference Rates Committee, which was convened by the Federal Reserve Board and the Federal Reserve Bank of New York, has recommended that SOFR plus a recommended spread adjustment as its preferred alternative to USD-LIBOR. There are significant differences between LIBOR and SOFR, such as LIBOR being an unsecured lending rate while SOFR is a secured rate, and SOFR is an overnight rate while LIBOR reflects term rates at different maturities. We expect that all LIBOR settings relevant to us will cease to be published or will no longer be representative after June 30, 2023. As a result, any of our LIBOR-based borrowings that extend beyond such date will need to be converted to a replacement rate. Certain risks may arise in connection with transitioning contracts to SOFR or any other alternative variable rate, including any resulting value transfer that may occur. The value of loans, securities, or derivative instruments tied to LIBOR could also be impacted. During the three months ended March 31, 2022, the Company entered into a new term loan and related swap which are both indexed to SOFR. Also, during the three months ended March 31, 2022, EastGroup refinanced an existing term loan modifying the index from LIBOR to SOFR, and concurrently amended the related swap to reference SOFR rather than LIBOR. The Company’s unsecured bank credit facilities and three of its senior unsecured term loans and interest rate swap contracts are indexed to LIBOR and include provisions for a replacement rate which we believe will be substantially equivalent to the all-in LIBOR-based interest rate in effect prior to its replacement. Therefore, management believes the transition will not have a material impact on the Company’s consolidated financial statements. The Company is continuously monitoring and evaluating the related risks, which include interest on loans and amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans or derivative instruments indexed to LIBOR could also be impacted if LIBOR is limited or discontinued as interest rates may be adversely affected. While we expect LIBOR to be available in substantially its current form until June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. As of March 31, 2022 and December 31, 2021, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk: Interest Rate Derivative Notional Amount as of March 31, 2022 Notional Amount as of December 31, 2021 (In thousands) Interest Rate Swap — $75,000 Interest Rate Swap $65,000 $65,000 Interest Rate Swap $100,000 $100,000 Interest Rate Swap $100,000 $100,000 Interest Rate Swap $50,000 $50,000 Interest Rate Swap $100,000 — The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021. See Note 17 for additional information on the fair value of the Company’s interest rate swaps. Derivatives As of March 31, 2022 Derivatives As of December 31, 2021 Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Derivatives designated as cash flow hedges: Interest rate swap assets Other assets $ 17,130 Other assets $ 2,237 Interest rate swap liabilities Other liabilities — Other liabilities 935 The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021: Three Months Ended 2022 2021 (In thousands) DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS Interest Rate Swaps: Amount of income recognized in Other comprehensive income on derivatives $ 14,952 7,163 Amount of (income) loss reclassified from Accumulated other comprehensive income (loss) into Interest expense 876 1,051 See Note 13 for additional information on the Company’s Accumulated other comprehensive income (loss) resulting from its interest rate swaps. Derivative financial agreements expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements. The Company believes it minimizes the credit risk by transacting with financial institutions the Company regards as credit-worthy. The Company has an agreement with its derivative counterparties containing a provision stating that the Company could be declared in default on its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender. If the Company breached any of these provisions it would be required to settle its obligations under the agreements at their termination value of $17,248,000 as of March 31, 2022. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | EARNINGS PER SHARE The Company applies ASC 260, Earnings Per Share , which requires companies to present basic and diluted earnings per share (“EPS”). Basic EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period. The Company’s basic EPS is calculated by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. The Company calculates diluted EPS by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding plus the dilutive effect of unvested restricted stock. The dilutive effect of unvested restricted stock is determined using the treasury stock method. Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows: Three Months Ended 2022 2021 (In thousands) BASIC EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Numerator – net income attributable to common stockholders $ 63,580 27,339 Denominator – weighted average shares outstanding 41,246 39,673 DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Numerator – net income attributable to common stockholders $ 63,580 27,339 Denominator: Weighted average shares outstanding 41,246 39,673 Unvested restricted stock 113 92 Weighted average diluted shares outstanding 41,359 39,765 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION EastGroup applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The cost for market-based awards and awards that only require service are expensed on a straight-line basis over the requisite service periods. The cost for performance-based awards is determined using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. This method accelerates the expensing of the award compared to the straight-line method. For awards with a performance condition, compensation expense is recognized when the performance condition is considered probable of achievement. The total compensation expense for service and performance based awards is based upon the fair market value of the shares on the grant date. The grant date fair value for awards that have been granted and are subject to a future market condition (total shareholder return) are determined using a Monte Carlo simulation pricing model developed to specifically accommodate the unique features of the awards. During the restricted period for awards no longer subject to contingencies, the Company accrues dividends and holds the certificates for the shares; however, the employee can vote the shares. Share certificates and dividends are delivered to the employee as they vest. Forfeitures of awards are recognized as they occur. The Compensation Committee of the Company’s Board of Directors (the “Committee”) approves long-term and annual equity compensation awards for the Company’s executive officers. The vesting periods of the Company’s restricted stock plans vary, as determined by the Committee. Restricted stock is granted to executive officers subject to both continued service and the satisfaction of certain annual performance goals and multi-year market conditions as determined by the Committee. The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming three fair value of the awards which is determined using a simulation pricing model developed to specifically accommodate the unique features of the award. These market based awards are expensed on a straight-line basis over the requisite service period (75% vests at the end of the three-year performance period and 25% vests the following year). The long term awards subject only to continuing employment are expensed on a straight-line basis over the requisite service period (25% vests in each of the following four years). The annual equity compensation awards include components based on certain annual Company performance measures and individual annual performance goals over the upcoming year. The certain Company performance measures for 2022 are: (i) funds from operations (“FFO”) per share, (ii) cash same property net operating income change, (iii) debt-to-EBITDAre ratio, and (iv) fixed charge coverage. The Company begins recognizing expense for its estimate of the shares that could be earned pursuant to these awards on the grant date; the expense is adjusted to estimated performance levels during the performance period and to actual upon the determination of the awards. The shares are expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period (34% vests at the end of the one one Equity compensation is also awarded to the Company’s non-executive officers and directors, which are subject to service only conditions and expensed on a straight-line basis over the required service period. The total compensation expense is based upon the fair market value of the shares on the grant date. The Committee has adopted an Equity Award Retirement Policy (the “retirement policy”) which allows for accelerated vesting of unvested shares for retirement-eligible employees (defined as employees who meet certain age and years of service requirements). In order to qualify for accelerated vesting upon retirement, the eligible employees must provide required notification under the retirement policy and must retire from the Company. The Company has adjusted its stock-based compensation expense to accelerate the recognition of expense for retirement-eligible employees. Stock-based compensation cost for employees was $2,561,000 for the three months ended March 31, 2022, of which $691,000 was capitalized as part of the Company’s development costs. For the three months ended March 31, 2021, stock-based compensation cost for employees was $2,144,000, of which $550,000 was capitalized as part of the Company’s development costs. Stock-based compensation expense for directors was $33,000 for the three months ended March 31, 2022, and $3,000 for the same period in 2021. Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices. Of the shares that vested in the three months ended March 31, 2022, the Company withheld 34,251 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the grant dates, the fair value of shares that were granted during the three months ended March 31, 2022 was $7,013,000. As of the vesting dates, the aggregate fair value of shares that vested during the three months ended March 31, 2022 was $17,124,000. Award Activity: Three Months Ended Shares Weighted Average Grant Date Fair Value Unvested at beginning of period 106,212 $ 116.38 Granted (1) (2) 60,120 116.65 Forfeited — — Vested (80,565) 102.42 Unvested at end of period 85,767 $ 129.68 (1) Includes shares granted in prior years for which performance conditions have been satisfied and the number of shares have been determined. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for using fair value to measure financial assets and liabilities. The Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at March 31, 2022 and December 31, 2021. March 31, 2022 December 31, 2021 Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value (In thousands) Financial Assets: Cash and cash equivalents $ 5,718 5,718 4,393 4,393 Interest rate swap assets 17,130 17,130 2,237 2,237 Financial Liabilities: Unsecured bank credit facilities - variable rate (2) 197,313 197,280 209,210 209,202 Unsecured debt (2) 1,270,000 1,251,686 1,245,000 1,267,702 Secured debt (2) 2,128 2,170 2,156 2,269 Interest rate swap liabilities — — 935 935 (1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below. (2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 for additional information). The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents: The carrying amounts approximate fair value due to the short maturity of those instruments. Interest rate swap assets (included in Other assets on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. Unsecured bank credit facilities: The fair value of the Company’s unsecured bank credit facilities is estimated by discounting expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs. Unsecured debt: The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Secured debt: The fair value of the Company’s secured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Interest rate swap liabilities (included in Other liabilities on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | RISKS AND UNCERTAINTIES The state of the overall economy can significantly impact the Company’s operational performance and thus impact its financial position. Should EastGroup experience a significant decline in operational performance due to the current coronavirus (“COVID-19”) pandemic or other general economic conditions, it may affect the Company’s ability to make distributions to its shareholders, service debt, or meet other financial obligations. Although COVID-19 has had an overall minimal impact on the Company in 2020, 2021 and during the first three months of 2022, EastGroup remains unable to predict any future impact that it may have on its business, financial condition, results of operations and cash flows. |
LEGAL MATTERS (Notes)
LEGAL MATTERS (Notes) | 3 Months Ended |
Mar. 31, 2022 | |
LEGAL MATTERS [Abstract] | |
Legal Matters and Contingencies [Text Block] | LEGAL MATTERSThe Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened against the Company or its properties, other than routine litigation arising in the ordinary course of business. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | RECENT ACCOUNTING PRONOUNCEMENTS EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
SUBSEQUENT EVENTS (Notes)
SUBSEQUENT EVENTS (Notes) | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS In January 2022, the Company and a group of lenders agreed to terms on the private placement of $150 million of senior unsecured notes with a fixed interest rate of 3.03% and a 10-year term. The notes were issued and sold on April 20, 2022 and require interest-only payments. The notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Subsequent to March 31, 2022, the Company closed on the acquisition of 25.8 acres of development land in Houston, known by the Company as Cypress Preserve Land, for approximately $7.8 million. Also subsequent to March 31, 2022, the Company acquired Zephyr Distribution Center, a multi-tenant distribution building in the Hayward submarket of San Francisco containing 82,000 square feet, for $28.5 million. The building is currently in the lease-up phase of the development and value-add portfolio. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and its investment in any joint ventures in which the Company has a controlling interest. As of March 31, 2022 and December 31, 2021, EastGroup held a controlling interest in two joint venture arrangements. In 2019, the Company acquired 6.5 acres of land in San Diego, known by the Company as the Miramar land. Also in 2019, the Company acquired 41.6 acres of land in San Diego, known by the Company as the Otay Mesa land. During the year ended December 31, 2021, EastGroup began construction of Speed Distribution Center, a 519,000 square foot building on the Otay Mesa land, which was completed and transferred to the Company’s operating portfolio during the three months ended March 31, 2022. As of both March 31, 2022 and December 31, 2021, EastGroup had a 95% controlling interest in the Miramar land and a 99% controlling interest in Speed Distribution Center. The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements. The equity method of accounting is used for the Company’s 50% undivided tenant-in-common interest in Industry Distribution Center II. All significant intercompany transactions and accounts have been eliminated in consolidation. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and to disclose material contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. |
Discontinued Operations | The Company considers a real estate property to be held for sale when it meets the criteria established under ASC 360, Property, Plant and Equipment, including when it is probable that the property will be sold within a year. Real estate properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The Company did not classify any properties as held for sale as of March 31, 2022. As of December 31, 2021, the Company owned one operating property that was classified as held for sale on the December 31, 2021 Consolidated Balance Sheet. The property was sold, and a gain on the sale was recorded in the three months ended March 31, 2022. In accordance with FASB ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, |
Real Estate Property Acquisitions and Acquired Intangibles [Policy Text Block] | Upon acquisition of real estate properties, EastGroup applies the principles of FASB ASC 805, Business Combinations. The FASB Codification provides a framework for determining whether transactions should be accounted for as acquisitions of assets or businesses. Under the guidance, companies are required to utilize an initial screening test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. EastGroup determined that its real estate property acquisitions in 2021 and the first three months of 2022 are considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business. As a result, the Company capitalized acquisition costs related to its 2021 and 2022 acquisitions. The FASB Codification also provides guidance on how to properly determine the allocation of the purchase price among the individual components of both the tangible and intangible assets based on their respective fair values. The allocation to tangible assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. Land is valued using comparable land sales specific to the applicable market, provided by a third party. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties. The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates. The purchase price is also allocated among the following categories of intangible assets: the above or below market component of in-place leases, the value of in-place leases, and the value of customer relationships. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current market rents over the remaining term of the lease. The amounts allocated to above and below market lease intangibles are included in Other assets and Other liabilities , respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining terms of the respective leases. The total amount of intangible assets is further allocated to in-place lease values and customer relationship values based upon management’s assessment of their respective values. Factors considered by management in the allocation include an estimate of foregone rents and avoided leasing costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. These intangible assets are included in Other assets |
Earnings Per Share, Policy [Policy Text Block] | The Company applies ASC 260, Earnings Per Share , which requires companies to present basic and diluted earnings per share (“EPS”). Basic EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period. The Company’s basic EPS is calculated by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. The Company calculates diluted EPS by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding plus the dilutive effect of unvested restricted stock. The dilutive effect of unvested restricted stock is determined using the treasury stock method. |
Share-based Payment Arrangement [Policy Text Block] | EastGroup applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The cost for market-based awards and awards that only require service are expensed on a straight-line basis over the requisite service periods. The cost for performance-based awards is determined using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. This method accelerates the expensing of the award compared to the straight-line method. For awards with a performance condition, compensation expense is recognized when the performance condition is considered probable of achievement. The total compensation expense for service and performance based awards is based upon the fair market value of the shares on the grant date. The grant date fair value for awards that have been granted and are subject to a future market condition (total shareholder return) are determined using a Monte Carlo simulation pricing model developed to specifically accommodate the unique features of the awards. During the restricted period for awards no longer subject to contingencies, the Company accrues dividends and holds the certificates for the shares; however, the employee can vote the shares. Share certificates and dividends are delivered to the employee as they vest. Forfeitures of awards are recognized as they occur. The Compensation Committee of the Company’s Board of Directors (the “Committee”) approves long-term and annual equity compensation awards for the Company’s executive officers. The vesting periods of the Company’s restricted stock plans vary, as determined by the Committee. Restricted stock is granted to executive officers subject to both continued service and the satisfaction of certain annual performance goals and multi-year market conditions as determined by the Committee. The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming three fair value of the awards which is determined using a simulation pricing model developed to specifically accommodate the unique features of the award. These market based awards are expensed on a straight-line basis over the requisite service period (75% vests at the end of the three-year performance period and 25% vests the following year). The long term awards subject only to continuing employment are expensed on a straight-line basis over the requisite service period (25% vests in each of the following four years). The annual equity compensation awards include components based on certain annual Company performance measures and individual annual performance goals over the upcoming year. The certain Company performance measures for 2022 are: (i) funds from operations (“FFO”) per share, (ii) cash same property net operating income change, (iii) debt-to-EBITDAre ratio, and (iv) fixed charge coverage. The Company begins recognizing expense for its estimate of the shares that could be earned pursuant to these awards on the grant date; the expense is adjusted to estimated performance levels during the performance period and to actual upon the determination of the awards. The shares are expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period (34% vests at the end of the one one Equity compensation is also awarded to the Company’s non-executive officers and directors, which are subject to service only conditions and expensed on a straight-line basis over the required service period. The total compensation expense is based upon the fair market value of the shares on the grant date. The Committee has adopted an Equity Award Retirement Policy (the “retirement policy”) which allows for accelerated vesting of unvested shares for retirement-eligible employees (defined as employees who meet certain age and years of service requirements). In order to qualify for accelerated vesting upon retirement, the eligible employees must provide required notification under the retirement policy and must retire from the Company. The Company has adjusted its stock-based compensation expense to accelerate the recognition of expense for retirement-eligible employees. |
Fair Value Measurement, Policy [Policy Text Block] | ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for using fair value to measure financial assets and liabilities. The Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). |
Real Estate Properties | REAL ESTATE PROPERTIES EastGroup has one reportable segment – industrial properties, consistent with the Company’s manner of internal reporting, measurement of operating results and allocation of the Company’s resources. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows (including estimated future expenditures necessary to substantially complete the asset) expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the three month periods ended March 31, 2022 and 2021, the Company did not identify any impairment charges which should be recorded. Depreciation of buildings and other improvements is computed using the straight-line method over estimated useful lives of generally 40 years for buildings and 3 to 15 years for improvements. Building improvements are capitalized, while maintenance and repair expenses are charged to expense as incurred. Significant renovations and improvements that improve or extend the useful life of the assets are capitalized. Depreciation expense was $29,392,000 and $25,147,000 for the three months ended March 31, 2022 and 2021, respectively. |
Development | For properties under development and value-add properties acquired in the development stage, costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are aggregated into the total capitalized costs of the property. Included in these costs are management’s estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities. The internal costs are allocated to specific development projects based on development activity. As the property becomes occupied, depreciation commences on the occupied portion of the building, and costs are capitalized only for the portion of the building that remains vacant. The Company transfers properties from the development and value-add program to Real estate properties as follows: (i) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (ii) for value-add properties, at the earlier of 90% occupancy or one year after acquisition. Upon the earlier of 90% occupancy or one year after completion of the shell construction, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land). |
Risks and Uncertainties | RISKS AND UNCERTAINTIES The state of the overall economy can significantly impact the Company’s operational performance and thus impact its financial position. Should EastGroup experience a significant decline in operational performance due to the current coronavirus (“COVID-19”) pandemic or other general economic conditions, it may affect the Company’s ability to make distributions to its shareholders, service debt, or meet other financial obligations. Although COVID-19 has had an overall minimal impact on the Company in 2020, 2021 and during the first three months of 2022, EastGroup remains unable to predict any future impact that it may have on its business, financial condition, results of operations and cash flows. |
New Accounting Pronouncements, Policy | RECENT ACCOUNTING PRONOUNCEMENTS EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Derivatives, Policy | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risk, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and, to a limited extent, the use of derivative instruments. Specifically, the Company has entered into derivative instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative instruments, described below, are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to certain of the Company’s borrowings. |
LEASE REVENUE (Tables)
LEASE REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Lease Revenue [Abstract] | |
Operating Lease, Lease Income [Table Text Block] | The table below presents the components of Income from real estate operations for the three months ended March 31, 2022 and 2021: Three Months Ended 2022 2021 (In thousands) Lease income — operating leases $ 84,945 73,382 Variable lease income (1) 28,007 24,535 Income from real estate operations $ 112,952 97,917 (1) Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. |
REAL ESTATE PROPERTIES (Tables)
REAL ESTATE PROPERTIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate Investment Property, Net [Abstract] | |
Schedule of Real Estate Properties | The Company’s Real estate properties and Development and value-add properties at March 31, 2022 and December 31, 2021 were as follows: March 31, December 31, (In thousands) Real estate properties: Land $ 560,512 544,505 Buildings and building improvements 2,473,788 2,408,944 Tenant and other improvements 582,708 570,627 Right of use assets — Ground leases (operating) (1) 20,488 22,635 Development and value-add properties (2) 549,584 504,614 4,187,080 4,051,325 Less accumulated depreciation (1,061,190) (1,035,617) $ 3,125,890 3,015,708 (1) EastGroup applies the principles of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases, and its related Accounting Standards Updates (“ASUs”) to account for its ground leases, which are classified as operating leases. The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets. (2) Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. |
REAL ESTATE PROPERTY ACQUISIT_2
REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Asset Acquisition [Abstract] | ||
Real Estate Properties Acquired [Table] | During the three months ended March 31, 2022, EastGroup acquired the following properties: REAL ESTATE PROPERTY ACQUIRED IN 2022 Location Size Date Cost (Square feet) (In thousands) Value-add property acquired (1) Cypress Preserve 1 & 2 Houston, TX 516,000 03/28/2022 $ 54,462 (1) Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. | During 2021, EastGroup acquired the following properties: REAL ESTATE PROPERTIES ACQUIRED IN 2021 Location Size Date Cost (Square feet) (In thousands) Operating properties acquired (1) Southpark Distribution Center 2 Phoenix, AZ 79,000 06/10/2021 $ 9,177 DFW Global Logistics Centre Dallas, TX 611,000 08/26/2021 89,829 Progress Center 3 Atlanta, GA 50,000 09/23/2021 5,000 Texas Avenue Austin, TX 20,000 10/15/2021 4,143 Total operating property acquisitions 760,000 108,149 Value-add properties acquired (2) Access Point 1 Greenville, SC 156,000 01/15/2021 10,501 Northpoint 200 Atlanta, GA 79,000 01/21/2021 6,516 Access Point 2 Greenville, SC 159,000 05/19/2021 10,743 Cherokee 75 Business Center 2 Atlanta, GA 105,000 06/17/2021 8,837 Siempre Viva Distribution Center 3-6 San Diego, CA 547,000 12/01/2021 134,479 Total value-add property acquisitions 1,046,000 171,076 Total acquired assets 1,806,000 $ 279,225 (1) Operating properties are defined as stabilized real estate properties (land including buildings and improvements) in the Company’s operating portfolio; included in Real estate properties on the Consolidated Balance Sheets. (2) Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. |
Acquired Assets and Assumed Liabilities [Table] | The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisition identified in the table above which was acquired during the three months ended March 31, 2022. ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2022 Cost (In thousands) Land $ 9,952 Buildings and building improvements 42,059 Tenant and other improvements 1,382 Total real estate properties acquired 53,393 In-place lease intangibles (1) 2,027 Below market lease intangibles (2) (958) Total assets acquired, net of liabilities assumed $ 54,462 (1) In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. | The following table summarizes the allocation of the consideration paid for the acquired assets and assumed liabilities in connection with the acquisitions identified in the table above which were acquired during the year ended December 31, 2021. ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2021 Cost (In thousands) Land $ 42,554 Buildings and building improvements 225,645 Tenant and other improvements 4,907 Right of use assets — Ground leases (operating) 12,708 Total real estate properties acquired 285,814 In-place lease intangibles (1) 9,949 Above market lease intangibles (1) 6 Below market lease intangibles (2) (3,836) Operating lease liabilities — Ground leases (3) (12,708) Total assets acquired, net of liabilities assumed $ 279,225 (1) In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. (2) Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. |
REAL ESTATE SOLD AND HELD FOR_2
REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Real estate properties sold [Table] | A summary of Gain on sales of real estate investments for the three months ended March 31, 2022 and the year ended December 31, 2021 follows: REAL ESTATE PROPERTIES SOLD Location Size Date Sold Net Sales Price Basis Recognized Gain (In square feet) (In thousands) 2022 Metro Business Park Phoenix, AZ 189,000 01/06/2022 $ 32,851 5,880 26,971 Cypress Creek Business Park (1) Fort Lauderdale, FL 56,000 03/31/2022 5,282 1,901 3,381 Total for 2022 245,000 $ 38,133 7,781 30,352 2021 Jetport Commerce Park Tampa, FL 284,000 11/09/2021 $ 44,260 5,401 38,859 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Assets [Abstract] | |
Other Assets | A summary of the Company’s Other assets follows: March 31, December 31, (In thousands) Leasing costs (principally commissions) $ 124,493 116,772 Accumulated amortization of leasing costs (43,320) (42,193) Leasing costs (principally commissions), net of accumulated amortization 81,173 74,579 Acquired in-place lease intangibles 32,362 31,561 Accumulated amortization of acquired in-place lease intangibles (14,277) (13,038) Acquired in-place lease intangibles, net of accumulated amortization 18,085 18,523 Acquired above market lease intangibles 841 885 Accumulated amortization of acquired above market lease intangibles (499) (508) Acquired above market lease intangibles, net of accumulated amortization 342 377 Straight-line rents receivable 54,248 51,970 Accounts receivable 3,892 7,133 Interest rate swap assets 17,130 2,237 Right of use assets — Office leases (operating) 1,861 1,984 Escrow deposits for pending acquisitions 7,275 3,050 Prepaid insurance 7,858 7,793 Goodwill 990 990 Receivable for tenant improvement cost reimbursements 140 7,680 Prepaid expenses and other assets 12,535 5,904 Total Other assets $ 205,529 182,220 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long term debt, by type [Table Text Block] | The Company’s debt is detailed below: March 31, December 31, (In thousands) Unsecured bank credit facilities - variable rate, carrying amount $ 197,313 209,210 Unamortized debt issuance costs (1,996) (2,144) Unsecured bank credit facilities, net of debt issuance costs 195,317 207,066 Unsecured debt - fixed rate, carrying amount (1) 1,270,000 1,245,000 Unamortized debt issuance costs (2,916) (2,430) Unsecured debt, net of debt issuance costs 1,267,084 1,242,570 Secured debt - fixed rate, carrying amount (1) 2,128 2,156 Unamortized debt issuance costs (13) (14) Secured debt, net of debt issuance costs 2,115 2,142 Total debt, net of debt issuance costs $ 1,464,516 1,451,778 (1) These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps. |
Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs and Secured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs ), as of March 31, 2022, are as follows: Years Ending December 31, (In thousands) 2022 - Remainder of year $ 87 2023 115,119 2024 120,122 2025 145,128 2026 141,672 2027 and beyond 750,000 Total $ 1,272,128 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Accounts Payable and Accrued Expenses | A summary of the Company’s Accounts payable and accrued expenses follows: March 31, December 31, (In thousands) Property taxes payable $ 18,755 4,494 Development costs payable 18,820 17,529 Retainage payable 13,779 10,576 Real estate improvements and capitalized leasing costs payable 7,920 5,798 Interest payable 8,876 6,547 Dividends payable 46,784 46,864 Book overdraft (1) 4,499 4,845 Other payables and accrued expenses 7,275 13,107 Total Accounts payable and accrued expenses $ 126,708 109,760 (1) Represents checks written before the end of the period which have not cleared the bank; therefore, the bank has not yet advanced cash to the Company. When the checks clear the bank, they will be funded through the Company’s working cash line of credit, which is included in the Company’s Unsecured bank credit facilities. |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Summary of other liabilities | A summary of the Company’s Other liabilities follows: March 31, December 31, (In thousands) Security deposits $ 30,057 28,343 Prepaid rent and other deferred income 15,083 16,401 Operating lease liabilities — Ground leases 20,814 22,898 Operating lease liabilities — Office leases 1,909 2,032 Acquired below market lease intangibles 8,819 8,124 Accumulated amortization of below market lease intangibles (3,324) (2,707) Acquired below market lease intangibles, net of accumulated amortization 5,495 5,417 Interest rate swap liabilities — 935 Tenant improvement cost liabilities 2,248 2,796 Other liabilities 3,516 3,516 Total Other liabilities $ 79,122 82,338 |
COMPREHENSIVE INCOME (Tables)
COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
COMPREHENSIVE INCOME [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of Accumulated other comprehensive income (loss) are presented in the Company’s Consolidated Statement of Changes in Equity and are summarized below. See Note 14 for information regarding the Company’s interest rate swaps. Three Months Ended 2022 2021 (In thousands) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): Balance at beginning of period $ 1,302 (10,752) Other comprehensive income - interest rate swaps 15,828 8,214 Balance at end of period $ 17,130 (2,538) |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES [Abstract] | |
Schedule of Derivative Instruments [Table Text Block] | As of March 31, 2022 and December 31, 2021, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk: Interest Rate Derivative Notional Amount as of March 31, 2022 Notional Amount as of December 31, 2021 (In thousands) Interest Rate Swap — $75,000 Interest Rate Swap $65,000 $65,000 Interest Rate Swap $100,000 $100,000 Interest Rate Swap $100,000 $100,000 Interest Rate Swap $50,000 $50,000 Interest Rate Swap $100,000 — |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021. See Note 17 for additional information on the fair value of the Company’s interest rate swaps. Derivatives As of March 31, 2022 Derivatives As of December 31, 2021 Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Derivatives designated as cash flow hedges: Interest rate swap assets Other assets $ 17,130 Other assets $ 2,237 Interest rate swap liabilities Other liabilities — Other liabilities 935 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021: Three Months Ended 2022 2021 (In thousands) DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS Interest Rate Swaps: Amount of income recognized in Other comprehensive income on derivatives $ 14,952 7,163 Amount of (income) loss reclassified from Accumulated other comprehensive income (loss) into Interest expense 876 1,051 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows: Three Months Ended 2022 2021 (In thousands) BASIC EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Numerator – net income attributable to common stockholders $ 63,580 27,339 Denominator – weighted average shares outstanding 41,246 39,673 DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS Numerator – net income attributable to common stockholders $ 63,580 27,339 Denominator: Weighted average shares outstanding 41,246 39,673 Unvested restricted stock 113 92 Weighted average diluted shares outstanding 41,359 39,765 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of total shares granted, forfeited and delivered | Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices. Of the shares that vested in the three months ended March 31, 2022, the Company withheld 34,251 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the grant dates, the fair value of shares that were granted during the three months ended March 31, 2022 was $7,013,000. As of the vesting dates, the aggregate fair value of shares that vested during the three months ended March 31, 2022 was $17,124,000. Award Activity: Three Months Ended Shares Weighted Average Grant Date Fair Value Unvested at beginning of period 106,212 $ 116.38 Granted (1) (2) 60,120 116.65 Forfeited — — Vested (80,565) 102.42 Unvested at end of period 85,767 $ 129.68 (1) Includes shares granted in prior years for which performance conditions have been satisfied and the number of shares have been determined. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Carrying amounts and fair value of financial instruments | The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at March 31, 2022 and December 31, 2021. March 31, 2022 December 31, 2021 Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value (In thousands) Financial Assets: Cash and cash equivalents $ 5,718 5,718 4,393 4,393 Interest rate swap assets 17,130 17,130 2,237 2,237 Financial Liabilities: Unsecured bank credit facilities - variable rate (2) 197,313 197,280 209,210 209,202 Unsecured debt (2) 1,270,000 1,251,686 1,245,000 1,267,702 Secured debt (2) 2,128 2,170 2,156 2,269 Interest rate swap liabilities — — 935 935 (1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below. (2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 for additional information). The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents: The carrying amounts approximate fair value due to the short maturity of those instruments. Interest rate swap assets (included in Other assets on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. Unsecured bank credit facilities: The fair value of the Company’s unsecured bank credit facilities is estimated by discounting expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs. Unsecured debt: The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Secured debt: The fair value of the Company’s secured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Interest rate swap liabilities (included in Other liabilities on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. |
PRINCIPLES OF CONSOLIDATION (De
PRINCIPLES OF CONSOLIDATION (Details) | Mar. 31, 2022aft²Integer | Dec. 31, 2021ft²aInteger |
Controlling interest joint ventures and equity method investees [Line Items] | ||
Number of joint venture arrangements | Integer | 2 | 2 |
Percentage recorded of assets, liabilities, revenues, and expenses of the buildings and land held in joint ventures | 100.00% | 100.00% |
Speed Distribution Center | ||
Controlling interest joint ventures and equity method investees [Line Items] | ||
Area of real estate property | ft² | 519,000 | 519,000 |
Industry Distribution Center II - undivided tenant-in-common interest [Member] | ||
Controlling interest joint ventures and equity method investees [Line Items] | ||
Tenant-in-common interest | 50.00% | 50.00% |
Controlling Interest Joint Ventures [Domain] | Miramar Land [Member] | ||
Controlling interest joint ventures and equity method investees [Line Items] | ||
Acres of real estate investment property | 6.5 | 6.5 |
Less than wholly owned joint venture, investment ownership percentage | 95.00% | 95.00% |
Controlling Interest Joint Ventures [Domain] | Otay Mesa Land [Member] | ||
Controlling interest joint ventures and equity method investees [Line Items] | ||
Acres of real estate investment property | 41.6 | 41.6 |
Less than wholly owned joint venture, investment ownership percentage | 99.00% | 99.00% |
LEASE REVENUE (Details)
LEASE REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Lease Revenue [Line Items] | |||
Lease income - operating leases | $ 84,945 | $ 73,382 | |
Variable lease income | [1] | 28,007 | 24,535 |
Income from real estate operations | $ 112,952 | $ 97,917 | |
[1] | Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. |
REAL ESTATE PROPERTIES (Details
REAL ESTATE PROPERTIES (Details) | 3 Months Ended | |||
Mar. 31, 2022USD ($)Integer | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | ||
Real Estate Properties [Line Items] | ||||
Number of Reporting Units | Integer | 1 | |||
Depreciation Expense During the Period | $ 29,392,000 | $ 25,147,000 | ||
Maximum occupancy at acquisition date that defines an investment property as value-add | 75.00% | |||
Minimum percentage of acquisition cost used in redevelopment costs that defines an investment property as value-add | 20.00% | |||
Real Estate Properties | ||||
Land | $ 560,512,000 | $ 544,505,000 | ||
Building and building improvements | 2,473,788,000 | 2,408,944,000 | ||
Tenant and other improvements | 582,708,000 | 570,627,000 | ||
Right of use assets - Ground leases (operating) | [1] | 20,488,000 | 22,635,000 | |
Development and value-add properties | [2] | 549,584,000 | 504,614,000 | |
Real estate, development and value-add properties | 4,187,080,000 | 4,051,325,000 | ||
Less accumulated depreciation | (1,061,190,000) | (1,035,617,000) | ||
Real estate, net | $ 3,125,890,000 | $ 3,015,708,000 | ||
Building [Member] | ||||
Real Estate Properties [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 40 years | |||
Minimum [Member] | Improvements [Member] | ||||
Real Estate Properties [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Maximum [Member] | Improvements [Member] | ||||
Real Estate Properties [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 15 years | |||
[1] | EastGroup applies the principles of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases, and its related Accounting Standards Updates (“ASUs”) to account for its ground leases, which are classified as operating leases. The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets. | |||
[2] | Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. |
DEVELOPMENT AND VALUE-ADD PRO_2
DEVELOPMENT AND VALUE-ADD PROPERTIES (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Development properties [Member] | |
Development and Value-add [Line Items] | |
Percentage of occupation when property transfers from the development and value-add program to real estate properties | 90.00% |
Length of time after project completion (developments) or acquisition (value-add) when project transfers to real estate properties | 1 year |
Value-add properties [Member] | |
Development and Value-add [Line Items] | |
Percentage of occupation when property transfers from the development and value-add program to real estate properties | 90.00% |
Length of time after project completion (developments) or acquisition (value-add) when project transfers to real estate properties | 1 year |
Development and value-add properties [Member] | |
Development and Value-add [Line Items] | |
Percentage of occupation when costs ceased being capitalized | 90.00% |
Length of time after project completion when development cost ceased being capitalized | 1 year |
REAL ESTATE PROPERTY ACQUISIT_3
REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022USD ($)ft² | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)ft² | ||
Property Acquisition [Line Items] | ||||
Amortization expense for lease intangibles | $ 2,465,000 | $ 1,431,000 | ||
Above and below market lease intangibles incremental increase to rental Income | $ 845,000 | $ 229,000 | ||
Maximum occupancy at acquisition date that defines an investment property as value-add | 75.00% | |||
Minimum percentage of acquisition cost used in redevelopment costs that defines an investment property as value-add | 20.00% | |||
Land | $ 560,512,000 | $ 544,505,000 | ||
Building and building improvements | 2,473,788,000 | 2,408,944,000 | ||
Tenant and other improvements | 582,708,000 | 570,627,000 | ||
Right of use assets - Ground leases (operating) | [1] | $ 20,488,000 | $ 22,635,000 | |
2022 Value-Add Property Acquisitions | Cypress Preserve 1 & 2 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [2] | 516,000 | ||
Date Acquired | [2] | Mar. 28, 2022 | ||
Cost of property acquired | [2] | $ 54,462,000 | ||
2022 Acquisitions | ||||
Property Acquisition [Line Items] | ||||
Land | 9,952,000 | |||
Building and building improvements | 42,059,000 | |||
Tenant and other improvements | 1,382,000 | |||
Total real estate properties acquired | 53,393,000 | |||
Assets acquired, net of liabilities assumed | $ 54,462,000 | |||
Weighted average remaining lease term of acquired properties | 4 years 7 months 6 days | |||
2022 Acquisitions | Leases, Acquired-in-Place [Member] | ||||
Property Acquisition [Line Items] | ||||
Lease intangibles | [3] | $ 2,027,000 | ||
2022 Acquisitions | Below market lease [Member] | ||||
Property Acquisition [Line Items] | ||||
Lease intangibles | [4] | $ (958,000) | ||
2021 operating property acquisitions | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [5] | 760,000 | ||
Cost of property acquired | [5] | $ 108,149,000 | ||
2021 operating property acquisitions | Southpark Distribution Center 2 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [5] | 79,000 | ||
Date Acquired | [5] | Jun. 10, 2021 | ||
Cost of property acquired | [5] | $ 9,177,000 | ||
2021 operating property acquisitions | DFW Global Logistics Centre | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [5] | 611,000 | ||
Date Acquired | [5] | Aug. 26, 2021 | ||
Cost of property acquired | [5] | $ 89,829,000 | ||
2021 operating property acquisitions | Progress Center 3 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [5] | 50,000 | ||
Date Acquired | [5] | Sep. 23, 2021 | ||
Cost of property acquired | [5] | $ 5,000,000 | ||
2021 operating property acquisitions | Texas Avenue [Member] | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [5] | 20,000 | ||
Date Acquired | [5] | Oct. 15, 2021 | ||
Cost of property acquired | [5] | $ 4,143,000 | ||
2021 Value-add Property Acquisitions | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [2] | 1,046,000 | ||
Cost of property acquired | [2] | $ 171,076,000 | ||
2021 Value-add Property Acquisitions | Access Point 1 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [2] | 156,000 | ||
Date Acquired | [2] | Jan. 15, 2021 | ||
Cost of property acquired | [2] | $ 10,501,000 | ||
2021 Value-add Property Acquisitions | Northpoint 200 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [2] | 79,000 | ||
Date Acquired | [2] | Jan. 21, 2021 | ||
Cost of property acquired | [2] | $ 6,516,000 | ||
2021 Value-add Property Acquisitions | Access Point 2 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [2] | 159,000 | ||
Date Acquired | [2] | May 19, 2021 | ||
Cost of property acquired | [2] | $ 10,743,000 | ||
2021 Value-add Property Acquisitions | Cherokee 75 Business Center 2 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [2] | 105,000 | ||
Date Acquired | [2] | Jun. 17, 2021 | ||
Cost of property acquired | [2] | $ 8,837,000 | ||
2021 Value-add Property Acquisitions | Siempre Viva Distribution Center 3-6 | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | [2] | 547,000 | ||
Date Acquired | [2] | Dec. 1, 2021 | ||
Cost of property acquired | [2] | $ 134,479,000 | ||
2021 Acquisitions | ||||
Property Acquisition [Line Items] | ||||
Size (square feet) | ft² | 1,806,000 | |||
Cost of property acquired | $ 279,225,000 | |||
Land | 42,554,000 | |||
Building and building improvements | 225,645,000 | |||
Tenant and other improvements | 4,907,000 | |||
Right of use assets - Ground leases (operating) | 12,708,000 | |||
Total real estate properties acquired | 285,814,000 | |||
Operating lease liabilities - Ground leases | [6] | (12,708,000) | ||
Assets acquired, net of liabilities assumed | $ 279,225,000 | |||
Weighted average remaining lease term of acquired properties | 2 years 10 months 24 days | |||
2021 Acquisitions | Leases, Acquired-in-Place [Member] | ||||
Property Acquisition [Line Items] | ||||
Lease intangibles | [3] | $ 9,949,000 | ||
2021 Acquisitions | Above Market Leases [Member] | ||||
Property Acquisition [Line Items] | ||||
Lease intangibles | [3] | 6,000 | ||
2021 Acquisitions | Below market lease [Member] | ||||
Property Acquisition [Line Items] | ||||
Lease intangibles | [4] | $ (3,836,000) | ||
[1] | EastGroup applies the principles of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases, and its related Accounting Standards Updates (“ASUs”) to account for its ground leases, which are classified as operating leases. The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets. | |||
[2] | Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. | |||
[3] | In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. | |||
[4] | Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets. These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. | |||
[5] | Operating properties are defined as stabilized real estate properties (land including buildings and improvements) in the Company’s operating portfolio; included in Real estate properties on the Consolidated Balance Sheets. | |||
[6] | Operating lease liabilities - Ground leases are included in Other liabilities on the Consolidated Balance Sheets. |
REAL ESTATE SOLD AND HELD FOR_3
REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022USD ($)ft² | Dec. 31, 2021USD ($)ft² | |
Real Estate Properties Sold [Line Items] | ||
Right of use liability, ground lease | $ 20,814 | $ 22,898 |
2022 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 245,000 | |
Net sales price | $ 38,133 | |
Basis | 7,781 | |
Recognized gain | $ 30,352 | |
Metro Business Park | 2022 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 189,000 | |
Date sold | Jan. 6, 2022 | |
Net sales price | $ 32,851 | |
Basis | 5,880 | |
Recognized gain | $ 26,971 | |
Cypress Creek Business Park | 2022 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 56,000 | |
Date sold | Mar. 31, 2022 | |
Net sales price | $ 5,282 | |
Basis | 1,901 | |
Recognized gain | 3,381 | |
Right of use asset, ground lease | 1,745 | |
Right of use liability, ground lease | $ 1,745 | |
Jetport Commerce Park | 2021 dispositions | ||
Real Estate Properties Sold [Line Items] | ||
Size (square feet) | ft² | 284,000 | |
Date sold | Nov. 9, 2021 | |
Net sales price | $ 44,260 | |
Basis | 5,401 | |
Recognized gain | $ 38,859 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Assets Components [Abstract] | ||
Leasing costs (principally commissions) | $ 124,493 | $ 116,772 |
Accumulated amortization of leasing costs | (43,320) | (42,193) |
Leasing costs (principally commissions), net of accumulated amortization | 81,173 | 74,579 |
Acquired in-place lease intangibles | 32,362 | 31,561 |
Accumulated amortization of acquired in-place lease intangibles | (14,277) | (13,038) |
Acquired in-place lease intangibles, net of accumulated amortization | 18,085 | 18,523 |
Acquired above market lease intangibles | 841 | 885 |
Accumulated amortization of acquired above market lease intangibles | (499) | (508) |
Acquired above market lease intangibles, net of accumulated amortization | 342 | 377 |
Straight-line rents receivable | 54,248 | 51,970 |
Accounts receivable | 3,892 | 7,133 |
Interest rate swap assets | 17,130 | 2,237 |
Right of use assets - Office leases (operating) | 1,861 | 1,984 |
Receivable for common stock offerings | 7,275 | 3,050 |
Prepaid Insurance | 7,858 | 7,793 |
Goodwill | 990 | 990 |
Receivable for tenant improvement cost reimbursements | 140 | 7,680 |
Prepaid expenses and other assets | 12,535 | 5,904 |
Total Other Assets | $ 205,529 | $ 182,220 |
DEBT (Details)
DEBT (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)basisPointsInteger | Dec. 31, 2021USD ($) | ||
Secured and Unsecured Debt [Line Items] | |||
Moody's Credit Rating | Baa2 | ||
Unsecured bank credit facilities | $ 195,317,000 | $ 207,066,000 | |
Secured Debt | 2,115,000 | 2,142,000 | |
Unsecured Debt | 1,267,084,000 | 1,242,570,000 | |
Total debt | 1,464,516,000 | 1,451,778,000 | |
Secured and unsecured debt, net of debt issuance costs [Member] | |||
Payments of principal over future years [Abstract] | |||
2022 - Remainder of year | 87,000 | ||
2023 | 115,119,000 | ||
2024 | 120,122,000 | ||
2025 | 145,128,000 | ||
2026 | 141,672,000 | ||
2027 and beyond | 750,000,000 | ||
Total | $ 1,272,128,000 | ||
$75 million unsecured term loan (repaid in 2022) [Member] | |||
Secured and Unsecured Debt [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 3.03% | ||
Unsecured debt, carrying amount repaid | $ 75,000,000 | ||
$100 million senior unsecured term loan (refinanced in 2022) | |||
Secured and Unsecured Debt [Line Items] | |||
Basis point reduction in credit spread | basisPoints | 60 | ||
Debt instrument, basis spread above variable rate | basisPoints | 85 | ||
Debt Instrument, Term | 5 years | ||
Fixed interest rate | 1.80% | ||
Unsecured debt, carrying amount | $ 100,000,000 | ||
$100 million senior unsecured term loan (new in 2022) | |||
Secured and Unsecured Debt [Line Items] | |||
Debt Instrument, Term | 6 years 6 months | ||
Debt Instrument, Interest Rate, Effective Percentage | 3.06% | ||
Debt Instrument, Basis Spread on Variable Rate | 1.30% | ||
Unsecured debt, carrying amount | $ 100,000,000 | ||
Unsecured bank credit facilities | |||
Secured and Unsecured Debt [Line Items] | |||
Unsecured bank credit facilities - variable rate, carrying amount | 197,313,000 | 209,210,000 | |
Unsecured bank credit facilities | 195,317,000 | 207,066,000 | |
Unamortized debt issuance costs | (1,996,000) | (2,144,000) | |
Unsecured Debt [Member] | |||
Secured and Unsecured Debt [Line Items] | |||
Unamortized debt issuance costs | (2,916,000) | (2,430,000) | |
Unsecured debt, carrying amount | [1] | 1,270,000,000 | 1,245,000,000 |
Unsecured Debt | 1,267,084,000 | 1,242,570,000 | |
Secured Debt [Member] | |||
Secured and Unsecured Debt [Line Items] | |||
Secured debt-fixed rate, carrying amount | [1] | 2,128,000 | 2,156,000 |
Secured Debt | 2,115,000 | 2,142,000 | |
Unamortized debt issuance costs | (13,000) | $ (14,000) | |
Nine bank group unsecured revolving credit facility [Member] | Former credit facility obtained in 2018 - $350 million [Member] | |||
Secured and Unsecured Debt [Line Items] | |||
Line of Credit Facility, Borrowing Capacity | $ 350,000,000 | ||
Debt instrument, basis spread above variable rate | 100 | ||
Line of credit, facility fee (in basis points) | 20 | ||
Debt Instrument, Maturity Date, Description | July 30, 2022 | ||
Nine bank group unsecured revolving credit facility [Member] | Bank credit facility obtained in 2021 - $425 million | |||
Secured and Unsecured Debt [Line Items] | |||
Line of Credit Facility, Interest Rate at Period End | 1.168% | ||
Line of Credit Facility, Borrowing Capacity | $ 425,000,000 | ||
Number of banks included in the unsecured revolving credit facility | Integer | 9 | ||
Debt instrument, basis spread above variable rate | 77.5 | ||
Line of credit, facility fee (in basis points) | 15 | ||
Debt Instrument, Maturity Date, Description | July 30, 2025 | ||
Extension option on credit facility | two six-month extensions | ||
Line of credit facility, accordion | $ 325,000,000 | ||
Unsecured bank credit facilities - variable rate, carrying amount | $ 183,000,000 | ||
Nine bank group unsecured revolving credit facility [Member] | Bank credit facilities obtained in 2021 - $425 and $50 million | |||
Secured and Unsecured Debt [Line Items] | |||
Sustainability performance linked basis point reduction (in basis points) | 1 | ||
Initial pricing basis for credit facilities | BBB+/Baa1 | ||
Line of credit facility covenant terms, consolidated leverage ratio | 32.50% | ||
Pnc Na Unsecured revolving credit facility [Member] | Former credit facility obtained in 2018 - $45 million [Member] | |||
Secured and Unsecured Debt [Line Items] | |||
Line of Credit Facility, Borrowing Capacity | $ 45,000,000 | ||
Debt instrument, basis spread above variable rate | 100 | ||
Line of credit, facility fee (in basis points) | 20 | ||
Debt Instrument, Maturity Date, Description | July 30, 2022 | ||
Pnc Na Unsecured revolving credit facility [Member] | Bank credit facility obtained in 2021 - $50 million | |||
Secured and Unsecured Debt [Line Items] | |||
Line of Credit Facility, Interest Rate at Period End | 1.227% | ||
Line of Credit Facility, Borrowing Capacity | $ 50,000,000 | ||
Debt instrument, basis spread above variable rate | 77.5 | ||
Line of credit, facility fee (in basis points) | 15 | ||
Debt Instrument, Maturity Date, Description | July 30, 2025 | ||
Extension option on credit facility | two six-month extensions | ||
Unsecured bank credit facilities - variable rate, carrying amount | $ 14,313,000 | ||
[1] | These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps. |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Accounts Payable and Accrued Expenses [Abstract] | |||
Property taxes payable | $ 18,755 | $ 4,494 | |
Development costs payable | 18,820 | 17,529 | |
Retainage payable | 13,779 | 10,576 | |
Real estate improvements and capitalized leasing costs payable | 7,920 | 5,798 | |
Interest payable | 8,876 | 6,547 | |
Dividends payable | 46,784 | 46,864 | |
Book Overdraft | [1] | 4,499 | 4,845 |
Other payables and accrued expenses | 7,275 | 13,107 | |
Total accounts payable and accrued expenses | $ 126,708 | $ 109,760 | |
[1] | Represents checks written before the end of the period which have not cleared the bank; therefore, the bank has not yet advanced cash to the Company. When the checks clear the bank, they will be funded through the Company’s working cash line of credit, which is included in the Company’s Unsecured bank credit facilities. |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Liabilities, Unclassified [Abstract] | ||
Security deposits | $ 30,057 | $ 28,343 |
Prepaid rent and other deferred income | 15,083 | 16,401 |
Operating lease liabilities - Ground leases | 20,814 | 22,898 |
Operating lease liabilities - Office leases | 1,909 | 2,032 |
Acquired below market lease intangibles | 8,819 | 8,124 |
Accumulated amortization of acquired below market lease intangibles | (3,324) | (2,707) |
Acquired below market lease intangibles, net of accumulated amortization | 5,495 | 5,417 |
Interest rate swap liabilities | 0 | 935 |
Tenant improvement cost liabilities | 2,248 | 2,796 |
Other liabilities | 3,516 | 3,516 |
Total Other Liabilities | $ 79,122 | $ 82,338 |
COMPREHENSIVE INCOME (Details)
COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
COMPREHENSIVE INCOME [Abstract] | ||
Balance at Beginning of Period | $ 1,302 | $ (10,752) |
Other comprehensive income (loss) - interest rate swaps | 15,828 | 8,214 |
Balance at End of Period | $ 17,130 | $ (2,538) |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)Integer | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Derivative [Line Items] | |||
Number of interest rate swaps | Integer | 5 | ||
Interest Rate Cash Flow Hedge Assets at Fair Value | $ 17,130,000 | $ 2,237,000 | |
Interest rate cash flow hedge liabilities at fair value | 0 | 935,000 | |
Swap termination value | $ 17,248,000 | ||
Remaining loans indexed to LIBOR | Integer | 3 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | |||
Derivative [Line Items] | |||
Cash flow hedge amount to be reclassified to Interest Expense in next 12 months | $ 2,352,000 | ||
Amount of income (loss) recognized in Other comprehensive income on derivatives | 14,952,000 | $ 7,163,000 | |
Amount of (income) loss reclassified from Accumulated other comprehensive income into interest expense | 876,000 | $ 1,051,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | |||
Derivative [Line Items] | |||
Interest Rate Cash Flow Hedge Assets at Fair Value | 17,130,000 | 2,237,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Liabilities [Member] | |||
Derivative [Line Items] | |||
Interest rate cash flow hedge liabilities at fair value | 0 | 935,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $75 million interest rate swap executed in 2015 [Member] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 0 | 75,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $65 million interest rate swap executed in 2016 [Member] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 65,000,000 | 65,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap (2019) [Domain] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 100,000,000 | 100,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap (2020) [Member] | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 100,000,000 | 100,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $50 million interest rate swap executed in 2021 | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | 50,000,000 | 50,000,000 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap executed in 2022 | |||
Derivative [Line Items] | |||
Notional Amount of Interest Rate Derivatives | $ 100,000,000 | $ 0 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
BASIC EPS COMPUTATION FOR NET INCOME AVAILABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS [Abstract] | ||
Net income attributable to common stockholders | $ 63,580 | $ 27,339 |
Weighted average shares outstanding (in shares) | 41,246 | 39,673 |
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | ||
Net Income Available to Common Stockholders | $ 63,580 | $ 27,339 |
Weighted average shares outstanding (in shares) | 41,246 | 39,673 |
Unvested restricted stock | 113 | 92 |
Weighted average diluted shares outstanding | 41,359 | 39,765 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ (2,594,000) | $ (2,147,000) | ||
Shares withheld for tax obligations | 34,251 | 30,252 | ||
Award Recipient Type Director [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 33,000 | $ 3,000 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of shares vested as of the vesting date | $ 17,124,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 105,485 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 85,767 | 106,212 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value (in shares) | $ 129.68 | $ 116.38 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | [1],[2] | 60,120 | ||
Grant date fair value of shares issued (in dollars per share) | [1],[2] | $ 116.65 | ||
Forfeited (in shares) | 0 | |||
Forfeited (per share) | $ 0 | |||
Vested (in shares) | (80,565) | |||
Vested (per share) | $ 102.42 | |||
Fair value of shares granted, as of the grant dates | $ 7,013,000 | |||
Restricted Stock [Member] | Award Recipient Type Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Payment Arrangement, Expense | 2,561,000 | 2,144,000 | ||
Stock-based compensation costs capitalized as development costs | $ 691,000 | $ 550,000 | ||
Company performance based award | Executive Officer [Member] | End of one-year performance period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 34.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||
Company performance based award | Executive Officer [Member] | Each of the following two years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | |||
Individual performance based award | Executive Officer [Member] | End of one-year performance period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 34.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||
Individual performance based award | Executive Officer [Member] | Each of the following two years | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | |||
Total shareholder return | Executive Officer [Member] | Following year after performance period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||
Total shareholder return | Executive Officer [Member] | End of three-year performance period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 75.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Continuing employement awards | Executive Officer [Member] | Each year of 4-year service period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||
[1] | Does not include the restricted shares that may be earned if the performance goals established in 2020 and 2021 for long-term performance and in 2022 for annual and long-term performance are achieved. Depending on the actual level of achievement of the goals at the end of the open performance periods, the number of shares earned could range from zero to 105,485. | |||
[2] | Includes shares granted in prior years for which performance conditions have been satisfied and the number of shares have been determined. |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value [Member] | |||
Financial Assets [Abstract] | |||
Cash and Cash Equivalents, Fair Value Disclosure | $ 5,718 | $ 4,393 | |
Interest rate swap assets | 17,130 | 2,237 | |
Financial Liabilities [Abstract] | |||
Unsecured bank credit facilities - variable rate | 197,280 | 209,202 | |
Unsecured debt Fair Value Disclosure | 1,251,686 | 1,267,702 | |
Secured debt | 2,170 | 2,269 | |
Interest rate swap liabilities | 0 | 935 | |
Carrying Amount [Member] | |||
Financial Assets [Abstract] | |||
Cash and Cash Equivalents, at Carrying Value | [1] | 5,718 | 4,393 |
Interest rate swap assets | [1] | 17,130 | 2,237 |
Financial Liabilities [Abstract] | |||
Unsecured bank credit facilities - variable rate | [1] | 197,313 | 209,210 |
Unsecured debt Fair Value Disclosure | [1] | 1,270,000 | 1,245,000 |
Secured debt | [1] | 2,128 | 2,156 |
Interest rate swap liabilities | [1] | $ 0 | $ 935 |
[1] | Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below. (2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 for additional information). The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents: The carrying amounts approximate fair value due to the short maturity of those instruments. Interest rate swap assets (included in Other assets on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. Unsecured bank credit facilities: The fair value of the Company’s unsecured bank credit facilities is estimated by discounting expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs. Unsecured debt: The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Secured debt: The fair value of the Company’s secured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Interest rate swap liabilities (included in Other liabilities on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR and SOFR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] $ in Thousands | 1 Months Ended |
Apr. 27, 2022USD ($)ft²a | |
$150 million senior unsecured note (2022) | |
Subsequent Event [Line Items] | |
Debt Instrument, Face Amount | $ 150,000 |
Debt Instrument, Interest Rate, Stated Percentage | 3.03% |
Long-term Debt, Term | 10 years |
Cypress Preserve Land | |
Subsequent Event [Line Items] | |
Payments to Acquire Land | $ 7,800 |
Acres of real estate investment property | a | 25.8 |
Zephyr Distribution Center | |
Subsequent Event [Line Items] | |
Area of real estate property | ft² | 82,000 |
Payments to Acquire Real Estate | $ 28,500 |
Mesa Gateway Commerce Park | |
Subsequent Event [Line Items] | |
Area of real estate property | ft² | 147,000 |
Payments to Acquire Real Estate | $ 18,300 |